June 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

Oregon Tobacco Action Goes to U.S. Supreme Court for Third Time
On June 9, 2008, the U.S. Supreme Court agreed to hear another appeal in Philip Morris USA v. Williams (Dkt. No. 07-1216). The court's decision to grant certiorari in the case will be the third time the court has agreed to hear an appeal in the case, which involves a $79.5 million punitive damages award relating to the death of an Oregon smoker and tobacco manufacturers' conduct in down-playing the health effects of cigarette smoking. The U.S. Supreme Court's previous decision in the case, issued in February 2007 and reported at CCH Products Liability Reports ¶17,676 (ip access user), reversed the Oregon Supreme Court and ruled that jury instructions allowed the jury to punish improperly the manufacturer for injuries to nonparties. On remand, the Oregon Supreme Court ruled that the manufacturer had forfeited its right to appeal the jury instruction's under state procedural law and it reiterated that the size of the punitive award was justified because of the reprehensibility of the manufacturer's conduct. (CCH Products Liability Reports, Report No. 1161, June 18, 2008)

Medical Monitoring Ruled Not Available Under New Jersey Law
Members of a class action made up of patients who had taken the pain medication Vioxx were not entitled to medical monitoring because the New Jersey Products Liability Act (NJPLA) does not provide a remedy without the presence of a physical injury, the New Jersey Supreme Court ruled. The class members sought medical monitoring for the cardiovascular side effects (e.g., heart attack, stroke) that led to the drug's 2004 withdrawal from the market. The class action, which was made up of patients who had taken the drug for at least six weeks and had not sought to recover damages for personal injuries, argued that New Jersey law did not preclude the use of medical monitoring as a remedy, citing its previous use in asbestos actions. Although the state's high court acknowledged that medical monitoring may have been available prior to the passage of the NJPLA, it found that a "personal physical injury" was required under the current statute. The NJPLA defined the harm that is required for a viable claim as using the phrase "physical illness, injury, or death." The court determined that the term "physical" modified all three types of harm including the "injury." The court reasoned that under this definition of harm an injury was required to have a personal physical manifestation. The court concluded that class members who did not have any physical manifestation of a cardiovascular side effect from taking Vioxx did not have a viable claim under the NJPLA and, therefore, could not seek medical monitoring as a remedy. The court also ruled that the class members could not seek an alternative remedy under the state's Consumer Fraud Act because the product-related nature of their claims made the NJPLA the exclusive remedy (Sinclair v. Merck & Co., Inc., N.J. S.Ct., CCH Products Liability Reports ¶18,011 (ip access user)).

Asbestos-Like Behavior Found in Nanotechnology Safety Study
A recent study published in Nature Nanotechnology reported that some carbon nanotubes resulted in "asbestos-like" behavior when injected into mice. Carbon nanotubes are nanometer-size molecular structures that are used in many nanotechnology applications, including sporting goods and electronics. The needle-like fiber shape of carbon nanotubes has led to comparisons with asbestos and has created concerns relating to whether exposure to carbon nanotubes could lead to mesothelioma. The study, released on May 20, injected various carbon nanotube structures into the abdominal mesotheial lining of mice and found that long multi-walled carbon nanotubes led to the formation of inflammation and lesions which indicated that the development of mesothelioma was possible. Short carbon nanotubes and those in tangled ball-like structures, however, did not result in the same negative reaction. The study used direct injections of nanotube material and specifically did not address whether, or how likely, nanotubes could become airborne. The study's authors noted the importance of the study's results in light of large investments in nanotechnology research and its possible use in a wide range of products. The Project on Emerging Nanotechnologies (http://www.nanotechproject.org/), an effort to track the number of consumer products that rely on some form of nanotechnology, estimated recently that more than 600 consumer products are currently on the market and new products are released at the rate of 3-4 per week. The study concluded that great caution should be used before introducing carbon nanotube-containing products into the market and advised that further research on the safety of such products was needed. (CCH Products Liability Reports, Report No. 1160, June 4, 2008)

Consumer Product Safety

Child Safety Bill Cleared for White House
The Senate on June 16 passed a bill that would require child-resistant closures on all portable gasoline containers. Under the bill, which is titled the Children's Gasoline Burn Prevention Act (H.R. 814), the Consumer Product Safety Commission would be required to issue regulations mandating these closures. In October of 2007, the House of Representatives approved the measure, so this week's Senate action clears the bill for the president. (CCH Consumer Product Safety Guide, Report No. 917, June 25, 2008)

