Inflaming a Venire

If you haven’t already, you will likely hear about some accidents involving Napa Firelite Fire Gel, which has ignited a firestorm of controversy, pictured here (h/t TortsProf Blog).  The New York Times published a story about the accidents, using some fairly inflammatory quotes, even comparing the Fuel Gel to a Molotov Cocktail.  The Fuel Gel remains the hottest gift of the summer, though, providing a lot of bang for the buck.

Lest you think my introduction replete with fire references was somewhat crass, let me suggest it was no more incendiary than the piece in the Times that, using the quotes of witnesses to the accidents, compares Firelite to the following: napalm, Molotov Cocktail, lethal weapon, and gasoline in a bottle.  Plaintiff’s lawyers are already linking to the Times piece, to legitimize their opinion that the Firegel contains a “blatant defect.”  Yikes.  I understand that completely neutral stories would not sell newspapers, but there has to be some concern about the potential impact of stories such as these on the venire.  Put between a rock and a hard place, Napa pulled the product from shelves, until a different warning could be put on the label.

While the New York Times goes out of its way to roast Napa, there is relatively little overt discussion of what probably happened.  From the descriptions in the Times, it seems that both cases of explosions were caused when an individual added more fire gel to an already ignited or hot firepot.  Now, there was a warning not to do this, but the jury question will be whether this warning was adequate.  While you and I may not put a flammable jelly-like substance into a hot container, not all are as cautious.  Did the inadequate warning cause the injuries?  Who knows?  But The New York Times is doing its part to fan the flame, and to ensure that any possible juror knows that Napa products are defective before any factfinding has taken place.

Thoughts on “The Taxpayer’s Burden Product-Related Harm”

On some level, we miss law school.  Mostly the extended breaks between semesters, and that  cachet has been replaced by the tenth-of-the-hour.  But we thank the TortsProf Blog for providing some stimulation on the academic side, and most recently providing this link where we were able to glance an interesting paper entitled “The Taxpayer’s Burden from Product-Related Harm,” a collaboration among Ruth Ruttenberg, Jonathan Cardi, and Estye Fenton.   You can find the abstract and download it from SSRN here.  We get really excited when we get to talk about “externalities,” a word and concept far too often left out of memoranda in support of summary judgment.

So, the flavor of the paper is that tort recovery is often insufficient for individuals who suffer product-related harms, and that the economic results of the insufficiencies is the injured person being on the government dole or somehow passing along medical bills or other costs to the taxpaying public, which apparently is an ever-declining population.  The paper looks at two methodologies for tracking the externalities.  The thrust of the paper is that the externalities due to product-related harm may be as high as $1 trillion, and that the cost of products are artificially low, and the taxpayers are getting hosed.  While we agree that taxpayers generally get hosed, externalities or not, we now take a minute to explore some other issues necessarily related.

While we agree that as a general principle externalities should be internalized, we have allocated risk in a certain way that is best for society.  There is a certain systemic logic that runs through the law.  For instance, part of the paper discusses barriers to court and compensation, which contributes to the externality problem.  I would say that we need to reframe the argument.  What we have said is that if a plaintiff can’t prove a product defect, then he shouldn’t recover, or, in a sense, society would rather have the product as-is and pay for the injury.  In this sense, society perhaps has taken on the externality of the injury, but only after making a jurisprudential choice that product innovation may be worth more than that injury.  If the authors of “Burden” make the argument that externalities include one individual’s lost wages, lost taxes paid, and value of benefits paid, then certainly there is a counterargument that the designers and manufacturers produce a benefit in taxes and wages paid, and the legal burden for determining whether society or the manufacturer subsidizes innovation is whether the product is unreasonably dangerous.  If there is a systemic cost, then there should be a systemic benefit.  I think it could just as easily be argued that if the injured party is always compensated, then the systemic cost is the lost opportunity of innovation or ideas.  While externalities may be internalized, that does not necessarily mean that the cost imposed on society is necessarily lessened.  But it is impossible to measure empirically the business ideas or products that are not brought to bear or are made economically infeasible (hence less taxes or wages paid and perhaps a different set of people on the government dole).  We say all this to ask, what’s so wrong with a bit of externalities?  Isn’t inefficiency a value judgment?  But perhaps this doesn’t make any sense, as we are litigators and not professors.  After all, no matter injury or innovation, there is some kind of insurance pool, and we all end up paying.

