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Steffy v. Home Depot

March 31, 2009

DARREL STEFFY AND SUSANNE STEFFY
v.
THE HOME DEPOT, INC. AND PATRIOT TIMBER PRODUCTS INTERNATIONAL, INC.



The opinion of the court was delivered by: Yvette Kane, Chief Judge United States District Court Middle District of Pennsylvania

(Chief Judge Kane)

MEMORANDUM

Before the Court are separate motions for summary judgment pursuant to Rule 56(c) of the Federal Rules of Civil Procedure by Defendant The Home Depot, Inc. ("Home Depot")(Doc. No. 64) and Defendant Patriot Timber Products International, Inc. ("Patriot Timber")(Doc. No. 63). The motions are fully briefed and are ripe for disposition. For the reasons that follow, the motions will be granted in part and denied in part.

I. BACKGROUND

A. Factual Background*fn1

Plaintiff Darrel Steffy is the president and CEO of Steffy Concrete, Inc. (See Doc. No. 64-6 Ex. B, Deposition of Darrel Steffy at 10: 21-25 (hereinafter "Steffy Dep").) Mr. Steffy has 30 years experience in the construction industry. (Doc. No. 67 ¶ 2.) In addition to his work in his own concrete business, Mr. Steffy also worked for his father as a masonry and concrete contractor, and as a builder and land developer. (Id.) He lacks any formal training in designing buildings or installation of HVAC systems. (Doc. No. 63 ¶ 11.)

In September 2005, Darrel Steffy and his wife, Plaintiff Susanne Steffy, began construction of a building on their property for various uses, including: storage, fitness, entertaining friends, display space for hunting trophies, and office space. (Doc. No. 67 ¶ 3.) Mr. Steffy served as the building's general contractor, and made all decisions regarding the project. (Doc. No. 63 ¶¶ 16-17.) He hired Hoover Construction Company to erect the pre-engineered steel exterior of the building, which had no set interior design. (Doc. No. 67 ¶ 6.) The pre-engineered structure was not accompanied by instructions or recommendations on how to finish the building, but Mr. Steffy did consult with Hoover Construction occasionally for information on the structure's load bearing capacity. (Id. ¶ 6; see also Steffy Dep.at 43: 11-14.) Mr. Steffy also hired Quality Design and Drafting to assist him with some of the more ornamental designs on the interior of the structure and the 'Steffy Concrete' sign that hangs on the outside of the building. (Doc. No. 63. ¶ 10.) Mr. Steffy handled all other aspects of the design and construction of the interior of the building by himself. (Id. ¶ 17.) He did not consult an architect for the project. (Id. ¶ 14.) He installed his own HVAC system with advice from L&G Mechanical, his heating and cooling system supplier. (Id. ¶¶ 11, 13.) Mr. Steffy also did not consult an indoor quality air company during the building process. (Id. at 140-141: 25, 1.) The building as finally designed has about 20,000 square feet of floor space and cost about $900,000 to build. (Doc. No. 67 ¶¶ 5, 9.) Steffy chose to not install windows in the building because the extra light would be harmful to the hunting trophies he planned to display. (Doc. No. 63 ¶ 15.)

While browsing around Home Depot, Mr. Steffy spotted plywood and decided to use it to panel the interior walls of the building (other than the garage) because it would be cheaper and more sturdy than drywall. (Doc. No. 67 ¶ 11; see also Steffy Dep.at 70: 10-25.) On or about November 10, 2005, he purchased 300 four by eight foot sheets of 3/4 inch thick, 13 ply, cabinet grade plywood from Hope Depot at $23.00 per sheet. (Id. ¶ 11.) He purchased an additional 100 sheets of similar plywood on January 3, 2006. (Id. ¶ 14.) This plywood was supplied to Home Depot from Defendant Patriot Timber Products. (Doc. No. 63 ¶ 17.) Mr. Steffy's contact at Home Depot for the purchase of this plywood was David Mitchell, who worked at the "contractor sales desk." (Doc No. 67 ¶ 12; see also Doc. No. 64-7 Ex. C, Deposition of David Mitchell at 11-12: 8-23, 1-3 (hereinafter "Mitchell Dep").) The Defendants allege that Mr. Steffy did not tell David Mitchell how he intended to use the plywood or why they were purchasing the plywood. (Doc. No. 67 ¶ 13; see also Mitchell Dep. at 21: 8-24.) The Plaintiffs allege that Mr. Steffy did in fact tell Mitchell that he intended to use the material as wall paneling. (Doc. No. 77; see also Doc. No. 74-4 Ex. 2, Declaration of Darrel Steffy, ¶¶ 3-4 (hereinafter "Steffy Decl."); Doc. No. 74-4 Ex. 3 Declaration of Scott Achey, ¶¶ 7-8 (hereinafter "Achey Decl.").)

