United States: Product Liability Update: January 2016

Last Updated: February 7 2016
Article by David R. Geiger and Catherine C. Deneke

Foley Hoag LLP publishes this quarterly Update concerning developments in product liability and related law of interest to product manufacturers and sellers.

Supreme Court Holds Defendant Cannot Moot Putative Class Action by Making Unaccepted Offer of Judgment for Complete Relief to Representative Plaintiff

In Campbell-Ewald Co. v. Gomez, No. 14-857, 2016 U.S. LEXIS 846 (S. Ct. Jan. 20, 2016), plaintiff filed a putative nationwide class action in the United States District Court for the Central District of California alleging the defendant multimedia developer violated the Telephone Consumer Protection Act ("TCPA") by sending unsolicited text messages to him and the other class members.  Before plaintiff moved for class certification, defendant filed an offer of judgment pursuant to Fed. R. Civ. P. 68 to allow judgment to be entered against defendant on plaintiff's individual claim in the amount of triple the statutory damages, as is available under the TCPA where a "defendant willfully or knowingly violate[s]" the statute.  The offer also included reimbursing plaintiff's costs, but not his attorneys' fees, and a stipulated injunction in which defendant denied liability but would henceforth be barred from sending any text messages that violated the TCPA.  Plaintiff did not accept defendant's offer within the 14-day window provided by Rule 68.  Thereafter, defendant moved to dismiss, arguing its offer of judgment mooted plaintiff's individual claims because it provided him complete relief and, because it was made before he had moved for class certification, the putative class claims were also moot.  The district court denied the motion to dismiss but awarded defendant summary judgment on other grounds.  On appeal, the United States Court of Appeals for the Ninth Circuit agreed the claims were not moot and also reversed the summary judgment decision, reinstating the action in its entirety.

Despite the non-final nature of the judgment below, the United States Supreme Court granted review to resolve a split among the federal circuits on the mootness issue—which was of considerable importance to class action litigation—and held plaintiff's claims were not moot.  The Court began by noting that "[a]n unaccepted settlement offer—like an unaccepted contract offer—is a legal nullity, with no operative effect," and that under the terms of Rule 68 itself an "unaccepted offer is considered withdrawn."  Accordingly, defendant's offer in this case, once rejected, had no continuing efficacy, the parties remained adverse and there was still a live case or controversy supporting federal court jurisdiction.  In this respect, therefore, the case differed from a series of tax collection cases that the Court had held moot after the railroads paid the taxes claimed, as in those cases the plaintiffs had actually been paid.  Further, while the putative class here lacked independent status because it was not yet certified, because plaintiff himself had a live claim he was entitled to the opportunity to argue for certification.

Finally, the Court acknowledged the dissent's argument that a no-mootness ruling would give too much power to individual plaintiffs to pursue a broad class action even though they had been offered complete relief for any unlawful conduct as to them.  But the Court countered that a contrary rule would give too much power to defendants who were guilty of unlawful conduct to avoid a potentially adverse class-wide decision solely by mooting the individual plaintiff's claim.

First Circuit Affirms Class Action Settlement Despite Disparity Between Refund Estimate in Class Notice and Actual Refund, Proof-of- Purchase Requirement for Objectors But Not Certain Claimants and Attorneys' Fee Award Following Defendant's Agreement Not to Oppose

In Bezdek v. Vibram USA, Inc., No. 15-1207, 2015 U.S. App. LEXIS 22925 (1st Cir. Dec 31, 2015), plaintiff purchasers of "barefoot" running footwear brought a putative class action against the manufacturer in the United States District Court for the District of Massachusetts alleging false and deceptive marketing about the product's health benefits. A later-filed but similar putative class action from another federal court was transferred to Massachusetts and consolidated with the first case.  After extensive written discovery but before plaintiffs moved for class certification, the parties submitted a proposed settlement agreement to the court for approval.

Under the terms of the settlement, defendant would create a $3.75 million fund from which refunds would be paid on a pro rata basis, the parties agreed it was reasonable to expect class members might receive refunds of $20 to $50 per pair, costs and attorneys' fees—which defendant agreed not to oppose if not exceeding 25% of the settlement fund—would be paid out of the fund and an injunction would order defendant to refrain from making representations about the product's health benefits unless supported by "competent and reliable scientific evidence."  In addition, individuals could participate in the settlement for no more than two pairs without written proof of purchase; for a larger claim, or to object to the settlement, such proof was required.  The district court preliminarily approved the settlement, certified a class for settlement purposes only and ordered notice sent to the class summarizing the settlement's terms.  Although written objections to the settlement were filed, after a fairness hearing the district court approved the settlement as "fair, reasonable, and adequate" under Fed. R. Civ. P. 23(e)(2).

