Thursday, August 26, 2010

Pennsylvania ATV Case Highlights the Difference Between Misuse and Unintended Use in Products Cases

In Smith v. Yamaha Motor Corporation, U.S.A., — A.2d —, 2010 WL 3239476 (Pa. Super. Ct. Aug. 18, 2010), an appeals court in Pennsylvania considered whether a trial court erred in granting summary judgment to Yamaha on claims of negligence and strict liability, and whether it erred by striking the report of Plaintiffs’ accident reconstruction expert in its entirety.

On September 23, 1999, Jeffrey Smith, an experienced ATV rider, was attempting to back his Yamaha ATV, more specifically a 1987 Yamaha Big Bear 350, down a hill when his foot slipped and struck the right-rear fender of the ATV. The fender collapsed, and his right leg became trapped between the frame and the wheel. The ATV then rolled back over Mr. Smith, causing him to suffer severe injuries that left him disabled and disfigured. According to the website, this ATV was Yamaha’s first 4×4 ATV:

Mr. Smith and his wife, Susan, sued Yamaha under theories of strict liability, negligence, and breach of warranty, and claimed that the rear fender and instrument panel were defective. Yamaha answered, and asserted that Mr. Smith was contributorily negligent by trying to back the ATV down the hill, and by consuming alcohol (Mr. Smith’s BAC was 75% below the legal limit) and taking drugs (he was ingesting prescription OxyContin for a degenerative back condition).
Yamaha’s motion for summary judgment as to Plaintiffs’ strict liability claims was granted on the grounds that Plaintiff was misusing the ATV at the time of the accident because the ATV manual, which Plaintiff acknowledged receiving, warned against consuming drugs or alcohol in connection with using the ATV, and also counseled against letting the ATV roll backwards on a hill. By doing all of these things, Yamaha argued, Mr. Smith was “operating the vehicle in an unintended manner” (emphasis added). Yamaha’s motion for summary judgment as to Plaintiffs’ claims for negligence was also granted, as was its motion to strike the expert report of Plaintiffs’ accident reconstruction expert, because it raised a new theory of recovery after the statute of limitations had expired.
The appellate court reversed the trial court’s striking of the expert’s report in its entirety, holding that even though part of the report did raise a new recovery theory following the statute of limitation’s expiration, the remainder of the report did not and, therefore, the offending portion should merely have been redacted. The expert, therefore, should have been allowed to propound his theories about the defectiveness of the design of the fender and the availability of alternative designs that would have prevented Plaintiff’s injuries.
With this part of the expert’s report back in evidence, Plaintiffs’ claims under the negligence theory were once again viable. The expert was allowed to opine that Yamaha’s design did not meet the state of the art at the time of design and manufacture of ATVs. The appellate court, therefore, reversed the trial court’s decision to grant Yamaha’s summary judgment motion on Plaintiffs’ negligence claims.
The most instructive portion of this decision, however, was the appellate court’s decision to reverse the granting of Yamaha’s motion for summary judgment on Plaintiffs’ strict liability claims. In doing so, the court explained that “the trial court conflated the doctrine of unintended use with the concept of misuse” (emphasis added). According to the appellate court, Plaintiff was indeed operating the ATV for its intended use–off-road riding. What he may have been doing, however, was misusing the vehicle by operating it in a manner not intended by the manufacturer–backwards and potentially under the influence of drugs and alcohol. Finally:
It is well-settled that a plaintiff’s misuse of a product cannot be grounds for granting summary judgment in favor of the manufacturer under a design defect theory unless it is established that the misuse solely caused the accident while the design defect did not contribute to it.

Because the evidence of Plaintiff’s riding on the date of the accident went to the issue of misuse, rather than unintended use, and because there was evidence that a design defect may have caused or at least contributed to the accident, the trial court’s grant of summary judgment was reversed.
posted by Frances Zacher
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Monday, May 3, 2010

Foreseeable Misuse in Pennsylvania

Does foreseeable misuse have a place in determining liability in a products liability action? In Pennsylvania, it doesn’t. Recently, the Third Circuit, applying Pennsylvania law, rejected a consumer’s argument that the meaning of “intended use” included all uses “reasonably foreseeable” by the manufacturer. Jacobson v. BMW of North America, LLC, No. 08-4322, 2010 WL 1499809 (3d Cir. Mar. 23, 2010).

