December 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

U.S. High Court Asked to Review D.C. Gun Case
A victim of a gun shooting has asked the U.S. Supreme Court (Docket No. 08-545) to review a decision by the U.S. Court of Appeals for the District of Columbia Circuit in District of Columbia v. Beretta U.S.A. Corporation, which is reported at CCH Products Liability Reports ¶17,899 (ip access users), dismissing strict liability claims brought under a District of Columbia statute against various manufacturers of assault weapons. The claims were properly dismissed under the federal Protection of Lawful Commerce in Arms Act (PLCAA). Although the PLCAA mandated a ban on causes of action against manufacturers for harm caused by the unlawful misuse of a firearm, the plaintiffs asserted that their claims were exempted under the statute's exception for instances where the manufacturer violates a state or federal statute. However, the federal court of appeals found that the plaintiffs could not rely on the District of Columbia's statute which specifically permitted tort liability claims against manufacturers of assault weapons because the general duty of care imposed under tort law was not of the type of statutory violation the authors of the PLCAA reasonably intended. In addition, the D.C. Circuit ruled that application of the PLCAA to dismiss a lawsuit authorized under a District of Columbia statute did not violate the separation of powers principles or due process principles embodied in the Fifth Amendment of the U.S. Constitution. The U.S. Supreme Court has been asked to decide whether the U.S. Congress may, relying solely on its Commerce Clause power, retroactively eliminate a claim for money damages that has already accrued under applicable local law without providing any remedy or offsetting benefits for the harms suffered by the plaintiffs. The petition for cert. was filed sub nom Lawson v. Beretta USA Corp., October 23, 2008. (CCH Products Liability Reports, No. 1173, December 23, 2008)

Manufacturers Had No Duty to Warn of Respirable Asbestos
A successor corporation (corporation) to a company that manufactured an evaporator (a device that desalinates seawater) did not have a duty to warn a U.S. Navy employee of the hazards of the evaporator’s asbestos insulation, which was manufactured by another corporation, and the exposure to which the employee alleged was the cause of his lung cancer, the Washington Supreme Court held. The court ruled that the corporation was not strictly liable for its failure to warn the employee of the hazards and did not have a duty to warn the employee under common law of negligence. The asbestos insulation was applied by the navy or another entity to the evaporator after the device was manufactured and shipped. The employee performed maintenance on the evaporator during his employment with the navy and claimed that the exposure occurred when asbestos insulation had to be removed from the equipment. The state high court ruled that because the corporation did not manufacture, sell or supply the asbestos insulation, it had no duty to warn the employee and could not be held liable for failing to warn of the hazards of another manufacturer's product. The court also held that it was not the evaporator, but the dangers inherent in the asbestos insulation, a product the corporation did not manufacture or supply, that was the proximate cause of the employee’s alleged injury. Case law supported the conclusion that there was no strict liability for failure to warn of the dangers inherent in another product. Therefore, because the corporation was not in the chain of distribution of the dangerous product, and did not have control over the type of insulation the navy selected, the corporation could not be strictly liable for failure to warn.

In a similar case, the Washington Supreme Court reaffirmed its ruling in Simonetta, holding that manufacturers of pumps and valves, which were sold to the U.S. Navy for use aboard ships and insulated by the navy with asbestos-containing thermal insulation, did not have a duty to warn a navy employee of the danger of exposure to the asbestos insulation, which was manufactured by another corporation. The court said that a manufacturer has no duty under common law products liability or negligence principles to warn of the dangers of exposure to asbestos in products it did not manufacture and for which the manufacturer was not in the chain of distribution. The court found that these holdings foreclosed the employee's products liability and negligence claims based on failure to warn of the danger of exposure to asbestos (1) in insulation applied to pumps and valves that the defendant-manufacturers sold to the navy, where the manufacturers did not manufacture or sell the insulation and were not in the chain of distribution of it, and (2) in replacement packing and gaskets installed in or connected to the pumps and valves after they were installed aboard ships, where the manufacturers did not manufacture or sell the replacement packing and gaskets and were not in the chain of distribution of these products. The court of appeals was reversed, and summary judgment by the trial court in favor of the manufacturers was reinstated. (Simonetta v. Viad Corp., Wash. S. Ct.. CCH Products Liability Reporter ¶18,132; and Braaten v. Saberhagen Holdings, Wash. S. Ct., CCH Products Liability Reporter ¶18,133)

