Friday, December 25, 2009
Merry Christmas and Happy Holidays
Merry Christmas and Happy Holidays from the South Carolina Products Liability Law Blog. I am currently enjoying the holidays with family in Starkville, Mississippi. I hope you have a Merry Christmas, and best of luck in 2010.
Tuesday, December 22, 2009
New Products Liability Decision: Economic Loss Rule
In yesterday's advance sheets, the South Carolina Supreme Court issued its decision in Sapp v. Ford Motor Co. The opinion can be found at page 86 at this link. This case is significant because it clarifies the economic loss rule in the products liability context and overrules a prior decision of the South Carolina Supreme Court.
FACTUAL BACKGROUND: Plaintiff-Appellant ("Sapp") purchased a 2000 Ford F-150 truck for $5,000 in 2004. The truck had 190,000 miles on it and was purchased "as is." In 2005, the cruise control on the truck stopped working, and the vehicle caught fire when Sapp parked it. The fire did not injure Sapp or damage any property other than the vehicle itself. The cost to repair the vehicle was $7,000.
PROCEDURE: Sapp filed suite against Ford alleging causes of action for negligence, strict liability, breach of warranty, and fraud/misrepresentation. He alleged that Ford knew of a design defect in the cruise control switch that would short circuit and cause a fire in the engine compartment. The circuit court granted summary judgment as to all causes of action and found that the economic loss rule precluded the tort claims. Sapp appealed.
ISSUES: Sapp argued on appeal that the circuit court erred in granting summary judgment.
DISPOSITION: The South Carolina Supreme Court agreed with the circuit court and affirmed dismissal. It also overruled its prior decision in Colleton Preparatory Academy, Inc. v. Hoover Universal, Inc., 379 S.C. 181, 666 S.E.2d 247 (2008).
RULES AND OPINION: The key language that summarizes the court's holding is as follows:
The court agreed with federal court decisions that the economic loss rule precludes a negligence action against a manufacturer where duties are created solely by contract and where the product only injured itself or where the damages were contemplated by the parties' contract.
Justice Beatty concurred in the decision but discussed the inconsistent treatment of the doctrine and suggested that the use of varying analytical frameworks does not provide the bench and bar with guidance in its application. He suggested that the Court should should pronounce a list of areas to which public policy prohibits the application of the economic loss doctrine and forego any legal analysis.
This post is subject to the DISCLAIMER & TERMS OF USE of this website.
FACTUAL BACKGROUND: Plaintiff-Appellant ("Sapp") purchased a 2000 Ford F-150 truck for $5,000 in 2004. The truck had 190,000 miles on it and was purchased "as is." In 2005, the cruise control on the truck stopped working, and the vehicle caught fire when Sapp parked it. The fire did not injure Sapp or damage any property other than the vehicle itself. The cost to repair the vehicle was $7,000.
PROCEDURE: Sapp filed suite against Ford alleging causes of action for negligence, strict liability, breach of warranty, and fraud/misrepresentation. He alleged that Ford knew of a design defect in the cruise control switch that would short circuit and cause a fire in the engine compartment. The circuit court granted summary judgment as to all causes of action and found that the economic loss rule precluded the tort claims. Sapp appealed.
ISSUES: Sapp argued on appeal that the circuit court erred in granting summary judgment.
DISPOSITION: The South Carolina Supreme Court agreed with the circuit court and affirmed dismissal. It also overruled its prior decision in Colleton Preparatory Academy, Inc. v. Hoover Universal, Inc., 379 S.C. 181, 666 S.E.2d 247 (2008).
RULES AND OPINION: The key language that summarizes the court's holding is as follows:
The purpose of the economic loss rule is to define the line between recovery in tort and recovery in contract. Contract law seeks to protect the expectancy interests of the parties. Tort law, on the other hand, seeks to protect safety interests and is rooted in the concept of protecting society as a whole from physical harm to person or property. In the context of products liability law, when a defective product only damages itself, the only concrete and measurable damages are the diminution in the value of the product, cost of repair, and consequential damages resulting from the product's failure. Stated differently, the consumer has only suffered an economic loss. The consumer has purchased an inferior product, his expectations have not been met, and he has lost the benefit of the bargain. In this instance, however, the risk of product failure has already been allocated pursuant to the terms of the agreement between the parties. On the other hand, the parties have not bargained for the situation in which a defective product creates an unreasonable risk of harm and causes personal injury or property damage. Accordingly, where a product damages only itself, tort law provides no remedy and the action lies in contract; but when personal injury or other property damage occurs, a tort remedy may be appropriate.
The court reviewed its prior decisions in Kennedy v. Columbia Lumber & Mfg. Co., 299 S.C. 335, 341, 384 S.E.2d 730, 734 (1989) and Colleton Preparatory Academy, Inc. v. Hoover Universal Inc., 379 S.C. 181, 666 S.E.2d 247 (2008). The court reiterated that its holding in Kennedy only applies in the residential home context. (In Kennedy, the court held that a homebuyer could recover in tort against a developer or builder where the builder violates an applicable building code, deviates from industry standards, or constructs a home that he knows or should have known will pose a serious risk of physical home). The court explained that the reason for the exception in Kennedy was related to the the mechanics and context of home purchasing, which make it different from the purchase of other manufactured goods.
Significantly, the court overruled its decision in Colleton Prep to the extent that it expanded the Kennedy's exception beyond the residential builder context. The court also stated that -- like the dissent in Colleton Prep -- it was cautious in permitting negligence actions where there is neither personal injury nor property damage.
Imposing liability merely for the creation of risk when there are no actual damages drastically changes the fundamental elements of a tort action, makes any amount of damages entirely speculative, and holds the manufacturer as an insurer against all possible risk of harm.
The court agreed with federal court decisions that the economic loss rule precludes a negligence action against a manufacturer where duties are created solely by contract and where the product only injured itself or where the damages were contemplated by the parties' contract.
Justice Beatty concurred in the decision but discussed the inconsistent treatment of the doctrine and suggested that the use of varying analytical frameworks does not provide the bench and bar with guidance in its application. He suggested that the Court should should pronounce a list of areas to which public policy prohibits the application of the economic loss doctrine and forego any legal analysis.
This post is subject to the DISCLAIMER & TERMS OF USE of this website.
Friday, December 11, 2009
Products Liability Actions in 2009 and Request for Help
As 2009 closes out, I am going to try and prepare a capsule summary of significant 2009 decisions involving South Carolina products liability law. I ran a preliminary search this morning, and after weeding out the transfer orders and random cases that slipped through the search, I came up with 8 cases that appear to have focused on some aspect of products law, as follows:
Jackson v. Bermuda Sands, Inc., 383 S.C. 11, 677 S.E.2d 612 (Ct. App. 2009)
Duncan v. Ford Motor Co., 385 S.C. 119, 682 S.E.2d 877 (Ct. App. 2009)
Weston v. Kim's Dollar Store, 684 S.E.2d 769 (Ct. App. 2009)
Laffitte v. Bridgestone Corp., 381 S.C. 460, 674 S.E.2d 154 (S.C. 2009)
Solo v. Bausch & Lomb, Inc., 2009 WL 4287706 (Sept. 25, 2009 D.S.C.)
In re Bausch & Lomb, Inc. Contact Lens Solution Prods. Liab. Litig., 2009 WL 2750462 (Apr. 26, 2009 D.S.C.)
State v. Astra Zeneca Pharms. LP, 2009 WL 1227848 (May 5, 2009 D.S.C.)
Riggs v. Dupps Co., 2009 WL 1160934 (Apr. 28, 2009 D.S.C.)
As you can see from the hyperlinks, I have already briefed two of these cases in prior postings, and I dealt with the Jackson case in my series on "essentially the same condition."
If anyone has been involved with a case that has been decided in a published or slip opinion that I have missed above, please let me know in a comment and I will try to include it. I am focusing on the South Carolina Supreme Court, South Carolina Court of Appeals, District of South Carolina, and Fourth Circuit Court of Appeals cases that focus on South Carolina substantive law.
I will try to do some sort of capsule summary for all the cases, either this month or early in the new year, but just want to make sure I capture everything. Let me know if I have missed something.
Jackson v. Bermuda Sands, Inc., 383 S.C. 11, 677 S.E.2d 612 (Ct. App. 2009)
Duncan v. Ford Motor Co., 385 S.C. 119, 682 S.E.2d 877 (Ct. App. 2009)
Weston v. Kim's Dollar Store, 684 S.E.2d 769 (Ct. App. 2009)
Laffitte v. Bridgestone Corp., 381 S.C. 460, 674 S.E.2d 154 (S.C. 2009)
Solo v. Bausch & Lomb, Inc., 2009 WL 4287706 (Sept. 25, 2009 D.S.C.)
In re Bausch & Lomb, Inc. Contact Lens Solution Prods. Liab. Litig., 2009 WL 2750462 (Apr. 26, 2009 D.S.C.)
State v. Astra Zeneca Pharms. LP, 2009 WL 1227848 (May 5, 2009 D.S.C.)
Riggs v. Dupps Co., 2009 WL 1160934 (Apr. 28, 2009 D.S.C.)
As you can see from the hyperlinks, I have already briefed two of these cases in prior postings, and I dealt with the Jackson case in my series on "essentially the same condition."
If anyone has been involved with a case that has been decided in a published or slip opinion that I have missed above, please let me know in a comment and I will try to include it. I am focusing on the South Carolina Supreme Court, South Carolina Court of Appeals, District of South Carolina, and Fourth Circuit Court of Appeals cases that focus on South Carolina substantive law.
I will try to do some sort of capsule summary for all the cases, either this month or early in the new year, but just want to make sure I capture everything. Let me know if I have missed something.
Tuesday, November 17, 2009
SC Lawyer Article: "Essentially the Same Condition"
My article entitled "Products Liability Claims in South Carolina: What Exactly Does Essentially the Same Condition Mean?" has been published in the November edition of South Carolina Lawyer. You can find a copy of it here.
As you may recall, I did a series over the summer relating to this element of a South Carolina products liability claim (see parts I through V at this link). This article puts all of those posts together and provides more information. Check it out!
As you may recall, I did a series over the summer relating to this element of a South Carolina products liability claim (see parts I through V at this link). This article puts all of those posts together and provides more information. Check it out!
Monday, November 16, 2009
Case Brief: Taylor v. Nix
By Brian A. Comer
This case brief is of Taylor v. Nix, 307 S.C. 551, 416 S.E.2d 619 (1992). From a product liability standpoint, it is most significant for what it says about the admissibility of recall evidence, which it holds may be admissible to show that a defective condition existed at the time alleged by a plaintiff.
FACTUAL BACKGROUND: Plaintiffs Kathy and Glenn Taylor leased a Porsche from the defendants. 307 S.C. 553, 416 S.E.2d 620. They discovered multiple defects shortly after taking possession. Id. Ms. Taylor alleged headaches from fumes, that her child got a blister from touching the hot middle console in the front seat, and that her legs were reddened when she drove from their proximity to the console. Id. at 554, 416 S.E.2d at 620. They took the car to the dealer multiple times, and the dealer never did anything about the problems. Id. at 554-55, 316 S.E.2d at 620-21. Dealer representatives also treated them poorly (ignored their service requests, made off-color comments, and were generally not helpful). Id., 416 S.E.2d at 621.
PROCEDURE: Plaintiffs sued the lessor and manufacturer for breach of warranty, strict liability and violation of the Regulation of Manufacturers, Distributors and Dealers Act (the "Act"). 307 S.C. at 553, 416 S.E.2d at 620. A jury found that the defendants maliciously violated the Act and returned a verdict of $16,100 in actual damages and three times the actual damages (the maximum under the Act). Id. at 555, 416 S.E.2d at 621.
ISSUES: Defendants appealed multiple issues relating to the Act, the award of attorneys' fees, and admissibility of certain pieces of evidence. 307 S.C. at 553, 416 S.E.2d at 620.
DISPOSITION: The South Carolina Supreme Court affirmed the trial court decision. 307 S.C. at 558, 416 S.E.2d at 623.
RULES AND OPINION: The Act adequately provides notice of what conduct is prohibited under it, and it is not unconstitutionally vague. 307 S.C. at 555, 416 S.E.2d at 621. Though the trial court's charge as to the definition of "arbitrary" under the Act was erroneous, it was not prejudicial and the defendants were not harmed because of it. Id. at 555-56, 416 S.E.2d at 621. With regard to damages under the Act, the trial court charged that the jury should assess actual damages under the breach of warrranty and strict liability claims and then determine only if the defendants' conduct violated the statute. Id. at 556, 416 S.E.2d at 622. This was erroneous. Id. The jury should have been charged to determine what damage arose from the defendants' conduct which constituted a violation of the Act. Id. Even so, the defendants were not prejudiced because any actual damages suffered by the Plaintiffs resulted from the defendants' acts, which violated the Act. Id. There was also sufficient evidence to find "malice" by the defendants under the Act so as to justify treble damages. Id. at 556-57, 416 S.E.2d at 622.
Defendants also challenged the awarding of attorneys' fees by saying that the portion related to the non-statutory actions (breach of warranty and strict liability) should have been excluded from consideration. 307 S.C. at 557, 416 S.E.2d at 622. Though the appellate court agreed, the defendants' presentation to the lower court of what would have constituted reasonable fees was not adequate. Id. The party asserting the right to attorneys fees has to provide an itemized affidavit of their fees which they believe are related to the statutory claim. Id. The party opposing the fees has the burden of showing which of the fees are clearly unrelated. Id.
With regard to evidentiary issues, Ms. Taylor's notes itemizing malfunctions of the car were prepared prior to taking it for service, making them admissible as a witness's past recollection. 3-7 S.C. 557, 416 S.E.2d at 622. The court held that subsequent remedial measures, though inadmissible to show negligence, may be admissible for other purposes, such as showing that the defective condition existed at the time alleged. Id. at 558, 416 S.E.2d at 623. Therefore, the subsequent recall of the car due to overheating of the catalytic converter was admissible for this purpose. Id.
This post is subject to the DISCLAIMER & TERMS OF USE of this website.
This case brief is of Taylor v. Nix, 307 S.C. 551, 416 S.E.2d 619 (1992). From a product liability standpoint, it is most significant for what it says about the admissibility of recall evidence, which it holds may be admissible to show that a defective condition existed at the time alleged by a plaintiff.
FACTUAL BACKGROUND: Plaintiffs Kathy and Glenn Taylor leased a Porsche from the defendants. 307 S.C. 553, 416 S.E.2d 620. They discovered multiple defects shortly after taking possession. Id. Ms. Taylor alleged headaches from fumes, that her child got a blister from touching the hot middle console in the front seat, and that her legs were reddened when she drove from their proximity to the console. Id. at 554, 416 S.E.2d at 620. They took the car to the dealer multiple times, and the dealer never did anything about the problems. Id. at 554-55, 316 S.E.2d at 620-21. Dealer representatives also treated them poorly (ignored their service requests, made off-color comments, and were generally not helpful). Id., 416 S.E.2d at 621.
PROCEDURE: Plaintiffs sued the lessor and manufacturer for breach of warranty, strict liability and violation of the Regulation of Manufacturers, Distributors and Dealers Act (the "Act"). 307 S.C. at 553, 416 S.E.2d at 620. A jury found that the defendants maliciously violated the Act and returned a verdict of $16,100 in actual damages and three times the actual damages (the maximum under the Act). Id. at 555, 416 S.E.2d at 621.
ISSUES: Defendants appealed multiple issues relating to the Act, the award of attorneys' fees, and admissibility of certain pieces of evidence. 307 S.C. at 553, 416 S.E.2d at 620.
DISPOSITION: The South Carolina Supreme Court affirmed the trial court decision. 307 S.C. at 558, 416 S.E.2d at 623.
RULES AND OPINION: The Act adequately provides notice of what conduct is prohibited under it, and it is not unconstitutionally vague. 307 S.C. at 555, 416 S.E.2d at 621. Though the trial court's charge as to the definition of "arbitrary" under the Act was erroneous, it was not prejudicial and the defendants were not harmed because of it. Id. at 555-56, 416 S.E.2d at 621. With regard to damages under the Act, the trial court charged that the jury should assess actual damages under the breach of warrranty and strict liability claims and then determine only if the defendants' conduct violated the statute. Id. at 556, 416 S.E.2d at 622. This was erroneous. Id. The jury should have been charged to determine what damage arose from the defendants' conduct which constituted a violation of the Act. Id. Even so, the defendants were not prejudiced because any actual damages suffered by the Plaintiffs resulted from the defendants' acts, which violated the Act. Id. There was also sufficient evidence to find "malice" by the defendants under the Act so as to justify treble damages. Id. at 556-57, 416 S.E.2d at 622.
Defendants also challenged the awarding of attorneys' fees by saying that the portion related to the non-statutory actions (breach of warranty and strict liability) should have been excluded from consideration. 307 S.C. at 557, 416 S.E.2d at 622. Though the appellate court agreed, the defendants' presentation to the lower court of what would have constituted reasonable fees was not adequate. Id. The party asserting the right to attorneys fees has to provide an itemized affidavit of their fees which they believe are related to the statutory claim. Id. The party opposing the fees has the burden of showing which of the fees are clearly unrelated. Id.
