New Jersey’s Products Liability Act as Exclusive Remedy for Claims Based on Harm Caused by a Product

As we previously reported here, harm covered by New Jersey’s Products Liability Act (“PLA“) may not be redressed through a claim under New Jersey’s Consumer Fraud Act (“CFA“). However, based on a recent opinion from the United States District of New Jersey, practitioners should be aware that there are no hard and fast rules for early dismissal when a plaintiff asserts claims under both the PLA and CFA. Shannon v. Howmedica Osteonics Corp., No. 09-4171, 2010 WL 1492857 (D.N.J. Apr. 14, 2010).

In Fellner, discussed in our Tuna A Day post, the United States District Court of New Jersey found that the mere fact that the plaintiff sought damages for the cost of the allegedly defective tuna did not negate the fact that her underlying claim was that the product was defective, which claim was covered by the PLA. Fellner v. Tri-Union Seafoods, LLC, No. 06-0688, 2010 WL 1490927 (D.N.J. Apr. 13, 2010). As a result, on defendant’s motion to dismiss, Judge Cavanaugh found that the plaintiff’s claim under the CFA was subsumed by the PLA and dismissed plaintiff’s CFA claims.

In a matter decided one day after Fellner, Judge Linares was not as easily convinced that the plaintiff’s CFA claim was subsumed by the PLA. In this matter, Dave Shannon (“Shannon”) brought an action against Howmedica Osteonics Corporation (“Howmedica“) asserting that a “tibial insert manufactured and sold by Howmedica and inserted into his knee prematurely failed.” Shannon brought claims under both the PLA and CFA. Howmedica moved to dismiss his CFA claim on the ground that it was subsumed by the PLA.

Howmedica argued that the “essential nature of Plaintiff’s CFA claim is a product liability action,” and that the “damages that he seeks in his CFA claim are recoverable under the PLA.” This is a similar argument to the one defendant made in Fellner, which the Fellner Court accepted. In response, while the Shannon court agreed that generally “where the essential nature of a claim is a products liability claim, all other claims are subsumed by the PLA claim,” it pointed out that it appeared that Shannon was seeking damages for the cost to replace the insert — damages that may not be covered under the PLA. Then, however, the Court acknowledged that Shannon may be seeking the same damages under both the PLA and CFA. The Court denied Howmedica’s motion to dismiss and allowed discovery to proceed. Judge Linares stated the following:

If, after discovery, it is clear that all of the harm for which Mr. Shannon seeks redress is covered by his PLA claim, then Howmedica may move for summary judgment on the CFA claim.

From this decision, it appears that claimants in New Jersey may still be able to survive a motion to dismiss when he or she brings both PLA claims and CFA claims where the damages alleged raise the question whether they are covered by the PLA, even where the essential nature of the claim is that a product is defective. As a result, we may see more and more claimants pleading damages similar to Shannon to at least make defendants litigate both PLA and CFA claims through discovery. It will be interesting if the United States District Court of New Jersey further clarifies this issue, providing more concrete rules when CFA claims are subsumed by the PLA.

Friday Links

We believe the attorney on the cover of the comic book cover depicted above is making a good objection, although it may be untimely. Surely he was aware that Batman was invisible before he took the stand to testify. (There may also be a confrontation clause objection.). Such was the dilemma in Detective Comics #199 from September 1953. To be honest, we’re not certain Robin is dressed in appropriate courtroom attire.

We are disappointed to learn that Bobby G. Frederick, the author of the South Carolina Criminal Defense Blog, may be taking down his other site, Trial Theory, a blog dedicated to trial practice. (See here for his post on the stressors of the profession.).

If you haven’t read “Trout in the Milk,” last Friday’s post at the Drug and Device Law blog, do yourself a favor and check it out.

In this post, the Legal Ethics Forum directs our attention to this article (registration required) suggesting that male lawyers are overconfident about outcomes. Surely that is not correct, and we know for a fact that we would win an argument on that issue.

Ted Frank at Point of Law points us to some news suggesting that some consumers are drinking their Benadryl Extra-Strength Itch-Stopping Gel. Gross.