On appeal to the United States Court of Appeals for the First Circuit, the objectors argued that (i) the class notice was misleading because it posited a recovery of $20 to $50, whereas the actual per-pair refund was only $8.44, and the discrepancy could have affected whether or not class members objected, (ii) it was punitive to require only objectors to provide proofs of purchase, (iii) the injunctive relief was inadequate, and (iv) the attorneys' fees awarded were unreasonable due to defendant's agreement not to oppose them up to 25% of the recovery.

On the first argument, the appellate court found no misrepresentation in the notice, as the numbers provided were only an estimate and the notice specifically warned the actual refund could decrease depending on the number of valid claims.  Moreover, despite the variance from initial estimates, the $8.44 actually awarded was a fair settlement because of the uncertainty of success at trial and the trial costs, which would decrease the net amount of any damages award.  The court also rejected the objectors' argument that class counsel should have anticipated the higher number of claims or waived some of their own fees to compensate class members, as objectors cited no legal authority and simply imagining a better settlement would not mean such a settlement was reasonable or feasible.

As for the objector standard, the court held that while the imposition of a proof-of-purchase standard for objectors but not for at least some class members was a factor that could bear on fairness, that disparity alone was not enough to render an otherwise fair settlement unfair.

Regarding the challenged injunctive relief, the objectors argued it only required the manufacturer to do what it was already legally obligated to do.  But the circuit court affirmed the district court's ruling that the requirement of competent and reliable scientific evidence to substantiate any health claims was a "valuable contribution," because allegedly false advertising formed the crux of the litigation.

Finally, on the attorneys' fees issue, the court cited its prior precedent that a "clear-sailing" agreement (i.e., an agreement not to challenge a fee application) was not per se unreasonable.

While fee awards following such agreements must be afforded extra scrutiny, the award here survived both because it was reasonable when compared to the "lodestar" amount—counsel's hours worked multiplied by reasonable hourly rates—and because other courts had found fees of 25% of a recovery to be reasonable.

Massachusetts Federal Court Finds Hospital Implanting Surgical Device Not Fraudulently Joined to Defeat Diversity Jurisdiction Where (1) It Was Plausible Massachusetts Would Recognize Breach of Warranty Claim Against Hospital, (2) Preemption and Statute of Limitations Defenses Were Not Unique to Hospital, (3) Plaintiff's Claims Were Not Preempted Because "Parallel" To Federal Law and (4) Claims Were Timely Under "Discovery Rule"

In Rosbeck v. Corin Group, PLC, No. 15-12954, 2015 U.S. Dist. LEXIS 145621 (D. Mass. Oct. 27, 2015), plaintiff sued three manufacturers of an implanted hip resurfacing system and the hospital where the implantation surgery occurred in Massachusetts Superior Court alleging he suffered injuries caused by the release of chromium and cobalt from abrasion of the implant.  Plaintiff brought claims against the manufacturers for negligence, breach of the implied warranty of merchantability (the Massachusetts near-equivalent of strict liability) and violation of Mass. Gen. L. ch. 93A (the Massachusetts unfair and deceptive practices statute), and alleged the implant's excessive wear and tear violated United States Food and Drug Administration regulations under the Federal Food, Drug and Cosmetic Act ("FDCA") and the manufacturers unrealistically lubricated the implant during simulator testing so it would appear to comply with the regulations.  Plaintiff also asserted a claim for breach of the implied warranty of merchantability against the hospital for its sale of the allegedly defective product.

After defendants removed the case to the United States District Court for the District of Massachusetts, plaintiffs sought remand to state court, arguing the federal court lacked diversity jurisdiction because they and the defendant hospital were all Massachusetts citizens.  One of the manufacturers opposed the motion to remand, arguing the hospital was fraudulently joined solely to defeat diversity because (1) Massachusetts has never recognized a breach of warranty claim for a medical product provided by a hospital, limiting its liability instead to medical malpractice, and any claim against the hospital was (2) preempted by the FDCA and (3) barred by the statute of limitations.