With regard to evidentiary issues, Ms. Taylor's notes itemizing malfunctions of the car were prepared prior to taking it for service, making them admissible as a witness's past recollection. 3-7 S.C. 557, 416 S.E.2d at 622. The court held that subsequent remedial measures, though inadmissible to show negligence, may be admissible for other purposes, such as showing that the defective condition existed at the time alleged. Id. at 558, 416 S.E.2d at 623. Therefore, the subsequent recall of the car due to overheating of the catalytic converter was admissible for this purpose. Id.
This post is subject to the DISCLAIMER & TERMS OF USE of this website.
Monday, October 26, 2009
More on Eli Lilly Pharmaceutical Settlement
The State Newspaper included more details about the settlement between South Carolina and drug manufacturer Eli Lilly with regard to allegations of off-label marketing for the drug Zyprexa. The settlement was $45 million, which was the largest dollar amount any state has won from Eli Lilly, per the article cut and pasted below.
S.C., Lilly reach $45 million settlement
Drug company's payout sets record for state
By GINA SMITH - gnsmith@thestate.com
South Carolina reached a record $45 million settlement Friday with drug maker Eli Lilly over the marketing of an anti-psychotic drug, Zyprexa.
State lawmakers will have the final say on how 84 percent - or nearly $38 million of the money - is spent. The rest goes to the attorneys who represented the state and to the state attorney general's office.
The settlement is the second largest in state's history, behind only the 1998 multibillion-dollar Tobacco Master Settlement Agreement, according to the attorney's general's office.
It's also the largest dollar amount any state has won from Eli Lilly. Connecticut is second with its $30 million settlement.
"This is a victory for South Carolina's taxpayers who were forced to bear the financial costs of Eli Lilly's unlawful conduct," Attorney General Henry McMaster said Friday.
Eli Lilly spokeswoman Marni Lemons said Friday it's time to move on.
"We think that putting the issue behind us is not only in the best of interest of Eli Lilly, but also the patients and physicians who count on Zyprexa as a life-saving drug every day," Lemons said.
South Carolina and 44 other states have brought some action against the Indianapolis-based drug maker, claiming it falsely marketed Zyprexa, a drug approved for the treatment of schizophrenia and bipolar disorder only.
In the lawsuit, South Carolina sought to recover the millions of dollars Medicaid and the state health plan paid for the drug and to treat side effects caused by off-label use of the drug. The suit alleges nearly 64,000 S.C. patients were affected from 1996 to 2007.
South Carolina and other states successfully argued Eli Lilly:
- Did not properly warn of the drug's side effects, including heart problems, diabetes, hyperglycemia and an increased risk of death in patients with dementia
- Pushed doctors to prescribe the drug to treat other illnesses, including depression, attention deficit disorder and dementia
While 84 percent of South Carolina's settlement could go to reimburse the state's Medicaid and state health plan, state lawmakers have the final say.
POLITICAL COMPLICATIONS?
Under a unique retention agreement McMaster's office drafted in 2004, 15 percent, or nearly $7 million, will go to three attorneys hired by McMaster's office to represent South Carolina in the case. The attorneys' fees are the smallest in the nation, McMaster's office said.
And 1 percent, or about $647,000, will go to the attorney general's office.
Under the agreement, outside attorneys hired to do work for McMaster's office are paid between 4 percent and 23 percent of a judgment/settlement. The larger the award/settlement, the less the attorneys receive.
Then, attorneys must give 10 percent of their pay back to the attorney general's office.
"Ours is considered a model ... agreement," McMaster said, noting bills have been introduced in both the state Senate and House to require future S.C. attorneys general and solicitors to adopt the same agreement.
"We did copious research to come up with the best agreement based on what other states do," McMaster said. "It keeps complete control of the litigation with the (attorney general), who can relieve his (appointed attorneys) for any reason or no reason at all. It protects the interest of the state."
But the arrangement smells fishy to Darren McKinney of the American Tort Reform Association, a Washington D.C.-based nonprofit.
McMaster, who is running for governor, accepted campaign contributions from two of the attorneys he hired to help work on the Zyprexa case.
After being criticized by rival campaigns, McMaster returned the donations.
"If you're signing on with your buddies who agree to give you 10 percent off the top plus campaign contributions, that stinks on its face," McKinney said. "That's not in the public interest."
McMaster's office has said the appointment of the attorneys was based on their expertise with other drug cases - not friendships or promises of campaign contributions.
SEPARATION OF POWER?
Under the agreement, the attorney general's office will receive about $647,000 of the settlement.
Eli Lilly's attorneys unsuccessfully argued in court papers that only the General Assembly and the state Budget and Control Board can allocate state funds.
Attorney Dick Harpootlian, a key adviser to a rival gubernatorial candidate, said McMaster's agreement is not illegal, but is problematic.
"You want your prosecutors, your attorney general making decisions on what's best for the state of South Carolina, not what's best for their budget," Harpootlian said. "There's, in appearance, a constitutional problem with this. It almost puts a bounty on these cases. It puts him at a conflict of interest."
But McMaster's office points to various state laws that allow the office to keep the funds. McMaster said he would put the money into his general fund to be used to "prosecute more bad guys."
Reach Smith at (803) 771-8658.
This post is subject to the DISCLAIMER & TERMS OF USE of this website.
S.C., Lilly reach $45 million settlement
Drug company's payout sets record for state
By GINA SMITH - gnsmith@thestate.com
South Carolina reached a record $45 million settlement Friday with drug maker Eli Lilly over the marketing of an anti-psychotic drug, Zyprexa.
State lawmakers will have the final say on how 84 percent - or nearly $38 million of the money - is spent. The rest goes to the attorneys who represented the state and to the state attorney general's office.
The settlement is the second largest in state's history, behind only the 1998 multibillion-dollar Tobacco Master Settlement Agreement, according to the attorney's general's office.
It's also the largest dollar amount any state has won from Eli Lilly. Connecticut is second with its $30 million settlement.
"This is a victory for South Carolina's taxpayers who were forced to bear the financial costs of Eli Lilly's unlawful conduct," Attorney General Henry McMaster said Friday.
Eli Lilly spokeswoman Marni Lemons said Friday it's time to move on.
"We think that putting the issue behind us is not only in the best of interest of Eli Lilly, but also the patients and physicians who count on Zyprexa as a life-saving drug every day," Lemons said.
South Carolina and 44 other states have brought some action against the Indianapolis-based drug maker, claiming it falsely marketed Zyprexa, a drug approved for the treatment of schizophrenia and bipolar disorder only.
In the lawsuit, South Carolina sought to recover the millions of dollars Medicaid and the state health plan paid for the drug and to treat side effects caused by off-label use of the drug. The suit alleges nearly 64,000 S.C. patients were affected from 1996 to 2007.
South Carolina and other states successfully argued Eli Lilly:
- Did not properly warn of the drug's side effects, including heart problems, diabetes, hyperglycemia and an increased risk of death in patients with dementia
- Pushed doctors to prescribe the drug to treat other illnesses, including depression, attention deficit disorder and dementia
While 84 percent of South Carolina's settlement could go to reimburse the state's Medicaid and state health plan, state lawmakers have the final say.
POLITICAL COMPLICATIONS?
Under a unique retention agreement McMaster's office drafted in 2004, 15 percent, or nearly $7 million, will go to three attorneys hired by McMaster's office to represent South Carolina in the case. The attorneys' fees are the smallest in the nation, McMaster's office said.
And 1 percent, or about $647,000, will go to the attorney general's office.
Under the agreement, outside attorneys hired to do work for McMaster's office are paid between 4 percent and 23 percent of a judgment/settlement. The larger the award/settlement, the less the attorneys receive.
Then, attorneys must give 10 percent of their pay back to the attorney general's office.
"Ours is considered a model ... agreement," McMaster said, noting bills have been introduced in both the state Senate and House to require future S.C. attorneys general and solicitors to adopt the same agreement.
"We did copious research to come up with the best agreement based on what other states do," McMaster said. "It keeps complete control of the litigation with the (attorney general), who can relieve his (appointed attorneys) for any reason or no reason at all. It protects the interest of the state."
But the arrangement smells fishy to Darren McKinney of the American Tort Reform Association, a Washington D.C.-based nonprofit.
McMaster, who is running for governor, accepted campaign contributions from two of the attorneys he hired to help work on the Zyprexa case.
After being criticized by rival campaigns, McMaster returned the donations.
"If you're signing on with your buddies who agree to give you 10 percent off the top plus campaign contributions, that stinks on its face," McKinney said. "That's not in the public interest."
McMaster's office has said the appointment of the attorneys was based on their expertise with other drug cases - not friendships or promises of campaign contributions.
SEPARATION OF POWER?
Under the agreement, the attorney general's office will receive about $647,000 of the settlement.
Eli Lilly's attorneys unsuccessfully argued in court papers that only the General Assembly and the state Budget and Control Board can allocate state funds.
Attorney Dick Harpootlian, a key adviser to a rival gubernatorial candidate, said McMaster's agreement is not illegal, but is problematic.
"You want your prosecutors, your attorney general making decisions on what's best for the state of South Carolina, not what's best for their budget," Harpootlian said. "There's, in appearance, a constitutional problem with this. It almost puts a bounty on these cases. It puts him at a conflict of interest."
But McMaster's office points to various state laws that allow the office to keep the funds. McMaster said he would put the money into his general fund to be used to "prosecute more bad guys."
Reach Smith at (803) 771-8658.
This post is subject to the DISCLAIMER & TERMS OF USE of this website.
Monday, October 12, 2009
Case Brief: Duncan v. Ford Motor Company
By Brian A. Comer
At long last, here is the case brief for Ford v. Duncan. Sorry for the delay (and length...there is a lot to this case). I will circle back around and drop in citations once the case is published. In the meantime, you can find it here.
FACTUAL BACKGROUND: A fire, originating under the hood of Plaintiffs' 2000 Ford Expedition, destroyed Plaintiffs' home on March 1, 2005. Evidence was presented at trial that Ford had recalled two lines of vehicles because of under-hood fires (one in 1999, and one in 2005). Ford attributed the under-hood fires to a certain failure of the speed control deactivation switch (the "switch"), which was manufactured by Texas Instruments ("TI") and installed by Ford. One month after the 1999 recall, a group of scientists employed by Ford produced an internal document that analyzed causes of the fires and proposed solutions. Ford acknowledged in the report that it did not completely understand the cause of the fires, but the report identified a failure in the switch as a potential cause. Ford did not implement any of the report's proposed solutions and did not address the switch failure during the 1999 recall.
At trial, Ford's expert, Mark Hoffman, testified that Ford did not incorporate the proposed solutions because it determined the switch failure and subsequent fires were caused by manufacturing problems at TI. Mr. Hoffman testified that Ford ensured that TI resolved its manufacturing issues, and it replaced any switches that deviated from its specifications. Plaintiffs' expert Jeff Morrill testified that (1) the switch in Plaintiffs' vehicle was the same type of switch that was in the line of vehicles recalled in 1999, (2) the fire was caused by the same failure in the switch as the one that caused the failure in the 1999 recall, and (3) Ford knew of the switch failure before manufacturing Plaintiffs' vehicle, as evidenced by the 1999 recall and the internal report. Plaintiffs' then called their engineering expert Kendrick Richardson, who testified that Ford breached the engineering standard of care. Plaintiffs also offered a report by economist Oliver Wood relating to Ford's net worth and ability to pay a punitive damages award.
PROCEDURE: Plaintiffs brought suit against Defendant Ford. The jury returned a verdict in Plaintiffs' favor, awarding them $620,759.79 in actual damages, reduced to $589,721.80 in proportion to Plaintiffs' comparative fault, and $3 million in punitive damages. Ford appealed the verdict.
ISSUES: Ford's arguments on appeal related to the trial court's admission of certain evidence and the jury's award of punitive damages.
RULES AND OPINION: With regard to Ford's evidentiary arguments, the South Carolina Court of Appeals found as follows:
(1) Plaintiffs' expert Jeff Morrill testified within his area of expertise (i.e., the cause and origin of the fire), and he never offered any design opinions. Morrill's testimony about the switch failure was not that it was defectively designed, but that it was the cause of the fire. Furthermore, he relied on the internal report to provide this opinion, and therefore he could testify about it (despite not having firsthand knowledge of the report, and despite not having worked at Ford).
(2) The trial court did not abuse its discretion by allowing Plaintiffs' expert Kendrick Richardson to respond to the hypothetical question of whether Ford breached its engineering standard of care, based on Morrill's conclusions. As stated before, Morrill was qualified to offer his testimony. Plaintiffs' posing of this question to Richardson at trial was not misleading--even though it omitted the manufacturing problems at TI--because it was based on Morrill's testimony and the internal report, neither of which referred to manufacturing issues at TI.
(3) The trial court did not err in preventing Ford from asking Morrill and Richardson who manufactured the switch and why Ford decided to recall the line of vehicles in 1999. "A manufacturer who incorporates into his product a component made by another has a responsibility to test and inspect such components, and his negligent failure to properly perform such duty renders him liable for injuries proximately caused as a consequence." (citing Nelson v. Coleman Co., 249 S.C. 652, 657, 155 S.E.2d 917, 920 (1967)). Because Ford incorporated the switch manufactured by TI, it was legally responsible for it in the event that it failed and caused damage. For this reason, the fact that TI made the switch was irrelevant. In addition, Ford produced no evidence that its 1999 recall was prompted by manufacturing problems at TI. Even if the trial court committed error in precluding this line of questioning, Ford was not prejudiced.
(4) The trial court did not abuse its discretion by allowing the 1999 recall into evidence. The evidence indicated that the under-hood fires that prompted the 1999 recall of the other line of Ford vehicles were substantially similar to the under-hood fires in the Plaintiffs' Expedition. (Citing Whaley v. CSX Transp., Inc. 362 S.C. 356, 483, 609 S.E.2d 286, 300 (2005) (noting other incidents must be substantially similar to be relevant and admissible in a products liability action)).
(5) The court did not find error with regard to submission of Plaintiff Anna Duncan's claim for emotional distress to the jury in the absence of expert testimony. The jury verdict of $620,759.79 was less than the evidence of actual damages presented at trial (exclusive of the claim for emotional distress), and therefore the verdict should not be disturbed on appeal. (Citing Burns v. Universal Health Servs., Inc., 361 S.C. 221, 232, 603 S.E.2d 605, 611 (Ct. App. 2004)).
(6) The trial court did not abuse its discretion by excluding Jack Threadgill's appraisal of Plaintiffs' home from evidence. Ford sought to introduce the document to show the value Threadgill assigned to Plaintiff's home, and the business records exception does not allow subjective opinions within documents to be introduced into evidence. (Citing S.C. R. Evid. 803(6)). Threadgill's appraisal was a subjective opinion.
With regard to Ford's punitive damages arguments, the South Carolina Court of Appeals found as follows:
(1) The court upheld that clear and convincing evidence concerning Ford's conduct supported the jury's award of punitive damages. As stated by the court:
(2) The court did not believe that the evidence or the arguments in the case required that the trial court charge the jury "not to consider conduct occurring outside of South Carolina or harm to non-parties when decideing whether to award punitive damages." The Due Process Clause requires this charge only when there is a risk that a jury may award punitives for conduct occurring outside the state for harm to non-parties. The recalls introduced into evidence by the plaintiffs were introduced for notice and to show that a prior recall was due to the same type of failure. Plaintiffs introduced evidence to show the reprehensible nature of Ford's conduct, and not to show the number of vehicles recalled or the number of under-hood fires.
(3) The court disagreed that Oliver Wood's expert testimony about Ford's general wealth and ability to pay a punitive damages award was inadmissible. The court cited to prior authority in which testimony beyond a defendant's mere net worth was allowed to establish the defendant's ability to pay a punitive damages award. The court also stated that Dr. Wood's testimony allowed the jury to follow the court's instructions and "punish the defendant but not effect bankruptcy."
(4) The court reviewed the procedural and substantive constitutional limitations on the award of punitive damages as set forth in BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 562 (1996). With regard to reprehensibility of conduct, the court noted that the damage was economic (destruction of the house), as opposed to physical, which weighed in Ford's favor. However, in spite of this, the court found that Ford's conduct was reprehensible because:
At long last, here is the case brief for Ford v. Duncan. Sorry for the delay (and length...there is a lot to this case). I will circle back around and drop in citations once the case is published. In the meantime, you can find it here.
FACTUAL BACKGROUND: A fire, originating under the hood of Plaintiffs' 2000 Ford Expedition, destroyed Plaintiffs' home on March 1, 2005. Evidence was presented at trial that Ford had recalled two lines of vehicles because of under-hood fires (one in 1999, and one in 2005). Ford attributed the under-hood fires to a certain failure of the speed control deactivation switch (the "switch"), which was manufactured by Texas Instruments ("TI") and installed by Ford. One month after the 1999 recall, a group of scientists employed by Ford produced an internal document that analyzed causes of the fires and proposed solutions. Ford acknowledged in the report that it did not completely understand the cause of the fires, but the report identified a failure in the switch as a potential cause. Ford did not implement any of the report's proposed solutions and did not address the switch failure during the 1999 recall.
