Inside Counsel Explores California Green Chemistry Regs

Your humble blogger is quoted in the latest edition of the fine publication INSIDE COUNSEL.  See “Proposed Regulation Requires Companies To Go Green,” Inside Counsel, November 1, 2010.

Readers know we have posted on California's Green Chemistry program.  This new article explores its potential impact, which will likely reverberate far beyond that state’s borders.  for example, I spoke to the publication about the impracticality of making two versions of many products, one for California and one for the rest of the nation. 

The article also suggests that plaintiffs attorneys will likely find plenty of litigation opportunities in the initiative, including the argument that changes made to comply with the regulation could and should have been made earlier, as I discussed with the author.

I also pointed out that there doesn’t appear to be an easy mechanism for getting a chemical or product off the state's target list once it’s finalized, highlighting the importance of the initial comment period.

 

Twombly and Iqbal Webinar

Since the U.S. Supreme Court’s rulings in Twombly and Iqbal —which updated the Conley “any set of facts” standard for motions to dismiss, and confirmed that the new plausibility standard applies to all civil cases— federal courts and some state courts have wrestled with how to apply the clarified pleading standards to all sorts of complaints.

BNA is holding a webinar on Wednesday, November 17, and my partner Stephen J. McConnell and I will be on a panel to discuss the impact of the rulings on plaintiffs and the courts.

The seminar will be November 17, 2010; 1:00 PM – 2:30 PM EST.

Topics to be discussed will include:

■ Have courts granted significantly more motions to dismiss in the wake of these cases?


■ Have plaintiffs’ attorneys risen to the challenge of meeting the plausibility standard laid out in the cases?


■ What types of claims have been most affected since the rulings came down?


■ Will Congress respond to these decisions?



To register for this webinar or for more information, please click here.

 

DRI Annual Meeting Held

Your humble blogger spent part of last week at the DRI Annual Meeting in SanDiego, CA.  (I serve as Chair of the Mass Tort and Class Action Subcommittee of the Product Liability Committee.)

DRI is the international organization of attorneys defending the interests of business and individuals in civil litigation. DRI provides numerous educational and informational resources to DRI members and offers many opportunities for liaison among defense trial lawyers. DRI's goals include: To teach and educate and to improve the skills of the defense law practitioner; to strive for improvement in the civil justice system; to be a counterpoint to the plaintiff's bar and seek balance in the justice system in the minds of potential jurors and on all fields where disputes are resolved; and to assist members in dealing with the economic realities of the defense law practice, including the competitive legal marketplace.

The first day keynote speaker was former Navy SEAL Marcus Luttrell.

He received his Basic Underwater Demolition/SEAL (BUD/S) training in Coronado, California, just down the road from the site of the DRI conference.  He participated in multiple missions in Iraq and Afghanistan.  In 2005, Luttrell and his SEAL Team 10 were assigned to a mission to kill or capture Ahmad Shah, a high-ranking Taliban terrorist leader responsible for multiple killings and atrocities.

Luttrell shared with the defense bar lawyers his harrowing mission, beginning with when his team was accidentally stumbled upon by local goat herders.  They let the herders go as non-combatants, but apparently the herders immediately  told the local Taliban about the team. Within a short time, the four SEALs were engaged in a vicious fire-fight against a force of 100-150 enemy fighters. The SEAL team engaged the Taliban for several hours in a running fire-fight through the hills and valleys of Afghanistan, killing more than half of them.  All of the SEALs continued to fight after being wounded multiple times. Eventually, all of the other team members were killed. Luttrell barely survived after being blown out of a gap in the boulders by an RPG, and rolling down the mountain away from the bulk of the forces.

A helicopter trying to rescue the SEALs was also shot down when it reached the hill on which the battle was raging.

Badly wounded in multiple places, Luttrell managed to crawl seven miles to evade capture, during which he killed several more Taliban.  Eventually, he was  given shelter in a village, whose elders follow the belief that an injured stranger needing shelter must be given it.

Luttrell recounts his ordeal in the New York Times bestseller Lone Survivor: The Eyewitness Account of Operation Redwing and the Lost Heroes of SEAL Team 10.

He told DRI that he doesn't view his appearances as being about "motivational speeches."  But it was clear that the dominant theme was applicable to anyone facing bad odds or tough times or difficult  challenges: don't give up, don't give in; you don't know what you are capable of until you try.

CPSC Shares Public Comments on Product Database

The Consumer Product Safety Commission is in the process of reviewing comments submitted on the impending consumer product safety information database. The agency has posted the comments received.