South Carolina Supreme Court Brings Down the Hammer on Discovery Abuse

Last week, the South Carolina Supreme Court indicated that it would no longer tolerate impermissible fishing expeditions during the discovery process. In so doing, the court took the extraordinary measure of granting a writ of certiorari to review an administrative law court’s discovery orders and then vacating those orders and remanding the case back to that court. See Oncology & Hematology Assocs. of S.C., LLC v. South Carolina Dep’t of Health & Envtl. Control, — S.E.2d —-, No. 26814., 2010 WL 1756850 (S.C. May 3, 2010). The court described the case as between two “fiercely competitive healthcare providers” involved in a dispute over the “vying for cancer patients in Greer, South Carolina.” The specific facts of the dispute are irrelevant to the cautionary point offered by the case: be careful what you ask for in discovery.

This is a case with which litigators should be familiar. At issue in the opinion were the discovery requests sent by Spartanburg Regional Healthcare System (“SRHS”) to Oncology and Hematology Associates of South Carolina, d/b/a Cancer Centers of the Carolinas (“CCC”), several of which the court quoted in their entirety in the opinion. The central issue in the case, as noted by the Court, was “whether the 2004-2005 South Carolina Health Plan standards applied to the relocation of SRHS’s linear accelerator.” That was a relatively narrow issue, though the discovery requests at issue were quite broad. Indeed, the specific proceeding arose after SRHS submitted a Certificate of Need application to the South Carolina Department of Health and Environmental Control to relocate the linear accelerator from one facility to another. That request was granted by the governmental authorities, but CCC sought a contested case hearing before an administrative judge on the issue. Ultimately, the Court concluded that SRHS “took a shotgun approach and sought virtually all information concerning every facet of CCC’s operation.”

Nothing good can follow that statement if it was your discovery at issue.

Pausing to quote the rules, and expound upon its scope, the Court observed:

We are keenly aware that the scope of discovery is broad. Rule 26(b)(1), SCRCP, provides:
Parties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action . . . [and] [i]t is not ground for objection that the information sought will be inadmissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence.

Yet, there are limits, which we see trial courts generally unwilling to recognize and enforce. SRHS’s discovery requests of CCC and its business partners are abusive and beyond the pale.

Our willingness to review a discovery order by way of a writ of certiorari will be as rare as the proverbial “hen’s tooth.” We have no desire to micromanage discovery orders. It is our hope that in resolving this matter, we will speak to trial courts generally. While discovery serves as an important tool in the truth-seeking function of our legal system, we are concerned that “discovery practice” has become a cottage industry and the merits of a claim are being relegated to a secondary status.

In finding that SRHS had abused the discovery rules, the Court further noted:

SRHS’s discovery requests are not remotely relevant to a resolution of the issue concerning the relocation of the linear accelerator. A challenge to relocation of the linear accelerator does not entitle SRHS to the information it seeks from CCC and affiliated entities. SRHS abused the discovery process with its scorched-earth approach.

We decline to rewrite and narrowly tailor SRHS’s oppressive discovery requests so as to make them proper. That would reward improper conduct. Where, as here, a party abuses discovery, the proper remedy is to vacate the requests and require the party to start over. As a result, we vacate the five discovery orders before us.

Ouch.

If you file motions to compel in South Carolina, or elsewhere, you will likely see the case cited in any responses to your motions. (This opinion could be persuasive authority elsewhere, and in fact, the Court itself invoked a 2003 Texas Supreme Court opinion in support of its conclusion.). If you respond to many such motions, it’s time to update your form response.

New York High Court Affirms Plaintiff’s Verdict in Lift Case

In the summer of 1997, Walter Adams, a maintenance man, climbed into a personnel lift (a device which a basket into which a person enters and presses a button, which causes the basket to rise or lower depending upon the operator’s preference). After he had taken the basket to a height of approximately twelve feet, the lift tipped to one side and Adams fell from the basket. Adams later brought suit against Genie Industries, Inc., the designer, manufacturer, and seller of the lift at issue. Following a trial, a jury found that the lift had been defectively designed. Yesterday, nearly thirteen years after the accident at issue, the New York Court of Appeals, that state’s highest court, affirmed that verdict in Adams v. Genie Industries, Inc., No. 67, 2010 WL 1849325 (N.Y. May 11, 2010) [PDF].

