March 2007

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

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Products Liability

U.S. High Court Rules on Role of Nonparties in Punitive Award
In a 5–4 decision, the U.S. Supreme Court held that a $79.5 million punitive damages award potentially based in part on a desire to punish a tobacco manufacturer for harming nonparties amounted to a taking of property without due process. The case presented to the Court involved the estate of a deceased cigarette smoker that brought claims of negligence and deceit against the tobacco manufacturer Philip Morris for its public statements which downplayed the health risks of smoking. A jury found that Philip Morris liable for deceit for “falsely and knowingly” leading the decedent to believe that smoking was safe. In response to the estate's closing statement, which stressed the number of Oregon smokers who were likely to die as a result of smoking, the manufacturer proposed a jury instruction that advised against punishing the defendant for the impact of its alleged misconduct on nonparties. The Supreme Court of Oregon ultimately affirmed the jury's $79.5 million award, rejecting claims that the award improperly punished the manufacturer for harm to nonparties. In writing for the majority, Justice Breyer explained that while evidence of harm to nonparties was relevant to the reprehensibility of a defendant's conduct, the Constitution's Due Process Clause forbids the use of punitive damages to directly punish a defendant for injuries to nonparties. The Court reasoned that without this limitation on punitive awards, defendants would be subjected to liability for which they had not been allowed to defend themselves (Philip Morris USA v. Williams, U.S.S.Ct., CCH Products Liability Reports ¶17,676).

$20 Million Punitive Award for Seat Back Design Reversed
There was insufficient evidence to support a $20 million punitive damage award based on recklessness in a manufacturer's design of its seat backs, according to a Tennessee appeals court. An infant suffered a fatal injury when his head collided with the head of another occupant after the seat in front of the child failed during a rear-end collision accident. The manufacturer asserted that it could not be found to have been reckless and subjected to punitive damages because its seats tested at more than twice the torque mandated by federal safety standards (Federal Motor Vehicle Safety Standard No. 207). The court agreed, finding that the manufacturer's seats “drastically exceeded” the federal standard. The court noted that, under Tennessee presumption law, a product which complied with government standards was not unreasonably dangerous. The court concluded that given the manufacturer's level of compliance, there was not sufficient support for a finding of recklessness under a clear and convincing standard (Flax v. DaimlerChrysler Corp., Tenn. Ct. App., CCH Products Liability Reports ¶17,688).

Products Safety

NHTSA Updates Door Lock and Retention Standard
Federal Motor Vehicle Safety Standard No. 206, "Door Locks and Door Retention Components," was amended to address the safety problem posed by occupants being ejected from motor vehicles. The final rule improves the safety standard by adding new test requirements and procedures. NHTSA is aware that between 1995 and 2003, there were more than 54,000 incidents annually of vehicle occupants being ejected from their vehicles. Fifty-nine percent of those ejections occurred through vehicle windows and 26 percent through vehicle doors. Crashes and impacts can create load conditions that cause doors to open. According to the agency, the final rule targets dangerous load conditions, and is intended to increase motor vehicle safety by making several improvements to FMVSS No. 206. The final rule replaces the previous requirement for sliding doors with new requirements and a related full vehicle test procedure, requiring that sliding side doors have either a secondary latched position, as a backup to the fully latched position, increasing the probability that a striker will remain engaged with the latch when the door is incompletely closed, or a system to signal that the door is not fully closed and latched. The final rule also requires a secondary latched position for double-doors ("cargo-doors"). It adds a dynamic inertial test procedure, used in Europe, as an optional alternative to the previous inertial calculation, and new requirements for side doors with rear mounted hinges to prevent openings while the vehicle is moving. Minor modifications have been made to door lock requirements, and application of the standard has been extended to buses with a gross vehicle weight rating of 4,536 kg (10,000 pounds) or less, including 12–15 passenger vans. Finally, the final rule eliminates a prior exclusion from FMVSS No. 206 for vehicle doors that were equipped with wheelchair platform lifts. The final rule is effective September 1, 2009. Optional early compliance is permitted as of February 6, 2007. (CCH Consumer Product Safety Guide ¶41,956)