No surprise, those consumer-oriented interest groups in favor of a database generally praise what CPSC is proposing to do, and industry groups reiterate concerns they have about the implementation of the database concept.

As we have posted before, even back to the time Congress was considering this provision, there remain concerns about the accuracy and confidentiality of reports of alleged injury submitted and conveyed back tot he public in the database;  and the CPSC remains vague about how it will provide "due process" for product sellers who could find the database being used against them even when it contains erroneous, duplicate, or confidential data.  for manufacturers and private labelers.  There seems scant attention to legitimate issues of a manufacturer's goodwill and reputation, to the costs of unnecessary panic among product consumers, and the mischief that plaintiffs' lawyers might cause with unwarranted increase in litigation against manufacturers.


Organizations such as  the National Association of Manufacturers noted that false or inaccurate information does not serve the interests of consumers. Congress knew that counterfeit products are too common in the marketplace and may be confused with real brand name products.  Manufacturers and private labelers of products have a legitimate interest in protecting their brands from inaccurate, defamatory, and intentionally false statements and in protecting trade secret and confidential commercial information.  Accordingly, a request for confidential treatment “is not a matter that should be left to the discretion of a CPSC staffer,” NAM said.

Industry groups also worried about the CPSC's unduly broadening the list of people who can submit a report to the database. Broadening the list of reporting parties does not serve the Congressional interest in providing accurate information to consumers about reports of harm. It is obvious why parties included in CPSC's broad proposed listing of "others" may not be reliable reporters of an incident. CPSC has largely added parties who are more likely to have an agenda that goes beyond merely advising CPSC of an incident. The possibility that someone might attempt to seed the database with inaccurate or misleading information to provide ostensible support for lawsuits is a real concern. 

So far, the Commission has not ensured that the CPSC will deal with accuracy challenges in a timely manner. Conceivably, busy CPSC staff might take weeks, months, or even years to determine whether information that is posted on the database is materially inaccurate.  CPSC has also set up a catch-22 procedure for handling such challenges. CPSC has asked firms who wish "expedited" treatment to submit no more than five pages including attachments to show a problem. However, CPSC has simultaneously set a standard of  "significant evidence" to support claims that information is materially inaccurate.  To provide sufficient evidence to support a challenge, a manufacturer may need to provide more than 5 pages of information; however, if they do so,  CPSC will publish first, and resolve the challenge at some indefinite time in the future.

These parts of the proposal likely will not withstand judicial scrutiny, nor should they have any credibility with the public.

 

Alleged Damages in Hurricane Katrina from Dredging Operations Not Forseeable

A court of appeals has affirmed the dismissal of multiple claims alleging that negligent dredging operations before Hurricane Katrina led to the failure of levee systems in Louisiana.  See In Re: In the Matter of the Complaint of Great Lakes Dredge & Dock Co. LLC, No. 08-30738 (5th Cir. Oct. 14, 2010). Claimants were Hurricane Katrina flood victims who filed claims alleging negligence on the part of operators of dredging vessels along the Mississippi River Gulf Outlet. Plaintiffs argued that they suffered damages from the flooding of Orleans and St. Bernard Parishes when several levee systems failed as a result of the erosion of protective wetlands allegedly caused by the defendants’ negligent dredging operations.

The Mississippi River Gulf Outlet  (“MRGO”) is a 76-mile navigational channel that connects the Gulf of Mexico with the Industrial Canal in New Orleans, bisecting the marshy wetlands of St. Bernard Parish and Chandeleur Sound. It was built between 1958 and 1965 by the United States Army Corps of Engineers.  Beginning in 1993, the Corps of Engineers contracted with numerous private dredging companies, including the defendants, to assist the Corps of Engineers in maintenance dredging along the MRGO. From 1999 to 2004, the Corps of Engineers awarded more than 150
contracts to private dredging companies to dredge the length of the MRGO channel.

Plaintiffs, who numbered in the tens of thousands, were individuals, businesses, and other entities who owned property that was damaged due to flooding after Hurricane Katrina made landfall on August 29, 2005. (BTW, for readers, there is a fascinating new exhibit at the Newseum in Washington, DC, on the media coverage of Katrina.)  Plaintiffs contend that the defendants'  maintenance dredging operations caused severe damage to the Louisiana wetlands, which had been providing a natural barrier against tidal surge from storms and hurricanes. This damage to the wetlands allegedly caused an amplification of the storm surge in the New Orleans region
during Hurricane Katrina, which increased the pressure on the levees and flood walls along the MRGO, leading eventually, they alleged, to levee breaches and the subsequent flooding of St. Bernard Parish and Orleans Parish.