At trial, Ford's expert, Mark Hoffman, testified that Ford did not incorporate the proposed solutions because it determined the switch failure and subsequent fires were caused by manufacturing problems at TI. Mr. Hoffman testified that Ford ensured that TI resolved its manufacturing issues, and it replaced any switches that deviated from its specifications. Plaintiffs' expert Jeff Morrill testified that (1) the switch in Plaintiffs' vehicle was the same type of switch that was in the line of vehicles recalled in 1999, (2) the fire was caused by the same failure in the switch as the one that caused the failure in the 1999 recall, and (3) Ford knew of the switch failure before manufacturing Plaintiffs' vehicle, as evidenced by the 1999 recall and the internal report. Plaintiffs' then called their engineering expert Kendrick Richardson, who testified that Ford breached the engineering standard of care. Plaintiffs also offered a report by economist Oliver Wood relating to Ford's net worth and ability to pay a punitive damages award.
PROCEDURE: Plaintiffs brought suit against Defendant Ford. The jury returned a verdict in Plaintiffs' favor, awarding them $620,759.79 in actual damages, reduced to $589,721.80 in proportion to Plaintiffs' comparative fault, and $3 million in punitive damages. Ford appealed the verdict.
ISSUES: Ford's arguments on appeal related to the trial court's admission of certain evidence and the jury's award of punitive damages.
- With regard to the admission of evidence, Ford argued that the trial court (1) erred by allowing Plaintiffs' expert Jeff Morrill to present design opinions; (2) erred by allowing Plaintiffs to ask Plaintiffs' expert Kendrick Richardson whether Ford breached its engineering standard of care based on Mr. Morrill's conclusions; (3) erred by preventing Ford from asking Plaintiffs' experts, Morrill and Richards, who manufactured the switch and why Ford decided to recall the line of vehicles in 1999; (4) erred by admitting the 19999 recall of the line of vehicles into evidence; (5) erred by submitting Plaintiff Anna Duncan's claim for emotional distress to the jury in the absence of expert testimon; and (6) abused its discretion by not admitting Jack Threadgill's appraisal of the Plaintiffs home into evidence because it qualified as a business record.
- Ford contended that the jury's award of punitive damages should be reversed because (1) Ford's conduct did not rise to the level of reckless, willful, or wanton conduct, and (2) the trial court should have instructed the jury not to consider conduct occurring outside of South Carolina or harm to non-parties when deciding whether to award punitive damages, (3) the trial court should not have allowed economist Oliver Wood to testify because his testimony invited the jury to return an award of punitive damages against it based solely on its financial well-being, and (4) Ford's conduct satisfied the guideposts set forth in BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996).
RULES AND OPINION: With regard to Ford's evidentiary arguments, the South Carolina Court of Appeals found as follows:
(1) Plaintiffs' expert Jeff Morrill testified within his area of expertise (i.e., the cause and origin of the fire), and he never offered any design opinions. Morrill's testimony about the switch failure was not that it was defectively designed, but that it was the cause of the fire. Furthermore, he relied on the internal report to provide this opinion, and therefore he could testify about it (despite not having firsthand knowledge of the report, and despite not having worked at Ford).
(2) The trial court did not abuse its discretion by allowing Plaintiffs' expert Kendrick Richardson to respond to the hypothetical question of whether Ford breached its engineering standard of care, based on Morrill's conclusions. As stated before, Morrill was qualified to offer his testimony. Plaintiffs' posing of this question to Richardson at trial was not misleading--even though it omitted the manufacturing problems at TI--because it was based on Morrill's testimony and the internal report, neither of which referred to manufacturing issues at TI.
(3) The trial court did not err in preventing Ford from asking Morrill and Richardson who manufactured the switch and why Ford decided to recall the line of vehicles in 1999. "A manufacturer who incorporates into his product a component made by another has a responsibility to test and inspect such components, and his negligent failure to properly perform such duty renders him liable for injuries proximately caused as a consequence." (citing Nelson v. Coleman Co., 249 S.C. 652, 657, 155 S.E.2d 917, 920 (1967)). Because Ford incorporated the switch manufactured by TI, it was legally responsible for it in the event that it failed and caused damage. For this reason, the fact that TI made the switch was irrelevant. In addition, Ford produced no evidence that its 1999 recall was prompted by manufacturing problems at TI. Even if the trial court committed error in precluding this line of questioning, Ford was not prejudiced.
(4) The trial court did not abuse its discretion by allowing the 1999 recall into evidence. The evidence indicated that the under-hood fires that prompted the 1999 recall of the other line of Ford vehicles were substantially similar to the under-hood fires in the Plaintiffs' Expedition. (Citing Whaley v. CSX Transp., Inc. 362 S.C. 356, 483, 609 S.E.2d 286, 300 (2005) (noting other incidents must be substantially similar to be relevant and admissible in a products liability action)).
(5) The court did not find error with regard to submission of Plaintiff Anna Duncan's claim for emotional distress to the jury in the absence of expert testimony. The jury verdict of $620,759.79 was less than the evidence of actual damages presented at trial (exclusive of the claim for emotional distress), and therefore the verdict should not be disturbed on appeal. (Citing Burns v. Universal Health Servs., Inc., 361 S.C. 221, 232, 603 S.E.2d 605, 611 (Ct. App. 2004)).
(6) The trial court did not abuse its discretion by excluding Jack Threadgill's appraisal of Plaintiffs' home from evidence. Ford sought to introduce the document to show the value Threadgill assigned to Plaintiff's home, and the business records exception does not allow subjective opinions within documents to be introduced into evidence. (Citing S.C. R. Evid. 803(6)). Threadgill's appraisal was a subjective opinion.
With regard to Ford's punitive damages arguments, the South Carolina Court of Appeals found as follows:
(1) The court upheld that clear and convincing evidence concerning Ford's conduct supported the jury's award of punitive damages. As stated by the court:
Under South Carolina law, punitive damages may be awarded to punish torfeasors who have acted in a "reckless, willful, or wanton" manner. The plaintiff must prove punitive damages by clear and convincing evidence. Clear and convincing evidence is: "that degree of proof which will produce in the mind of the trier of facts a firm belief as to the allegations sought to be established." The clear and convincing standard is the highest burden of proof known to civil law.(Citations omitted). Based on this standard, the court found that Ford knew that the switch it installed could fail and that the failures were causing fires before its manufacture of Plaintiffs' vehicle. Ford's knowledge and failure to make any changes to the switch rose to the level of reckless, willful, and wanton conduct.
(2) The court did not believe that the evidence or the arguments in the case required that the trial court charge the jury "not to consider conduct occurring outside of South Carolina or harm to non-parties when decideing whether to award punitive damages." The Due Process Clause requires this charge only when there is a risk that a jury may award punitives for conduct occurring outside the state for harm to non-parties. The recalls introduced into evidence by the plaintiffs were introduced for notice and to show that a prior recall was due to the same type of failure. Plaintiffs introduced evidence to show the reprehensible nature of Ford's conduct, and not to show the number of vehicles recalled or the number of under-hood fires.
(3) The court disagreed that Oliver Wood's expert testimony about Ford's general wealth and ability to pay a punitive damages award was inadmissible. The court cited to prior authority in which testimony beyond a defendant's mere net worth was allowed to establish the defendant's ability to pay a punitive damages award. The court also stated that Dr. Wood's testimony allowed the jury to follow the court's instructions and "punish the defendant but not effect bankruptcy."
(4) The court reviewed the procedural and substantive constitutional limitations on the award of punitive damages as set forth in BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 562 (1996). With regard to reprehensibility of conduct, the court noted that the damage was economic (destruction of the house), as opposed to physical, which weighed in Ford's favor. However, in spite of this, the court found that Ford's conduct was reprehensible because:
In short, Ford installed a switch into the [Plaintiffs'] Expedition that it knew could cause fires. This conduct clearly amounts to a reckless disregard for the health and safety of others. . . . While Ford's conduct did not rise to the level of intentional malice, trickery, or deceit, Ford's act of installing a switch in the [Plaintiffs'] Expedition that it knew could cause fires amounts to affirmative misconduct.
The court also found the award to be reasonable (with regard to Gore's second factor). The economic harm, combined with the threat of serious physical injury, made the punitive damages award that was 5.087 times the actual damages reasonable. Finally, in examining Gore's third factor regarding comparable civil fines, the court found that the jury's award of three million dollars in punitive damages was not unconstitutionally excessive.
This post is subject to the DISCLAIMER & TERMS OF USE of this website.
Thursday, October 8, 2009
Settlement in Pharmaceutical Case
The action brought by Attorney General Henry McMaster against drug manufacturer Eli Lilly has reportedly settled. The below appeared in today's issue of The State newspaper. This lawsuit related to alleged off-label promotion of the drug Zyprexa.
Settlement reportedly reached in Lilly case
Drug maker Eli Lilly & Co. has agreed to settle a lawsuit brought by state Attorney General Henry McMaster on behalf of South Carolina.
Sources close to the case say a settlement has been reached but the details, including how much money South Carolina will receive, are not yet available.
South Carolina sued Eli Lilly in 2007, alleging the company marketed its anti-psychotic medication, Zyprexa, for off-label purposes and failed to disclose side effects including weight gain.
The drug is only approved to treat schizophrenia and bipolar disorder.
South Carolina had hoped to recoup $200 million in its lawsuit that it said was wrongfully spent on Zyprexa prescriptions and millions of dollars more in fines.
The company has already agreed to pay more than $360 million to more than 30 states following a U.S. Justice Department investigation into its marketing practices.
The lawsuit has also brought some controversy to S.C. Attorney General Henry McMaster who is also seeking the Republican nomination in next year's gubernatorial race. McMaster accepted campaign donations from the two private attorneys he hired to represent South Carolina in the Lilly case.
McMaster has since returned nearly $33,000 in donations he has received during his time in office from attorneys he has hired to work on cases for the state.
- Gina Smith
This post is subject to the DISCLAIMER & TERMS OF USE of this website.
Settlement reportedly reached in Lilly case
Drug maker Eli Lilly & Co. has agreed to settle a lawsuit brought by state Attorney General Henry McMaster on behalf of South Carolina.
Sources close to the case say a settlement has been reached but the details, including how much money South Carolina will receive, are not yet available.
South Carolina sued Eli Lilly in 2007, alleging the company marketed its anti-psychotic medication, Zyprexa, for off-label purposes and failed to disclose side effects including weight gain.
The drug is only approved to treat schizophrenia and bipolar disorder.
South Carolina had hoped to recoup $200 million in its lawsuit that it said was wrongfully spent on Zyprexa prescriptions and millions of dollars more in fines.
The company has already agreed to pay more than $360 million to more than 30 states following a U.S. Justice Department investigation into its marketing practices.
The lawsuit has also brought some controversy to S.C. Attorney General Henry McMaster who is also seeking the Republican nomination in next year's gubernatorial race. McMaster accepted campaign donations from the two private attorneys he hired to represent South Carolina in the Lilly case.
McMaster has since returned nearly $33,000 in donations he has received during his time in office from attorneys he has hired to work on cases for the state.
- Gina Smith
This post is subject to the DISCLAIMER & TERMS OF USE of this website.
Wednesday, September 30, 2009
Medical Device Review Under Scrutiny
Though not specific to South Carolina, I have been reading recently about how the FDA is planning to take a closer look at its 510K review process for medical devices. This is the abbreviated process for obtaining medical device approval. There is a good article in the Wall Street Journal today summarizing what is going on, and if you do medical device work, this should be of interest.
FIRMS WARN OF DELAYS FROM FDA SCRUTINY
(September 30, 2009 edition of the Wall Street Journal)
By ALICIA MUNDY
Medical-device makers including Johnson & Johnson are warning of delays in device approvals after the Food and Drug Administration announced a major review of the process that has allowed quick clearance for thousands of products.
An internal FDA memo suggests that the tightening of the abbreviated process known as 510k is beginning already, before the review has been completed.
"It's Autumn, and change is in the air. This is particularly true for our 510k program," said Donna-Bea Tillman, head of the device evaluation office, in an email to her staff late Friday that was reviewed by The Wall Street Journal.
Dr. Tillman said in the memo that she needed to "get a better lay of the land" and called on branch chiefs to inform her when they were asked to clear a new "indication" or use "that you have never cleared for that device type." FDA reviewers typically don't run such individual applications by an official at Dr. Tillman's level, according to two FDA scientists.
Dr. Tillman didn't respond to requests for comment. The FDA said in a statement that her memo "reflects and is a furtherance of [FDA head Peggy Hamburg's] new direction."
The FDA's action came after it found "definite threats" to the integrity of its approvals in the case of a knee device approved last year that was the target of intensive lobbying by Democratic politicians. Dr. Tillman's role in the approval was critiqued in the FDA report on the episode.
The FDA has also commissioned an outside group to look into the issue.
The reviews "could have an impact now, in that they may lead FDA reviewers to be more conservative or more cautious in 510k reviews," said Jeffrey Gibbs, a Washington lawyer who advises device makers on FDA issues. "It's a very nervous time for the device industry."
A Johnson & Johnson spokeswoman defended the current 510k process, which streamlines clearance for products deemed "substantially equivalent" to devices already on the market. Carol Goodrich said the process "builds on ever-expanding knowledge" and accelerates innovation. Requiring more evidence for approval through the 510k process "would raise development costs substantially while also creating barriers to market entry that would reduce competition," she said.
At J&J, about $23 billion of the company's $64 billion in world-wide sales in 2008 came from the medical devices and diagnostic equipment division.
The FDA's Dr. Tillman said in her memo that the agency has set up a working group on 510k matters in her unit, and she called for extra scrutiny of certain applications.
She said the new scrutiny is "just the first of what I am sure will be many things that we will be doing to strengthen the 510k and all of our other programs in the months ahead."
The FDA's moves came in the wake of other potentially bad news for the industry in Washington. Leading Democrats have included a tax on device makers in health-overhaul legislation that would raise $40 billion over 10 years. Companies are fighting on Capitol Hill to stop or reduce those taxes.
Companies have valued the 510k process because it doesn't normally require lengthy clinical trials, allowing them to get their products to market sooner. Some members of Congress and some FDA device reviewers say the process is used too often for complex products that need more testing for safety and efficacy.
The Advanced Medical Technology Association, the industry's lobbying group, has met with members to discuss how to get their concerns reflected in the reviews at the FDA.
The association's executive vice president, David Exon, said the industry supports the reviews and is open to changes, so long as the "standards are reasonable and applied with consistency and transparency."
But Mr. Exon said he fears the multiple reviews could have a "chilling effect now" on FDA staff.—Nomaan Merchant contributed to this article.
Write to Alicia Mundy at alicia.mundy@wsj.com
FIRMS WARN OF DELAYS FROM FDA SCRUTINY
(September 30, 2009 edition of the Wall Street Journal)
By ALICIA MUNDY
Medical-device makers including Johnson & Johnson are warning of delays in device approvals after the Food and Drug Administration announced a major review of the process that has allowed quick clearance for thousands of products.
An internal FDA memo suggests that the tightening of the abbreviated process known as 510k is beginning already, before the review has been completed.
"It's Autumn, and change is in the air. This is particularly true for our 510k program," said Donna-Bea Tillman, head of the device evaluation office, in an email to her staff late Friday that was reviewed by The Wall Street Journal.
Dr. Tillman said in the memo that she needed to "get a better lay of the land" and called on branch chiefs to inform her when they were asked to clear a new "indication" or use "that you have never cleared for that device type." FDA reviewers typically don't run such individual applications by an official at Dr. Tillman's level, according to two FDA scientists.
Dr. Tillman didn't respond to requests for comment. The FDA said in a statement that her memo "reflects and is a furtherance of [FDA head Peggy Hamburg's] new direction."
The FDA's action came after it found "definite threats" to the integrity of its approvals in the case of a knee device approved last year that was the target of intensive lobbying by Democratic politicians. Dr. Tillman's role in the approval was critiqued in the FDA report on the episode.
The FDA has also commissioned an outside group to look into the issue.
The reviews "could have an impact now, in that they may lead FDA reviewers to be more conservative or more cautious in 510k reviews," said Jeffrey Gibbs, a Washington lawyer who advises device makers on FDA issues. "It's a very nervous time for the device industry."
A Johnson & Johnson spokeswoman defended the current 510k process, which streamlines clearance for products deemed "substantially equivalent" to devices already on the market. Carol Goodrich said the process "builds on ever-expanding knowledge" and accelerates innovation. Requiring more evidence for approval through the 510k process "would raise development costs substantially while also creating barriers to market entry that would reduce competition," she said.
At J&J, about $23 billion of the company's $64 billion in world-wide sales in 2008 came from the medical devices and diagnostic equipment division.