After the project was completed, starting around February 2006, people inside the building began to notice adverse effects from being inside the structure, including: watering and burning eyes, headaches, and burning in the throat. (Doc. No. 63 ¶ 21; Steffy Dep. at 65-67.) Mr. Steffy investigated the causes of the irritation by talking to manufacturers of the masonry, concrete, insulation, and heating system in the building; they all denied that their products could be causing the problems after review and Mr. Steffy took them at their word. (Doc. No. 63 ¶ 26.) Eventually, a tile-setter who was working in the building suggested to Mrs. Steffy that the irritation was the result of formaldehyde from the plywood. (Id. ¶ 23; see also Doc. No. 63-6 Ex. D, Deposition of Douglas Clelan, at 19.) After a handheld device revealed formaldehyde in the air, Mr. Steffy contacted Edward Montz Jr.'s ("Montz") of Indoor Air Solutions ("IAS") to test the building's air on July 20, 2006. (Doc. No. 67 ¶¶ 19-20.) After initial air testing, IAS found that the formaldehyde levels were "far higher than any concentrations that we have observed in any newly constructed space, to date, as a result of construction materials alone." (Doc. No. 63-7, Ex. G at 6 (hereinafter "Montz Report").) Following this testing, a second study was proposed by Plaintiffs aimed at evaluating Mr. Steffy's concern about paneling containing formaldehyde." (Doc. No. 63 ¶ 44.) IAS took two samples of plywood, which were comprised of five four-by-eight sheets taken randomly throughout the Building. (Montz Report at 4.) These samples were then sent to a lab where they were loaded into a chamber for emissions monitoring; a process called large chamber ASTM Method. (Id.) Following the results from these tests on the plywood paneling, Montz concluded that "[t]he paneling obtained by Mr. Steffy and installed in the above-referenced building is a very potent source of formaldehyde in the building (estimated to be over 20 times the OSHA maximum Permissible Exposure Limit for industrial workplace environments at the time of installation)." (Id. at 10.) He further concludes that of the various options to fix the problem, the best would be "a complete removal of all of the paneling and any reservoirs in the building which currently exist." (Id. at 11.) Defense experts disagree with Montz's conclusion on causation and instead conclude that decisions made in construction of the building, other formaldehyde producing materials, and an inadequate ventilation system have caused the formaldehyde problem. (Doc. No. 64 ¶¶ 60-64.) Expert William A. Wheatley 's ("Wheatley") concludes that the building was designed as a commercial structure and that the HVAC system is inadequate:

the HVAC system provided for the building was inadequate to meet the building's needs for fresh air. The lack of fresh air caused the formaldehyde released by the building materials to accumulate rather than to dissipate, and this in turn caused the symptoms experienced that were the subject of the complaint. It is likely that if code-required volumes of fresh air were provided for the spaces, they would be occupiable now without discomfort. The amount of formaldehyde released will decrease over time, and will not remain a problem.

(Doc. No. 63-8, Ex. L at 15 (hereinafter "Wheatley Report"); see also Doc. No. 63-9, Ex. P at 12 (hereinafter "Swann Report").) There is some agreement between Plaintiff and Defense experts that the formaldehyde problem in the building will slowly dissipate over time, (Montz Report at 11; Wheatley Report at 15), but Plaintiffs' allege that the problem is not resolved. (Doc. No. 76 ¶ 74.)

