"Greenwashing" Litigation in California

In November 2011, a California federal court is scheduled to preside over a significant “greenwashing” class action lawsuit which was filed against S.C. Johnson & Son, Inc. by a California resident on behalf of purchasers of various household products manufactured by the company. Koh v. S.C. Johnson & Son, Inc., No. C-09-00927 RMW (N.D. Cal.). “Greenwashing” is a term used to describe the deceptive use of “green” marketing to promote a misleading perception among buyers that a company’s products are environmentally friendly.

In January 2008, S.C. Johnson, the maker of household cleaning products including Windex and Shout stain remover, began marketing and selling Windex with its prominently displayed, trademarked “Greenlist” labeling. It later incorporated the Greenlist label on other products, including Shout. The company devloped this system internally to rate its products in terms of their impacts on the environment. The plaintiffs alleged that the Greenlist label was deceptively designed to look like a third party’s seal of approval, which it is not. They further alleged that “among today’s environmentally-conscious consumers, products seen as ‘green,’ or environmentally friendly, often command a premium price and take market share away from similar, non-‘green’ products.” The plaintiffs claimed that had they known the Greenlist label was the result of the company’s own review process, they would not have purchased them.

Before the class-certification stage, S.C. Johnson moved to dismiss the complaint on two grounds: (1) that the plaintiff had not sufficiently alleged an injury; and (2) no reasonable consumer could have found the Greenlist label misleading. That motion to dismiss was denied by the California federal court in a five-page, unpublished order in January of 2010. Koh v. S.C. Johnson & Son, Inc., 2010 WL 94265 (N.D. Cal. Jan. 6, 2010).

This will be an important case to watch, as it could have significant implications on acceptable “green” marketing practices. In fact, the class-action suit should serve as a warning to product makers to be cautious in advertising their products as “green” or environmentally friendly, especially where that representation is not supported by a credible third party.

Allegedly Ambiguous Warning Fails to Insulate Manufacturer from Design Defect Claims

In a recent indemnity action brought by a residential care facility for the severely developmentally disabled against a plumbing company and a mixing valve manufacturer, the U.S. District Court for the Northern District of California granted in part and denied in part a manufacturer’s motion for summary judgment on the plaintiff’s manufacturing and design defect claims. Res-Care, Inc. v. Roto-Rooter Servs. Co., — F. Supp.2d —, No. C-09-03856, 2010 WL 4367219 (N.D. Cal. Oct. 28, 2010). The plaintiff commenced the action after settling a lawsuit for $8.5 million with the conservator of one of its residents who was badly scalded during a shower at the plaintiff’s facility.

Defendant, Leonard Valve Company (“Leonard”), manufactured a Leonard Valve Model 110 tempering valve (“the valve”) that was attached to the water heater at the plaintiff’s facility. A warning label placed in the product catalog and affixed to the valve itself indicated that the valve was not to be used for “direct showering and bathing applications,” should not be considered an “anti-scald device,” and should be inspected every six to twelve months. Leonard designed the valve in the 1950’s, and it had never been certified to meet any industry standards. The plaintiff was unsure of the age of the valve, but estimated that it had been installed in 1995. At any rate, the valve was visibly present and attached to the showering line when a plumber replaced the hot water heater at the plaintiff’s facility in 2004, approximately one week prior to the scalding. Following the accident, the valve was found to be corroded and likely inoperable for at least two months.

While the Court began its opinion by ruling in favor of Leonard on the plaintiff’s manufacturing defect claim citing a lack of evidence that the valve was not installed as an anti-scald device, Leonard’s fortunes quickly deteriorated. Despite Leonard’s argument that its warnings reduced the likelihood of injury and the fact that the valve had not been inspected for nearly ten years (contrary to the valve’s specific instructions to do so every six to twelve months), the Court held there to be a triable issue of fact as to the plaintiff’s design defect claim finding little evidence to show that the benefits of the Model 110 valve design outweighed the risk of danger.

