Archives for Products Liability

Class Action Lawsuit

paul_lipman2Paul Lipman has just obtained an MSJ in conjunction with a co-defendant and a dismissal for our national client, a food retailer in a large food-related class action case in Federal court.  Plaintiff’s trial attorney was a nationally prominent class action trial attorney, and thrust of the case was to create a new theory of recovery that could have opened up many more such lawsuits had it been successful.  Hundreds of thousands of dollars were spent on the plaintiff’s side just on experts.  The case is subject to confidentiality agreements and is therefore discussed in generalities.  It is, however, likely to have repercussions for 9th Circuit food related class actions going forward.

The suit sought millions of dollars for allegedly misrepresenting product and allegedly selling “deemed contaminated” product, and was brought under the UCL, CLRA and breach of warranty.  In 2016, the CDC and FDA traced 9 cases of food borne illness to co-defendant Manufacturer, and to some products that Manufacturer sold to co-defendant Packer / Distributor during a four month time frame in 2014.  After consultation with the FDA and CDC, Manufacturer over-broadly issued a recall for all product they produced and sold to Packer / Distributor over the four month period.  The defendant grocery chain who bought these products from Packer / Distributor was notified by them of the recall and was provided a spreadsheet listing the over-broadly recalled items by purchase order number, lot code and “best by date”.  The retailer then conducted an even more over-broad outreach to any customer who had purchased items of that type and brand, regardless of whether they bought the “correct” lot code and best-by date that defined what was and was not recalled product.  This is because when you buy groceries, the cash-register bar code scanner only picks up a bar code, not separately printed material on the bag such as lot code or best-by date.  Thus once a customer buys a bag, the only person who has access to that separately-printed information is the customer, who has generally thrown the bag away if he’s eaten it, or may still have it in the freezer and can check.  The only thing the retailer has left in its system is the UPC (bar code) information that was scanned in, which does not include things like lot code or best-by date.

The limitations on cash register bar code scanners is not a conspiracy by retailers to protect themselves from class actions.  On the contrary, it causes retailers to have to reach out and offer refunds to many more people than actually bought specific best-by dates and lot codes.  Retailers often end up voluntarily warning and offering refunds to everyone who bought, say, a bag of Brand X frozen corn, even though only a small subset of these bags has the correct best by dates and lot codes that defined them as recalled product.  Bar codes, the only thing scanners pick up, are governed by universal standards (hence, “Universal Bar Code”) and they do not encode things like best by dates, because their function is just to trigger the cash register to look up the correct price the store attaches to that bar code.  If you buy a gallon of milk at any store, all it will pick up is the bar code, it will not read anything else stamped on the item.  As a result it was not possible to know who bought the specific recalled bags with specific lot codes and best-by dates just from the cash register data, which only picks up the item type and its price.  Consequently the defendant retailer reached out to everyone who had bought any of these item types going back 18 months to tell them all to check the dates on any bags they still had, and to offer a refund.  This was done immediately, using industry-leading methods such as millions of robo-calls within 24 hours , next-3-receipts messaging, in-store sign messaging, etc.

As to who specifically bought recalled product, that is not possible to tell but is not always necessary for a class action, as long as you can prove how much of the allegedly defective product was sold.  The one person who absolutely must prove that he was one of the people that bought recalled product is the putative class representative, i.e. the named plaintiff.  This plaintiff said he could prove he bought recalled product, because his family got sick and his wife tested positive for the microbe.  He said that when he was contacted by defendant’s recall team, he said his wife had been sick and that he would have her tested.  He said she tested positive.  Thus, he was chosen to be the putative class representative as they thought he had a strong chance of proving causation and standing.  As to others who bought recalled product, it would not be possible to tell which individuals bought the  recalled items but class actions allow suit to proceed if plaintiff can show how many sales there were in the aggregate, and then, if liability is proven, the court can direct all  money proven as damages to be distributed to a charity, a mechanism called “cy pres” or “fluid recovery”.  This supposedly serves the purpose of class actions, to let small individual claims that would never be brought individually, be aggregated so as to incentivize product quality.  In this case, plaintiff proposed to take the recall spreadsheet showing all recalled product sold to the retailer, and simply multiply the number of recalled units sold to the retailer by the retail sales price per unit.

