A case decided by the Texas Supreme Court on September 17th may have a profound impact on duty to warn concepts. Humble Sand & Gravel, Inc. v. Raymond Gomez, 47 Tex. Sup. J. 1214 (September 17, 2004). The Texas Supreme Court held that although a supplier does not have a duty to warn companies that purchase its products of commonly known hazards (like silica) because they are "sophisticated users," the supplier may have a duty to warn those companies' employees. This duty to warn may depend upon the "efficacy" of the warning those employees. To determine if there is such a duty to a purchaser's employees, the Court sent the case back to the trial court to weigh six factors:

(1) the likelihood of serious injury from the lack of warning;

(2) the burden on the supplier to provide the warning;

(3) the feasibility and effectiveness of a warning;

(4) the existence and effectiveness of other protections (discounting OSHA regulations);

(5) the reliability of customer companies to warn their employees; and

(6) the social utility of requiring suppliers to warn to end users.

Counsel for Humble Sand & Gravel, Inc., is confident that Humble Sand will prevail when the trial court considers these factors. Nevertheless, the message is clear for those of us who apply preventive law to product stewardship programs, insurance coverage, and occupational safety and health law compliance: We must review the warnings being used and, if necessary, improve and expand them. To us, the Humble Sand & Gravel case presents a compelling argument to expand product and site risk warnings to reach product end users and other potentially exposed, high risk plaintiffs (e.g., contractors and temporary employees). It seems that whenever "factors" are weighed in a case involving an individual plaintiff and a corporate defendant, the tendency will be to rule against the corporation.

Although we hope that the impact of the Humble decision will be limited to Texas, and to the specific causes of action and defenses raised in that case, we foresee the potential application of its reasoning to other, related situations.

Because compliance with OSHA and MSHA standards is mandatory, instances of noncompliance will be used against a company in enforcement and tort litigation. The concern raised by the Humble Sand & Gravel case is that the existence of and compliance with OSHA and MSHA standards that should protect end users and others may not be sufficient to defend successfully against allegations of a failure to warn in a tort case.

One conclusion we have reached from this case is that hazard warning systems (e.g., labels, signs, instructions, MSDS, and training materials) should be audited and expanded, if necessary, to make sure that accurate and consistent risk information is reaching all of those potentially exposed to risk, particularly "high" liability risk groups. Another conclusion is that current insurance coverage should be reviewed, and "old" insurance policies located, analyzed and secured as assets, because they potentially provide defense costs and coverage from the time of first exposure. The Humble Sand decision may well embolden plaintiff lawyers to expand silica and other similar cases even beyond their already extensive growth trend.

As many of you know, we have been counseling companies and offering liability reduction audits and hazard communication improvement efforts in anticipation of litigation.  We have also been providing expert and regulatory help to local counsel for clients already facing litigation. If we can be of assistance regarding these issues or other matters, please contact Mark Savit in Denver (msavit@pattonboggs.com, Cass Weiland in Dallas (cweiland@pattonboggs.com), or Henry Chajet in Washington DC (hchajet@pattonboggs.com).

Of course, Patton Boggs correctly predicted the election results (or at least the Republican half of the firm did). We now predict OSHA, MSHA, NIOSH, ATF, and EPA developments in the aftermath of the election. First, at least two of our four favorite agencies are expected to have new leaders by March, with OSHA being the first. In fact, the race for the OSHA job is heating up quietly in DC, even before any formal announcement has been made.

Second, we predict that several politically sensitive decisions will be made by the EH&S agencies within six months after the election. OSHA staff is planning to move forward initiatives on hexavalent chrome, respirators, silica and MSDS reform and enforcement. MSHA started the post election process by releasing an in-depth agency funded evaluation of its programs, conducted by an independent consultant, that had been the subject of a union FOIA request for some time.

The MSHA study, reported by one newspaper to have cost $400,000, is believed to be the first "outside" review of MSHA, and contains plenty of material to support oversight hearings, agency changes and legislative reform, beyond what early newspaper reports are summarizing as "MSHA should focus on serious hazards rather than "nitpicking" citations. Assistant Secretary Lauriski stated in a press release: "Injuries and fatalities in the U.S. mining industry are at an all-time low. ….This third-party review is just one of the many tools … in our ongoing evaluations…" This report does support some improvements that we have already made at MSHA, though the report itself was not the sole catalyst for those changes. The study took a fresh look at how to enhance mine safety and we may not find every recommendation to be useful. We are still evaluating…" We expect a similar OSHA outside consultant review in the next year.

Recall that the House of Representatives, led by Rep. Charlie Norwood (R-Ga)’s subcommittee, passed meaningful OSHA reform measures this session that are still hung up in the Senate. The Senate, led by Senator Mike Enzi (R-Wyo) focused on Hazard Communication reform but did not pass any legislation. The House bills were the first meaningful OSHA reforms ever passed by a chamber of Congress (and included a measure that would give deference to the independent review commission interpretations of law over those of DOL). Although it is doubtful that the measures will move in the lame duck session, the House leadership has invested wisely in them and we expect the bills to appear again in 2005, hopefully extended to MSHA, and expanded to address pending items like improper "outsourcing" of rulemaking to non consensus standard (e.g., ACGIH). In the Senate, we expect Sen. Enzi to assume the role of the Chairman of the full Labor Committee, but to continue his focus on Hazard Communication, even after OSHA starts their agency initiative on MSDS.

NIOSH is still stinging from a reorganization imposed on it by HHS that changed its budget and reporting dynamics. Ironically, industry (perhaps for the first time) came to the aid of the "new" NIOSH and opposed the reorganization. Hopefully, NIOSH and HHS leadership will not permit the reorganization to deter the Administration’s commitment to improving scientific work products and making NIOSH studies transparent, subject to consultation and independent review. It would be a shame if the progress made in the last two years by the NIOSH Director was lost to the whim of a reorganization, particularly since the "new" NIOSH has not yet convinced some career researchers that opening science up to public scrutiny is worthwhile. They seemingly prefer the old closed process, not subject to review until after data can be "sliced and diced," and published, condemning industries and products to bias, pre-judged conclusions that could only be rebutted months, if not years after their publication.

Unfortunately, we predict continued NIOSH staff resistance to transparency, and new attempts by some to lower standards, without sound science.  Regardless of agency politics, and based on funding for a multi-state expansion of the SENSOR program, we expect to see more NIOSH funds used to generate publications pawned off as research (e.g., a 2004 road repair silica health crisis article) that have little scientific merit, and harm industry segments selected for "study." However, we also are confident that NIOSH attempts at cooperation and helpful research on control technologies will continue to expand.

At ATF, we expect the permit process to accelerate as the agency learns how to deal more effectively with its expanded responsibilities. In addition, the change from MSHA inspection of mine sites to ATF inspection will undoubtedly see closer scrutiny for compliance with ATF mandates. Above all, we expect a focus by ATF on inventory accounting and immediate loss reporting, with the threat of permit revocation as the ultimate penalty that could put a mining company or other intensive user out of business.

At EPA, we predict "more of the same." The Agency will be busy working with Congress to shape the spate of environmental legislation that is expected to be considered by the new, larger Republican majorities in Congress (e.g., Clear Skies, energy legislation, etc). Regulations dealing with clean air (mercury, as well as ozone and particulate matter) will move ahead, and continue to be controversial. We expect a number of high visibility enforcement cases to be initiated before the 2006 Congressional elections, and those who are the subject of investigations and resource intensive inspections in 2005 should be cautious. We also expect a renewed emphasis on Homeland Security issues at high hazard sites, with the potential for regulatory and statutory initiatives, in addition to enforcement scrutiny.