The Plaintiff’s principal theory was that the lift at issue did not have interlocking outriggers. The device actually came with outriggers, but sometime between the purchase of the lift in 1986 and the accident in 1997, Plaintiff’s employer lost them. That didn’t affect Plaintiff’s employer’s use of the equipment, though, and the lift remained in service despite a warning on the equipment advising that “[a]ll outriggers must be installed before using.” Plaintiff theorized that the lift was unsafe because the outriggers at issue did not feature an interlocking mechanism, i.e. a device that would prevent the lift from being operated without the outriggers installed and in use.

The evidence clearly showed that the use of outriggers would have made the product safer. Expert testimony explained that outriggers would have expanded the product’s “footprint,” making it more stable by distributing its weight over a wider area. Indeed, Genie’s own label warned against using the product without outriggers. It is thus reasonable to conclude that an interlock, making use without outriggers impossible, would have increased the safety of the product.

Plaintiff also offered evidence from which a jury could find that, in 1986 when the product was sold, it was technologically possible, at minimal cost, to design the product with interlocked outriggers. A qualified expert so testified, and illustrated his point with a model that he had created of Genie’s machine, to which he had added a half dozen switches, of a kind available in the late 1980s for $20 to $25 each.

The court acknowledged Genie’s point that liability could not attach “merely on a showing that a safer product was theoretically possible at the time the machine was made.” However, the Court cited to testimony that a former Genie employee had specifically envisioned and discussed the possibility of interlocked outriggers in 1985, a year before the sale of the device at issue, and that he recalled thatGenie had obtained a competitor’s lift featuring interlocked outriggers in 1985, as well. Further, a Genie official had apparently secured company permission in 1985 to present the idea of interlocked outriggers before a safety panel in 1985 to an industry safety committee.

The court sustained Genie’s point of error that the trial court had erred in submitting to the jury the issue of its alleged negligence from 1986 to 1997 in failing to retrofit or recall the lift at issue. However, the court essentially punted on this issue, finding that the error was harmless.

In so doing, the Court remarked:

Our decisions make clear that, in general, the duty of the seller of a product who discovers, after the sale, risks that were not known beforehand is (sic) a duty to warn. In this case, there can be no successful claim that Genie breached any duty to warn, either pre-sale or post-sale. Supreme Court held, on a pretrial motion, that the warning contained in Genie’s product label was adequate, and that holding is not challenged here. We have never imposed a post-sale duty to recall or retrofit a product, and the facts of this case provide no justification for creating one. Thus the jury should not have been permitted to find that Genie was negligent in failing to recall or retrofit its product after the 1986 sale.

The trial court’s error in submitting this theory to the jury, however, had no impact on the outcome of the case. Plaintiff’s post-sale negligence claim, as presented at trial, was no more than a duplicate of his design defect and negligent design claims. Plaintiff presented no evidence of any facts that came to Genie’s attention after the sale that might have triggered a new duty; plaintiff merely asserted that Genie should have recalled or retrofitted the personnel lift for the same reasons that it should not have sold it in the first place-principally, because the outriggers were not interlocked. Genie points to no evidence admitted on the post-sale negligence claim that would have been inadmissible on the other claims, and identifies no way in which the court’s error in submitting one claim might have tainted the jury’s verdict on the others.

Id. (citations omitted).

It appears that there were a number of liability issues which were either not subject to the appeal or not discussed in meaningful detail by the Court. However, aside from a few brief statements, the court did not spend much time addressing the Plaintiff’s employer’s use of the lift in contravention of the warning and its admitted loss of the outriggers at issue. Further, there was no discussion of whether the accident at issue would have occurred had the originally included outriggers been present and installed on the lift at issue at the time of the accident. Had the Plaintiff, or his employer, used the product as intended or as contemplated by the warning on the face of the equipment, the accident may well have not occurred.

Certainly, between a lift with no outriggers of any kind, and a lift with interlocked outriggers, the latter may be safer than the former. But Genie did not sell a lift sans outriggers in 1986; it sold one with them, albeit non-interlocked. But in losing the outriggers, Plaintiff’s employer made the device less safe, yet continued to use it, presumably for some time. What of that? Should Genie be responsible for a Plaintiff’s employer’s modification of the device? Should it be responsible for the device being made less safe by such an alteration? If the device is made less safe by a third party, is it that less-safe device the standard that shall be judged, or the device as it was sold?