The Four Loko DJ Action

We are pleased to announce that Selective Insurance Company of South Carolina was bold enough to write coverage for Phusion Projects, LLC, the company that formerly manufactured Four Loko as we once knew it.  Four Loko took all the hard work out of mixing alcohol and caffeine at the bar by combining the two in the  manufacturing process.  Yet Law 360 informs us Selective filed a DJ  action in Illinois to clarify that there are certain suits it will not defend, based on a defense that the policy was not in force when the “bodily injury” alleged in several lawsuits occurred.

There seems to be very little of interest (at least at first glance) in the declaratory judgment complaint other than what we have previously blogged about in a prior Four Loko related post.  Namely, Selective probably thought it was pretty safe (okay, somewhat safe) insuring this company since the beverage was merely a manufacturing of an aftermarket process.    Moreover, although a DJ is always a good idea, as it puts lawyers to work who were previously not occupied, it remains to be seen whether this DJ will be effective.  After all, Selective insured Phusion while it was manufacturing Four Loko and placing it in the stream of commerce.  The dates of bodily injury in these cases may not be determinative.  There certainly will have to be some scintillating discovery on dates of manufacture, lot numbers and dates of distribution before the lawyers reach the salacious details of surrounding the consumption of the Four Loko.

We don’t claim to be actuaries (Oh, that we had made that choice), but we would be interested to know from our legion of actuary readers how one would price products liability insurance for products such as Four Loko.  We imagine the underwriter would gather some documents and get some input from actuarial and legal departments and the following exchange takes place:

UW: So, what are the chances for a lawsuit coming into being here?  I mean, this seems to be a pretty safe product.  Caffeine.  Alcohol.  There’s some kind of tagline about “blackout in a can” that’s somewhat troubling though.

Actuarial: [Speaking unintelligible secret mathy language]

In-house Lawyer: [Wearing a polo shirt, chinos, and no socks] I would put our chances at being sued at greater than 90%.  Actuary, can you account for that in your pricing?

Actuarial: [Emitting a series of beeps]

In-house Lawyer: Don’t forget to account for the irresponsibility co-efficient of drunk young adults.

And eventually, a premium is settled upon that becomes a second-guessed business decision, and indirectly punishes innovation in the alcoholic energy drink market.  Perhaps this is a good thing.

Procedure Matters in New York (In Lye Cases, Too)

I used to have a professor who would say something like, “The best way to win a lawsuit is on a technicality.”  I think what he was getting at (as all law professors force you to guess what they are getting at, rather than actually coming out and saying what they are getting at) is that it is much easier to win and defend on appeal a clear procedural decision.  The converse of that is, the worst way to lose a lawsuit is on a technicality.  Even worse, it is absolutely no fun at all to explain to a client that you lost a lawsuit because of a technicality.  Today, through Chow v. Reckitt & Colman, Inc., No. 81, 2011 WL 1752234 (N.Y. May 10, 2011) [PDF], we are reminded that procedure matters.

I think we can all agree that drain cleaner is dangerous and can cause physical harm if not used correctly.  After all, anything that will eat through grease, hair, and other sludge would probably taint the delicate skin of a lawyer.  In Chow, a restaurant employee used Red Devil Lye to clear a drain in a Manhattan restaurant and was injured during that task.   There was no problem dispensing with the failure to warn claim, but the design defect claim was a different issue.  In its motion for summary judgment, the defendant said something like, “C’mon, this is lye.  We buy it specifically because it devours sludge.  It’s dangerous because it has to be dangerous to do its job. ”  But the Court of Appeals denied summary judgment.  New York rules require the movant to produce evidence at the summary judgment stage in order to perform the risk-utility test.  There was no such evidence in the record. On this point, the Court of Appeals noted as follows:

[D]efendants, in support of their summary judgment motion, produced no evidence of the absence of a safer but functionally equivalent alternative to lye. Defendants relied simply on a statement in an attorney’s affirmation that “the product at issue … cannot be designed differently without making it into an entirely different product” (emphasis omitted). The burden of making the necessary evidentiary showing might not have been hard to meet: an affidavit from someone knowledgeable in the industry—either a retained expert or an employee of one of the defendants—could have done it. But the burden was not met.