Several features of the case made it a test case for plaintiffs, and one that was vigorously fought and won by defendants:

  • Instead of suing on behalf of physically injured buyers, the suit excluded physical injury claims and instead sought “only” economic damages.  In addition to claiming that the food was misrepresented as free from contaminants, the suit claimed it was illegal, unfair and a breach of warranty to sell the recalled product.  While the items were relatively inexpensive, millions of allegedly misrepresented units were sold.
  • Of the 9 cases of food-borne illness nationwide that were traced by the  CDC and FDA to a single manufacturer, none were identified as having been distributed or sold by our client or its distributor.  Plaintiff realized he could not prove how many bags were actually contaminated, so he tried instead to sue simply on what was This would be a dangerous precedent.  Plaintiff’s theory was that certain statutes define food as “adulterated” if they are produced under conditions making it reasonably likely that any given unit is contaminated, without having to prove which units were or were not actually contaminated.   These statutes’ regular purpose is to let regulatory agencies like the FDA test only a portion of, say,  a warehouse full of eggs, and if enough test positive, they can condemn or enjoin the sale of the whole warehouse.  These statutes also enable civil and criminal penalties on sellers of contaminated product.  They have not, however, been used heretofore in California as a civil standard to prove damages. In a nutshell, the “deemed adulterated” statutes are to let the government  prevent sale before it happens, not to ascertain the scope of civil damages after the fact or substitute for proof of actual contamination and damages.  Had the “statutory adulteration”  theory worked, the plaintiff wanted all recalled merchandise as identified on the recall spreadsheet to be deemed statutorily adulterated, illegal to sell, and wanted a Full Refund for every unit sold.  Had this model worked, it would have become the new means of generating class action victories without having to prove that any product, even in the aggregate, was actually contaminated, as long as it was either recalled, or if a jury could be convinced it was produced under conditions making contamination of any given likely enough to instigate a recall.

Originally, a motion to dismiss was denied.  A plan was then undertaken in conjunction with a co-defendant Distributer, to show that plaintiff could not prove that the purchases on his loyalty card history were of recalled product.  A sophisticated inventory and sales analysis was done by both defendants and the results merged, to rule out all but one of his purchases.  As to this last one, defendants argued that it was at best speculative as to whether this was a recalled bag, defeating his standing to sue.  The court also agreed with our argument the statutes regarding “adulterated” were meant to allow government agencies to order food not to be sold in emergencies, not to create a private right of action after the fact and act as a substitute for proving actual contamination of someone sues for damages. Once the court took “statutory adulteration” away from him, plaintiff was left unable to prove how many bags were sold that were actually contaminated, defeating the class action altogether.  Finally, the court also agreed with us that the mere purchase of recalled product does not prove an economic injury.

This case was an important win against the “recall = injury” movement.  If you are being sued for a recalled product, or have a recall you expect litigation from, feel free to call us to discuss a winning strategy

Doctor’s Statements Are Not Enough to Raise Eyebrows

September 21, 2011

By: Christopher P. Wesierski and Roxana Amini

Like many women, Donna Hennigan wanted to enhance her appearance by getting permanent make-up. She sought the treatment of an aesthetician at a day spa to affix permanent tattooed pigment on her eyebrows and eyelids. This is a popular procedure that obviates the need for regular makeup. The aesthetician did not perform any kind of spot test or patch test on Hennigan’s skin prior to applying the pigment, even though such tests are common in the industry.

About three months after the procedure, Hennigan developed a bacterial infection in her eyebrows and eyelids. Ultimately, one of her eyelids dropped to such an extent that she had to undergo surgery to repair it.

A year after receiving the treatment, Hennigan sued the owner of the day spa and the manufacturer of the pigment, claiming negligence and strict products liability. To support her negligence claim, Hennigan pointed to the fact that the aesthetician failed to conduct a patch test prior to commencing the tattoo process. To support her strict products liability claim, Hennigan provided three affidavits from her treating physicians, which stated that her medical reactions and related conditions were caused by the cosmetic tattooing. She also produced an “FDA Talk Paper” which was issued three months after she filed her suit. The “Talk Paper” alerted the public to reports of adverse reactions suffered by those injected with certain pigments, including the type used on Hennigan.

