ABA Joint CLE Seminar Liveblogging (Day 2)

Although this morning’s program began a little later (although still early at 7:30 a.m. local time) the room was still bare with only two minutes to go before the official start-time. People slowly trickled in as the program began. The first topic of the day was effective and inexpensive technology and presentation techniques, moderated by John T. Lay, Jr., of Ellis, Lawhorne & Sims in Columbia, South Carolina. Panel members were Robert L. Featherly of Litigation Insights, a company offering jury research and trial presentation services; defense litigator Cathy Havener Greer of Wells, Anderson & Race, L.L.C. in Denver, Colorado; and the Honorable Michael J. Watanabe, a federal magistrate for the U.S. District Court for the District of Colorado.

The lesson of the day: Just because you can conduct a high tech trial in a fully wired courtroom does not mean that you should necessarily do so. For half an hour, the panelists discussed the history of courtroom technology and the tools of the trade, beginning with blackboards all the way to creative computerized visual animations and the latest technological gadgets.

Above: The view from the conference center.

As a no-nonsense judge who takes control of his courtroom, Magistrate Judge Watanabe told the attendees that he expects three things from lawyers in his courtroom: professionalism, preparedness, and punctuality. It is essential for practitioners to know both their jurisdiction and their audience, but also to be ready for anything unexpected (whether that be the judge’s refusal to permit certain evidence or the crashing of one’s computer). He reminded those assembled that it is the judge – not the lawyer – that decides the order and the manner of the presentation of evidence during a judicial proceeding.

Another lesson: The biggest mistake that lawyers can make is to allow technology to interfere with their connection to the jury. Technology, if relied upon too heavily, can create too much distance between the advocate and the finder of fact. As aptly pointed out by Mr. Lay, a lawyer’s charisma and voice are key to any attempt to make a connection with a jury. For that reason, he advocates using technology to enhance a presentation or to highlight a key theme or exhibit, but not to overpower it. Mixing high-tech exhibits with good communication not only fosters the credibility with the jury, but also maintains the jury’s interest, which would certainly wane otherwise. Overall, the session offered some good pointers applicable to any practice area.

Above: The conference center itself.

The seminar then became an interesting plenary session on the role of the human genome and genetic testing in toxic tort and mass tort litigation. The use of DNA testing to determine whether an individual could be or has been injured by an alleged exposure to toxic substances is a cutting edge, but it could one day become central in mass tort and products liability cases. Law professor Gary E. Marchant of Arizona State University commented that, within just a few short years, we will all be “genotyped” and will know our particular traits and susceptibilities. That information can obviously be used in multiple various ways by both plaintiffs and defendants.

Dr. Marchant explained that genes express themselves in different ways when exposed to different chemicals. For instance, in instances of Benzene exposure alleged to have caused leukemia, in approximately 80 percent of such cases, chromosomes 5 and 7 will break. That fact can help to determine whether Benzene exposure actually played a role in the alleged injury.

Above: Just outside the conference center.

What will this mean for litigation? These issues will, of course, continue to develop along with the science. Key issues for the future will be whether manufacturers will have to warn against particular susceptibilities affecting small percentages of the population. So far, the Fourth Circuit has at least determined that there is no duty to protect unusually susceptible people. This may be the way that the law develops at least in the context of strict liability. Turning to negligence, however, as duties extend to even eggshell plaintiffs (you take them as you find them), manufacturers could find themselves on the hook. Another key question is whether courts will one day require that a plaintiff produce evidence of “biomarkers,” or some change in the genes to establish exposure to a particular product or substance. Time will tell.

Last, but certainly not least, the seminar divided into several smaller break-out sessions. Essentially a review of developments in 2009, the products liability session generated much discussion about the new Medicare legislation, which will require that insurers report payments to Medicare-eligible claimants to the Centers for Medicare Services.

Overall, the 2010 ABA Section of Litigation’s Joint CLE Seminar was fruitful and productive. Now it is time to join everyone on the slopes!

ABA Joint CLE Seminar Liveblogging (Day 1)

The ABA’s Section of Litigation Joint CLE for the Environmental, Mass Torts and Products Liability Committees is officially underway! It is touted as one of the most successful joint committee endeavors in the ABA. Given that so many issues are common among these areas of the law, and with the growing limitations on travel and resources, it makes even more sense that these committees work together.

