904 F.3d 475
7th Cir.2018Background
- Over 20 current/former ConAgra employees sued Givaudan (flavor supplier) alleging inhalation of diacetyl in butter flavorings caused bronchiolitis obliterans ("popcorn lung").
- Givaudan had prior knowledge of diacetyl hazards: trade‑association warnings in the 1980s, a 1990s outbreak at a Givaudan predecessor plant (several employees sick, one death), internal investigations, and safety procedures requiring respirators for liquid diacetyl.
- Givaudan supplied material safety data sheets (MSDS) to ConAgra that omitted diacetyl quantities (claimed trade secret) and did not explicitly warn that inhalation could cause permanent lung disease; some MSDS language said "no known health hazards."
- ConAgra knew butter flavorings contained diacetyl but did not know full component levels; ConAgra relied on suppliers to disclose hazards and on MSDS for handling guidance and did not warn employees that diacetyl can cause permanent lung injury.
- District court granted summary judgment to Givaudan on all claims (strict liability, negligence, failure to warn, and design defect); the Seventh Circuit affirms on all except the failure to warn rule based on the sophisticated‑intermediary doctrine, which it reverses and remands for trial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Givaudan failed to warn of latent danger (diacetyl causing lung disease) | Givaudan knew or should have known diacetyl was hazardous and its MSDS omitted adequate warnings to ConAgra and employees | Givaudan argues MSDS and communications adequately warned ConAgra and it reasonably relied on ConAgra to warn employees (sophisticated intermediary) | Reversed summary judgment on failure‑to‑warn: factual disputes about what Givaudan vs. ConAgra knew preclude summary judgment; remanded for trial |
| Whether the sophisticated intermediary doctrine bars employee failure‑to‑warn claims | Plaintiffs: ConAgra was not as informed as Givaudan and did not pass warnings to employees | Givaudan: ConAgra was a sophisticated intermediary with equal or greater knowledge and was adequately warned | Court: Application of doctrine is fact‑intensive and usually for a jury; here genuine disputes defeat summary judgment |
| Whether common‑law negligence claim survives separate from Indiana Product Liability Act (IPLA) | Plaintiffs: employees are intermediary workers not covered by IPLA and thus can pursue common law negligence | Givaudan: employees are "users or consumers" under IPLA, so common law negligence is preempted | Affirmed summary judgment for Givaudan: employees are users/consumers under IPLA; negligence claim subsumed by statute |
| Whether plaintiffs presented admissible evidence to support a design‑defect claim (cost/benefit and feasible alternative) | Plaintiffs: diacetyl‑containing design was defective; alternatives (diacetyl‑free flavors) existed | Givaudan: plaintiffs offered no expert proof comparing costs/benefits or showing viable, cost‑effective alternative that would have prevented injuries | Affirmed summary judgment for Givaudan: plaintiffs failed to present expert evidence required to establish design defect |
Key Cases Cited
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment evidence standard for nonmoving party)
- American Eurocopter Corp. v. Crawford, 378 F.3d 682 (7th Cir. 2004) (sophisticated intermediary doctrine factors and jury question on adequacy of warnings)
- Nat. Gas Odorizing, Inc. v. Downs, 685 N.E.2d 155 (Ind. Ct. App.) (discussing sophisticated intermediary exception and factors)
- Taylor v. Monsanto, 150 F.3d 806 (7th Cir. 1998) (illustrative application of sophisticated intermediary where user had extensive industry expertise)
- Butler v. City of Peru, 733 N.E.2d 912 (Ind. 2000) (employee of consuming entity is a "user or consumer" under IPLA)
- Piltch v. Ford Motor Co., 778 F.3d 628 (7th Cir. 2015) (Indiana Product Liability Act governs product claims)