The court first noted that joinder of a defendant is fraudulent "where there is no reasonable possibility that the state's highest court would find that the complaint states a cause of action upon which relief may be granted against the non-diverse defendant."  In accord with other jurisdictions, the court should apply a standard of review "more lenient than that for a motion to dismiss" and resolve any ambiguities in favor of plaintiff.

On the breach of warranty issue, while the Massachusetts Supreme Judicial Court ("SJC") had not ruled on it and the majority of states rejected hospital warranty liability in favor of malpractice, at least one other state supreme court had permitted such a claim and the SJC could plausibly follow this minority view.  Defendants argued Massachusetts would follow the majority view because it had "demonstrated a public policy protective of hospitals" by creating medical malpractice tribunals to filter out frivolous claims and refusing to apply abnormally dangerous activity liability to hospitals, but the court was not persuaded that either fact meant the SJC would necessarily reject hospital warranty claims.  In addition, Massachusetts' Uniform Commercial Code warranty provisions expressly covered transactions involving the provision of both a good and services, as here, even though the ultimate success of plaintiff's claim might depend in part on what facts discovery revealed about the hospital's role.  Also, two other federal district courts had remanded similar cases where there was no appellate authority in those states regarding whether warranty claims could be asserted against hospitals.

The court also rejected defendant's arguments that joinder was fraudulent because plaintiff's claims were preempted or barred by the statute of limitations.  First, the court recognized the "common defense rule," adopted in other jurisdictions and based on United States Supreme Court precedent, under which there is no fraudulent joinder if "[plaintiff's] claim against the non-diverse defendants is no weaker than his claim against the diverse defendants," i.e., if defendant's argument applies to the case as a whole rather than just the allegedly fraudulently joined defendants.  Here, the preemption and statute of limitations arguments overlapped among the defendants as all were based on essentially the same set of factual allegations relating to non- compliance with the FDCA.

In addition, the court rejected the preemption and statute of limitations defenses on the merits.  The FDCA preempts only state law claims based on requirements that are "different from, or in addition to," the requirements of federal law.  Here plaintiff's state law claims stemmed "solely" from violations of the federal requirements, i.e., the FDCA-based wear and tear regulations.  Accordingly, plaintiff pled a claim that was "parallel" to and hence not preempted by federal law.

Regarding the three-year Massachusetts statute of limitations, under the "discovery rule" plaintiff's claim only accrued when he reasonably should have known he was harmed by defendant's conduct.  Here, while plaintiff was informed his blood contained sharply elevated levels of chromium and cobalt in August 2011 and did not sue until April 2015, no reasonable person should have known at the earlier time that the implant system was the cause of the blood results.  For all these reasons, the court granted plaintiffs' motion to remand.

Massachusetts Federal Court Applies Massachusetts Statute of Limitations to Claim Based on Product Use and Injury in Oklahoma, Where Plaintiff Saw Product Advertisement, Bought Product By Phone and Received Worker's Compensation Benefits in Massachusetts

In Elliston v. Wing Enters., No. 15-11739, 2015 U.S. Dist. LEXIS 155256 (D. Mass. Nov. 17, 2015), plaintiff sued a ladder manufacturer incorporated in Utah in the United States District Court for the District of Massachusetts after he was injured when the ladder's leg buckled during use.  Plaintiff saw advertisements for the ladder in Massachusetts, purchased the ladder by phone there and the ladder was delivered to his home there, but plaintiff never used the ladder until he brought it to his second home in Oklahoma, where the accident occurred. Defendant moved to dismiss, arguing Oklahoma's two-year statute of limitations applied and barred the claim, even though it was timely under Massachusetts's three-year statute. 

The Court began by citing the Restatement (Second) of Conflict of Laws, § 142, which states that a forum will apply its own statute of limitations unless the claim would be barred under the limitations law of a state with a more significant relationship to the parties and occurrence.  Defendant argued Oklahoma had a more significant interest in the action because it had a more significant relationship with the parties, product and occurrence than Massachusetts, but the court disagreed, finding Massachusetts had at least three substantial interests warranting application of its statute.  First, the state had an interest in providing a remedy for Massachusetts residents who were injured and holding manufacturers of defective products responsible; while plaintiff had a secondary home in Oklahoma, that did not diminish his Massachusetts residency. Second, Massachusetts had an interest based on the defendant's advertising and sales in the state.  Third, plaintiff held a Massachusetts construction supervisor's license, was a registered Massachusetts home improvement contractor and had received Massachusetts worker's compensation benefits due to his fall.  While the fact that the product was used and plaintiff's injury occurred in Oklahoma was relevant, that was only one aspect of plaintiff's claim—among other things, the product had been neither designed, manufactured nor sold in Oklahoma.  Accordingly, Oklahoma had only a minimal interest in the application of its statute of limitations, even though the analysis might be different if a more substantive law—such as one that sought to change the actual behavior of tortfeasors— were at stake.