Motorcycle Kickstand Not Defective Under Pennsylvania’s Risk-Utility Test
A 1995 motorcycle that did not incorporate a Side Stand Interlock System (SSIS), which would have shut off the motorcycle’s engine if the kickstand was not fully retracted during operation, was not unreasonably dangerous under a risk-utility analysis, but could have been negligently designed, a federal district court in Pennsylvania ruled. The court thoroughly analyzed the seven factors used by Pennsylvania courts to determine whether a product was unreasonably dangerous. The factors weigh the product’s risk of harm against its social utility. Six of the seven factors weighed in favor of a finding that the condition of the 1995 motorcycle at the time it was marketed was not, as a matter of law, unreasonably dangerous. However, it was for the jury to determine whether the manufacturer’s failure to include an SSIS breached a duty of care in that the motorcycle would have been safer with that feature. (Kagen v. Harley Davidson, Inc., E.D. Pa., CCH Products Liability Reporter ¶18,067 (ip access users))

Lack of Warning Gives Rise to Presumption of Liability for Child’s Overdose Death
The Indiana Court of Appeals found that the failure to warn that a graduated medicine cup should not be used to dispense precise medicinal dosages to children created a presumption of causation in the death of a 9-year-old. The child succumbed from an overdose of the opiate Codeine, which was administered using a medicine cup, after an adenoidectomy. The absent warning involved the very risk--an overdose--that caused the child's death and an adequate warning not to use the medicine cup to measure precise medication dosages to children would have been heeded. Thus, the lower court's summary judgment for the medicine cup's manufacturers/sellers on product liability and implied warranty-of-merchantability claims brought by the child's parents was error and the cup manufacturers' cross-claim to exclude the testimony of the parents' expert was rejected. However, the parents’ claim for breach of implied fitness for a particular purpose failed, as they were unable to show the requisite vertical privity with the manufacturers/sellers of the medicine cup. (Kovach v. Alpharma, Inc., Ind. Ct. App., CCH Products Liability Reporter ¶18,071 (ip access users))

State Failure-to-Warn Claim Not Preempted by FDA Advisory Letter
A Federal Drug Administration advisory letter to consumers regarding the risks posed by mercury in fish products did not create a federal standard or regulatory action that preempted a consumer’s failure-to-warn claim against a tuna products producer and distributor, the U.S. Court of Appeals for the Third Circuit held. Finding no reason to deviate from the U.S. Supreme Court’s traditional presumption against preemption, the 3rd Circuit found no conflict between the consumer’s state failure-to-warn claim and any federal law. According to the court, the tuna producer could have complied with both federal law and state law warning requirements. (Fellner v. Tri-Union Seafoods, CCH Products Liability Reporter ¶18,059 (ip access users))

Failure-to-Warn Claim Against Skydiving Harness Maker Preempted, Not Design Defect Claim
A state law failure-to-warn claim against a skydiving harness manufacturer on behalf of an individual who fell to her death after slipping out of a tandem harness during a skydiving instruction session was preempted by the Federal Aviation Act of 1958, but a design-defect claim was not, an Ohio federal court determined. With respect to the failure-to-warn claim, the court articulated that federal law establishes the applicable standard of care in the field of air safety generally, thus preempting the entire field from state and territorial regulation. As for the design defect claim, the court remarked that although the Act's preemptive effect is broad, it is not the type of complete preemption asserted by the manufacturer. While the harness is subject to certification procedures imposed by the Federal Aviation Administration, nothing suggests that the process is anything more than general, nor was there any suggestion that the design submitted is subject to any type of specific review beyond general certification procedures. (McWilliams v. S.E., Inc., N.D. Ohio, CCH Products Liability Reporter ¶18,078 (ip access users))

Removal of Sausage Machine’s Guard Altered Product
Removal of the guard from a co-extrusion sausage processing system was a substantial modification of the machine that made it more dangers, a federal district court in Wisconsin ruled in dismissing strict products liability claims against the machine’s manufacturer. A worker was attempting to remove sausages that became stuck in the machine when the tips of his glove became caught in the spinning blade and his hand was pulled into the machine. There was no evidence that the machine was designed to be operated without the guard; rather four bolts held the guard in place and a wrench or pliers was required to remove it. Rejecting the worker’s contention that removal of the guard was a foreseeable use, not an alteration, the court reiterated that foreseeability is not an element to be considered in strict products liability claims in Wisconsin. (Bush v. Townsend Vision, Inc., E.D. Wis. CCH Products Liability Reports ¶18,060 (ip access users))