In other words, the defendant couldn’t just point to the absence of evidence for the plaintiff’s case.  Indeed, the court was clear that the plaintiff could not win at trial on the evidence before the court, and at trial, a directed verdict would be proper.  Nevertheless, New York procedure requires the submission of evidence in cases at the summary judgment stage in cases such as these.  It was not enough to say that the product was dangerous by nature, but proof that there was no functionally equivalent safer alternative was necessary.

So, the lesson for today is, we must look at all of our cases and think about how we could lose them.  There are entire blogs about frivolous lawsuits, and defense lawyers are notorious for thinking that at least half of all  lawsuits are trumped up lottery tickets.  Nevertheless, not looking at the motion critically had some real consequences in Chow.  But the plaintiff’s lawyer did what he intended to do, which is survive summary judgment.  Don’t take your cases for granted, defense lawyers.  An overlooked procedural detail may bite you.

Expert Used to Deny Summary Judgment in Kitchen Fire

I think all lawyers are nominal conspiracy theorists. What else does the law school environment teach other than not to trust anyone at any time, and that most people – probably all – people are out to get you? At the risk of being untoward, but last month’s Godwin v. Electrolux Home Products, Inc., No. 2:09-0106, 2011 WL 1357691 (M.D. Tenn. Apr. 11, 2011) [PDF] makes you wonder what a plaintiff (or his subrogee) can pull out of his hat.

The crux of the case involves that perilous issue: expert testimony. The court, in assessing the admissibility of such testimony, ruled that the Plaintiff’s expert could testify as to the source of a fire based on burn patterns, and rightly so, as the expert was qualified and burn patterns are a reliable source of data to use in an house fire. Thus, Plaintiff’s expert’s testimony precluded summary judgment in favor of the defendant. But something seemed a little off in the facts.

Frances Godwin’s home is destroyed by a fire. There seems to be no dispute that the fire originated at the stove. However, the stories of the reason for the fire diverge. I assume that Godwin’s insurer brought the action as a subrogee, and that’s what makes this case particularly interesting. If Godwin burned down the house because of her own negligence, then the insurer is out the money paid for the claim. But if there is some chance that a product defect contributed to the fire, then the insurer can spread the misery around a bit. The plaintiff put forth a theory that the stove in the home was defective, but the defendant put forward these facts:

A dispute arises as to the timing of the fire alarm at Plaintiff’s residence. According to Plaintiff, the fire alarm occurred at approximately 5:35 p.m., to which two different fire departments responded. (Docket Entry Number 49, Plaintiff’s Responses to Defendant’s Statement of Material Facts at ¶ 2). The fire department report for the Cumberland County Fire Department reflects that the fire alarm sounded at 7:11 p.m., Jay Schienost, Plaintiff’s daughter, places the fire starting between 5:30 and 5:45 p.m.

Defendant cites the testimony of Jimmy Barnes, a volunteer firefighter for the Cumberland County Fire Department, who responded to the fire. Plaintiff allegedly stated that she had cooked dinner on the stove a couple of hours before the fire and had left some pots and pans on the stove top. Barnes testified that there were pots and pans on the top of the range, and that one of the stove’s top knobs had been left in the “on” position. The Cumberland County Fire Department concluded that the fire “started from something left unattended on the range.”

This seems like a pretty clear case of homeowner negligence. In a cunning move, the insurer hired a fire investigator, who attributed the fire to a defect in the Electrolux stove. (There was some testimony about the self-cleaning mechanism not working properly prior to the fire.) The plaintiff hired a mechanical engineer to opine on the cause of the fire, who stated that the fire was not caused by cooking. Summary judgment denied. In so many other cases, we see ill-qualified experts who cannot withstand Daubert. In this case, careful expert selection helped to create an issue fact resolvable only be a jury, and probably helped Godwin’s insurer recoup some of the loss on the home. Congratulations to Godwin’s insurer in using a slick litigation strategy to get past summary judgment. Whether or not the fire was caused by Godwin’s negligence, perhaps the insurer won’t bear the entire loss. Creation of fact seems to be a fine form of risk spreading.