The FDA's Dr. Tillman said in her memo that the agency has set up a working group on 510k matters in her unit, and she called for extra scrutiny of certain applications.
She said the new scrutiny is "just the first of what I am sure will be many things that we will be doing to strengthen the 510k and all of our other programs in the months ahead."
The FDA's moves came in the wake of other potentially bad news for the industry in Washington. Leading Democrats have included a tax on device makers in health-overhaul legislation that would raise $40 billion over 10 years. Companies are fighting on Capitol Hill to stop or reduce those taxes.
Companies have valued the 510k process because it doesn't normally require lengthy clinical trials, allowing them to get their products to market sooner. Some members of Congress and some FDA device reviewers say the process is used too often for complex products that need more testing for safety and efficacy.
The Advanced Medical Technology Association, the industry's lobbying group, has met with members to discuss how to get their concerns reflected in the reviews at the FDA.
The association's executive vice president, David Exon, said the industry supports the reviews and is open to changes, so long as the "standards are reasonable and applied with consistency and transparency."
But Mr. Exon said he fears the multiple reviews could have a "chilling effect now" on FDA staff.—Nomaan Merchant contributed to this article.
Write to Alicia Mundy at alicia.mundy@wsj.com
Friday, September 25, 2009
Another Punitive Damages Case
The South Carolina Supreme Court decided Mitchell v. Fortis Insurance on September 14, 2009. This is another punitive damages case, coming shortly after Duncan v. Ford, so there has been quite a bit of activity on the punitive damages front here lately. A copy of the case can be found here. Also, my friend and colleague, Christian Stegmaier, has posted some good summary material on his blog concerning retail and hospitality law. You can find his post here.
In a nutshell, the decision seems to show a greater reliance on the punitive damages standards set forth in the United States Supreme Court decision of BMW of North America v. Gore, 517 U.S. 559 (1996). Though the court reduced the punitive damages award, it upheld an award toward outer limits of the single-digit ratio. At trial, plaintiffs had received $36,000 in actual damages for breach of contract, $150,000 in actual damages for the bad faith rescission claim, and $15 million in punitive damages from the bad faith claim. On appeal, the South Carolina Supreme Court reduced the punitive damages to $10 million.
An article about it appeared in the State here, and it is cut and pasted below.
SC man gets $10M after health insurance rejection
By JEFFREY COLLINS - Associated Press Writer
COLUMBIA, S.C. -- The South Carolina Supreme Court on Monday upheld a multimillion verdict against an insurer who the justices said revoked a man's health policy after he tested positive for HIV based solely on a nurse writing down the wrong year for the test.
The court in this conservative, often pro-business state called Fortis Insurance Company's actions "highly reprehensible," but did reduce punitive damages awarded to Jerome Mitchell Jr. from $15 million to $10 million.
Mitchell first found out he might have HIV when he tried to donate blood in April 2002. The Red Cross let him know his sample tested positive, and a trip to his personal physician confirmed the diagnosis.
Fortis said it revoked Mitchell's policy because he didn't reveal his diagnosis when he applied for insurance in May 2001 as the then 17-year-old from Florence prepared to head to college and could no longer be covered under his mother's policy. The company cited a note made by a nurse on Mitchell's chart that incorrectly gave the wrong year for the test confirming the HIV diagnosis, placing it one day before Mitchell's application for insurance, according to court records.
The committee that decides whether to revoke policies heard Mitchell's case and 45 others in a two-hour session. Court records showed the members were given a report from an underwriter that included the note: "Technically, we do not have the results of the HIV test. This is the only entry in the medical records regarding HIV status. Is it sufficient?"
Mitchell would later hire a lawyer who sent the company the original test results with the correct date. But a second committee also upheld revoking the insurance and Mitchell didn't have coverage for 20 months before Fortis changed its mind, according to trial testimony.
The company's "conduct involved repeated acts of deliberate indifference for more than two years," the justices wrote in their decision.
A phone listing for Mitchell could not be found, and his attorneys didn't return a phone call seeking comment. A spokesman for Fortis, which now does business as Assurant Health, said the company doesn't comment on pending lawsuits.
Fortis had appealed the case, saying the trial judge allowed improper evidence, the jury ruled on passion instead of the law and the $15 million in punitive damages was too much. The justices only budged on the damages, saying awarding Mitchell nearly 14 times the approximately $1.1 million it will cost to treat him during his life was excessive.
The justices also ruled the trial judge was correct to allow jurors to consider the value of the care Mitchell got at the free clinic when it considered how much money to give him.
This post is subject to the DISCLAIMER & TERMS OF USE of this website.
In a nutshell, the decision seems to show a greater reliance on the punitive damages standards set forth in the United States Supreme Court decision of BMW of North America v. Gore, 517 U.S. 559 (1996). Though the court reduced the punitive damages award, it upheld an award toward outer limits of the single-digit ratio. At trial, plaintiffs had received $36,000 in actual damages for breach of contract, $150,000 in actual damages for the bad faith rescission claim, and $15 million in punitive damages from the bad faith claim. On appeal, the South Carolina Supreme Court reduced the punitive damages to $10 million.
An article about it appeared in the State here, and it is cut and pasted below.
SC man gets $10M after health insurance rejection
By JEFFREY COLLINS - Associated Press Writer
COLUMBIA, S.C. -- The South Carolina Supreme Court on Monday upheld a multimillion verdict against an insurer who the justices said revoked a man's health policy after he tested positive for HIV based solely on a nurse writing down the wrong year for the test.
The court in this conservative, often pro-business state called Fortis Insurance Company's actions "highly reprehensible," but did reduce punitive damages awarded to Jerome Mitchell Jr. from $15 million to $10 million.
Mitchell first found out he might have HIV when he tried to donate blood in April 2002. The Red Cross let him know his sample tested positive, and a trip to his personal physician confirmed the diagnosis.
Fortis said it revoked Mitchell's policy because he didn't reveal his diagnosis when he applied for insurance in May 2001 as the then 17-year-old from Florence prepared to head to college and could no longer be covered under his mother's policy. The company cited a note made by a nurse on Mitchell's chart that incorrectly gave the wrong year for the test confirming the HIV diagnosis, placing it one day before Mitchell's application for insurance, according to court records.
The committee that decides whether to revoke policies heard Mitchell's case and 45 others in a two-hour session. Court records showed the members were given a report from an underwriter that included the note: "Technically, we do not have the results of the HIV test. This is the only entry in the medical records regarding HIV status. Is it sufficient?"
Mitchell would later hire a lawyer who sent the company the original test results with the correct date. But a second committee also upheld revoking the insurance and Mitchell didn't have coverage for 20 months before Fortis changed its mind, according to trial testimony.
The company's "conduct involved repeated acts of deliberate indifference for more than two years," the justices wrote in their decision.
A phone listing for Mitchell could not be found, and his attorneys didn't return a phone call seeking comment. A spokesman for Fortis, which now does business as Assurant Health, said the company doesn't comment on pending lawsuits.
Fortis had appealed the case, saying the trial judge allowed improper evidence, the jury ruled on passion instead of the law and the $15 million in punitive damages was too much. The justices only budged on the damages, saying awarding Mitchell nearly 14 times the approximately $1.1 million it will cost to treat him during his life was excessive.
The justices also ruled the trial judge was correct to allow jurors to consider the value of the care Mitchell got at the free clinic when it considered how much money to give him.
This post is subject to the DISCLAIMER & TERMS OF USE of this website.
Tuesday, September 1, 2009
Update
My apologies for not posting a brief of Ford v. Duncan, as per my last post below. I am two-thirds of the way through briefing this lengthy (and "meaty") opinion, but my wife and I recently welcomed a new baby into the world, so my blog has been somewhat on hold.
I have been trying to average about one post per week, but things have been a bit hectic as of late with settling into a new firm and a new baby. I hope to have a full brief of the case up soon. Thanks for your patience, and I hope that you will continue checking in on the blog.
As I have requested in the past, if anyone has any news that is not posted, suggestions or other feedback, I welcome your comments.
I have been trying to average about one post per week, but things have been a bit hectic as of late with settling into a new firm and a new baby. I hope to have a full brief of the case up soon. Thanks for your patience, and I hope that you will continue checking in on the blog.
As I have requested in the past, if anyone has any news that is not posted, suggestions or other feedback, I welcome your comments.
Friday, August 14, 2009
New Products Liability Case Reported
By Brian A. Comer
The South Carolina Court of Appeals issued a decision yesterday in Duncan v. Ford Motor Company. Ford appealed a jury award of approximately $589,722 in actual damages and $3 million in punitive damages against Ford. The court affirmed the lower court decision and award. I haven't read through this case line by line yet, but there appears to be a great deal in the opinion concerning expert witness qualifications, use of hypotheticals by experts, cross examination of experts, admissibility of recalls, and punitive damages. You can find the decision here.
I will post a brief in the next couple of days, but wanted to give readers the heads-up of the decision.
The South Carolina Court of Appeals issued a decision yesterday in Duncan v. Ford Motor Company. Ford appealed a jury award of approximately $589,722 in actual damages and $3 million in punitive damages against Ford. The court affirmed the lower court decision and award. I haven't read through this case line by line yet, but there appears to be a great deal in the opinion concerning expert witness qualifications, use of hypotheticals by experts, cross examination of experts, admissibility of recalls, and punitive damages. You can find the decision here.
I will post a brief in the next couple of days, but wanted to give readers the heads-up of the decision.
Sunday, August 9, 2009
Case Brief: Weston v. Kim's Dollar Store
By Brian A. Comer
NOTICE: PLEASE SEE BOTH BRIEFS BELOW. THE FIRST BRIEF IS OF THE SOUTH CAROLINA COURT OF APPEALS DECISION ISSUED JULY 15, 2009.
THE SOUTH CAROLINA SUPREME COURT GRANTED A WRIT OF CERTIORARI TO REVIEW THE COURT OF APPEALS DECISION, AND IT ISSUED ITS DECISION ON AUGUST 8, 2012. THE BRIEF FOR THAT CASE FOLLOWS FURTHER BELOW.
SOUTH CAROLINA COURT OF APPEALS CASE BRIEF
This case brief is of the July 15, 2009 South Carolina Court of Appeals decision, Monica Weston v. Kim's Dollar Store and CIBA Vision, a division of Novartis Company. It is currently only available as a slip opinion. When it is published, I will try and circle back around to drop in the reporter citations. This case is noteworthy because a South Carolina court assesses whether state tort claims are preempted by federal law in the context of a medical device case.
FACTUAL BACKGROUND: Plaintiff purchased two pairs of contacts manufactured by Defendant CIBA Vision ("CIBA") from Defendant Kim's Dollar Store ("Kim's"). Plaintiff had no prescription for the "prescription only" lenses. Plaintiff was given no instructions for usage of the lenses, and she was not informed of the need for a prescription. After wearing the contact lenses, Plaintiff developed an eye infection that caused her to temporarily lose vision in her left eye.
PROCEDURE: Plaintiff brought suit against Defendants alleging six causes of action:(1) negligence per se for selling misbranded contact lenses; (2) negligence in the manufacture, sale and/or distribution of contact lenses, and in failing to provide adequate warnings and instructions; (3) breach of implied warranty of merchantability and fitness because the lenses were not safely labeled; (4) strict liability for placing defectively labeled products into the stream of commerce; (5) sale of a defective product due to inadequate warnings; and (6) violation of the South Carolina Unfair Trade Practices Act by committing an unfair or deceptive act or practice, including inadequate labeling and warnings, in the conduct of trade or commerce. CIBA moved for summary judgment on the basis that the majority of Plaintiff's claims were subject to federal preemption pursuant to the Medical Device Amendments of 1976 ("MDA") to the Federal Food, Drug, and Cosmetic Act ("FDCA"). The circuit court granted CIBA's motion and found that CIBA was entitled to summary judgment on the basis of federal preemption on all actions depending on warning, labeling, design, marketing, misbranding, or other similar claims. The circuit court stated that CIBA could file additional motions to test the viability of the remaining causes of action, and the circuit court restricted Plaintiff from pursuing additional discovery on the aforementioned topics.
ISSUES: "[Plaintiff argue[d] the circuit court erred in granting summary judgment because (1) the circuit court lacked jurisdiction to determine whether the contact lenses at issue were federally regulated medical devices, (2) a genuine issue of material fact existed, and (3) there was neither a showing nor a finding that any South Carolina law conflicted with federal law."
DISPOSITION: The South Carolina Court of Appeals affirmed the decision of the circuit court.
RULES AND OPINION: With regard to the first issue, the court found that the circuit court properly interpreted federal statutes to determine whether the MDA preempted South Carolina law in this matter. "' The interpretation of a statute is a question of law for the [c]ourt.'" (Quoting In re Campbell, 379 S.C. 593, 599, 666 S.E.2d 908, 910-11(2008)). Tort claims are within the jurisdiction of the circuit court, and "[w]hen federal law seats exclusive jurisdiction over a particular type of claim in the federal courts, South Carolina courts must examine the federal law to determine whether it preempts state law." (Citing McCullar v. Estate of Campbell, 381 S.C. 205, 206, 672 S.E.2d 784, 784 (2009), and Griggs v. S.C. Elec. & Gas Co., 320 S.C. 127, 129, 463 S.E.2d 608, 609 (1995)). The circuit court did not err in interpreting the federal law because doing so is an essential step in determining whether the federal law preempts the state law.
With regard to the second issue, the court found that the circuit court correctly concluded no genuine issue existed as to whether CIBA's contacts were federally regulated as medical devices. The court reviewed the history of medical device and contact lense regulation, as well as the standard for summary judgment. From the evidence, the contact lenses fit the FDCA's definition of a "device," and CIBA presented uncontradicted evidence that the lenses were Class III medical devices subject to and approved by the FDA pursuant to the pre-market approval process. This evidence included:
This post is subject to the Disclaimer & Terms of Use of this website.
NOTICE: PLEASE SEE BOTH BRIEFS BELOW. THE FIRST BRIEF IS OF THE SOUTH CAROLINA COURT OF APPEALS DECISION ISSUED JULY 15, 2009.
THE SOUTH CAROLINA SUPREME COURT GRANTED A WRIT OF CERTIORARI TO REVIEW THE COURT OF APPEALS DECISION, AND IT ISSUED ITS DECISION ON AUGUST 8, 2012. THE BRIEF FOR THAT CASE FOLLOWS FURTHER BELOW.
SOUTH CAROLINA COURT OF APPEALS CASE BRIEF
This case brief is of the July 15, 2009 South Carolina Court of Appeals decision, Monica Weston v. Kim's Dollar Store and CIBA Vision, a division of Novartis Company. It is currently only available as a slip opinion. When it is published, I will try and circle back around to drop in the reporter citations. This case is noteworthy because a South Carolina court assesses whether state tort claims are preempted by federal law in the context of a medical device case.
FACTUAL BACKGROUND: Plaintiff purchased two pairs of contacts manufactured by Defendant CIBA Vision ("CIBA") from Defendant Kim's Dollar Store ("Kim's"). Plaintiff had no prescription for the "prescription only" lenses. Plaintiff was given no instructions for usage of the lenses, and she was not informed of the need for a prescription. After wearing the contact lenses, Plaintiff developed an eye infection that caused her to temporarily lose vision in her left eye.
PROCEDURE: Plaintiff brought suit against Defendants alleging six causes of action:(1) negligence per se for selling misbranded contact lenses; (2) negligence in the manufacture, sale and/or distribution of contact lenses, and in failing to provide adequate warnings and instructions; (3) breach of implied warranty of merchantability and fitness because the lenses were not safely labeled; (4) strict liability for placing defectively labeled products into the stream of commerce; (5) sale of a defective product due to inadequate warnings; and (6) violation of the South Carolina Unfair Trade Practices Act by committing an unfair or deceptive act or practice, including inadequate labeling and warnings, in the conduct of trade or commerce. CIBA moved for summary judgment on the basis that the majority of Plaintiff's claims were subject to federal preemption pursuant to the Medical Device Amendments of 1976 ("MDA") to the Federal Food, Drug, and Cosmetic Act ("FDCA"). The circuit court granted CIBA's motion and found that CIBA was entitled to summary judgment on the basis of federal preemption on all actions depending on warning, labeling, design, marketing, misbranding, or other similar claims. The circuit court stated that CIBA could file additional motions to test the viability of the remaining causes of action, and the circuit court restricted Plaintiff from pursuing additional discovery on the aforementioned topics.
ISSUES: "[Plaintiff argue[d] the circuit court erred in granting summary judgment because (1) the circuit court lacked jurisdiction to determine whether the contact lenses at issue were federally regulated medical devices, (2) a genuine issue of material fact existed, and (3) there was neither a showing nor a finding that any South Carolina law conflicted with federal law."
DISPOSITION: The South Carolina Court of Appeals affirmed the decision of the circuit court.
