Date: 12-12-2017

Case Style:

Case Number: 17-1461

Judge: Lybcg

Court: United States Court of Appeals for the First Circuit on appeal from the District of Massachusetts (Suffolk County)

Plaintiff's Attorney: Carla Burke Pickrel, Richard M. Sandman

Defendant's Attorney: Thomas M. Goutman, Richard L. Campbell and Kim Kocher

Description: This is an appeal from the entry
of judgment for the defendants in a products liability case brought
by the plaintiff, Town of Westport ("Westport"). The defendants
are Monsanto Company, Solutia, Inc., and Pharmacia Corporation
(collectively "Pharmacia"). Westport filed suit under
Massachusetts law against Pharmacia, seeking to recover the cost
of remediating Westport Middle School ("WMS") after discovering
polychlorinated biphenyls ("PCBs") -- chemicals that are hazardous
above certain concentrations -- in the school building.
When WMS was built in 1969, the contractor, who is not
a defendant in this suit, used caulk that contained PCBs. Although
Monsanto did not make the caulk at issue, it sold plasticizers --
a component of caulk -- to the third-party manufacturer who did.
Westport alleges that Pharmacia is liable for what it claims to be
"property damage" caused by the "PCB contamination" at WMS.
The district court entered judgment against Westport on
all alleged counts of tort liability. On appeal, Westport
challenges only the entry of judgment against its (1) breach of
warranty and (2) negligent marketing claims.
We affirm the district court's grant of summary
judgment. Monsanto did not breach the implied warranty of
merchantability because it was not reasonably foreseeable in 1969
that there was a risk PCBs would volatilize from caulk at levels
requiring remediation -- that is, levels dangerous to human health.
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And as a matter of state law, a negligent marketing claim cannot
be maintained independent of a design defect claim on these facts.
I. Background
Because this case comes to us following Pharmacia's
motion for summary judgment, we recite the facts in the light most
favorable to Westport.1
A. Overview of PCB-Containing Plasticizers
Monsanto began to manufacture and sell PCB mixtures,
trademarked as Aroclors, in 1935. Aroclors were a popular
plasticizer -- an additive used in building materials to increase
1 As a threshold matter, we must resolve two outstanding
motions which affect the content of the record before us.
(1) Westport asks us to reconsider its motion to
supplement the record with two studies that it alleges Pharmacia
improperly withheld during discovery. In the alternative,
Westport seeks to reverse the district court's entry of judgment
and asks us to remand the case with instructions to allow these
studies to be introduced. We deny Westport's motion, which is too
little, too late. Westport's counsel waited nearly a month after
Pharmacia produced these studies to file this motion. In any case,
Westport's counsel should have filed a Rule 60(b)(2) motion in the
district court, which has far greater familiarity with the record
than we do, but it did not.
(2) We grant Pharmacia's motion to strike a settlement
agreement contained in the addendum to Westport's amended reply
brief and all citations to it. The settlement agreement was not
presented to the district court, so Westport cannot include it in
its appellate briefing. See Rosaura Bldg. Corp. v. Municipality
of Mayaguez, 778 F.3d 55, 64 (1st Cir. 2015) ("Appellate review
concentrates on considering the factual record presented in the
trial courts."). The agreement is also irrelevant to our
disposition of this case.
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fluidity -- because they were viscous, thermally stable, and nonflammable.
By August of 1970, however, Monsanto pulled PCBcontaining
Aroclors from the market because of their environmental
impact.
1. Supply Chain and Warnings
Before August 1970, Monsanto sold PCB-containing
Aroclors to formulators of building materials, who then
incorporated them into various end products. For "major customers"
and "major applications," Monsanto likely sold Aroclors in bulk,
in 55-gallon drums. Some of Monsanto's direct customers were
companies that manufactured end products, such as paint and caulk,
while others produced polymer components of end products.
Monsanto continually updated its direct customers with
information about the chemical properties and health effects of
its PCB mixtures. For instance, the record includes Monsanto's
technical bulletins for Aroclor plasticizers from 1943, 1955,
1966, and 1970. These bulletins included information about the
plasticizers' rate of vaporization, as well as warnings about their