In 1999, Robert Jacobson (“Jacobson”) went to do errands with his two sons, Ryan and Christopher, in his BMW 325i. Jacobson stopped at a convenience store, parked, placed the gear shift in park, turned off the engine, engaged the emergency brake, removed the keys from the ignition, and exited the vehicle, leaving his sons inside. Ryan, playing with the gear shift, placed the vehicle in reverse or neutral and the vehicle began to roll. Christopher exited the vehicle without injury. However, Ryan sustained severe injuries as a result of his exit from the vehicle. Thereafter, Jacobson filed a action against BMW alleging that it should have had a device in place that would have prevented the car from shifting out of park.

At trial, the jury returned a verdict in favor of BMW. Jacobson filed a motion for a new trial, which was denied, and filed the present appeal. Jacobson raised four errors on appeal, including an argument that the court gave an erroneous jury instruction on the definition of “design defect.”

Under Pennsylvania law, “a manufacturer can be deemed liable only for harm that occurs in connection with a product’s intended use by an intended user.” On appeal Jacobson cited to two Third Circuit opinions, Pacheco v. The Coats Co., 26 F.3d 418, 422 (3d Cir. 1994) and Sheldon v. West Bend Equipment Corp., 718 F.2d 603, 608 (3d Cir. 1983) for the proposition that “intended use” under Pennsylvania law includes all uses “reasonably foreseeable by the manufacturer.” The Court disagreed and held that this proposition had been expressly rejected by the Pennsylvania Supreme Court in Pa. Dep’t of Gen. Servs. v. U.S. Mineral Prods. Co., 898 A.2d 590 (Pa. 2006). The Court found no error in the underlying court’s decision to omit “foreseeability” from its jury instruction on “intended use.”

This case seems to represent the current state of Pennsylvania law; however, practitioners and courts alike recognize the potential for change. As recognized by the Eastern District of Pennsylvania in July 2009, McGonigal v. Sears Roebuck and Co., No. 07-CV-4115, 2009 WL 2137210 (E.D. Pa. Jul. 16, 2009), Pennsylvania courts note that “negligence concepts should not be imported into strict liability law.” However, the McGonigal court also stated that “[t]he role of negligence concepts in strict liability doctrine in Pennsylvania features numerous unsettled issue of law.” The Supreme Court of Pennsylvania was recently afforded the opportunity to clarify strict liability law in Bugosh v. I.U. N. Am., Inc., 971 A.2d 1228 (Pa. 2009) — as recognized by Drug and Device Law blog back in April 2009 — however, the appeal was dismissed as been “improvidently granted.” As a result, Pennsylvania law still contains inconsistencies with the hope for clarification someday.
posted by Mary Giorgi
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Monday, April 26, 2010

More than 10 Years Later, Drug Settlement Litigation is Still Going

On November 19, 1999, American Home Products Corporation, now known as Wyeth, entered into a settlement agreement with class members of a diet drug nationwide class action, creating a settlement trust to pay claims of class members that were injured by ingesting certain diet drugs. On August 28, 2000, the Eastern District of Pennsylvania entered an order certifying and approving the nationwide settlement class. Now, more than 10 years later, there is still litigation surrounding claimants seeking benefits under this settlement agreement.

In fact, in the past two weeks, on April 6, 2010 and April 13, 2010, the Eastern District of Pennsylvania and Third Circuit, respectively, upheld the decisions by the settlement trust to deny benefits. In re Diet Drugs Products Liability Litigation, No. 99-20593, 2010 WL 1404624 (E.D. Pa. Apr. 6, 2010); In re Diet Drugs Products Liability Litigation, No. 09-2424, 2010 WL 1473752 (3d Cir. Apr. 14, 2010).

The decision by the Eastern District of Pennsylvania on April 6, 2010 involved claimant Betty Brown-Riddle. In order to seek benefits from the trust, Brown-Riddle had to submit evidence that she she suffered from “moderate aortic regurgitation,” as set forth in the Settlement Agreement. Brown-Riddle submitted a statement by her treating physician that she suffered from “mild to moderate aortic insufficiency.” Thereafter, the trust forwarded Brown-Riddle’s claim for review. The reviewing physician found that there was no reasonable medical basis for her treating physician’s finding that she suffered from moderate aortic regurgitation. As a result, the trust denied her claim and she sought review. After a series of administrative reviews pursuant to the Settlement Agreement, Brown-Riddle’s found its way into the district court for review.

