United States: Product Liability Law

• United States Supreme Court Holds Defective Design Claim Based On Vehicle’s Lack Of Airbag System Preempted By Federal Automotive Safety Standard
• Massachusetts Appeals Court Reaffirms That Statute of Limitations Begins to Run When Plaintiff Has Reason To Know Of Injury And Possible Cause, Not At Time Of Eventual Medical Diagnosis
• Massachusetts Superior Court Imposes Over $90,000 In Sanctions On Product Liability Defendants For Failure To Comply With Discovery Order
• Massachusetts Federal District Court Finds Risks Of Smoking Commonly Known At Least As Of 1964 And Dismisses Failure-To-Warn Claims Against Cigarette Manufacturer, Also Dismisses Fraud Claims For Lack Of Particularity
• Massachusetts Federal District Court Excludes Chemist’s Opinions On Mechanical Design And Medical Causation Testimony And Grants Summary Judgment Against Product Liability Suit
• Massachusetts Federal District Court On Post-Trial Motion Reverses Self And Applies 1961 Statute on Damages Cap to Reduce Jury Award In Wrongful Death Suit Arising Out Of Acts In 1950s And ‘60s

The United States Supreme Court recently held that a state-law tort claim for the allegedly defective design of an automobile was preempted by the National Traffic and Motor Vehicle Safety Act of 1966 (the "Act") and a Federal Motor Vehicle Safety Standard (the "Standard") promulgated there under by the Department of Transportation ("DOT").

In Geier v. American Honda Motor Co., 120 S. Ct. 1913 (2000), plaintiff had been injured when the 1987 Honda Accord she was driving, which had no airbag, crashed. The federal Standard required only that a certain percentage of each manufacturer’s cars have airbags, and it was undisputed that Honda had complied with this requirement. Nevertheless, plaintiff sued Honda in the United States District Court for the District of Columbia, claiming that, under District of Columbia law, the lack of an airbag in this particular vehicle was negligent. The district court held, and the appeals court agreed, that plaintiff’s claim was preempted by the Act and Standard.

The Supreme Court affirmed. The Court addressed two seemingly contradictory provisions of the Act, a "preemption" provision and a "savings" provision. The preemption provision bars a state from enforcing "any safety standard applicable to the same aspect of performance . . . or item of equipment which is not identical to the Federal standard." The savings provision, on the other hand, states that compliance with a federal safety standard under the Act "does not exempt any person from any liability under common law."

The Court’s analysis proceeded in three stages. First, the Court concluded that the phrase "safety standard" in the preemption provision encompasses only rule-like standards adopted through regulation, and not "standards" implemented through the application of common law tort principles in particular cases. The contrary rule would make surplusage of the savings provision: by eliminating all common law tort claims, the preemption provision would leave nothing for the savings provision to save. Thus, the Court concluded, plaintiffs’ common law claim was not expressly preempted by the Act.

Second, the Court addressed the effect of the savings provision on the rule of "conflict preemption" — i.e., the rule that state law is preempted where it "stands as an obstacle to" federal policy. The Court concluded that the savings clause has no effect on this general rule. On its face, the provision merely states that compliance with a federal standard is not itself a defense; it does not impose a heightened burden on a defendant seeking to show that state law conflicts with a particular federal policy. Further, the Court reasoned, there is no reason to suppose that Congress wanted to impose such a heightened standard.

Third, the Court concluded that the tort claim in this case conflicted with the policies embodied in the Standard, and was therefore preempted. The Court noted that the Standard’s less-than-total airbag requirement was backed by important policy considerations, including safety concerns associated with airbags at the time and the need for comparative data on different passive restraint systems so that manufacturers could develop cheaper and safer systems. Finally, the Court placed "some weight" on DOT’s conclusion, in an amicus brief, that allowing plaintiff’s claim here would frustrate the purposes of the Standard. The Court noted that DOT, as the agency implementing the Standard, was "uniquely qualified" to predict the effect that state law would have on its own regulations.