B. Procedural History

In their complaint, the Plaintiffs have stated causes of action for strict liability and negligence against both defendants. (Doc. No. 1 ¶¶ 50-59.) Solely against Defendant Home Depot, Plaintiffs have included claims for breach of implied warranties of merchantability and fitness for a particular purpose, fraud, negligent misrepresentation, breach of implied consumer product warranties under 15 U.S.C. § 2301, and violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law. 73 P.S. § 201 et seq. (Id. at ¶¶ 59-91.) While Plaintiffs' complaint initially asserted both personal injury and property damage claims, the personal injury claims have been withdrawn. (Doc. Nos. 65, 77; see also Doc. No. 64-8.)

On December 10, 2008, the Court issued a memorandum and order adjudicating the parties' Daubert motions. (Doc. No. 160.) The Court will rely on expert reports and affidavits in the record to the extent they were found admissible.

C. Standard of Review

The Defendants have separately moved for Summary Judgment pursuant to Rule 56(c) of the Federal Rules of Civil Procedure, which provides that "[t]he judgment sought should be rendered if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). The substantive law identifies which facts are material, and "[o]nly disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute about a material fact is genuine only if there is a sufficient evidentiary basis that would allow a reasonable fact finder to return a verdict for the non-moving party. Id. at 248-49.

The moving party has the initial burden of identifying evidence that it believes shows an absence of a genuine issue of material fact. Conoshenti v. Pub. Serv. Elec. & Gas Co., 364 F.3d 135, 145-46 (3d Cir. 2004). Once the moving party has shown that there is an absence of evidence to support the nonmoving party's claims, "the non-moving party must rebut the motion with facts in the record and cannot rest solely on assertions made in the pleadings, legal memoranda, or oral argument." Berckeley Inv. Group. Ltd. v. Colkitt, 455 F.3d 195, 201 (3d Cir. 2006); accord Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). If the nonmoving party "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden at trial," summary judgment is appropriate. Celotex, 477 U.S. at 322. Summary judgment is also appropriate if the non-moving party provides merely colorable, conclusory, or speculative evidence. Anderson, 477 U.S. at 249. There must be more than a scintilla of evidence supporting the nonmoving party and more than some metaphysical doubt as to the material facts. Id. at 252; see also, Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). In making this determination, the Court must "consider all evidence in the light most favorable to the party opposing the motion." A.W. v. Jersey City Pub. Schs., 486 F.3d 791, 794 (3d Cir. 2007).

II. LIABILITY

Pennsylvania strict products liability law allows recovery where a product in a defective condition, unreasonably dangerous to the user or consumer, causes harm to the plaintiff. Phillips v. A-Best Products Co., 665 A.2d 1167, 1170 (Pa. 1995). There are three kinds of defective conditions that give rise to a strict liability claim: design defect, manufacturing defect, and defect by failure to provide adequate warnings for a product's safe use. Id. (citing Walton v. Avco Corp., 610 A.2d 454, 458 (Pa. 1992)). All three types of defect have been alleged in this case.

Both Defendants make several arguments that raise issues against Plaintiffs' ability to make a showing sufficient to establish the existence of essential elements of their claims. The Court will address these contentions as they were argued by the parties.

A. Intended-Use

The Defendants argue that the Plaintiffs' use of the plywood was not an "intended-use" and cannot support a strict liability claim. Both Defendants argue that the use of the plywood in a non-ventilated building was inconsistent with "known principles of building design," as espoused by their experts. (Doc. Nos. 65 at 23; 66 at 24.) Patriot Timber contends that improper design of the structure at issue "necessarily demonstrates that they used the plywood in a manner that was not intended by Patriot." (Doc. No. 66 at 24.) Home Depot further argues that paneling the walls in cabinet grade plywood and not consulting an indoor air quality company shows the non-intended use of the product. (Doc. No. 65 at 23.) They claim that their experts have opined that the building was improperly designed and the Plaintiffs have offered no contrary evidence, so they cannot withstand summary judgment on strict liability.