toxicity and environmental impact.
Beginning in 1937, Monsanto warned customers that
experimental studies in animals showed that "prolonged exposure to
Aroclor vapors evolved at high temperatures or by repeated oral
ingestion" would "lead to systemic toxic effects." These warnings
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were present in all subsequent technical bulletins. The bulletins
also prescribed precautions for industrial workers, such as
ventilation and protective gear.
In addition, Monsanto warned its customers about the
environmental hazards of PCBs. In its March 1970 bulletin,
Monsanto explicitly advised against certain uses of Aroclors:
Some specific applications where the use of
PCB should definitely be avoided are in paints
and sealants for swimming pools, paints and
waterproofing agents in silos and other
buildings where food products for humans or
animals are stored, and as a component of any
container of wrapping used in packaging food
products.
These warnings were only given to Monsanto's direct customers, and
not to end users.
2. Studies of Health Effects
Between 1934 and 1972, Monsanto sponsored 300 studies on
the health effects of PCB exposure through inhalation and skin
contact. These included skin patch and inhalation tests, as well
as studies of the long-term reproductive and toxicological effects
of PCBs in lab animals. In 1938, one study showed that PCBs were
linked to liver toxicity. However, a series of studies in the
1950s, sponsored by Monsanto, and conducted by Dr. Treon,
demonstrated that "at ordinary temperatures," the hazard of
inhaling PCBs from Aroclors "may well be slight or entirely
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absent." These studies concluded that the Aroclors tested only
volatilized at levels sufficient to cause adverse health effects
in animals when they were heated to 100 degrees Celsius (212
degrees Fahrenheit).
Although Monsanto was not legally required to test the
volatilization of PCBs from consumer end products that it did not
manufacture -- such as paints and resins -- it sometimes did so.
These studies only showed elevated levels of volatilization at
room temperature from latex paints and resins. Specifically,
Monsanto's U.S.-based research division and U.K.-based medical
department conducted at least three studies on the volatilization
of PCBs from latex paints between 1952 and 1955. Around that time,
one of Monsanto's clients, Dow Chemicals, had expressed interest
in using Aroclors in its latex paints.
Monsanto's paint studies revealed that air samples
collected from rooms covered in latex paint containing Aroclors,
with temperatures between 70 and 100 degrees Fahrenheit, contained
elevated PCB concentrations (above 0.15 mg per cubic meter) that
persisted for one month (the duration of the study). Based on
these findings, in 1953, Monsanto U.S. recommended against
incorporating Aroclors into latex paints for indoor use.
Monsanto U.K. later followed suit by recommending that the company
continue to manufacture paints "based on chlorinated rubber" and
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"to sell Aroclors for production of paints intended for exterior
application," but to "discontinue sale of Aroclors for use in the
manufacture of all other paints."
However, neither Monsanto nor any other research entity
studied the rate of PCB volatilization from caulk. According to
Westport's own experts, even though Monsanto had conducted weightloss
tests to ascertain the amount of Aroclor vaporization from
caulk, the first study on the rate of PCB volatilization did not
take place until "the early 2000s" -- more than three decades after
WMS was constructed in 1969. And there are still no studies to
date that establish PCBs volatilize from caulk at levels harmful
to human health.
3. Legislative Response
Six years after Monsanto removed PCB-containing Aroclors
from the market, Congress enacted the Toxic Substances Control Act
("TSCA"), 15 U.S.C. § 2601, et. seq., which prohibited (with
limited exceptions) the manufacture and distribution of PCBs in
commerce. Id. § 2605(e)(2). The TSCA authorized the Environmental
Protection Agency ("EPA") to implement specific regulations
regarding PCB use and disposal. See id.
Following this authorization in 1976, the EPA
promulgated regulations which required entities to obtain an
exemption for the continued use of PCBs in a non-enclosed manner
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at concentrations above 50 parts-per-million. See 40 C.F.R.
§ 761.20(c)(1). As justification for its decision, the agency
pointed to, inter alia, "the well-documented human health and