The Court found that Brown-Riddle merely disagreed with the reviewing physician’s determination that she lacked a medical basis for her claim. She failed to identify or substantiate any specific errors and rested on her physician’s “check-the-box diagnoses.” The Court affirmed the decision of the trust denying benefits.

Similar to the above case, on April 13, 2010, the Third Circuit reviewed a claim of a class member that had been denied benefits. In this case, the Court affirmed the decision of the district court that the claimant did not provide adequate proof of diet drug ingestion required to support her claim because her supporting affidavits provided a dispense date when the drugs were off the market and stated dosages that were inconsistent with the dosages at which the drugs were issued. Further, addressing an argument by claimant, the Court found that the form she had to fill out in connection with her claim for benefits did not constitute a contract for benefits.

These decisions by the the Eastern District of Pennsylvania and the Third Circuit show that even when a mass class action is settled, litigation continues and our courts are continually asked to evaluate expert evidence as it would in a case of traditional posture. Plaintiffs in these types of cases are not off the hook of providing expert testimony. It will be interesting to note when litigation surrounding this class settlement ends — 10 more years, maybe 20.

posted by Mary Giorgi
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Wednesday, March 24, 2010

Third Restatement Comes In First in Pennsylvania

Over the course of the past year, I have become quite accustomed to the federal government telling me that it knows what is best for me, regardless of what actually may be best for me. Depending on which side of the aisle you stand, you may revel in the audacity of hope, or just simply marvel at the audacity of your political opponents. But we need not sink into the ether of partisanship; not this day – not when there is jurisprudence to be discussed. As will be seen in the coming months, in our land of multiple sovereigns, the judiciary too walks a delicate line among competing interests. As an example of that trend, the Eastern District of Pennsylvania recently authored an opinion illustrating the unique nature of our system.

In Hoffman v. Paper Converting Machine Co. , No. 08-3012, 2010 WL 845984 (E.D. Pa. March 3, 2010), the Plaintiff injured himself when using a printing press, amputating fingers on his right hand. He sued in federal court. The defendants moved for summary judgment. The initial issue in the decision relates to the proper substantive law for decision. Even though a federal court sitting in diversity applies substantive state law, the federal court may still be forced to speculate what a state court might do when state law is nebulous on the issue at hand. The district court, per the case discussed below, ruled that the Third Restatement was the standard of decision, and it decided various issues raised in the summary judgment motion.

In Berrier v. Simplicity Manufacturing, Inc., 563 F.3d 38 (3d Cir. 2009) [PDF], the Third Circuit was confronted with the issue of whether Pennsylvania courts would adopt the principles of the Third Restatement of Torts. The Third Circuit had some pretty strong indications (a pending case before the Pennsylvania Supreme Court) that the Pennsylvania Supreme Court was going to move to the liability scheme found in the Third Restatement, so the Third Circuit made that prediction. It turned out that the Pennsylvania Supreme Court dismissed the pending appeal as improvidently granted, and, therefore, Pennsylvania, for the time being, still adheres to the Second Restatement.

In Hoffman, the Plaintiff preferred the Second Restatement, while Defendants sought the application of the Third. Deciding between the Second and Third Restatement is a big decision, since each presents a different definition of a product defect, and in a products liability action, the definition of defect is likely to come up at some point in the proceedings. But there really was no decision to be made:

[A] district court is bound by Third Circuit precedent on state law issues unless a subsequent[] decision by the highest state court diverges from Third Circuit precedent.

Hoffman at *3. The district court ruled that the Third Restatement was the standard of decision, and it decided the various issues related to the summary judgment motion, granting it in part and denying it in part.

Defendants, pay attention. You can now do some forum shopping of your own, deciding whether to stay in state court, or remove to federal court, depending on which liability scheme is favorable to you. If you decide to remove, don’t forget about Iqbal and Twombley. As much as I would love to pontificate a potential law school exam question on this, I think I’ll just make the point that, in the short term, plaintiffs in Pennsylvania will have to pay attention to their products cases (including potential CAFA jurisdiction) to ensure that they get to apply Pennsylvania substantive law, at least in the short term, or in the alternative, prepare their complaints to survive a motion to dismiss under either standard. For the time being, in federal court, Pennsylvania state law is not really Pennsylvania state law.
posted by Kevin Couch
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Thursday, January 21, 2010

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.”

posted by Mary Giorgi
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