In strict-liability actions, a manufacturer is liable only for harm that occurs in connection with the manufacturer's intended use for the product by an intended user; there is no strict liability in Pennsylvania relative to non-intended uses even where foreseeable by a manufacturer. DGS, 898 A.2d at 600 (citing Phillips v. Cricket Lighters, 841 A.2d 1000, 1007 (Pa. 2003)). The "intended use" inquiry is construed strictly and even "foreseeable misuse of a product will not support a strict liability claim. Id. at 601. One method of determining this "manufacturer's intent" has been by reference to the owner's manual and warning labels on the product itself.

See Clevenger v. CNH America, LLC, 2008 WL 2383076, *4 (M.D. Pa. 2008).

As Patriot Timber acknowledges, "[p]lywood is a common building material with a multitude of uses . . . ." (Doc. No. 78 at 8.) There are no instructions available on this plywood; a Material Safety Data Sheet ("MSDS") sheet composed for the plywood included warnings about formaldehyde and the need for "adequate" ventilation, but the record shows that the Plaintiffs never received the MSDS sheet or these warnings (discussed further below). As such, it is difficult to narrow down a specific intended use for the plywood on this record and the general nature of the product. The Court agrees with the Plaintiffs, however, that at minimum the product's intended use anticipated direct exposure to interior air of buildings and residences. (Doc. No. 75 at 11.) In this case, Mr. Steffy used the plywood as paneling for the building's interior walls, opting for plywood instead of drywall primarily because he wanted extra durability in his walls. (Steffy Dep at 73.) The plywood itself was structurally suited to be wall-paneling. Defendants' expert Wheatley himself suggests that plywood paneling-albeit exterior-grade- was suitable at least in the trophy room of the building to accommodate the heavy hunting trophies. (Wheatley Report at 14.) As such, the Court cannot agree that use of the plywood in this building, even considering its design and ventilation, was necessarily an unintended use of a product when that product is meant to be used indoors in buildings and residences. Given the above and considering the evidence in the light most favorable to the Plaintiffs, the Court finds that Defendants are not entitled to summary judgment on these grounds.

B. Failure to Warn

Patriot Timber argues that the Plaintiffs' failure to warn theory is unsupported by the evidence because the plywood's MSDS contained sufficient warnings to dispel their duty to warn of the product's inherent dangers. (Doc. No. 66 at 25.) Plaintiffs argue that the MSDS sheet is irrelevant because they had no access to the MSDS sheet or other warnings prior to purchasing the plywood. (Doc. No. 75 at 12.) Plaintiffs further contend that the MSDS sheet itself was inadequate to warn the them of the dangers. (Id.) Plaintiffs rely on Montz to support this contention, who opines in his report that "the MSDS does not comply with OSHA requirements for disclosure of hazards of formaldehyde in this particular product. Specifically there is no section identifying hazardous ingredients and their respective percentages . . . . These recommendations are not practical for controlling consumer exposures . . . ." (Montz Report at 10.) In reply, Patriot Timber again argues that Montz is not qualified to opine as to the adequacy of warnings. (Doc. No. 78 at 9.)

A product can be considered defective under products liability principles when it is distributed without adequate warnings to notify the ultimate user of the inherent dangers in the product. Mackowick v. Westinghouse Elec. Corp., 575 A.2d 100, 102 (Pa. 1990). "Where warnings or instructions are required to make a product non-defective, it is the duty of the manufacturer to provide such warnings in a form that will reach that ultimate consumer and inform of the risks and inherent limits of the product. The duty to provide a non-defective product is non-delegable . . . ." Avco Corp., 610 A.2d at 458-59 (quoting Berkebile v. Brantly Helicopter Corp., 337 A.2d 893, 902-903 (Pa.)). To proceed on a failure to warn theory, a plaintiff must establish that 1) a warning was either absent or inadequate, and 2) the user would have avoided the risk had he been advised of it by the seller. Blake v. Greyhound Lines, Inc., 448 F. Supp. 2d. 635, 642 (E.D. Pa. 2006) (citing Phillips v. A-Best Prods. Co., 542 Pa. 124, 665 A.2d 1167, 1171 (Pa.1995)). A warning must be directed to the understanding of the intended user, and it is sufficient if it adequately notifies the intended users of the unobvious dangers inherent in the product. Mackowick, 575 A.2d at 102. In addition, "to reach a jury on a failure to warn theory of liability, the evidence must be such as to support a reasonable inference, rather than a guess, that the existence of an adequate warning might have prevented the injury." Pavlik v. Lane Ltd./Tobacco Exporters Int'l, 135 F.3d 876, 881 (3d Cir.1998). The plaintiff enjoys the benefit of a rebuttable presumption that an adequate warning would have been heeded if it had been provided. Id.