environmental hazard of PCB exposure, [and] the high probability
of human and environmental exposure to PCBs and PCB Items from
manufacturing, processing, or distribution activities." Id.
§ 761.20.
B. Construction and Remediation of WMS
When WMS was built in 1969, Congress had yet to pass the
TSCA, the EPA did not exist, and Aroclors were still on the market.
The builders of WMS used caulk -- a construction material made up
of plasticizers, resin, fillers, and other additives -- that
contained PCBs. Monsanto supplied the two PCB mixtures at issue
-- Aroclor 1248 and 1254 -- to Product Research & Chemical
Corporation ("PRC"), which produced the caulk used at WMS.
Nearly four decades later, in 2010, Westport took part
in the Massachusetts State Building Authority's Green Repair
Program to renovate WMS's windows and roof. In preparation,
Westport tested the building for hazardous substances, including
PCBs. The tests indicated the presence of PCBs in the window
glazing, exterior window caulking, and interior door caulking.
Westport then embarked on a multi-million dollar remediation
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project to remove the PCBs and brought suit against Pharmacia for
the costs.
C. District Court Proceedings
Westport filed this action on May 4, 2014, alleging seven
counts of tort liability: (1) breach of the implied warranty of
merchantability for defective design, (2) breach of the implied
warranty of merchantability for failure to warn, (3) negligence,
(4) public nuisance, (5) private nuisance, (6) trespass, and (7)
violation of the Massachusetts Oil and Hazardous Material Release
Prevention and Response Act. Westport sought, inter alia,
"compensatory damages . . . including, but not limited to" the
"costs of investigating, sampling, testing, and assessing the
extent of PCB contamination at Westport Middle School," and the
costs of "removing PCBs and PCB-containing materials . . . from
school property."
Pharmacia filed a partial motion to dismiss counts 4
through 7. The district court granted the motion, and the parties
proceeded to discovery on the remaining claims. Westport alleged
that it had spent between $3.1 and $3.7 million on its PCB
remediation and subsequent PCB monitoring at WMS; its expert
estimated that an additional $23.5 million was needed to "fully
abate and encapsulate" the PCBs within WMS.
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At the close of discovery, Pharmacia (1) moved in limine
to exclude the testimony of Westport's experts, and (2) moved for
summary judgment on all counts, or in the alternative, for partial
summary judgment on Westport's damages claims. The district court
entered judgment against Westport on all of its claims and denied
the motion in limine and motion for partial summary judgment as
moot.2 On appeal, Westport challenges the district court's entry
of judgment against count 2 (breach of the implied warranty of
merchantability for failure to warn), and count 3 (negligence).
Westport does not challenge the entry of judgment against Count 1
(design defect).
II. Discussion
We review de novo the district court's entry of judgment.
Pac. Indem. Co. v. Deming, 828 F.3d 19, 22 (1st Cir. 2016). Summary
judgment is appropriate when the "there is no genuine issue as to
any material fact and the movant is entitled to judgment as a
matter of law." Fed. R. Civ. P. 56(c) (2016). A "genuine" issue
of "material fact" only exists "if a reasonable factfinder,
examining the evidence and drawing all reasonable inferences
helpful to the party resisting summary judgment, could resolve the
dispute in that party's favor." Cortés-Irizarry v. Corporación
Insular de Seguros, 111 F.3d 184, 187 (1st Cir. 1997). Applying
2 The district court did strike a portion of the testimony
of Westport's expert, Dr. Matson. See infra note 6.
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this standard, we find that Westport failed to raise a genuine
dispute as to the merits of its breach of warranty claim or its
negligence claim.
A. Breach of the Implied Warranty of Merchantability
In order to establish a breach of the implied warranty
of merchantability under Massachusetts law, a plaintiff must
demonstrate that the product was "defective and unreasonably
dangerous" for the "ordinary purposes" for which it was "fit," at
the time that it left the supplier's hands. Evans v. Lorillard
Tobacco Co., 990 N.E.2d 997, 1010 (Mass. 2013) (quoting Haglund v.
Philip Morris, Inc., 847 N.E.2d 315, 322 (Mass. 2006)). A product
can be unreasonably dangerous if the supplier fails to "reasonably
. . . warn of the product's foreseeable risks of harm." Id.