RULES AND OPINION: With regard to the first issue, the court found that the circuit court properly interpreted federal statutes to determine whether the MDA preempted South Carolina law in this matter. "' The interpretation of a statute is a question of law for the [c]ourt.'" (Quoting In re Campbell, 379 S.C. 593, 599, 666 S.E.2d 908, 910-11(2008)). Tort claims are within the jurisdiction of the circuit court, and "[w]hen federal law seats exclusive jurisdiction over a particular type of claim in the federal courts, South Carolina courts must examine the federal law to determine whether it preempts state law." (Citing McCullar v. Estate of Campbell, 381 S.C. 205, 206, 672 S.E.2d 784, 784 (2009), and Griggs v. S.C. Elec. & Gas Co., 320 S.C. 127, 129, 463 S.E.2d 608, 609 (1995)). The circuit court did not err in interpreting the federal law because doing so is an essential step in determining whether the federal law preempts the state law.
With regard to the second issue, the court found that the circuit court correctly concluded no genuine issue existed as to whether CIBA's contacts were federally regulated as medical devices. The court reviewed the history of medical device and contact lense regulation, as well as the standard for summary judgment. From the evidence, the contact lenses fit the FDCA's definition of a "device," and CIBA presented uncontradicted evidence that the lenses were Class III medical devices subject to and approved by the FDA pursuant to the pre-market approval process. This evidence included:
- FDA approval letters that set forth the appropriate warnings and regulations pertaining to the lenses.
- Expert testimony that CIBA always treated the contact lenses as medical devices and that they were always approved through the pre-market approval process.
- The "Rx only" symbol on the packaging substantiated that the contact lenses at issue were medical devices that should only be sold pursuant to prescription.
- The contacts included a package insert that was drafted by CIBA and reviewed and approved by the FDA.
- There was evidence that he contact lenses had medical or therapeutic purposes (e.g., ultra-violet radiation protection).
With regard to the third issue, the court found that any jury verdict imposing different requirements than the federal law would constitute an impermissible conflicting state law. Having found that the contact lenses were subject to FDA regulation as Class III medical devices, the court had to assess whether Plaintiffs' claims were subject to federal preemption, thereby entitling CIBA to judgment as a matter of law. "Whether a federal statute preempts state law is a question of law for the court to decide." (Citing Campbell, 379 S.C. at 599, 666 S.E.2d at 910-11). Pre-market approval of a medical device by the FDA results in device-specific requirements that preempt inconsistent state requirements, including those sought to be imposed through tort claims.
Specifically, the MDA prohibits States from imposing on devices intended for human use "any requirement (1) which is different from, or in addition to, any requirement applicable under this chapter to the device, and (2) which relates to the safety or effectiveness of the device or to any other matter included in a requirement applicable to the device under this chapter."
(Quoting 21 U.S.C.A. section 360k(a)). This clause has been read to extend to attempts to impose state tort liability. The court found that the circuit court correctly applied the doctrine of federal preemption because "a jury's acceptance of the disputed claims could result in different or additional requirements from the federal requirements. . . . This is not permissible." The court reasoned that such jury findings would be in addition to or contrary to to federal requirements. Therefore, the circuit court correctly granted summary judgment on all actions dependent on warning, labeling, design, marketing, misbranding, or similar claims.
SOUTH CAROLINA SUPREME COURT CASE BRIEF
FACTUAL BACKGROUND: Plaintiff purchased a pair of prescription decorative, colored contact lenses without a prescription from Defendant Kim's Dollar Store, an unauthorized seller. Defendant CIBA Vision manufactured the lenses. Plaintiff developed an eye infection, resulting in loss of vision in her left eye.
PROCEDURE: Plaintiff brought an action against Kim's Dollar Store and CIBA Vision. The trial court granted partial summary jdugment in CIBA's favor as to three of six causes of action based on federal preemption. The South Carolina Court of Appeals affirmed, and the South Carolina Supreme Court granted certiorari.
ISSUES: On certiorari, Plaintiff conceded the lenses she purchased were Class III medical devices but argued her claims were not preempted because CIBA failed to show the lenses were approved by the Food and Drug Administration ("FDA") through the pre-market approval ("PMA") process.
DISPOSITION: The court found the lenses were approved through the PMA process and affirmed the court of appeals to the extent partial summary judgment was granted on claims that would impose common-law requirements "different from, or in addition to" applicable FDA requirements. As to the remaining causes of action, it remanded the matter for further proceedings consistent with the opinion.
RULES AND OPINION: The court reviewed briefly the factual and procedural history set forth in greater detail in the court of appeals decision. (See case brief above). The court stated that the sole issue before it was Plaintiff's claim that a genuine issue of material fact exists as to whether the lenses were subject to FDA approval through the PMA process.
After reviewing the standard for granting summary judgment, the court provided its analysis. Congress provided an express preemption provision in the Medical Device Amendments of 1976 ("MDA"). Citing to National Meat Ass'n v. Harris, 132 S.Ct. 965 (2012), the court emphasized that the United States Supreme Court has held that express preemption provisions should be construed broadly, and the decision was instructive with regard to how to construe express preemption provisions where the federal regulatory scheme at issue does not contain a saving clause.
After reviewing the applicable law in Riegel v. MEdtronic, Inc., 552 U.S. 312, 322 (2008) concerning the device-specific requirements contemplated by the MDA and the PMA process, the court set forth the process to follow in a preemption inquiry. The first step is to determine whether the federal government has established requirements applicable to the device through the PMA process. If so, the next step is to determine whether state common-law claims paralellel the federal requirements. If so, the state claim is not preempted. However, if the state common-law claims are "different from or in addition to" the federal requirements (as outlined in Riegel), then the state claim is preempted.
The court found there was no genuine issue of material fact that the lenses purchased by Plaintiff were subject to device-specific federal requirements by virtue of the PMA process. Prior correspondence between CIBA and the FDA established that the lenses went through the PMA process and were approved, triggering express preemption. On the second question in the inquiry, the court referenced Plaintiff's claim that CIBA knew or should have known its lenses were being marketed and sold unlawfully without a prescription and by unauthorized sellers.
The court reviewed the trial court's grant of summary judgment and vacated any summary judgment granted with regard to negligence. CIBA’s counsel conceded that negligence survived summary judgment. The court also held that any grant of summary judgment based on sufficiency of FDA-approved requirements imposed by PMA process was proper. Requirements different from or in addition to them are preempted, and any claim that is parallel may proceed.
The court noted that it could not be more specific with regard to claims that survived summary judgment due to lack of specificity in that court order. Therefore, it affirmed partial grant of summary judgment to the extent it was granted on claims that would impose common law requirements “different from, or in addition to” applicable FDA requirements.
SOUTH CAROLINA SUPREME COURT CASE BRIEF
FACTUAL BACKGROUND: Plaintiff purchased a pair of prescription decorative, colored contact lenses without a prescription from Defendant Kim's Dollar Store, an unauthorized seller. Defendant CIBA Vision manufactured the lenses. Plaintiff developed an eye infection, resulting in loss of vision in her left eye.
PROCEDURE: Plaintiff brought an action against Kim's Dollar Store and CIBA Vision. The trial court granted partial summary jdugment in CIBA's favor as to three of six causes of action based on federal preemption. The South Carolina Court of Appeals affirmed, and the South Carolina Supreme Court granted certiorari.
ISSUES: On certiorari, Plaintiff conceded the lenses she purchased were Class III medical devices but argued her claims were not preempted because CIBA failed to show the lenses were approved by the Food and Drug Administration ("FDA") through the pre-market approval ("PMA") process.
DISPOSITION: The court found the lenses were approved through the PMA process and affirmed the court of appeals to the extent partial summary judgment was granted on claims that would impose common-law requirements "different from, or in addition to" applicable FDA requirements. As to the remaining causes of action, it remanded the matter for further proceedings consistent with the opinion.
RULES AND OPINION: The court reviewed briefly the factual and procedural history set forth in greater detail in the court of appeals decision. (See case brief above). The court stated that the sole issue before it was Plaintiff's claim that a genuine issue of material fact exists as to whether the lenses were subject to FDA approval through the PMA process.
After reviewing the standard for granting summary judgment, the court provided its analysis. Congress provided an express preemption provision in the Medical Device Amendments of 1976 ("MDA"). Citing to National Meat Ass'n v. Harris, 132 S.Ct. 965 (2012), the court emphasized that the United States Supreme Court has held that express preemption provisions should be construed broadly, and the decision was instructive with regard to how to construe express preemption provisions where the federal regulatory scheme at issue does not contain a saving clause.
After reviewing the applicable law in Riegel v. MEdtronic, Inc., 552 U.S. 312, 322 (2008) concerning the device-specific requirements contemplated by the MDA and the PMA process, the court set forth the process to follow in a preemption inquiry. The first step is to determine whether the federal government has established requirements applicable to the device through the PMA process. If so, the next step is to determine whether state common-law claims paralellel the federal requirements. If so, the state claim is not preempted. However, if the state common-law claims are "different from or in addition to" the federal requirements (as outlined in Riegel), then the state claim is preempted.
The court found there was no genuine issue of material fact that the lenses purchased by Plaintiff were subject to device-specific federal requirements by virtue of the PMA process. Prior correspondence between CIBA and the FDA established that the lenses went through the PMA process and were approved, triggering express preemption. On the second question in the inquiry, the court referenced Plaintiff's claim that CIBA knew or should have known its lenses were being marketed and sold unlawfully without a prescription and by unauthorized sellers.
The court reviewed the trial court's grant of summary judgment and vacated any summary judgment granted with regard to negligence. CIBA’s counsel conceded that negligence survived summary judgment. The court also held that any grant of summary judgment based on sufficiency of FDA-approved requirements imposed by PMA process was proper. Requirements different from or in addition to them are preempted, and any claim that is parallel may proceed.
The court noted that it could not be more specific with regard to claims that survived summary judgment due to lack of specificity in that court order. Therefore, it affirmed partial grant of summary judgment to the extent it was granted on claims that would impose common law requirements “different from, or in addition to” applicable FDA requirements.
Monday, August 3, 2009
SC Products Case in Recent Advance Sheets
By Brian A. Comer
Okay, in settling into a new firm and a lot going on the last couple of weeks, I let a products decision pass me by.
The July 20, 2009 edition of the Advance Sheets included Weston v. Kim's Dollar Store and CIBA Vision. From a quick skim of the case, it is a contact lense/medical device case that focuses on preemption.
A brief is forthcoming in the next couple of days, but I just wanted to spread the information. The link for the July 27, 2009 Advance Sheets is here, and the case is on page 98.
This post is subject to the DISCLAIMER & TERMS OF USE of this website.
Okay, in settling into a new firm and a lot going on the last couple of weeks, I let a products decision pass me by.
The July 20, 2009 edition of the Advance Sheets included Weston v. Kim's Dollar Store and CIBA Vision. From a quick skim of the case, it is a contact lense/medical device case that focuses on preemption.
A brief is forthcoming in the next couple of days, but I just wanted to spread the information. The link for the July 27, 2009 Advance Sheets is here, and the case is on page 98.
This post is subject to the DISCLAIMER & TERMS OF USE of this website.
Wednesday, July 22, 2009
The Basics: Successor Liability in Products Liability Actions
By Brian A. Comer
As I have begun settling in with my new law firm, I have received a couple of case files that have successor liability issues in the products liability arena. Therefore, it seemed like a good topic for a quick blog entry to summarize this area of the law.
A former colleague of mine, Tim Orr, wrote an excellent article for South Carolina Lawyer in the March 2006 edition that fully summarizes this area of the law, and I would highly recommend the article for anyone with a products liability successor liability issue. The article is aptly titled "Successor Liability" and fully analyzes this area of the law. It also provided me with a great primer for a conference call with a client today.
In a nutshell, Simmons v. Mark Lift Indus., Inc., 366 S.C. 308, 622 S.E.3d 213 (2005) addressed this issue in a certified question from the United States District Court. The court stated as follows:
As I am learning, it is critical to examine the transaction documents at issue in a successor liability case to determine if the purchasing entity intended to assume the seller's liabilities. This can also become a "form versus substance" issue where the purchasing company is merely a continuation of the predecessor, i.e., it has a "common identity" of the officers, directors and stockholders between the predecessor and successor. In such cases, a court may find that the owners and directors of a company merely dissolved the company and formed a new one to avoid the prior debts and liabilities. In such cases, the "mere continuation" exception may apply to make the successor company liable.
I will try to profile each of these exceptions in future blog entries, but the above serves as "the basics" for now.
This post is subject to the DISCLAIMER & TERMS OF USE of this website.
As I have begun settling in with my new law firm, I have received a couple of case files that have successor liability issues in the products liability arena. Therefore, it seemed like a good topic for a quick blog entry to summarize this area of the law.
A former colleague of mine, Tim Orr, wrote an excellent article for South Carolina Lawyer in the March 2006 edition that fully summarizes this area of the law, and I would highly recommend the article for anyone with a products liability successor liability issue. The article is aptly titled "Successor Liability" and fully analyzes this area of the law. It also provided me with a great primer for a conference call with a client today.
In a nutshell, Simmons v. Mark Lift Indus., Inc., 366 S.C. 308, 622 S.E.3d 213 (2005) addressed this issue in a certified question from the United States District Court. The court stated as follows:
[I]n the absence of statute, a successor or purchasing company ordinarily is not liable for the debts of a predecessor or selling company unless (1) there was an agreement to assume such debts, (2) the circumstances surrounding the transaction warrants [sic] a finding of a consolidation or merger of the two corporations, (3) the successor company was a mere continuation of the predecessor, or (4) the transaction was entered into fraudulently for the purpose of wrongfully defeating creditors’ claims.Id. at 312, 622 S.E.2d at 215 (quoting Brown v. Am. Ry. Express Co., 128 S.C.428, 123 S.E. 97 (1924). Simmons is significant because it adopted the court's opinion in the commercial case of Brown v. Am. Ry. Express Co. and extends the test applied by the Brown court for successor liability to all products liability actions. Adoption of these four exceptions aligns South Carolina with the majority of states that have adopted these same four exceptions. As of the date of Tim's article, he cites to 30 states that have also retained an applied these exceptions in the products liability setting. See Tim Orr, Successor Liability, March 2006 edition of South Carolina Lawyer, at 35.
As I am learning, it is critical to examine the transaction documents at issue in a successor liability case to determine if the purchasing entity intended to assume the seller's liabilities. This can also become a "form versus substance" issue where the purchasing company is merely a continuation of the predecessor, i.e., it has a "common identity" of the officers, directors and stockholders between the predecessor and successor. In such cases, a court may find that the owners and directors of a company merely dissolved the company and formed a new one to avoid the prior debts and liabilities. In such cases, the "mere continuation" exception may apply to make the successor company liable.
I will try to profile each of these exceptions in future blog entries, but the above serves as "the basics" for now.
This post is subject to the DISCLAIMER & TERMS OF USE of this website.
Wednesday, July 15, 2009
Case Brief: Allen v. Long Mfg. NC, Inc.
Today's case brief is of Allen v. Long, Mfg. NC, Inc., 332 S.C. 422, 505 S.E.2d 354 (Ct. App. 1998). This is a warnings case, and it is significant because it discusses the adequacy of warnings, rejects that compliance with industry standards is conclusive evidence of adequacy, and establishes the heeding presumption in South Carolina.
FACTUAL BACKGROUND: Otis Allen, Sr. ("Allen") was using a portable grain auger to load grain onto a grain drill. 332 S.C. at 424, 505 S.E.2d at 355. The auger's center of gravity could change when grain was conveyed to the top of the auger without replacing the material at the bottom (which kept it stable and prevented it from becoming top heavy). Id. Allen was standing beneath the auger's discharge end when it became unstable and struck him in the head, killing him. Id. He had not anchored the lower end or supported the discharge end. Id. The auger contained a warning label with the word "CAUTION" preceding eleven different instructions. 332 S.C. at 425, 505 S.E.2d at 356.
PROCEDURE: Allen's estate ("Plaintiff") brought a wrongful death and pain and suffering action against Defendant Long Mfg. NC, Inc. ("Long", the manufacturer of the auger) and Glen Kinard, the auger's owner. 332 S.C. at 424-25, 505 S.E.2d at 355. The theories of recovery were strict liability and negligence. Id. at 424, 505 S.E.2d at 355. The trial court granted Long's motion for summary judgment. Id. Plaintiff appealed to the South Carolina Court of Appeals.
ISSUES: The questions on appeal were whether genuine issues of material fact existed regarding (1) whether the auger was in a "defective condition unreasonably dangerous" to Allen, (2) whether Long breached its duty of care by failing to provide an adequate warning, and (3) whether Allen's failure to follow the warning was the proximate cause of his injuries. 332 S.C. at 425-26, 505 S.E.2d at 356.
DISPOSITION: The Court of Appeals reversed the trial court's grant of summary judgment. 332 S.C. at 426, 505 S.E.2d at 356. It found that the sufficiency of the auger's warnings was a question of fact for the jury. Id.
