May 31, 2006
Supreme Court Will Review Another Punitive Damages Award
The Supreme Court has agreed to hear the appeal of a verdict in an Oregon case awarding $79.5 million in punitive damages against Philip Morris. That amount is nearly 100 times the jury's original $821,485 compensatory award. The Oregon Supreme Court allowed the verdict to stand in a February ruling, finding that the award was not excessive even in light of the guidelines set forth in State Farm v. Campbell and Gore v. BMW suggesting that punitive damages should rarely exceed a 9-1 ratio to compensatory awards. The Supreme Court's guidelines in Campbell appear to often have been ignored by state courts reviewing punitive damages awards. With two new justices, perhaps the court will now decide that it is necessary to be more explicit in setting constitutional limits on such awards. See stories by the Associated Press and by Tony Mauro for Legal Times.
May 30, 2006
Product Liability Cases in Federal Courts Decline
Recent data indicate that the number of products liability cases filed in federal courts has declined slightly since 2004's peak. The data indicate that filings in 2001 numbered about 5000, rose to more than 13,000 in 2002, climbed further to 17,000 in 2003, then soared to nearly 28,000 lawsuits in 2004. Last year, the number of filings fell slightly to about 24,000 and filings for 2006 are on pace for fewer than 20,000. It is unclear whether the decline over the last two years is indicative of a trend back toward historical levels or whether the Class Action Fairness Act of 2005 is affecting the number of filings. See a summary of the LexisNexis Market Intelligence report with a link to the full report.
May 26, 2006
Safe Bicycles Need Two Wheels!
A man injured when the front wheel of his mountain bike came off as he rode it over a bump on a motocross course has sued the bicycle manufacturer, a manufactuer of some of the bike's components and the bicycle shop from which the bike was purchased in the late 1980s or early 1990s. The quick-release hub was apparently not fastened properly, causing the wheel to separate from the front fork in which it was mounted. Beginning about a decade ago, bicycle manufacturers began to use a fork design that prevents the wheel from falling off even when the quick-release hub on the wheel is not properly fastened. The injury victim's bike used an earlier fork design without this safety feature. See the article by Tom Sharpe in the Santa Fe New Mexican.
May 24, 2006
FDA Launches Medical Device Innovation Initiative
In a May 22, 2006 press release, the FDA announced the launching of the Medical Device Innovation Initiative to facilitate the development and availability of medical devices in order to make new medical devices available more quickly for patients. The initiative is intended to promote early interaction between industry and the FDA to optimize review times and foster innovation. According to the press release, "[t]he Center for Devices and Radiological Health (CDRH) will expand current efforts to promote scientific innovation in product development, focus device research on cutting edge science, modernize the review of innovative devices, and facilitate a least burdensome approach to clinical trials" by building "on CDRH's strong scientific foundation and additional resources for the device review program provided under the Medical Device User Fee and Modernization Act of 2002 (MDUFMA)."
Debate Over Texas Tort Reform
The continuing debate over legislative changes in tort law in Texas - a debate no different than that in many other states - is reflected in a recent study released by the Pacific Research Institute praising changes in Texas law and an editorial bemoaning those same changes. An article by David Hendricks in the San Antonio Express-News says that the PRI study ranks Texas as the best legal environment in the nation for economic development, citing several changes made over the last few years. Those changes include limits on punitive damages, restrictions on certain asbestos-related claims, elimination of class action contingency fees, caps on pain and suffering and other non-economic damages in medical malpractice suits, and others limitations on products liability suits.
An editiorial in the Houston Chronicle says that the Texas legislature "has gone too far." The editorial notes that critics claim that the costs of pursuing certain claims are so high that injured persons now "cannot afford to go to court and few lawyers will take their cases."