Initially the Court notes that the MSDS sheet referred to by Patriot Timber is a document compiled to comply with 19 C.F.R. § 1910.1200, a regulation promulgated under the Occupational Safety and Health Act ("OSHA"), 29 U.S.C. § 651 et seq. As both the regulation itself and OSHA make clear-and as the Defendants themselves have argued at other points in this litigation-these rules are meant to protect workplace and not consumer safety. See 19 C.F.R. § 1910.1200 ("The purpose of this section is to ensure that the hazards of all chemicals produced or imported are evaluated, and that information concerning their hazards is transmitted to employers and employees.") As such, the Court cannot find that the MSDS sheet on this plywood was directed at Mr. Steffy as a consumer.

Further, the Plaintiffs did not receive the MSDS sheet in question, nor is it even clear from the record that such documentation was available at the Home Depot when he purchased the plywood. (See Mitchell Dep. at 39-41; see also Steffy Dep. at 79-83.) Patriot Timber suggests that the MSDS would have been available upon request (Doc. No. 78 at 8 n.3), but offers no authority to suggest that a consumer of its product is required to request allegedly necessary warnings. Additionally, while it appears from the record that there is growing awareness of formaldehyde contained in building products, it is far from clear that these issues have become general public knowledge such that the risks of formaldehyde saturation in plywood would be an open and obvious danger such as the Defendants seem to argue. As such, considering the evidence in the light most favorable to the Plaintiffs, the Plaintiffs have made a showing sufficient to establish the existence of this element and the Defendant is not entitled to summary judgment on this claim.

C. Unreasonably Dangerous Product

Both Defendants claim that the plywood itself is not "unreasonably dangerous" because formaldehyde is common in all building products. (Doc. No. 66 at 22.) The Defendants argue that Plaintiffs have neither identified any objective standard or regulation that demonstrates the plywood emitted excessive amounts of formaldehyde nor provided a qualified expert to testify to the fact the formaldehyde off-gassing was excessive and unreasonable. (Id. at 23.) Home Depot adds that "it is well known that plywood, like many building products, contains formaldehyde. And that cabinet grade plywood is not appropriate for use as wall paneling because its thickness requires much more glue, and therefore much more formaldehyde." (Doc. No. 65.) Under these circumstances, Patriot Timber contends that the jury will have to speculate that the off-gassing rate shown by Montz's tests is excessive and dangerous. (Id.) The Plaintiffs argue that they have made a legally sufficient claim that the plywood was unreasonably dangerous and that wall-paneling was an "intended use" of the cabinet-grade plywood. (Doc. No. 75.)

The Pennsylvania Supreme Court has held that before a products liability action is submitted to a jury, it is a judicial function as a threshold matter to determine whether, under plaintiff's averment of facts, recovery would be justified. Azzarello v. Black Bros. Co.. Inc., 391 A.2d 1020, 1026 (Pa. 1978). To make this threshold determination, the court must engage in a risk-utility analysis, weighing a product's harms against its social utility, considering:

(1) The usefulness and desirability of the product--its utility to the user and to the public as a whole; (2) The safety aspects of the product--the likelihood that it will cause injury, and the probable seriousness of the injury; (3) The availability of a substitute product which would meet the same need and not be as unsafe; (4) The manufacturer's ability to eliminate the unsafe character of the product without impairing its usefulness or making it too expensive to maintain its utility; (5) The user's ability to avoid danger by the exercise of care in the use of the product; (6) The user's anticipated awareness of the dangers inherent in the product and their avoidability, because of general public knowledge of the obvious condition of the product, or of the existence of suitable warnings or instruction; and (7) The feasibility, on the part of the manufacturer, of spreading the loss of [sic] setting the price of the product or carrying liability insurance.

