Products Liability and Safety Update August 2008

August 2008

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.

Products Liability

Punitive Damages Award Against Auto Maker Upheld in Part . . .
A punitive damages award in the amount of $13,367,345 for the wrongful death of a child in a rear-end collision was upheld by the Tennessee Supreme Court because there was sufficient evidence to support the jury’s conclusion that the seat back design used in the minivan in which the child was riding was defective and that the award was not excessive. However, both the compensatory and punitive damages awarded to the mother for her emotional distress in witnessing her child’s death were vacated. (Flax v. DaimlerChrysler Corp., Tenn. S.Ct., CCH Products Liability Reporter ¶18,055 (ip access users))

. . . While Punitive Award Against Hormone Drug Maker Vacated
A $27.12 million punitive damage award again the maker of a hormone replacement therapy drug was vacated by a federal district court in Arkansas because expert testimony given during the punitive damage phase of the trial should not have been admitted. The expert’s testimony consisted of read snippets of documents or paraphrased content with no assistance to the jury in evaluating the importance of the documents or the contents. (Scroggins v. Wyeth, WD Ardk, CCH Products Liability Reporter ¶18,047)

Injured Worker Awarded Increased Damages
A 27-year-old worker who sustained wrist and knee injuries while operating a defective compact personnel lifting machine was granted additur of damages for past and future suffering that increased his award of $100,000 and $400,000 to $500,000 and $750,000 respectively. In affirming the additur, the New York Supreme Court, Appellate Division found that the jury’s determination that the machine was defective was amply supported by expert testimony and a former employee of the machine’s manufacturer. The award was in keeping with the evidence of the worker’s injuries and with prior decisions involving comparable injuries. (Adams v. Gnie Industries, Inc., N.Y. App. Div., CCH Products Liability Reporter ¶18,045 (ip access users)

Question of Used Machine Seller’s Liability Certified
he question of whether strict liability applied to sellers of used goods was certified to the New York Court of Appeals by the U.S. Court of Appeals for the Second Circuit in an action brought by a worker whose hand was injured when it became caught in a used folding/gluing machine. The company that sold the machine argued that it was not strictly liable because it was a “casual” or “occasional” seller and it had sold the machine “as is, where is” and without warranties. Noting that the question of whether strict liability applied to sellers of used goods was an open question in New York, the federal court certified that question to New York’s high court for resolution. (Jaramillo v. Weyerhaeuser Co., 2nd Circuit, CCH Products Liability Reporter ¶18,048 (ip access users))

Consumer Product Safety

President Signs CPSC Reform Bill
By Paula Cruickshank, White House Correspondent, CCH News Bureau
President Bush on August 14 signed the Consumer Product Safety Improvement Act of 2008 (HR 4040), which reauthorizes the Consumer Product Safety Commission (CPSC) for Fiscal Years 2010 to 2014. The new consumer protection law grants new resources and authority to the CPSC, requires mandatory testing on children’s products, bans lead in children’s toys and provides the public with faster information when a potential problem emerges. Under the law, CPSC funding levels will increase from $118 million in fiscal year 2010 to $136 million in 2014. As part of the reauthorization, conferees directed $25 million toward establishing a public database that would include any reports of injuries, illness, death or risk related to consumer products. (CCH Consumer Product Safety Guide, Report No. 921, August 25, 2008)

Firms To Pay $350,000 in Children's Outerwear Settlement
Nine firms have agreed to pay $350,000 in civil penalties to provisionally settle allegations that they failed to report to the CPSC, as required by federal law, that their children's hooded sweatshirts, jackets, or sweaters were sold with drawstrings at the hood and neck. The firms are A & R Knitwear, Inc., AJ Blue LLC, Cobmex, Inc., Liberty Apparel Co., Inc., Rebelette International Trading Corporation, Scope Imports, Inc., Sears Holding Management Corporation, Siegfried & Parzifal, Inc., and Vacation Clothing Exchange, Inc. The products which pose strangulation hazards have been recalled. (CCH Consumer Product Safety Guide ¶56,764 (ip access users))

Synthetic Turf Fields Evaluated for Lead Levels
An evaluation of various synthetic athletic fields was released by the Consumer Product Safety Commission concluded that young children were not at risk from exposure to lead in these fields. The staff evaluation found that newer fields had no lead or generally had the lowest lead levels. Small amounts of lead were detected on the surface of some older fields. However, none of the tested fields released amounts of lead that would be harmful to children according to the CPSC. (CPSC News Release, #08-348, July 30, 2008, CCH Consumer Product Safety Guide, Report No. 920, August 11, 2008)

Confidential Treatment of EWR Submission Date Established
Manufacturers' requests for confidential treatment of Early Warning Reporting data on incidents involving a death or an injury, property damage claims or light vehicle production must be submitted by August 27, 2008. The requests should be sent to NHTSA's Chief Counsel. The Transportation Recall Enhancement, Accountability, and Documentation (TREAD) Act required NHTSA to develop rules establishing early warning reporting (EWR) requirements. The EWR regulations required manufacturers of motor vehicles producing 500 or more vehicles annually, all manufacturers of child restraint systems, and manufacturers of tires above a specified volume to report, on a quarterly basis, information on production, incidents involving fatalities and injuries based on claims and notices, claims for property damage, consumer complaints, warranty claims and field reports, and to submit copies of certain field reports. Manufacturers of motor vehicles that produced less than 500 vehicles annually and all other equipment manufacturers, are not required to provide quarterly reports, but must report information on incidents involving death(s) based on claims or notices. The EWR rule did not address whether the information submitted by manufacturers would be released to the public. (CCH Consumer Product Safety Guide ¶56,742 (ip access users))