August 2007
From the editors of Wolters Kluwer Law & Business, this update describes important developments from CCH products liability and safety publications.
If you have any comments or suggestions concerning the information provided or the format used, we'd like to hear from you. Please send your comments to pamela.maloney@wolterskluwer.
Delaware Distinguishes Merchantability, Negligent Assembly Verdicts
There was no inconsistency between a jury's finding that a retailer had not been negligent in its assembly of a bicycle but nonetheless was liable under an implied warranty of merchantability claim, according to the Delaware Supreme Court. The consumer was injured when the right pedal snapped off of his bicycle, causing him to lose control of the bicycle and crash. The consumer had recently purchased the bicycle and received it pre-assembled. The parties' experts agreed that the pedal's failure was caused by improper assembly of the pedal which left it cross-threaded, causing it to break off. Although the jury found that the retailer had breached its implied warranty of merchantability, it also found that the retailer was not negligent in its assembly of the bicycle. The state's high court reversed the trial court's decision, finding no inconsistency in the jury's verdict. The court explained that the jury could have found that the retailer was not negligent in assembling the bicycle based on witness testimony concerning the retailer's assembly process and training of its employees. The court also found that the jury could have reasonably found that the cross-threaded pedal existed at the time the bicycle was sold, breaching its implied warranty of merchantability. The court reconciled these verdicts by distinguishing the focus of a negligence claim on the retailer's conduct and the focus of a warranty claim on the product's condition. The court concluded that given these differences in focus, a jury could find that the pedal was defectively assembled without finding that the retailer acted negligently. Hyatt v. Toys "R" Us, Inc., Del. S. Ct., CCH Products Liability Reporter ¶17,779 (ip access user).
Reliance on Adverse Event Reports Fatal
to Baycol Expert Testimony
Reliance on adverse event report
(AER) data relating to the cholesterol drug Baycol undermined the reliability
of multiple plaintiff experts, the U.S. District Court for the District
of Minnesota ruled. The manufacturer of the cholesterol-lowering statin
drug Baycol sought to exclude multiple experts presented by approximately
580 remaining plaintiffs with product liability claims pending against
the drug maker. The experts' testimony sought to establish the comparatively
high toxicity of Baycol to other statin drugs. The court, however, found
that many of the proposed experts improperly relied on AER data or had
relied on the work of other experts who had. Although the court acknowledged
the relevancy of AER data as an indicator of reporting rates and as a
signal to the manufacturer concerning the safety of a drug, the court
rejected the use of AER data to establish occurrence rates or to compare
the safety of different drugs. The court concluded that AER data was unreliable
for drug comparison purposes and, therefore, any expert testimony that
at least partially relied on the AER data was properly excluded. In re:
Baycol Prods. Litig., D. Minn., CCH Products Liability Reporter ¶17,787
(ip
access user).
Post-Transfer Choice-of-Law Clarified
by Eighth Circuit
In resolving a conflict among
its own previous opinions, the U.S. Court of Appeals for the Eighth Circuit
embraced the view that after a §1406(a) transfer, the application
of the law of the transferee court should apply to the transferred claim.
A railroad maintenance worker was injured by a ballast cleaning machine
when the machine engaged, pinching the worker between a conveyor and other
machinery. Although the worker was injured on a work site in Nebraska,
he brought suit in Virginia where his employer's principle place of business
was located. After the worker discovered that the foreign manufacturer
of the machine was not subject to suit in Virginia, the worker's action
was transferred to Nebraska. The appeals court acknowledged that its previous
rulings on which jurisdiction's law should apply to a transferred claim
were inconsistent. The court concluded that it should abandon its previous
decisions supporting the application of the law of the transferor court,
confessing that the other circuits had failed to adopt its view. Eggleton
v. Plasser & Theurer Export Von Bahnbaumaschinen Gesellschaft, MBH,
8th Cir., CCH Products Liability Reporter ¶17,781
(ip
access user).
Consumer Product Safety
CPSC Authority Restored, Temporarily
The Consumer Product Safety
Commission (CPSC) had been without authority to promulgate rules, force
mandatory recalls, or issue civil penalties since January, when its six-month
“short quorum” expired. Under federal regulations (16 C.F.R.
§1000.09; CCH Consumer Product Safety Guide
¶12,010.09 (ip
access user)), three commissioners are required for the transaction
of Commission business. If a vacancy in the Commission results in only
two members serving, two members may constitute a quorum, but only for
six months. In July 2006, Chairman Stratton left the CPSC, and with the
vacancy unfilled, the two-member short quorum subsequently expired in
January. President Bush in March nominated a replacement for the departed
chairman. The nominee, a senior lobbyist from the National Association
of Manufacturers, consistently opposed consumer interests and initiatives
aimed at protecting children and consumers from unsafe products. The nomination
was met with heavy criticism and opposition, and ultimately was withdrawn.
Bush's failure to fill the position and restore a quorum at the Commission
has left the agency powerless to take action against companies that manufacture,
sell, or distribute unsafe consumer products. Following an alarming number
of recent recalls, most notably involving products imported from China,
Senator Pryor (D-AR) advocated for an amendment to a homeland security
bill, to insert a provision that would restore the agency's authority.
