Interesting Case Management Issue in Welding MDL

We have posted about the welding fumes MDL before. Call it case management by option-- as the court has worked through the bellwether trials, it is interesting that the MDL court gave the next-up plaintiff (in the Street trial) a choice.  Plaintiff could either (1) maintain his existing trial date of June 1, 2011, at which trial he may not offer the opinions of his expert Dr. Sanchez-Ramos; or (2) postpone the starting date for trial of his case until on or about November 1, 2011, and the Court would conduct a Daubert hearing on the admissibility of Dr. Sanchez-Ramos’s opinions during the summer of 2011.

Plaintiff Street chose the second option. Accordingly, the MDL Court has set the Daubert hearing to begin on August 24, 2011, with the expectation the hearing will last two days. The parties were directed to negotiate a schedule for briefing, expert depositions, and so on, and provide it to the Special Master as soon as possible. The schedule will include a deadline of April 5, 2011, for provision by Dr. Sanchez-Ramos of a supplemental expert report and literature review list.


Trial of the Street case was accordingly postponed to November 1, 2011. The Court said it will
discuss trial preparation deadlines with the parties during the next case management teleconference.  In re Welding Fume Products Liability Litigation,  No. 1:03-CV-17000 (N.D. Ohio, 3/25/11).  

Jury Rejects Medical Monitoring Claim in Coal Dust Litigation

A West Virginia jury last week ruled in favor of defendant Massey Energy Co. in a class action accusing the company of exposing plaintiffs from an elementary school to toxic coal dust. Dillon et al. v. Goals Coal Co. et al., No. 05-c-781 (Circuit Ct. Raleigh County, W.Va.).

The plaintiffs first filed suit in 2005, complaining about a coal silo near the Marsh Fork Elementary School in Raleigh County.  Coal dust allegedly drifted from the silo into the school, exposing the plaintiffs, and putting them at increased risk of lung disease.  The court eventually certified a class of about 300.

Plaintiffs sought a medical monitoring program to early detect the alleged effects of the exposure.  In order to sustain a claim for medical monitoring expenses under West Virginia law, the plaintiff must prove that (1) he or she has, relative to the general population, been significantly exposed; (2) to a proven hazardous substance; (3) through the tortious conduct of the defendant; (4) as a proximate result of the exposure, plaintiff has suffered an increased risk of contracting a serious latent disease; (5) the increased risk of disease makes it reasonably necessary for the plaintiff to undergo periodic diagnostic medical examinations different from what would be prescribed in the absence of the exposure; and (6) monitoring procedures exist that make the early detection of a disease possible.  See Bower v. Westinghouse Electric Corp., 522 S.E.2d 424 (W. Va. 1999).

The defense challenged both the significant exposure and increased risk prongs. The jury rejected the medical monitoring claim after a 2 week trial.

Plaintiffs' Daubert Challenges Rejected in Peanut Butter MDL

In the MDL coordinating the litigation stemming from alleged contamination of peanut butter in 2007, the court has ruled that five experts may testify for defendant ConAgra, overruling plaintiffs' Daubert challenge. In re Con Agra Peanut Butter Litigation, No. 07-1845 (N.D. Ga. 3/23/11).

The litigation stems from the company's 2007 recall of Peter Pan and Great Value peanut butter for possible salmonella contamination.  Plaintiffs moved to exclude microbiologists Dr. Mansour Samadpour and Dr. Gregory Ma, epidemiology expert Dr. Douglas Weed, medical expert Dr. Samuel Miller, and food safety expert Dr. Linda Harris.

Dr. Mansour Samadpour and Gregory Ma are microbiologists at the Institute for Environmental Health/Molecular Epidemiology, Inc. (“IEH”), an organization retained by ConAgra (and several plaintiffs’ attorneys, interestingly) to test jars of recalled peanut butter for Salmonella. Samadpour and Ma intended to testify about the test methods and results. Plaintiffs complained that Samadpour and Ma "arbitrarily excluded" the results of over 36% of the Salmonella tests that they performed. Samadpour and Ma admitted that they excluded the results of 729 tests from their reported analysis. But they explained that these results were excluded because the tests were performed by IEH for plaintiffs’ attorneys, and were subject to confidentiality agreements that precluded disclosure of the test results to ConAgra. That by itself is not grounds to find their method unreliable.

Also, Plaintiffs argued that Samadpour and Ma included test results of samples that were too old to yield reliable results. The Plaintiffs claimed that 99.99% of Salmonella in peanut butter dies after 24 weeks, rendering Salmonella tests conducted more than 24 weeks after manufacture unreliable. They supposedly based this conclusion on an article co-authored by a defense expert; but that article only stated that  Salmonella can be reliably recovered from peanut butter at least up to 24 weeks post manufacture. The CDC thinks it can test well after 24 weeks.

Dr. Douglas Weed intended to testify about the appropriate methodology for determining specific causation in contaminated food cases. Readers will recall the distinction between general causation (can salmonella in food cause the illness) and specific causation (did it cause this plaintiff's illness this time). Dr. Weed is a faculty member in the Department of Epidemiology at Johns Hopkins School of Hygiene and Public Health. He has published numerous articles on topics including causal inference, epidemiological and public health methods, and evidentiary and inferential methods.  Even if he had never applied his causation approach to peanut butter, he was more than qualified to do so, said the court.

Dr. Samuel Miller was offered to testify about the causes of gastroenteritis; the rates and sources of salmonellosis; the investigation by the CDC that led to ConAgra’s voluntary recall; and the possible prognoses for patients with salmonellosis. He also proposed to testify about the limitations of patient history and physical exams in determining the actual cause of gastroenteritis and opine that a stool culture is the only method that allows for the identification of the source of a bacterial infection of the gastrointestinal tract. He was found well qualified; he relied in part on the other experts, and because their opinions were independently admissible, his reliance on them was acceptable as well.

