Cadmium in the News

Cadmium, a transition metal with possible carcinogenic effects, has garnered a fair amount of press coverage of late, as it appears that foreign manufacturers are now using it instead of lead in the production of toys, including children’s jewelry. On January 11, 2010, Inez Tenenbaum, Chairman of the Consumer Products Safety Commission, issued a videotaped statement to be delivered to the Asia-Pacific Economic Cooperation Toy Safety Initiative/Dialogue in Hong Kong, in which she stressed that children’s products must be free of heavy metals. She also stated that voluntary efforts to ensure that children’s toys are free of cadmium might only be marginally effective. The CPSC reports that it continues to investigate this issue.

In a related news report , the Associated Press reports that New York Senator Charles Schumer (D – New York) intends to propose legislation in response to the reports of cadmium being found in toys manufactured in the People’s Republic of China. (See Senator Schumer’s January 13 press release on this topic here.). As quoted by the AP, Senator Schumer stated that his legislation, if passed, would “put an end to the use of cadmium in our children’s jewelry and toys once and for all . . . whether it’s made here or in China or anywhere else. It will just stop it cold.” The AP report also also referenced laboratory testing conducted by the news agency ” . . . on 103 pieces of low-priced children’s jewelry [which] found 12 items with cadmium content above 10 percent of the total weight. Some were as much as 90 percent cadmium.”

South Carolina Supreme Court Retreats from Economic Loss Rule Exceptions

Last month, the South Carolina Supreme Court retreated from some exceptions it had previously carved out of the economic loss rule and strongly suggested the possibility that it will find no further exceptions to the rule. In Sapp & Smith v. Ford Motor Co., — S.E.2d —-, No. 26754 (S.C. Dec. 21, 2009), the Court began this new direction by noting that South Carolina continues to follow the economic loss rule in products liability cases:

‘The economic loss rule is a creation of the modern law of products liability. Under the rule, there is no tort liability for a product defect if the damage suffered by the plaintiff is only to the product itself.’ Kennedy v. Columbia Lumber & Mfg. Co., 299 S.C. 335, 341, 384 S.E.2d 730, 734 (1989). In other words, tort liability only lies where there is damage done to other property or personal injury.

Id. In the past, South Carolina courts have developed an exception to the rule for construction of residential homes. See Kennedy, 299 S.C. at 341, 384 S.E.2d at 734. Some of the reasons for the exception were: a home is typically the single largest investment of an individual, a home is a completely different type of manufactured good, and the sale of a home involves inherently unequal bargaining power between the parties. Two years ago, in Colleton Preparatory Acad,, Inc. v. Hoover Universal Inc., 379 S.C. 181, 666 S.E.2d 247 (2008), the court seemed to extend this exception to the construction of commercial buildings, as well.

In Sapp, the plaintiffs involved in the consolidated appeal had each purchased used Ford trucks. The trucks allegedly had a design defect with their cruise control mechanism, which in turn caused the trucks to catch fire. In each case, there was neither a personal injury claim nor a property damage claim (other than to the trucks themselves). Further, in each respective case, the plaintiffs lost at the trial court level due to the court’s application of the economic loss rule. On appeal, each plaintiff argued that the exception outlined in Colleton applied to their cases, and thus, their claims should not be barred by the economic loss rule. The court disagreed, holding that that the economic loss rule barred both plaintiffs’ claims.

The Sapp court went on to overrule the expansion of the exception initially created in Kennedy. In so doing, it expressly overruled Colleton to the extent it expanded the narrow exception to the economic loss rule beyond the residential builder context as pronounced by Kennedy.