Massachusetts Superior Court Applies Law of Colorado As Place of Injury in Claim Against Massachusetts Drug Manufacturer, As Massachusetts Did Not Have More Significant Relationship With Claim; Among Other Things, State's Product Liability Policy Focused on Deterrence and Compensation Was Not Superior to Colorado's Policy Balancing Those Concerns With Insurance Cost and Availability Concerns, Resulting in Cap on Non-Economic Damages Awards

In Ogburn-Sisneros v. Fresenius Med. Care Holdings, Inc., No. 131756, 2015 Mass. Super. LEXIS 96 (Super. Ct. Oct. 19, 2015), plaintiff sued several related companies responsible for the manufacture and sale of a kidney dialysis drug, alleging her decedent died as a result of defendants' failure to warn of the drug's risks.  At issue was whether Massachusetts or Colorado law applied to the claims.  Defendants were Massachusetts corporations and made all drug warning decisions in Massachusetts, but manufactured the drug in Ohio and Texas and distributed it throughout the United States.  Decedent resided, was prescribed and received dialysis treatment, including the drug, in Colorado, and also died there.

The court began by noting that Massachusetts follows the Restatement (Second) of Conflict of Laws ("Restatement") for its choice-of-law rules.  Under Restatement § 146, because plaintiff's claims were for personal injury, the law of Colorado—the state where the injury had occurred—should apply, unless some other state had a more significant relationship to the injury and parties. Restatement § 6(2) then lists six factors generally to be considered in determining which state has a more significant relationship to the injury and parties, and §145(2) lists three factors to be considered when applying § 6's principles in tort cases.

Turning to §6's general factors, the court first concluded that applying Colorado law was consistent with the interstate system's needs, because Colorado had substantial contacts with both the injury and parties.  With respect to the product liability policies of the two states, while Massachusetts focused broadly on deterring the sale of defective products and compensating injured individuals, Colorado balanced a concern about these issues with concerns about dramatic increases in the cost of, and difficulty in obtaining, insurance, as a result of which it imposed a $250,000 cap on non-economic damages awards ($500,000 if a court found justification by clear and convincing evidence); accordingly, Massachusetts' policy was not superior to Colorado's.  The §6 factors of certainty, predictability and uniformity were less important in tort cases than in contractual disputes where the parties give advance thought to the applicable law, and while it would be easier for a Massachusetts court to apply its own law, this factor could not outweigh all the other factors that weighed in favor of Colorado law.

The court then applied §145(2) and held Colorado had a more significant relationship to the injury and parties because the injury occurred there and the parties' relationship was centered there, as that was where decedent had been prescribed and received the drug.  The conduct causing decedent's injury also occurred in Colorado, because under prior precedent the relevant conduct in a prescription drug product liability case is the use of the product and any accompanying warnings, which occurred in Colorado, not the decisions regarding warnings, which occurred in Massachusetts.  For all these reasons, therefore, Colorado law applied.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
25 Oct 2017, Webinar, Boston, United States

Foley Hoag will present a 60-minute webinar on Wednesday, October 25 at 12:30 pm EDT, offering guidance for in-house counsel regarding the basics of trademark and design protection in the European Union. Attendees will learn about the opportunities and pitfalls to be on the lookout for when looking to secure, protect, and enforce an IP portfolio overseas.

1 Nov 2017, Webinar, Boston, United States

Please join Foley Hoag on Wednesday, November 1, 2017 for a webinar that covers the details of drafting an appropriate arbitration clause for your company’s commercial contracts.

9 Nov 2017, Conference, Waltham, United States

Please join us on Thursday, November 9 at the Westin Waltham Hotel for our quarterly New England M&A Forum, which brings the latest in market trends and recent legal developments to the New England M&A professionals' community.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.