April 2008

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

Sophisticated User Defense Adopted by California High Court
The Supreme Court of California adopted the sophisticated user doctrine in a lawsuit brought by a certified heating, ventilation, and air conditioning (HVAC) technician against a manufacturer of commercial evaporators. The worker developed pulmonary fibrosis as a result of inhaling phosgene gas—a dangerous gas that is generated from the heating hydrochlorofluorocarbon refrigerants during welding repairs. The worker brought a lawsuit against the manufacturer of air conditioning equipment, alleging that it should have provided warnings on the potential hazards of phosgene gas exposure. The manufacturer argued that it had no duty to warn because the technician was a sophisticated user in light of his certification as a HVAC technician. The state's high court noted that although it had not specifically adopted the sophisticated user doctrine in the past, the state had accepted the obvious danger rule—the concept from which the sophisticated user doctrine evolved. The court adopted the doctrine and found that the manufacturer did not have a duty to warn of risks that it could reasonably expect should have been known by HVAC technicians (Johnson v. American Standard, Inc., Cal. S.Ct.; CCH Products Liability Reporter, April 23, 2008, ¶17,964 (ip users)).

Innocent Seller's Statutory Right to Indemnity Clarified
A manufacturer of latex gloves fulfilled its obligations under the Texas innocent seller statute by offering to defend or indemnify a medical supply distributor for the portion of claims that related to its products, according to the Texas Supreme Court. The distributor was the object of numerous multidistrict litigation lawsuits alleging that the latex gloves it sold failed to include a warning on the risks associated with latex allergies. The distributor, in turn, sought indemnity from the manufacturers of the latex gloves under the state's innocent seller statute (Tex. Civ. Prac. & Rem. Code § 82.002). Although two of the glove manufacturers had offered to defend and indemnify the distributor for the portion of claims involving their products, the distributor argued that the state's statute allowed it to recover all the costs related to the action from any single manufacturer. The Texas high court, however, found that the statute contained an assumption that there was a nexus between the product at issue and the manufacturer from which indemnity was sought. The court concluded that a manufacturer's duty under the statute was fulfilled by their an offer to defend and indemnify against the portion of claims involving their own products (Owens & Minor, Inc. v. Ansell Healthcare Prods., Inc. and Ansell Healthcare Prods., Inc. v. Owens & Minor, Inc., Tex. S.Ct.; CCH Products Liability Reporter, April 23, 2008, ¶17,968 (ip users) and ¶17,967 (ip users)).

Government Mining Accident Report Improperly Excluded
The exclusion of a investigative report produced by the Mine Safety and Health Administration (MSHA) following the death of a Virginia mine worker was an abuse of discretion, the U.S. Court of Appeals for the Fourth Circuit held. The worker's estate argued that his death was caused by a defective mining machine and its associated defective remote controller. Although there were no direct witnesses to the worker's death, his estate asserted that its allegations were supported by the MSHA report which found the accident was caused by a build-up of debris in one of the machine's components. The lower court, however, excluded the report and granted the mining machine's manufacturer summary judgment because without the report there was insufficient evidence of a product defect. The appeals court held that the exclusion of the MSHA report was an abuse of discretion because the report was admissible as a public record. The court noted that the report was produced by a government agency that had no interest in the worker's lawsuit and was compiled after an investigation that occurred only hours after the accident took place. Although the lower court found that the report's conclusion was speculative, the appeals court found that the lower court failed to explain why the report's conclusions were not reliable. In light of the lack of reasoning and the general presumption that public records are admissible and reliable, the court concluded that the report was admissible (Kennedy v. Joy Tech., Inc., 4th Cir.; CCH Products Liability Reporter, April 9, 2008, ¶17,959 (ip users)).

Product Safety

Flammability Standard for General Wearing Appeal Amended
The flammability standard for general wearing apparel was amended by the CPSC to better reflect current consumer garment care practices and to make the standard easier to understand. The changes, which are effective September 22, 2008, apply to all items of clothing and fabrics used for clothing, for both adults and children and for both daywear and nightwear. The preamble to the amending order is reported at CCH Consumer Product Safety Guide ¶41,978 (ip users). The rule changes will be reflected at a later date, closer to the effective date of the new standards.

Import Safety Agreement Signed with Vietnam
An agreement with the Vietnamese government aimed at improving the safety of consumer products exported to the Unites States from Vietnam was announced by the Consumer Product Safety Commission. The agreement between the CPSC and the Directorate for Standards and Quality of the Ministry of Science and Technology requires information and technical exchanges to implement consumer safety programs. The number of imports from Vietnam has greatly increased in recent years. Nearly $8.6 billion worth of products under CPSC jurisdiction came from that country in 2007. (CCH Consumer Product Safety Guide, Number 911, March 31, 2008)

Reebok To Pay $1,000,000 in Civil Penalties
In what is the largest penalty assessed for a violation of the Federal Hazardous Substances Act (FHSA), Reebok International Ltd. of Canton, Mass., has agreed to pay $1,000,000 in civil penalties following a recall by CPSC and Reebok of 300,000 charm bracelets given as free gifts with the purchase of children’s footwear. In March 2006, Reebok received a report of the death of a 4-year-old child allegedly caused by lead poisoning after swallowing a heart-shaped pendant on the bracelet. Samples of the bracelets tested at the CPSC laboratory produced results indicating that certain components of the charm bracelets had lead levels that were toxic under FHSA. The agreement was entered into for settlement purposes only and did not constitute an admission by Reebok or a determination by the CPSC that Reebok knowingly violated the FHSA. (CCH Consumer Product Safety Guide, Number 911, March 31, 2008)