These allegations were different from some earlier Katrina claims, adding that their injuries resulted from the erosion to the wetlands caused by the negligent dredging, performed in breach of the standards set out in their Corps of Engineers contracts and various rules and regulations
alleged to apply to their operations, to try to defeat the dredgers’ government contractor immunity defenses, as well as the dredgers’ entitlement to exoneration from or limitation of liability under the Limitation of Liability Act.

Defendants moved to dismiss.  The district court dismissed the claims, and plaintiffs appealed. The 5th Circuit noted that to avoid dismissal, a complaint must contain sufficient factual matter,
accepted as true, to state a claim to relief that is plausible on its face.  Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 554, 570 (2007)). To be plausible, the complaint’s factual allegations must be enough to raise a right to relief above the speculative level. In deciding whether the complaint states a valid claim for relief, we accept all well-pleaded facts as true and construe the complaint in the light most favorable to the plaintiff.

Defendants argued that they could not have foreseen that discrete acts of negligent dredging could have resulted in the absolutely devastating and cataclysmic damages that occurred to St.
Bernard and Orleans Parishes.  Plaintiffs asserted that it is well known, as a matter of general knowledge, that the wetlands provide storm surge mitigation; that the levees protecting cities and towns in the coastal areas were designed with the assumption that the buffering action provided by the wetlands would remain intact; and that dredging activities cause damage to the wetlands.

Duty and forseeability were the key concepts here, and maritime law on this issue mirrored general negligence law.  Determination of the tortfeasor’s duty is a question of law.  A duty may be owed only with respect to the interest that is forseeably jeopardized by the negligent conduct. Thus, if the injuries suffered allegedly as a result of the negligent dredging were not foreseeable, the defendants owed no duty; to show a duty, plaintiffs had to show that each dredger reasonably should have foreseen that the sequence of events leading to their damages—the amplification of the storm surge during Hurricane Katrina, the failure of the levee systems, and the subsequent flooding of Orleans and St. Bernard Parishes—would be a probable result of its negligent acts and the marginal erosion to the wetlands caused thereby.

The 5th Circuit agreed with the trial court that the defendants in this case had no knowledge of an immediate and pending natural disaster that would affect how they conducted their dredging operations. Furthermore, it cannot be said that any dredger could have foreseen that performing its dredging activities negligently—as opposed to in conformity with the Corps of Engineers’ specifications— would probably result in the series of events culminating in the catastrophic damages that occurred during Hurricane Katrina. No reasonable dredger could have anticipated that its negligence would make the difference between the levee systems holding or failing in the event of a hurricane. The damages alleged here were beyond the pale of general harm which reasonably might have been anticipated by negligent dredgers.

The court cautioned that that was not to say that it could never be foreseen that dredging could create conditions that would result in flooding after a hurricane. Rather, it was not foreseeable that the marginal erosion caused by any act of negligence by a defendant here would substantially affect the impact of the hurricane such that the failure of the levee systems and subsequent flooding would be the probable result. The causal sequence alleged in the present case was just far too attenuated.

 

MDL Court in Peanut Butter Litigation Grants Multiple Summary Judgments For Defense

The MDL court overseeing the coordinated federal litigation stemming from a 2007 peanut butter recall recently granted summary judgment to the defendant manufacturer ConAgra Foods in multiple cases.  See Southern v. ConAgra Foods Inc., MDL 1845, No. 09-1544  (N.D. Ga. 9/29/10).

Readers may recall that in 2007, ConAgra Foods Inc. recalled jars of Peter Pan and Great Value peanut butter that were made at its Georgia plant, after the CDC and FDA observed a possible association between these products and reports of salmonella poisoning.  As part of the recall, ConAgra instructed consumers to discard the jar but to save the lid, which contained the product code identifying when and where the peanut butter was manufactured.  After the recall, multiple consumers sued ConAgra, alleging they had contracted salmonella after eating either Peter Pan or Great Value peanut butter. The lawsuits were consolidated in an MDL in the Northern District of Georgia.

To prove causation, each plaintiff must show that it is more likely than not that contaminated peanut butter caused his or her illness. The best way to show that peanut butter is contaminated with Salmonella is to test the peanut butter itself, said the court. The fact that the peanut butter was recalled here does not mean that it was contaminated. In fact, most of the recalled peanut butter was completely free of Salmonella contamination. During discovery, accordingly, ConAgra asked the plaintiffs to provide the product code for the peanut butter that allegedly caused their illnesses. It also asked the plaintiffs whether they submitted a blood, urine, or stool sample to a doctor for testing. Because the symptoms of Salmonellosis are similar to those of other common gastrointestinal illnesses, these samples were important in determining causation, said defendant.