Further, the Court held that there was at least a triable issue of fact as to whether the warning attached to the valve was ambiguous. The plaintiff argued that the phrase “direct showering or bathing application” was ambiguous by presenting evidence that the experienced plumber was unable to decipher the meaning of the phrase. While it could be argued that the definition of “bath” could encompass anything from a simple handwashing to a complex soak in the tub, it is interesting that the Court and the experienced plumber could assign an ambiguous meaning to the phrase “direct showering.” Apparently, the Court was aware of a line of cases assigning ambiguous meanings to unambiguous terms which the counsel for Leonard was not privy.

Had Leonard been aware of the Court’s opinion on the adequacy of its warning label, perhaps it would not have insisted on further relying upon it in defense of its argument for summary judgment on the plaintiff’s negligent design claim. Unfortunately for Leonard, the Court, in denying Leonard’s motion, held that warnings are not relevant in determining whether a manufacturer breached a duty to design a safe product and relied instead on the evidence that Leonard never considered an alternative design and failed to test to industry standards.

Lost in this discussion is the fact that the plaintiff not only failed to maintain the valve, contrary to Leonard’s instructions, but also knew at least five days prior to the incident that the water temperature was wildly fluctuating and still elected to place a severely developmentally disabled resident into the shower. This case demonstrates that despite instructions on the proper use of a product that may appear clear and unambiguous (at least to the average products liability legal blog contributor), a manufacturer can never be entirely certain that its product is not going to be misused by even the most “sophisticated” consumer.

Lawsuit Alleging False Advertising and Misrepresented Prices Comes Week Before Black Friday

Think you’re outsmarting the system by avoiding the hoards of Christmas shoppers and choosing instead to order gifts this year online? Perhaps not always the case, according to a complaint recently filed by seven northern California district attorneys against online retail giant Overstock.com, which is headquartered in Salt Lake City. Just as Christmas shopping reaches its peak, the discount retailer has been forced to defend its advertising and pricing practices, both of which have come under fire in the wake of allegations raised by the lawsuit.

According to the 33-page complaint, filed on November 17 in California’s Alameda County, Overstock has for several years “routinely and systematically made untrue and misleading comparative advertising claims about the prices of its products.” The suit alleges that Overstock used misleading measures to inflate its comparative prices and thus artificially increase the discounts that it claimed to be offering consumers. According to the suit, these misleading statements accompanied virtually every product listing on the Overstock site. Essentially, the complaint alleges that instead of comparing its prices with other merchants’ prices as claimed, Overstock often would make up “list prices” and “compare at” prices based on arbitrary markups over its costs for the products. The complaint seeks $15 in restitution and penalties.

As reported by ConsumerAffairs.com, the complaint cites by way of example one buyer’s purchase of a patio set that Overstock advertised as having a “list price” of $999. The website offered the set for a seemingly huge discount at $449. The buyer who purchased the set, however, found a WalMart sticker on the set listing the sale price as $247, about $200 less than Overstock’s sale price. Vice president and general counsel for Overstock reportedly explained that this particular instance was simply the result of a misunderstanding between Overstock and its vendor. He said that Overstock strives to be as accurate as possible with its pricing because customers can easily check prices that are available elsewhere.

Overstock’s official statement regarding the lawsuit fires back, explaining that it had been in discussions over a period of several years with the California representatives who ultimately filed suit, and that Overstock had been under the impression that “great progress” had been made toward resolution. It thus “profoundly regret[ed]” that these officials chose to file a lawsuit “at what appears to us to be a strategically-timed moment” — i.e. about one week before “Black Friday” and “Cyber Monday.”

It certainly does seem suspicious, if Overstock’s representations are true, that California officials decided after years of discussions, to file suit on the eve of the height of Christmas shopping. Time will tell if media coverage of the suit is enough to turn shoppers away from Overstock this season.