Dr. Linda Harris was offered to present several food opinions, including: (1) that  there was no industry standard for a specific minimum log reduction or minimum time and temperature parameter for the dry roasting of peanuts; (2) that levels of Salmonella on raw peanuts are likely to be similar to those found on almonds; (3) that ConAgra’s internal safety plan appropriately identified dry roasting as a control measure capable of reducing potential biological hazards; (4) that ConAgra properly evaluated and monitored that control measure; (5) that ConAgra took
appropriate corrective action following detection of Salmonella in an isolated finished
product in October 2004; and (6) that there was no evidence that the outbreak at issue
was attributable to the roaster. Plaintiffs argued that Dr. Harris was an expert in almonds, not peanuts, and her expertise in almonds did not qualify her to testify about peanuts. However, said the court, an expert’s training does not always need to be narrowly tailored to match the exact point of dispute in a case. Instead, an expert with the education or background to permit her to analyze a given set of circumstances can through reading, calculations, and reasoning from known scientific principles make herself very much an expert in regard to the particular product even though she has not had actual experience with the product. Santoro v. Donnelly, 340 F. Supp. 2d 464, 473 (S.D.N.Y. 2004).

Her broad expertise in food-borne Salmonella as well as specific expertise in almonds, a high-fat, low moisture food that has properties similar to peanuts, was sufficient. 

Motions denied. 

Negligence Ruling in Florida Chinese Drywall Litigation

The judge overseeing one part of the litigation involving Chinese drywall -- the Florida class action -- has issued an important ruling on the negligence claims. Bennett v. Centerline Homes Inc. et al., No. 2009-ca-014458 (Palm Beach County, Fla.)

Defendants moved to dismiss the negligence claims, arguing they had no duty to protect the plaintiffs from the unknown and unforeseeable harm of the drywall.  The court found that there was no duty to inspect or test the drywall for a latent defect, and thus to warn the plaintiffs.  Florida law does not impose a duty to inspect a product for a latent defect, or to warn others about a latent defect, unless the product is inherently dangerous (which drywall is not).

Home builders, installers or suppliers of allegedly defective Chinese drywall could only be held negligent if it is established that the companies were aware that the drywall was defective, through actual or implied notice.  But the issue whether a defendant had notice of a defect must be
determined on an individual, case-by-case basis.  Thus, the court declined to grant the motion on an omnibus basis. 

As we have noted before, according to the allegations of the litigation, a shortage of drywall made in the U.S. caused many builders to use imported Chinese drywall during Florida's construction boom between 2004 and 2006. Much of the drywall was used in construction after Hurricane Katrina.  Lawsuits filed over the drywall issues allege that excessive sulfur levels in the Chinese-made products are causing health effects and problems with air conditioning systems, appliances, internal wiring and other electrical systems. The U.S. Judicial Panel on Multidistrict Litigation consolidated the lawsuits in the U.S. District Court for the Eastern District of Louisiana.  Other defendants, including building supply distributors, general contractors and installers, face  litigation in state courts, like this one.

Showdown Over Regulation of Greenhouse Gas Looming in Congress

We have posted before about a number of issues related to greenhouse gas regulation and climate change litigation.  Now comes word that a potential showdown in the U.S. Senate over competing proposals to either strip the EPA of asserted authority to regulate greenhouse gas emissions or to delay the implementation of such rules has been put off until Senators return from their recess at the end of this month.

Earlier this month, Senate Republicans offered an amendment to the Small Business Reauthorization Act (S. 493) that would end all EPA authority to address emissions related to global climate change and block all current and future emissions rules. And the House Energy and Commerce Committee on March 15 approved an identical, stand-alone measure (H.R. 910), which we have posted on before.  The committee vote was along party lines. Also in play is an alternative offered by Sen. Jay Rockefeller (D-W.Va.) that would impose a two-year delay of enforcement of EPA's rules regarding power plants and other large emitting facilities. 

There is also speculation about other measures short of a complete ban on EPA regulation, including a  proposal to exempt the agricultural sector from EPA's greenhouse gas rules.   

All this may come to a head when the Senate reconvenes in April. Meanwhile in the litigation, New York Attorney General Eric T. Schneiderman filed a brief with the U.S. Supreme Court last week (on behalf of Respondents New York, Connecticut, California, Iowa, Rhode Island, Vermont, and the city of New York) asking the Court to  to recognize the right of states to sue various power companies as contributors to global warming. American Electric Power Co. v. Connecticut, No. 10-174 (U.S., brief filed 3/11/11).  The case is set for oral argument on April 19.

Appeals Court Applies Sophisticated User Doctrine

A California appeals court earlier this month affirmed a trial court's dismissal of a product liability failure to warn claim, based on the sophisticated user doctrine. Walkowiak v. MP Associates, No. B220494, (Cal. Ct. App., 2d App. Dist., 3/9/11)(not published).

Plaintiff Christopher Walkowiak began working for a special effects company in the movie industry in 1994. His boss had a Class 1 Pyrotechnic Operator license, and Walkowiak received on-the-job training in special effects. He obtained a Class 3 Pyrotechnic Operator license in 1995 and a Class 2 license in 1998. In order to obtain these licenses, Walkowiak had to obtain references from pyrotechnicians and pass a written examination. The written examination was general in nature and did not cover every specific types of explosive device used in productions.

Defendant MP Associates (MP) manufactures pyrotechnic devices. Defendant Roger George Rentals (RGR) rents and sells special effects supplies, including pyrotechnic devices manufactured by MP. Its primary clientele is the entertainment industry. One of the products they sold was a simulated stinger missile (SSM). The SSM consists of a cardboard tube with a red plastic cap on one end and a white plastic cap on the other end. The tube contains pyrotechnic materials near the end with the red plastic cap. Prior to ignition, the white plastic cap is to be removed. Upon ignition, a pellet of pyrotechnic material is propelled out of the end of the tube by gunpowder. It produces bright white light and smoke, and it travels about 200 feet. It simulates the appearance of a missile. Pretty clever, and can fool the camera.

