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The duty to warn usually cannot be delegated, but in Indiana, an exception to this rule exists.  In this case, the defendant applied the “sophisticated intermediary doctrine” in hopes of addressing one of four counts brought against it in a product liability lawsuit. The district court granted summary judgment in favor of the defendant on all four counts, but the 7th Circuit reversed the grant of summary judgment on the duty to warn claim and remanded for further proceedings.

Overview: The plaintiffs worked at a microwave popcorn plant in Indiana. During their employment, the plant used butter flavorings containing diacetyl, an organic additive with a buttery flavor, in its microwave popcorn.  The flavorings were supplied by the defendant-manufacturer.  The employees allege that the defendant failed to warn them of the linkage between diacetyl and “popcorn lung” disease, and their exposure to the chemical resulted in their developing respiratory illnesses. When inhaled, diacetyl can cause bronchiolitis obliterans, referred to as “popcorn lung,” which is the inflammation and obstruction of the smallest airways of the lungs. Symptoms of this disease include a dry cough, shortness of breath, wheezing, fatigue and can lead to worse personal injuries. To support their claim, the employees offered opinions of various expert witnesses, such as occupational physicians and an epidemiologist, who all concluded that the defendant should have known that diacetyl caused lung disease, and that the defendant withheld from the plant owner the health risks of its butter flavoring.

“Popcorn lung” has been an issue in the microwave popcorn industry since at least the 2000s, when a different microwave popcorn plant had an outbreak of bronchiolitis obliterans in Missouri. The defendant-manufacturer implemented procedures designed to reduce the risk of personal injuries from the use and handling of diacetyl, including an employee protection program.

Federal Occupational Safety and Health Administration regulations require chemical manufacturers to evaluate and to classify each product sold and to provide with the product a “material safety data sheet.” The data sheets that accompanied the defendant’s shipments of butter flavoring containing diacetyl did not disclose how much, or even if, diacetyl was present in certain flavors. The defendant considered that information a trade secret. The sheets also did not include warnings that inhalation of fumes from butter flavorings made with diacetyl could cause permanent lung injury or bronchiolitis obliterans.

The microwave popcorn plant employees brought a multi-count complaint in Indiana state court asserting the defendant was liable for their injuries based on: 1) strict liability for providing a defective product, 2) failure to warn about the butter flavoring causing respiratory disease, 3) common law negligence, and 4) defective product design. The case was transferred to federal court and the district court granted summary judgment in favor of the defendant on the first three counts.  Then, some months later, the Court granted summary judgment in favor of the defendant on the design defect claim.

Outcome: On appeal to the Seventh Circuit, the court ruled that the district court erred in granting motion for summary judgment in favor of the defendant with regards to the failure to warn claim. While the district court believed that defendant discharged its duty to warn under sophisticated intermediary doctrine by reasonably relying on plaintiffs' employer to warn them about any dangers from use of diacetyl, the Seventh Circuit ruled a question of fact remained for a jury to answer as to whether the plant owner and employer of the plaintiffs could be considered a “sophisticated intermediary” or at least as sophisticated as the defendant with regards to diacetyl and its harmful effects.

Practice Tip:  A trial court cannot resolve questions of fact or evaluate the credibility of witnesses when considering a motion for summary judgment.  Given that all a party responding to a motion for summary judgment needs to do to defeat the motion is demonstrate that a reasonable question of fact exists, these motions can be difficult for a defendant to win.  Here, the Seventh Circuit may have been influenced by the fact that the defendant flavor manufacturer was less than forthcoming in terms of the information it supplied to the plaintiffs’ employer.  For example, despite its proven knowledge of the potential health hazards associated with the use of diacetyl, the manufacturer stated in its material safety data sheet provided to the employer that there were “no known health hazards” in the product.  Nevertheless, when relying on the sophisticated intermediary doctrine as a defense, practitioners should not overlook the importance of discovery of the so-called intermediary, in this case the employer, which was not a party to the case.  Depositions of key personnel of the intermediary to establish their sophistication in manufacturing their product and in providing safe working conditions for their employees can go a long way towards eliminating the type of “question of fact” that resulted in the reversal of the defense judgment in this case.

To review the appellate ruling, click here.