Here, the 19 plaintiffs could not establish causation, as a matter of law. First, they could not show that the peanut butter they ate was manufactured by ConAgra at the Sylvester plant during the outbreak.  Plaintiffs did not know the product codes from their peanut butter. Without these numbers, which indicate when the peanut butter was manufactured, it was impossible to know whether the peanut butter was at risk of contamination.

Second, the plaintiffs did not provide enough evidence to show that they contracted Salmonellosis shortly after eating the peanut butter. Symptoms alone are not enough to permit a reliable diagnosis of this disease because the symptoms of Salmonellosis – usually diarrhea, abdominal cramps, and fever – are more commonly associated with viruses, parasites, fungi, other bacteria, toxins, and various chronic diseases. Indeed, the CDC estimates that nearly 300 million cases of diarrhea and related gastrointestinal symptoms occur each year of other causes. A positive blood, urine, or stool sample is the best way to show that Salmonella caused a plaintiff’s illness. A proper differential diagnosis by a physician who examined and treated a plaintiff during his illness may also support a finding of causation in some cases, said the court.  

But none of the plaintiffs here provided evidence of a differential diagnosis or a positive blood, urine, or stool culture. None of the plaintiffs' available medical records indicated that the plaintiffs’ doctors considered and excluded other causes or performed any form of differential diagnosis or diagnostic tests. To the contrary, the records showed that most plaintiffs did not even visit the doctor until several months after eating the allegedly contaminated peanut butter.

Without more, concluded the court, no reasonable jury could find that it was more likely than not that
contaminated peanut butter caused the plaintiffs’ alleged illnesses.

 

 

DTSC Green Chemistry Symposium

The California Department of Toxic Substances Control (DTSC) and the state's Department of Public Health (DPH) are hosting a brown-bag symposium, "Green Chemistry through the Lens of Public Health," next week.  The program will examine the potential and intended effects of Green Chemistry on public health. It is set for Monday, October 18, 2010, 10 a.m. – 3 p.m.
 

We have posted on the California Green Chemistry Initiative, from the introduction of legislation for the program, to the proposal of draft regulations, to the final rule making stages.  As readers know from previous posts, "green chemistry" is the state's effort to require that chemical products be designed in such a way as to reduce the use or generation of hazardous substances and reduce health and environmental risks, with a clear emphasis on finding alternatives to "chemicals of concern."  Two bills passed in 2008 by the legislature mandated that DTSC develop regulations for identifying and prioritizing chemicals of concern, to create methods for analyzing alternatives to existing chemicals, and to create a mechanism for regulatory response, including possible restrictions or bans on certain chemicals. The laws also created a Green Ribbon Science Panel to advise DTSC, and provided for a Chemical Information Clearinghouse that will make chemical risk information more accessible to the public.

The symposium is scheduled to feature interactive discussions with physicians, scientists and some stakeholders on the impact of the new chemicals policy on public health. The keynote speakers are Dr. Margaret Kripke, Ph.D., immunologist, and Steve Owens from the U.S. Environmental Protection Agency’s Office of Chemical Safety and Pollution Prevention.

The event is open to the public and is supposed to be accessible via a live webcast at www.dtsc.ca.gov/greenchemistry.
 

 

European Regulators Reaffirm Stance on BPA

Readers of MassTortDefense are accustomed to European regulatory approaches that are much stricter than in North America, under a co-called "precautionary" approach.  So what does it say about the hysteria in the U.S. over BPA when the European Food Safety Authority (EFSA) concludes that there is no new evidence to suggest the tolerable daily intake (TDI) for bisphenol A  needs to be changed?  EFSA recently reconfirmed that current levels of exposure pose no significant threat to human health.

Bisphenol A is a chemical used as a monomer in polycarbonate plastic and epoxy resins, in food contact materials used in the manufacture of some plastic bottles and food and drink can linings.  EFSA had an expert panel perform a detailed and comprehensive review of recent scientific literature and studies on the toxicity of bisphenol A at low doses.  The latest work carried out by EFSA scientists followed a request from the European Commission to: a) carry out a review of recent scientific literature on the toxicity of BPA to assess whether the TDI should be updated; b) assess a new study on possible neurodevelopmental effects (i.e. possible effects to the brain and central nervous system) of BPA in rats, known as the Stump study; and c) advise on the BPA risk assessment by Denmark’s DTU Food Institute.