RULES AND OPINION: With regard to whether the auger was in a defective condition, unreasonably dangerous to the user, the court pointed out that "[i]f a warning is given which, if followed, makes the product safe for use, the product cannot be deemed defective or unreasonably dangerous." 332 S.C. at 427, 505 S.E.2d at 357 (citing Restatement (Second) of Torts section 402A cmt. j (1965)). Whether a warning is adequate is a question of fact for the jury as long as evidence has been presented that the warning was not adequate. Id. at 428, 505 S.E.2d at 357. Plaintiff's expert provided testimony regarding the auger's warning that created a genuine issue of material fact. 332 S.C. at 429, 505 S.E.2d at 358. There was nothing in the auger's warnings to explain that the machine's center of gravity could change as it emptied. Id. Furthermore, the court disagreed with the trial court's interpretation of Bragg v. Hi-Ranger, Inc., 319 S.C. 531, 462 S.E.2d 321 (Ct. App. 1996) as establishing that a warning is adequate as a matter of law if it complies with industry standards. 332 S.C. at 430-31, 505 S.E.2d at 358-59 ("We reject this principle as unsound since it would allow the industry to set its own standard of safety, a proposition which finds no support from other jurisdictions, and which is antithetical to the underlying premise of strict liability."). Finally, the court stated that it need not address whether a feasible design alternative must be presented to survive summary judgment. Id. at 431, 505 S.E.2d at 359. The court agreed that Plaintiff failed to present a factual issue on this point, but it concluded that the court erred in ruling upon it because Long conceded that the auger required a warning to be made safe. Id. This concession foreclosed Plaintiff's argument that the auger could have been redesigned to be made safer and rendered the trial court's holding moot. Id. at 431-32, 505 S.E.2d at 359.
With regard to Long's duty of care, the court reversed the trial court's determination that Long satisfied its duty of care because its determination was premised on the legal adequacy of the auger's warning, which the Court of Appeals (supra) held was an issue of fact for the jury. Id. at 432, 505 S.E.2d at 359.
Finally, the court reversed the trial court's finding that the Plaintiff failed to introduce evidence of causation. 332 S.C. at 432-33, 505 S.E.2d at 359-60. At trial, Long successfully argued that Allen's failure to heed the auger's warning was the proximate cause of his injuries because Plaintiff's expert stated that if Allen had followed the warnings, the accident would not have occurred. Id. at 432, 505 S.E.2d at 359-60. The court stated that when an adequate warning is given, the manufacturer may assume that it will be heeded by the product user. Id. at 432-33, 505 S.E.2d at 360. However, the testimony by Plaintiff's expert created a factual issue as to whether a different, adequate warning could have changed Allen's conduct. Id. at 433, 505 S.E.2d at 360.
This post is subject to the DISCLAIMER & TERMS OF USE of this website.
FACTUAL BACKGROUND: Otis Allen, Sr. ("Allen") was using a portable grain auger to load grain onto a grain drill. 332 S.C. at 424, 505 S.E.2d at 355. The auger's center of gravity could change when grain was conveyed to the top of the auger without replacing the material at the bottom (which kept it stable and prevented it from becoming top heavy). Id. Allen was standing beneath the auger's discharge end when it became unstable and struck him in the head, killing him. Id. He had not anchored the lower end or supported the discharge end. Id. The auger contained a warning label with the word "CAUTION" preceding eleven different instructions. 332 S.C. at 425, 505 S.E.2d at 356.
PROCEDURE: Allen's estate ("Plaintiff") brought a wrongful death and pain and suffering action against Defendant Long Mfg. NC, Inc. ("Long", the manufacturer of the auger) and Glen Kinard, the auger's owner. 332 S.C. at 424-25, 505 S.E.2d at 355. The theories of recovery were strict liability and negligence. Id. at 424, 505 S.E.2d at 355. The trial court granted Long's motion for summary judgment. Id. Plaintiff appealed to the South Carolina Court of Appeals.
ISSUES: The questions on appeal were whether genuine issues of material fact existed regarding (1) whether the auger was in a "defective condition unreasonably dangerous" to Allen, (2) whether Long breached its duty of care by failing to provide an adequate warning, and (3) whether Allen's failure to follow the warning was the proximate cause of his injuries. 332 S.C. at 425-26, 505 S.E.2d at 356.
DISPOSITION: The Court of Appeals reversed the trial court's grant of summary judgment. 332 S.C. at 426, 505 S.E.2d at 356. It found that the sufficiency of the auger's warnings was a question of fact for the jury. Id.
RULES AND OPINION: With regard to whether the auger was in a defective condition, unreasonably dangerous to the user, the court pointed out that "[i]f a warning is given which, if followed, makes the product safe for use, the product cannot be deemed defective or unreasonably dangerous." 332 S.C. at 427, 505 S.E.2d at 357 (citing Restatement (Second) of Torts section 402A cmt. j (1965)). Whether a warning is adequate is a question of fact for the jury as long as evidence has been presented that the warning was not adequate. Id. at 428, 505 S.E.2d at 357. Plaintiff's expert provided testimony regarding the auger's warning that created a genuine issue of material fact. 332 S.C. at 429, 505 S.E.2d at 358. There was nothing in the auger's warnings to explain that the machine's center of gravity could change as it emptied. Id. Furthermore, the court disagreed with the trial court's interpretation of Bragg v. Hi-Ranger, Inc., 319 S.C. 531, 462 S.E.2d 321 (Ct. App. 1996) as establishing that a warning is adequate as a matter of law if it complies with industry standards. 332 S.C. at 430-31, 505 S.E.2d at 358-59 ("We reject this principle as unsound since it would allow the industry to set its own standard of safety, a proposition which finds no support from other jurisdictions, and which is antithetical to the underlying premise of strict liability."). Finally, the court stated that it need not address whether a feasible design alternative must be presented to survive summary judgment. Id. at 431, 505 S.E.2d at 359. The court agreed that Plaintiff failed to present a factual issue on this point, but it concluded that the court erred in ruling upon it because Long conceded that the auger required a warning to be made safe. Id. This concession foreclosed Plaintiff's argument that the auger could have been redesigned to be made safer and rendered the trial court's holding moot. Id. at 431-32, 505 S.E.2d at 359.
With regard to Long's duty of care, the court reversed the trial court's determination that Long satisfied its duty of care because its determination was premised on the legal adequacy of the auger's warning, which the Court of Appeals (supra) held was an issue of fact for the jury. Id. at 432, 505 S.E.2d at 359.
Finally, the court reversed the trial court's finding that the Plaintiff failed to introduce evidence of causation. 332 S.C. at 432-33, 505 S.E.2d at 359-60. At trial, Long successfully argued that Allen's failure to heed the auger's warning was the proximate cause of his injuries because Plaintiff's expert stated that if Allen had followed the warnings, the accident would not have occurred. Id. at 432, 505 S.E.2d at 359-60. The court stated that when an adequate warning is given, the manufacturer may assume that it will be heeded by the product user. Id. at 432-33, 505 S.E.2d at 360. However, the testimony by Plaintiff's expert created a factual issue as to whether a different, adequate warning could have changed Allen's conduct. Id. at 433, 505 S.E.2d at 360.
This post is subject to the DISCLAIMER & TERMS OF USE of this website.
Tuesday, July 7, 2009
Changing Firms
I am proud to announce that I will be joining Collins and Lacy, effective July 13, 2009.
Collins and Lacy is a litigation firm with approximately 28 attorneys in three South Carolina offices (Greenville, Columbia, and Myrtle Beach). The firm will provide me with the opportunity to do a greater variety of litigation, including products liability work. I will be working with Gray T. Culbreath, who is the firm's managing shareholder and has a fantastic litigation practice (including an extensive products liability practice). This platform will also provide me with a great opportunity to grow my practice over the long-term.
I will be in the Columbia office, and that contact information is as follows:
Collins and Lacy
1330 Lady Street, Sixth Floor
P.O. Box 12487 (29211)
Columbia, SC 29201
TEL: 803.256.2660
TOLL FREE: 888.648.0526
FAX: 803.771.4484
This blog will continue as it has been, but I wanted to provide an explanation for some changes in my contact information, certain hyperlinks, etc. I sincerely thank the great folks at Collins and Lacy for this opportunity. I will miss the people at Nelson Mullins and look forward to keeping in touch!
Collins and Lacy is a litigation firm with approximately 28 attorneys in three South Carolina offices (Greenville, Columbia, and Myrtle Beach). The firm will provide me with the opportunity to do a greater variety of litigation, including products liability work. I will be working with Gray T. Culbreath, who is the firm's managing shareholder and has a fantastic litigation practice (including an extensive products liability practice). This platform will also provide me with a great opportunity to grow my practice over the long-term.
I will be in the Columbia office, and that contact information is as follows:
Collins and Lacy
1330 Lady Street, Sixth Floor
P.O. Box 12487 (29211)
Columbia, SC 29201
TEL: 803.256.2660
TOLL FREE: 888.648.0526
FAX: 803.771.4484
This blog will continue as it has been, but I wanted to provide an explanation for some changes in my contact information, certain hyperlinks, etc. I sincerely thank the great folks at Collins and Lacy for this opportunity. I will miss the people at Nelson Mullins and look forward to keeping in touch!
Tuesday, June 30, 2009
Case Brief: Harris v. Rose's Stores, Inc.
Today's case brief is of Harris v. Rose's Stores, Inc., 315 S.C. 344, 433 S.E.2d 905 (Ct. App. 1993). This case stands for the principle that causation in a products liability case must be based on "probability," as opposed to mere "possibility."
FACTUAL BACKGROUND: A fire at a residence killed a minor child. 315 S.C. at 345, 433 S.E.2d at 906. The fire was alleged to have been caused by a ceiling fan. Id. The fan was sold by Defendant Rose's ("Rose's") to Defendant Edgar Gregory ("Gregory"), the landlord of the burned residence. Id.
PROCEDURE: Plaintiff Pamela Harris (personal representative deceased's estate and hereinafter, "Plaintiff") brought wrongful death and survival actions against Rose's under a products liability theory. 315 S.C. at 345, 433 S.E.2d at 906. The trial court granted Rose's motion for summary judgment on Plaintiff's claim and and on a cross-claim asserted by Gregory against Rose's. Id. Plaintiff appealed. Id.
ISSUE: Whether the trial court erred in granting summary judgment to Rose's based on Plaintiff's belief that she had produced sufficient circumstantial evidence that the ceiling fan, which the fire totally destroyed, was defective and a substantial contributing cause of the fire. 315 S.C. at 345, 433 S.E.2d at 906.
DISPOSITION: The South Carolina Court of Appeals held that the trial court's grant of summary judgment was proper. 315 S.C. at 347, 433 S.E.2d at 907.
RULES AND OPINION: Plaintiff relied on the deposition testimony of her expert witness and a non-expert to establish the elements of her case. 315 S.C. at 346, 433 S.E.2d at 906-07. The expert was unable to point to any direct evidence that the fan was defective and caused the fire. 315 S.C. at 346, 433 S.E.2d at 907. The most he could say was that it was "possible" that the fan caused the fire, with other factors being equally as likely to have caused it. Id. The non-expert also could not establish that the fan was the cause of the fire. Id. "Causation based upon a possibility rather than a probability is not sufficient for a plaintiff to recover in a products liability case." Id. (citing Am Law Prod Liab 3d section 4:34, at 44 (1987). On this basis, the court held that Plaintiff had not met her burden of proof in establishing that Rose's negligence was the proximate cause of the injuries. 315 S.C. at 346-47, 433 S.E.2d at 907.
This post is subject to the DISCLAIMER & TERMS OF USE of this website.
FACTUAL BACKGROUND: A fire at a residence killed a minor child. 315 S.C. at 345, 433 S.E.2d at 906. The fire was alleged to have been caused by a ceiling fan. Id. The fan was sold by Defendant Rose's ("Rose's") to Defendant Edgar Gregory ("Gregory"), the landlord of the burned residence. Id.
PROCEDURE: Plaintiff Pamela Harris (personal representative deceased's estate and hereinafter, "Plaintiff") brought wrongful death and survival actions against Rose's under a products liability theory. 315 S.C. at 345, 433 S.E.2d at 906. The trial court granted Rose's motion for summary judgment on Plaintiff's claim and and on a cross-claim asserted by Gregory against Rose's. Id. Plaintiff appealed. Id.
ISSUE: Whether the trial court erred in granting summary judgment to Rose's based on Plaintiff's belief that she had produced sufficient circumstantial evidence that the ceiling fan, which the fire totally destroyed, was defective and a substantial contributing cause of the fire. 315 S.C. at 345, 433 S.E.2d at 906.
DISPOSITION: The South Carolina Court of Appeals held that the trial court's grant of summary judgment was proper. 315 S.C. at 347, 433 S.E.2d at 907.
RULES AND OPINION: Plaintiff relied on the deposition testimony of her expert witness and a non-expert to establish the elements of her case. 315 S.C. at 346, 433 S.E.2d at 906-07. The expert was unable to point to any direct evidence that the fan was defective and caused the fire. 315 S.C. at 346, 433 S.E.2d at 907. The most he could say was that it was "possible" that the fan caused the fire, with other factors being equally as likely to have caused it. Id. The non-expert also could not establish that the fan was the cause of the fire. Id. "Causation based upon a possibility rather than a probability is not sufficient for a plaintiff to recover in a products liability case." Id. (citing Am Law Prod Liab 3d section 4:34, at 44 (1987). On this basis, the court held that Plaintiff had not met her burden of proof in establishing that Rose's negligence was the proximate cause of the injuries. 315 S.C. at 346-47, 433 S.E.2d at 907.
This post is subject to the DISCLAIMER & TERMS OF USE of this website.
Monday, June 29, 2009
Drilling Down: "Essentially the Same Condition" (Part V)
By Brian A. Comer
This is the final installment of a series based on some research I have been doing for an article. The first four installments can be found here (part I), and here (part II), and here (part III), and here (part IV).
Meaning of "Essentially the Same Condition": South Carolina statutory law provides some guidance in the strict liability context, and South Carolina's federal and state courts have also interpreted the "essentially the same condition" element in various products liability cases. From my research, the following factors are relevant to whether a product is in "essentially the same condition.
Liability Despite A Change in the Product's Condition: A defendant may still be liable under South Carolina law even if a product is not in essentially the same condition. "'Liability [may] . . . be imposed upon a manufacturer or seller notwithstanding subsequent alteration of the product . . . [when] the alteration could have been anticipated by the manufacturer or seller, or did not causally contribute to the damages or injuries complained of.'" Fleming v. Borden, 316 S.C. 452, 458, 450 S.E.2d 589, 593 (1994) (quoting Robert D. Hersh & Henry J. Bailey, American Law of Products Liability 2d § 130 (1974)).
With regard to whether an alteration is "foreseeable," this aspect of the analysis correlates directly with one of South Carolina's tests for whether a product is in a defective condition, unreasonably dangerous for its intended use. See Bragg v. Hi-Ranger, Inc., 319 S.C. 531, 543, 462 S.E.2d 321, 328 (1995) ("The first test is whether the product is unreasonably dangerous to the ordinary consumer or user given the conditions and circumstances that foreseeably attend the use of the product.") (emphasis added). If a jury can determine that an alteration was a foreseeable circumstance based on the product's design, then a defendant may be liable despite the fact that a product is not in "essentially the same condition." See, e.g., Kennedy v. Custom Ice Equip. Co., Inc., 271 S.C. 171, 246 S.E.2d 176 (1978) (holding that there was evidence from which a jury could have determined that modifications to an ice-making machine were a foreseeable circumstance that required the incorporation of protective shields in the machine's design, and affirming submission of the case to the jury); Fleming v. Borden, 316 S.C. 452, 450 S.E.2d 589 (1994) (holding that expert testimony concerning a manufacturer's design and placement of a machine created a jury question as to whether removal of a platform for cleaning it was a foreseeable alteration, and reversing the trial court's decision to grant a directed verdict for the manufacturer).
Whether a modification causally contributed to a party's injuries does not appear to have been the focus of many South Carolina cases. Small v. Pioneer Machinery, Inc., 329 S.C. 448, 494 S.E.2d 835 (Ct. App. 1997), is the best example and involved a plaintiff who worked in the timber industry and was injured by a falling limb. The plaintiff claimed that the cause of the accident was a design defect in a log skidder. Id. at 455-60, 494 S.E.2d at 838-41. There was evidence that a log skidder was missing its driver's side door and its hand throttle. Id. at 466, 494 S.E.2d at 844. There was also testimony that neither the hand brake nor the foot brake on the log skidder were operable at the time of the accident. Id. Nevertheless, the jury found that the alterations did not causally contribute to the accident, and the South Carolina Court of Appeals held that the trial court did not err in submitting the case to the jury. Id.
This concludes this series of posts about this element of all South Carolina product liability law actions. You can find all of the installments, and other information pertaining to this particular element, by clicking here or on the "Same Condition" topic tag to the right of the page.
This post is subject to the DISCLAIMER & TERMS OF USE of this website.
This is the final installment of a series based on some research I have been doing for an article. The first four installments can be found here (part I), and here (part II), and here (part III), and here (part IV).
Meaning of "Essentially the Same Condition": South Carolina statutory law provides some guidance in the strict liability context, and South Carolina's federal and state courts have also interpreted the "essentially the same condition" element in various products liability cases. From my research, the following factors are relevant to whether a product is in "essentially the same condition.