Revisiting The Unreasonably Dangerous Undergarment

Generally, when a matter originating from South Carolina reaches a level of national discussion, we don’t find the news coverage to be entirely favorable. Much of that criticism is undeserved. We must confess, though, that our fair state is not immune to litigious ridiculousness. Indeed, suits brought by unreasonable Plaintiffs still percolate through our court system.

Today, dear readers, we revisit the case of the dangerously defective bra.

Take for example, the very recent Bennett v. Hanesbrands, Inc., No. 2-11-0613, 2011 WL 1459213 (D.S.C. Apr. 15, 2011). At the time of our initial post, the complaint was made in state court. However, the defendants removed the case, as defendants often do, and the plaintiff’s attorney filed a motion to remand, arguing that the purported permanent discoloration of his client’s skin was worth less than $75,000. Presumably, the Plaintiff sought to avoid federal court due to the mandatory scheduling order, expert deadlines, and other work that must go into the litigation of a case in federal court. Judge Norton, after analyzing the complaint, decided that the facts alleged in the complaint could in fact support diversity jurisdiction, because the Plaintiff capped the value of only one cause of action, rather than on all her causes of action alleged. Accordingly, he denied the Plaintiff’s motion for remand, and the case stay with the feds.

Judge Norton did not recite the facts set forth in the state court complaint, a copy of which is available on PACER as well as here [PDF]. However, our faithful readers will recognize that we previously blogged about this suit, prior to its removal, in which Ms. Bennett pleaded that “the defendants knew or should have known that the bra was an inherently dangerous product.”

Obviously, the counsel for the plaintiff knew or should have known that if a defendant spots a chance to remove a lawsuit, it likely will. Hanesbrand and Wal-mart did so in March, and it seems that recoverable damages on the face of the complaint were in excess of $75,000.

Judge Norton ended his opinion with an invitation to the plaintiff: “should plaintiff wish to voluntarily dismiss her case without prejudice, the court would be pleased to entertain such a motion.” We’ll see what happens. Perhaps the defendants will be happy to litigate in federal court and force the plaintiff to expend some resources on discovery and expert reports. I’m certain that permanent skin discoloration would support some significant expert work. Now that this is a federal case, it will be easier to track, but the lesson to be learned here, is, to make sure to plead that in no event are recoverable damages in the entire matter more than $75,000, lest you find yourself in federal court.

Which Came First? The Salmonella or the Punitive Damages?

Mmmmmm, salmonella. It will be a while before I enjoy an omelet again. You can read Holt v. Quality Egg, LLC, 2011 WL 1113780 (N.D. Iowa March 25, 2011) and see why. Due to a 2010 outbreak of salmonella allegedly stemming from the defendant’s products, the plaintiffs sought punitive damages, and Quality Egg moved to dismiss those claims. Quality Egg’s motions were denied. In short, the plaintiffs were able to use offensively information from an FDA form that found some “problems” at the egg facilities in (John) Galt, Iowa, and the facts set forth in this opinion surely reflect the unabashed capitalism set forth in the made for Tea Party movie, Atlas Shrugged. The FDA found the following physical manifestations of grossness:

Chicken manure located in the manure pits below the egg laying operations was observed to be approximately 4 feet high to 8 feet high

Un-baited, unsealed holes appearing to be rodent burrows located along the second floor baseboards

Dark liquid which appeared to be manure was observed seeping through the concrete foundation to the outside of the laying houses

The house entrance door to access both House 11 and 12 was blocked with excessive amounts of manure in the manure pits

Live and dead flies too numerous to count were observed at the following locations inside the egg laying houses

It’s not a stretch to say that the plaintiffs pleaded that Quality Egg ran its business in a manner where salmonella contamination was likely to occur. Frequently, I like to wax economical, and I have to agree with the defendant’s course of business here. Given the facts, I think any rational actor choosing between cleaning up 8 feet of chicken manure and the chance of having to pay punitive damages would pay the punitive damages. Other trial strategies of the defendant include using real evidence rather than demonstratives. The smell of the manure will truncate jury deliberations.