The agency reaffirmed its positions stated over the last couple years, and concluded that it would maintain the current TDI of 0.05mg/kg/bodyweight.  The scientists on the EFSA CEF Panel concluded they could not identify any new evidence which would lead them to revise the current Tolerable Daily Intake for BPA as set by EFSA in its 2006 opinion and re-confirmed in its 2008 opinion. (In 2006, EFSA set the TDI for BPA at 0.05 mg BPA/kg body weight (b.w.)/day. This is based on the No-Observed-Adverse-Effect-Level (NOAEL) of 5 mg/kg b.w./day that has been identified in multi-generation reproductive toxicity studies in rodents, where the critical effects were changes in body and organ weights in adult and offspring rats and liver effects in adult mice, respectively. In 2008, EFSA reaffirmed this TDI, concluding that age-dependent toxicokinetics differences of BPA in animals and humans would have no implication for the TDI.) 

Moreover, the research pointed to by those out to ban BPA had “many shortcomings” and uncertain relevance to human health.   In particular, the panel dismissed concerns over the alleged neurobehavioral toxicity of BPA attributed to the Stump study and a risk assessment by Denmark's National Food Institute,  finding the alleged link uncertain and pointing out a variety of flaws in the analysis of the Stump data after further evaluation from EFSA’s Assessment and Methodology group. The careful review of the scientific literature failed to provide any convincing evidence that BPA has any adverse effects "on aspects of behavior, such as learning and memory.”

EFSA's conclusions, after intense scientific scrutiny, get little play in the mainstream press, but continue to reaffirm the safety of BPA in food contact applications.

  

Sad News About Mass Tort Scholar

It is with great sadness that we pass on the news that Prof. Richard A. Nagareda, an expert on aggregate litigation and author of numerous publications on mass torts, passed away suddenly last week.  He was only 47.

Prof. Nagareda headed Vanderbilt law school's Cecil D. Branstetter Litigation and Dispute Resolution Program. Readers may recall that in 2003, he was named an Associate Reporter for the American Law Institute project on Principles of the Law of Aggregate Litigation; the report, which he coauthored with three colleagues, was released earlier this year.  Before joining academia in 1994, Professor Nagareda clerked for Judge Douglas H. Ginsburg on the U.S. Court of Appeals for the District of Columbia.  He had been recognized multiple times, most recently earlier in 2010, with the Hall-Hartman Award for Excellence in Teaching, an award based on students' votes at his law school, and he held the Tarkington Chair for Teaching Excellence, a three-year appointment, from 2006-09.

Among his recent works were "Mass Torts in a World of Settlement," University of Chicago Press (2007);  “Embedded Aggregation in Civil Litigation,” 95 Cornell Law Review 1105 (2010);
"Aggregate Litigation across the Atlantic and the Future of American Exceptionalism,” 62 Vanderbilt Law Review 1 (2009);  and “Class Certification in the Age of Aggregate Proof,” 84 New York University Law Review 97 (2009).

He was indeed one of the top scholars in the field of mass tort litigation, and will be missed by all of us who practice in this area.

Supreme Court Grants Cert in Important Personal Jurisdiction Cases

Last week, the Supreme Court granted review in two product liability cases that raise cutting edge personal jurisdiction issues that may not only impact foreign manufacturers but and may also alter due process/personal jurisdiction jurisprudence. See J. McIntyre Machinery Ltd. v. Nicastro, U.S., No. 09-1343 (certiorari petition granted 9/28/10); Goodyear Luxembourg Tires SA v. Brown, U.S., No. 10-76 (certiorari petition granted 9/28/10).  Personal jurisdiction addresses the reach of the court’s power over a party, and without such jurisdiction, any ruling by the court is not binding on the party. Plaintiff lawyers focus on personal jurisdiction as part of the equation where they can sue; defendants as part of where they can be sued properly.  As a general matter, a defendant can only be sued where it has sufficient minimum contacts with the state such that a suit there does not offend traditional notions of fair play and substantial justice.

The issue framed in Nicastro is: Whether, consistent with the Due Process Clause and pursuant to the stream-of-commerce theory, a state may exercise in personam jurisdiction over a foreign manufacturer when the manufacturer targets the U.S. market for the sale of its product and that product is purchased by a forum state consumer.  The corresponding issue in Brown is: Whether a foreign corporation is subject to general personal jurisdiction, on causes of action not arising out of or related to any contacts between it and the forum state, merely because other entities distribute in the forum state products placed in the stream of commerce by the defendant.