California Appellate Court Upholds Summary Judgment Where Expert Offers No Factual Basis for Opinion

The California Court of Appeals recently upheld summary judgment in favor of both defendants, an escalator manufacturer and Nordstrom department store, in a case where a shopper alleged she sustained injuries when an escalator stopped during a power outage. The court held that the opinions of the plaintiff’s motion engineering expert lacked adequate foundation. Bozzi v. Nordstrom, Inc., 111 Cal.Rptr.3d 910 (Cal. Ct. App. 2010).

The plaintiff was riding a Nordstrom escalator when an automobile accident outside the store caused an electrical service interruption, temporarily stopping power inside the store. The lights went out and the escalator stopped. The plaintiff had been holding on to one or both of the handrails, but alleged she was injured when her left foot moved down one step on the escalator. She did not fall. The power was out for approximately one minute before it was restored, at which time the lights came back on, the escalator descended to the first floor, and the plaintiff walked out of the store.

The plainitff sued both parties for negligence and failure to warn and included a strict liability action against the escalator manufacturer. It was the plaintiff’s theory that the defendants should have supplied an alternate power source for the escalator or otherwise have designed and maintained it such that it would have slowed to a gradual stop when the power went out. In support of her theory and in an effort to withstand summary judgment, the plaintiff proffered a motion engineering expert, who opined that there was “certain technology” available at the time of the escalator’s placement in 1985 that would have prevented the abrupt stop of which the plaintiff complained. It was his opinion that the fact that the escalator came to a jolting stop proved that there was a defect, because a properly designed and maintained escalator should not stop abruptly.

Although both the trial and appellate courts held that the plaintiff’s expert was properly qualified, they excluded as speculative and without foundation his conclusion that the escalator’s failure to come to rest in a power outage constituted faulty design or maintanence. An important factor in the courts’ conclusion was that the proffered expert had never seen, ridden or inspected the escalator. The appellate court held that he “relied on nothing more than syllogistic reasoning to conclude that if an escalator stops abruptly, it must have been defectively designed or maintained.”

An opinion is, according to the court, “only as good as the facts and reasoning on which it is based.” Because this expert failed state any facts to support his opinion, it was not appropriate for summary judgment analysis. This case is another illustration of an important defense victory where a plaintiff seeks to create issues of fact by offering unsubstantiated expert opinions.

No Federal Jurisdiction Over Spoiled Food Case

Wouldn’t it be great to be incarcerated in the state prison system? I imagine that it would lend a great deal of structure to my day, and I could file my lawsuits for free. Perhaps some court would write about me in an opinion. Instead of identifying me by name, the court would simply start the opinion with “Plaintiff is incarcerated at Ironwood State Prison . . . .” Alas, Walter Brown, Jr. was so lucky, as shown in Brown v. Summerset, No. C 09-04764, 2010 WL 3154538 (N.D. Cal. Aug. 9, 2010).

Brown filed a products action based on the peanut products recall in 2009. Apparently, Summerset, the menu coordinator for the state prison system, also tried to punish Brown by providing him with “spoiled beef and textured vegetable protein tacos.” (This and other tidbits are available in the Complaint, which is Document 1 in the case easily found on PACER.) Although the complaint describes the injuries suffered, I’ll spare you most of the details, only to say that Plaintiff complained of an intestinal ailment that he described as “watery.”

Brown must have spent much of his time in prison studying law, as he stated claims for negligence, strict liability, warranty, and even intentional infliction of emotional distress. Brown did an excellent job pleading facts to get past Iqbal and Twombly. He alleged that the “Plaintiffs believed they would succumb to their sickness” and that the Peanut Corporation of America knowingly distributed tainted food. He also alleged damages of at least $35 million, ensuring that he would meet the amount in controversy requirement.

But woe to Brown, that in all of his legal study, the seminal case of Strawbridge v. Curtiss eluded him, and his suit was doomed from the start when he sued Ms. Summerset, a fellow California citizen, thereby destroying complete diversity among the parties. Judge Armstrong went the extra mile, even addressing whether federal question jurisdiction was available. Indeed it was not. Brown’s claim, being dismissed, may be re-filed in California state court, where it will be much harder for me to find and read his complaint on the internet. Good luck, Mr. Brown. May your next meal of beef and textured vegetable protein tacos be more appetizing.

