Drilling Down: The Duty to Warn

By Brian A. Comer

I have been doing some research on South Carolina warnings law lately, and now is as good a time as any to provide some further explanation on this area of products liability law. I always enjoy cases involving warnings, primarily because I never cease to be amazed at how different sides of the bar can have totally divergent views on whether a specific warning is "adequate."

No South Carolina state court (that I have found) explicitly sets forth when the duty to warn arises in a products liability case. However, in Gardner v. Q.H.S., Inc., 448 F.2d 238 (4th Cir. 1971), the Fourth Circuit Court of Appeals provided extensive guidance on the duty to warn in an appeal of a South Carolina products liability action arising in diversity, and the South Carolina Supreme Court cited to Gardner’s rationale in its negligent failure to warn analysis in Livingston v. Noland Corp., 239 S.C. 521, 362 S.E.2d 16 (1987). Gardner supports that the duty to warn arises when (a) the reasonably foreseeable risks of a product – either from its intended use or from the environment in which it is used – pose a potential danger, and (b) the user may not realize the potential danger. In such cases, the manufacturer and supplier has a duty to warn the user. Gardner, 448 F.2d at 242-43; Livingston, 293 S.C. at 525, 362 S.E.2d at 18.

Gardner involved the ignition of hair rollers when the water in which they were heating boiled out of the pot. Id. at 240-41. After putting the rollers on the stove to heat, the user fell asleep in the bathtub. Id. at 241. The resulting fire substantially destroyed the apartment building, and the building owner sued the hair roller manufacturer to recover his losses. Id. at 240. One of his theories for recovery was that the manufacturer’s warning about the flammability of the rollers was inadequate. Id. The warning at issue stated as follows: “Use plenty of water. Do not let water boil away. Cautionary note: Rollers may be inflammable only if left over flame in pan without water. Otherwise Q.H.S. Setting/Rollers are perfectly safe.” Id. at 241.

The district judge granted a directed verdict in favor of the manufacturer on grounds that the hair rollers were not “inherently dangerous.” Id. at 240. Therefore, the manufacturer had no duty to provide a more extensive warning than the one provided. Id. On appeal, the Fourth Circuit rejected the district judge’s focus on the inherent danger of the rollers as the determinative factor for the manufacturer’s duty to warn. Id. at 242. Instead, the court suggested that the duty to warn arises if a supplier and manufacturer “(a) . . . know or have reason to know that the chattel is or is likely to be dangerous for the use for which it is supplied, [and] (b) they lack reason to believe that the user will realize the potential danger. . . . “ Id. at 242 (citing Restatement (Second) of Torts §§ 388 and 295 (1965)). The court elaborated that the duty is determined through an analysis of foreseeability, and it cited to Mickle v. Blackmon, 252 S.C. 202, 166 S.E.2d 173 (1969) as the applicable South Carolina law. Gardner, 448 F.2d at 242-43. The court quoted from Mickle as follows:

Normally a seller or manufacturer is entitled to anticipate that the product he deals in will be used only for the purposes for which it is manufactured and sold: thus he is expected to reasonably foresee only injuries arising in the course of such use. However, he must also be expected to anticipate the environment which is normal for the use of his product and where, as here, that environment is the home, he must anticipate the reasonably foreseeable risk of the use of his product in such an environment. These are risks which are inherent in the proper use for which his product is manufactured.

Id. (quoting Mickle, 252 S.C. at 233, 166 S.E.2d at 187).

Using this framework, the court determined that a jury could conclude that a momentary interruption that results in water boiling away is so common that the manufacturer should have foreseen that it could occur while its product was being used. Id. at 243. The court also concluded that a jury could find that the manufacturer knew or should have known that the heat to which the product would be subjected during those occasions could exceed the normal ignition point of the hair roller’s contents. Id. Therefore, the court concluded that the jury could have found that there was a duty to warn of these risks. Id.

I will continue to post on when the duty to warn arises as I continue to research warnings law. However, from my research to date, no other case summarizes when the duty arises better than Gardner.

