Articles & Publications 08.01.23

Seventh Circuit Holds That Product Manufacturers Are Responsible for Their Product’s Packaging Under Illinois Law

You can’t judge a book by its cover, but you can hold the publisher liable for the packaging. In its recently issued opinion, Johnson v. Edward Orton, Jr. Ceramic Foundation, 71 F.4th 601 (7th Cir. 2023), the Seventh Circuit clarified that product manufacturers can be held liable under Illinois law for their failure to warn of the danger of the materials used to ship or package their products.

The facts of the case are relatively simple. The plaintiff brought a negligence product liability action, including failure to warn, against Edward Orton Jr. Ceramic Foundation (Orton), alleging that her deceased husband contracted mesothelioma from asbestos that was contained in the vermiculite packaging material that Orton used to transport its ceramic cones to prevent them from breaking.

Evidence showed that Orton received a Material Safety Data Sheet in 1981 that stated the vermiculite used by Orton from 1963-1975 and from 1979-1981 contained less than 0.1% by weight of asbestos. The district court held the plaintiff failed to establish that Orton owed her husband a duty because she did not show that Orton knew, or should have known, that the vermiculite contained asbestos before receiving the data sheet in 1981.

Crucial to the district court’s reasoning was its finding that Orton did not have a duty to apprise itself of the possibility that asbestos was present in the vermiculite packaging because Orton was not a “manufacturer” of the vermiculite. The court instead saw Orton’s role as “more analogous to that of a seller of vermiculite who placed reasonable trust in the supplier.” The district court thus granted summary judgment for Orton. It held that Orton should only be held to the standard of knowledge of the ceramics industry—not to the expert standard of knowledge of a vermiculite manufacturer—and that Orton therefore did not have a duty to know the risk present in vermiculite before receiving the data sheet.

The Seventh Circuit disagreed. It held that the district court erred in finding that Orton was not a manufacturer of the vermiculite packaging under Illinois law. The circuit court explained that because Orton manufactured and sold the ceramic cones, it had a duty to prepare the product—and its packaging—so that it could be safely transported without exposing others to unreasonable danger.[1] The court also rejected Orton’s argument that, even if the vermiculite packaging were considered part of its “product,” Orton should only be held to the standard of knowledge of the ceramics industry, and not to the expert standard required by sellers of vermiculite.

The circuit court explained that Illinois product liability law holds that what a manufacturer knew or should have known is determined by the state of the art, i.e., the “present state of human knowledge.” [2] As a result, because it was possible for Orton to know that its packaging contained asbestos, Orton should have known the materials were dangerous. The court thus held there was a genuine issue of fact as to whether Orton had constructive knowledge of the possible presence of asbestos in the vermiculite and therefore had a duty to warn the plaintiff’s decedent. Accordingly, the circuit court reversed the grant of summary judgment and remanded the matter for further proceedings.

What lessons should product manufacturers take from this decision?

Product manufacturers have a duty to warn Illinois customers not only of the hazards in the design of their product itself, but also of any dangerous propensity in the packaging of the product that could foreseeably harm consumers. And the standard for what is foreseeable to a product manufacturer is not limited to their industry, but instead encompasses the present state of human knowledge relating to all materials included in the manufacturer’s product and its packaging.

Ultimately, manufacturers must be experts not only in the products that they design, but also in the packaging and materials used for transporting and housing their products. Product manufacturers must therefore ensure they have complete knowledge regarding the packaging materials used, the manner of production, and how customers will interact with and use the packaging for their products. The failure to do so could ultimately open a manufacturer to significant exposure in a product liability action for failing to remove the dangerous condition or to warn its customers of the potential danger present in its packaging.

[1] Lewis v. Stran Steel Corp., 57 Ill. 2d 94, 311 N.E.2d 128, 132 (Ill. 1974).

[2] In support of this holding, the Court cited Woodill v. Parke Davis & Co., 79 Ill. 2d 26, 402 N.E.2d 194, 37 Ill. Dec. 304 (Ill. 1980), and McKinney v. Hobart Bros. Co., 2018 IL App (4th) 170333, 430 Ill. Dec. 940, 127 N.E.3d 176 (Ill. App. Ct. 2018).