(emphasis added). This includes risks that were "reasonably
foreseeable" at the time of sale, or that could have been
"discovered by way of reasonable testing before marketing the
product." Vassallo v. Baxter Healthcare Corp., 696 N.E.2d 909,
923 (Mass. 1998).
Westport and Pharmacia disagree about two aspects of the
foreseeability analysis: (1) what specific risk of harm
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Pharmacia's duty to warn encompassed, and (2) whether that risk
was reasonably foreseeable or discoverable in 1969.
1. Foreseeability Standard
Westport argues that, because it is bringing a claim for
property damage, the correct inquiry is whether, as of 1969, it
was foreseeable that there was a risk PCBs would volatilize out of
caulk, not whether they would do so at levels harmful to human
health. To support its position, Westport cites a series of cases
that purportedly define property damage without reference to a
requisite level of contamination.
But Westport misses the point.3 The district court did
not hold that a property damage claim can only be brought when
there is a risk to human health. It merely ruled that the PCB
contamination in this case needed to rise to a level requiring
3 The cases Westport cites only deal with statutory or
contractual remedies for property damage. See, e.g., Essex Ins.
Co. v. BloomSouth Flooring Corp., 562 F.3d 399, 406 (1st Cir. 2009)
(holding that because odors can "consitute physical injury to
property under Massachusetts law," they qualify as property damage
under Essex's insurance policy); Guaranty-First Trust Co. v.
Textron, Inc., 622 N.E.2d 597, 597 (Mass. 1993)(addressing whether
lost rent is compensable under the Massachusetts Oil and Hazardous
Material Release Prevention Act); Clean Harbors Envtl. Servs. Inc.
v. Bos. Basement Techs., Inc., 916 N.E.2d 406, 409-10 (Mass. App.
Ct. 2009) (interpreting the scope of an insurance policy's
exclusion provision for property damage). They are inapposite
here because Westport is bringing a common law claim.
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remediation -- that is, a level harmful to human health -- in order
to qualify as property damage.
This makes sense. To make out a property damage claim
under Massachusetts law, Westport must demonstrate that the level
of PCB contamination at WMS decreases the school's fair market
value or necessitates remediation. Cf. Guaranty-First Trust Co.,
622 N.E.2d at 599 ("At common law, '[t]he general rule for
measuring property damage is diminution in market value.' However,
'[i]f the injury is reasonably curable by repairs, the expense of
repairs, if less than the diminished market value, is the measure
of recovery.'" (alterations in original) (internal citations
omitted)).
Only PCB contamination levels sufficient to pose a
health risk warrant remediation.4 Westport itself admits that "the
presence of PCBs would not be considered 'contamination' if they
were benign substances." Given that PCBs are "invisible to the
naked eye," and "lack a characteristic odor or appearance to alert
users of their presence," their only deleterious effect is their
potential harm to health. In other words, no remediation is
4 Westport disputes this by arguing that it was legally
compelled to remove the PCBs at WMS. But whether the remediation
was required by EPA regulations or the TSCA is a causation issue
that we need not address here. It has no bearing on what harms
Monsanto should have foreseen, and warned its customers about, in
1969. Indeed, the TSCA was not enacted until 1976.
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necessary –- and hence, no property damage results -- unless the
PCB contamination in a building poses an actual health risk.
Accordingly, the district court applied the correct
standard of foreseeability in this case: whether Monsanto should
have reasonably known, in 1969, that there was a risk PCBs would
volatilize out of caulk at levels harmful to human health.
2. Evidence Supporting Summary Judgment
Westport further contends that, even if the district
court's standard of foreseeability is correct, the evidence on
record is sufficient to defeat summary judgment. Specifically,
Westport argues that because PCBs were known, as of 1969, to (1)
cause adverse health effects, and (2) volatilize from paints and
resins at elevated levels, there is a genuine dispute as to whether
it was reasonably foreseeable that PCBs in caulk would pose a
health risk. We disagree based on the evidence presented.
While "[i]t is well-settled that a judge must not engage
in making credibility determinations or weighing the evidence at
the summary judgment stage," "it is equally clear that judges