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Case Brief: Watson v. Ford Motor Co.

By Brian A. Comer

UPDATE: The South Carolina Supreme Court has re-filed this opinion as of September 13, 2010, and the below brief was based on the first opinion, and not the re-filed one. Please see this post for more details and links to the current opinion. The new opinion upholds the reversal and deals with the same issues (expert testimony and admission of other incidents), but it also includes additional language concerning Ford's motion for judgment notwithstanding the verdict.

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Yesterday, the South Carolina Supreme Court reversed an $18 million jury verdict against Ford Motor Co. on grounds that the trial court erred in admitting certain expert testimony, as well as in admitting evidence of other incidents. The case can be found here . It provides some great guidance on South Carolina's law concerning the admissibility of expert testimony and the responsibility of the trial court to act as a "gatekeeper" for same. It also sets forth certain factors that can be applied in the products liability context to determine whether evidence of other incidents should be admitted.

FACTUAL BACKGROUND: In December of 1999, Plaintiff Sonya Watson ("Watson") was driving a 1995 Ford Explorer with three other passengers, including Patricia Carter ("Carter"). After entering the interstate, Watson lost control of the vehicle, and it rolled for times. Watson and Carter were ejected from the vehicle. Watson was rendered a quadriplegic, and Carter died.

PROCEDURE: Plaintiffs filed a products liability lawsuit against Ford, D&D Motors, Inc. and TRW Vehicle Safety Systems, Inc., alleging that the cruise control system and seatbelts were defective and seeking actual and punitive damages. Plaintiffs' theory was that the Ford Explorer's cruise control system was defective because it allowed electromagnetic interference ("EMI") to affect it. Plaintiffs presented an electrical engineer, Dr. Antony Anderson, to support their theory. He testified that EMI can interfere with the speed component of a cruise control system and cause a vehicle to suddenly accelerate. He also testified that Ford could have used "twisted pair wiring" to prevent EMI so that the accident would not have occurred. Plaintiffs also presented the testimony of Bill Williams as an expert on "cruise control diagnosis," as well as evidence from four witnesses who testified about other incidents in which their Ford Explorers suddenly accelerated. Ford presented its own cruise control expert, Karl Passeger, who testified that EMI signals have no effect on cruise control. Ford also presented evidence that the floor mats could have caused the acceleration, as they had on prior occasions. The jury awarded compensatory damages of $15 million to Watson and $3 million to Carter's Estate.

ISSUES: The South Carolina Supreme Court addressed three issues presented by Ford on appeal:

1. Did the trial court err in qualifying Plaintiffs' expert Bill Williams as an expert in cruise control systems?
2. Did the trial court err in allowing Dr. Anderson's expert testimony regarding EMI and alternative feasible design?
3. Did the trial court err in allowing evidence of other incidents of sudden acceleration in Explorers?

DISPOSITION: Reversed.

RULES AND OPINION: The Court reviewed South Carolina's law of admission of expert testimony, which is governed by South Carolina Rule of Evidence 702. The trial court must make three key preliminary findings before presenting the testimony to the jury:

First, the trial judge must find that the subject matter is beyond the ordinary knowledge of the jury, thus requiring an expert to explain the matter to the jury. Next, while the expert need not be a specialist in the particular branch of the field, the trial court must find that the proffered expert has indeed acquired the requisite knowledge and skill to qualify as an expert in the particular subject matter. Finally, the trial court must evaluate the substance of the testimony and determine whether it is reliable.

(Citations omitted). The Court analyzed the three appellate issues in this context.

Issue Number 1: The Court found that the trial court erred in qualifying Mr. Williams as an expert on cruise control diagnosis. A trial court's inquiry into the qualifications of an expert should be "broad in scope." Although Williams testified that he had worked in the automotive industry as a trainer, consultant, software developer, and a writer, his qualifications were lacking in other respects.

• He had no professional experience working on cruise control systems prior to the litigation.
• He had not conducted any comparison of the Explorer's cruise control system to any other system.
• He had never taught or published papers on cruise control systems.
• "Williams had no knowledge, skill, experience, training or education specifically related to cruise control systems." Instead, he "taught [him]self" about the Explorer's system prior to trial.