The Massachusetts Appeals Court recently reaffirmed that the statute of limitations in a product liability action begins to run once the plaintiff knows or has reason to know (i.e., is put on sufficient notice) of her injury and its possible cause, and not when diagnosed by a medical professional.

Plaintiff in Martinez v. Sherwin-Williams, 50 Mass. App. Ct. 908 (2000), had been exposed at her place of employment to certain solvent sprays since 1983. From the outset, plaintiff suffered severe headaches and other symptoms that she attributed to the sprays, and mentioned her concern to her gynecologist. It was not until 1990, however that plaintiff, prompted by worsening symptoms, consulted with medical specialists; while she received differing reports, several advised that her symptoms likely stemmed from the solvents. One of the specialists also advised plaintiff to take steps to determine the cause of her symptoms, including staying away from work for a short period to avoid exposure. Fearful of losing her job, however, plaintiff declined to do this.

Plaintiff did not sue the solvent manufacturer until 1994, within weeks after having been terminated by her employer. She alleged that defendant was negligent, breached the implied warranty of merchantability (the Massachusetts analog to "strict liability") and committed unfair or deceptive trade practices proscribed by Mass. Gen. L. ch. 93A (the Massachusetts consumer protection statute) by failing to warn of the product’s risks.

In considering whether plaintiff’s claims were barred by Massachusetts’ three-year tort statute of limitations, the court explained that the general rule is that a cause of action accrues at the time plaintiff suffers some type of injury. The "discovery rule" is an equitable exception to that rule, tolling the statute of limitations when a reasonably prudent person in plaintiff’s position would not have known or had reason to know that she may have been harmed by the conduct of another.

Applying the discovery rule, the court found that plaintiff had actual notice of her harm since the mid-1980s and that, moreover, plaintiff herself attributed her symptoms to the solvents well before 1991. The court rejected plaintiff’s contention that the statute of limitations did not begin to run until her suspicions were confirmed by a doctor; rather, it was sufficient that plaintiff was on notice of a possible cause of her injury. The court also summarily rejected plaintiff’s argument that her fear of losing her job prevented her from following her doctors’ advice to remain away from her workplace for a "short time," noting that were the courts to take employment relationships into account in determining the accrual of claims, the statute would be eviscerated.

A Massachusetts Superior Court recently required defendants in a products liability suit to pay more than $90,000 in attorneys’ fees and costs incurred by other parties because defendants’ failure to comply with an order requiring the production of documents resulted in the litigation of issues that would not otherwise have been required.

Decedent in Farago v. Def-Tec Corp., No. 95-645-B, 200 WL 1531733 (Mass. Super. Ct. Oct. 13, 2000), died shortly after being sprayed with pepper mace. The plaintiff administratrix brought suit in 1995 for negligence and breach of warranty against Def-Tec Corp. ("Def-Tec") and its successor, DT-Wyoming Corp. ("DT"), the alleged manufacturers and/or distributors of the mace, and Adamson Industries, Inc. ("Adamson"), the alleged retailer. Counsel for Def-Tec initially represented that it was a defunct corporation that had played no role in the product’s manufacture or distribution and did not respond to the complaint. DT, represented by the same counsel, answered that it was without knowledge whether it had manufactured or distributed the mace; in addition, in 1997 DT produced nothing in response to plaintiff’s request for documents concerning the sale or distribution of the product at issue and in fact produced documents relating to a different product.

At deposition, however, DT’s designated witness testified that both Def-Tec and DT had manufactured and distributed the relevant pepper mace. The court allowed plaintiff’s subsequent motion for an order compelling defendants to serve corrected discovery responses. Def-Tec – after filing a belated answer – produced no further documents, contending that it was unable to provide additional information because it was no longer a going concern and its successor, DT, had been sold to a new holding company. Plaintiff thereafter amended her complaint to add eight new parties believed to be successors in liability to Def-Tec, including DT’s new holding company and its subsidiaries.

