Products Liability Case Dismissed for No Injury

It’s been a tough year for Toyota. The automaker has built a strong reputation based on quality craftsmanship, but plaintiffs’ lawyers keep piling on, filing suits like the one described here, accusing Toyota of ignoring acceleration problems for years. So far, however, the allegations regard economic loss: “The revised lawsuit was filed in U.S. District Court in Southern California on behalf of nearly 40 consumers and businesses for claims of economic losses, including diminished vehicle values, stemming from complaints of Toyota cars racing out of control.”

Plaintiffs may be better off in California, because the District of Utah granted Toyota’s Motion to Dismiss in a similar case, Winzler v. Toyota Motor Sales USA, Inc., No. 1:10-CV-00003, 2010 WL 3064364 (D. Utah Aug. 3, 2010). In Utah at least, a plaintiff must suffer some kind of injury before recovering money from a defendant. Winzler brought an action based on her 2006 Toyota Corolla. Incredibly, “Ms. Winzler does not claim that she has suffered any problems with the engine in her car.” She alleged that she has been injured because she did operate the car, and such operation exposed her to increased risk of personal injury. Or, I could have been injured, thankfully I was not, please pay me some money anyway. One of the quotes attributed to Winston Churchill is “The greatest thrill a man can experience is to be shot at and missed.” For some reason, plaintiffs do not agree and instead ruminate on the misfortune of not having been injured. It’s a shame really. All of these uninjured people walking around thinking about what they’re life had been like had they been injured.

You might guess that the District of Utah dispensed with the case quickly. To the court’s credit, it reasons through the law, rather then simply saying something like, “Every first year law student knows that you need an injury to recover.” Instead the court reasons why the cases cited by the plaintiff in support for her argument, alleging constitutional violations, have a different analytical framework than your average products liability action. Neither may Winzler recover for her supposed economic damages. In short, the Court noted that a plaintiff must suffer an injury to recover under a products liability, negligence, or breach of warranty theory. Because Winzler did not allege that her car has shown any defect, her suit was dismissed.

Coming back to the California case, it should be interesting to see what the different sovereigns allow in the forms of product liability claims. I imagine the plaintiffs’ lawyers have this figured out, and a great deal of forum shopping has already or will take place. Hopefully Toyota can dispatch with these types of cases quickly and move to the cases where there may actually have been an injury.

FDA Update on Cereal Recalls

As we recently reported here, this summer the Kellogg Company voluntarily recalled boxes of its Corn Pops, Honey Smacks, Froot Loops, and Apple Jacks due to “an off-flavor and odor” emanating from the cereal. We can’t believe that Toucan Sam, who always seems to be bragging about his nose, missed those foul-smelling boxes.

The FDA recently provided an update on the recall, explaining that the culprit causing the bad smell and taste appeared to be the wax paper liners in the boxes. According to the FDA, only about 50 reports of the foul smell were reported, and no one sustained a serious injury. One of the question-and-answer notes in the update caught our eye:

Are Waxed Papers Legal and Safe to Use in Food Packaging?
Yes, but only when they are manufactured and used in compliance with Federal Food, Drug and Cosmetic Act requirements and FDA regulations.

It comes as a reminder that the FDA does not only regulate the food on our shelves, but also its packaging, known in government-speak as “Food Contact Substances.” Other items with which you may be familiar in terms of the regulation of packaging that comes into contact with food include the debate that rages concerning the level of Bisphenol A, also known as “BPA,” in plastic containers and baby bottles.

More information about the regulation can be found on the FDA website page devoted to the wide world of packaging. In the meantime, we can apparently eat our favorite sugary cereal without first subjecting it to the smell test.

South Carolina Court of Appeals Rejects Pre-Impact Fear Recovery

Personal representatives in South Carolina cannot recover damages for those last few seconds of life when their decedent knew for a fact that they would die. Last week, the South Carolina Court of Appeals rejected a Plaintiff’s ability to recover damages for “pre-impact fear.” See Rutland v. South Carolina Dep’t of Transp., No. 4721 (S.C. Aug. 4, 2010).

That case involved a wrongful death action brought by the personal representative of the estate of a passenger killed following a highway automobile accident during a heavy rain storm. The Plaintiff sued various defendants, but all but the Department of Transportation settled out before the trial. (It’s unclear from the facts of the opinion what the Plaintiff’s theory of recovery was against the State.). The jury awarded the Plaintiff $300,000, but the trial court granted the Department’s post trial motion for set-off and reduced the verdict to zero.