The Court found that the trial court failed to properly evaluate Williams' qualifications specific to cruise control systems and erred in qualifying him as a cruise control expert. However, Williams' testimony was primarily descriptive of the cruise control system, its scope was controlled by the trial court, and he was subject to extensive cross examination to impeach his credibility. Therefore, the error did not prejudice Ford.

Issue Number 2: The Court found that the trial court abused its discretion in admitting Dr. Anderson's testimony. First, the Court rejected the notion that technical evidence is not subject to the same reliability requirements as scientific evidence. "The trial court must examine the substance of the testimony to determine if it is reliable, regardless of whether the expert evidence is scientific, technical, or other specialized knowledge."

Next, the Court examined Dr. Anderson's qualifications and the reliability of his testimony (applying the reliability factors articulated in State v. Council, 335 S.C. 1, 19, 515 S.E.2d 515, 517 (1999)). The Court found that with regard to his opinions concerning alternative feasible design, Dr. Anderson failed to meet Rule 702's rule that the witness be qualified in the particular area of expertise. Dr. Anderson's experience was in working with large generators with different electrical wiring systems and voltage levels. He had no experience in the automotive industry, never studied a cruise control system, and never designed any component of such a system. Plaintiffs also failed to illustrate that his testimony that twisted pair wiring would have cured the EMI defect was reliable, or how it could be incorporated into a cruise control system. There was also a lack of evidence to support the economic feasibility of this alternative.

The Court also found that Dr. Anderson's testimony about EMI and its effect on the cruise control system was unreliable. He admitted that his theory had not been peer-reviewed, he had never published papers on it, and he had never tested it. He also could not pinpoint where the EMI that caused the malfunction originated, or the system in the Explorer that it affected. His only document to support his theory was a 1975 National Highway Safety Administration report, which had been superseded in 1989. The Court focused on the fact that Dr. Anderson had never published his theory, never tested it, and that his theory had been rejected in the scientific community. Admission of Dr. Anderson's testimony was prejudicial error because it was the only evidence presented by Plaintiffs to support their theory of defect.

Issue Number 3: The Court found that the trial court's admission of evidence of other incidents of sudden acceleration was prejudicial error. Evidence of similar incidents is admissible where there is some special relation between the accidents tending to prove or disprove some fact in dispute. (Citing Whaley v. CSX Transp., Inc., 362 S.C. 456, 483, 609 S.E.2d 286, 300 (2005)). The Court also cited to a District of North Carolina case, Buckman v. Bombardier Corp., 893 F. Supp. 547, 552 (E.D. N.C. 1995), for factors to consider regarding admissibility of similar incidents to prove defect, including (1) similarity of the products, (2) similarity of defects, (3) causation related to defect in the other incidents, and (4) exclusion of other reasonably secondary explanations for the cause of the other incidents. Plaintiffs failed to show that the incidents were substantially similar and failed to establish a special relation between the other incidents and Plaintiffs' accident. The products were not similar because the other incidents involved Explorers made in different years and of a different model type. Plaintiffs failed to show a similarity of causation between the incidents, and they failed to excluse reasonable explanations for the cause in the other incidents. Therefore, this evidence was irrelevant. The admission of this evidence was highly prejudicial, especially in light of the fact that Plaintiffs' counsel highlighted it in his closing argument and "thereby possibly induced the jury to speculate as to other causes of the accident not supported by any evidence."

CONCURRING OPINION: Justice Pleicones wrote the concurring opinion for Justices Waller, Beatty, Kittredge, and Pleicones. The concurring opinion focuses primarily on the framework for analyzing the admissibility of expert testimony. It disagrees with the first inquiry in the framework articulated in the majority opinion, "Is the subject matter of the testimony beyond the knowledge of a layperson, thus requiring and expert to explain it?" Instead, the concurring opinion cites to the framework cited in State v. Council, 335 S.C. 1, 515 S.E.2d 508 (1999), which is (1) is the underlying science reliable?; (2) is the expert qualified?; and (3) would the evidence assist the trier of fact to understand the evidence or to determine a fact in issue? The concurring opinion also disagreed that the model and manufacture year of the Explorers in the other incidents were meaningful distinctions for purposes of excluding this evidence.