Readers may recall our previous post on Nicastro. The state court held that a foreign manufacturer will be subject to its jurisdiction if it knows or reasonably should know that through its distribution scheme its products are being sold in the state. A manufacturer that knows or reasonably should know that its products are distributed through a nationwide distribution system that might lead to those products being sold in any of the fifty states must expect that it will be subject to the state’s jurisdiction if one of its defective products is sold to a consumer, causing injury, said the state court. The focus under this approach is not on the manufacturer’s control of the distribution scheme, but rather on the manufacturer’s knowledge of the distribution scheme.  If a manufacturer does not want to subject itself to the jurisdiction of a state court while targeting the United States market, then, the court said, it must take some reasonable step to prevent the distribution of its products in that state.

The power of the state to subject a person or business to the jurisdiction of its courts has evolved with the changing nature of the American economy, said the court. As the nation is part of a global economy driven by startling advances in the transportation of products and people and instantaneous dissemination of information, the expanding reach of a state court’s jurisdiction, as supposedly permitted by due process, has reflected those historical developments, found the state court.

The stream-of-commerce doctrine of jurisdiction is particularly suitable in product-liability actions, opined the court. It will not necessarily be a substitute for other jurisdictional doctrines -- such as minimum contacts -- that will apply in contract and other types of cases. The exercise of jurisdiction by New Jersey in this case was called "a reasoned response" to the globalization of commerce that permits foreign manufacturers to market their products through distribution systems that bring those products into the state. With the privilege of distributing, indirectly, products to consumers comes the responsibility of answering in a New Jersey court if one of those consumers is injured by a defective product, concluded the majority in Nicastro

"Stream of commerce" personal jurisdiction, if recognized, would allow any state to assume jurisdiction over any product manufacturer whose product found its way into the state, no matter how many independent, separate distributors the product had passed through in separate legal transactions. A lengthy dissent in Nicastro argued that the majority had ignored the fact that the original stream of commerce idea had included the element of a manufacturer's expectation that its products will be purchased in the forum state.  Many foreign and out-of-state manufacturers reasonably should know that their products are distributed through a system that might result in sales in any given state.  As applied in this case, it seems to eliminate any requirement of intentional state-specific activity by the defendant. And in that respect, has potential implications for lots of entities besides foreign product manufacturers. 

You may recall that the Supreme Court took a look at "stream of commerce" jurisdiction over 20 years ago, and split with no majority decision. But a plurality rejected the "stream of  commerce" concept in Asahi Metal Industry Co. v. Superior Court of California, 480 U.S. 102 (1987). 

The Court called for these cases to be argued in tandem.  The Brown case arises from a bus accident in France that killed two North Carolina residents whose families sued foreign affiliates of Goodyear Tires.  Again this case raises the issue whether activities on the part of the foreign manufacturer should subject them to personal jurisdiction in the U.S., and whether there is "purposeful availment" just because the product is sold in a state -- that is, as long as the defendant intentionally placed their products into the stream of commerce without attempting to exclude a specific state. Brown also raises the issue whether the state court confused "specific jurisdiction"--which applies only in suits arising out of or related to the defendant’s contacts with the forum--  with "general jurisdiction," which, where applicable, permits a defendant to be haled
into court in the state on any claim whatsoever, but only when the defendant’s activities in a state are so substantial and of such a nature as to justify suit against it on causes of action arising from dealings entirely distinct from those activities.

Game Over for Plaintiffs in Wii Class Action

A federal court last week granted defendant's summary judgment motion in a putative class action alleging Nintendo of America Inc. sold defective wrist straps with its Wii controllers.  Elvig, et al. v. Nintendo of America Inc., No. 08-cv-02616 (D. Colo.)

Readers are familiar with the Wii game system. The Wii employs a motion sensing controller that allows the player to manipulate the on-screen action by performing imitative physical actions, such as swinging the controller like a tennis racquet to control the onscreen action in a tennis game. (Readers may recall the classic product liability issues over various lawn dart games; with Wii you can play them in your family room.) To ensure that controllers do not leave a player’s hand during vigorous physical activity, Nintendo includes a “safety strap” to be worn around the player’s wrist. The strap, in turn, connects to the controller by means of a “string sling.” 

Plaintiff sued, alleging the strap was defective, broke, and caused damage to her television. She alleged violation of the Colorado Consumer Protection Act (“CCPA”), of the Colorado Product Liability Act, and a breach of implied warranty or merchantability and of fitness for a particular purpose. To establish a claim under the CCPA, a plaintiff must show: (i) that the defendant engaged in one of several categories of unfair or deceptive trade practices; (ii) the practice occurred in the course of the defendants business or trade; (iii) the practice significantly impacts the public as actual or potential consumers of the defendant’s goods or services; (iv) the plaintiff suffered an injury; and (v) the challenged practice caused the injury. Nintendo argued that Ms. Elvig could not establish the first and last elements – i.e. a deceptive practice and causation of injury.  The court found that plaintiff's vague reference to “false advertising” that “touts the Wii’s athletic usages while making no mention of the straps’ propensity to break” was inadequate in detail and content to make out such a claim.  Plaintiff lacked specifics about what the advertising actually said.