It was an early start to the day in Beaver Creek, with breakfast starting at 6:00 a.m. and the obligatory ethics CLE session at 6:30 a.m., before the sun has risen above the surrounding peaks. It was particularly early given that the seminar kicked off with a welcoming reception last evening, followed by dinner in Beaver Creek Village. But, the early start time is undoubtedly designed so that the sessions can end midday, allowing attendees plenty of opportunity to take in the slopes and go to the spa.
There were no topics on the agenda for today that were substantively related to products liability. Those sessions, particularly including the products liability update from 2009, are set for tomorrow. However, many of the sessions today provided general tips, techniques and information that can, of course, be applied to a products liability practice.
The ethics session was fairly interesting, with a focus on the ethical limitations of making statements about clients or litigation outside of the courtroom, particularly in high profile cases in which you may find yourself standing front and center with a microphone in your face. The panel, composed of attorneys from both sides of the courtroom, along with a member of the judiciary, the Honorable Kristen L. Mix of the District of Colorado, discussed how they would handle various scenarios. As always, it was good to hear a judge’s insight on how to conduct yourself in representing your client, both inside and outside of the courtroom. The best tidbit of advice from Judge Mix? “Mea culpa goes a long way.” If something goes awry, fess up about the matter before the court and offer ways to fix it. The judge will at least respect that you comprehended the rules and recognized your misstep.
The seminar next moved on to a reflection from in-house counsel on the economy and its effects on their litigation and practice. The panel was comprised of current in-house counsel for Coca-Cola Company, Livingston Johnson; Alcon Laboratories, Inc., Jerry Bradford; and Electrolux, Sharon A. Luarde. The fourth panel member, Laurie A. Polinsky, who now finds herself a casualty of the declining economy, was former assistant general counsel for Sanofi-Aventis and then for Amgen. The panel did a great job of moving beyond the topic that reverberates through most panel discussions involving in-house counsel (that being, the likes and dislikes of their relationships and interactions with outside counsel). Rather, they discussed the present strains and pressures under which they now find themselves and how that is necessarily trickling down to outside counsel, from budget issues to increased demands on time.
The last plenary session of the morning addressed legal tactics to use with suspected baseless or fraudulent claims. As promised, the Honorable Judge Janis Graham Jack was on the panel and described how she came to uncover mass fraud in the silica litigation. With her background as a nurse before going to law school and making her way to the bench, she was well-suited to understand the medical issues that led her to determine that a handful of doctors had been manufacturing diagnoses of silicosis for money. Other well-known mass fraud cases, particularly relating to Fen-Phen weight loss pills and to cases filed against Dole arising from the use of pesticides on banana farms in Latin America (banana farmers claimed that the pesticides rendered them sterile), were also addressed. The short of it, as advice for attorneys to take away, is to know the medicine. You have to know the medicine in order to ferret out if there is any fraud in how the person came to be diagnosed with some medical condition caused by a product. And, if there is fraud, because you may not have the benefit of having Judge Jack with her medical knowledge and background, you have to be ready to educate the court.
Overall, this morning’s sessions offered some good refreshers and practice pointers to keep us on our toes in the face of fast-paced litigation.
What’s next? Time to get down to business with committee business meetings and plans for 2010! Then it will be off to some mingling and a dinner event for seminar attendees.

