92 N.Y.2d 387 (1998)

A company that designs and builds a safety device for its own machinery, not for sale, is considered a ‘casual manufacturer’ and has a limited duty to warn subsequent users of known, non-obvious defects, but is not subject to strict products liability or negligent design claims.

Summary

Scott Gebo, an employee of Knowlton Specialty Papers, was injured while operating an embossing unit that had been modified by Filtration Sciences, the prior owner of the mill. Gebo sued Filtration Sciences, alleging strict products liability, negligent design, failure to warn, and breach of warranty. The New York Court of Appeals held that Filtration Sciences, as a ‘casual manufacturer’ who built the safety device for its own use, had a duty to warn of known defects, but this duty was satisfied because Gebo’s employer was aware of the resin-related problems that caused the accident. The court affirmed the dismissal of Gebo’s claims.

Facts

Filtration Sciences purchased an embossing unit in 1966 and made modifications, including adding a safety guarding system to protect operators from the nip point of high-speed rollers. This guarding system included a panel that, when raised, protected the operator. However, the system could fail if resin, a byproduct of the paper manufacturing process, built up on a microswitch, allowing the unit to operate with the guard panel down. Gebo was injured when his hand became caught in the unguarded nip point. Filtration Sciences later sold the paper mill to Knowlton Specialty Papers, Gebo’s employer, prior to the accident.

Procedural History

Gebo sued Filtration Sciences in Supreme Court, alleging several causes of action. The Supreme Court granted summary judgment to Filtration Sciences, dismissing all claims. The Appellate Division affirmed. The New York Court of Appeals granted leave to appeal and affirmed the Appellate Division’s decision.

Issue(s)

Whether a company that designs and builds a safety device for its own use, and not for market sale, can be held liable under theories of strict products liability or negligent design to a subsequent user injured by the device.

Holding

No, because Filtration Sciences was a “casual manufacturer” that built the protective guarding system for its own use, not for sale or transfer. As such, it had only a limited duty to warn of known defects, a duty that was satisfied in this case because the employer was already aware of the danger.

Court’s Reasoning

The court distinguished Filtration Sciences from typical manufacturers, noting that strict liability is imposed on manufacturers who place defective products into the stream of commerce. However, the court found that Filtration Sciences was a “casual manufacturer” because it designed and assembled the guarding system for its own use, not for sale. Citing Sukljian v. Ross & Son Co., 69 N.Y.2d 89 (1986), the court stated that casual sellers (and by analogy, casual manufacturers) have only a duty to “warn the person to whom the product is supplied of known defects that are not obvious or readily discernible.” The court reasoned that the policy justifications for imposing strict liability on manufacturers—such as their ability to understand the design and safety of their products—do not apply to casual manufacturers. The court also rejected the negligence claim, stating that the duty of a casual manufacturer is limited to warning of known, non-obvious defects. Here, the court found that Knowlton Specialty Papers, Gebo’s employer, was aware of the resin-related problems that caused the accident, thus negating any causal connection between Filtration Sciences’ alleged failure to warn and Gebo’s injuries. Moreover, because the employer was aware of the problems, the danger was “readily discernible.” The court quoted from Restatement (Second) of Torts § 395, Comment b, explaining that the responsibilities for manufacturers rests “upon the foreseeability of harm if proper care is not used; upon the representation of safety implied in the act of putting the product on the market; and upon the economic benefit derived by the manufacturer from the sale and subsequent use of the chattel.” These considerations did not apply to Filtration Sciences because it did not derive significant commercial benefit from the sale of the mill, and the injury was not foreseeable when the guarding system was designed.