Product Liability

In a decision issued on March 7, 2013, the Supreme Court of Florida reaffirmed Florida’s commitment to adherence to the economic loss rule in product liability litigation. In Tiara Condominium Association, Inc. v. Marsh & McLennan Companies, Inc. etc., et al., No. SC10-1022, the high court provides a helpful discussion of the origin and development of the economic loss rule. In summary, the economic loss rule is described as “the fundamental boundary between contract law, which is designed to enforce the expectancy interests of the parties, and tort law, which imposes a duty of reasonable care and thereby encourages citizens to avoid causing physical harm to others.” Thus, economic loss has been defined by Florida courts as “damage for inadequate value, costs of repair and replacement of the defective product, or consequent loss of profits – without any claim of personal injury or damage to other property.” In other words, economic losses are “disappointed economic expectations,” which are protected by contract law, rather than tort law.

Despite the rule’s underpinnings in the product liability context, the economic loss rule has also been applied to circumstances when the parties are in contractual privity and one party seeks to recover damages in tort for damages arising in contract.

In a product liability context, the economic loss rule was developed to protect manufacturers from liability for economic damage caused by a defective product beyond those damages provided by warranty law. In discussing the development of economic loss rule principles, the Florida Supreme Court analyzed the California Supreme Court’s holding in Seely v. White Motor Co., 403 P.2d 145 (Cal. 1965). In Seely, the California Supreme Court held that the doctrine of strict liability in tort did not supplant causes of action for breach of express warranty.

In that case, the court was confronted with a situation in which plaintiff sought recovery for economic loss resulting from his purchase of a truck that failed to perform according to expectations. The court concluded that the strict liability doctrine was not intended to undermine the warranty provisions of sales or contract law, but was designed to govern the wholly separate and distinct problem of physical injuries caused by defective products. In East River Steamship Corp. v. Transamerica Delaval, Inc., 476 U.S. 858 (1986), the U.S. Supreme Court adopted the reasoning of Seely when it considered the issue of economic loss resulting from defective products in the context of admiralty.

According to the Supreme Court, when the damage is to the product itself, “the injury suffered – the failure of the product to function properly – is the essence of a warranty action, through which a contracting party can seek to recoup the benefit of its bargain.” Recognizing that the extending strict product liability law to cover economic damages would result in “contract law… drowning in a sea of tort,” the Supreme Court held that “the manufacturer in a commercial relationship has no duty either under a negligence or a strict products liability theory to prevent a product from injuring itself.” Thus, from the outset, the focus of the economic loss rule was directed to damages resulting from defects in the product itself.

In a Client Alert, dated July 5, 2011, Stites & Harbison lawyers John L. Tate and Cassidy R. Rosenthal wrote about the Kentucky Supreme Court’s adoption of the economic loss rule in Giddings & Lewis, Inc. v. Industrial Risk Insurers (6/18/11). The Court unanimously held that “a manufacturer in a commercial relationship has no duty under a negligence or strict products liability theory to prevent a product from injuring itself.” The Court wrote: “We believe the parties’ allocation of risk by contract should control without disturbance by the courts via product liability theories.”

As discussed by Mr. Tate and Ms. Rosenthal, in Giddings & Lewis, the manufacturer sold a sophisticated machining center to an industrial concern. The parties set forth their mutual obligations in a detailed commercial contract. After seven years of continuous operation and after the contract’s express warranty expired, the machining center malfunctioned in a spectacular fashion – throwing chunks of steel weighing thousands of pounds across the factory floor. The costs to repair the machining center and to get the business up and running again were almost $3 million. After reimbursing the machine’s owner for its losses, a consortium of insurance companies asserted a subrogation claim against the machining center’s manufacturer. With the warranty expired, the insurance companies sued in negligence, strict liability, negligent misrepresentation, and fraudulent misrepresentation. What could be more tortious conduct that this?

Applying the economic loss doctrine, the Kentucky Supreme Court agreed with Mr. Tate holding that the purchaser could not recover from the manufacturer under any tort theory. The consortium was limited to contractual remedies, all of which expired years earlier.