Product Safety

CPSC Enacts Safety Standards for ATVs . . .
As required by the Consumer Product Safety Improvement Act of 2008 (CPSIA), the CPSC has published as a mandatory consumer product safety standard the American National Standard for Four Wheel All-Terrain Vehicles Equipment Configuration, and the performance requirements developed by the Specialty Vehicle Institute of America (American National Standard ANSI/SVIA 1-2007). Other provisions of the CPSIA that apply to ATVs will also be reviewed by the Commission. The rule takes effect April 13, 2009. (CCH Consumer Product Safety Guide ¶41,992 (ip access users))

. . . and Labeling Requirements for Toy/Game Advertising
Also as directed by the Consumer Product Safety Improvement Act of 2008 (CPSIA), the Commission has promulgated regulations with respect to advertising for certain toys and games in catalogues and other printed materials. The final rule details requirements regarding the size and placement of the cautionary labeling and the use of abbreviated warnings. The rule exempts catalogues circulated solely between businesses from the rule's requirements, except when the recipient business is one that could be expected to be purchasing the product for the use of children rather than for resale. There is a grace period of 180 days for distribution of catalogues and other printed materials printed prior to the effective date of February 10, 2009. (CCH Consumer Product Safety Guide ¶41,993 (ip access users))

Accreditation Requirements Approved for Toy Testing
A notice of requirements for accreditation of third party conformity assessment bodies (third party laboratories) to test children's products for conformity with the Commission's regulations for identifying toys and other articles intended for use by children under three years of age which present choking, aspiration, or ingestion hazards because of small parts was issued by the Commission. Each manufacturer, including the importer, or private labeler of products subject to the regulations must have products manufactured more than 90 days after the Federal Register publication date of the notice, November 17, 2008, tested by a laboratory accredited to do so and must issue a certificate of compliance with the applicable regulations based on that testing. Comments in response to this notice should be provided by December 17, 2008. (CCH Consumer Product Safety Guide ¶56,907 (ip access users))

CPSC Clarifies Conformity Certification Requirements
The conformity certification requirements for consumer products subject to safety rules under CPSC jurisdiction is the subject of a final rule issued by the CPSC. The Consumer Product Safety Act (CPSA), as amended by the Consumer Product Safety Improvement Act of 2008 (CPSIA), required that, for products manufactured on or after November 12, 2008, manufacturers, including importers, and private labelers of the products certify that the products comply with all applicable CPSA consumer product safety rules and similar rules, bans, standards and regulations under any other laws administered by the Commission. A certificate must accompany the product and must specify each such rule, ban, standard, or regulation with which the product must comply. In general, the certification must be based on a test of each product or upon a reasonable testing program. Certificates and certification for certain children's products must be based on testing by third party laboratories whose accreditation to do so has been accepted by the Commission. The third party testing requirements become effective on a rolling schedule as the Commission issues specific laboratory accreditation requirements. The final rule limits the parties who must issue conformity certifications to the importer and, in the case of domestically produced products, the U.S. manufacturer. It also specifies the requirements that an electronic certificate must meet. The rule is effective November 18, 2008. (CCH Consumer Product Safety Guide ¶41,994 (ip access users))

Virginia Graeme Baker Pool/Spa Safety Law Takes Effect
Public pool and spa owners were reminded by the CPSC that the Virginia Graeme Baker Pool and Spa Safety Act [CCH Consumer Product Safety Guide ¶10,850] became effective as of December 19, 2008. The law requires installation of anti-entrapment drain covers and other systems. Public pools and spas that operate year-round are expected to be in compliance by December 19, 2008. Seasonal public pools and spas that are currently closed must be in compliance with the law on the day they reopen in 2009. The Commission encouraged pool and spa operators to continue working as diligently as possible to become compliant with the law. The CPSC also noted that it is empowered, along with state Attorneys General to close down any pool or spa that fails to meet the Act's requirements. (CPSC News Release, #09-065, December 15, 2008, CCH Consumer Product Safety Guide, Report No. 929, December 22, 2008)