May 19, 2006
Massachusetts Supreme Judicial Court Limits Defense in Wrongful Death Case Against Philip Morris
In Haglund v. Philip Morris Inc., a wrongful death case based on breach of implied warranty (In Massachusetts implied warranty is the functional equivalent of strict liability) arising out of the death from lung cancer of the plaintiff's husband, the Massachusetts Supreme Judicial Court determined that Philip Morris could not assert as an affirmative defense that the decedent's use of cigarettes was "unreasonable," within the meaning of the court's earlier decision in Correia v. Firestone Tire and Rubber Co., 446 N.E.2d 1033, 1040 (Mass. 1983), in which the court held that "the user's negligence does not prevent recovery except when he unreasonably uses a product that he knows to be defective and dangerous." The court explained that "the Correia defense presumes that the product at issue is, in normal circumstances, reasonably safe and capable of being reasonably safely used, and therefore that the consumer's unreasonable use of the product he knows to be defective and dangerous is appropriately penalized," but that in this case, "both Philip Morris and the plaintiff agree that cigarette smoking is inherently dangerous and that there is no such thing as a safe cigarette. Because no cigarette can be safely used for its ordinary purpose, smoking, there can be no nonunreasonable use of cigarettes. Thus the Correia defense, which serves to deter unreasonable use of products in a dangerous and defective state, will, in the usual course, be inapplicable." The court said that the key to the continued viability of the Correia defense "is not the care, knowledge, or intent of the manufacturer, but the duty of the user to act reasonably concerning a product known to be defective and dangerous." The court noted that there may be cases where it will be appropriate to assert the defense. The court gave as an example a case where a consumer begins smoking cigarettes with knowledge that she has a serious medical condition, such as emphysema, which is exacerbated by smoking. To assert the Correia defense in such a case the defendant would have to prove that the plaintiff knew that smoking would exacerbate her specific illness at the time she started smoking, not "that the consumer had a medical expert's knowledge of the risk." Supreme Judicial Court Web Page
May 18, 2006
Oregon Court of Appeals Reversed Punitive Damages Award Against Philip Morris
In Estate of Schwarz v. Philip Morris Inc., 2006 WL 1330862(Ore. Ct. App. May 17, 2006), the Court of Appeals of Oregon in an in banc decision reversed a $100 million punitive damages judgment against Philip Morris while affirming a compensatory damages award of $168,514.22 in a wrongful case arising out of the death of the decedent from metastatic lung cancer from smoking cigarettes promoted by Philip Morris as ‘low-tar." Four judges dissented on the punitive damages decision. The case provides an excellent example of the difficulty courts have in implementing the Supreme Court’s punitive damages guidelines State Farm Mut. Ins. Co. v. Campbell, 538 U.S. 408 (2003) and BMW of North America, Inc. v. Ore, 517 U.S. 559 (1996). The jury initially awarded the plaintiff $150 million in punitive damages. The trial court reduced it to $100 million. The court of appeals remanded the case for a new trial for punitive damages on all claims. The plaintiff’s decedent smoke both Benson & Hedges and Merit cigarettes, both manufactured by Philip Morris. She switched to Merit because of her belief that she would be able to quit smoking. She was unable to do so. The suit was based on several theories, including strict liability, negligence, and fraud. As stated by the court of appeals, the gist of the allegations was that ‘(1) the Merit brand of cigarettes was unreasonably dangerous in a manner that was not contemplated by the consumer because it was marketed as a less harmful alternative to ordinary cigarettes; (2) defendant had been negligent in the manner in which it tested, manufactured, and marketed the Merit brand; and (3) the defendant had defrauded consumers by making false claims about the health effects of the Merit brand, the contents of the brand itself, and its addictive nature." The jury returned a verdict for the plaintiff on all claims. It apportioned 49 percent of the fault to the decedent and 51 percent to the defendant on the strict products liability and negligence claims. The jury awarded punitive damages of $10 million on the strict liability claim, $25 million on the negligence claim, and $115 million on the fraud claim. The defendant requested a jury instruction stating that ‘[y]ou are not to punish a defendant for the impact of its conduct on individuals in other states." The trial court refused the instruction. Finding that the instruction accurately incorporated the due process concerns expressed by the Supreme Court in Campbell and Gore, the court of appeals reversed the punitive damages award as to all theories.
Hey! Who Put a Tooth in My Peanuts?
Kraft Foods has been sued by a man who claims to have found a non-human tooth in a package of Planters peanuts. The suit alleges that the plaintiff bit into what appears to be a rodent tooth as he was eating the peanuts and subsequently became physically ill and mentally distressed, worrying that he has been exposed to disease. See the Associated Press story.
May 16, 2006
Minnesota Supreme Court Holds Health Impact Fee Not in Violation of 1998 Tobacco Settlement Agreement
In State v. Philip Morris USA, Inc.State v. Philip Morris USA, Inc., the Minnesota Supreme Court held in an opinion handed down on May 16, 20067, that the imposition of a Health Impact Fee under Minn. Stat. § 256.9658 (Supp. 2005) does not violate the 1998 settlement agreement between the State and the tobacco companies. The supreme court concluded "that to construe the settlement agreement as respondents urge, that is, to waive the legislature’s authority to enact revenue measures to recover tobacco-related health care costs, would be a surrender of the legislature’s sovereign power. As a result, the unmistakability doctrine applies and requires that we not so construe the settlement agreement unless it surrenders sovereign power in unmistakable terms. We do not find the requisite unequivocal language in the settlement agreement, and therefore conclude that the Health Impact Fee legislation does not violate the terms of the agreement."
