2/8/2011

Over $1 Million for CSST Case

Cozen O’Connor recently won the first U.S. jury trial involving corrugated stainless steel tubing. The attorney in the case talks about its implications.

By Staff Report

Cozen O'Connor recently secured a 100% recovery of both subrogated and uninsured losses, for a total judgment exceeding $1 million on behalf of Terence and Judith Tincher and their property insurance carrier. The case represents the first jury trial in the nation involving corrugated stainless steel tubing, or CSST. The tubing is widely used in industrial, commercial and residential construction to transport pressurized propane and natural gas. The Tincher jury found CSST to be a defective product due to its extreme vulnerability to physical damage from indirect lightning strikes.

Annually, CSST failures and the resultant fires are responsible for millions of dollars in property damage nationwide, and hundreds of claims are pending against the major manufacturers, as well as the various contractors that install the product. The Pennsylvania jury's decision not only opens the door for more litigation against the major manufacturers and installers of CSST, but gives rise to a public awareness of the latent dangers associated with this seemingly harmless product.

Claims Advisor sat down with Cozen O'Connor attorney Mark Utke, who represented the Tinchers and their property insurance carrier as they tried to recover losses caused by the failure of a CSST line.

Claims Advisor: What does this decision mean for insurance carriers?
Mark Utke: It's going to increase the value of CSST settlements. With this precedent, the pressure is on manufacturers and installers to settle these claims, as opposed to proceeding to trial. We're doing research now as to whether affirmative collateral estoppel will apply to these claims as well. In essence, this would preclude the product manufacturer from any defense as to whether the product is defective. If collateral estoppel is applied, a case will begin with a ruling that CSST is a defective product, and that issue will not have to be considered by a jury. The legal principal essentially states, "We've already found the product to be defective. You just have to show that the defect was a proximate cause of your injuries."
In describing the dangers of CSST, what do you mean by "The Blowtorch Effect"?
A direct lightning strike will overwhelm electrical and gas systems and cause severe damage to any residential or commercial structure. With an indirect strike, like in the Tincher case, it is much different. A lightning strike occurred approximately a half mile away from their home, and a tremendous electrical charge traveled through the ground. This kind of charge can enter a structure either on the water main, through the underground utilities, or via anything that will conduct electricity from the exterior of the structure. For a microsecond, it will energize everything in the structure and then go to ground.

When you had black iron pipe, which was used for over 100 years without a known breach due to a lightning strike, it would act as a lightning rod and bring a charge to ground because it was thick enough to withstand such incredible energy for that short period of time. If you compare the thickness of black iron pipe to CSST, black iron pipe is about 40 sheets of paper thick and CSST is about four sheets thick—there's a vast difference in the ability to withstand energy.

When CSST is energized, it tries to bring the electricity to ground and will arc to anything conductive, such as another metal object. Typically, in those areas where utilities are run through structures, you have ductwork, copper piping, and other metallic surfaces in the same area where the CSST is routed. The electrical energy will arc to one of the metal surfaces, and when it does, it produces a molten hole that simultaneously ignites the pressurized gas inside the corrugated tube. The flame that comes out is about three to four feet long with an unlimited supply of gas—essentially, a blowtorch. There's no gas shut-off valve or any other means of sensing that a breach in the pipe has occurred. The uncontrolled flame quickly burns out of control and will cause massive damage to any structure.

How prevalent is CSST?
As of October 2010, well over 750,000 million feet of CSST had been sold by the major manufacturers. One of the defenses used by the CSST manufacturers is premised on the vast quantity of the product that has been installed without incident. If a structure was built in the last 10 years, it is likely that CSST was used. Contractors use it because of the ease of installation, which is similar to running a garden hose through the structure, as well as the savings in labor costs. It is estimated that CSST can be installed in one third the time that is required for black iron pipe.
What is its typical use, and what is being done to make it safe?
It's used for both propane and natural gas piping, so anywhere that you would use gas in a residential or commercial setting, you'll likely find CSST used as well—it is the go-to product in the construction industry today. However, many contractors who install it are unaware of its associated dangers when exposed to the electrical energy from lightning. Presently, there are several studies taking place to determine whether bonding, which is similar to grounding, is an effective means of making CSST safe. In the field, we have seen bonded and non-bonded systems experience the same type of failure from this energy, so there is a legitimate question as to whether bonding is the answer.

Has there been any loss of life attributed to a CSST case?
No, the industry as a whole has been extremely lucky.

For chief claims officers or high-level managers, what would be their best course of action in preparation for theses types of cases?
Have a qualified cause and origin investigator on site immediately after the fire to identify whether or not you have a CSST failure, and from that point forward, bring in the appropriate experts—electrical engineers, mechanical engineers, etc. Carriers are making recoveries on those cases that are investigated properly from day one. By way of example, if evidence is not preserved correctly at the loss scene and three months down the road you determine a CSST fire took place, it will be difficult to eliminate other potential ignition sources and failure scenarios in an effective manner. Being proactive from the start is the key element to a successful recovery.


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