The Plaintiff appealed. In its opinion, the Court of Appeals addressed various appellate points, but it is the Plaintiff’s second appellate point that is of interest. The Plaintiff had argued that “pre-impact” fear was recoverable in a South Carolina survival action “when the decedent suffered mental trauma before actual physical injury resulting in the decedent’s death.”

Citing some recent federal authority, and distinguishing an 80 year old case the Plaintiff had invoked in support of his theory, the Court of Appeals disagreed, noting as follows:

South Carolina does not recognize “pre-impact fear” as a compensable cause of action. See Hoskins v. King, 676 F. Supp. 2d 441, 451 (D.S.C. 2009) (concluding South Carolina law does not permit recovery for pre-impact fright). Also, we decline to extend the holding in [Spaugh v. Atlantic Coast Line Railroad. Co., 158 S.C. 25, 155 S.E. 145 (1930)] for the proposition that “pre-impact fear” is recoverable in this State.

In Hoskins, a case involving a cyclist killed after an automobile accident, Judge Joseph F. Anderson, Jr. had found that there was no support in South Carolina law for the recovery of such damages:

However, in addition to seeking the more established post-impact survival damages, Hoskins seeks damages for the split-second between when the rear tire of the bicycle touched the front bumper of the Pacifica and the impact of Thomas Hoskins on the windshield. However, this position does not find support under South Carolina law. Hoskins has cited many cases, from other jurisdictions which recognize recovery for pre-impact fright. In nearly all of these cases the victims knew they were going to die for a period of at least some seconds, not fractions of a second. Moreover, there was evidence in almost all of the cases that the victim saw their ending coming and there was no question that the victim consciously perceived the cause of his or her death-such as a car crashing in to the back of a tractor trailer, an imminent plane crash, or a pedestrian trapped on roadway.

In this case the King’s car closed from the rear at a high rate of speed, causing a tremendous impact-throwing Thomas Hoskins seventy-five feet in the air-and instantly killing him. A survival claim requires that the deceased consciously endure pain and suffering. Due to the severity of the impact, the court finds that the evidence does not demonstrate that the decedent had time to consciously perceive the means of his death, much less consciously suffer pain.

Further, the Court of Appeals had distinguished Hough as a case involving “a woman who became physically ill after experiencing a nervous breakdown when she was stranded by a train company” and that in that case the South Carolina Supreme Court had determined that there was sufficient evidence to conclude that the plaintiff had actually suffered “bodily injury.”

Friday Links

A judicial candidate in Florida may not personally promote his or her campaign on Facebook, says the Florida Judicial Ethics Advisory Committee in a recent opinion. However, the opinion does note that a committee working on behalf of the judicial campaign may establish such a Facebook presence; it’s just that the judge may not do so in his or her own personal capacity. (Hat tip: The Legal Profession Blog).

Hold onto your hats: The Workplace Prof Blog informs us that a new edition of The Bluebook has been published. Ah, The Bluebook. It will forever remind of those halcyon law school days when we performed citation checks on articles assigned to us by our law review editors.

The Detroit Free Press has a great article about crazy statutes still on the books. (Hat tip: The Business Law Prof Blog). Our favorite? It is illegal in Clawson to throw a snowball. Someday, perhaps, we’ll do a similar analysis of South Carolina laws.

We hope this one doesn’t go to litigation. The DRI Blog has a post entitled “Frozen Reptile Food Poses Salmonella Risk to Snake Owners.” Yikes. We’re at a loss.

Overlawyered reports on the interplay between the ADA and South Carolina courthouses.

Being an Expert Expert Doesn’t Make You an Expert

You know him well. He is the professional expert. No matter the issue, the case, or the product, there he is, opining that your client’s product is unreasonably dangerous, and unquestionably caused the plaintiff to suffer personal injuries, psychological damage, and lost income. In fact, as soon as you see this expert’s name at the top of the report, you can recite its contents, eyes closed and one hand tied behind your back.

Not so fast. In Beam v. McNeilus Truck and Manufacturing, Inc., 697 F. Supp. 2d 1267 (N.D. Ala. 2010), the Northern District of Alabama considered the defendant’s motion to exclude the testimony of Dr. L.D. Ryan, a mechanical engineer and professional expert, as to the defectiveness of the design of a garbage truck. The case involved an accident in which the plaintiff’s decedent, a garbage collector, fell or stepped off of the riding step of a garbage truck and died as a result of his injuries. The central issue of the case was whether the truck was defectively designed with regard to the riding steps.