cannot allow conjecture to substitute for the evidence necessary
to survive summary judgment." Pina v. Children's Place, 740 F.3d
785, 802 (1st Cir. 2014). A "nonmovant [who] bears the ultimate
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burden of proof" must provide "definite, competent evidence."
Mesnick v. Gen. Elec. Co., 950 F.2d 816, 822 (1st Cir. 1991).
Here, Westport failed to proffer any scientific studies
evidencing a risk that PCBs volatilize from caulk at harmful
concentrations when inhaled, much less that such a risk was known
to Pharmacia before 1969.5 Nor did Westport point to other evidence
in the record supporting such a conjecture. In fact, Westport's
own experts conceded that there is no scientific literature to
date demonstrating that PCBs volatilize from caulk at a rate that
is hazardous to human health.
Still, Westport asserts that, because PCBs were known
to volatilize from paints and resins at elevated levels in 1969,
it should have been reasonably foreseeable then that there was a
risk they would volatilize from caulk at harmful levels. That
does not follow. The risk that PCB-containing caulk would cause
adverse health effects could not have been "reasonably
foreseeable" in 1969 given that the existence of such a risk
5 Westport's expert, Dr. Matson, states in his expert
report that certain studies "demonstrated that Monsanto should
have understood that plasticizers volatilize from polymers,
regardless of whether the polymer is a thin coating like paint or
a thicker material like joint sealant." But those studies only
suggest that there is a basis for concluding PCBs volatilize from
caulk, not that there was a risk they would do so at levels that
pose a health risk. Simply put, Westport fails to provide any
basis for concluding that PCBs volatilize from caulk, paints, and
resins at the same rate.
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remains unverified by scientific studies today. Although we draw
all reasonable inferences in Westport's favor, we will not "draw
unreasonable inferences or credit bald assertions." Cabán
Hernández v. Philip Morris USA, Inc., 486 F.3d 1, 8 (1st Cir.
2007).
In fact, the evidence unequivocally supports the
conclusion that the risk PCBs would volatilize from caulk at
harmful levels was not reasonably foreseeable in 1969.6 Westport's
own expert, Dr. Dorman, conceded that there were no scientific
studies evidencing, or even suggesting, that the rate of PCB
volatilization from paints could, let alone should, be
extrapolated to caulk. And Westport provides no evidence to the
contrary.
On the other hand, the record is replete with evidence
establishing that it was reasonable for Monsanto to conclude that
the paint studies were not applicable to caulk. For instance, one
6 The only evidence to the contrary is the expert report
by Dr. Matson, which stated that "Monsanto produced and sold PCBcontaining
Aroclors as plasticizers for polysulfide sealants and
other building materials . . . knowing that volatilization of PCBs
would result in PCB contamination in indoor air . . . ." The
district court correctly excluded this testimony, however, because
Dr. Matson cannot testify to Monsanto's specific knowledge or
motivations. See In re Toyota Motor Corp., 978 F. Supp. 2d 1053,
1087 (C.D. Cal. 2013) (holding that "Toyota's knowledge (or lack
thereof) is not a proper subject for expert testimony, and it must
be established (if at all) by other evidence").
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of Pharmacia's witnesses, Dr. Kaley, testified that in general,
incorporating PCBs into a plastic matrix such as caulk would
"significantly reduce th[eir] vapor pressures," leading to lower
volatilization. And Westport's own expert, Dr. Matson, gave ten
factors that affect the rate at which PCBs volatilize from
different building materials. These factors, which include "other
ingredients in the matrix," "the thickness of the product," "air
temperature," and "the surface temperature on which the product is
sitting," all point to the rate of PCB volatilization differing
between paint and caulk.
As such, the district court did not engage in improper
"credibility determinations or weighing [of] the evidence," Pina,
740 F.3d at 802, when it found what Westport's "reliance
on . . . inferences" was insufficient to defeat summary judgment.
Town of Westport v. Monsanto Co., No. 14-12041, 2017 WL 1347671,
at *7 (D. Mass. Apr. 7, 2017). The district court merely
determined, as it should, that a reasonable fact-finder could not
rule for Westport because there is no evidence in the record, from
either 1969 or the present day –- aside from Westport's own