Friday Links

  • “[W]hile the Beastie Boys might disagree, the First Amendment does not imply a ‘right to party’ dissociated from expression.” URI Student Senate v. Town of Narragansett, — F. Supp. 2d —-, No. 08-207, 2010 WL 222587, at *6 n.4 (D.R.I. Jan. 22, 2010) (internal link obviously added) (Link courtesy of The Volokh Conspiracy). Nice, but can it compete with the 1987 Fifth Circuit Talking Heads opinion? We here think not.
  • The Cal Biz Lit blog offers its analysis of some recent uses of California’s Proposition 65, which empowers private plaintiffs to sue certain companies who are allegedly exposing persons to “chemicals known to the State of California to cause cancer” or “chemicals known to the State of California to cause reproductive or developmental harm” without a “clear and reasonable warning.” The blog notes how this provision was recently used to extract settlements from manufacturers of purses made of vinyl and leather, which sometimes contain lead.
  • The VLW Blog reports on the very recent Sutton v. Roth, L.L.C., No. 08-1914, 2010 WL 235143 (4th Cir. Jan 21, 2010) (unpublished), a ruling the TortsProf Blog is calling a “sequel to the McDonald’s coffee case.” Apparently, the Plaintiff alleged that when he bit into his sandwich, “the grease from the inside of the chicken sandwich spread out all over [his] bottom lip, [his] top lip, down onto [his] chin.” According to The VLW Blog, the Plaintiff sued McDonald’s and its franchisee for $2 million, but a federal district judge granted summary judgment for McDonald’s and judgment as a matter of law for the franchisee, who had to face a brief trial on the merits. (Perhaps the franchisee didn’t earn summary judgment because one of its employees remarked that “[t]his is what happens to the sandwiches when they aren’t drained completely.”). The district court did, however, grant the franchisee’s motion in limine to exclude that statement, which became one of the Plaintiff’s appellate points. Last week, the Fourth Circuit reversed both orders and remanded the case back to trial. (The opinion is here [PDF]).
  • This week, Brian A. Comer at the South Carolina Products Liability Blog began the first in a series of posts on South Carolina warning law.
  • The South Carolina Bar has made available online the full report of its Young Lawyers Division Social Media Task Force. Initially submitted to the Bar’s Board of Governors in November of 2009, the report was presented to the Board at last week’s South Carolina Bar state convention by our own Jim Dedman, who chaired the task force. Included in the report are recommendations on how the State Bar can use social media to better communicate with its members. You can see the full report here (PDF).

Live Blogging the ABA Joint CLE Seminar in Colorado

This morning, I am making the trek out to the Park Hyatt Beaver Creek Resort and Spa, the location for this year’s American Bar Association Section of Litigation “Environmental, Mass Torts and Products Liability Litigation Committees Joint CLE Seminar” in Avon, Colorado. (You can see the brochure for this conference here [PDF]). I’ll be live blogging the event and plan a series of short posts over the course of the conference. Nestled among mountain peaks that rise up to 14,000 feet, the resort is in the heart of Beaver Creek Village in the beautiful Vail Valley. It is hard not to be excited about such a beautiful destination, with some free time built into the schedule to take in a few downhill runs or, perhaps, a spin on the ice rink.

There are many reasons to look forward to this CLE seminar. Not only will there be an opportunity to catch up on the latest legal news and litigation techniques, there will also be break-out organizational meetings for the Section’s substantive subcommittees. At this conference, plans for the coming year are solidified and assignments are made to various subcommittees. If a lawyer wants to be involved in the environmental, mass torts or products liability committees, this is the place where he or she would begin that path.

As for the CLE program, there are, of course, multiple featured speakers of interest, from trial counsel and experts to members of the judiciary, including the Honorable Janis Graham Jack of the U.S. District Court for the Southern District of Texas. Those attorneys involved in silica litigation or who have represented manufacturers of asbestos-containing products are undoubtedly well familiar with Judge Jack. In 2005, she garnered much attention after issuing a 249-page order in In Re Silica Products Liability Litigation, in which she exposed fraud in the manufacturing of silicosis claims through for-profit mass screenings. 398 F.Supp.2d 563 (S.D. Tex. 2005). A former nurse, Judge Jack found that “[i]n the majority of cases, these diagnoses [were] more the creation of lawyers than of doctors.” Id. at 635. They “were driven by neither by health nor justice: they were manufactured for money.” Id. With such a background, she is well-suited for a panel addressing suspected baseless or fraudulent claims in litigation.

Further, it is no surprise to see a session devoted to the economy and its effects on the practice of law – a topic that has become all too relevant and seems to appear on virtually every program for these types of meetings, along with the impact of the Obama administration, which seems to be a theme that will be intertwined into several of the presentations and panel discussions.

Although provided with some advance materials, attendees must wait to receive materials for the products liability breakout CLE, which will provide a year in review. We are promised some insight on landmark Supreme Court decisions, the new administration, and a focus on health care reform. Panelists Penelope Dixon, Brian Fowler, and Lori Leskin, have reportedly scrutinized the legal trends over the past year and will reveal “what is really going on – including the good, the bad and the ugly of 2009.”

