Product Liability and the Applicable Statute of Repose

The plaintiffs, a decedent’s estate and another individual injured in the same accident that caused the decedent’s death, sued for damages incurred as a result of escaped anhydrous ammonia from a nurse tank that had ruptured along the tank’s longitudinal weld.  The wrongful death suit claimed that the anhydrous manufacturer and other supply chain parties were negligent in their failure to warn the plaintiff and the plaintiff’s employer (a local cooperative in Calamus, Iowa) of the dangers associated with older nurse tanks and their potential for failure without the appropriate internal inspections for tank integrity.  The tank at issue had been in use for 27 years.  The tank manufacturer claimed it was protected under the Iowa Statute of Repose, and that the nurse tank failure was the result of corrosion caused by anhydrous ammonia.  The anhydrous manufacturer and two other defendants settled with the original plaintiff for $2.25 million before the case went to trial.  The anhydrous manufacturer paid half of the settlement amount.  The plaintiffs continued to pursue their claim through trial against the non-settling defendants and the anhydrous manufacturer pursued a contribution claim against the tank manufacturer.  The jury awarded $9.6 million in damages for the plaintiffs (including $3.9 million against the anhydrous manufacturer), but because of the pre-trial settlement, the anhydrous manufacturer’s financial responsibility was limited to the amount it had already paid.  In addition, the jury verdict involving the anhydrous manufacturer’s contribution claim attributed 80 percent of the fault to the tank manufacturer.  That meant the anhydrous manufacturer, according to the jury, would be reimbursed $900,000 of their contribution to the settlement from the tank manufacturer.   

On appeal, however, the court held that the Iowa Statute of Repose and Iowa’s contribution statute (Iowa Code §614.1(2A) and Iowa Code §668.5, respectively) prevents common liability between the anhydrous manufacturer, the distributors of the anhydrous, the safety training company involved in the case and the tank manufacturer as a matter of law.  The Court noted that for a contribution claim to be viable, common liability under the contribution statute must be present between the tortfeasors at the time of the injury out of which the right to contribution arose.  Because that was not the case, the statue precluded a contribution claim against the tank manufacturer.  So, the trial court’s judgment against the tank manufacturer was reversed, but the judgment against the safety training company for $769,000 was upheld (they failed to file a notice of appeal or cross appeal).  Estate of Ryan, et al. v. Heritage Trails Associates, Inc., et al., 745 N.W.2d 724 (Iowa Sup. Ct. 2008).