The provision was added to the bill, which became Public Law No. 110-53
when President Bush signed the legislation on August 3. Section 2204 of
the “Implementing Recommendations of the 9/11 Commission Act of
2007” provides that two members of the CPSC, as long as they are
not affiliated with the same political party, may constitute a quorum
for six months following enactment of the legislation. (CCH Consumer
Product Safety Guide, August 10, 2007)
Company Sentenced for Sale of Illegal
Fireworks Components
A New Mexico company was sentenced
after pleading guilty to three counts of introducing into interstate commerce,
and aiding and abetting the introduction into interstate commerce, of
banned hazardous substances. United Nuclear Scientific Supplies LLC, of
Edgewood, New Mexico, sold chemicals and components used to make illegal
fireworks, including M-80s and quarter sticks, which are banned under
the Federal Hazardous Substances Act and CPSC regulations. The company
and its founder, Robert Lazar, and accountant, Joy White, entered into
a consent decree permanently restricting sales of fireworks-related chemicals
and prohibiting the sale of fuses, tubes and end caps. The consent decree
also required destruction of the company’s remaining inventory of
specified chemicals and components. At sentencing, the company was fined
$7,500 and given three years probation for violations of federal law prohibiting
the sale of chemicals and components used to make illegal fireworks. The
disposition of the lawsuit constituted another success for the CPSC in
its fireworks enforcement program aimed at reducing deaths and injuries
to consumers from illegal fireworks. Earlier this year, a permanent injunction
was entered in the District Court of Idaho against Firefox Enterprises
Inc., and its owners (see CCH Consumer Product Safety Guide ¶75,746
(ip
access user)), prohibiting them from selling certain chemicals and
components used in illegal fireworks, and imposing shipping and strict
record keeping requirements on the company. (CCH Consumer Product
Safety Guide ¶56,195
(ip
access user))
Tree Stand Manufacturer Sued for Reporting
Violations
A lawsuit was filed in a federal
court in Wisconsin alleging that Ardisam Inc., of Cumberland, Wisconsin,
a manufacturer of hunting tree stands, violated federal law by failing
to timely report severe injuries that resulted from use of the Big Foot
and Lite Foot Series hunting tree stands. The tree stands at issue were
recalled in a July 2004 action [CCH Consumer Product Safety Guide Transfer
Binder "Developments 2003 to 2004," ¶55,011
(ip
access user)]. However, Ardisam allegedly received information as
early as April 2000 that the tree stands unexpectedly detached from trees,
resulting in broken bones and other serious injuries to consumers. The
lawsuit alleged that the company failed to immediately inform CPSC of
the incidents, as required by federal law. Ardisam provided no notice
and reported no information regarding the tree stands to the CPSC until
April 29, 2004—four years after it first received incident information.
Under the Consumer Product Safety Act, which is intended to protect the
public against unreasonable risks of injury associated with consumer products,
manufacturers, distributors and retailers of consumer products are required
to immediately inform the CPSC about products that could create a substantial
risk of injury to the public or that create an unreasonable risk of serious
injury or death. (CCH Consumer Product Safety Guide ¶56,203
(ip
access user))
A petition to amend Federal Motor Vehicle Safety Standard No. 208, “Occupant Crash Protection,” by adding a dynamic automatic suppression system (DASS) test procedure under the advanced air bag options for minimizing the risk of air bag-induced injuries to “vulnerable” occupants, including children and short women seated very close to air bags, and out-of-position occupants, was denied by the National Highway Traffic Safety Administration. The advanced air bag rule allows for compliance through three different options, including DASS, which senses the location of an occupant with respect to the air bag, interprets the occupant characteristics and movement, and determines whether to allow the air bag to deploy. A test procedure for determining compliance with the DASS option was not specified in the advanced air bag rule because at the time the rule was promulgated, it was not known what technologies would be applicable. After reviewing the test procedure proposed by the petitioner, the agency believed that vehicle occupants may undergo more complex motion than that simulated by the proposed test procedure, that occupant recognition remained an area of concern because real-world occupants may have optical characteristics significantly different from the manikin used in the proposed test, and that system latency, or delays caused by data processing and communication, may result in a difference between where the DASS “thinks” an occupant is, and the occupant's actual location. The agency concluded that the petitioner's proposed test procedure was not sufficiently robust or repeatable to establish the benchmark for assessment of future DASSs. (CCH Consumer Product Safety Guide ¶56,232 (ip access user))
Hot Topic of the Month
This month’s hot topic is toy recalls. Mattel, Inc., of El Segundo, California, recently recalled about 345,000 Batman and One Piece magnetic action figure sets. Small, powerful magnets inside the accessories of the toy figures can fall out and be swallowed or aspirated by young children. If more than one magnet is swallowed, they can attract inside the body and cause intestinal perforation, infection or blockage which can be fatal. The firm is aware of at least 21 incidents of magnets falling out of the toy figures. [CCH Consumer Product Safety Guide ¶56,222 (ip access user)] This was the second toy recall announcement from Mattel in August. Approximately 70-80 percent of all toys sold in the U.S. each year are imported from China. Approximately 683,000 Barbie and Tanner play sets also were recalled by Mattel because a small magnet inside the “scooper” accessory can come loose. The recalled play sets were sold at toy stores and various other retailers nationwide from May 2006 to August 2007. [CCH Consumer Product Safety Guide ¶56,224 (ip access user)]
Recall information for toys and other consumer products are covered in a number of ways in the Consumer Product Safety Guide.
- Products Liability and Safety News
- Consumer Product Safety Guide Report Letter
- Provides summary of all recall notices
with a link to the text of the recall notice in the New Developments
division
- Consumer Product Safety Guide
- Daily Document Update Advance Releases
- Consumer Product Safety Guide recall
notices are downloaded from the CPSC as they are posted. Subscribers
receive e-mail notification of the availability of these postings.
- Consumer Product Safety Guide
- Recall Quick Reference List (¶41,021 –available in print only)
- A complete listing of all consumer products, motor vehicles, and motor vehicle equipment recalled by the Consumer Product Safety Commission and the National Highway traffic Safety Administration with citation to the CCH Consumer Product Safety Guide New Development paragraph number.