The defense sought summary judgment to have the case dismissed before it went to trial. In support of its motion, the defendant submitted an expert declaration that stated that the omission of a patch test did not contribute to Hennigan’s injury. Specifically, allergic reactions to tattooing often do not occur for years or even decades after the application of permanent pigments. Hennigan’s own injury did not occur for three months after the procedure. Thus, a patch test would not have prevented the injury to the plaintiff because it would not have proved that she was allergic. The defense expert also indicated that an individual’s allergic reaction to permanent cosmetic pigment does not, in and of itself, suggest or establish that such pigment is defective; rather, it simply demonstrates the responsiveness of that particular individual’s immune system to the pigment in question. Based on the expert declaration, the trial court ruled on behalf of the defendants and Hennigan appealed.

The California appeals court in Hennigan v. White also agreed with the defense and upheld its motion for summary judgment. In particular, the court held that Hennigan’s doctor’s statements were insufficient to prove that the product was defective because a product is not rendered defective per se by the mere fact that it causes injury to certain individuals who may be hypersensitive. Along the same lines, the court noted that FDA Talk Paper was also insufficient to prove the product was defective because it was issued one year after Hennigan began experiencing adverse effects. Accordingly, Hennigan had produced insufficient evidence to support her claim.

The significance of the Hennigan case is two-fold: First, a mere abundance of allergic reactions to a specific product does not support a claim that the product is defective. Second, the importance of gathering evidence and producing proper expert testimony can mean the difference between winning a trial and losing on summary judgment.

Manufacturer Can’t Always Seek Equitable Indemnity From Strictly Liable Defendants

September 19, 2011

By: Paul J. Lipman

The law is quite complicated on the issue of when a defendant who is strictly liable (like a store that stocks a champagne bottle that explodes due to a manufacturing or design defect) can be sued by another defendant, such as the manufacturer, for indemnity. One factor is whether there have been jury findings already, and whether the parties to a subsequent suit for indemnity are bound by them. Another is whether the act at issue is that of the strictly liable defendant, or that of the party suing him for indemnity. Some of the fact patterns and answers were recently reviewed in Bailey v. Safeway, Inc. (2011 DJDAR 14109), published September 19, 2011.

In Bailey, the plaintiff sued the champagne bottle manufacturer and the store for eye injuries. Plaintiff settled with the manufacturer for $1 million plus an assignment of rights to pursue the store for equitable indemnity. The case then went to trial against Safeway only, and the jury found that Safeway was not negligent, but was strictly liable on the design defect as a seller in the chain of distribution. Plaintiff then filed a follow up suit against Safeway for equitable indemnity, with plaintiff now standing in the shoes of the manufacturer pursuant to the assignment of rights. Safeway demurred, and the trial court agreed with Safeway that the prior jury finding of no negligence on Safeway’s part precluded any subsequent lawsuit by the manufacturer (or plaintiff, standing the manufacturer’s shoes; an assignee of a cause of action inherits all claims and defenses of the person he got the claim from) for equitable indemnity.

Now, you might think this is a common sense result, and conclude from the case that anytime a negligent defendant (or someone who takes their rights by assignment) sues a merely strictly liable defendant for equitable indemnity, he is out of luck, because equitable indemnity is about apportionment of “fault”. But the rules are not that simple. As Bailey noted, “We caution that our decision in no way suggests that equitable indemnity can never be based on strict liability”. It then reviewed some cases on this subject and distinguished them.

For instance, in GEM Developers v. Hallcraft Homes (213 Cal.App.3d 419), the court did allow an equitable indemnity suit between strictly liable defendants. Two co-developers, each of whom committed separate acts, were both found strictly liable. Defendant Hallcraft sold the finished residential lot (with the condo on it manufactured by defendant GEM), so that Hallcraft could be viewed as the end-retailer and GEM as the manufacturer. Both committed independent acts that gave rise to strict liability. By comparison, “Safeway’s liability was not based on it’s independent acts or omissions, but was based solely on its role as retailer” of the defective product.” The Bailey court emphasized that “a manufacturer (or it’s assignee) cannot seek equitable indemnification from a retailer found not to have been negligent or independently at fault, but found liable solely under the strict liability theory of design defect. Under these limited circumstances the retailer is not ‘at fault’ within the meaning of a cause of action for equitable indemnity” (underlines added for emphasis).