Head of CPSC Raises Concerns about Senate Reform Bill
Senate legislation to overhaul the Consumer Product Safety Commission (CPSC) could have “unintended consequences,” jeopardizing the agency’s ability to do its job with limited resources, warned CPSC Acting Chairman Nancy Nord. The acting agency head on May 13 raised concerns over several provisions of the Consumer Product Safety Commission Reform Act (S.2663), including provisions involving a ban on children’s products containing lead, enforcement by state attorneys general, and whistle blower protections in the public and private sector. Nord, in remarks before the National Retail Federation on May 13, contended that the CPSC should be given the authority to exempt certain lead-containing products for children from the ban if the lead content is not accessible to them and does not pose a safety hazard. She took issue with the whistleblower provisions, saying they have the potential to “seriously disrupt” agency performance. (CCH Consumer Product Safety Guide, Report No. 915, May 28, 2008)

NHTSA Revises Crash Test Dummy Specifications
In response to petitions for reconsideration of a December 6, 2006 final rule establishing a new mid-size adult male side crash test dummy, called the "ES-2re" test dummy NHTSA has revised several test dummy specifications and test requirements. Revisions were made to the specifications for conducting the neck assembly qualification test, narrowed the tolerances for the tuning spring rates for the dummy's thorax, revised performance corridors for the full body thorax test, corrected cross-references in the Part 572 regulatory text and made minor changes to the drawing package and user's manual for the test dummy. The final rule is effective August 15, 2008. Petitions for reconsideration of this rule must be received by July 31, 2008. (CCH Consumer Product Safety Guide ¶41,981 (ip access user))

Petition to Make Communications Systems Inoperative Denied
A petition for rulemaking from the Center for Auto Safety requesting the National Highway Traffic Safety Commission to address the issue of driver distraction related to the use of cell phones and other telematic devices by requiring that when these devices are integrated into the vehicle, they would be rendered inoperable when the vehicle is in motion was denied by NHTSA. According to NHTSA, it has worked with researchers in universities, private organizations and industry to address the issues of driver distraction due to use of phones and/or other devices and found that if these were required to be inoperable when the vehicle was in motion, drivers would switch to the use of portable devised instead. Thus, there was no reason to believe that the requested rule would result in safety benefits. (CCH Consumer Product Safety Guide ¶56,681.

California Has Jurisdiction over South African Infant Seat Maker
A South African manufacturer of an infant seat that was sold throughout the United States by a national retailer had sufficient contacts with California to support jurisdiction in that state, the U.S. District Court for the Northern District o f California ruled. Although it was not known if the manufacturer has a distribution agreement with the national retailer, or what the terms of that agreement might be, there was sufficient evidence that the manufacturer was not only aware that its products would reach California but that it acted with “the intent and purpose to serve the state.” (Lamm v. Bumbo, N.D. Cal., CCH Consumer Product Safety Guide ¶75,764 (ip access user))

Purchase of Recalled Crib Insufficient to Establish Injury
The purchase of a crib that was later recalled because of a safety-related design defect did not create a legally cognizable injury under Minnesota law, the U.S. District Court for the District of Minnesota held. Consumer complaints concerning the risk that the crib’s drop-side—the side of the crib that could be raised and lowered to place a child into, or remover a child from, the crib—could become loose and pose a risk of child suffocation were first reported to the CPSC in 2003. After media coverage of the death of three children and reports of 63 other incidents to the CPSC, a recall was issued in 2007. The manufacturer, however, did not accept customer returns of the crib but supplied retrofit kits that would make the crib safe by rendering the drop-side nonfunctional. A proposed class action sought recover for economic loss stemming from claims that they received less than the benefit-of-the-bargain (that is, the difference in value between a safe crib with a drop-side and a crib without one). The district court rejected the claims finding that without the retrofit, the cribs still functioned properly and thus, the class was no able to demonstrate a sufficient injury to support their claims. (O’Neil v. Sumplicity, Inc., D. Minn., CCH Consumer Product Safety Guide ¶75,763 (ip access user))