August 2009

From the editors of Wolters Kluwer Law & Business, this update describes important developments from CCH products liability and safety publications.

If you have any comments or suggestions concerning the information provided or the format used, we'd like to hear from you. Please send your comments to pamela.maloney@wolterskluwer.

Products Liability

High Court Review of New Proof Rule in Cigarette Action Sought …
An executor of an estate of a woman who died after developing lung cancer after smoking a tobacco manufacturer’s cigarettes for over 40 years has petitioned the U.S. Supreme Court (Adamo v. Brown & Williamson Tobacco Corp., Dkt. No. 09-15) to review a New York Court of Appeals decision (Adamo v. Brown & Williamson Tobacco Corp., CCH Products Liability Reporter ¶18,142 (ip access user)) finding in favor of the tobacco manufacturer in the estate’s products liability action after a jury had found for the deceased. The action had proceeded on the theory that the manufacturer negligently designed its cigarettes by manipulating the levels of nicotine to start and sustain addiction. The estate argued that as a direct result of that nicotine manipulation, the deceased was unable to quit smoking during her first 15 “quit attempts,” and that as a result of her addiction to nicotine, she was subjected to prolonged exposure to cancer-producing tar, which caused her lung cancer and death. The estate asked the U.S. Supreme Court whether the New York Court of Appeals denied it due process under the Fourteenth Amendment by creating a new rule of law (requiring an additional element of proof in a negligent cigarette design case) after a jury verdict in favor of the estate and then retroactively applied it to dismiss the estate’s action, where the estate justifiably relied upon New York State product liability law that existed at the time of the trial.

… and Court Petitioned to Examine Oklahoma Choice of Law Rule
A manufacturer of fixed, non-adjustable accelerator pedals installed in another manufacturer’s trucks has asked the U.S. Supreme Court (Williams Controls, Inc. v.Cuesta, Dkt. No. 09-81) to review a decision by the Oklahoma Supreme Court (sub nom Cuesta v. Ford Motor Co., CCH Products Liability Reporter ¶18,237 (ip access user)) holding that Michigan law applied to a class action against both manufacturers alleging that the pedals were defective. The complaint included claims of breach of express and implied warranty, negligence, and strict liability, and alleged that when forcible pressure was applied to the pedal, the truck shifted to idle instead of accelerating, rendering the design defective and unreasonably dangerous. The petition for certiorari was filed on July 20, 2009.

Claims Against Sealant’s Distributor/Seller Addressed
Neither a distributor or retail seller of a spray-on sealant used by consumers to seal ceramic tile grout in kitchens, bathrooms, and similar areas were strictly liable for alleged design and manufacturing defects that caused respiratory problems experienced by users, a federal district court in Georgia ruled in dismissing those claims as a matter of law in two separate proceedings. However, jury questions were raised as to whether the distributor was liable under the negligent design and negligent failure to warn claims raised by the consumer class. The class of consumers who experienced respiratory problems, such as chemical pneumonitis, from exposure to the sealant claimed that the injuries occurred after the manufacturer changed the chemical formula, switching from one fluoropolymer to another. The court also dismissed the breach of implied warranty of merchantability claims against the distributor finding that there was no privity of contract between it and the members of the consumer class. In addition, the finding no evidence of a conscious indifference to the risk of injuries posed by the sealant, the court dismissed the consumer class’s claim for punitive damages. Finally, in a third proceeding, the court determined that opinions of three experts testifying on behalf of the manufacturers of the spray-on sealant were admissible. (In re Stand ’n Seal Products Liability Litigation (NDGa) ¶18,258 (ip access user), ¶18,259 (ip access user), and ¶18,260 (ip access user))

“Bystander Contemplation Test” Rejected in Wisconsin
A jury was properly instructed under Wisconsin law that a bystander personal injury claim in strict products liability is available only if the product is unreasonably dangerous based on the expectations of an ordinary user or consumer (the “consumer contemplation test”) in an action brought by the parents of a two year-old boy who had both feet severed in a riding lawn mower accident, the Wisconsin Supreme Court held. When he reversed the lawn mower, the boy’s father did not see the boy and ran over the boy’s feet. The parents argued that the jury instruction was an incorrect statement of the law and that when a product is dangerous only to a bystander and not to a user or consumer, the consumer contemplation test is inappropriate. They contended the court should have instructed the jury that a product is unreasonably dangerous based on the contemplation and expectations of an ordinary bystander (a “bystander contemplation test”). However, the state high court determined that while bystanders may recover when injured by an unreasonably dangerous product, the determination of whether the product was unreasonably dangerous was based on the expectations of the ordinary consumer. Therefore, the court ruled, the jury was properly instructed in the case. (Horst v. Deere & Co. (WisSCt) CCH Products Liability Reporter ¶18,261 (ip access user))