Despite such groundbreaking decisions, is the economic loss rule under-utilized in products liability and commercial litigation today? Of course, if personal injury results from an alleged defect, the rule does not apply. However, not infrequently, complaints alleging damages arising from a defective product that purportedly caused economic loss sound in negligence or strict products liability. Are defense lawyers seeking dismissal of these tort claims on the basis of the economic loss rule as often as they should?

This blog was originally posted on the Toxic Tort Litigation Blog on April 3 by Bill Ruskin. Click here to see the original post.

Categories: Product Liability | Toxic Tort

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As a general proposition, a defendant at trial suffers unfair prejudice when the court does not permit the jury to learn of certain facts that, if disclosed, would reveal a witness’s bias or self-interest. If a witness with no apparent motive for lying gives strong testimony favoring one side at trial, that testimony may have a significant impact on the jury. It is for this reason that all potential bias or self-interest of both fact and expert witnesses must be vigorously explored during pre-trial discovery.

In Polett v. Public Communications, Inc., No. 1865 EDA 2011, slip op. (Pa. Super. March 1, 2013), a verdict for a whopping for $27.6 million in the Court of Common Pleas of Philadelphia County, Civil Division, was reversed on multiple grounds. However, for purposes of this article, we focus on the finding by the Superior Court that it was error for the trial court not to permit the jury to learn that plaintiff’s treating physician, Dr. Richard Booth, an orthopedic surgeon, had been a named defendant earlier in the litigation and had entered into a tolling agreement with the plaintiffs. Under such a tolling agreement, a plaintiff can await the outcome at trial and decide afterward whether to pursue the party with whom she had entered into the tolling agreement. Dr. Booth's best protection against being sued at a later date was to ensure that the plaintiffs made a substantial recovery at trial. Is this self-interest? You bet!

By way of background, in mid-2006, Zimmer, a medical device manufacturer, launched the Gender Solutions Knee, a knee replacement device designed specifically for women. Zimmer hired Public Communications, Inc. (“PCI”), a marketing firm, to produce a sales video, which would include interviews and footage of patients who had undergone successful knee replacement surgery using the device. Plaintiff Margo Polett underwent successful bilateral knee replacement surgery. On account of her good surgical outcome, her treating physician, Dr. Richard Booth, recommended Mrs. Polett to Zimmer as a candidate to participate in Zimmer’s sales video.

Plaintiffs allege that following the videotaping, which involved Mrs. Polett riding on a stationery exercise bike, her condition worsened and she underwent four further surgeries in failed attempts to repair the damage that plaintiffs alleged occurred during the filming of the promotional video. Dr. Booth admitted in deposition that the “sword of litigation” hung suspended above his head. Substantial evidence was developed during discovery that when Dr. Booth first gave his causation testimony, which supported plaintiffs’ theory of the case, he had a strong incentive to place responsibility on the medical device manufacturer and the filming company and away from himself.

Due to his clear self-interest in presenting causation testimony favorable to plaintiffs, the Superior Court determined that the defendants should have been permitted to demonstrate Dr. Booth’s partiality as a doctor who faced the possibility of litigation; who did not think he was at fault; who did not want to alienate his patient; and who squarely placed responsibility for Mrs. Polett’s injuries on the filming company and the device manufacturer.

In so holding, the appellate court concluded that the probative value of the tolling agreement outweighed the danger of unfair prejudice. Although the use of a tolling agreement for impeachment purposes was a matter of first impression for Pennsylvania courts, other Pennsylvania courts had found that analogous agreements were admissible to show bias or prejudice.

Another type of agreement between a plaintiff and a defendant is referred to as a “Mary Carter agreement." These agreements are a means of effectuating a settlement with some but not all defendants in a multi-party lawsuit. Like the tolling agreement in Polett, evidence of a Mary Carter agreement's existence should be presented before the jury, but they are often shrouded in secrecy and never reach the light of day.