The SSM had a sticker on the side of the cardboard tube which read, “Dangerous. Handle With Care. Keep Fire Away.” This was a standard warning that MP placed on all of the pyrotechnic devices it sold. The SSM also had a piece of tape over the white plastic cap which read, “Remove Before Ignition. This Side Up.” Once the tape was removed, there was nothing on the SSM to indicate which end was to face up. Packaging materials which came with the SSM included a list of “Dos and Don’ts” which applied to pyrotechnic devices in general. The list included the warning not to “use any explosive material unless completely familiar with safe procedures for their use, or under the direction of competent, experienced persons.” However, the packaging materials did not include any specific instructions for use of the SSM.  The manufacturer sold SSMs only to purchasers with a Class 1 or Class 2 Pyrotechnic Operator license. And the company would personally discuss use of the SSM with the purchaser. Since 1998, MP had reportedly sold over 20,000 SSMs. Until the accident in this case, there had been no misfires or injuries resulting from the use of an SSM.

On January 18, 2007, Walkowiak was working on the movie set for “Charlie Wilson’s War.”  His supervisor instructed Walkowiak to test fire an SSM that had been leftover from a previous production, using the same shoulder launcher that had been used in “Over There.” The shoulder launcher consisted of a steel tube bolted to a rifle stock. The steel tube was closed at the end bolted to the rifle stock. The SSM was loaded into the open end of the steel tube. It was fired by means of a battery-operated power switch which was connected to the SSM by wires. Walkowiak’s Class 2 license allowed him to use the SSM fired from a shoulder launcher under the supervision of a Class 1 license holder.

But Walkowiak had not worked on “Over There.” He had never fired an SSM before or seen an SSM loaded into a shoulder launcher. He had not seen any instructions for using the SSM. What he did know was that the SSM was a controlled pyrotechnic device that was potentially dangerous. He knew that he should get questions regarding its use answered before using it. Walkowiak called one of the defendants and asked how to operate the shoulder launcher. Defendant told him how to wire and prepare the launcher. He did not tell Walkowiak how to load the SSM into the launcher, however. Before loading the SSM into the shoulder launcher, Walkowiak saw tape with printing on one end of the SSM. He did not recall seeing the words “Remove Before Ignition” or “This Side Up” on the tape. However, he understood these words to mean that the cap and tape should be removed before discharging the SSM, and “This Side Up” referred to the discharge end of the SSM.

Walkowiak removed the cap and the tape from the SSM. Walkowiak made the decision as to how to load the SSM into the shoulder launcher. Walkowiak loaded the SSM into the shoulder launcher and connected the wires. He believed he was loading the device safely and correctly. He knelt down and pointed the shoulder launcher toward a wall. After a countdown, Walkowiak fired the device. There was an explosion and a bright flash of light. The SSM exploded in the steel tube. The steel tube broke off the rifle stock and hit Walkowiak in the face, causing severe injury. It was determined that he had loaded the SSM in backwards.

Plaintiff sued the various parties in the chain of distribution of the SSM.  The trial court dismissed the claim.  The trial court explained that merely because an accident has occurred, there is no presumption of a defect or negligence.  In this case, Walkowiak had not shown that the device had any physical, manufacturing or design defect. There was no evidence of even a single incident where the device was used properly but caused this kind of injury.  Therefore, the trial court noted, the only potential basis for imposing liability on defendants was the breach of a duty to warn of a danger. The court added, however, that product liability cannot be based on failure to warn of a danger that is known or obvious to a user, under California law. Failure to warn of a danger that is generally known and recognized does not, by itself, render a product dangerous.

Plaintiff appealed. The court of appeals discussed the doctrine of sophisticated user. In explaining the development of the sophisticated user defense, the state Supreme Court had begun with the general principle that manufacturers have a duty to warn consumers about the hazards inherent in their products. This enables consumers to avoid the hazards through careful use of the products or refraining from using the products altogether.  However, the sophisticated user defense exempts manufacturers from their typical obligation to provide product users with warnings about the products’ potential hazards. It provides that sophisticated users need not be warned about dangers of which they are already aware or should be aware. Because these sophisticated users are charged with knowing the particular product’s dangers, the failure to warn about those dangers is not the legal cause of any harm that product may cause. The rationale supporting the defense is that the failure to provide warnings about risks already known to a sophisticated purchaser usually is not a proximate cause of harm resulting from those risks suffered by the buyer’s employees or downstream purchasers. This is because the user’s knowledge of the dangers is the equivalent of prior notice.

In California, a manufacturer is not liable to a sophisticated user of its product for failure to warn of a risk, harm, or danger, if the sophisticated user knew or should have known of that risk, harm, or danger. An objective test applies, because it would be nearly impossible for a manufacturer to predict or determine whether a given user or member of the sophisticated group actually has knowledge of the dangers because of the infinite number of user idiosyncrasies. Hence, even if a user was truly unaware of a product’s hazards, that fact is irrelevant if the danger was objectively obvious to the expert user.  And, the defense applies to both negligence and strict liability causes of action.

Here, Walkowiak’s own deposition testimony supported the finding that he was a sophisticated user of pyrotechnics. He had a Class 2 Pyrotechnic Operator license and years of experience in special effects. He knew that the SSM was a controlled pyrotechnic device and potentially dangerous. He understood the nature of the warnings provided on and with the SSM. He knew to ask for instructions on how to operate the device, and in fact asked for some information. In other words, said the court, Walkowiak knew or should have known of the risk involved in use of the SSM.

That Walkowiak did not have experience using the SSM and could only use it under supervision did not establish that he was unaware of the risks associated with its use. His testimony established that he was aware of the risks: he knew the SSM was dangerous, and he understood the nature of the warnings on the device, “Remove Before Ignition” and “This Side Up.” He simply did not know how to use the SSM with the shoulder launcher. Plaintiff could cite no authority, however, that would require a manufacturer not only to apprise a user of the risks associated with use of its product but also to provide instruction on how to use the product in a device it did not manufacture. 

(The court remanded the design defect claim, under the risk benefit test, as the trial court had jumped the gun on its conclusion that an alternate design would make the SSM unsuitable for other uses.)


 

Bills to Curb Frivolous Suits Introduced in Congress

With the Republicans in control of the House, many were wondering about the prospects for tort reform at the federal level.  Indeed, President Barack Obama observed in his State of the Union address on January 25, 2011, “I am willing to look at . . . ideas to bring down costs including reform to rein in frivolous lawsuits.” 