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Case Brief: Moore v. Barony House Restaurant

By Brian A. Comer

Today's case brief is Moore v. Barony House Restaurant, LLC, 382 S.C. 35, 674 S.E.2d 500 (Ct. App. 2009). This is (predominantly) a warnings case, and its significance relates to the concept that there is no duty to warn of open and obvious dangers associated with use of a product.

FACTUAL BACKGROUND: A doctor hosted a Christmas party in 2004 in which folks had socialized at one section of his property and then were transported to a different section across a public road for dinner. 382 S.C. at 38, 673 S.E.2d at 502. The deceased worked for the caterer and was in charge of transporting party-goers to the dinner section of the property via a golf cart. Id. Plaintiff attempted to cross the road in a golf cart that was not equipped with lights. Id. An SUV was approaching, did not see the golf cart in time, struck the cart, and killed the driver. Id. at 39, 673 S.E.2d at 502.

PROCEDURE: The deceased's estate ("Plaintiff") brought suit against the various parties responsible for the party (the doctor, caterer, golf cart manufacturer, etc.). 382 S.C. at 39, 674 S.E.2d at 502. Against the manufacturer, Plaintiff alleged causes of action for strict liability based on the manufacturer's used fleet golf cars being unreasonably dangerous in light of their foreseeable use and based on inadequate warnings. Id. Plaintiff also alleged negligence based on a failure to warn. Id. The trial court granted summary judgment in favor of the manufacturer on these claims, and Plaintiff appealed. 382 S.C. at 40, 674 S.E.2d at 503.

ISSUES: Whether the trial court erred in granting summary judgment on Plaintiff's strict liability and negligence claims relating to the manufacturer's alleged failure to warn. 382 S.C. at 40, 674 S.E.2d at 503.

DISPOSITION: The South Carolina Court of Appeals affirmed the grant of summary judgment by the trial court. 382 S.C. at 43, 674 S.E.2d at 504.

RULES AND OPINION: The Court first addressed Plaintiff's strict liability claim. 382 S.C. 40, 674 S.E.2d at 503. Plaintiff contended that the golf car was defective and unreasonably dangerous because the manufacturer marketed the used fleet golf cars for operation on public roads without affixing lights and reflective devices or without providing warnings. Id. at 41, 674 S.E.2d at 503. The Court disagreed and stated that while lights and reflectors would make the carts more safe, the absence of such optional safety features did not make the cart defective. Id. "'Most any product can be made more safe . . . . [A] bicycle is more safe if equipped with lights and a bell, but the fact that one is not so equipped does not create the inference that the bicycle is defective and unreasonably dangerous." Id. (quoting Marchant v. Mitchell Distrib. Co., 270 S.C. 29, 35-36, 240 S.E.2d 511, 513 (1977)). The Court also disagreed with Plaintiff's contention that the golf cart was defective and unreasonably dangerous because the manufacturer failed to provide adequate warnings regarding operation at night and on public roads. Id. The Court acknowledged that a product may be defective and unreasonably dangerous if it is not accompanied by an adequate warning. Id. at 41, 674 S.E.2d at 503-04. However, the Court recognized that a seller is not required to warn of dangers or potential dangers that are generally known and recognized. Id. "[O]peration of an unlighted golf car on a public highway at night presents an open and obvious risk." Id. at 42, 675 S.E.2d at 504. Therefore, the golf cart was not defective and unreasonably dangerous for failure to include a warning about nighttime operation. Id.

With regard to Plaintiff's negligence claim, the Court reiterated that there is no duty to warn of dangers that are open and obvious. Id. at 42, 674 S.E.2d at 504. Furthermore, the Court stated that although questions of negligence are often for the jury, "when the risk complained of is open and obvious to consumers, there is no duty to warn of that risk as a matter of law." Id. The Court also believed that the deceased's negligence in operating the golf cart would prohibit a recovery under a negligence theory as a matter of law. Id. at 43, 674 S.E.2d at 504.