Bounce Houses — Possible Toxic Entertainment for Children

What you see captured above is Main Street Friday in our own downtown Greenville, South Carolina. You will notice what some people call a “Bounce House” or “Bouncy Castle” featured in the photo. While all Greenville parents are happy to have a form of entertainment for their children as they enjoy the show, what they do not know is that they may be allowing their children to jump in a toxic structure.

Last week, The New York Times reported that California Attorney General Jerry Brown filed a lawsuit against entities that manufacture, distribute, or supply bounce houses used at events such as Main Street Friday or children’s birthday parties. He claims that the houses contain more than the allowable limit of lead and pose health risks to children. The Center for Environmental Health began an investigation into the vinyl used in the construction of bounce houses — the component that gives them the bounce. The results of their investigation revealed lead levels in the vinyl varying from 5,000 parts per million to 29,000 parts per million. The federal limit for lead levels is 90 to 300 parts per million, significantly lower than the vinyl tested in these houses.

Attorney General Brown reported that his intention for this lawsuit is to cause manufacturers to stop using lead-containing vinyl and/or ensure that all bounce houses have adequate warnings regarding possible lead exposure. While that actual health effects on children by jumping in a bounce house for several hours is unknown, Dr. Megan Schwarzman, a family physician at Berkeley Center for Green Chemistry, told the Times that “there was no safe level of lead exposure for children.” It will be interesting to see how this litigation progresses and whether similar lawsuits will arise around the country. While parents will be glad to be warned about the possible toxicity of bounce houses, I am sure that children will not be pleased!

Ice Cream and Popcorn – Snack Foods or Hazards?

Not only are these tasty treats two of my favorite indulgences, but they are the subjects of two pending products liability actions.

On May 13, 2010, New York resident Mirko Carrea (“Carrea“) filed a lawsuit in the U.S. District Court for the Northern District of California. Carrea, on behalf of himself and a nationwide class of consumers, alleged that Dreyer’s Grand Ice Cream labels are misleading and could deceive a reasonable consumer into believing that their products are healthier than they truly are. Carrea v. Dreyer’s Ice Cream, No. 3:10-1044, amended complaint filed (N.D. Cal. May 13, 2010). The Federal Drug Administration provided that a product with more than 13 grams of total fat or 4 grams of saturated fat cannot claim to be trans-fat-free. Carrea takes issue with the fact that nothing on the Dreyer’s Drumstick ice cream cone directs a consumer to the nutritional information, even though it contains 19 grams of fat and 10 grams of saturated fat. Carrea also takes issue with the fact that the label uses the work “original” and the ingredients when this product was first made differs from the ingredients used today. Carrea seeks restitution of funds gained through this alleged “false advertising” and an injunction to stop marketing in this manner.

Another interesting suit was filed on May 3, 2010 by Agnes Mercado (“Mercado”), a New York women, who asserted that she ate two to three bags of popcorn a day for about 16 years and, as a result, developed severe lung disease that may require a lung transplant. Mercado v. ConAgra Foods Inc., et al., No. 11069/10, complaint filed (N.Y. Supreme Ct., Queens County May 3, 2010). Mercado filed suit against ConAgra and Givaudan Flavors Corp., manufacturers of the butter flavoring diacetyl added to the popcorn. She alleges that the diacetyl causes “serious debilitating” respiratory illnesses. Mercado’s complaint alleges negligence, defective design, failure to warn and breach of warranty. She is seeking $100 million in compensatory damages and punitive damages.

Two thoughts – ice cream is not “healthy” in any form and 2 to 3 bags of popcorn a day for 16 years, she must be acquaintances with the Plaintiff we wrote about in our A Can of Tuna a Day post. Both of these action will be interesting to follow to see how at least two courts address claims by Plaintiffs seeking damages for what likely are open and obvious risks?

