Product Liability -- 2016



Occidental Chemical Corporation v. Jenkins   (Texas Supreme Court)

Forever liability for improvements to real estate

On 01/08/2016, in a 9-0 decision, the Texas Supreme Court issued an opinion reversing the judgment of the Houston court of appeals and rendering a take-nothing judgment against Jason Jenkins. In its opinion, the Texas Supreme Court concluded that Occidental breached no duty of care to Jenkins. As a result, the court never reached the statute of repose issues in the case. The NAM had filed two briefs with the Texas Supreme Court in this matter arguing that the lower court’s decision breaks from clearly established Texas law and sets a dangerous precedent that weakens Texas’ robust manufacturing economy. Manufacturers across Texas were facing unforeseeable and expensive liability created by the decision.

As way of background, a Texas court imposed forever liability on a previous owner of real property for improvements designed by licensed engineers and constructed by the plant owner, notwithstanding two statutes of repose that require that any claims be brought within 10 years following design or construction. This case presents the concern that prior owners of realty who make permanent improvements are retroactively held liable, but are powerless to maintain, update or remove the improvements or to train third parties on how to properly use them. In this case, Occidental Chemical Corporation constructed a new mechanical system for its chemical manufacturing plant to replace a manual process. The system was used safely for 14 years. Meanwhile, the plant was sold to a new owner. An employee of the new plant owner was injured while operating the machinery and won a jury verdict against the prior owner. However, the trial court applied the statutes of repose and ordered that the plaintiff “take nothing,” and awarded zero damages. The Texas Court of Appeals overturned the take-nothing verdict, imposed liability on the prior owner, and reinstated nearly $10 million in damages.


Related Documents:
NAM brief  (February 13, 2015)
NAM amicus letter  (April 24, 2014)

 


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