The above quote and the part we underlined appear to stand for the following rules. “Fault” within the meaning of an equitable indemnity suit against you means not just your negligence (carelessness), but can include your mere strict liability, too – IF the fault is based on your own acts or omissions, not just automatic liability for someone else’s acts or omissions. In other words, for instance, if you sell bottles in your store and are found strictly liable for a design defect in the bottle because you are in the stream of commerce, still, the act for which you are strictly liable was the act of design, which was someone else’s act. You can’t be sued in equitable indemnity for the plaintiff’s own act, where you were not negligent and had no part in the subject act itself. So even though you are at “fault” legally as between you and the plaintiff because of strict liability, that is not the kind of “fault” that will support a cross claim for equitable indemnity by the party who committed the act at issue, i.e., the bottle designer.

Put another way, yes, you can sue someone for equitable indemnity who was not negligent but was only strictly liable, but only if the act or omission you are suing them on was really their own act. If it was, you can often sue them for indemnity even if they were not “negligent” for an apportionment. But if it was not even their own act for which they were found strictly liable, but your own, then no, you can’t sue them for an apportionment.

On top of these rules is the procedural issue of whether or not there has been a binding adjudication already on negligence and strict liability. In Bailey, there was. The jury found that Safeway was not negligent, i.e., careless, but that it was still strictly liable as being a seller in the chain of commerce. The key to Safeway’s defense in the follow up suit by the manufacturer (actually, it’s assignee) for equitable indemnity was that the thing that Safeway was found strictly liable for, design defect, was obviously an act only of the manufacturer. Safeway’s strict liability for design defect arose only because it was in the chain of commerce, not through any act of it’s own. The manufacturer was part of the underlying lawsuit and had full and fair opportunity to litigate it’s positions there. It is accordingly bound to the jury’s findings and cannot relitigate them, under the doctrine of collateral estoppel (a relative of res judicata).

Your cases will have variations on the above themes. Sometimes prior findings are binding later, sometimes not. Sometimes the findings can be interpreted to imply the proper type of “fault” so as to support a later indemnity claim, sometimes not. Wesierski & Zurek LLP has extensive experience litigating products claims and will be happy to consult with you on these issues in any case.

In Products Cases, Consumer Expectation Test Not Always Appropriate

August 3, 2011

By: Paul Lipman

In a products liability case, plaintiffs have the option to try liability for defective design under either the “consumer expectation test” (did the product perform as safely as a reasonable consumer would expect) or the “risk/benefit” test (do the benefits of the design outweigh the risks inherent in the design). Plaintiffs often prefer the consumer expectation test as it is fairly simple to show a jury an injury, a product, and ask “is this really what you expect the product to do?”. It avoids the need for experts. However, many cases are not appropriate for understanding or resolution without experts, to testify about matters an ordinary consumer cannot be expected to know about. In such cases, the consumer expectation test is not appropriate. As reiterated on August 3, 2011 in Mansur v. Ford Motor Co. 2011 DJDAR 11704, a vehicle roll-over case where the manufacturer was faulted for not having certain technology built into it’s seat belts and for not having additional strengthening in the roof support, “The consumer expectations test is reserved for cases in which the everyday experience of the products’ users permits a conclusion that the product’s design violated minimum safety assumptions” without the need for experts; i.e., “regardless of expert opinion about the merits of the design”. “Expert witnesses may not be used to demonstrate what an ordinary consumer would or should expect, because the idea behind the consumer expectation test is that the lay jurors have common knowledge about the product’s basic safety”.

It is possible to present a design defect case involving apparently complex science on a consumer expectation theory, if the accident is plainly one that should not have occurred in a reasonably safe design, regardless of the specifics. “A complex product may perform so unsafely that the defect is apparent to the common reason, experience, and understanding it’s ordinary consumers”. For instance, if a chef knife (an all purpose knife for chopping, etc.) has a tendency to shatter anytime more than a few pounds of force is applied, the plaintiff does not need to bring in experts to waste a lot of time on how knives are forged, their tensile versus ductile strength, etc. Knives sold for chopping and all around kitchen use are just not supposed to regularly shatter when only a few pounds of force are applied, and it doesn’t matter how complex the science behind that is. However, if a plaintiff is going to present a design defect case based on the consumer expectation theory, the plaintiff has to present evidence of the objective features of the product which are relevant to an evaluation of it’s safety. This is not necessarily easy to do when talking about cars, as opposed to knives.