I suppose that the lesson learned from this case is that grossness will support a claim for punitive damages. Or that business practices should be reviewed in light of the potential for litigation. Maybe the Quality Egg officers looked at those large piles of dung and thought that nothing would happen, or that the piles would take care of themselves. That was not the case. This is probably a case where some good science and statistics could have informed the egg laying practices: Small piles of manure – small chance of passing salmonella to eggs. Big piles of manure – big chance of passing salmonella. We posted earlier that the industry standard should be allowed a little more weight as a method of explaining business practices to a jury, but I can’t think that the industry standard would be of much help here. The small problems of today can compound and become mountains of manure that are hard to handle in the future.

Of Lawn Mowers and Industry Standards in Minnesota

Today is not a day of lighter fare, but it is a day to examine the notion of industry standards determining safety and other matters. The opening sentence in Sobolik v. Briggs & Stratton Power Products Group, LLC, No. 09-1785, 2011 WL 1258503 (D. Minn. March 30, 2011) gives the main operative fact: a lawn tractor user was killed when the lawn tractor rolled over near a ditch. The complaint stated claims on design defect and failure to warn, and that the lawn tractor should have had some device protecting against rollover.

Before we get started, feel free to search for “lawn mower rollover protective device” and see the number of law firms that specialize in lawn mower accidents. You’ll notice that the plaintiff’s attorney in this case has a website advocating the use of roll over protective devices and YouTube videos showing how evil all the manufacturers of lawn tractors are for not using these devices.

These type of sites feed the theory that big corporations are out to make dangerous products as cheaply as possible to sell them and take advantage of an uneducated public. Necessarily, all the big corporations conspire to make sure that some company that doesn’t care about profit can’t make its products any safer than the rest. In the lawn tractor industry, it is not the norm to require some roll over protective device. Surely there are enough players in the lawn tractor market that prevent this industry standard from arising out of some massive conspiracy to sell lawn tractors as cheaply as possible to the detriment of consumer safety. There must be some sound business principle for not mandating a roll over protective device. In looking to the industry standard, I am not advocating that the standard be given some preclusive effect. But I think that the industry standard is more than merely some evidence that any particular design is not defective. While juries usually ferret out the truth, I am a little skittish about a jury being able to say that an entire industry is wrong and all of their respective designs are defective and could be made safer. That reminds me slightly of Homer Simpson’s car design that was to be the epitome of everyman’s desire.

Furthermore, in an effort to generate some comment, let me state that the use of such devices would not necessarily make anything safer. Please refer to the Peltzman effect to see what I mean. I don’t mean to imply that I am up to date on seat belt design data, and that you should not wear seat belts, but, for a while, there were some questions regarding whether seat belts lower risk or merely redistribute it in response to the perceived safety benefit of the seat belts. If you really wanted to make people drive more safely, you would make cars less safe and accidents more expensive. Wouldn’t you drive more safely if a manufacturer installed an axe blade in the steering wheel, and that was part of the safety features of the car? Obviously you couldn’t do this, because safety on the roads depends in part on the choices of all of the other people on the road that you interact with. I’m not willing to increase my risk of serious accident because there are others on the road who may not value my life or theirs as much as I do. But I am unsure if line of reasoning holds true with products that are mostly used in isolation, i.e., a lawn tractor.

I’m not sure you would or could make the argument that the lack of a roll over protective device on a lawn mower increases safety. Certainly when I’ve used a mower near an embankment, I am conscious of the roll over risk, and I change my behaviour in response to that risk. I think it’s certainly arguable that, at least in theory, that if you mandate installation of a roll over protective device you may merely redistribute risk into some other form of accident rather than reducing it. While alternate designs are considered by business, unfortunately, in cases such as the above, that involve serious injury or death, arguing that a roll over protective device doesn’t necessarily increase safety probably doesn’t play well in front of a jury. Which is why allowing a company to rely on industry standards is important. A jury may not be able to hear that the installation of a safety device is a bad idea, but it may be more receptive to the argument that this particular company designed their product in accordance with industry standards. As shown by this District of Minnesota opinion, conforming with the industry standard, is merely evidence that the design was not defective, and perhaps in a jury case that is the best that can be done.