House Judiciary Committee Chairman Lamar Smith (R-Texas) earlier this month introduced legislation to reduce frivolous lawsuits. Senate Judiciary Committee Ranking Member Chuck Grassley (R-Iowa) then introduced a companion bill in the Senate (S.533).

The Lawsuit Abuse Reduction Act (LARA), H.R. 966, would impose mandatory sanctions for plaintiff lawyers who file merit-less suits in federal court. 

Chairman Smith argued that lawsuit abuse has become too common in American society partly because the lawyers who bring these cases have everything to gain and nothing to lose. Plaintiffs' lawyers can file frivolous suits, no matter how absurd the claims, without any penalty. Meanwhile defendants are faced with the choice of years of litigation, high court costs and attorneys' fees or a settlement. Our legal system encourages frivolous lawsuits while defendants are left paying the price even when they are innocent. Many of these cases have cost innocent people and business owners their reputations and hundreds of thousands of dollars.

Ranking Member Grassley noted that without the serious threat of punishment for filing frivolous lawsuits, innocent individuals and companies will continue to face the harsh economic reality that simply paying off frivolous claimants through monetary settlements is often cheaper than litigating the case. "This perverse dynamic not only results in legalized extortion, it leads to businesses spending money to defend against baseless lawsuits rather than to create new jobs."

The Lawsuit Abuse Reduction Act would take three steps to help thwart frivolous lawsuits.

* Reinstates the requirement that if there is a violation of Rule 11, there will be sanctions.

* Requires that judges impose monetary sanctions against lawyers who file frivolous lawsuits.

* Reverses the 1993 amendments to Rule 11 that allow parties and their attorneys to avoid sanctions for making frivolous claims by withdrawing them within 21 days after a motion for sanctions has been served.

The House Judiciary Committee has already held a hearing on the House version, at which witnesses included Elizabeth A. Milito of the NFIB Small Business Legal Center, Professor Lonny Hoffman of the University of Houston Law Center, and Victor E. Schwartz, well known tort reform advocate.


 

Court of Appeals Vacates Premature Class Certification

The 11th Circuit earlier this month vacated the district court's premature certification of a class of property owners allegedly harmed by releases from a nearby industrial facility.  Sher v. Raytheon Corp., No. 09-15798 (11th Cir. 3/9/11).

Plaintiffs alleged that Raytheon, through improper disposal and/or storage of hazardous waste at its St. Petersburg, Florida facility, was responsible for the release of toxic waste into the  groundwater of surrounding neighborhoods.

To demonstrate the predominance of common issues under Rule 23(b)(3), plaintiffs’ offered a groundwater expert, Dr. Philip Bedient, who identified the impacted area as a toxic underground plume stretching approximately one mile long and 1.7  miles wide from the Raytheon facility. The need to show on an individual basis the impact of the pollution on each property is a major reason these kinds of property damage class claims are not certified. To try to show here that damages for alleged property injury to 1000 class members could be appropriately resolved in a single class action, plaintiffs presented the affidavit of their damages expert, Dr. John A.  Kilpatrick, who stated that he could develop a hedonic multiple regression model to determine diminution-in-value damages without resorting to an individualized consideration of each of the various properties.

Defendants, in turn, challenged Dr. Bedient’s methodology for defining the impacted area, or really the putative class, as “inconsistent with applicable professional standards.”  Dr. Bedient’s area of impact apparently encompassed many properties on which no contamination had been detected at all.  Raytheon also introduced its damages expert, Dr. Thomas O. Jackson. Dr. Jackson’s report stated that the Plaintiffs’ expert’s “proposed method of analysis of property value diminution using mass appraisal/regression modeling would be unacceptable for this purpose, and would not eliminate the need to evaluate each property in the proposed class area on an individual basis.”

So, notwithstanding the general rule that the court should not delve too deeply into the merits at the class certification stage, the court was confronted with dueling experts, and, more importantly, a serious challenge to the methodology of plaintiffs' experts.

As a threshold matter, the district court punted-- finding that it was not necessary at this stage of the litigation to declare a "proverbial winner in the parties’ war of the battling experts" or choose between the dueling statistics and chemical concentrations. This type of determination would require the court to weigh the evidence presented and engage in a Daubert-style critique of the proffered experts qualifications, which would be "inappropriate" at this stage of the litigation.  More specifically, an inquiry into the admissibility of plaintiffs’ proposed expert testimony as set forth in Daubert would be inappropriate, "because such an analysis delves too far into the merits of Plaintiffs’ case."

On appeal of the certification order, the court of appeals found the Seventh Circuit’s opinion in American Honda Motor Co., Inc., 600 F.3d 813 (7th Cir. 2010), to be persuasive. We posted on that before. The issue before the Seventh Circuit in American Honda was whether or not the district court should have conclusively ruled on the admissibility (versus the weight of, as also in this case) of expert opinion prior to certifying the class. In American Honda, the Seventh Circuit found that “when an expert’s report or testimony is critical to class certification, as it is here . . . , a district court must conclusively rule on any challenge to the expert’s qualifications or submissions prior to ruling on a class certification motion.” Id. at 815-16. The American Honda court found that, if the situation warrants, the district court must perform a full Daubert analysis before certifying the class. Id. at 816. “A district court is the gatekeeper. It must determine the reliability of the expert’s experience and training as well as the methodology used." Id. “The [district] court must also resolve any challenge to the reliability of information provided by an expert if that information is relevant to establishing any of the Rule 23 requirements for class certification.” Id.

Accordingly, here, in its Rule 23 analysis, the district court erred as a matter of law by not sufficiently evaluating and weighing conflicting expert testimony on class certification. It was error
for the district court to decline to declare a proverbial, yet tentative winner of the Daubert issue. Plaintiffs are required to prove, at the class certification stage, more than just a prima facie case, i.e., more than just a “pretty good case.” A district court must make the necessary factual and legal inquiries and decide all relevant contested issues prior to certification. Thus, the court erred in granting class certification prematurely. Tough questions must be faced and squarely decided, said the court, not side-stepped in an overly cautious attempt to avoid the merits. 