Contractor Defense Prevented Airplane Maker’s Liability
The military contractor defense shielded an aircraft manufacturer from state law tort liability stemming from an airplane crash in which a United States Air Force (USAF) Reserves officer, who co-piloted the aircraft, died, the U.S. Court of Appeals for the Eleventh Circuit held. The officer’s widow/estate executrix alleged that the aircraft was defectively designed. Following application of the test set forth in Boyle v. United Tech Corp. [CCH Products Liability Reporter ¶11,830], the court found the manufacturer presented sufficient evidence to establish, as a matter of law, that the USAF approved reasonably precise specifications of the airplane’s rudder trim system and its critical component, the trim aid device (TAD), satisfying the first prong of the Boyle test, which was designed to ensure that “the design feature in question was considered by a Government officer.” In addition, the court found that the manufacturer carried its burden as to the second Boyle condition, i.e., that the equipment at issue conformed to precise, government specifications, by presenting evidence that engineers representing the government reviewed drawings to ensure that the “as-built” configuration of the aircraft complied with its design documentation. (Brinson v. Raytheon Co. (11th Cir.) CCH Products Liability Reporter ¶18,252 (ip access user))

FEMA EHU Claims Preempted; “Manufacturer” Status OK’d
State law products liability claims brought by individual residents of emergency housing units (EHUs), which were provided by the Federal Emergency Management Agency (FEMA) following Hurricanes Katrina and Rita, against the units’ manufacturers alleging unsafe levels of formaldehyde in the air of the EHUs were impliedly preempted by federal law, a federal district court in Louisiana ruled in multi-district litigation relating to FEMA trailers affected by formaldehyde. The Manufactured Home Construction and Safety Standards Act (MHA) and the standards and regulations promulgated by the U.S. Department of Housing and Urban Development (HUD) governed and regulated the construction of the EHU mobile homes. The court agreed with the manufacturers who argued that the residents’ claims asserted standards that conflicted with federal standards established by HUD in such a way as to create an obstacle to the achievement of Congress’s objective in the MHA. The court also ruled that the residents’ claims relating to inadequate warnings of exposure to purportedly high levels of formaldehyde contained in EHUs were preempted by federal law and dismissed by the court. In addition, in a separate proceeding in the multi-district litigation, the court held that EHU residents asserted sufficient allegations against individual assistance/technical assistance contractors (IA/TACs)—who contracted with FEMA to provide services, including the management of the hauling and the installation of emergency housing units (EHUs)—to state a claim under the Louisiana Products Liability Act (LPLA). The residents alleged that the formaldehyde-related defect occurred in part because of the assembly process used by the IA/TACs when they constructed or assembled the EHUs. The court found that case law indicated that a “defect” which manifested itself in the assembly process could impose LPLA manufacturer liability on a party when the defect was created by the assembly process. Therefore, because the transformation was alleged to have materially altered the intended purpose of the EHUs and because the assembly was alleged to have created/added to the alleged formaldehyde-related defects, the court held that the residents asserted sufficient allegations to survive the IA/TACs’ motion to dismiss. (In re: FEMA Trailer Formaldehyde Products Liability Litigation (E.D. La.) CCH Products Liability Reporter ¶18,247 (ip access user) and ¶18,248 (ip access user))

California Law Dictated Punitive Award in Heart Monitor Action
Applying the most significant relationship test to resolve the conflict between the state of Washington’s strong policy against punitive damages awards and California’s interest in deterring fraudulent activities such as allowing heart monitors with defective software to remain in use was sufficient to support a punitive damages award of $8,350,000 to a patient who is expected to have severe medical problems as a result of injuries caused by the defect, a Washington court of appeals determined. The patient underwent a heart transplant after his heart was burned during a routine heart bypass surgery performed in a Washington hospital. A defect in the monitor’s software turned off the fail-safe devices causing the catheter which had been inserted into the patient’s heart to heat up, destroying his heart. The evidence established that the California-based company which manufactured the heart monitor knew of the defect, but failed to correct it, recall the unit or warn users of the potential problem. Instead, the maker removed and replaced the defective software that caused the problems when monitors came in for repair. According to the court, California, not Washington, law applied in this case because the manufacturer was headquartered in California, the operator’s manual directing the surgeon on how to use the monitor was written in California, the defect in the software was discovered in California, and the decision not to recall or warn users was made in California. The court also determined that the jury’s award of compensatory and punitive damages was supported by the evidence. Moreover, the evidence presented was relevant to both the compensatory and punitive damage issues and limiting jury instructions verdict forms, combined with the jury’s actual verdict supported a finding that the compensatory damages of $31,750,000 and punitive damages of $8,350,000 (one percent of the manufacturer’s net worth) established that the verdict was not prejudicial, the court ruled. (Singh v. Edwards Lifesciences Corp. (WashCtApp) CCH Products Liability Reporter ¶18,255 (ip access user))