Mary Carter agreements usually incorporate the following basic elements although the terms vary from case to case:

1. the defendant in an multi-party lawsuit who enters into the agreement guarantees that the injured plaintiff will receive a certain amount, even if the plaintiff fails to receive a judgment against that defendant or the amount of the judgment obtained is less than the guaranteed amount;

2. the agreeing defendant’s liability, which is capped, can be reduced or even eliminated by increasing a co-defendant’s liability;

3. the agreement is kept secret from the jury absent court-ordered disclosure; and

4. the agreeing defendant remains in the lawsuit as a party.

For obvious reasons, Mary Carter agreements have been challenged as being unethical. Arguably, the agreement contravenes the canons of professional conduct concerning candor and fairness; conflicts of interest; unjustified litigation; and taking technical advantage of opposing counsel. Because Mary Carter agreements are collusive agreements between parties with supposedly adverse interests, they create an inherent danger of perjury.

Moreover, these agreements mislead the jury into thinking that the agreeing defendant has interests adverse to those of the plaintiff, when, in fact, the defendant may sometimes share in the proceeds of the plaintiff’s recovery. In my view, lawyers who enter into Mary Carter agreements are walking into an ethical minefield. In New York, these agreements are considered contrary to public policy and are not permitted..

But whether the agreement in question is a tolling agreement or Mary Carter agreement, the finder of fact should be fully apprised of any relevant information that might give rise to bias or interested testimony. It is discouraging that the Polett court seemingly failed to understand this basic premise of trial fairness.

This article was originally posted on March 27 on the Toxic Tort Litigation Blog by Bill Ruskin. You can read the original post here.

Categories: Product Liability | Toxic Tort

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Wednesday's United States Supreme Court opinion in Kiobel v. Royal Dutch Petroleum Co. et al., 569 U.S. ___ (2013), has confirmed that the Alien Tort Statute (ATS) has a limited scope and cannot open the doors of United States courts to lawsuits based on ordinary torts committed by companies outside the territorial confines of the United States. Although the Court did not meaningfully address the issue of corporate liability, its narrow holding all but guarantees that ATS will not become an issue in lawsuits against corporate clients in products cases.

At first blush, Kiobel does not appear to be the type of case that would interest product liability lawyers. It involved Nigerian nationals who had obtained asylum in the United States suing foreign corporations that has allegedly aided and abetted the government of Nigeria in committing abuses against its citizens including, among others, extrajudicial killings, crimes against humanity, and torture. It goes without saying that "crimes against humanity" are topics that are generally outside the pale of the average civil defense attorney's resume.

Representing clients in a global marketplace, however, often necessarily means representing clients who have potential exposure to liability abroad. Although your client may not be accused of crimes against humanity, the prospect of a German client with an American office being sued in America for building a product in Guatemala that injured someone in Japan is still daunting. Because ATS has a somewhat broad purpose: to permit federal courts to recognize "certain causes of action based on sufficiently definite norms of international law," 569 U.S. ___ (2013), it is conceivable that a clever plaintiffs' attorney would argue that principles of negligence or product liability were "sufficiently definite norms" of international law to warrant jurisdiction.

Whether that argument would be successful is doubtful. But the Second Circuit, whose opinion the Supreme Court reviewed, had a simple, comforting answer for corporate clients: ATS does not apply to corporations. The hypothetical Japanese plaintiff simply could not sue a corporate defendant in America to recover for her injuries. There would be no need to litigate if the lawsuit involved "sufficiently definite norms of international law."

Wednesday, the Supreme Court skirted the issue of corporate liability, but announced a rule that should provide a similar degree of certainty to corporate clients. Its decision did not turn on the corporate status of the defendant, but whether ATS applies extraterritorially. The Court concluded that it does not.

Writing for the majority, Chief Justice Roberts concluded that ATS was not intended to bring into the United States Courts claims involving torts committed against foreign subjects outside the territorial confines of the United States. The majority noted that, historically, ATS had been used only rarely since its 18th century enactment, and historically used only to address claims that a person had violated the law of nations: violating safe conduct, infringing on the rights of ambassadors, and piracy. Therefore, it held that to warrant jurisdiction under ATS, a plaintiff's claim must "touch and concern the territory of the United States . . . with sufficient force to displace the presumption against extraterritorial application."