On the product liability claim, Nintendo contended that it gave players adequate warnings of the need to retain possession of the controller and advised them of the possibility that release of the controller during vigorous motion could result in breakage of the strap and damage to persons or property. The court noted the evidence that Nintendo did advise players, via a safety card included with the Wii system, that “If you use excessive motion and let go of the Wii Remote, the wrist strap may break and you could lose control of the Wii Remote. This could injure people nearby or cause damage to other objects.” This, coupled with repeated instructions on the safety card that advise players “DO NOT LET GO OF THE REMOTE DURING GAME PLAY,” ensure that, if the player follows Nintendo’s instructions and heeds its warnings, the Wii system does not pose an unreasonable danger. Ms. Elvig did not dispute that such instructions were included with the Wii she received. Nintendo thus having given an adequate warning to users, it may “reasonably assume that it will be read and heeded,” and thus, has ensured that the product was not “unreasonably dangerous” under the Second Restatement, § 402A, comment j. An interesting take on the relationship of warning and design issues.

On the implied warranty of merchantability, the court cited the lack of evidence that would indicate what the intended purpose of the strap was. One might plausibly assume, as plaintiff did, that the strap was intended to prevent a controller, inadvertently released by the player during vigorous activity, from hurling towards the player’s television (or towards another player) and causing damage.  But equally, one might assume that the strap was simply intended to keep an
inadvertently released controller in the vicinity of the player so that it could be easily retrieved and was was never intended to withstand the forces of high-speed controller release. To withstand summary judgment, plaintiff needed more than one of alternate plausible assumptions; she needed evidence of the ordinary purpose of the strap and proof that it failed the ordinary purpose.

Finally, the court noted that a “particular purpose” differs from the ordinary purpose for which the goods are to be used; in other words, a buyer obtaining goods for a “particular purpose” is one who, for reasons peculiar to the buyer, is obtaining the goods for use other than that which is customarily made of the goods.  Here, there was no evidence that Ms. Elvig obtained the Wii for a “particular purpose” other than that for which it would customarily be used.  The damages occurred when the plaintiff was allegedly playing the Wii bowling game  (no bowling shoes required)-- in the manner and fashion represented by Nintendo in its marketing and promotion materials. In short, using the Wii for its “ordinary purpose” at the time of the accident, not for some “particular” – e.g. unusual – purpose.

Hence, summary judgment for defendant on all claims.

 

No Second Bite of the Apple for HT Plaintiffs

A federal court granted summary judgment in litigation brought by hormone replacement drug plaintiffs whose suits were previously ruled untimely by a New York court. See Rick v. Wyeth Inc.,  No. 08-1287 (D. Minn., 9/23/10).

Plaintiffs, all citizens of New York, were women, and spouses of women, who allegedly used
hormone therapy drugs manufactured and sold by defendants. Plaintiffs further alleged that they developed breast cancer as a result of the use of HT drugs.  Plaintiffs had previously brought suit individually in New York state court where their claims were consolidated into a single
coordinated proceeding. In the New York proceeding, defendants moved for summary judgment based on the New York statute of limitations. Foreseeing the end of their suits, plaintiffs moved for a discontinuance without prejudice. While the dueling motions in the New York proceeding were pending, plaintiffs commenced another action in federal court in Minnesota (where there is a much longer, highly controversial statute of limitations; none of plaintiffs, nor any of the claims at issue, had any connection to Minnesota. Instead, it seems this case, like hundreds of others involving HT drugs, was brought solely to take advantage of Minnesota’s six-year statute of limitations.)

The New York trial court granted the defendants’ motion for summary judgment and denied the
plaintiffs’ motion for "discontinuance without prejudice." In doing so, the New York trial court reasoned that the defendants would be unfairly prejudiced by allowing the litigation to re-start in another forum after having completed discovery and reached the summary judgment phase in the New York proceeding.