Stay tuned for updates and photos coming Friday and Saturday!

An Exception to the Firefighter’s Rule in Missouri

A recently released opinion from the Missouri Court of Appeals addresses some interesting points of law involving the Fireman’s Rule. In confronting that issue, the appellate panel in Martin v. Survivair Respirators, Inc., 298 S.W.3d 23 (Mo. Ct. App. 2009) [PDF] affirmed a $27 million verdict and sustained an abnormal use of “but-for” causation.

Regrettably, Martin involves the death of a firefighter. For this particular firefighting squad, each firefighter had a face mask with a valve that expelled the firefighter’s exhaled breath and a PASS alarm. The PASS alarm would screech when it was motionless for twenty seconds. At a fire in St. Louis, Firefighter Morrison, with the above-described equipment, entered a building in which the fire flared up. Morrison became disoriented and eventually non-responsive. After another firefighter, Walters, was unable to rescue Morrison, Walters left the building and informed other firefighters, including Martin, that Morrison was down. Morrison’s PASS alarm failed to activate. Martin entered the building and quickly radioed a personal distress call. Martin activated his PASS alarm in order to be found, but he proved difficult to locate because “the sound bounced off the walls.” Id. Martin was recovered, but not before he died of smoke inhalation. In response to the suit brought against it, the manufacturer, Survivair, claimed, among other things, that the Fireman’s Rule barred recovery, and that there was not a sufficient causal link between the failure of Morrison’s PASS and Martin’s death. Addressing the issue, the panel recited the Fireman’s Rule as follows:

The Fireman’s Rule states that a fireman who is brought in contact with an emergency situation solely by reason of his status as a fireman and who is injured while performing a fireman’s duties may not recover against the person whose ordinary negligence created the emergency.

298 S.W.3d at 32. The panel found that the Fireman’s Rule was inapplicable because the failure of the PASS alarm was not the cause of the fire and not within the “range of anticipated risks” involved with firefighting. It quickly moved to causation. Survivair argued that the failure of Morrison’s PASS was not the cause of Martin’s death. This makes sense. First, Martin was in a place of safety, outside of the burning building, when the PASS malfunctioned. Second, Martin went in the building voluntarily. The court gave weight to testimony that tended to show that because of Morrison’s malfunctioning PASS, Martin was in the building for much longer that he needed to be: Several firefighters testified that had Morrison’s PASS worked, he would have been found much sooner, meaning Martin could have left sooner. (This is in spite of the fact that, when Martin activated his PASS, there was testimony that the sound was bouncing off of the walls making him difficult to find.) Moreover, Martin’s own mask malfunctioned, and he was not wearing it when he was found. Nevertheless, under the approved jury instructions, because the plaintiffs submitted “substantial evidence” that the PASS directly “contributed to [the] cause” of the death of Martin, the case was properly submitted to the jury. Id. There are obviously several things at play here, like a deferential standard of review and terrible facts, but sustaining such a large verdict on speculative testimony and a weak (but approved) standard is troubling.

1.5 Million Graco Strollers Recalled; Manufacturer Takes Advantage of Social Media Outlets to Inform Consumers

Graco Children’s Products, Inc. of Atlanta and the Consumer Product Safety Commission announced on January 20, 2010 an enormous recall of Graco children’s strollers. This decision was made after Graco received seven reports of injury resulting from children placing their fingers in the stroller’s canopy hinge mechanism while the canopy was being opened or closed. Five finger amputations and two fingertip lacerations were reported.

In all, 1.5 million units, including the Graco Passage, Alano and Spree Strollers, and Travel Systems, were recalled, making it the largest stroller recall in history.

This latest recall is not the first of its kind. In November 2009, approximately 1 million strollers were recalled by the CPSC and the British manufacturer Maclaren after twelve reports of children’s fingertips being amputated by a hinge mechanism similar to that involved in the latest Graco recall. In 2005, 1.1 million Graco-manufactured strollers were recalled as a result of their failure to latch properly, causing some strollers to unexpectedly collapse during use.