Aortic Stent Manufacturing Defect Claim Permitted
A state law claim by a decedent’s family for strict liability arising out of a manufacturing defect of an aortic stent used in unsuccessful aortic stent graft repair surgery adequately alleged a claim parallel to federal requirements against the stent’s manufacturer to avoid the manufacturer’s preemption defense under the express preemption provision of the Medical Device Amendments (MDA) to the Food, Drug, and Cosmetic Act, a federal district court in California held. The court cited the U.S. Supreme Court’s holding in Riegel v. Medtronic, Inc. [CCH Products Liability Reporter ¶17,924 (ip access user)] that state common law duties are not preempted entirely under the MDA’s express preemption provision because a state is not prevented from providing a damages remedy for claims premised on a violation of Food and Drug Administration (FDA) regulations so that the state duties “parallel,” rather than add to, federal requirements. (Prudhel v. Endologix,Inc. (EDCal) CCH Products Liability Reporter ¶18,262 (ip access user))

Product Safety

Tenenbaum Sworn In As Chairperson of CPSC
Inez Moore Tenenbaum was sworn in on June 23, 2009, as the ninth Chairman of the U.S. Consumer Product Safety Commission (CPSC) to a term that expires in October 2013. She was nominated on June 9, 2009, and confirmed by the Senate on June 19, 2009. Ms. Tenenbaum has listed three major areas where she will focus her attention. The first is creation of an electronic database of product incident reports that consumers can search which would provide accessibility and transparency, Tenenbaum stated. She added that this would give the public confidence that CPSC is working openly and in their best interest. (CPSC News Release, #09-271, July 9, 2009, CCH Consumer Product Safety Guide, Report No. 943, July 27, 2009)

OKK Trading To Pay $665,000 For Violating Lead Paint Ban
OKK Trading, Inc., of Commerce, California, was fined $665,000 in civil penalties for failing to comply with a ban on lead paint on toys, as well as violating other federal safety standards. The settlement resolves CPSC staff allegations that OKK Trading knowingly imported and sold toys with paints that exceeded legal lead limits from November 2007 through August 2008. (CCH Consumer Product Safety Guide ¶57,210 (ip access user))

Compliance Date of Sliding Door Provisions Delayed Until 9-1-2010
In a final rule effective September 1, 2009, the National Highway Traffic Safety Administration delayed the compliance date of the sliding door provisions of a February 6, 2007 final rule [CCH Consumer Product Safety Guide ¶41,956], from September 1, 2009 to September 1, 2010. The earlier final rule amended the federal motor vehicle safety standard on door locks and door retention components to add and update requirements and test procedures and to synchronize with the world's first global technical regulation (GTR) for motor vehicles. As a contracting party to the 1998 Executive Committee of the United Nations Economic Commission for Europe (UNECE) Agreement Concerning the Establishment of Global and Technical Regulations for Wheeled Vehicles, Equipment and Parts Which Can Be Fitted And/Or Be Used on Wheeled Vehicles, NHTSA initiated a rulemaking to adopt the provisions of the global standard. The agency proposed updating Federal Motor Vehicle Safety Standard (FMVSS) No. 206, “Door Locks and Door Retention Components,” to provide uniformity with the GTR. (CCH Consumer Product Safety Guide ¶42,006 (ip access user))

Temporary Exemption Approved for Safety Requirements
Ferrari S.p.A and Ferrari North America, Inc.’s application for extension of a temporary exemption from some requirements of FMVSS No. 208, “Occupant Crash Protection” was granted by NHTSA. The exemption applies to the F430 vehicle line. The agency found that compliance would cause substantial economic hardship to a low-volume manufacturer that had tried in good faith to comply with the standard, and the exemption would have a negligible impact on motor vehicle safety. The exemption is effective through August 31, 2009. (CCH Consumer Product Safety Guide ¶57,236 (ip access user))

Air Brake Standard Amended To Improve Stopping Distance
In a final rule effective November 24, 2009, NHTSA amended the federal motor vehicle safety standard on air brake systems to improve the stopping distance performance of truck tractors. The rule requires the majority of new heavy truck tractors to achieve a 30 percent reduction in stopping distance compared to currently required levels. For these heavy truck tractors, the amended standard requires those vehicles to stop in not more than 250 feet when loaded to their gross vehicle weight rating (GVWR) and tested at a speed of 60 miles per hour (mph). For a small number of very heavy severe service tractors, the stopping distance requirement will be 310 feet under these same conditions. The final rule also requires that all heavy truck tractors must stop within 235 feet when loaded to their “lightly loaded vehicle weight” (LLVW). Petitions for reconsideration of the final rule must be received by September 10, 2009. (CCH Consumer Product Safety Guide ¶42,007 (ip access user))

GAO Issues Report on Use of Consumer Information
GAO has issued a report In response to a provision of the Consumer Product Safety Improvement Act of 2008 (CPSIA) requiring it to study disparities in the risks and incidence of preventable injuries and deaths among children of minority populations related to consumer products intended for children’s use. The CPSIA required the GAO to look at preventable injuries and deaths related to suffocation, poisoning, and drowning, including those associated with the use of swimming pools and spas; toys; cribs, mattresses, and bedding materials; and other products intended for children’s use. (Better Data Collection and Assessment of Consumer Information Efforts Could Help Protect Minority Children, GAO-09-731, August 2009, CCH Consumer Product Safety Guide, Report No. 944, August 10, 2009)