conjecture -- that PCBs volatilize from caulk at levels harmful to
human health. Indeed, Westport's own experts have conceded this
point.
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Accordingly, the district court correctly entered
judgment against Westport's breach of warranty claim for failure
to warn.
3. Post-Sale Failure to Warn
Westport also raises a related breach of warranty claim:
that Pharmacia violated its post-sale duty to warn. To succeed on
such a claim, Westport must establish that (1) Monsanto "kn[ew] or
reasonably should have known of product dangers discovered postsale,"
(2) "a reasonable person in [Monsanto's] position would
provide a warning," (3) "those to whom a warning might be provided
can be identified," and (4) the warning can be "effectively
communicated" to them. Lewis v. Ariens Co., 751 N.E.2d 862, 866
(Mass. 2001) (quoting Restatement (Third) of Torts: Prods.
Liability § 10(b)(2),(3) (1998)).
The district court entered judgment against this claim
because Westport failed to establish the third criterion: that WMS
was an identifiable end user. Westport nevertheless argues that
because (1) it was able to identify PRC as the formulator that
made the caulk used at WMS, and (2) Monsanto maintained a list of
direct customers, including PRC, there is a genuine issue of
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triable fact about whether Monsanto could have identified WMS as
an end user.
We agree with the district court. Although Westport is
entitled to the benefit of all reasonable inferences, it cannot
rest on "conclusory allegations, improbable inferences, [or]
unsupported speculation" to defeat a motion for summary judgment.
McCarthy v. Nw. Airlines, Inc., 56 F.3d 313, 315 (1st Cir. 1995).
That Monsanto maintained a list of direct customers has no bearing
on whether it could have identified all end users. Given
Monsanto's complex supply chain, tracing the caulk used at WMS
back to PCR (based on documents containing WMS's specifications
and communications from WMS's contractor) is not the same as being
able to identify WMS as an end user in the first place. As such,
Westport's assertion that WMS was an identifiable end user is mere
speculation. The district court correctly entered judgment
against Westport's post-sale failure to warn claim.
B. Negligent Marketing
Westport also contests the entry of judgment against its
negligent marketing claim.7 But no court, applying Massachusetts
law, has ever explicitly held that a negligent marketing claim can
be maintained independent of a design defect claim. Commonwealth
7 Because Pharmacia only has a duty to warn of foreseeable
dangers, our ruling on foreseeability also disposes of Westport's
negligence claim for failure to warn.
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courts have only opined that absent a design defect, a manufacturer
might still be liable if it intentionally targeted children. Cf.
Killeen v. Harmon Grain Prods., Inc., 413 N.E.2d 767, 772 (Mass.
App. Ct. 1980) (reversing judgment for plaintiff on negligent
marketing grounds but noting, in dicta, that a manufacturer's
liability might be based on the marketing of a product if it was
"calculated to induce direct purchases by children or others whose
use of the product would involve unreasonable risk of injury").
Here, Westport does not challenge the entry of judgment against
its design defect claim. And Aroclors were clearly not marketed
in a manner to "induce direct purchases by children." Evans, 990
N.E.2d at 1025. So, Westport cannot maintain its cause of action
for negligent marketing.
The only cases that Westport cites to support its
contrary position, Yakubowicz v. Paramount Pictures Corp., 536
N.E.2d 1067 (Mass. 1989), and Evans, 990 N.E.2d 997, are
inapposite. Yakubowicz did not deal with negligent marketing.
See 536 N.E.2d at 1072 (holding that Paramount was not liable, on
a failure to warn theory, for a fatal assault committed by a teen
who had watched, and was allegedly inspired by, Paramount's violent
film). And Evans vacated a judgment based on negligent marketing,
because of "the absence of guidance" to the jury "as to the meaning
of negligent marketing," and the fact that the product at issue
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-- cigarettes -- was marketed to both adults and children. Id. at
1025.
That ends the matter. Westport does not have a cause of
action for negligent marketing.

Outcome: For the foregoing reasons, we affirm the district
court's entry of judgment against Westport's breach of warranty
and negligence claims. Costs are awarded to Pharmacia.

Plaintiff's Experts:

Defendant's Experts:

Comments: