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State of West Virginia ex rel. Edlon, Inc. v. Wilson

State of West Virginia ex rel. Edlon, Inc. v. Wilson

Case No. 
16-0166
Type of Proceeding: 
Writ of Prohibition
Issues: 

Whether the trial court erred in denying Petitioner’s motion for summary judgment finding that Petitioner, a product seller, had a duty to warn employees of a product manufacturer of the hazards associated with his work.

Background: 

Theodore Ray Hudson died from mesothelioma on June 14, 2010.  Thereafter, his wife, Sharon Hudson, brought a wrongful death lawsuit against a product manufacturer, Cyclops Industries, Inc. (“Cyclops”) and a product seller, Edlon, Inc., successor-in-interest to Process Supply, Inc. (“Edlon”). Plaintiff’s contention in this case is that Mr. Hudson was exposed to asbestos-containing materials while working for Cyclops from 1972 until 1983 manufacturing sight glasses to be sold to customers.

When Mr. Hudson worked at Cyclops John Elliott was a shareholder and member of Cyclops’ Board of Directors and was also its President from 1976 to 1983. Cyclops shared space with Process Supply until approximately 1971. Process Supply was incorporated on February 27, 1958, by John Elliott. During the period of Mr. Hudson’s employment at Cyclops, Process Supply, a company owned by John Elliott, was a sales distributor for various manufacturers and was also retained by Cyclops “to render technical and engineering services and advisory and consultative services of a technical nature to industrial and commercial users of all types of instruments, machinery and supplies.”

In 1976, Cyclops retained Process Supply as its general sales agent. John Elliott was a sales representative for Cyclops through Process Supply. While a stockholder in Cyclops, Mr. Elliott contracted to distribute its products, and in 1972, was specifically paid to investigate the use of sight glasses in industry, and the OSHA implications of Cyclops’ product. Plaintiff presented circumstantial evidence that Mr. Elliott knew, or should have known, about the hazards of asbestos and that exposure to free crocidolite asbestos fiber is associated with mesothelioma.

Based upon evidence that OSHA may have inspected the Cyclops facility in 1972, that Mr. Elliott held positions at both Cyclops and Process Supply, and that Process Supply was a distributor of asbestos-containing products during the time of Mr. Hudson’s employment (and even sold asbestos filters to Union Carbide on multiple occasions), the circuit court held that Mr. Elliott, on behalf of Process Supply, had a responsibility to have known the OSHA regulations.

The court also concluded that the relationship between John Elliott, Cyclops and Process Supply was so interwoven that it created a duty on Process Supply to warn Mr. Hudson of the hazards associated with the handling of blue asbestos. The court determined that Mr. Elliott’s knowledge, combined with his crisscrossed responsibility with Cyclops and Process Supply, conjoined with his duty to investigate and to know how asbestos was being used in the construction of Cyclops glasses, and that OSHA guidelines placed upon him, as an agent of Process Supply, a duty to warn employees at Cyclops about the dangers of working with asbestos.

Positions of the Parties: 

Petitioner, Edlon, contends the law in West Virginia and every other jurisdiction imposes no duty on a sales agent for a manufacturer to warn the manufacturer’s employees about known workplace hazards. Edlon avers that the circuit court committed clear error by denying its motion for summary judgment in the absence of any legal authority supporting Plaintiff’s claim that a product seller owes a duty to warn the product manufacturer about potential hazards associated with making the manufacturer’s own product. Edlon contends that a product seller’s duty to warn extends only to the ultimate user or consumer of the product and cites, as support, Ilosky v. Michelin Tire Corp., 172 W.Va. 435, 442, 307 S.E.2d 603 (1983); Morningstar v. Black & Decker Mfg. Co., 162 W.Va. 857, 876, 253 S.E.2d 666 (1979).

Respondent contends that there exist issues of material fact concerning whether Process Supply itself, as well as by and through Mr. Elliott, knew or should have known of the hazards associated with the use of crocidolite asbestos fibers released by cutting gasket material and that, if Process Supply had such knowledge, it had a duty to warn Cyclops and its employees of the dangers of releasing asbestos fibers.

Probable Impact: 

The resolution of this issue could have broad implications with respect to West Virginia warnings law, as it pertains to asbestos litigation and beyond.  The decision also potentially implicates issues involving corporate formation and conduct with respect to closely-associated corporations and their safety obligations, not only to a business entity’s own employees, but also to the employees of closely-related business entities.

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