Harsh Punishment on the Horizon for Company, and Perhaps its Executives, Who Failed to Warn

A federal judge in Minnesota has rejected a proposed plea agreement between the federal government and Guidant Corporation, in which Guidant had agreed to plead guilty to two criminal misdemeanors and to pay a $296 million fine for continuing to sell heart defibrillators after discovering that some might short-circuit and fail, The New York Times reports. Federal Judge Donovan W. Frank said, in his 37-page opinion [PDF], that provisions of the agreement were not in the best interest of justice and do not serve the public’s interest because they do not adequately address Guidant’s history and the criminal conduct at issue.”

The problems associated with Guidant’s defibrillators, which have reportedly been associated with 6 deaths, came to light in 2005 when The New York Times published an article based on interviews of two Minneapolis cardiologists who treated Joshua Oukrup, a 21-year-old college student who reportedly died when his Guidant defibrillator short-circuited as it was charging to send out its life-saving jolt. Although Guidant had reportedly become aware of the defect associated with its product, its representatives merely fixed the flaw in new devices without warning doctors or regulators about the problem. As such, patients continued to get the potentially flawed older devices because the company did not pull them from hospital shelves.

Guidant’s chief medical officer explained that “the company had not seen a compelling reason to issue an alert to physicians about the defibrillators because the failure rate was very low and replacing the devices might pose greater patient risks.”

Mr. Oukrup’s treating cardiologist said that this was “a statistical argument that has little to do with real people.” In fact, prior to Judge Frank’s April 27 ruling, Mr. Oukrup’s two treating cardiologists wrote a letter [PDF] to the court urging the judge to reject the plea agreement. The doctors wrote that they were “extremely dismayed” with the decision to enter such an agreement with the company rather than to “prosecute the company and the individuals responsible for this egregious act.”

Judge Frank noted in his ruling that it is up to prosecutors, not the court, to decide who should be prosecuted. But his rebuke of the proffered plea deal certainly calls into question: “Who should be held accountable when a company sells a flawed product that can injure or kill patients? Is it the company or the people who run it?”

A Can of Tuna a Day, Keeps the Doctor Away?

A New Jersey women got the age-old saying a bit wrong and instead of an apple a day, consumed a can of tuna per day for 12 years, resulting in severe mercury poisoning. As a result of her injuries, she asked the United States District Court for the District of New Jersey to find the manufacturer of canned albacore tuna liable for “canning and distributing albacore tuna containing harmful mercury compounds, while failing to warn and disclose the harms associated with the mercury contained in its albacore tuna products.” Fellner v. Tri-Union Seafoods, LLC, No. 06-0688, 2010 WL 1490927 (D.N.J. Apr. 13, 2010).

Defendant moved to dismiss the action on the grounds that (1) Plaintiff’s claims under the New Jersey Consumer Fraud Act (“CFA“) were subsumed by her claims under the New Jersey Products Liability Act (“PLA“), (2) Plaintiff had failed to state her claims with sufficient particularity, (3) Defendant had no duty to warn, and (4) public policy considerations warranted dismissal of the action. The Court granted Tri-Union’s motion on the first ground, but denied on the other grounds.

Plaintiff, Deborah Fellner (“Fellner“), consumed approximately one can of Chicken of the Sea albacore tuna products per day for approximately 12 years. As a result, Fellner “contracted severe mercury poisoning and suffered extreme physical and emotional injuries.” Fellner then brought this action against Tri-Union Seafoods, LLC (“Tri-Union”) who manufactures, processes, tests, cans, markets and sells tuna products. Fellner asserted claims against Tri-Union under the PLA, the CFA and for punitive damages based on their failure to warn about the presence of mercury in their tuna products.

On Tri-Union’s first ground, the Court agreed with Tri-Union that Fellner’s claims under the CFA are subsumed by the PLA because the mere fact that Fellner sought economic damages to reimburse her for the cost of the product, did not negate the fact that her underlying claim was that the tuna was defective. A contrary finding would nullify the intended purpose of the PLA to “unify products liability causes of action into a single claim.”