Two years later, in March of 2000, during the course of the deposition of another Def-Tec witness, DT’s and Def-Tec’s counsel mentioned that an attorney from his office had traveled to Ohio to review Def-Tec documents. Plaintiff’s counsel, based in part on the deponent’s inability to recall when he had seen certain documents, then arranged to review these documents. The review revealed that responsive documents, including detailed log books showing that Def-Tec had in fact manufactured the mace, had not previously been produced; that Adamson, the alleged distributor, never had custody of the product; and that the actual distributor still had not been joined in the action.

Adamson by this time had incurred more than $26,000 in defense fees and costs, and plaintiff had incurred more than $64,000 litigating against unnecessarily added parties. Both parties moved for sanctions pursuant to Rule 37 of the Massachusetts Rules of Civil Procedure against Def-Tec and DT for violating the court’s earlier order to produce responsive documents.

The court found that the award of attorneys’ fees in the full amount requested was an appropriate sanction for defendants’ "flagrant disobedience" of the court’s order. Defendants’ actions caused the moving parties to devote "a great deal of time and energy to the issue which would have been unnecessary if the documents had been produced in a timely fashion."

In a significant cigarette product liability litigation decision, a Massachusetts federal district court has ruled that the health risks of smoking were common knowledge at least as of 1964, and hence granted a motion to dismiss a plaintiff’s claims alleging failure to warn of those risks. The court also dismissed all fraud claims as not pled with particularity.

In Johnson v. Brown & Williamson Tobacco Corp., 122 F. Supp. 2d 194 (D. Mass. 2000), plaintiff, executor of the estate of his decedent wife whose death allegedly resulted from years of cigarette smoking beginning in 1965, brought a multi-count complaint against the alleged cigarette manufacturer, Brown & Williamson Tobacco Corporation ("B&W"). The complaint included counts for negligence based on failure to warn and defective design; breach of express warranty, the implied warranty of merchantability (based on failure to warn and defective design), and the implied warranty of fitness for a particular purpose; fraud; civil conspiracy; and wrongful death. B&W moved to dismiss all counts for failure to plead fraud with particularity and failure to state a claim.

The court dismissed all of plaintiff’s claims except those based on defective design. As to failure to warn, the court first dismissed post-1969 claims as preempted by the Federal Cigarette Labeling and Advertising Act. That statute forbids states from imposing any requirement or prohibition based on smoking and health on the advertising or promotion of cigarettes labeled in conformity with federal law, and has uniformly been interpreted to bar all claims that a manufacturer should have made any public statement concerning smoking and health other than the warnings the statute requires on cigarette packs. As for pre-1969 failure-to-warn claims, the court took judicial notice that the risks of smoking were commonly known at least as of the Surgeon General’s famous 1964 report. Accordingly, the court dismissed these claims as well as there is no duty to warn of dangers that are generally known.

Next, the court dismissed plaintiff’s fraud counts for failing to allege that the decedent had relied specifically on any particular false statements by defendant and to allege the specific time, place and contents of any such statements. Rule 9(b) of the Federal Rules of Civil Procedure requires fraud claims to be pled "with particularity." Because fraud was also the basis for plaintiff’s conspiracy claim, the court dismissed that count, too. In addition, the court dismissed plaintiff’s claims for breach of express warranty and the implied warranty of fitness for a particular purpose, ruling that plaintiff had failed to plead any affirmation or promise that would constitute an express warranty or any particular purpose the decedent had for her cigarettes.

In a charitable turn toward plaintiff, the court held that he had adequately stated a design defect claim under negligence and the implied warranty of merchantability. While acknowledging that the general thrust of plaintiff’s complaint was that all cigarettes were unreasonably dangerous, a claim that would fail as a matter of law, the court found that a few references to alleged defects in the testing and design of defendant’s particular cigarettes rendered the claim sufficient to withstand dismissal. Finally, in accordance with its other rulings, the court dismissed the wrongful death claim except to the extent it was based on alleged defective design.

A Massachusetts federal district court recently excluded as unreliable the ostensibly "expert testimony" of a chemist on issues of mechanical design and medical causation and granted summary judgment for the defendant medical product manufacturer.