No justice dissented from the majority opinion, and even the most critical concurrence—by Justice Breyer, joined by Justices Ginsburg, Sotomayor, and Kagan—tended to confirm that corporate clients will not, in the ordinary course of litigation, be faced with jurisdiction based on ATS. The concurrence advocated reading ATS as permitting jurisdiction over extraterritorial torts when "the defendant's conduct substantially and adversely affects an important American national interest," emphasizing the importance of the United States not becoming a safe harbor for "a torturer or other common enemy of mankind."

In short, although the "easy" ATS answer is now gone, the average corporate client has little to fear from ATS. Negligence and products liability—while serious allegations—are hardly the stuff from which allegations of being a "common enemy of mankind" are made.

William F. Auther is the managing partner of the Phoenix, Arizona office of Bowman and Brooke, LLP, where he has an active trial practice in product liability and business litigation. Amanda Heitz is an associate at Bowman and Brooke.

Categories: Corporate Counsel | Product Liability | Supreme Court

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Law.com’s Legal Blog Watch recently noted a viral Facebook photo involving a “footlong” sandwich that appeared to be less than 12 inches long: http://legalblogwatch.typepad.com/legal_blog_watch/2013/01/how-many-inches-is-your-subway-footlong-sub.html. Citing a post from Today where restaurant customers were posting pictures of footlong sandwiches, http://lifeinc.today.com/_news/2013/01/17/16565128-wheres-the-inch-subways-footlong-falls-short?lite, Legal Blog Watch asked whether a class action or two or three would soon follow. One might reasonably question whether customers suffered any damages by the claimed shortfall. One might further question how plaintiffs’ counsel could possibly prove any sort of claim on a class-wide basis. Nonetheless, the fact that such questions come to mind shows the pervasiveness of class action litigation in today’s society. The issues inherent in the current use of the class action device are of such importance that the U.S. Supreme Court’s current docket features five merits cases involving class action claims. Those Supreme Court cases, along with a number of other cutting-edge class action topics, will be the subject of DRI’s 2013 Class Action Seminar, which will take place at the Washington Court Hotel in Washington, DC on July 25 and 26. DRI members interested in this area of law will want to attend this Program.

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Although by no means a “hell hole” jurisdiction, it is difficult for a peripheral asbestos defendant to obtain summary judgment in Bridgeport Superior Court in Connecticut. Once summary judgment is denied, many asbestos defendants with questionable liability will often settle out rather than risk the financial exposure of an adverse result in a mesothelioma jury trial. It is helpful for a company to have a well thought out appellate strategy in mind before selecting a jury in that jurisdiction. One recent asbestos trial did not turn out well for a trade association defendant..

On August 24, 2012, the Bridgeport Superior Court denied post-trial motions filed by Tile Council of North America (“Tile Council”) inHannibal Saldibar v. A.O. Smith Corp. The Tile Council is a trade association that developed and patented an asbestos-containing formula for dry set mortar. This jury verdict raises the issue whether a trademark licensor may be held liable under a theory of strict liability as the “apparent manufacturer” despite having never manufactured or sold the product at issue. The Apparent Manufacturer Doctrine seeks to hold the licensor vicariously liable for defective products manufactured by the licensee.

Over the past 50 years, trademark licensing has emerged as a preferred method of producing and marketing goods in the U.S. According to David J. Franklyn, a professor at Northern Kentucky University, who wrote an article titled, "The Apparent Manufacturer Doctrine, Trademark Licensors and Third Restatement of Torts" in the Case Western Reserve Law Review, some $50 billion dollars of licensed goods are sold each year.

The Bridgeport Superior Court’s decision is arguably a departure from the precedent established inBurkert v. Petrol Plus of Naugatuck, Inc., 216 Conn. 65 (1990), a well reasoned decision by the Supreme Court of Connecticut. The principal issue in Burkert was whether the distributor of an allegedly defective product, an automatic transmission fluid, was entitled to indemnification against GM, the licensor of a trademark under which the allegedly defective product was marketed. GM, the trademark licensor, did not participate in the production, marketing or distribution of the product.