 

  

District Court Upholds Punitives in Surprising Decision

In a surprising and somewhat questionable decision, the U.S. District Court for the Northern District of Ohio recently upheld a jury verdict awarding punitive damages with a ratio of more than 6-1 between punitive and compensatory damages. Cooley v. Lincoln Electric Co., No. 1:2005-cv-17734 (N.D. Ohio, 3/7/11).

The case was part of the welding fumes mass tort.  Plaintiff Curt Cooley used welding rods at work and home for about 40 years. After being diagnosed with a form of manganese poisoning, Cooley  sued several welding rod manufacturers, alleging that defendants knew that inhaling welding fumes presented a risk of irreversible neurological injury but failed to adequately warn of the risk.

The overwhelming majority of welding rod verdicts have been for defendants, but here a jury returned a verdict for plaintiffs, awarding $787,000 in compensatory damages, after reduction for the allocated plaintiff's comparative fault of 37%, and $5 million in punitive damages.

In post-trial motions, defendants moved, inter alia, for reduction of the punitive damages. In BMW
of North America, Inc. v. Gore
, the Supreme Court articulated three guideposts for lower courts to use in evaluating whether a punitive damages award is excessive. These guideposts are: (1) “the degree of reprehensibility” of defendants’ conduct; (2) “the disparity between the harm or potential harm suffered by [Cooley] and his punitive damages award;” and (3) “the difference between this remedy and the civil penalties authorized or imposed in comparable cases.”  The court here seemed overwhelmed by the first factor and gave insufficient weight to the second and third.

In State Farm Mutual Automobile Ins. Co. v. Campbell, the Supreme Court articulated five criteria for evaluating the degree of reprehensibility: (1) “the harm caused was physical as opposed to economic;”  (2) “the tortious conduct evinced an indifference to or a reckless disregard of the health or safety of others;” (3) “the target of the conduct had financial vulnerability;” (4) “the conduct involved repeated actions or was an isolated incident;” and (5) “the harm was the result of intentional malice, trickery, or deceit, or mere accident.”

The trial court found that the first two criteria allowed the jury to find a high degree of  reprehensibility. Here, the harm to Cooley was physical, but not fatal. Yet, the court rejected defendants' argument that this factor is not as strong as it is in cases where a person died as a result of a defendant's conduct.  The court concluded  that the jury was entitled to conclude defendants knew manganese in welding fumes could cause permanent neurological injury, but chose to give an inadequate warning.

The second guidepost looks to the mathematical relationship between compensatory and
punitive damages. The trial court stressed that the Supreme Court has avoided imposing a bright-line ratio between compensatory and punitive damages, and ignored the numerous cases questioning high single-digit multipliers, which are less likely to comport with due process. The trial court rejected the observation that for some defendants the ratio was close to 9-1. The jury awarded $1.25 million in compensatory damages, but assigned 37% fault to Cooley,
reducing the compensatory award to $787,500. It awarded punitive damages in the total amount of
$5 million, allocated among the defendants as: ESAB, $1.75 million; Hobart, $1.75 million; Lincoln, $750,000; and BOC, $750,000. Using a logical approach, the ratios are as follows: ESAB, 8.9:1; Hobart, 8.9:1; Lincoln, 3.8:1; and BOC, 3.8:1. But, if, instead, the ratio is not calculated for each individual defendant, the overall ratio is still $5 million divided by $787,500, or 6.3:1. The court was persuaded by the fact that all of these ratios, using either of these different approaches, are single-digit.  The court also found that the reprehensible conduct supported a higher ratio.

The court went on to twist the next factor - the comparison of punitives to compensatories-  right around.  It noted that whether viewed as $1.25 million or $787,500, the compensatories were "not large considering Cooley’s circumstances."   For example, Cooley testified he is depressed and
impotent, which are symptoms of manganese poisoning. All things considered, the jury’s award of
compensatory damages was "relatively conservative, making for a low denominator in the ratio." And since the denominator was "conservative" and "low," the higher ratio when compared to punitives was permitted.  However, the same jury that found punitive damages level conduct, found plaintiff 37% at fault, and awarded all of the damages it thought were appropriate to fully compensate the plaintiff.  This is not a case where the multiplier was high because the  compensatory damages are merely a nominal sum in recognition of an injury difficult to quantify in monetary terms.  As the court noted, this case involves a significant injury, and the jury awarded what it awarded.  The court seemed to be approaching the line of substituting its assessment of damages for the jury's, and upholding the punitive award because the compensatory award was too "conservative."

Defendants also argued that the punitive damages award was excessive because, using the factor of comparison to other fines and penalties, civil penalties under OSHA would be limited to approximately $70,000, the maximum fine per violation. The court rejected this because OSHA has never found a violation or fined defendants, and thus "analysis of this issue is necessarily speculative."  In fact, the comparison is not just to actual fines assessed, but to potential fines in order to give the court an idea of how the legislature and society would assess a penalty for the conduct alleged. If it was is unclear whether OSHA would treat the conduct in plaintiff's workplace as a single violation subject to a maximum fine of $70,000, as defendants argued, or impose a fine separately for pieces of the conduct, as plaintiff argued, the issue should have been decided, not pushed aside.

Finally the court rejected any relevance to any aspect of the punitive damages ratio analysis of the fact that Cooley's injury might have been avoided had he read a warning or a Material Safety Data Sheet, particularly those sent in the last decade of his career. This was only relevant to comparative fault for compensatory damages, said the court. But, in reality, it should have been considered a major factor in the reprehensibility analysis.

 

 

Court of Appeals Explores Obvious Danger Doctrine

The 5th Circuit last week affirmed a grant of summary judgment to defendants in a case of a plaintiff allegedly injured when he used a gasoline-soaked rag to start a diesel engine while wearing a polyester and cotton uniform. Spears v. Cintas Sales Corp., No. 09-30750 (5th Cir., 2/28/11).

At the time of his accident, Spears was employed as the shop foreman for Apeck Construction, Inc., and was the head mechanic in charge of servicing and repairing equipment used by Apeck in its business. While performing his duties, Spears wore a Cintas uniform that Apeck had purchased for him. The uniform was 65% polyester and 35% cotton.The agreement between Apeck and Cintas specified that the garments were not flame-retardant, and the employer promised to tell its employees that their garments are not designed for use in areas of flammability risk or where contact with hazardous materials is possible.