The court carefully considered Dr. Ryan’s qualifications, noting that “Plaintiff’s expert . . . has little or no experience in the world of refuse collection, road-vehicle design generally, or garbage truck design specifically.” Furthermore, although Dr. Ryan had watched “three hours of videos on ‘YouTube,’ he has no training or experience in designing waste-hauling routes” and has no knowledge “about the history or evolution of rear-loading garbage-truck designs.” In fact, the court stated, the “mere fact that Dr. Ryan is a licensed engineer is, in and of itself, insufficeint to qualitgy him as an expert in this case.”

The court’s harshest criticism of Dr. Ryan’s so-called qualifications, however, was reserved for his status as the professional expert. The court made several references to the fact that Dr. Ryan had acted as an expert in hundreds of cases. In fact, the court devoted an entire footnote to Dr. Ryan’s career expertise, opining that “Dr. Ryan has been involved in hundreds of cases invovling a variety of products, and his testimony has been at issue in a number of those cases,” and providing a list of some of those cases.

With no actual expertise on the subject of garbage truck design, the court excluded Dr. Ryan and his reports. Without expert testimony as to the defective design, the plaintiff could not make her case, and therefore the defendant’s motion for summary judgment was also granted.

Bravo, Northern District of Alabama. Abnormal Use salutes you. Next time, plaintiffs, make sure your expert does more than watch YouTube.

Products Liability Meets Criminal Law

It’s not often that products liability concepts intersect with criminal law. Such was the case in South Carolina last week, when Circuit Judge Roger Young of Charleston, in a 41-page order [PDF], threw out the conviction and granted a new trial to a young man whose defense team “did not appreciate how unlikely the ‘Zoloft defense’ would result in an acquittal.” As a result of that failure, the judge held, the defense team did not seriously pursue negotiations for a plea deal.

The case at issue is one that has drawn national media attention. Christopher Pittman of Chester, South Carolina, was just 12 years old when he reportedly shot his grandparents as they slept in their home, set their house on fire, and fled the scene in their SUV. The nearly three-week murder trial was moved to Charleston County because of the extensive publicity the case had garnered in the Upstate. Pittman was tried as an adult at age 15, was found guilty, and was sentenced to 30 years in the South Carolina Department of Corrections. He lost his appeals to the South Carolina and U.S. Supreme Courts.

For his criminal trial, Pittman’s defense team was reportedly comprised not of criminal defense attorneys, but of “lawyers who specialized in suing pharmaceutical companies.” They blamed the murders on the prescribed anti-depressant Zoloft, saying it clouded Pittman’s sense of right and wrong. Prosecutors argued in response that the premeditated nature of the murders, along with the fact that Pittman subsequently burned his grandparents’ home and thus knew the killings were wrong, discounted the defense’s Zoloft theory. The jury agreed, refusing to buy the defense team’s argument that Zoloft somehow made Pittman commit the murders. According to a 2008 article in The New York Times, Pfizer Inc., the maker of Zoloft, called the case “tragic” but said, “Zoloft didn’t cause his problems, nor did the medication drive him to commit murder.”

In his recent order, Judge Young chastised the defense team’s strategy, noting that the team, led by a civil attorney Andy Vickery, seemed more interested in putting Zoloft on trial than in doing what was best for the defendant. “After Vickery’s team took over the media attention grew exponentially greater,” Judge Young wrote, “in large part because the defense team cultivated it in order to draw attention to the side effects of SSRI (antidepressant) drugs such as Zoloft.”

Interesting, reportedly one year after Pittman’s trial, the FDA began requiring Zoloft and other antidepressants to carry “black box” warnings, the government’s strongest warning short of a total ban, about the increased risk of suicidal behavior in children. It does not, however, extend the warning to include potential homicidal risks.

Obstacles Can Be Good: South Carolina Supreme Court Affirms Trial Court’s Grant of Summary Judgment on Preemption Grounds in Products Case

Obstacles can be good, especially when they represent preemption defenses against state products liability claims. As we reported yesterday, the South Carolina Supreme Court issued a decision that Federal Motor Vehicle Standard 205 preempts a state claim. Standard 205 deals with glass used in vehicles. The lawsuit sprung from an automobile accident in which an occupant of a Ford F-150 was thrown from the cab. The personal representative filed suit, alleging the Ford should have used glass that would not shatter and would “retain occupants inside the vehicle.” Ford argued that Regulation 205 permitted discretion in which glass to use, and, therefore, the state law claim was preempted.

