Friday, July 27, 2012

Recent Publication (and Summary of South Carolina Non-Contractual Indemnification, Contribution, and Comparative Negligence Law)

As I have stated in prior posts, my law firm is a member of the Primerus society of law firms, and I am on its Products Liability Executive Committee.  Toward the latter part of 2011, our committee decided to do a compendium in which we would provide a state-by-state summary of the law of non-contractual indemnity.  We sought out volunteers for each state, provided a form template, and requested summaries for each state.  We requested that authors be sure to include any nuances specific to products liability law in their summary.

It was quite a bit of work.  In addition to writing the submission for South Carolina, I also reviewed ten or fifteen submissions for other states in order to ensure some measure of uniformity for each summary. 

The compendium in its entirety is now online, and you can find it at this link.  Although our Products Liability Group took the lead on it (and it includes substantial products liability case law), it is also a good primer on the general law of non-contractual indemnification, contribution, and fault allocation for each state.  My submission for South Carolina can be found here.  In it, you will find a general summary of South Carolina's comparative negligence law, its Uniform Contribution Among Tortfeasors Act, joint and several liability, the law of equitable (non-contractual) indemnification, and contribution.

With regard to any nuances in South Carolina relating to products liability law, the primary one relates to the fact that there is no right of equitable indemnity between mere joint tortfeasors.  Vermeer v. Wood/Chuck Chipper Corp., 336 S.C. 53, 64, 518 S.E.2d 301, 307 (Ct. App. 1999) (citing Scott v. Fruehauf Corp., 302 S.C. 364, 396 S.E.2d 354 (1990); Stuck v. Pioneer Logging Machinery, Inc., 279 S.C. 22, 301 S.E.2d 552 (1983); Atlantic Coast Line R.R. v. Whetstone, 243 S.C. 61, 132 S.E.2d 172 (1963)).  As context, joint tortfeasors are parties who act together in committing a wrong, or whose acts (if independent of each other) unite in causing a single injury.  Stated differently, joint tortfeasors are two or more persons jointly or severally liable for the same injury to person or property.  Vermeer, 336 S.C. at 64, 518 S.E.2d at 307 (citing Black’s Law Dictionary 839 (6th ed. 1990).  “Parties that have no legal relation to one another and who owe the same duty of care to the injured party share a common liability and are joint tortfeasors without a right of indemnity between them.”  Id.  Determining whether parties are joint tortfeasors requires a review of the factual evidence.  Id. 

This is significant in the context of products liability action.  South Carolina’s courts have held that where parties owe the same duty of care and have no legal relationship to one another, then they are joint tortfeasors and have a common liability without a right of equitable indemnity.  Scott, 302 S.C. at 371, 396 S.E.2d at 358.  For example, South Carolina’s strict liability statute makes each party in the chain of distribution (e.g., manufacturer, distributor, retailer) liable for sale of a defective product.  Vermeer, 336 S.C. at 65, 518 S.E.2d at 307-08 (citing to S.C. Code § 15-73-10 (1977)).  Therefore, if a plaintiff is injured by a product and sues a party in the chain of distribution, there is no right of indemnification between the parties in the chain of distribution.  See, e.g., Scott v. Fruehauf Corp., 302 S.C. 364, 396 S.E.2d 354 (1990) (holding there was no right of indemnity between co-defendants involved in distribution of a defective wheel assembly that exploded and injured plaintiff because both co-defendants shared common liability under South Carolina’s strict liability law).  Each party has a common duty and common liability to the ultimate consumer under the strict liability statute, making them joint tortfeasors. Conversely, if a party-defendant’s use of a product plays a role in causing injury to a plaintiff (independent of any fault of the alleged tortfeasor), then the product seller may be liable for indemnification.  See, e.g., Stuck v. Pioneer Logging Machinery, Inc., 279 S.C. 22, 301 S.E.2d 552 (1983) (holding that purchaser of mechanical harvesting machine had right of indemnity against seller in case where harvesting machine was mounted on truck, caused purchaser to lose control of truck, and ultimately caused injury to passengers in oncoming vehicle).

You can find all of the above and more in the South Carolina submission.  Enjoy.

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Monday, July 16, 2012

The Basics: Proving "Defective Condition, Unreasonably Dangerous"

I have not done many "primer" posts recently because it is sometimes difficult to synthesize entire areas of South Carolina products liability law.  It can quickly become a lengthy (translated: "snoozer") blog post, or it may be better suited to be an article.  However, it occurred to me that I have never really provided the "basics" for proving one element of any products liability claim: that the product at issue be in a "defective condition, unreasonably dangerous." 