In Burkert, the Connecticut Supreme Court made two significant rulings: (1) because GM did no more than allow others to use its Dexron® II trademark in the production, marketing and distribution of transmission fluid, absent any further involvement in the stream of commerce, GM could not be deemed a seller under Connecticut’s Product Liability Act; and (2) plaintiff could not rely upon Section 400 of the Restatement of Torts (Second) because that section applied only to those involved in the sale, lease, gift or loan of a product.

The Burkert court cited with approval the holdings of courts in other jurisdictions explicitly holding that liability against a trademark licensor under the Apparent Manufacturer Doctrine is appropriate only when the licensor is determined to have been significantly involved in the manufacturing, marketing or distribution of the defective product. Regardless of whether the plaintiff is proceeding on an “apparent manufacturer” or an “enterprise” theory of liability, the majority of cases emphasize the licensor’s degree of control and involvement exercised over design, manufacturer and sale.

The plaintiff in Saldibar may have raised sufficient factual issues to avoid summary judgment but arguably should not have prevailed on post-trial motions. In rejecting Tile Council’s argument that it was not a “product manufacturer” or “product seller” pursuant to the Connecticut Product Liability Act, the court found that the Tile Council was sufficiently involved in the distribution, marketing and manufacture of its products to “fall within the ambit of the product liability statute.” To add insult to injury, the trial court not only refused to set aside a $1,500,000 verdict in compensatory damages, plus $100,000 in loss of consortium damages, but also upheld an award of $800,000 in punitive damages based on the jury’s finding that Tile Council acted with “reckless disregard” for the safety of product users. Based upon this holding, a trademark licensor in Connecticut is potentially liable for punitive damages resulting from injuries caused by a product it neither manufactured nor sold.

Although the involvement of Tile Council may have been more extensive than that evidenced by GM, the trademark licensor in Burkert, it is questionable whether these factual distinctions warranted a finding of liability, let alone an award of punitive damages. In Saldibar, for example, the court relied upon testimony by a co-defendant, H.B. Fuller, that Tile Council had “developed a market for these products, based upon their formulas, based upon their trademark and hallmark, if you will, of an assurance that if you buy products that contain this logo, you can be sure that it did work.” There us absolutely no probative value to this testimony. On the other hand, If the Plaintiff or Plaintiff's employer had provided testimony that he relied on the presence of the licensor’s logo for assurance that the product was safe, it may have raised a reliance issue. But The co-defendant’s testimony, cited by the trial court, is not relevant to the issue of reliance because it did not purchase the product. Of more importance is that it does not appear Plaintiff was induced to purchase the asbestos-containing product because of the licensor's involvement.

Arguably, the licensor should only be potentially liable (as a threshold matter) when it induces the consumer to purchase the product or where plaintiffs can prove that they reasonably relied on the trademark.

What was apparently fatal to Tile Council was the trial court's determination that Tile Council set forth detailed specifications governing “all aspects” of the product, including the percentage and grade of the asbestos fiber to be used. Moreover, in Saldibar, Tile Council drafted the product warnings that appeared on the product. On the basis of these facts, the trial court distinguished Saldibar from Burkert.

Saldibar raises some troubling concerns from a policy standpoint. Saldibar rewards conduct by a licensor that distances it from the ultimate consumer. If Tile Council was in the best position to recommend warnings for the product label, why should this activity alone become a basis for imposing vicarioius liability? The issue in Saldibar was not whether the warnings were adequate to warn against the risks of asbestos use, but whether the warnings were sufficient to bring Tile Council under the ambit of the Connecticut Product Liability Act as a “apparent manufacturer.” There is no indication that Plaintiff ever read the warnings or that an alleged failure to warn was a proximate cause of plaintiff’s injury. As a practical matter, a plaintiff should be required to demonstrate that he saw the licensor’s logo and was induced to purchase the product on that basis. Whether there was detrimental reliance by the product purchaser was not an issue considered by the court.