Moyer v. United Dominion Industries, Inc., 473 F.3d 532, 538 (3d Cir. 2007) (quoting Dambacher v. Malis, 485 A.2d 408, 423 n.5 (Pa. 1984)). In weighing these factors, the Court must also keep in mind the intended purpose of the product; these risk-utility conclusions necessarily depend to some extent on whether the court construes the intended purpose of a product broadly or narrowly. See Schindler v. Sofamor Inc., 777 A.2d 765, 773 (Pa. Super. Ct. 2001). Relying on these factors and considering the facts in the light most favorable to the plaintiff, see Moyer, 473 F.3d at 538 (citing A-Best Prod. Co., 665 A.2d at 1171), the court determines whether the risk-utility balance so favors the manufacturer that the product cannot be deemed unreasonably dangerous as a matter of law.

The plywood in this case satisfies the threshold unreasonably dangerous inquiry. As discussed above, the plywood at issue in this case has a variety of uses and its intended purposes will be construed broadly. Most any intended use of this plywood, however, will have direct exposure to the interior air of buildings and residences. With this intended use in mind, the Court will consider the above factors highlighted by the parties in their submissions.*fn2

1. Product Utility and Likelihood of Injury

While the plywood paneling is certainly useful for interior construction purposes-as demonstrated by Mr. Steffy himself in choosing it for his building because of the product's durability and aesthetics-it is also clear from the expert reports that the formaldehyde used in such products has significant probability to cause serious illness or afflictions when people are exposed to high concentrations. Indeed, formaldehyde in plywood has been the subject of recent federal government studies from the Center for Disease Control and the United States House of Representatives Committee on Oversight and Government reform. (See Doc. No. 75-4, Ex. 2.) Patriot Timber's own MSDS sheet lists some dangers of gaseous formaldehyde, warning:

[Gaseous formaldehyde] [m]ay cause temporary irritation to eyes, nose and throat. Some reports suggest that formaldehyde may cause respiratory sensitization, such as asthma, and that pre-existing respiratory disorders may be aggravated by exposure. Formaldehyde is listed by the International Agency for Research on Cancer (IARC) as a probable human carcinogen. (Doc. No. 63-6.) Though the Plaintiffs provide no statistical evidence of the rate of such injury, the Court finds that the evidence, taken in the light most favorable to the Plaintiffs, suggests the plywood has a significant likelihood to cause serious injury when used for its intended purpose.

2. Exercise of Care and Awareness of Inherent Dangers

The proper focus in applying the fifth factor is an objective inquiry into "whether the class of ordinary purchasers of the product could avoid injury through the exercise of care in use of the product, not whether this particular plaintiff could have avoided this particular injury." See Surace v. Caterpillar Inc., 111 F.3d 1039, 1051 (3d Cir. 1997); see also Street v. Sunbeam Products, Inc., No. 07-2772, 2008 WL 4899463, *13 (E.D. Pa. 2008). Here, the Defendants have submitted expert evidence that Plaintiffs' building contained too much plywood for the amount of available ventilation and that Mr. Steffy made most of the decisions during construction of this building, but these are not proper considerations in this balancing. It does seem clear, however, that there are techniques available to consumers to lessen their exposure to formaldehyde, including extra ventilation and careful choice of building materials. Despite this, there were no warnings that the product even contained formaldehyde, as discussed above, and it is also not obvious from the product itself that using a certain quantity of plywood could be dangerous.

Further, while it appears from the record that there is growing awareness of formaldehyde contained in building products, it is far from clear that these issues have become "general public knowledge," such that the users of the plywood should be aware of the danger. Considering the evidence in the light most favorable to the Plaintiffs, these factors therefore weigh in their favor.

Considering the above, the Court finds as a threshold matter that the plywood at issue was unreasonably dangerous such that the ...


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