In this latest stroller recall, Graco has reportedly acted swiftly and cooperated with the CPSC in taking corrective measures for consumers. Graco immediately set up an interactive blog and FAQ page to provide information and instructions for consumers to order a free protective cover repair kit. Graco, taking advantage of all aspects of social media, has also been praised by some for its prompt responses to consumers’ questions and concerns on its Twitter account.

E-Cigarettes: Drug-device combo or mere tobacco product?

Since the fall of 2008, the U.S. Food and Drug Administration has routinely refused to allow the importation of electronic cigarettes, or “e-cigarettes,” into this country. A recent opinion might require a change of that policy. In Smoking Everywhere, Inc. v. U.S. Food & Drug Admin, No. 09-771(RJL), 2010 WL 129667 (D.D.C. Jan. 14, 2010), the U.S. District Court for the District of Columbia granted the Plaintiffs’ request for a preliminary injunction prohibiting the FDA from denying entry of e-cigarettes into the United States and from regulating e-cigarettes as a drug-device combination.

The plaintiffs in this action, Smoking Everywhere, Inc. and Sottera, Inc., are importers and distributors of e-cigarettes. These products are designed “to replicate the adult experience of smoking without combustion or the use of cancerous by-products.”Id. at *1. They import their products from manufacturers located overseas. However, their shipments were denied entry into the United States by the FDA on the basis that the shipments “appear to be adulterated, misbranded or otherwise in violation” of the Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq. Id. at *2.

Due to the action’s procedural posture, the court analyzed the likelihood of the Plaintiffs’ success on the merits, whether the Plaintiffs would suffer irreparable injury were an injunction not to be granted, and whether an injunction would further the public’s interest. Id. at *3. The court’s analysis required it to consider federal tobacco legislation, the FDCA, and the landmark decision of U.S. Food and Drug Admin. v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (2000), wherein the Supreme Court held that tobacco products were not subject to FDA regulation as a drug or device.

The Smoking Everywhere court rejected the FDA’s arguments that the term “tobacco product” should be narrowly defined and that e-cigarettes were drug-device combinations. The court stressed that due to the marketing of the e-cigarettes “for customary recreational use, those products (just like traditional cigarettes) are properly excluded from the meaning of drug or device under the FDCA.” Id. at *8. As such, the court determined that the Plaintiffs were “substantially likely to succeed on their claim that the FDA cannot regulate and thereby exclude their electronic cigarettes from the United States on the basis that those products are an unapproved drug-device combination under the FDCA.” Id. The court also determined that the Plaintiffs had suffered irreparable harm due to the FDA’s refusal to allow the importation of their e-cigarette shipments. Id. at *10. In the court’s final analysis, the factors weighed in the Plaintiffs’ favor, and therefore, the court granted the Plaintiffs’ request for an order enjoining the FDA from refusing admission into the U.S. e-cigarettes on the basis that such products are unapproved drugs, devices or drug-device combinations under the FDCA.

The Not-So Deep End

Above: A promotional still from the new ABC series, “The Deep End.”

In an attempt to keep this blog refreshing, the powers that be have consented to a minimal amount of frivolous Friday posts exploring the depiction of the legal profession in popular culture. Today’s post reviews last night’s series premiere of The Deep End, a legal comedy/drama on ABC shown from the perspective of five first-year associates at a BigLaw Los Angeles law firm, Sterling, Huddle, Oppenheim & Craft, not to be confused with Sagman, Bennett, Robbins, Oppenheim & Taft, a firm with a much more esteemed place in TV history.

It’s easy to attack The Deep End for its utter lack of realism. No one would watch a show about associates sitting in their offices 11-12 hours a day staring at documents and holding Dictaphones. So don’t expect realism. Really, don’t. A bitter custody dispute between a mother-in-law and daughter-in-law over the grandson/son ends with the litigants holding hands. (How many bitter family law cases do BigLaw first year associates handle? Don’t ask.).

Knowing that critics had somewhat panned the series prior to Thursday, I debated on the method of review. I considered writing and posting a predictive review prior to my actually viewing the premiere and then commenting on the accuracy of the prognostication, highlighting my sardonic wit whilst condemning Hollywood’s inability to write interesting programming. However, in an effort to find the truth, I settled on actually watching the show first. However, the former approach would have been perfectly adequate under the circumstances.