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More on the Punitive Damages House Bill

The House of Representatives passed the punitive damages bill that was the subject of my post yesterday. I'm surprised, primarily because I did not expect a bill that makes this kind of substantial change to progress very quickly through the State Legislature. Article and comments can be found at the State's website, here. I have also cut and pasted it below.

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Bill limiting punitive damages OK'd
S.C. House agrees to $350,000 cap; measure requires one more vote to advance to Senate
By GINA SMITH and LEROY CHAPMAN JR. - gnsmith@thestate.com lchapman@thestate.com

South Carolina juries would be limited to awarding $350,000 in punitive damages to winners of civil lawsuits under a bill approved by the S.C. House on Wednesday.

The proposed cap will make the state more appealing to businesses, argued House lawmakers, even though punitive damages are rare in the state.

House Speaker Bobby Harrell, R-Charleston, and other bill supporters said juries should not be allowed to grant cash awards in the millions of dollars to victims after they have already won compensatory judgments, which typically are based on actual loss of income and property or personal injury.

Punitive damages are additional financial penalties granted in cases in which a jury determines a defendant has behaved recklessly. Opponents of the cap say those judgments serve as the ultimate deterrent for bad behavior and are an important consumer protection.

But House lawmakers sided overwhelmingly - in a 104-9 vote - with those who view punitive damages as bad for business.

"Today, by passing our comprehensive Business Tort Reform Bill, the House took another major leap forward in making South Carolina a great place to do business," Harrell said. "Maintaining our low-tax and pro-business climate is key to our state's economic recovery."

House lawmakers debated the bill for hours Wednesday, with several amendments to raise the cap failing.

Some Democrats challenged the claim businesses would refuse to locate in South Carolina out fear of lawsuits.

Others asked whether any dollar amount is enough compensation for someone who has been maimed or a child who has been killed. Citing runaway Toyotas and incompetent doctors as reasons punitive damages are needed, opponents of the bill say punitive judgments send a message to corporations about protecting consumers.

"Let me tell you what this is truly about; it's corporate greed," said Rep. Chris Hart, D-Richland, who talked about how one insurance company made $58.1 billion in profits last year.

Hart said the bill is about protecting those businesses over the interests of future victims.

Hart, an attorney, also pointed out punitive damages are rare in South Carolina. The state's three largest counties - Charleston, Greenville and Richland - had 136 personal injury verdicts in 2007 and 2008. Punitive damages were awarded in seven, or 5 percent, of those cases.

But Hart and other opponents were a distinct minority in the House, where a lack of a punitive award cap was viewed as a stumbling block to attracting business.

Harrell and House Judiciary chairman James Harrison both made the point that neighboring Georgia and North Carolina have both capped punitive damage awards.

Harrell said the bill, if it becomes law, would put South Carolina on equal footing.

"Unlike a business in a neighboring state, a business in our state is too often one lawsuit away from being put out of business," he said.

The bill needs one more House vote before moving to the Senate.

Reach Smith at (803) 771-8462.

SC House of Representatives Looking At Punitive Damages

The front page of the State Newspaper has an article today on a bill in the South Carolina House of Representatives to cap punitive damages at either three times the amount of compensatory damages or $350,000, whichever is greater. Link to the article and comments is here. The cut and paste is below. Obviously this would have big implications for all litigation in South Carolina, including products liability.

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House may cap damage awards
Some lawmakers want to limit punitive amounts to $350,000, say more is bad for business

By GINA SMITH - gnsmith@thestate.com

Is a $15 million court judgment too much? Or is $350,000 enough to make the point?

Consider the case of Jerome Mitchell Jr.

The then-17-year-old Florence resident wanted to give blood but was told he couldn't; he was HIV positive.

His parents' insurance company - convinced Mitchell had defrauded it by not disclosing his illness - told the family it would not cover his medical bills.