First, allow me to provide some historical context.  In South Carolina, there are three defects a plaintiff can allege: (1) manufacturing defect, (2) design defect, and (3) a warning defect.  Watson v. Ford Motor Co., 389 S.C. 434, 444, 699 S.E.2d 169, 174 (2010).  In Claytor v. General Motors Corp., 277 S.C. 259, 286 S.E.2d 129 (1982) and Bragg v. Hi-Ranger, Inc., 319 S.C. 531, 543-44, 462 S.E.2d 321, 328 (Ct. App. 1995), South Carolina's appellate courts recognized two tests that had evolved for determining whether a product is defective.  The first test was the consumer expectations test, and the second test was the risk-utility test (explained in greater detail below).  The problem was that there was no real guidance on how to apply the different tests in the context of the different theories of product defect.  Generally, plaintiffs gravitated toward the consumer expectations test, and defendants gravitated toward the risk-utility test (i.e., because they believed each test was more favorable to their respective positions).  It was also unclear whether a design defect theory required proof of reasonable alternative design (i.e., as part of the risk-utility test).  Defendants generally maintained that proof of reasonable alternative design was a requirement, and a federal case in the District of South Carolina supported this argument.  (For information concerning proof of alternative design in South Carolina, see this post).  Although it was clear South Carolina recognized both tests, it was not clear which test was favored for any particular theory of defect.

Branham v. Ford Motor Co. 390 S.C. 203, 701 S.E.2d 5 (2010), clarified things.  Without going into the details of that case, the "basics" for proving product defect can now be summarized as follows:

Manufacturing Defect:  For a manufacturing defect, Branham suggests that the consumer expectations test is the applicable analysis for determining product defect by stating "[w]hile the consumer expectations test fits well in manufacturing defect cases, we do agree with Ford that the test is ill-suited in design defect cases."  Branham, 390 S.C. at 220, 701 S.E.2d at 14Branham quotes Claytor v. General Motors Corp., for its description of the consumer expectations test.  "'The test of whether a product is or is not defective is whether the product is unreasonably dangerous to the consumer or user given the conditions and circumstances that foreseeably attend use of the product.'"  Branham, 390 S.C. at 218, 701 S.E.2d at 13 (quoting Claytor, 277 at 262, 286 S.E.2d at 131).   Paraphrased, the standard allows a jury to infer the existence of a defect if product fails to meet reasonable expectations of consumers.  Although there is nothing in Branham to indicate the risk-utility test cannot be applied in the context of a manufacturing defect, its language suggests use of the consumer expectations test.

Design Defect: As you have probably already deduced, a big issue in Branham was whether the correct test was applied in the context of a design defect claim.  After evaluating both the consumer expectations test, the risk-utility test, and their historic application in South Carolina products liability cases, the court adopted the risk-utility test for cases in which a design defect is alleged as the theory of product defect.  Branham, 390 S.C. at 222, 701 S.E.2d at 15.  Applying the risk-utility test, "'a product is unreasonably dangerous and defective if the danger associated with the use of the product outweighs the utility of the product.'"  Id. at 218-19, 701 S.E.2d at 13 (quoting Bragg, 319 S.C. at 543, 462 S.E.2d at 328).  This is a balancing test involving numerous factors for consideration, such as usefulness and desirability of the product, the cost involved for added safety, the likelihood and potential seriousness of injury, and the obviousness of the danger.  Bragg, 319 S.C. at 543-44, 462 S.E.2d at 328.  "[I]n South Carolina we balance the utility of the risk inherent in the design of the product with the magnitude of the risk to determine the reasonableness of the manufacturer's action in designing the product."  Id. at 544, 462 S.E.2d at 328.  State of the art and industry standards are also relevant to show the reasonableness of the design.  Id. at 543, 462 S.E.2d at 328.    Furthermore, in Watson v. Ford Motor Co., 389 S.C. 434, 444, 699 S.E.2d 169, 174 (2010) and 5-Star, Inc. v. Ford Motor Co., 395 S.C. 392, 718 S.E.2d 220 (Ct. App. 2011), South Carolina's appellate courts stated that the design defect cases necessarily involve sophisticated issues beyond the knowledge of the average person and therefore require expert testimony.  (For more on this element of proof, see this post). 