Google Failed to Warn Woman Not to Walk into Oncoming Traffic

McDonald’s hot coffee suit, take 2? A California woman blindly followed Google Maps walking directions on her Blackberry, walking directly into oncoming traffic on a four-lane highway where she was struck by an approaching vehicle. She filed suit against Google, in which she seeks actual damages in excess of $100,000, punitive damages, and compensation for lost wages, although she reportedly is unemployed.

Her attorney, Allen K. Young, has tried to justify his client’s actions with the argument that the Plaintiff was walking in an area she had never been before, and at a time when it was “pitch black” outside. As if this somehow diminishes her own negligence. Young argues that Google failed to warn the Plaintiff that walking routes may be missing sidewalks or pedestrian paths. This failure-to-warn claim has been flatly disputed by Google, which has said every software version for mobile devices has had that disclaimer since Google Maps was launched in 2008.

The crux of the Plaintiff’s lawsuit appears to be that the woman crossed the road believing there to be a sidewalk on the other side. According to her lawyer, on the other side of the road was a “totally snowpacked” walkway that was of no use to pedestrians. Irrespective of the existence and condition of the walkway on the other side of the road, the woman, according to her own lawyer, didn’t even make it to the median! She wasn’t half-way across the street before she walked directly into the path of an oncoming vehicle.

Although Young has said that there is “enough fault to go around,” which presumably means he recognizes his client is at least partially responsible for her injuries, the absurdity of some liability arguments, and extent some will go to shift blame, continues to surprise.

Facebook and Federal Courts: Mafia Wars Jurisprudence

Mafia Wars significantly marginalizes the social utility of Facebook. I confirmed most of my Facebook friends against my better judgment, only to later hide their status updates, because I don’t care about the fake fortune they have amassed, the ” jobs” they have completed, or the multiple assassination attempts they have survived. I have gone to New York, Las Vegas, Paris, and London. I don’t need to pretend to go there to establish a simulated criminal empire that serves to camouflage a deep sense of loneliness. Moreover, because all Facebook users are subject to Mafia Wars updates, the backlash against Mafia Wars has also risen to new levels, robbing me of the usual cachet I enjoy when I express disdain directed towards society. Mafia Wars, how big a judgment would it take to end this?

Unfortunately, the first federal case to address this pernicious trend is not one in which an injunction was sought against ceaseless Mafia Wars updates. Rather, Zynga Game Network, Inc., the perpetrator of Mafia Wars, brought suit against Jason Williams, Luna Martini, and multiple John Does claiming that they engaged in the “unauthorized sale of Zynga Virtual Goods” through various Mafia Wars related websites. The court explains the backdrop of the dispute:

Mafia Wars (the “Game”) is one of Zynga’s most popular games in which users can start a Mafia family with their friends and compete to become the most powerful family. Zynga has made use of the service mark MAFIA WARS in commerce since September 2008, and of the trademark MAFIA WARS since April 2009. Zynga currently owns Trademark Application Serial No. 77772110 for the mark MAFIA WARS in International Classes 009 and 041. As of December 2009, the Game had over 7 million daily users.

When users sign up with Zynga to play the Game, they receive a certain amount of “Virtual Currency” that can be used to compete with other players. Players can increase their total number of “Virtual Currency” either by their play or by purchase from Zynga. Players use this “Virtual Currency” to purchase various virtual, in-Game digital items (“Virtual Goods”).

Users can additionally earn Virtual Goods by either doing “jobs” or playing the Game. Zynga allows users to use the “Virtual Currency” or Virtual Goods while playing the Game, but retains sole and exclusive ownership of them and of the source code that allows them to be used in the Game. Zynga has not authorized any third party to sell the “Virtual Currency” or Virtual Goods required to play the Game. Users are informed in the Terms of Service that they are prohibited from selling “Virtual Currency” or Virtual Goods for real-world money or for exchanging “Virtual Currency” or Virtual Goods for anything of value outside of the Game.