In the federal court proceeding, defendants then moved for summary judgment arguing that the New York judgment was entitled to preclusive effect.  The traditional rule for claim preclusion was that dismissal for untimeliness does not bar a second action in another jurisdiction with a longer, unexpired statute of limitations. Semtek Int’l Inc. v. Lockheed Martin Corp., 531 U.S. 497, 504 (2001). However, the actual test for a federal court determining the preclusive effects of a prior state-court judgment is to ask ask what preclusive effect that state intends other jurisdictions to accord its judgments.  Here, the federal court determined that New York has not definitively answered that question in this context. Therefore, the court had to determine what rule New York would likely apply.

On one hand, the New York Court of Appeals has stated that, in general, New York views statutes of limitations as procedural rather than substantive. However, the New York Court of Appeals has also held that, in the narrow context of claim preclusion, statutes of limitations “in a practical sense may also be said to be substantive.”  Thus, said the federal court, the procedural/substantive distinction that formed the foundation of plaintiffs’ argument here was hardly clear under New York law. Indeed, while the procedural/substantive distinction may be a useful tool in some instances, a clear line between procedure and substance is not always ascertainable.

In interpreting this ambiguous area of New York law, the federal court was also mindful of the overarching principals of claim preclusion. Claim preclusion doctrine values judicial economy, preventing parties from burdening courts with claims already litigated.

Against this backdrop, the federal court found the procedural posture of the case decisive.  In the New York proceeding, the plaintiffs moved for a discontinuance without prejudice. Under New York law, an element of granting such a motion is whether the adverse party will suffer prejudice. The NY trial judge believed that a discontinuance without prejudice would not have preclusive effects in the federal action, and noted that granting the plaintiffs’ motion might thus allow plaintiffs’ Minnesota action to continue. Concluding that defendants would be highly prejudiced if forced to continue litigation in another forum, the trial judge denied the plaintiffs' motion. Implicit in that reasoning was that the grant of summary judgment instead would have preclusive effect in the federal litigation. Indeed, the New York trial court specifically stated that defendants had a right to judgment on the merits.

Thus, at the summary judgment phase, the timeliness issues were “sufficiently close to the
merits” to implicate claim preclusion. Plaintiffs chose to bring their claims in New York and continued litigation up to summary judgment.

 

Oil Spill MDL May Appoint Special Master

The judge overseeing the Gulf oil spill  MDL has given notice of its intent to appoint Duke Law Professor Francis McGovern, as a special master to help the parties address several complex issues arising from the Deepwater Horizon accident.  In re: Oil Spill by the Oil Rig "Deepwater Horizon" in the Gulf of Mexico, on April 20, 2010, MDL No. 2179 (E.D. La.).

In the order last week, the court accordingly, pursuant to Rule 53 of the Federal Rules of Civil
Procedure, provided notice to the parties of its intention to appoint a special master.  In mass tort litigation, courts often appoint special masters to assist in managing the matters, especially the discovery. Rule 53 permits the court to appoint a master for pretrial matters that cannot be addressed effectively or in a timely manner by the court. Appointment of a special master to supervise discovery may be appropriate where the financial stakes justify imposing the expense on the parties, and where the amount of activity required would impose undue burdens on a judge.

The Manual for Complex Litigation says that it is preferable for the court to appoint the special master with the parties' consent, and here the court is giving the parties an opportunity to weigh in.  The success of the special master in the role the court assigns depends in the first instance on the person selected.  Prof. McGovern is well known to our readers, having served as special master or mediator in dozens of major mass torts, including several asbestos matters, DDT toxic exposure litigation, the Dalkon-Shield controversy, and silicone gel breast implant litigation.  As an academic, he has advocated for enhanced roles for court appointed special masters as "case managers" and "settlement masters." As a practicing case manager, he has helped courts to organize the pretrial administration of a case, and used ADR techniques to help the parties agree on efficient discovery approaches and schedules. (But note the Manual for Complex Litigation advises against referral of extensive pretrial management to a special master, at Section 10.14). His role as settlement master in some cases has required that he develop innovative ways to implement potential settlements. In the Dalkon Shield litigation, he helped organize and administer the distribution of the $2.4 billion trust established to compensate 100,000 women who had sued the maker of the device.

He is also a prolific author on mass torts issues, including A Model Mass Tort: The PPA Experience, 54 Drake Law Review 621-638 (2006); A Model State Mass Tort Settlement Statute, 80 Tulane Law Review 1809-1826 (2006); and A Proposed Settlement Rule for Mass Torts, 74 UMKC Law Review 623-636 (2006).

The final order appointing the special master will specify the scope of the reference, the circumstances under which ex parte communication will be deemed appropriate, and other relevant details.  Ordinarily, the special master will produce a report on the matters in his or her charge, with findings of fact and conclusions of law which would be reviewed by the district court.