Spears was injured while attempting to start a dump truck powered by a diesel engine.  Spears used a gasoline-soaked rag, a procedure he had used “thousands of times” to attempt to start an engine.The dump truck backfired, and Spears’s uniform caught on fire. As the uniform burned, it melted and fused to his body.

Spears filed suit in state court under the Louisiana Product Liability Act, alleging that the Cintas
uniform was an unreasonably dangerous product. Cintas moved for summary judgment, arguing that Spears could not present sufficient evidence to prove two elements of his claim: (1) that his damages were proximately caused by a characteristic of the Cintas uniform that rendered it unreasonably dangerous; and (2) that the damage arose from a reasonably anticipated use of the uniform. The district court found that Spears’s use of the uniform was not a reasonably anticipated use and granted summary judgment in favor of Cintas. Plaintiff appealed.

Under the LPLA, a manufacturer of a product shall be liable to a claimant for damage proximately caused by a characteristic of the product that renders the product unreasonably dangerous when such damage arose from a reasonably anticipated use of the product. If a plaintiff’s damages did not arise from a reasonably anticipated use of the product, then the unreasonably dangerous question need not even be reached. Reasonably anticipated use means a use or handling of a product that the product’s manufacturer should reasonably expect of an ordinary person in the same or similar circumstances. The court said  this is an objective inquiry that requires a court to ascertain what uses of its product the manufacturer should have reasonably expected at the time of manufacture.

A plaintiff’s use of a product is not reasonably anticipated in a situation where a manufacturer provides an express warning cautioning against a use of the product for which the product was neither designed nor intended, and where the plaintiff acts in direct contravention of that warning. Even if the warning did not reach the users, if the danger from a particular use of a product is obvious, then it is not a “reasonably anticipated use” under the LPLA. If the plaintiff acts in contravention of an express warning, the plaintiff’s use may still be reasonably anticipated if the plaintiff presents evidence that despite the warnings, the manufacturer should have been aware that users were using the product in contravention of the warnings.

Cintas did not dispute that the warning did not reach Spears. Instead, Cintas argued that Spears’s use was not a reasonably anticipated use because the danger of exposing the uniform to flammability risks was obvious to Spears. The record demonstrated that Spears knew that his uniform was not flame retardant. Furthermore, Spears’s testimony established that Spears knew that his poly-cotton uniform would melt.  Because the danger of exposing the uniform to flammability risks was obvious to Spears, his use of the uniform is not a “reasonably anticipated use” under the LPLA.

Plaintiff spent considerable effort arguing about the foreseeability of the danger involved in starting the engine with a gasoline-soaked rag. But the 5th Circuit said that was the wrong issue; it may be relevant in assessing a plaintiff’s comparative negligence, but it was not relevant to whether Spears’s use of the uniform was a reasonably anticipated use. The correct obvious-danger analysis in this case related to what Spears argues that Cintas should have warned against—that the uniform would melt when exposed to flame -- whatever the source. Furthermore, the court pointed out, Spears’s argument that he did not know the engine would backfire was contradicted by his other argument that Cintas should have reasonably anticipated that he would be exposed to flammability risks while wearing his uniform. If Spears, an expert mechanic, supposedly did not know that there was a risk that the engine would backfire when he attempted to start it, Cintas could not reasonably anticipate that its uniform would be exposed to the backfire of a diesel engine.

 

Joining the IADC

On a personal/professional note, I am pleased to report that your humble blogger has become a member of the International Association of Defense Counsel.

The International Association of Defense Counsel (IADC), in existence for more than 85 years, is an invitation-only, peer-reviewed association of corporate defense and insurance defense counsel, with only approximately 2,500 members from around the globe.  The IADC offers advanced continuing legal education programs, offers trial practice for less experienced lawyers through its annual Trial Academy, and works to ensure that the civil justice system functions properly.

The IADC strives to ensure fairness in legislation and the courts, and takes a leadership role in many areas of legal reform and professional development. It also offers amicus briefs in cases for which the IADC can offer meaningful input.
 

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State Supreme Court Affirms Exclusion of Unsound Expert Opinion

The Arkansas Supreme Court upheld recently the decision of a state trial court to bar a methodologically unsound expert report that sought to link fertilizer to a child's cancer.  Green v. George's Farms Inc., No. 10-26 (Ark. 2/17/11).

Defendants/Appellees were engaged in the poultry-production business in northwest Arkansas. For decades, their feeds have included the additive 3-Nitro, an FDA-approved product that is used to promote growth and prevent disease. Feed turns into excrement. Growers typically remove the chicken litter from poultry houses once a year, and the litter is then applied as fertilizer -- in this case to the fields surrounding plaintiffs' home, including areas near several schools. The chicken litter is spread primarily in the spring and fall, commonly at a ratio of two tons per acre. Sounds like good recycling.  But, said the court, roxarsone, an organic derivative of arsenic, comprises twenty percent of the ingredients contained in 3-Nitro. Arsenic, said the court, is a carcinogen and is considered both a cancer-causing agent and a promoter of cancer. The roxarsone that is fed to the chickens degrades into an inorganic form of arsenic that is excreted by the chickens.

Plaintiff Michael Green, was born and raised in the neighborhood near the schools and fields. In the fall of 1999, he experienced unexplained bruising, and was eventually diagnosed with a rare form of leukemia called chronic myelogenous leukemia (CML). He sued, alleging that the arsenic-laced litter produced by roxarsone-fed chickens polluted the air as a result of ventilating the chicken houses, and that dust clouds formed when the litter is spread, and that exposure to this inorganic arsenic caused his leukemia. (Other plaintiffs joined in the complaint, but the trial court severed the claims of the other plaintiffs.)  

In pretrial rulings, the circuit court granted summary judgment in favor of defendants on the issue of causation. Additionally, the court excluded under the Daubert rule all testimony pertaining to certain parts of a report entitled “Exposures to Carcinogenic Arsenicals and Other Toxic Substances in Washington County, Arkansas,” prepared by plaintiffs’ expert, Dr. Rod O’Connor.