In Polaino v. Bayer Corporation, No. 97-CV-11420-RGS, 2000 WL 1737856 (2000), an x-ray technician sued the manufacturer and installers of a hospital x-ray processor alleging negligence and breach of the implied warranty of merchantability for injuries allegedly sustained by inhaling chemicals used in developing x-rays. Plaintiff’s claim was that due to defective design the amount of water in the machine fell below appropriate levels and that, as a result, the insufficiently diluted chemicals were emitted in toxic concentrations.

In response to defendants’ summary judgment motion, plaintiff offered the testimony of a Ph.D. chemist as to both the alleged design defect and causation. To be admissible, expert opinion testimony must satisfy Rule 702 of the Federal Rules of Evidence, which requires that the witness possess sufficient knowledge, skill, experience, training or education in the relevant field to qualify as an "expert." Additionally, under cases such as Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), the expert’s methodology and opinion must have a reliable basis.

Plaintiff’s expert would first have opined that the x-ray processor was defectively designed because it lacked an audible and visual alarm alerting an operator when its water levels dropped, and because the processor and the room in which it was housed lacked sufficient ventilation. The court found, however, that the putative expert was not qualified to offer this opinion because he completely lacked training or experience in the field of mechanical engineering. The court also determined that the opinion was unreliable because the chemist had never inspected the specific x-ray processor at issue (or any other such processor) and never determined how it was ventilated, whether it did in fact emit chemicals when its water level was low and, if so, in what concentrations.

The putative expert also would have opined that plaintiff’s claimed ailment, reactive airway dysfunction syndrome or "RADS," was caused by fumes emitted from the processor. Again, however, the chemist never determined the actual concentrations, if any, of chemicals emitted from the x-ray processor and, as a result, the causation opinion was unreliable as well. The court thus excluded the proffered expert testimony and, plaintiff being left with no expert testimony on either defect or causation, entered summary judgment for defendants.

On a post-trial motion by defendants, a United States District Court for the District of Massachusetts reversed its earlier decision that the current iteration of the Massachusetts wrongful death act, which places no upward limit on damages, governed plaintiffs’ claims, and instead applied an earlier version of the statute containing a cap on damages, thereby reducing plaintiffs’ multi-million dollar jury award to approximately $40,000.

Plaintiffs in Heinrich v. Sweet, 118 F. Supp. 2d 73 (D. Mass. 2000), sued Massachusetts General Hospital ("MGH") and one of its doctors for negligence and the wrongful death of their decedents, the subjects of radiation experiments in the 1950s and early 1960s. Prior to deliberations, the court had instructed the jury based on the wrongful death statute in effect in 1995 – the year by which plaintiffs knew (or had reason to know) of their decedents’ injuries’ possible causation – which permits both compensatory and punitive damages without any dollar cap. The court rejected defendants’ request to apply the 1961 version of the statute – the year in which decedents died – which permits only punitive damages, subject to a $20,000 cap.

The jury found for plaintiffs and awarded approximately $3 million in compensatory and $5 million in punitive damages. Defendants moved for a reduction of the jury verdict on the ground that the court had applied the incorrect version of the wrongful death statute.

Reversing its earlier decision, the court held that the applicable statute was the one in force at the time of decedents’ deaths in 1961, and that the claims survived to 1995 because the statute of limitations had been tolled tolled by defendants’ asserted "fraudulent concealment" until that year. Critical to the court’s analysis, the version of the wrongful death statute in force in 1995 contains a provision that it shall only apply to causes of action "arising on or after" January 1, 1974. Noting that "Massachusetts courts consistently apply the statute in effect at the time of death, even if the statute of limitations was tolled," the court explained that a tolling provision "does not alter the date on which the action arose."

In John Doe v. Urohealth Systems, Inc., 216 F.3d 157 (1st Cir. 2000), the United States Court of Appeals for the First Circuit held that the trial judge erred in granting plaintiff’s motion for a voluntary dismissal to permit a similar state court suit where the case had been actively litigated for over a year (with multiple expert depositions having taken place), defendant had a pending summary judgment motion and the court’s ruling on that motion most likely would have been binding on defendant’s wholly-owned subsidiary, which plaintiff wished to sue in the new state court action.