Manufacturer of Text Message System in Truck Has No Duty to Third Party

While litigation drives change and can be an important medium of social commentary, many times it is no more than a less than well thought out attempt to get at a deep pocket. In Durkee v. C.H. Robinson Worldwide, Inc., No. 1:09cv449, 2011 WL 309693 (W.D.N.C. Jan. 28, 2011), there is such an attempt. While the facts are unfortunate, the limits of liability are not. A car with four passengers is struck by a tractor trailer, and the passengers are seriously injured. In the tractor trailer is a text message system that allows a driver to send and receive text messages while the vehicle is in operation. The passengers brought a products liability action against the manufacturer of the text messaging system, alleging that the design and manufacture was defective because an incoming text message could distract a driver.

The manufacturer won on a no duty argument. Note that there was no factual allegation that the driver received a text before the accident, or was in any other way distracted by that system, just that it’s possible that a driver might possibly be distracted. The court correctly found that the plaintiffs were not users of the product, and the magistrate judge noted that if anticipating misuse that could cause foreseeable harm to others was the test, then “no vehicle would be capable of traveling above the speed limit, car ignitions would be equipped with ignition interlock devices, and guns would not be sold to persons with poor judgment.”

Not only that, but anything that could distract, including cell phones, would be subject to a products liability claim. The focus is not on the dangerousness of the product, or the conduct of a distributor, but on the carelessness of the user, and there is already a tort for that. To the extent that this lawsuit is a cry to ban texting while driving or to further restrict drivers, then that’s fine. But the law can’t support finding liability against manufacturers from third parties injured by a user’s careless use of a product. If a brick mason carelessly tosses a brick that strikes a passerby, I don’t think anyone could argue that a viable products action lies with the injured party against the brick manufacturer. Would anyone want a brick that would disintegrate harmlessly if tossed through the air? You can think of endless examples. (Why would anyone design a truck that could jackknife?)

Serious injuries are serious. Injuries are unfortunate, and money is the best substitute that we have come up with for compensating injury. But that money can’t come from anyone, and manufacturers can’t be held responsible by third parties for the carelessness of users, when the product is being used as it should be used.

Abbott Labs Wins Motion to Dismiss

Where have we gone so wrong, America? Our pioneer forefathers are rolling in their graves. Whereas they endured disease, famine, and early death, we spit in their faces, enjoying our iPhones, antibiotics, and frivolous lawsuits. Some measure of order was restored in O’Neil v. Abbott Laboratories, Inc., No. 11-11, 2011 WL 902427 (E.D. La. March 11, 2011), when the court dismissed a complaint alleging infant injury from beetle parts allegedly present in Similac, which you may remember from here. Put simply, there may have been some ground up warehouse beetle in 0.2% in a particular lot of infant formula. No big deal. Even the FDA says that there is no immediate health risk just a chance of GI irritation.

Plaintiffs presented a putative class action based on the fact that their child suffered diarrhea and diaper rash due to consumption of Similac. Do you know what a pioneer would call a day in which he had to face only diarrhea and diaper rash? An outstanding day. If I told my mother that I found a bug in my food, do you know what she would call it? Protein. Oh, America, we have become a nation of wimps.

The court saw this putative class action for what it was, and used Iqbal to dismiss the action. Noting that infants often suffer diarrhea and diaper rash for “non-entomological reasons,” the court subtly chastised the plaintiffs for bringing a negligence-styled products liability action, when negligence is not available in the Louisiana Products Liability Act against manufacturers. Nevertheless, the court afforded the plaintiffs a chance to amend, and even spelled out the four elements that a plaintiff’s complaint must satisfy on its face.

Sure, it may be discomforting to imagine a baby consuming a little warehouse beetle. But babies lick the floor and eat other disgusting things. I’m sure that these concerned parents who think that their kid may have eaten a little bug would not self-report if they found their child chewing on a shoelace that may have touched a public restroom floor or other germ-infested surface. Unfortunately, this case will be refiled in a style that survives the motion to dismiss, and you and I will get the class action settlement notice by mail or email a year from now. Millions of dollars wasted to litigate some GI problems. Oh, America, what have we become?