Originally published in the Toxic Torts Litigation Blog

Categories: Causation | Copyright infringement | Defense Practice | Intellectual Property | Product Liability

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It is common in product liability litigation for the defendant company’s outside legal counsel to represent both employees and former employees of the company in deposition. In the absence of a claim of criminal conduct, which is rarely the case in civil tort litigation, there is generally no conflict of interest in having outside counsel represent both the company and its former employees, particularly where both parties have given their informed consent to be jointly represented. Therefore, it was peculiar for the issue to have been raised in a contact lens products case in Illinois.

In Kallal v. Ciba Vision Corp., (1:09-cv-03346), pending in the U.S. District Court for the Northern District of Illinois, the Hon. Rebecca R. Pallmeyer rejected an effort by plaintiff to disqualify Kelley Drye & Warren LLP, counsel for Ciba Vision Corporation. In ruling against plaintiff, it was reported in Law360 that Judge Pallmeyer advised the parties before ruling, “I don’t see a basis for why Ciba’s lawyers should be disqualified.” At issue was defense counsel’s appearance at the subpoenaed depositions of Dr. Scott Robirds, a former global head of clinical and regulatory affairs for Ciba, and William Schaeffer, a former director of global operations.

In denying plaintiff’s disqualification motion, the court agreed with the argument of defense counsel Catherine E. James that no conflict between Ciba and its former employees existed and that no ethical violation had been committed, which is a necessary perquisite for a disqualification motions to succeed.

In its opposition to plaintiff’s motion, Ciba recognized that the corporation and its individual employees admittedly may not have identical interests. Individuals are necessarily interested in their individual reputations, while a corporation is interested in its organizational reputation. However, Ciba argued that these different interests were hardly the basis for a conflict of interest. Citing Illinois Rule of Professional Conduct 1.7(a), which is modeled after the ABA Model Rule of Professional Conduct, Ciba argued that a conflict exists where the parties’ interests are “directly adverse” to each other, which was not the case here.

It is not altogether clear why the court did not award Ciba the sanctions it had requested for having to respond to a frivolous motion. However, there is no question that plaintiff’s chief motivation for filing the motion was to attempt to communicate informally with unrepresented former employees to advance their litigation interests. As such, the disqualification motion was a mere subterfuge.

There are many good reasons for a single law firm to represent both the company and its employees, both present and former. Dual representation reduces legal fees and prevents duplicative preparation and litigation costs. Moreover, dual representation provides for litigation strategies that would not otherwise be available.

As one commentator, Janet A. Savage, noted in the employment law context, an attorney is able to plan and execute a joint defense, as well as present a united front to the jury. Moreover, “dual representation offers logistical advantages. It facilitates common access to all necessary facts and maintains contact between the defendant employee and the defendant employer,” according to Savage. Of course, potential conflicts of interest must be carefully analyzed in every case.

*This was originally posted on October 19 on the Toxic Tort Litigation Blog posted by William A. Ruskin.

Categories: Product Liability

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According to a group of women who filed a lawsuit last week, Maybelline should pay up for making false claims about its “Super Stay” lipstick products. Filed in federal court in Manhattan, the complaint seeks declaratory relief and damages under several states’ consumer protection laws. From the defense perspective, this is the latest attempt at a “no injury” class action where no actual injuries or damages exist.

The Super Stay products at issue in the case include Super Stay 10HR Stain Gloss and Super Stay 14 HR Lipstick. The Complaint alleges that Maybelline’s website and television commercials “boast that the Super Stay Gloss ‘stays vibrant and shiny, yet transparent, and won’t fade’ for a ten-hour period.” Plaintiffs allege that to the contrary, “Super Stay Products do not remain on the wearer’s lips for the extended periods as advertised.” Accordingly, “Maybelline overstates and misrepresents the staying power of its Super Stay Products as a means to induce consumers to purchase the product.”

Plaintiffs seek nationwide class certification status on behalf of those who purchased and paid for Maybelline’s Super Stay products. The three named plaintiffs, who reside in Michigan, New York, and New Jersey, also seek certification of subclasses of purchasers under those three states’ consumer protection laws. The state consumer protection act claims assert that Maybelline’s advertising of these products constituted unfair and deceptive practices and that plaintiffs should be awarded compensatory and treble damages.