The South Carolina Supreme Court affirmed the trial court’s order granting Ford summary judgment. The legal issue was whether Regulation 205 merely sets a minimum safety floor (no preemption) or permits the manufacturer a range of choice in the production of its vehicles (preemption). Regulation 205 begins as follows:

S1. Scope. This standard specifies requirements for glazing materials for use in motor vehicles and motor vehicle equipment.
S2.Purpose. The purpose of this standard is to reduce injuries resulting from impact to glazing surfaces, to ensure a necessary degree of transparency in motor vehicle windows for driver visibility, and to minimize the possibility of occupants being thrown through the vehicle windows in collisions.

The court noted that Regulation 205 does not specify standards for which glass to use, but instead it references a safety code (ANS Z26) developed by the American National Standards Institute, a nonprofit entity. The code allows two different types of glass: 1) a tempered glass that shatters into dull pieces (safer for restrained occupants) and 2) a laminated glass that does not shatter (safer for unrestrained occupants by decreasing risk of ejection.

Important to the Court’s analysis was the National Highway Traffic Safety Administration’s withdrawal of a proposed rulemaking. The NHTSA contemplated authoring rules in the early 1990s requiring laminated glass to be used for side windows in vehicles. After studying the matter, the NHTSA withdrew its advanced notice of proposed rulemaking, and cited its study that the use of laminated glass increased the chances of injury to restrained occupants. See Notice of Withdrawal, 67 Fed. Reg. 41,365. The Court then examined three recent opinions from the Fifth Circuit, the West Virginia Supreme court, and the Tennessee Court of Appeals examining the potential preemption of Regulation 205. The state court opinions were driven by Geier v. Am. Honda Motor Co., Inc., 529 U.S. 861 (2000), which found that Regulation 208 had preemptive effect. Following the state court decisions, it seems that the NHTSA’s withdrawal was the crucial factor:

In issuing the notice of withdrawal, NHTSA declined to modify Regulation 205 and require advanced glazing. Thus, the notice of withdrawal kept Regulation 205 intact, thereby preserving the manufacturer’s option to use tempered glass on side windows.

Because the federal government authorized that choice, Regulation 205 must preempt a state claim. Note, however, that the Court footnoted the Foreword to ANS Z26, which does not support a finding of preemption, but the Foreword “is not part of” ANS Z26.

The Fifth Circuit decision in O’Hara v. General Motors Corp., 508 F.3d 753 (2007) went the other way. O’Hara reasoned that the NHTSA’s notice of withdrawal did not operate as a rejection of laminate glass in side windows. Moreover, the language of Regulation 208 “strongly supports the conclusion that it expresses a federal policy,” while Regulation 205 did not. Therefore, Regulation 205 was best understood as a minimum safety standard, leaving states free to regulate via tort.

The South Carolina Supreme Court footnoted multiple cases in which courts have dealt with the preemptive effect of Regulation 205. Although it seems both sides have valid arguments, there is the underlying current of rewarding risky behavior in not finding preemption. That is, laminate glass can protect unrestrained occupants from being ejected from a vehicle. Does a court really want to reward a risk-taking plaintiff by denying a defendant the defense of preemption. O’Hara involved the claims of a minor, so perhaps she was a more sympathetic plaintiff. At any rate, be aware of the split of authority, and look for the United States Supreme Court to take a Regulation 205 case on certiorari.

South Carolina Supreme Court Finds Products Liability Claim Preempted by Federal Motor Vehicle Standard 205

This morning, the South Carolina Supreme Court issued an opinion in Priester v. Ford Motor Co., Op. No. 26846 (S.C. August 2, 2010), in which it ruled that a state law products liability claim is preempted by Federal Motor Vehicle Standard 205 (49 C.F.R. § 571.205). After examining the current split of persuasive authority, the Court ruled that the regulation provides a “range of choices among” different types of glass that could be used in a vehicle, rather than a minimum safety standard. Thus, the Supreme Court affirmed the trial court, which had granted Ford’s motion for summary judgment on those grounds. We’ll write up a full analysis of this decision for tomorrow’s post.

Will you please assume my liability?

Several weeks ago, the defendant in Altman v. Motion Water Sports, Inc., No. 3:07-cv-01383, 2010 WL 2747306 (D. Conn. July 12, 2010), asked the District of Connecticut to grant its motion for summary judgment finding that it, as a successor corporation, is not liable to plaintiff for his injuries from a defective product that it neither manufactured nor sold to plaintiff. The Court denied defendant’s motion, providing some insight into the law of Connecticut on successor liability.