From a legal perspective, the depicted firm has several strange conflicts of interests. Cliff Huddle (Billy Zane), the Managing Partner, schemes against his firm’s own pro bono client, while new associate Beth Branford (Leah Pipes) fails to protect an elderly, vulnerable corporate CEO (although it wasn’t especially clear who the actual client was or should be – the corporation itself or the officer in his individual capacity.). There is a seemingly ex parte meeting with a judge. Another first year associate, Liam Priory, (Ben Lawson) almost breaks an ethical rule by having sex with a client, but thankfully, any sexual activity that may or may not have occurred took place before any retention agreement was signed. For a group of lawyers who purport to work 24/7, they seem to find enough to time to gather together to lament the fact they work 24/7.

Moreover, the show is simply predictable and boring, flaws which are not confined to legal dramas. Plots and characters are far from compelling, and cliches abound. The idealist associate wins in the end. (Of course). The spineless associate suddenly shows some backbone, earning respect for suddenly showing courage. The privileged associate fails to stand up to her overbearing father, provider of the privileged status. In addition, the writers offer awkward exchanges of dialogue in an attempt to capture the essence of first-year lawyering, e.g., (“Q: Are we supposed to love this job or hate it? A: Both.”). (This dialogue is said with excited smiles). I suppose that some of the shaky camera style was supposed to give us the feeling of a first year as well, along with first year associate Dylan Hewitt’s (Matt Long) constant hugging of his briefcase when things get tough. Yes, you are scared about failing. We get it. What I don’t get is why these first-year associates even have jobs. Who is this firm’s recruiting coordinator, who, I should note is conveniently absent from the pilot episode, perhaps due to the poor hiring choices?

My favorite part was about 42 minutes in, when it appears that the law firm misspells its own name in its signage: “Oppenhiem” on the sign v. “Oppenheim” on the ABC website. Good job, post production. At least the suboptimal effort was consistent on all fronts.

The pilot episode of The Deep End aired at 8 p.m. EST on ABC. The episode was written by David Hemingson and directed by Michael Fresco. The cast includes Matt Long (who plays Dylan Hewitt); Leah Pipes (Beth Branford); Ben Lawson (Liam Priory); Tina Majorino (Addy Fisher); Billy Zane (Cliff Huddle); Nicole Ari Parker (Susan Oppenheim); and Clancy Brown (Hart Sterling).

Are the Owners and Operators of a Parking Lot in the Business of Selling a Product Under Section 402A?

The Eastern District of Pennsylvania in Anastasio v. Kahn, No. 09-5213, 2010 WL 114879 (E.D. Pa. Jan. 13, 2010) [PDF] was recently asked to decide this question and held that owners and operators of property used as a parking lot were not sellers under Section 402A of the Second Restatement of Torts.

Plaintiff Theresa Anastasio exited an Acme supermarket on the sidewalk while operating a battery-powered scooter. The sidewalk and parking area were on the same level and there were “no marked crossings, crosswalks, skywalks, tunnels or any other sort of pathway, markings or stripings on the premises to mark off where a pedestrian . . . could go to be sure they were safe from motor traffic.” Id. at *1. As Anastasio was proceeding into the parking area, Defendant Harvey Kahn, Jr. struck her with his vehicle. As a result of this accident, Anastasio filed suit against Kahn, the supermarket, and the owners and operators of the parking lot asserting claims under both the Americans with Disabilities Act and state law strict liability.

The supermarket and the owners and operators of the parking lot moved to dismiss the strict liability claims, asserting that (1) the parking lot is not a “product” and (2) they are not “sellers” under Section 402A. The Court agreed and dismissed those claims. In so doing, the Court stated that this specific question had not been addressed by any Pennsylvania state court or the U.S. Court of Appeals for the Third Circuit. Therefore, the Court looked to interpretations of the word “seller” by Pennsylvania courts and found that, while interpreted broadly, it always involved the “transfer of possession of the subject product.” For instance, the Court cited to two decisions, one finding that United Airlines was not a seller because it was not in the business of transferring possession of an aircraft, and another finding that an amusement park was not a seller because it did not transfer control or possession of the park ride at issue.