Tri-Union’s second ground for dismissal was that Fellner failed to sufficiently plead her claim under the PLA. The Court first recognized that there is a rebuttable presumption that warning labels are not required where the company is in compliance with FDA requirements. However, this presumption can be overcome in the appropriate circumstances. Tri-Union asserted that Fellner could not rebut this presumption with her allegations that Tri-Union “concealed, suppressed, omitted, and/or failed to disclose material information regarding the presence of methylmercury and/or other harmful compounds in its Tuna Products.” The Court disagreed and found that, although Fellner’s pleadings were minimal, they were sufficient to survive a motion to dismiss as if accurate, could potentially rebut the presumption of the warning’s adequacy.

Tri-Union’s third ground for dismissal was that it had no duty to warn of the potential danger of mercury in its tuna products. Tri-Union first argued that the dangers of mercury are obvious, operating as a complete defense to a failure to warn action. The Court found that level of consumer knowledge was relevant but that this determination could not be made at this stage of the pleadings. Next, Tri-Union argued that Fellner misused the product by consuming the product in “abnormal” quantities and, therefore, the danger caused by such misuse was unforeseeable. The Court again found that while her consumption may be relevant, this determination could not be resolved on a motion to dismiss. Finally, the Court rejected Tri-Union’s argument that since mercury is naturally occurring, no warning was necessary. The Court stated that this was not a per rule.

Tri-Union’s final ground for dismissal was a public policy argument that permitting Fellner’s claim would reduce the consumption of health quantities of fish. The Court disagreed and stated that there was no indication that warning labels regarding mercury content would cease consumption of fish at healthy levels.

The Court’s ruling merely dismissed Fellner’s claim under the CFA but allowed her claim under the PLA for failure to warn to move forward. Therefore, it would be in the jury’s hands whether the dangers of consuming approximately 4,380 cans of tuna was knowledge a typical consumer possesses and whether this level of consumption was an unforeseeable misuse.

Friday Links

We’re taking a break this week from court related comic book covers to bring you the above, one of our favorite closing arguments from television sitcom history. That’s right, depicted above is the closing argument of Jackie Chiles, representing the main characters of “Seinfeld,” on charges that they violated a good Samaritan law, in the series finale of that program.

Maybe this guy’s got the right idea? Walter Olson at Overlawyered reports on a recent Indiana lawsuit in which the Plaintiff sued a local retail establishment, claiming that they prevented him from buying a lottery ticket, and of course, he would have picked the winning numbers, so they thwarted his win. How could they do that to him?

KC Johnson, who through his blog Durham in Wonderland, reported on the Duke lacrosse case several years ago, is now blogging the tragic Virginia lacrosse-related murder case. For his two most recent posts on that topic, see here and here.

If you haven’t already, check out this guest post by John A. Tartaglia III at the Drug and Device Law blog on “attempts in Congress to strip manufacturers of FDA premarket approved medical device manufacturers of their hard-won preemption defense.”

Oh, alright, we’ll do a comic book cover this week for good measure. Depicted below is Mr. District Attorney #65, originally published in 1958. We think that the defendant may have a good confrontation clause objection here, but then again, we’re not criminal lawyers.

The Tylenol Recall

Just in time for the height of the spring allergy season, a voluntary recall was announced on April 30, 2010 for numerous over the counter allergy treatment medications and pain relievers produced by McNeil Consumer Healthcare. This is the second major recall for Tylenol products this year. As you may recall, in January, there was a recall of the adult pain reliever due to concerns about mold. The products recalled were for children and infants which has created somewhat of a panic. McNeil’s most recent press release detailed the reason for the new recall:
McNeil Consumer Healthcare is initiating this voluntary recall because some of these products may not meet required quality standards. This recall is not being undertaken on the basis of adverse medical events. However, as a precautionary measure, parents and caregivers should not administer these products to their children. Some of the products included in the recall may contain a higher concentration of active ingredient than is specified; others may contain inactive ingredients that may not meet internal testing requirements; and others may contain tiny particles. While the potential for serious medical events is remote, the company advises consumers who have purchased these recalled products to discontinue use.

As can be seen, McNeil has cited quality control standards as being the reason for the recall. The buzz in the blogosphere and in the online news outlets references the presence of bacteria in at least one facility. At this point, it appears that the concerns are not as dire as the buzz would like to portray them. In this report from the Associated Press, Deborah Autor, director of the Food and Drug Administration’s drug compliance office, was quoted as stating that the risk, at this point, to consumers was “remote.” What may eventually come of the recall is too hard to predict at this point. However, with the FDA considering additional steps in the investigation, this is definitely an issue that we will need to continue to monitor. A complete list of the products that were involved in the most recent recall can be found here.