Courts have recently recognized the abstract and speculative nature of “no injury” class actions and have dismissed them based on a lack of Article III standing. Plaintiffs must offer proof of (a) injury-in-fact; (2) causal connection between the injury and conduct complained of; and (3) a likelihood that the injury will be redressed by a favorable decision. In the context of class actions, the class representative must establish an injury-in-fact, not simply that other putative class members suffered injuries. See e.g., Rivera v. Wyeth-Averst Laboratories, 283 F. 3d 315 (5th Cir. 2002). In the lipstick case, the federal court will have to determine whether the group of women suffered an injury-in-fact by purchasing a product that did not live up to its promises.

R. Scott Adams

Spilman, Thomas & Battle, PLLC

Categories: Bad Faith | Civil Justice System | Class Actions | Commercial Litigation | Product Liability

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In a step it rarely takes, the CPSC recently initiated separate administrative enforcement proceedings against two manufacturers of desktop magnets alleging that its products contain defects that can pose serious risk of injury. The CPSC sued the makers of Buckyballs and Zen Magnets seeking an order from an Administrative Law Judge directing them to cease all manufacture and distribution of their products (and other relief) after discussions with the companies failed to result in a voluntary recall plan.

The core issue is that these magnets can be dangerous if swallowed because the magnets can bind together and become lodged in the body, posing a risk of harm and perhaps a need for surgical intervention. The companies currently have warnings stating, among other things, that the products are not for use by children and that they should not be swallowed, but the CPSC alleges that the warnings and labeling do not effectively communicate the hazard associated with ingestion of the product. The CPSC continues to receive reports of injuries involving use of the product by children.

Given that most CPSC actions (e.g., recalls, civil penalties) are the result of agreements reached with manufacturers, these matters provide the public a rare opportunity to get a glimpse of a contested lawsuit regarding the justification for a recall. This case sets up as a classic battle that features competing themes of child protection vs. personal responsibility. On the one hand, the manufacturers say that the CPSC’s actions raise questions about when the government has the authority to stop companies from selling products that are reasonably safe if used properly. On the other hand, the CPSC alleges that injuries continue to occur, which suggests that the warnings in place are inadequate – and that perhaps no warning is adequate. For more information, click on the links below.

http://www.cpsc.gov/cpscpub/prerel/prhtml12/12234.html

http://www.cpsc.gov/cpscpub/prerel/prhtml12/12243.html

http://www.cpsc.gov/cpscpub/prerel/prhtml12/12037.html

http://www.wired.com/geekmom/2012/07/buckyballs-banned/

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I cut my teeth as a young lawyer doing almost exclusively automotive product liability defense. What always amazed me, particularly in cases involving extreme tragedy (death, disfigurement, paralysis), was how the automobile manufacturers took these risky cases to trial--and won! How was it possible to convince a jury to look beyond the tragedy and extreme suffering, consider the evidence about the design of a crucial component, understand that evidence, and return a verdict for the manufacturer? Particularly puzzling for me was the fact that, as we neared trial, even I still did not completely understand the technology, and I was a reasonably educated person who had been living with the case for several months.

A very distinguished trial lawyer answered this question during a pretrial presentation to our client of one particularly challenging case. He said that, in his experience presenting these cases to juries (and mock juries) all across the country, then debriefing the jurors after trial, it is clear that much of the technical nuances escape most jurors. No amount of careful teaching with brilliant demonstrative exhibits can make a person with a high school education or less, who has never worked in the automotive industry and, frankly, doesn't care much about cars at all, understand a component, and comprehend why a company chose design A over design B.

What does matter to these jurors, he said, is seeing the lengths to which the manufacturer went to understand what occurred and how the plaintiff suffered her injury. If something failed, jurors like to understand how and why it failed, and particularly why a safer alternative design wasn't available or why the design advocated by the plaintiff's expert wouldn't work or would have produced the same (or even worse) result. This is why it's so extremely expensive to take these kinds of cases to trial, particularly when it takes one or more full-fledged crash tests, using identical automobiles, to understand exactly what happened.