May 15, 2006
Bausch & Lomb Pull Product Line
A May 15, 2006 FDA press release said that on Thursday, May 11, 2006, a team from Bausch & Lomb met with FDA officials to share information that resulted from the company's internal investigation into cases of Fusarium keratitis associated with ReNu with MoistureLoc. Scientific and epidemiological data have suggested that Re Nu with MoistureLoc may increase susceptibility to Fusarium. Based on that data, Bausch & Lomb has decided to permanently remove the ReNu with MoistureLoc product worldwide. The FDA supports that decision. ReNu with MoistureLoc contact lens solution was voluntarily withdrawn from the market in the United States on April 13, 2006.
California Anti-Punitive Damages Initiative Dropped by Chevron and Tort Reformers
A Law.com article notes that Chevron Corp. and its allies in tort reform withdrew a proposed California ballot initiative last Wednesday that would have barred plaintiffs from recovering punitive damages in some products liability cases after legislative leaders apparently promised to address lawsuits targeting oil companies such as Chevron for polluting groundwater with methyl-butyl ether, a fuel additive known as MTBE. Chevron's initiative would have barred punitive damages awards against a manufacturer whose product complied with applicable state and federal rules. The initiative could have aided Chevron and other MTBE producers who are currently facing hundreds of contamination lawsuits. On two other occasions in a little over a year corporate-sponsored initiatives in California were withdrawn, one by the pharmaceutical lobby to cap contingency-fees when the Consumer Attorneys of California agreed to keep out of what turned out to be an unsuccessful campaign to cut prescription costs, and the other by a coalition of homebuilders and restaurant owners to limit lawsuits after the Consumer Attorneys of California withdrew three retaliatory construction-defect measures.
May 11, 2006
Owens Corning to Pay $5.2 Billion in Asbestos Settlement Agreement
A Bloomberg.com article reports that Owens Corning has said it will pay $5.2 billion to asbestos victims and $2.5 billion to creditors in a settlement that would permit an exit from bankruptcy this year. If approved by a U.S. bankruptcy judge, the settlement would create a company worth about $5.9 billion when it emerges from bankruptcy. The settlement agreement requires the company to pay $4.29 billion in cash into an asbestos victims' trust fund in addition to 28.6 million shares in the company when it emerges from bankruptcy, according to John D. Cooney, of the Chicago law firm of Cooney ^& Conway, who represented asbestos victims.
May 8, 2006
Aspartame Gets Green Light in Study
A Food and Drug Administration press release on May 8 responded to the European Food Safety Authority (EFSA) press release on its AFC  Panel's review of a long-term carcinogenicity study of aspartame that was conducted by the European Ramazzini Foundation (ERF). In its opinion published on May 5, the panel concluded that further review of the safey of aspartame is unnecessary and that there is no need to revise the previously established Acceptable Daily (ADI) intake for aspartame (40mg/kg body weight). The Panel also noted that intakes of asparatame in Europe, with levels up to 10 mg/kg body weight per day, are well below the ADI. The FDA requested the ERF study results and received them in late February, 2006. It is actively reviewing the data and will announce its results when the review is completed.
May 7, 2006
U.S. Presses Japan for Resumption of Beef Imports
Government officials in Japan have increasingly been calling for a resumption of beef imports from the United States as Japan and the U.S. are are scheduled to hold negotations on the issue later this month. Many Japanese officials are advociating an end to the ban even before confirmation of the safety of U.S. meat processing facilities. U.S. officials have been pressing Japan to lift the ban on beef imports imposed by the government in January when imported U.S. beef was found with body parts that were designated as materials that were risk for mad cow disease. Some Japanese officials are advocating the resumption of imports in stages, beginning with products that are processed at facilities Japanese inspectors have designated as safe. Daily Yomiuri Online
May 5, 2006
Illinois Supreme Court Denies Rehearing in Price v. Philip Morris, Inc.