Relying on this precedent and decisions from other jurisdictions, the Court found that since there was no transfer of a parking space, the supermarket and the owners and operators of the parking lot were not “sellers” and were not subject to strict liability under Section 402A. The Court also noted that this decision was in line with Pennsylvania law that strict liability principles are generally inapplicable to real property. Since the Court found that defendants were not “sellers” under Section 402A, it did not have to address defendants’ second argument that the parking lot was not a “product.”

This question had not previously been addressed in the Pennsylvania courts; it’s likely that it has not been addressed in many jurisdictions. Owners and operators of parking lots, or similar real property, that are faced with a strict liability claim should be aware of this argument and the precedent holding these persons and entities are not “sellers.”

South Carolina Federal Court Denies Statute of Repose Defense

Recently, the U.S. District Court for the District Court of South Carolina issued a products liability opinion, Ervin v. Continental Conveyor & Equip. Co., Inc., — F. Supp. 2d —, No. 4:07-CV-3010-TLW-TER, 2009 WL 4895559 (D.S.C. July 23, 2009), in which it denied two motions for summary judgment filed by the defendant-manufacturer. The issue in the case was the application of the statute of repose for actions involving real estate improvements to cases involving alleged defects in production equipment. Although the opinion was apparently issued seven months ago, it was only made accessible through Westlaw this week.

In that case, Plaintiff Marcus Ervin sued Continental Conveyor and Equipment Company, Inc. (“Continental Conveyor”) following a 2005 accident at a U.S. Department of Agriculture facility which caused him to lose an arm above the elbow. At issue was Continental Conveyor’s incline conveyor system. Due to the incline conveyor system’s “propensity to collect cotton around the lower belt pulley,” an unknown third party cut an access hole into the system’s casing to facilitate the removal of accumulated cotton. Immediately prior to the accident, the Plaintiff reached through the access hole to remove cotton “without turning off or locking out the power to the machine.” The system had originally been sold to the USDA in 1985 but was later disassembled and moved to its current location in Florence, South Carolina in 1994.

Continental Conveyor filed two separate motions for summary judgment, one based on South Carolina’s Statute of Repose for Improvements to Real Estate, and the other regarding substantive product liability issues. After a lengthy analysis, the court denied both motions.

In addressing the statute of repose issue, the Court construed S.C. Code 15-3-640, which established the period of repose after substantial completion of improvements to real property. The question for the Court was whether the incline conveyor system constituted an “improvement to real property” under South Carolina law. Finding no controlling state authority in South Carolina, the Court thoroughly surveyed a number of cases from other jurisdictions interpreting whether industrial equipment fell within the scope of similar statutes of repose.

The Court also noted that South Carolina authority suggested that the determination of whether an addition to real property constitutes an improvement required a case by case determination. Analyzing the factors set forth in South Carolina Pipeline Corp. v. Lone Star Steel, 345 S.C. 151, 546 S.E.2d 654 (2001), the Court easily concluded that the equipment at issue made the property more valuable and involved the investment of labor and money. However, the Court was “not prepared to reach the conclusion that the incline conveyor system [was] a permanent improvement to real property.” It reached that determination primarily because the system at issue was “relatively small scale” and the fact that not only was it mobile, but that it had been previously been moved, a fact the court found to be “important.”

With respect to Continental Conveyor’s second motion for summary judgment, the Court denied it on all its stated grounds, those being comparative fault (because the Court could not “conclude that the evidence support[ed] a finding that the plaintiff’s negligence exceeded that of the defendant as a matter of law”), assumption of risk (because the Plaintiff testified he “did not understand the nature and extent of the risk posed by the conveyor system,” despite his acknowledgment that he knew he could be injured by placing his arm into the machine), unforeseeable modification (because the defendant had preexisting knowledge of the accumulation of cotton problems which led to the unknown third party’s creation of the access hole), and the failure of Plaintiff’s experts to establish the equipment was defective (because there remained a question of fact whether the equipment was defective due to the accumulation problem).

The opinion does not necessarily signal the defeat of the statute of repose defense in South Carolina products liability litigation. As fact intensive as the opinion is, it may be difficult to rely upon this case in the future, simply because future disputes can be readily distinguished from the set of facts presented in Ervin.