- Whether it has been "subsequently mishandled;"
- Whether it has been modified or altered;
- Whether a significant amount of time has elapsed between when the product left the manufacturer's control and the time of injury, which can be relevant to "wear and tear;" and
- Maintenance.
Liability Despite A Change in the Product's Condition: A defendant may still be liable under South Carolina law even if a product is not in essentially the same condition. "'Liability [may] . . . be imposed upon a manufacturer or seller notwithstanding subsequent alteration of the product . . . [when] the alteration could have been anticipated by the manufacturer or seller, or did not causally contribute to the damages or injuries complained of.'" Fleming v. Borden, 316 S.C. 452, 458, 450 S.E.2d 589, 593 (1994) (quoting Robert D. Hersh & Henry J. Bailey, American Law of Products Liability 2d § 130 (1974)).
With regard to whether an alteration is "foreseeable," this aspect of the analysis correlates directly with one of South Carolina's tests for whether a product is in a defective condition, unreasonably dangerous for its intended use. See Bragg v. Hi-Ranger, Inc., 319 S.C. 531, 543, 462 S.E.2d 321, 328 (1995) ("The first test is whether the product is unreasonably dangerous to the ordinary consumer or user given the conditions and circumstances that foreseeably attend the use of the product.") (emphasis added). If a jury can determine that an alteration was a foreseeable circumstance based on the product's design, then a defendant may be liable despite the fact that a product is not in "essentially the same condition." See, e.g., Kennedy v. Custom Ice Equip. Co., Inc., 271 S.C. 171, 246 S.E.2d 176 (1978) (holding that there was evidence from which a jury could have determined that modifications to an ice-making machine were a foreseeable circumstance that required the incorporation of protective shields in the machine's design, and affirming submission of the case to the jury); Fleming v. Borden, 316 S.C. 452, 450 S.E.2d 589 (1994) (holding that expert testimony concerning a manufacturer's design and placement of a machine created a jury question as to whether removal of a platform for cleaning it was a foreseeable alteration, and reversing the trial court's decision to grant a directed verdict for the manufacturer).
Whether a modification causally contributed to a party's injuries does not appear to have been the focus of many South Carolina cases. Small v. Pioneer Machinery, Inc., 329 S.C. 448, 494 S.E.2d 835 (Ct. App. 1997), is the best example and involved a plaintiff who worked in the timber industry and was injured by a falling limb. The plaintiff claimed that the cause of the accident was a design defect in a log skidder. Id. at 455-60, 494 S.E.2d at 838-41. There was evidence that a log skidder was missing its driver's side door and its hand throttle. Id. at 466, 494 S.E.2d at 844. There was also testimony that neither the hand brake nor the foot brake on the log skidder were operable at the time of the accident. Id. Nevertheless, the jury found that the alterations did not causally contribute to the accident, and the South Carolina Court of Appeals held that the trial court did not err in submitting the case to the jury. Id.
This concludes this series of posts about this element of all South Carolina product liability law actions. You can find all of the installments, and other information pertaining to this particular element, by clicking here or on the "Same Condition" topic tag to the right of the page.
This post is subject to the DISCLAIMER & TERMS OF USE of this website.
Friday, June 26, 2009
Case Brief: Anderson v. Green Bull, Inc.
By Brian A. Comer
Today's case brief is Anderson v. Green Bull, Inc., 322 S.C. 268, 471 S.E.2d (Ct. App. 1996). This is a warnings case, and it stands for the principle that a seller is not liable for injuries caused by a product if there is an an adequate warning and the user fails to follow it. Furthermore, there is no duty to warn of common or obvious dangers.
FACTUAL BACKGROUND: Joe McLees ("Deceased") was working with another employee of Tucker Roofing ("Tucker") to replace a roof on a house. 322 S.C. at 270, 471 S.E.2d at 710. Two high-voltage power lines ran over the top of the house. Id. While they were moving an aluminum conveyor ladder, the Deceased was electrocuted and the other employee was injured. Id. Green Bull sold the ladder to Tucker, and Tucker assembled it, without modifications. Id. The ladder contained a red warning label that read, "KEEP ENTIRE UNIT CLEAR OF ALL UTILITY AND ELECTRICAL WIRING." Id.
PROCEDURE: The Deceased's personal representative ("Plaintiff") brought a strict liability action against Green Bull. 322 S.C. at 269, 471 S.E.2d at 709-10. At the close of evidence, Green Bull moved for directed verdict, which was denied. Id. at 269, 471 S.E.2d at 710. The jury returned a $50,000 verdict for the Plaintiff. Id. Green Bull moved for a judgment notwithstanding the verdict, which the trial court also denied. Id. Green Bull then appealed to the South Carolina Court of Appeals. Id.
ISSUES: Whether the trial court should have granted Green Bull's motions for directed verdict and judgment notwithstanding the verdict. 322 S.C. at 269-70, 471 S.E.2d at 710.
DISPOSITION: The South Carolina Court of Appeals reversed the decision of the trial court. 322 S.C. at 269, 471 S.E.2d at 710.
RULES AND OPINION: For any strict liability claim, a plaintiff must prove that the injury occurred because the product was in an unreasonably dangerous, defective condition. 322 S.C. at 270, 471 S.E.2d at 710. To prevent a product from being unreasonably dangerous, a seller may be required to provide a warning on the product concerning its use. Id. As stated by the court:
Id. at 270-71, 471 S.E.2d at 710 (citations omitted). On this basis, there was no evidence to infer that the roofers' injuries were caused by a defect in the ladder. Id. at 271, 471 S.E.2d at 710. It is commonly known that aluminum ladders should be kept away from power lines. Id. at 271, 471 S.E.2d at 711. Plaintiff also argued that the jury could have reasonably found that the accident resulted from "arcing" (i.e., where an electrical current "jumps" into a conductive source without direct contact), and that arcing is not common knowledge. Id. at 272, 471 S.E.2d at 711. However, the court said that there was no evidence from which a jury could reasonably conclude that arcing most probably took place. Id. For these reasons, the trial court erred in denying Green Bull's motions for directed verdict and judgment notwithstanding the verdict. Id.
CONCURRING OPINION (Cureton, J.): Judge Cureton concurred with the majority, but stated that the question presented was "whether Green Bull, knowing the foreseeable use of the ladder, had a duty to warn its users against the hazard of bringing the ladder into contact with electrical lines, and if so, whether the warning it placed on the ladder was adequate." 322 S.C. at 273, 471 S.E.2d at 712. Judge Cureton agreed that Green Bull had a duty to warn, but found that the warning provided by Green Bull was adequate. Id. at 273-74. 471 S.E.2d at 712.
DISSENTING OPINION (Howell, C.J.): Chief Judge Howell framed the issue as "not whether the trial judge considers the product unreasonably dangerous, but what the evidence reflects may reasonably be regarded as unreasonably dangerous." 322 S.C. at 275, 471 S.E.2d at 713. He reviewed the evidence concerning the use of fiberglass, how it would change the composition, utility and weight of the ladder, and the state of the art. Id. at 276-77, 471 S.E.2d at 713-14. Based on the evidence, Chief Judge Howell dissented because he believed that "there was ample competent evidence in the record for the trial judge to submit the issue of whether the ladder was defective by design to the jury." Id. at 277, 471 S.E.2d at 714.
This post is subject to the DISCLAIMER & TERMS OF USE of this website.
Today's case brief is Anderson v. Green Bull, Inc., 322 S.C. 268, 471 S.E.2d (Ct. App. 1996). This is a warnings case, and it stands for the principle that a seller is not liable for injuries caused by a product if there is an an adequate warning and the user fails to follow it. Furthermore, there is no duty to warn of common or obvious dangers.
FACTUAL BACKGROUND: Joe McLees ("Deceased") was working with another employee of Tucker Roofing ("Tucker") to replace a roof on a house. 322 S.C. at 270, 471 S.E.2d at 710. Two high-voltage power lines ran over the top of the house. Id. While they were moving an aluminum conveyor ladder, the Deceased was electrocuted and the other employee was injured. Id. Green Bull sold the ladder to Tucker, and Tucker assembled it, without modifications. Id. The ladder contained a red warning label that read, "KEEP ENTIRE UNIT CLEAR OF ALL UTILITY AND ELECTRICAL WIRING." Id.
PROCEDURE: The Deceased's personal representative ("Plaintiff") brought a strict liability action against Green Bull. 322 S.C. at 269, 471 S.E.2d at 709-10. At the close of evidence, Green Bull moved for directed verdict, which was denied. Id. at 269, 471 S.E.2d at 710. The jury returned a $50,000 verdict for the Plaintiff. Id. Green Bull moved for a judgment notwithstanding the verdict, which the trial court also denied. Id. Green Bull then appealed to the South Carolina Court of Appeals. Id.
ISSUES: Whether the trial court should have granted Green Bull's motions for directed verdict and judgment notwithstanding the verdict. 322 S.C. at 269-70, 471 S.E.2d at 710.
DISPOSITION: The South Carolina Court of Appeals reversed the decision of the trial court. 322 S.C. at 269, 471 S.E.2d at 710.
RULES AND OPINION: For any strict liability claim, a plaintiff must prove that the injury occurred because the product was in an unreasonably dangerous, defective condition. 322 S.C. at 270, 471 S.E.2d at 710. To prevent a product from being unreasonably dangerous, a seller may be required to provide a warning on the product concerning its use. Id. As stated by the court:
A product bearing a warning that the product is safe for use if the user follows the warning is neither defective nor unreasonably dangerous; therefore, the seller is not liable for any injuries caused by the use of the product if the user ignores the warning. Further, a seller is not required to warn of dangers or potential dangers that are generally known or recognized. It follows, then, that a product cannot be deemed either defective or unreasonably dangerous if a danger associated with the product is one that the product's users generally recognize.
Id. at 270-71, 471 S.E.2d at 710 (citations omitted). On this basis, there was no evidence to infer that the roofers' injuries were caused by a defect in the ladder. Id. at 271, 471 S.E.2d at 710. It is commonly known that aluminum ladders should be kept away from power lines. Id. at 271, 471 S.E.2d at 711. Plaintiff also argued that the jury could have reasonably found that the accident resulted from "arcing" (i.e., where an electrical current "jumps" into a conductive source without direct contact), and that arcing is not common knowledge. Id. at 272, 471 S.E.2d at 711. However, the court said that there was no evidence from which a jury could reasonably conclude that arcing most probably took place. Id. For these reasons, the trial court erred in denying Green Bull's motions for directed verdict and judgment notwithstanding the verdict. Id.
CONCURRING OPINION (Cureton, J.): Judge Cureton concurred with the majority, but stated that the question presented was "whether Green Bull, knowing the foreseeable use of the ladder, had a duty to warn its users against the hazard of bringing the ladder into contact with electrical lines, and if so, whether the warning it placed on the ladder was adequate." 322 S.C. at 273, 471 S.E.2d at 712. Judge Cureton agreed that Green Bull had a duty to warn, but found that the warning provided by Green Bull was adequate. Id. at 273-74. 471 S.E.2d at 712.
DISSENTING OPINION (Howell, C.J.): Chief Judge Howell framed the issue as "not whether the trial judge considers the product unreasonably dangerous, but what the evidence reflects may reasonably be regarded as unreasonably dangerous." 322 S.C. at 275, 471 S.E.2d at 713. He reviewed the evidence concerning the use of fiberglass, how it would change the composition, utility and weight of the ladder, and the state of the art. Id. at 276-77, 471 S.E.2d at 713-14. Based on the evidence, Chief Judge Howell dissented because he believed that "there was ample competent evidence in the record for the trial judge to submit the issue of whether the ladder was defective by design to the jury." Id. at 277, 471 S.E.2d at 714.
This post is subject to the DISCLAIMER & TERMS OF USE of this website.
Tuesday, June 23, 2009
Feedback
The site has been up about a month now, and I wanted to take the opportunity to solicit any feedback. If you have any constructive criticism, requests for content, or anything else, please comment to this post and let me know.
One thing that has been an issue on my end is that -- early on at least -- there was a problem with Internet Explorer that would cause the loading of the site (or pages within the site) to "abort" (i.e., there would be a pop-up saying "operation aborted," followed by a blank page). Is anyone having this problem when viewing the site?
This problem is not limited to this blog. It has been a problem for many blogger.com sites due to some issue with Internet Explorer. I read that it had something to do with a having a "site meter" (i.e., a tool bar that indicates how many people are visiting your site). I do not have a site meter for this reason, and I have tried to minimize which "toolbars" I have on the site so as to avoid this loading problem. I read that if you view blogger sites with a different browser (i.e. Mozilla Firefox, etc.), it is not an issue. Please let me know if you have had this problem.
In addition, if there are any links that do not work, or other issues, let me know and I will try to fix them.
In the future, I plan to continue surveying verdicts, new advance sheet opinions (state and federal), briefing past cases, and providing commentary on the elements of South Carolina products liability cases. If you have any other suggestions, I would enjoy hearing them.
One thing that has been an issue on my end is that -- early on at least -- there was a problem with Internet Explorer that would cause the loading of the site (or pages within the site) to "abort" (i.e., there would be a pop-up saying "operation aborted," followed by a blank page). Is anyone having this problem when viewing the site?
This problem is not limited to this blog. It has been a problem for many blogger.com sites due to some issue with Internet Explorer. I read that it had something to do with a having a "site meter" (i.e., a tool bar that indicates how many people are visiting your site). I do not have a site meter for this reason, and I have tried to minimize which "toolbars" I have on the site so as to avoid this loading problem. I read that if you view blogger sites with a different browser (i.e. Mozilla Firefox, etc.), it is not an issue. Please let me know if you have had this problem.
In addition, if there are any links that do not work, or other issues, let me know and I will try to fix them.
In the future, I plan to continue surveying verdicts, new advance sheet opinions (state and federal), briefing past cases, and providing commentary on the elements of South Carolina products liability cases. If you have any other suggestions, I would enjoy hearing them.
Monday, June 22, 2009
Verdicts: Lawrence Keeter, et al v. Alpine Towers Int'l, Inc.
Summary and Commentary by Brian A. Comer
A York County jury awarded $4,750,000 to the family of a former Fort Mill High School student in a case that included products liability claims. The plaintiff was paralyzed when he fell during a climbing wall accident. The Rock Hill Herald reported the story in an article that is cut and pasted further below. I have also obtained a copy of the Amended Complaint and the jury verdict form from Plaintiff's counsel. A summary of the case, based on all of the information received to date, is as follows:
Date of Injury: May 5, 2006
Date of Award: June 19, 2009
County and Court: York County Court of Common Pleas, Sixteenth Judicial Circuit
Trial Judge: The Honorable John C. Hayes, III
Plaintiffs and Counsel: Lawrence "Larry" Keeter was the injured plaintiff. He was 20 years old at the time of trial, and a senior at Fort Mill High School at the time of the accident. His parents, Ronald Travis Keeter and Rebecca Keeter, were also named as plaintiffs in the Amended Complaint. They were represented by Richard A. Harpootlian and Graham L. Newman (Columbia, South Carolina).
Defendants and Counsel: Alpine Towers International, Inc. ("Alpine") (whose website, I believe, is here) and Ashley Sexton were named as defendants in the Amended Complaint (filed May 28, 2009). Alpine installed the "Alpine Tower" climbing equipment at issue in the case, according to the Amended Complaint and the news report. Ms. Sexton was the "belayer" who allegedly lost her grip on the rope that was holding the injured plaintiff. Ms. Sexton was dismissed from the case, but she was included on one portion of the verdict form in order for the jury to apportion fault. Alpine was represented by Thomas C. Salane (Columbia, South Carolina) at trial.
Nature of Injury: The injured plaintiff fractured his spine after falling 20 feet in a climbing wall accident. Heis confined to a wheelchair and doctors have told him he might never walk again, per the news report.
Nature of claims: Plaintiffs brought the following claims in the case, as set forth in the Amended Complaint:
(Verdict Form as to Larry Keeter)
****************
A cut and paste from the news article in The Rock Hill Herald that reported the verdict is provided below.
http://www.heraldonline.com/front/story/1422640.html
Verdict brings ‘closure' for student hurt in climbing wall fall
By Matt Garfield - mgarfield@heraldonline.com
A York County jury on Friday awarded $4.7 million to the family of a former Fort Mill High School student left paralyzed in a climbing wall accident.
Larry Keeter suffered a fractured spine when he fell 20 feet to the ground during a Spring Fling field day in May 2006. Doctors have told him he might never walk again.
Keeter's family filed a lawsuit against the North Carolina-based company that installed the climbing wall. Friday's verdict delivered long-awaited relief to Keeter and his parents, who voiced hope that it would lead to improved safety conditions at similar climbing walls across the country.
“Hating somebody is not going to get me up and walking,” Keeter said. “The best thing I can do is help people realize there's a change that's needed to prevent this from happening again.”
The tower company, Alpine Towers International of Pineola, N.C., did not return phone calls seeking comment Friday afternoon. Thom Salane, an attorney for the company, also couldn't be reached.