On December 15, 2005, the Illinois Supreme Court previously reversed an Illinois Circuit Court in a case involving a $10.1 billion damages award, including $3 billion in punitive damages, against Philip Morris USA over its light cigarettes. On Friday, May 5, the Illinois Supreme Court decided that it will not rehear arguments in the case. Mealys
Vermont Considers Making Genetically Modified Seeds a Private Nuisance
A boston.com article notes that Vermont Governor James Douglas said he would veto a bill that would permit farmers to sue manufacturers of genetically modified seeds if the seeds drift into their their fields. He expressed concern that manufacturers affected by the bill would be discouraged from selling seed in Vermont. As passed by the Vermont House and Senate, the bill provides that "[the release by a manufacturer . . . of a genetically engineered (GES) or plant part (GEPP) that causes the unintended presence of such seed or plant part within the lands owned or occupied by a person with whom the manufacturer has not entered a contrct of sale, use, or license shall constitute an unreasonable interference with the use and enjoyment of such lands," and that "[a] release that causes the unintended presence of GES or GEPP shall constitute substantial interference with the use and enjoyment of such lands if damages in any one calendar year from such unintended presence exceed $3,500.00 after mitigation of damages." If a release meets those criteria the bill states that it "shall constitute a private nuisance, and the manufacturer shall be liable for any damages resulting from the private nuisance." Damages are recoverable for economic loss caused by the GES or GEPP.
May 4, 2006
Taser International Suit Dismissed
Taser International announced in a press release issued on Tuesday that a products liability lawsuit against it was dismissed in the U.S. District Court for the Southern District of Florida. The release noted that this was the fourteenth wrongful death or personal injury suit in which dismissal was granted or judgment entered in favor of Taser International. Products liability suits against Taser International are typically coupled with claims against governmental units based on 42 U.S.C. § 1983, based on the use of excessive force. The products liability claims may be asserted in either negligence or strict liability. The motions for pretrial dismissal are not always granted, however. E.g., Rosa v. City of Seaside, 2006 WL 581090 (N.D. Cal. Mar. 7, 2006); Lewis v. City of Tallahassee, 2006 WL 231291 (N.D. Fla. Jan. 30, 2006) (motion to dismiss for failure to state a claim granted in part and denied in part); Lash v. City of Moberly, 2006 WL 44249 (E.D. Mo. Jan. 6, 2006) (motion to dismiss for failure to state a claim granted in part and denied in part).
May 2, 2006
Britain Warns 14 Countries of vCJD Danger
According to an AP release in Findlaw, the British Health Protection Agency confirmed on Tuesday that Britain has warned 14 countries that recipients of British blood products exported in the 1990s may be at risk of developing the human form of mad cow disease. The Guardian newspaper obtained documents through the Freedom of Information Act revealing which countries received the approximately 170 batches of blood products that were exported by the Bio Products Laboratory between 1990 and 1997. The countries are Brunei, the United Arab Emirates, France, India, Israel, Jordan, the Netherlands, Oman, Singapore, Belgium, Morocco, Egypt, Brazil and Turkey, according to the Health Protection Agency. Brazil and Turkey are more at risk because of the specific types of products they received. The disclosure followed revelations that nine British donors who had completed 23 donations to the general pool all died from variant Creutzfeldt-Jakob disease, or vCJD. By Suevon Lee, AP.
GM Initiates Pickup Truck Recall
According to an AP article in Findlaw, General Motors Corp. will recall approximately 400,000 pickup trucks because of defective brake lights. The recall was initiated after an inquiry by the National Highway Traffic Safety Administration, which contacted GM after receiving three complaints about the problem. The vehicles affected by the recall are the Chevrolet Colorado and GMC Canyon from the 2004-2006 model years and the 2006 Isuzu i-280 and i-350. The problems vary. Some of the pickup trucks may permanently lose brake-lamp function or have brake lamps that are always on. According to a GM spokesperson, no crashes have been caused by the problem. The NHTSA was notified of the recall on Friday. Dealers will replace the affected brake lamp assembly without charge.
May 1, 2006
China Adopts Standards for Farm Produce Quality Safety
An article in China View reports that on Saturday, April 29, the Standing Committee of the National People's Congress adopted a law on farm produce quality safety. The law becomes effective on November 1. Several measures to ensure farm produce safety were adopted. The law forbids the discharge of sewage, waste gas, and solid waste, or other poisonous substances in agricultural product production areas and prohibits the production and collection of farm products at locations where poisonous and harmful substances exceed the statutory standards.