Propane Odor Fade Litigation: Past, Present & Future — PART 1

In August 1987, I tried a lawsuit in Macon, Georgia. Although I had tried many lawsuits by this point in my career, this was my first time defending a propane distributor. It also happened to be the first lawsuit in the country to go to trial alleging a brand-new type of claim against the propane industry — “odor fade,” or the notion that propane can lose its distinctive odor before it gets to the customer, rendering it undetectable in the event of a leak and marking the beginning of what would become known as propane odor fade litigation.

I lost that case, but in the years to come, I would win many more as the industry took action to respond to this attack on the odorization of propane. How did plaintiffs’ lawyers and experts develop the odor fade theory, and how did they exploit it to win significant verdicts and settlements? What actions did the propane industry take to counter this theory in the courtroom? How did new technologies alter odor fade claims? And where does the industry stand today in defending odor fade lawsuits?

Over the next three months, we will address these questions in this column and many others as we trace the long history of this attack on the industry.

Rotten Egg Odor

So, let’s start with the basics. Virtually all readers of this column understand that, in its natural state, propane is odorless and colorless. This means that a dangerous propane leak could go undetected in the absence of some warning or signal to people in the area that there is danger. In its early days, the propane industry focused on finding a chemical that could safely be added to propane to act as a warning signal.

In 1931, the United States Bureau of Mines published research designed to identify chemical compounds that could be added to gas (both propane and natural gas) to provide a distinct, unpleasant odor to warn of a gas leak before it reached an explosive concentration in air. Many compounds were analyzed, but sulfur compounds such as ethyl mercaptan were identified as a highly effective warning agent because of their distinctive “rotten egg” odor. Researchers found that this type of odor triggered an instant “danger” response in humans.

Reaction With Rust

Ethyl mercaptan was especially appropriate for use as a gas odorant because it could be detected at minute levels (parts per billion) that were far below a concentration of gas in air that was flammable. And ethyl mercaptan had another advantage: Because propane is stored under pressure as a liquid but used as a vapor, it is essential that a propane odorant that is added must, as closely as possible, vaporize at the same rate as propane. Ethyl mercaptan outperformed all other candidates in this regard.

And so, in short order, ethyl mercaptan became the odorant of choice for the propane industry. However, problems lurked on the horizon. For one thing, mercaptans — especially ethyl mercaptan — tended to react with rust (such as might be found on the inside of a steel propane tank) to produce an allegedly less odorous compound. In addition, mercaptan chemicals could be potentially filtered out of odorized gas as it passed through certain types of soils after an underground leak, thus reducing the odor of the gas.

Litigation Revolution

These potential issues remained in the background for decades, but that would change by the 1980s. Several things happened. First, of course, is the litigation revolution that began to sweep the United States starting in the 1960s and 1970s, prompted in part by court decisions establishing the concept of product liability. In addition, courts at this time made it much easier to make claims of “failure to warn” regarding the alleged defects of a product. Personal injury lawsuits became much more prevalent and much easier to win.

Second, in the late 1970s, the U.S. Consumer Product Safety Commission investigated a series of incidents in which appliance heater control valves failed, often resulting in serious personal injuries to consumers attempting to relight a pilot light that had gone out. The valves were designed to shut off the flow of gas to the main appliance burner if the standing pilot light is extinguished, but they had an unfortunate tendency to stick in the open position.

This led to a potentially dangerous scenario: (1) an appliance pilot light goes out, (2) the control valve sticks in the open position, allowing unburned gas to flow into the area of the appliance through the main appliance burner, and (3) the consumer attempts to light the pilot and unwittingly ignites the gas that had flowed through the burner.

Team of Experts

The defective control valves were recalled, and plaintiffs’ lawyers took advantage of the relatively new product liability laws to sue the manufacturers on behalf of injured plaintiffs. The propane supplier was often drawn into these lawsuits because inevitably the injured consumer claimed he or she did not smell gas before attempting to light the pilot light. The control valve manufacturers, who really had no defense to these suits, certainly welcomed an additional defendant to share the risk, and perhaps they even promoted the odor fade theory (and experts who espoused it) to find an extra defendant to share the risk of potentially defective products.

In short order, the plaintiffs’ lawyers had a team of experts to focus on the rare situations where ethyl mercaptan odor was depleted by rust or soil and to argue that this must have been the reason why consumers smelled no odor when attempting to light a pilot light. They coined the term “odor fade” to describe this, claiming this rendered ethyl mercaptan “defective” as a propane odorant.

‘Conspiracy’

The plaintiffs’ experts also pointed to a controversial 1977 study conducted by the Bartlesville Energy Research Center. This study attempted to replicate “real-world conditions” to assess whether ethyl mercaptan and several other potential odorants would actually be smelled and recognized as a warning in “everyday settings.” Plaintiff experts said it established another “defect” of ethyl mercaptan as a warning agent, while defendants argued forcefully that it was “junk science.” Regardless, it was another log on the fire that the plaintiffs’ lawyers were building.

However, the most damaging aspect of the new odor fade theory was the “failure to warn” claim. Plaintiffs argued that the propane marketers had “known for years” that ethyl mercaptan could be affected by certain types of rust and soils but failed to warn their customers about the potential hazard. They presented this to juries as a “conspiracy to hide the truth” from consumers. In fact, they contended customer safety brochures that were used at the time actively misled customers by implying that if there was a dangerous leak, they would always smell the warning odor.

By the late 1980s, the litigation revolution that had started several decades was roaring. And by the late 1980s and early 1990s, the odor fade attack on the propane industry was in full swing. Large verdicts and settlements abounded as propane marketers were ill-equipped to mount an effective defense, especially to the failure to warn claims.

Next month’s column will examine the industry’s response over the next decade — to be continued.