A corollary is that jurors appreciate learning how hard the manufacturer worked, and how carefully the component was tested, to assure that the car was as safe as possible for the driver and her passengers. To the extent this can be woven into a story, with witnesses who do not drone on for days, the chances of keeping jurors awake to hear the ending improves. I like to think this principle can be equally applied to any context in which jurors are going to be asked to evaluate highly technical evidence. It becomes less about how or why something works, and more about how much the defendant cares about learning what really happened in a given case.

This blog was originally posted on July 21st on the blog Atcounseltable. Alex Craigie is a member at Dykema Gossett in Los Angeles, California.

Categories: Evidence | Product Liability

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The Toxic Tort Litigation Blog brings to the attention of defense practitioners weapons to add to their defense arsenal. An article in the Bloomberg BNA Toxics Law Reporter (6/14/02), titled "Making the Most of Twombly/Iqbal in Product Liabililty Cases," offers a valuable primer concerning how the pleading requirements under Rule 8(a) of the Federal Rules of Civil Procedure have been reinterpreted and reshaped by the U.S. Supreme Court in two landmark decisions, Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556 U.S 662,129 S. Ct. 1937 (2009).

In the article, Arnold & Porter’s Anand Agneshwar and Paige Sharpe review how these two decisions have been employed in product liability litigation either to win outright dismissals of complaints or to force plaintiffs to clearly state in their complaints – and not after discovery – precisely what they seek to prove. Motions brought under Twombly and Iqbal have come to be known as Twiqbal motions.

Prior to the Supreme Court’s publication of Twombly in 2007, federal trial courts were guided by the holding in Conley v. Gibson, a U.S. Supreme Court case decided in 1957. Pursuant to the holding of that case, “a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” As Mr. Agneshwar and Ms. Sharpe point out, Twombly retired the “no set of facts” language of Conley, and in its place issued a plausibility standard under which plaintiffs must provide “more than labels and conclusions, and a formulaic recitation of the elements of the cause of action will not do so.” Thus, in order to “nudge [] their claims across the line from conceivable to plausible,” plaintiffs must provide a complaint with “enough heft to show that the pleader is entitled to relief.”

The policy rationale for this holding is the avoidance of “potentially enormous expense of discovery in cases with no reasonably founded hope that the discovery process will reveal relevant evidence.” Twombly left unclear whether its pleading directives applied to all civil cases brought in federal court, or just antitrust cases. However, two years later, the Iqbal court made clear that the pleading requirements in Twombly were to be applied across-the-board.

How successful have Twiqbal motions been in product liability cases? A 2011 law review article by Professor William M. Janssen in the Louisiana Law Review, which focused on pharmaceutical and medical device litigation, found that some 21% of the 264 cases studied were dismissed on Iqbal grounds during the relevant time period. This statistic suggests that it would be imprudent to file a Twiqbal motion in every product liability case. Thankfully, Mr. Agneshwar and Ms. Sharpe provide a series of factors that should be considered prior to filing a Rule 8(a) motion.

As a general rule, defense counsel should carefully scrutinize their adversary’s pleadings in products cases to evaluate whether plaintiff has properly alleged facts to support an essential element of a claim, such as how a product is defectively designed (design defect claim) or how specifically defendants’ product labeling is insufficient (failure to warn claim). A complaint that contains only conclusory allegations is vulnerable to Twiqbal attack.

Categories: Antitrust | Product Liability | Supreme Court | Toxic Tort

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The Economic Loss Rule: An Under-Utilized But Not-So-Secret Weapon

Mary Carter and Other Agreements Should Be Disclosed To Juries

Supreme Court's Kiobel v. Royal Dutch Skirts the Issue of Corporate Liability, But Denies Extraterritorial Application of Alien Tort Statutes

“How much is not enough? Blog asks whether class action litigation will follow if sandwiches don’t measure up.”

Trademark Licensors As "Apparent Manufacturers" In Product Liability Cases

The Benefits of Joint Representation

Lipstick Case Presents Latest “No Injury” Class Action

CPSC Sues to Ban Desktop Magnets: A Rare Inside Look at the Battle Over When to Recall a Product

What If the Jury Simply Cannot Comprehend the Subject Matter?

The Impact Of Twombly & Iqbal In Products Cases

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