When Is a Product Sold?

I am honored to have the Cinco de Mayo post, and, in honor of this holiday, please ponder with me the age-old question, when does a bucket truck become a bucket truck? In Campbell v. Altec Industries, Inc., No. 09-13472, 2010 WL 1740691 (11th Cir. May 3, 2010) [PDF], the Eleventh Circuit certified a question to the Georgia Supreme Court to decide an statute of repose issue. Campbell worked for Georgia Power Company and was injured when a cylinder on a bucket truck, owned by Georgia Power, failed. Campbell sued the manufacturer of the truck (“Altec”) and the manufacturer of the defective lift cylinder (“THI”). The statute of repose limits the timing of a products liability action to “ten years from the date of the first sale for use or consumption of the personal property causing or otherwise bringing about the injury.” The certified question asks whether the statute of repose begins to run when

(1) a component part causing an injury is assembled or tested, (2) a finished product, which includes an injuring component part, is assembled, or, (3) a finished product, which includes an injuring component part, is delivered to its initial purchaser?

Id. The district court ruled that the statute of repose began to run on January 14, 1998, when Altec placed the completed lift assembly on a test chassis and operated it. “The final assembly of the lift cylinder and placement onto the bucket truck, however, did not occur until sometime in March 1998. The initial delivery to the ultimate purchaser, Georgia Power Company, then occurred in April 1998.” Id. The district court’s order granting the defendants’ motion for partial summary judgment shed’s more light on the facts, noting that Georgia Power initially ordered the bucket truck in March 1997 from Altec, and Altec purchased the lower lift boom cylinder in October 1997. The district court essentially reasoned that Altec purchased the cylinder for production of the truck ordered by Georgia Power, and the completion of the lift assembly on January 14, 1998, which could operate independently of the truck itself, was the moment triggering the statute of repose.

Thus, the relevant inquiry is not when the bucket truck ultimately entered the stream of commerce or whether it was operating as it was intended but rather the movement and function of the lift.

Order, Campbell v. Altec Indus., Inc., No. 08-CV-0810 (N.D. Ga. Feb. 19, 2009) [DE #56]. As shown above, the dates matter, because if the statute of repose was triggered by the assembly of the final bucket truck or its delivery, then Campbell’s suit is timely.

It will be interesting to see what Georgia does with this case. The case will impact vehicles that do something in addition to being vehicles (fire trucks with ladders) in addition to finished products made from components that can function independently of the finished product. I like the defendant-friendly ruling, but I don’t know if it will hold up in a different factual scenario, e.g., firefighter deaths from a defective ladder assembly.

Defective Vacuum Sucks Hair Out of Scalp, Suit Says

An Illinois woman has recently filed suit against Ohio-based vacuum manufacturer The Kirby Company for $200,000, reports the Chicago Sun-Times, alleging her defective vacuum cleaner broke during use and sucked the hair out of her scalp.

The complaint, filed in U.S. District Court in Illinois on April 23, reportedly sets forth that the vacuum was “defective and unreasonably dangerous” and that Kirby sold the vacuum without adequate testing and without proper warnings of the hazards of personal injuries. The plaintiff’s Chicago-area lawyer, Thomas A. Reed, to whom the plaintiff referred all questions, has told the media that his client was using the vacuum hose to clean underneath her bed when the attachment broke, “causing a tremendous sucking that took her hair right into the machine.” He declined to discuss the extent of his client’s injuries, but did indicate that she was rushed to the emergency room after the incident.

The suit has generated considerable discussion. See local Chicago NBC coverage here, where a poll shows that 79 percent of Chicago locals think the story is laughable, or commentary here, where one writer notes the marketing potential (“Hairs on the floor don’t stand a chance!”).

In spite of the skepticism surrounding the suit, there appears to be evidence to suggest her claim may have legs. Video coverage at Fox News includes pictures of the woman’s scalp allegedly showing the injury to her head. The pictures were thought to be so disturbing that the affected area of the woman’s scalp were blurred for the television clip.

It’s certainly an interesting set of facts. We’ll have to see where this one goes.