Now 20, Keeter is confined to a wheelchair. Every day, he says, his mind flashes back to the accident.
Then a senior, Keeter had ascended the 50-foot climbing wall and was rappelling down while strapped inside a harness.
A student on the ground acting as a “belayer” lost her grip on the rope, and Keeter plummeted 20 feet, landing on his feet and then crumpling to the ground, the lawsuit states. He shattered one vertebrae; the impact sent a shock up his back and fractured his spine.
Doctors at Carolinas Medical Center in Charlotte removed bone fragments from Keeter's spinal canal and realigned his spine. They put eight bolts and two metal rods in his back.
Keeter's family brought in Columbia attorney Dick Harpootlian to pursue a lawsuit against Alpine Towers, which had installed the tower after it was donated by Carowinds.
Harpootlian cited faulty design, saying the belay equipment lacked an automatic locking device that could have prevented Keeter's fall. The suit also said Alpine did not adequately train Fort Mill High School faculty members.
“You don't put kids in a position where their lives literally hang in the balance based on the attentiveness of other kids,” Harpootlian said Friday. “That is what our experts hammered.”
Harpootlian said he expects Alpine to file an appeal.
Fort Mill officials took down the climbing wall soon after the accident. Alpine installed the tower and trained school officials on how to use it, according to the lawsuit.
There are at least 11 alpine towers in South Carolina and nearly 240 around the world, according to published reports. A 10-year safety report published in 1999 concluded that tower users reported 176 minor accidents and 18 serious accidents.
After Keeter's accident, some tower operators said they would re-evaluate their safety methods.
Keeter has made progress over the past three years. He lives in a handicapped accessible apartment near the Rock Hill Galleria and drives himself around in a car equipped with a gas pedal on the steering wheel.
He earned a computer certification from York Technical College but hasn't found steady work.
Memories from the accident are still fresh in Keeter's mind. Hitting the ground. School personnel rushing to help him. Learning at the hospital that he had broken his spine.
The jury's decision brought closure to a long ordeal, but Keeter was in no mood to celebrate. His family had waited at the courthouse until well past midnight Thursday while the jury deliberated.
Asked what he planned to do next, Keeter said he just wanted to go home and take a nap.
This post is subject to the DISCLAIMER & TERMS OF USE of this website.
A York County jury awarded $4,750,000 to the family of a former Fort Mill High School student in a case that included products liability claims. The plaintiff was paralyzed when he fell during a climbing wall accident. The Rock Hill Herald reported the story in an article that is cut and pasted further below. I have also obtained a copy of the Amended Complaint and the jury verdict form from Plaintiff's counsel. A summary of the case, based on all of the information received to date, is as follows:
Date of Injury: May 5, 2006
Date of Award: June 19, 2009
County and Court: York County Court of Common Pleas, Sixteenth Judicial Circuit
Trial Judge: The Honorable John C. Hayes, III
Plaintiffs and Counsel: Lawrence "Larry" Keeter was the injured plaintiff. He was 20 years old at the time of trial, and a senior at Fort Mill High School at the time of the accident. His parents, Ronald Travis Keeter and Rebecca Keeter, were also named as plaintiffs in the Amended Complaint. They were represented by Richard A. Harpootlian and Graham L. Newman (Columbia, South Carolina).
Defendants and Counsel: Alpine Towers International, Inc. ("Alpine") (whose website, I believe, is here) and Ashley Sexton were named as defendants in the Amended Complaint (filed May 28, 2009). Alpine installed the "Alpine Tower" climbing equipment at issue in the case, according to the Amended Complaint and the news report. Ms. Sexton was the "belayer" who allegedly lost her grip on the rope that was holding the injured plaintiff. Ms. Sexton was dismissed from the case, but she was included on one portion of the verdict form in order for the jury to apportion fault. Alpine was represented by Thomas C. Salane (Columbia, South Carolina) at trial.
Nature of Injury: The injured plaintiff fractured his spine after falling 20 feet in a climbing wall accident. Heis confined to a wheelchair and doctors have told him he might never walk again, per the news report.
Nature of claims: Plaintiffs brought the following claims in the case, as set forth in the Amended Complaint:
- Negligence as to Defendant Sexton (relating to her duty to properly belay the injured plaintiff);
- Negligence as to Alpine (relating to its duty to adequately train high school faculty members so as to ensure proper supervision of participants and use of the equipment);
- Products liability (strict liability) as to Alpine (relating to failure to provide adequate instructions and warnings, and failure to incorporate an aut0-locking device);
- Products liability (negligence) as to Alpine (relating to failure to cure deficiencies in its instructions, warnings, and safety devices);
- Loss of services as to Defendant Sexton and Alpine (relating to loss of services by Plaintiff's parents).
(Verdict Form as to Larry Keeter)
- Strict Liability: "We find for Larry Keeter $ five hundred & 00/100 ($500.00) in actual damages."
- Products Liability (Negligence): The jury found Alpine to have been negligent with regard to "Inadequate Instructions and Warnings and Failure to Incoporate an Autolocking Belay Device." The jury apportioned 100 percent fault to Alpine with regard to this theory. The jury awarded $900,000 in actual damages and $160,000 in punitive damages to Larry Keeter for this claim.
- General Negligence: The jury found Alpine generally negligence with regard to "Failure to Adequately Train"). The jury apportioned 100 percent fault to Alpine with regard to this theory. The jury awarded $2,500,000 in actual damages and $950,000 in punitive damages to Larry Keeter for this claim.
(Verdict Form as to Travis and Rebecca Keeter)
- Loss of Service: The jury found for Travis and Rebecca Keeter with regard to this theory and awarded $240,000 in actual damages.
(Verdict Form (pertaining to fault apportionment))
- The jury apportioned fault as to Larry Keeter's fall in the amount of 40% for Alpine and 60% for Ashley Sexton.
****************
A cut and paste from the news article in The Rock Hill Herald that reported the verdict is provided below.
http://www.heraldonline.com/front/story/1422640.html
Verdict brings ‘closure' for student hurt in climbing wall fall
By Matt Garfield - mgarfield@heraldonline.com
A York County jury on Friday awarded $4.7 million to the family of a former Fort Mill High School student left paralyzed in a climbing wall accident.
Larry Keeter suffered a fractured spine when he fell 20 feet to the ground during a Spring Fling field day in May 2006. Doctors have told him he might never walk again.
Keeter's family filed a lawsuit against the North Carolina-based company that installed the climbing wall. Friday's verdict delivered long-awaited relief to Keeter and his parents, who voiced hope that it would lead to improved safety conditions at similar climbing walls across the country.
“Hating somebody is not going to get me up and walking,” Keeter said. “The best thing I can do is help people realize there's a change that's needed to prevent this from happening again.”
The tower company, Alpine Towers International of Pineola, N.C., did not return phone calls seeking comment Friday afternoon. Thom Salane, an attorney for the company, also couldn't be reached.
Now 20, Keeter is confined to a wheelchair. Every day, he says, his mind flashes back to the accident.
Then a senior, Keeter had ascended the 50-foot climbing wall and was rappelling down while strapped inside a harness.
A student on the ground acting as a “belayer” lost her grip on the rope, and Keeter plummeted 20 feet, landing on his feet and then crumpling to the ground, the lawsuit states. He shattered one vertebrae; the impact sent a shock up his back and fractured his spine.
Doctors at Carolinas Medical Center in Charlotte removed bone fragments from Keeter's spinal canal and realigned his spine. They put eight bolts and two metal rods in his back.
Keeter's family brought in Columbia attorney Dick Harpootlian to pursue a lawsuit against Alpine Towers, which had installed the tower after it was donated by Carowinds.
Harpootlian cited faulty design, saying the belay equipment lacked an automatic locking device that could have prevented Keeter's fall. The suit also said Alpine did not adequately train Fort Mill High School faculty members.
“You don't put kids in a position where their lives literally hang in the balance based on the attentiveness of other kids,” Harpootlian said Friday. “That is what our experts hammered.”
Harpootlian said he expects Alpine to file an appeal.
Fort Mill officials took down the climbing wall soon after the accident. Alpine installed the tower and trained school officials on how to use it, according to the lawsuit.
There are at least 11 alpine towers in South Carolina and nearly 240 around the world, according to published reports. A 10-year safety report published in 1999 concluded that tower users reported 176 minor accidents and 18 serious accidents.
After Keeter's accident, some tower operators said they would re-evaluate their safety methods.
Keeter has made progress over the past three years. He lives in a handicapped accessible apartment near the Rock Hill Galleria and drives himself around in a car equipped with a gas pedal on the steering wheel.
He earned a computer certification from York Technical College but hasn't found steady work.
Memories from the accident are still fresh in Keeter's mind. Hitting the ground. School personnel rushing to help him. Learning at the hospital that he had broken his spine.
The jury's decision brought closure to a long ordeal, but Keeter was in no mood to celebrate. His family had waited at the courthouse until well past midnight Thursday while the jury deliberated.
Asked what he planned to do next, Keeter said he just wanted to go home and take a nap.
This post is subject to the DISCLAIMER & TERMS OF USE of this website.
Friday, June 19, 2009
Case Brief: Schall v. Sturm, Ruger Co.
By Brian A. Comer
Today's brief is of Schall v. Sturm, Ruger Co., 278 S.C.646, 300 S.E.2d 735 (1983). This case is most often cited for the rule that a cause of action for strict liability does not exist if a product entered the stream of commerce prior to the enactment of the strict liability statute, which became effective on July 9, 1974.
FACTUAL AND PROCEDURAL BACKGROUND: There were no plaintiff-specific facts in the opinion. Instead, pursuant to Rule 46, Rules of Practice of the South Carolina Supreme Court, the United States District Court for the District of South Carolina certified a question to the South Carolina Supreme Court. 278 S.C. at 647-48, 300 S.E.2d at 735.
CERTIFIED QUESTION: "Does a cause of action in strict liability exist under Section 15-73-10, Code of Laws of South Carolina, 1976, in favor of a party injured after July 9, 1974, by a product that was placed in the stream of commerce prior to codification of Restatement (Second) of Torts Section 402A?" 278 S.C. at 647-48, 300 S.E.2d at 735.
DISPOSITION: "Absent clear legislative direction, and deferring policy determinations to the General Assembly, we find that a cause of action resting upon strict liability under Section 15-73-10, Code, does not exist in South Carolina where a product entering the stream of commerce prior to July 9, 1974 is alleged to have caused injury thereafter." 278 S.C. at 650, 300 S.E.2d at 737.
RULES AND OPINION: Strict liability became the law of South Carolina by the enactment of 1974 Act No. 1184 (effective July 9, 1974). 278 S.C. at 648, 300 S.E.2d at 736. The Act adopted almost verbatim the rule set forth in Restatement (Second) of Torts section 402A, as well as its comments (as its legislative intent). Id. Strict liability was not recognized by South Carolina's common law prior to the Act. Id. Recovery for strict liability does not rest upon any rights or duties that are established by some transaction, as is the case with a breach of warranty lawsuit. Id. It also renders the concept of a duty irrelevant because a party can recover even though a seller "has exercised all possible care in the preparation and sale of his product. . . . " Id. Rather, it is an entirely new cause of action. Id. For this reason, "operative events" (i.e. time of sale, time of injury, etc.) distort the nature of this theory of recovery. Id. at 649, 300 S.E.2d at 726.
Id. Therefore, the nature of strict liability precludes the use of time as being dispositive of the issue. Id. at 649-50, 300 S.E.2d at 736-37. Rather, strict liability's policy objectives govern it, and the General Assembly's adoption of strict liability reflects its legislative judgment as to when the theory of recovery should exist. Id. at 650, 300 S.E.2d at 737. Because there is nothing in the Act to provide guidance as to when inchoate strict liability can be deemed to exist, the court follows the "well-settled rule that a statute may not be applied retroactively in the absence of specific provision or clear legislative intent to the contrary." Id.
NOTES: The rule in Schall is important for any older equipment that is still in service. In my own experience, I have noticed that farm machinery can frequently implicate the policies set forth in Schall. A farmer may purchase older equipment because it is sold at a discounted price, refurbish it, use it, and then resell it to another farmer . . . who continues the cycle. I had a case involving a corn picker that was very old, but was still in use despite its age and modifications over the years. Schall was very important to the outcome of that case.
Furthermore, though products that pre-date the 1974 Act cannot be the subject of a strict liability claim, it may also be difficult for a plaintiff to prevail on other products liability theories, as well (i.e., negligence and breach of warranty). Under any theory of recovery in a South Carolina products liability case, the plaintiff has to prove that the product was in "essentially the same condition" at the time of the injury as when it left the control of the defendant. This is likely to be more difficult with an older product that pre-dates the 1974 Act. The product's age, its modification and maintenance over the years, and any mishandling may detract from arguments that is can satisfy the "essentially the same condition" requirement. For more information on this particular element, see "Same Condition."
This post is subject to the DISCLAIMER & TERMS OF USE of this website.
Today's brief is of Schall v. Sturm, Ruger Co., 278 S.C.646, 300 S.E.2d 735 (1983). This case is most often cited for the rule that a cause of action for strict liability does not exist if a product entered the stream of commerce prior to the enactment of the strict liability statute, which became effective on July 9, 1974.
FACTUAL AND PROCEDURAL BACKGROUND: There were no plaintiff-specific facts in the opinion. Instead, pursuant to Rule 46, Rules of Practice of the South Carolina Supreme Court, the United States District Court for the District of South Carolina certified a question to the South Carolina Supreme Court. 278 S.C. at 647-48, 300 S.E.2d at 735.
CERTIFIED QUESTION: "Does a cause of action in strict liability exist under Section 15-73-10, Code of Laws of South Carolina, 1976, in favor of a party injured after July 9, 1974, by a product that was placed in the stream of commerce prior to codification of Restatement (Second) of Torts Section 402A?" 278 S.C. at 647-48, 300 S.E.2d at 735.
DISPOSITION: "Absent clear legislative direction, and deferring policy determinations to the General Assembly, we find that a cause of action resting upon strict liability under Section 15-73-10, Code, does not exist in South Carolina where a product entering the stream of commerce prior to July 9, 1974 is alleged to have caused injury thereafter." 278 S.C. at 650, 300 S.E.2d at 737.
RULES AND OPINION: Strict liability became the law of South Carolina by the enactment of 1974 Act No. 1184 (effective July 9, 1974). 278 S.C. at 648, 300 S.E.2d at 736. The Act adopted almost verbatim the rule set forth in Restatement (Second) of Torts section 402A, as well as its comments (as its legislative intent). Id. Strict liability was not recognized by South Carolina's common law prior to the Act. Id. Recovery for strict liability does not rest upon any rights or duties that are established by some transaction, as is the case with a breach of warranty lawsuit. Id. It also renders the concept of a duty irrelevant because a party can recover even though a seller "has exercised all possible care in the preparation and sale of his product. . . . " Id. Rather, it is an entirely new cause of action. Id. For this reason, "operative events" (i.e. time of sale, time of injury, etc.) distort the nature of this theory of recovery. Id. at 649, 300 S.E.2d at 726.
Neither conduct nor obligation underlie recovery but rather the combination of a defective product with an instance of causally related injury. Strict liability would be best analogized to a legal status: inchoate at the moment when the product leaves the seller's hands in a defective condition that is unreasonably dangerous, ripe for determination at the instant of injury, and fixed by action and final judgment.
Id. Therefore, the nature of strict liability precludes the use of time as being dispositive of the issue. Id. at 649-50, 300 S.E.2d at 736-37. Rather, strict liability's policy objectives govern it, and the General Assembly's adoption of strict liability reflects its legislative judgment as to when the theory of recovery should exist. Id. at 650, 300 S.E.2d at 737. Because there is nothing in the Act to provide guidance as to when inchoate strict liability can be deemed to exist, the court follows the "well-settled rule that a statute may not be applied retroactively in the absence of specific provision or clear legislative intent to the contrary." Id.
NOTES: The rule in Schall is important for any older equipment that is still in service. In my own experience, I have noticed that farm machinery can frequently implicate the policies set forth in Schall. A farmer may purchase older equipment because it is sold at a discounted price, refurbish it, use it, and then resell it to another farmer . . . who continues the cycle. I had a case involving a corn picker that was very old, but was still in use despite its age and modifications over the years. Schall was very important to the outcome of that case.
Furthermore, though products that pre-date the 1974 Act cannot be the subject of a strict liability claim, it may also be difficult for a plaintiff to prevail on other products liability theories, as well (i.e., negligence and breach of warranty). Under any theory of recovery in a South Carolina products liability case, the plaintiff has to prove that the product was in "essentially the same condition" at the time of the injury as when it left the control of the defendant. This is likely to be more difficult with an older product that pre-dates the 1974 Act. The product's age, its modification and maintenance over the years, and any mishandling may detract from arguments that is can satisfy the "essentially the same condition" requirement. For more information on this particular element, see "Same Condition."
This post is subject to the DISCLAIMER & TERMS OF USE of this website.
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