That decision, the Mitchells contended in a lawsuit against the Fortis insurance company, amounted to a death sentence. In 2004, a jury agreed, awarding Mitchell $186,000 in actual damages.

And the jury also awarded $15 million in punitive damages.

State lawmakers say such punitive awards, although exceptionally rare, are bad for business.

This week, House lawmakers will debate whether to cap the amount that juries can award individuals and businesses as punishment for the bad behavior by others.

In the Mitchell case, the S.C. Supreme Court agreed Fortis "demonstrated an indifference to Mitchell's life and a reckless disregard to his health and safety."

But the state's highest court still reduced the punitive damages awarded.

The bill before lawmakers would not outlaw punitive awards. But it would limit them to $350,000.

"Punitive damages are about punishing somebody, not about making them whole or compensating them for a loss," said House Speaker Bobby Harrell, R-Charleston, a sponsor of the bill.

Harrell said he has no problems with individuals being awarded money for the economic and noneconomic losses that they suffer, including pain and suffering.

But capping punitive damages is an important economic development tool to attract businesses to the state, he said.

"This protects businesses from being put out of business by one lawsuit," said Cam Crawford, executive director of the S.C. Civil Justice Coalition, which represents the business community in tort and workers' compensation issues. "(Punitive damages) is the most important business litigation issue to corporations and even to small businesses."

Most Southeastern states -including North Carolina, Georgia and Florida - cap punitive damages.

Supporters say the House bill would bring South Carolina in line with those states, capping punitive damages at three times the amount of the compensatory damages awarded or $350,000 - whichever is greater. Compensatory damages are losses a victim can prove in court, such as the loss of income. Those are not capped in most cases.

"Punitive damages is something a business looks at when it's deciding whether to do business here," said state Rep. Jim Harrison, R-Richland, an attorney and sponsor of the bill. "We don't want to be at a disadvantage."

However, trial attorneys and some Democrats say they doubt companies pay much attention to whether punitive damages are capped. Additionally, they say big punitive damage awards rarely happen in the Palmetto State, making the bill pointless.

"There's a lot of rhetoric around the nation and in South Carolina about lawsuit abuse. But the data in South Carolina doesn't bear that out," said Mike Hemlepp, executive director of the S.C. Association for Justice, formerly the S.C. Trial Lawyers Association. "We don't have out-of-control jury verdicts."

Hemlepp points to data from the state's three largest counties, - Charleston, Greenville and Richland - that showed 136 personal injury verdicts in 2007 and 2008. Punitive damages were awarded in seven of those cases. Five of those awards were less than $7,000 each.

"Punitive damages are rare, and they're tough to prove," Hemlepp said, adding juries must decide a defendant is guilty of reckless disregard for the safety and rights of others in order to award punitive damages.

"We just don't see exorbitant lawsuits in South Carolina, much less exorbitant damages," said state Rep. Todd Rutherford, D-Richland, an attorney who said he has heard of S.C. cases where a child was killed and punitive damages did not top $900,000.

But big damage awards do sometimes happen, both sides concede.

The oft-mentioned example is the case of Florence's Jerome Mitchell Jr.

Crawford, whose group represents businesses, said the insurer should have been punished for its behavior but the jury's $15 million punitive damages award was exorbitant.

Hemlepp, who represents plaintiffs, disagrees, arguing the insurer behaved egregiously and was held accountable.

Opponents of the cap also point out anyone slapped with a punitive damages award can appeal the verdict in court. Fortis fought the judgment. The Supreme Court eventually reduced the $15 million damage award to $10 million.

This House bill, if passed, would mark the second time in five years S.C. has capped civil jury awards.

In 2005, the Legislature capped pain-and-suffering awards at $350,000 for medical malpractice lawsuits. Medical malpractice insurance was becoming too expensive for doctors, lawmakers who supported that bill said at the time.

Harrell said it is time to provide more relief to business by shielding businesses from big punitive damage awards.

"It makes sense to cap them."

Reach Smith at (803) 771-8658.