On the (first) appeal the supreme court held that a question of fact remained on the issue of causation. Green I, 373 Ark. at 396, 284 S.W.3d at 42–43. However, the court found no abuse of discretion in the circuit court’s decision to exclude the testimony. Id. at 408, 284 S.W.3d at 51. On remand, the trial court granted a directed verdict, and this, the second appeal, ensued.

Noting that the lack of publication and peer review had influenced the court’s earlier decision, appellants asserted that Dr. O’Connor’s work had since been peer reviewed and published, and thus it should have been admitted on remand. Defendants responded that the law-of-the-case
doctrine precluded reconsideration of this issue. The trial court found that the published article utilized the same unreliable methodology to estimate peak air exposure concentration that it had previously ruled inadmissible. The trial court also stated that the expert's calculations were based on unreasonable assumptions and scientifically unsound mathematical extrapolations from dust samples collected in the area, and that Dr. O’Connor continued to use a formula that the EPA had warned should only be used to determine air levels of lead. The trial court found that the theory advanced by the expert had never been tested and still had not been sufficiently tested by any other scientist.

The doctrine of law of the case prohibits a court from reconsidering issues of law and fact that have already been decided in a case. The doctrine also provides that a decision of an appellate court establishes the law of the case for the trial upon remand and for the appellate court itself upon subsequent review. The law-of-the-case doctrine in some forms also prevents consideration of an argument that could have been raised at the first appeal and is not made until a subsequent appeal.  The doctrine serves to effectuate efficiency and finality in the judicial process, and its purpose is to maintain consistency.  The law-of-the-case doctrine is conclusive only where the facts on the second case/appeal are substantially the same as those involved in the prior appeal, and it does not apply if there was a material change in the facts.

And that was one of the issues here. The record reflected that the rejected parts of Dr. O’Connor’s report included his calculations relating to inhalation exposure reconstruction that were based on a formula for converting measurements of arsenic in dust to measurements of arsenic in air.  Plaintiffs argued that publication and peer review of his methodology represented a material change in circumstances that would permit reconsideration of this issue. However, the court recognized that publication is not a talisman or "get out of jail free" card from our favorite old board game. It was not apparent to the court whether the specific inhalation exposure reconstruction reflected in the report was indeed subjected to peer review in the article. The fact of publication (or lack thereof) in a peer reviewed journal thus is a relevant, though not dispositive, consideration in assessing the scientific validity of a particular technique or methodology on which an opinion is premised. 

Here, the absence of peer review and publication was but one factor in the overall assessment of the validity of Dr. O’Connor’s methodology. Given the serious flaws exposed in the expert's methods, the court was not persuaded that the publication of the article in a peer-reviewed journal constitutes a new fact that is sufficiently material to overcome the law-of- the-case doctrine. Further, plaintiffs’ argument that criticisms of his methods should only affect the weight but not the admissibility of the evidence was also barred by law of the case.

 

State Supreme Court Explores Plaintiff Fault in Enhanced Injury Context

The Indiana Supreme Court recently answered a certified question from the federal court asking whether, in a crash-worthiness case alleging enhanced injuries under the Indiana Products Liability Act, the finder of fact shall apportion fault to the person suffering physical harm when that alleged fault relates to the cause of the underlying accident. Green v. Ford Motor Co., No. 94S00-1007-CQ-348 (Ind. 2/8/11).  The court answered in the affirmative, laying out a two-step procedure for the consideration of a plaintiff's fault in enhanced-injury cases.

The case was a damages action by Nicholas Green against Ford Motor Company under the Indiana Product Liability Act, asserting that Green's 1999 Ford Explorer vehicle was defective and unreasonably dangerous, and that Ford was negligent in its design of the vehicle's restraint system. Back in 2006, while Green was driving the vehicle, it left the road, struck a guardrail, rolled down an embankment, and came to rest upside down in a ditch. Green sustained severe injuries. He sued, claiming that his injuries were substantially enhanced because of the alleged defects in the vehicle's restraint system. In the federal case, Green moved in limine to exclude any evidence of his alleged contributory negligence on the grounds that any conduct by him in causing the vehicle to leave the road and strike the guardrail was not relevant to whether Ford's negligent design of the restraint system caused him to suffer greater injuries he would not have otherwise suffered.

So in this "crash-worthiness" claim for the "enhanced injuries" suffered, Green sought to exclude evidence at trial regarding his own alleged initial negligence resulting in the vehicle leaving the road and striking the guardrail. Ford asserted that Green's product liability lawsuit is subject to Indiana's statutory comparative fault principles, which require the jury to consider the fault of Green in causing or contributing to the physical harm he suffered.

The "Crash-worthiness Doctrine" has been identified in numerous cases, e.g., Larsen v. General Motors Corp., 391 F.2d 495, 502 (8th Cir. 1968).  The notion is that, in light of the statistical inevitability of collisions, a vehicle manufacturer must use reasonable care in designing a vehicle to avoid subjecting the user to an unreasonable risk of injury in the event of a collision. The reasoning is that the manufacturer should be liable for that portion of the damage or injury caused by the defective design over and above the damage or injury that would have occurred as a result of the impact or collision absent the allegedly defective design.  Thus a normal risk of driving must be accepted by the user, but the policy is not to penalize the user by subjecting him to an unreasonable risk of further injury due to negligence in design.

The court noted that in both the state Product Liability Act and the Comparative Fault Act, the legislature employed expansive language to describe the breadth of causative conduct that may be considered in determining and allocating fault. Both enactments require consideration of the fault of all persons who caused or contributed to cause the harm. The Comparative Fault Act further specifies that, in comparative fault actions, the "legal requirements of causal relation apply." The state legislature has thus directed that a broad range of potentially causative conduct initially may be considered by the fact-finder, but that the jury may allocate comparative fault only to those actors whose fault was a proximate cause of the claimed injury.