Plaintiff, Russell Altman (“Altman”), purchased water skis from Earth and Winter Sports, Inc. (“EWS”) some time prior to March 28, 2003. On this date, EWS sold all of its assets to Motion Ocean Sports, Inc. (“MOS”). The purchase agreement between EWS and MOS expressly provided that MOS did not assume any liabilities of EOS. Further, there was no continuity of stock, stockholders, or directors. On the other hand, after the MOS purchased EWS’s assets, MOS continued to manufacture the same products, under the same names; took over the EWS factory; and hired approximately 50 of EWS’s former employees.

After the take-over, on July 21, 2004, Altman fell while water skiing and one of the skis failed to release from his foot. Altman alleged permanent physical injuries arguing that the ski was defective in several respects. Thereafter, Altman filed suit against MOS to recover for his injuries. In response, MOS moved for summary judgment on the ground that “under a general common law rule relating to corporations, a purchaser of the assets of a corporate business is not liable for the debts and liabilities of the previous owner of those assets.” Altman’s arguments in opposition to MOS’s motion included an argument that certain exceptions to the common law rule against asset-purchaser liability applied in this situation. See this opinion for all the other grounds Altman asserted in opposition of MOS’s motion.

The general rule is that “a corporation which purchases all the assets of another company does not become liable for the debts and liabilities of its predecessor unless (1) the purchase agreement expressly or impliedly so provides; (2) there was a merger or consolidation of the two firms; (3) the purchaser is a ‘mere continuation’ of the seller; or (4) the transaction was entered into fraudulently for the purpose of escaping liability.” Ricciardello v. J.W. Gant & Co., 717 F. Supp. 56 (D. Conn. 1989). Altman relied upon the third exception and argued that MOS was a mere continuation of EWS.

Within the “mere continuation” exception, the Court identified several different theories. The first is the so-called common law exception. Under this theory, the Court found that MOS was entitled to summary judgment because there was no transfer of corporate stock between the two companies and there was a total lack of continuity of shareholders and directors. Next, the Court stated that the continuity-of-enterprise theory applies where “the successor maintains the same business, with the same employees doing the same jobs, under the same supervisors, working conditions, and production processes, and produces the same products for the same customers.” The Court found that MOS did many of these things and that Altman was entitled to full discovery on this theory.

The final theory was the “product line” exception to the rule against successor liability. The Court noted that unlike the other two theories which were widely accepted in Connecticut, no Connecticut appellate court had considered the product-line theory. After considering the decisions of Superior Courts that have considered this theory, the Altman Court stated that since this theory was more consistent with the consumer-protection goals of the Connecticut Products Liability Act, he was entitled to invoke this exception and engage in full discovery on its applicability.

This case shows that there are not merely four exceptions to the rule against successor liability but theories within those exceptions that are being continually argued. If a corporation, such as MOS, takes over the assets of another corporation, it should be aware of these exceptions and ensure that their practices would not allow a plaintiff to successfully argue successor liability.

Friday Links

  • Eric Goldman of the Technology and Marketing Blog has this post, entitled “Private Facebook Group’s Conversations Aren’t Defamatory.” In so doing, he profiles the recent case of Finkel v. Dauber, 2010 WL 2872874 (N.Y. Sup. Ct. July 22, 2010), in which the court was called upon to review a private group started by a group of puerile high school students and dedicated to making fun of a classmate, who brought suit for defamation. Goldman notes that “the group’s discussion is embarrassingly puerile and hearkens back to John Hughes’ bleak depictions of high school life.” Ah, high school.
  • The Tex Parte Blog has this post about the perils of attorneys attempting to follow up with an appellate court about the release of an overdue opinion. Apparently, counsel for the Plaintiff contacted with the Texas Supreme Court to inquire about a matter which had been pending before the court for four years. Eight days after the request was made, the Texas Supreme Court issued its opinion and ruled against the Plaintiff.
  • The title of this post at the Legal Profession Blog, “After Failed Witchcraft, Client in Love With Attorney Sought Hit Man to Murder His Wife,” says it all. A must read. Who knew workers compensation litigation could be so dangerous?
  • The North Carolina Business Litigation Report has this post entitled “A Tale of Reluctant Reconsideration in the Business Court.” In that post , author John Buford tells of a recent case in which the North Carolina Business Court “reconsidered and reversed the prior dismissal of a breach of fiduciary duty claim, but the principles it outlined should not give litigants high hopes for reconsideration motions in general.”
  • And, no, we here at Abnormal Use have still not yet seen Inception. Well, contributor Kevin Couch has, but he is under strict orders not to reveal any spoilers.