It is within the jury’s common experience that knives are supposed to be able to take the ordinary forces applied to them without shattering on a regular basis. But without specific evidence, it is not so clear based on everyday experience how an SUV is “supposed” to hold up in a particular accident. Vehicles are not held to an injury-proof standard. We all know that a few pounds is not supposed to shatter a knife, but it is not immediately clear based on common experience whether a certain amount of roof-crush or a certain level of roof pillar strength is to be expected by an average objective consumer. This is relative, perhaps, to expectations set by the manufacturer. The court pointed out that if the manufacturer had shown ads of rollovers at high speeds with all occupants walking out uninjured, one could say that the consumer could “expect” that level of safety from it’s SUV’s. The manufacturer did not do that; they did advertise the SUV as a “family” vehicle, but this was not enough to constitute a claim of a particular level of safety under particular conditions. The court accordingly held that it would take experts to determine if the design was defective, under the risk / benefit test, and that the consumer expectation test was inappropriate. In a nutshell, it is not appropriate to ask the jury to decide a products case based just on common sense and experience of whether a particular product should have failed under the circumstances (i.e., under the consumer expectations test), unless there really is either experience or evidence of how the product is “supposed” to act under the circumstances of the case.

Full Compliance with the FDA’s Labeling Requirements Does Not Bar Punitive Damages

January 20, 2011

By: Christopher P. Wesierski and Andrew Brown

The California Second District Court of Appeal recently held that a drug manufacturer may be liable for punitive damages for failing to warn of known, dangerous side effects, in spite of full approval by and compliance with the Federal Drug Administration’s (FDA) warning requirements.

Motrin was first approved as a prescription drug in 1974, and containing warnings against SJS, TEN, and other life threatening reactions. Ten years after the prescription version, over-the-counter ibuprofen (Motrin) was introduced with the required and approved FDA labeling. Later, in 1994, the gelcap version of the drug was approved by the FDA. In 2000, the over-the-counter Motrin label was again approved by the FDA as being “safe and effective for use as recommended in the submitted labeling.” Then, in 2005, the FDA implemented new labeling requirements for the larger family of NSAID products, which includes Motrin. Importantly, the new warnings did not have to be implemented until December of 2005.

In October 2005, before the new label was required to be implemented, 15 year old Christopher Trejo suffered a severe adverse reaction to Motrin and developed two rare and serious skin conditions, SJS and TEN. The labeling on the over-the-counter Motrin bottle he used was in full compliance with FDA labeling requirements. He sued Johnson & Johnson for strict products liability, among other things, claiming that their Motrin contained a design defect, that they did not adequately warn of the serious conditions associated with such, and that they did not report and misrepresented study results to the FDA. He asked for punitive damages and alleged that the drug makers carried out “despicable conduct…with a willful and conscious disregard of the rights or safety of others.”

Johnson & Johnson responded that Motrin was “at all times marketed and sold…with a label approved by the [FDA] and consistent with the FDA’s standards for [over the counter] medication.” They also pointed to the fact that any changes to the label after initial approval must be further approved by the FDA before implementation, requiring the submission of new applications and scientific studies. There was no evidence that Johnson & Johnson failed to report or misrepresented study results to the FDA.

In considering if the plaintiff alleged sufficient facts to constitute a claim for punitive damages, the court held that Johnson & Johnson may have showed a conscious disregard for safety and despicable conduct by waiting for the FDA to require labeling changes, as opposed to making the changes on their own accord and seeking later approval. In so determining, the court pointed to a federal regulation that “provides that if a manufacturer is changing a label to add or strengthen a contraindication, warning, precaution, or adverse reaction…it may make the labeling change upon filing…with the FDA; it need not wait for FDA approval.” Also, “the manufacturer bears responsibility for the content of its label at all times,” and due to this they must ensure “that its warnings remain adequate as long as the drug is on the market.” As such, full compliance with the FDA was not enough to bar a claim for punitive damages before trial.

This ruling warns drug makers that they must take it upon themselves to supplement their warnings–before any FDA action or recommendation–if they know of additional dangerous side effects. Otherwise, they face potential liability for punitive damages above and beyond any other loss to the plaintiff, and plaintiff’s attorneys are sure to exploit this ruling when seeking out deep-pocketed drug manufacturers.

Facts and Legal Analysis taken from Johnson & Johnson v. The Superior Court of Los Angeles County (2011) 192 Cal.App.4th 757. Internal citations and quotations have been omitted.