In the present action, Zynga has alleged claims against Defendants for the unauthorized sale of Zynga Virtual Goods through the Internet domain names MAFIAWARSDIRECT.COM, MWBLACKMARKET.COM, and MWFEXPRESS.COM. Through these domain names, Defendants sell Virtual Goods that users, playing the Game through the Providers’ websites and/or applications, can use to compete with other players who obtained their Virtual Goods directly from Zynga. Defendants use Zynga’s MAFIA WARS mark and similar variations of it in advertising and for selling Virtual Goods. Plaintiff has never authorized Defendants to use the MAFIA WARS mark, sell Virtual Goods for use in the Game, or transfer Virtual Goods that Defendants have “sold” to players through the Infringing Websites.

Zynga Game Network Inc. v. Williams, No. CV-10:01022, 2010 WL 2077191, at *1 (N.D. Cal. May 20, 2010).

Sigh. No injunction sought; of course, Zynga can’t sue to enjoin itself. Interestingly enough, this is the second federal opinion involving Mafia Wars, the first being Zynga Game Network, Inc. v. McEachern, No. 09-1557, 2009 WL 1108668, at *1 (N.D. Cal. April 24, 2009). In that case, Zynga sought a temporary restraining order against a former employee who had developed Mafia Wars but left the company to create his own game, Mob Underworld.

We write about frivolous lawsuits nearly every day. Isn’t there one vexatious litigant out there who can save my Facebook account from this game? Come on!

In the mean time, we’ll consult Wigmore on Mafia Wars to explore our options.

Ninth Circuit Affirms Exclusion of Two Experts in Products Case in Eight Paragraphs

We here at Abnormal Use adore concise, get-to-the point jurisprudence, which is why we pause today to reflect upon the Ninth Circuit’s recent eight paragraph memorandum opinion in Shalaby v. Newell Rubbermaind, Inc., No. 09-56331 (9th Cir. May 17, 2010) (unpublished) [PDF]. To reduce the disposition of a products liability action to eight paragraphs is sublime.

In that case, the Plaintiffs, apparently from California, filed a products liability action after Mr. Shalabay was allegedly injured “when a handheld, gas-powered torch that he had purchased from a Home Depot store exploded.” Ever so briefly and succinctly, the Ninth Circuit observed that expert testimony is required in products liability matters to establish causation when the theory is “beyond common experience,” and because the Plaintiffs’ two proffered experts had been properly excluded by the trial court, the Plaintiff had no case. Thus, the Ninth Circuit affirmed the ruling of the district court, which had initially excluded both experts.

The money paragraphs were:

The court excluded the testimony of one of those witnesses, Dr. Anderson, a metallurgy expert, as unreliable and irrelevant. To support his theory that a design defect in the torch caused the explosion, Dr. Anderson conducted two tests on exemplar torches to demonstrate the flaw. The district court concluded that because Dr. Anderson had performed only two non-standardized tests, on torches that may have been different from the one here at issue, and did not adequately explain the results of or discuss the possible rate of error for such tests, his testimony would be unreliable. It would also be unreliable because he did not address certain contradictory evidence. Finally, he did not present adequate evidence that the design flaw caused Shalaby’s injuries, rendering his testimony irrelevant.

The district court excluded the testimony of the other witness, Dr. Vredenburgh, because she was not a qualified expert and, even if she were, her testimony was unreliable and irrelevant. Dr. Vredenburgh’s field of expertise was not torches; she had some experience in the formulation of warning instructions for various devices. When asked whether a different or larger warning would have helped in Shalaby’s case, Dr. Vredenbugh testified that “I don’t know why [the torch] failed, so I don’t know that a warning would have helped.” She stated that she had never operated a handheld torch and had not seen one operated in seventeen years. She had not spoken to any users of handheld torches in many years, and she had incorrectly testified about how such a torch is used. Dr. Vredenburgh admitted that she did not collect any empirical data, did not conduct any testing, did not conduct any surveys, did not seek data from manufacturers, did not review any peer-reviewed literature, did not conduct any other kind of research prior to forming her opinion, and did not follow her own typical process for developing product warnings.

Sure, maybe the conclusion was so easily reached that it only merited an eight paragraph opinion. But it’s nice to see such a case given short shrift.