Therefore, in a crash-worthiness case alleging enhanced injuries under the Indiana Product Liability Act, it is the function of the fact-finder to consider and evaluate the conduct of all relevant actors who are alleged to have caused or contributed to cause the harm for which the plaintiff seeks damages. An assertion that a plaintiff is limiting his claim to "enhanced injuries" caused by only the "second collision" does not preclude the fact-finder from considering evidence of all relevant conduct of the plaintiff reasonably alleged to have contributed to cause the ultimate injuries. From that evidence, the jury must then determine whether such conduct satisfies the requirement of proximate cause.  The fact-finder may allocate as comparative fault only such fault that it finds to have been a proximate cause of the claimed injuries. And if the fault of more than one actor is found to have been a proximate cause of the claimed injuries, the fact-finder, in its allocation of comparative fault, may consider the relative degree of proximate causation attributable to each of the responsible actors.

While a jury in a crash-worthiness case may receive evidence of the plaintiff's conduct alleged to have contributed to cause the claimed injuries, the issue of whether such conduct constitutes proximate cause of the injuries for which damages are sought is typically a matter for the jury to determine in its evaluation of comparative fault.  
 

State Supreme Court Vacates Plaintiff Verdict After Trial By Ambush

The Mississippi Supreme Court has vacated a $4.5 million verdict in favor of plaintiffs in a case against defendant Hyundai over a serious car accident. Hyundai Motor America v. Applewhite, No. 2008-CA-01101-SCT (Miss., 2/10/11).

Casino co- workers Dorothy Applewhite, Cecilia Cooper, and Anthony Stewart were traveling in Applewhite's 1993 Hyundai Excel after work.  It is unclear who was driving, but the two women were in the front seats, and Stewart was in the rear seat. A co-worker traveling ahead of them testified that he noticed the car weaving, drifting onto the shoulder, and finally swerving into the northbound lane, where it collided with another vehicle. The Excel separated into two pieces. All three passengers in the Excel died at the scene of the accident. 

Family members of the three decedents sued Hyundai. At trial, the plaintiffs undertook to prove that the Excel was not crashworthy due to alleged defects in both its design and manufacture, including the welds in the vehicle. Plaintiffs offered the testimony of several expert witnesses, including Andrew Webb, an accident reconstructionist.  Webb testified that he had used a computer program to reconstruct the accident and concluded that, had the Excel remained intact, the occupants would have experienced a change in velocity of thirty-five miles per hour. Another expert then testified that at thirty-five miles per hour, it was more likely than not that the occupants would have survived the crash.

The jury awarded the plaintiffs $4.5 million, or $1.5 million for each of three decedents, finding that the automobile at issue was defective in both its design and manufacture.

On appeal, Hyundai argued that it was entitled to a new trial because it was ambushed by changes
to Webb’s opinion. As noted, one of Webb’s main contentions was that, had the Excel remained
intact, the vehicle would have experienced a change in velocity (delta-v) of no more than thirty-five miles per hour. Hyundai deposed Webb before trial, at which time Webb gave a detailed
explanation of his calculations. Months after the deposition, Webb signed an errata sheet concerning his deposition testimony, changing four key variables that he had used to make his calculations. Most notably, Webb changed the angle of the Excel from 22 degrees to 44 degrees and increased the closing speed of the Excel from 68 miles per hour to 78 miles per hour. Despite these dramatic changes, Webb did not alter his ultimate conclusion that the car would have sustained a delta-v of only thirty-five miles per hour had it remained intact.

At trial, Webb testified about the errata sheet, claiming that he had to change several variables because he realized after he had been deposed that he had made some mistakes in his initial analysis. It is undisputed that Webb’s errata sheet was not done to correct errors made by the court reporter or to clarify his testimony. On the sheet itself, Webb listed the reason for the changes simply as “range not asked.”

Hyundai moved to strike Webb’s testimony at trial, alleging that it had never received the errata sheet during discovery and that these changes were a surprise. In response, the plaintiffs argued that the changes were not material because they did not alter Webb’s ultimate conclusion. The plaintiffs also produced a letter trying to demonstrate that they had forwarded Webb’s errata sheet to the defendant. The trial court heard extensive arguments on the issue and denied the defendant’s motion.

The Supreme Court did not agree.  The discovery rules impose a duty on the parties to amend a prior response when the party knows that the response, though correct when made, is no longer
true and the circumstances are such that a failure to amend the response is in substance a
knowing concealment. The failure seasonably to supplement or amend a response is a discovery violation that may warrant sanctions, including exclusion of evidence. Whether the plaintiffs did or did not send the errata sheet was unnecessary and irrelevant to a proper analysis. Even if Hyundai did receive the errata sheet, simply giving the defendant this document did not relieve the plaintiffs of their duties under the rules. The purpose of an errata sheet is to correct scrivener’s errors or provide minor clarification; it is not a means of making material, substantive changes to a witness’s testimony. See e.g., Garcia v. Pueblo Country Club, 399 F.3d 1233, 1242 n.5 (10th Cir. 2002) (“A deposition is not a take home examination.”) If a witness changes his testimony in a manner that conflicts with prior discovery responses, the sponsoring party has a duty under the rules (Rule 26(f) in this state) seasonably and formally to amend or supplement the response -- not try to sneak it through in an errata sheet. This the responsibility of the party sponsoring the witness, not the responsibility of the witness.

The plaintiffs argued that Webb’s changes were not material because they did not alter his opinion that, had the car not separated, the occupants would have experienced a delta-v of only thirty-five miles per hour. The Court did not agree. The changes in Webb’s calculations were material changes because they were essential components of the basis for his opinion. When Hyundai attempted to cross-examine Webb about his calculations, Webb referred to his errata sheet at least seven times to demonstrate that he had corrected his mistakes. It is clear from Webb’s own trial testimony that the figures on the errata sheet were important to his calculations. Moreover, when Hyundai’s experts performed crash testing, they relied on and used the figures given by Webb in his deposition in an attempt to test his opinions and refute his testimony. When Webb changed his calculations, the entire crash test using Webb’s initial calculations lost much of its relevance.  

The Court found that the trial judge abused his discretion by not enforcing the rules, noting "we do
not condone trial by ambush." Hyundai was entitled to full and complete disclosure of the plaintiffs’ expert testimony, and neither these plaintiffs nor any other party litigant may rely on a witness’s notations on a deposition errata sheet as a substitute for formal and timely supplementation.