CPSA to Assess Voluntary Crib Standards
As required by the Consumer Product Safety Improvement Act of 2008 (CPSIA), the Commission will examine and assess, in consultation with consumer groups, juvenile product manufacturers, and independent child product engineers and experts, the effectiveness of voluntary standards for full size and non-full-size cribs. The CPSC will examine and assess potential design and durability issues by seeking input and information about hardware systems, other hardware issues, assembly and instructional problems and wood quality/strength issues for full size and non-full-size cribs with stationary or drop-side construction. Because of the amount of information necessary to address the range of technical issues involved in evaluating the hazards posed by cribs, and the amount of time needed by CPSC staff to evaluate that information prior to the issuance of a notice of proposed rulemaking, the Commission began the ANPR as part of the consultation process. The Commission solicited written comments concerning the risks of injury associated with full size and non-full-size cribs, possible ways to address these risks, and the economic impacts of the various regulatory alternatives. (CCH Consumer Product Safety Guide ¶40,219 (ip access usesrs))

Rules on Product-Specific Information Disclosure Issued
A final rule has been issued by the Commission to reflect amendments made by the Consumer Product Safety Improvement Act of 2008 on public disclosure of product-specific information. The amendments shorten the time periods for notice and opportunity to comment on public disclosure of product-specific information, broaden the statutory exceptions to section 6(b) of the Consumer Product Safety Act and eliminate the Federal Register publication requirement the Commission previously had to follow when it made a finding that the public health and safety required public disclosure within a lesser period of notice than that required by section 6(b)(1). Because the amendments became effective by statutory enactment on August 14, 2008, the Commission published the amendments to its regulations to make them consistent with the statutory provisions. (CCH Consumer Product Safety Guide ¶41,995 (ip access users))

Electronic Tire Registration Rules Issued
NHTSA has amended the tire identification and recordkeeping regulation to codify existing interpretations regarding opportunities for electronic registration of tire sales and leases and to create new opportunities for the public to use electronic means to register new tires. The regulation requires manufacturer-owned tire distributors and dealers to register the names and addresses of the people to whom they sell or lease new tires, and specifies the use of standardized paper forms for this purpose. It also requires independent distributors and dealers to provide purchasers with standardized registration forms—with the tire identification number filled in—that can be completed and mailed to the manufacturer or its designee. The revised rule accommodates and facilitates Internet and other electronic registration of tires, including voluntary registration of tires by independent dealers. The final rule takes effect January 27, 2009. Optional immediate compliance is permitted as of November 28, 2008. Petitions for reconsideration must be received no later than January 12, 2009. (CCH Consumer Product Safety Guide ¶41,997 (ip access users))

$500,000 Fine for Failing to Report Hazardous Candles. . .
IKEA North American Services, LLC was fined $500,000 in civil penalties for failing to timely notify the Consumer Product Safety Commission of defective outdoor candles. IKEA sold about 133,000 six-pack sets of the outdoor candles in the United States between February 2001 and July 2005. The firm received at least 32 reports worldwide of unexpected flare-ups, including fire, scorching and 12 reported injuries, including minor to serious burns. Under federal law, a company must report to the Commission within 24 hours of receiving information reasonably supporting a conclusion that the company's product contains a defect that could create a substantial risk of injury to the public, presents an unreasonable risk of serious injury or death, or violates a federal safety standard. IKEA recalled about 133,000 packages of the candles in May 2006 [CCH Consumer Product Safety Guide ¶55,730 (ip access users)], and recommended that consumers stop using the product immediately. (CCH Consumer Product Safety Guide ¶56,928 (ip access users))

. . . and a $60,000 Fine for Failure to Report Use of Drawstrings
Nordstrom, Inc. was fined $60,000 in civil penalties for failing to timely notify the Consumer Product Safety Commission of children's hooded jackets and sweaters that were sold with drawstrings at the hood and neck. Nordstrom sold about 2,400 drawstring jackets and sweaters in the United States between November 2007 and December 2007. Under federal law, a company must report to the Commission within 24 hours of receiving information reasonably supporting a conclusion that the company's product contains a defect that could create a substantial risk of injury to the public, presents an unreasonable risk of serious injury or death, or violates a federal safety standard. In February 2008 and March 2008, CPSC and Nordstrom announced the recall of the drawstring jackets and sweaters [CCH Consumer Product Safety Guide ¶56,521 (ip access users) and ¶56,560 (ip access users)]. (CCH Consumer Product Safety Guide ¶56,929 (ip access users))