Plaintiff in Doe brought claims of strict liability, negligence and breach of warranty against defendant, manufacturer of a surgical implant. The implant was designed by another corporation, which subsequently became defendant’s wholly-owned subsidiary, but plaintiff did not name the subsidiary as a defendant in the federal suit. After discovery closed and defendant filed a summary judgment motion on the merits, plaintiff filed a motion under Fed. R. Civ. P. 41(a)(2) seeking to voluntarily dismiss the action. The district court allowed the motion and plaintiff then filed a new action in state court, this time joining the subsidiary. Defendant appealed the allowance of plaintiff’s motion to voluntarily dismiss.

The First Circuit reversed, finding that defendant would suffer true "legal prejudice" by having to start over in state court without the benefit of a ruling on the pending dispositive motion. The court noted that the case had been heavily litigated and that plaintiff had been reprimanded for "dilatory" and "inappropriate" conduct during discovery -- for example, plaintiff had forced defendant to take multiple expert depositions by naming multiple expert witnesses, some of whom testified that they had never even been retained by plaintiff. "[A] plaintiff cannot conduct a serious product liability claim in a federal court, provoke over a year’s worth of discovery and motion practice, allow the case to reach the stage at which the defendant filed a full-scale summary judgment motion, and then when matters seemed to be going badly for plaintiff simply dismiss its case and begin all over again in a state court in what is essentially an identical proceeding."

The court also rejected plaintiff’s argument that, because defendant would have to relitigate claims against its subsidiary in the state suit anyway, defendant would suffer no prejudice if the federal suit were dismissed. The court determined that defendant and its subsidiary were in privity by virtue, among other things, of that relationship and that therefore any summary judgment in defendant’s favor would have a preclusive effect for both companies.

In Leonard v. Parry, 219 F.3d 25 (1st Cir. 2000), the United States Court of Appeals for the First Circuit recently held that a complaint amended by the plaintiff to correct a misnamed defendant related back to the filing of the original complaint and hence was not barred by the statute of limitations even though the limitations period had expired since the original filing and plaintiff was on notice of the mistake before the expiration.

Plaintiff in Leonard, driver of one of two cars involved in a collision, filed suit in the United States District Court for the District of New Hampshire alleging that the other driver’s negligence had caused the accident. Plaintiff mistakenly named the owner of the other vehicle, rather than its driver, as defendant. Plaintiff’s counsel discovered the mistake shortly before the statute of limitations expired but waited until just after that date to amend the complaint. When the new defendant, who had previously been aware of the lawsuit, moved to dismiss under the statute of limitations, the court held that the amendment did not relate back to the date of the original pleading under Fed. R. Civ. P. 15(c)(3) and granted the motion.

The First Circuit reversed. Writing for a unanimous three-judge panel, Judge Selya explained that Rule 15(c)(3) sets forth three criteria for whether an amendment of this type will relate back to the original filing: (1) the amended pleading must concern the same conduct, transaction or occurrence as the original pleading; (2) the new defendant must be on notice of the action within 120 days of the filing of the original pleading; and (3) within the same 120-day period, the new defendant must be on notice that it is the intended party and there has been a mistake concerning identity. Because all three of these criteria were met in Leonard, the amended complaint related back despite plaintiff’s lack of diligence in amending.

Although Leonard underscores a plaintiff’s ability to amend and correct his complaint after a lawsuit commences, the First Circuit also noted several important limitations on this ability. First, although plaintiff in Leonard did not need to seek leave to amend because no responsive pleading had been served, the court observed that, where such leave is required, a trial judge has discretion to deny leave if the pleader has been careless. Second, the court noted that post-filing actions may shed light on whether the pleader’s original "mistake" was genuine and whether the unnamed defendant was on notice of the mistake -- for example, undue delay in correcting the "mistake" may lead the omitted defendant to believe plaintiff named whom he intended. Finally, the court noted that "Rule 15(c)(3) is not designed to remedy a mistake in the selection of a legal theory," even if the new theory plaintiff would like to assert requires naming a new defendant.