Warnings claim: (This blogger maintains that a warnings claim is a design defect claim by another name.  Therefore, one could argue that the risk-utility test is the applicable standard).  Nothwithstanding this argument, a plaintiff usually argues that a product failed to provide a warning (where there has been proof of duty to warn) or that the warning provided was inadequate.  Since a warnings claim relates to the product’s design, a plaintiff must provide proof of an alternative warning that would have prevented the product from being unreasonably dangerous (i.e., one that was adequate).  So, what is the test for adequacy of a warning?  South Carolina law does not require that a warning make a product itself “safe” in order to be adequate.  Aldana v. R.J. Reynolds Tobacco Co., No. 2:06-3366-CWH, 2008 WL 1883404, at *2 (Apr. 25, 2008 D.S.C.) (denying plaintiff’s motion for reconsideration of dismissal where plaintiff’s argument was that “the warnings did not make the defendant’s cigarette products safe because the cigarette products caused the decedent’s death.”).  Rather, the plaintiff’s burden is to show that a different and adequate warning would have made a difference in the conduct of the person warnedAllen v. Long Mfg. NC, Inc., 332 S.C. 422, 432, 505 S.E.2d 354, 359 (Ct. App. 1998) (citing 63A Am. Jr. 2d Products Liability § 1240 (1997)).  Therefore, determining whether a warning is adequate involves an inquiry into causation and whether a different warning would have prevented the injury.  Odom v. G.D. Searle & Co., 979 F.2d 1001 (4th Cir. 1992) (affirming district court’s grant of summary judgment in failure to warn case involving intra-uterine device where plaintiff failed to prove her doctor would have a prescribed a different course of treatment if a more drastic warning had been given).  In cases involving prescription drugs and the learned intermediary doctrine, this means that a plaintiff must establish "'the additional non-disclosed risk was sufficiently high that it would have changed the treating physician's decision to prescribe the product for the plaintiff.'"  Sauls v. Wyeth Pharmaceuticals, Inc., 2012 WL 724794, at *3 (D.S.C. Mar. 7, 2012) (quoting Odom v. G.D. Searle & Co., 979 F.2d 1001, 1003 (4th Cir. 1992).

As always, I invite your feedback, and hopefully this post is useful for summarizing the applicable law for this element of any South Carolina products liability claim.

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Thursday, July 12, 2012

DRI Products Liability Steering Committee Fly-In Meeting De-Brief

On Monday, I flew to Chicago to attend the Defense Research Institute ("DRI") Products Liability Steering Committee "Fly-In" meeting.  We have this meeting every year to plan the organization's Products Liability Conference for the following year.  It is a great group of about fifty to sixty attorneys from across the country who assist with planning of the conference.

On Monday evening, we had a dinner for anyone who flew in the night before the meeting.  It was a good opportunity to network with other committee members and enjoy some great food at Carnivale.  Many thanks to committee member Denise Bense for taking the lead in planning this event.

Our meeting was on Tuesday and did not begin until 10 a.m. (i.e., so that people had the option of just flying up for the day).  We met from about 10 a.m. to 2:15 p.m. and discussed all of the plans for next year's meeting.  The meeting is planned for April 3-5, 2013 at a new location (at least as long as I have been going to this event), the Gaylord National Resort and Convention Center on the Potomac in National Harbor, Maryland.  We do not have a "theme" per se yet, as the committee is still reviewing various topics for presentation. 

I submitted four potential topics in hopes of being selected to present on the "main stage" (i.e., this is during the full session of the conference, as opposed to the breakout sessions for the various Specialized Litigation Groups).  The committee has requested more information about two of my topics (mocks trials and focus groups as a tool in litigation, and manufacturer involvement in standards activity), so I am hopeful that I may get the opportunity to present to the full session of attendees.  Go ahead and mark your calendar now.  If you defend products liability claims, this is a yearly event you do not want to miss.

I flew out of Chicago at 4:20 p.m., and I ran smack dab into the storms in Charlotte, which held me up for two hours.  Instead of landing in Columbia at 8:30 p.m., we touched down at 10:30 p.m.  A long day, but always good to get home.

Check back for more details as the 2013 DRI Products Liability Conference agenda is finalized! 

Monday, July 9, 2012

Upcoming CLE: SCDTAA Products Liability Seminar

I am the Co-Chairman of the Products Liability Substantive Law Committee for the South Carolina Defense Trial Attorneys Association ("SCDTAA"), and I have been working with SCDTAA on some programming ideas (which I alluded to in this post).  Specifically, I wanted to do the first ever Continuing Legal Education ("CLE") seminar devoted entirely to South Carolina products liability law and offered through SCDTAA.  I reached out to members to gauge interest and solicited ideas for topics.  I am pleased to report that this CLE has come together and registration is now "open."  (Thanks to the Collins & Lacy, P.C. Marketing Department and Aimee Hiers at SCDTAA for all their assistance!) 

On August 24, 2012, we will have an entire day of speakers and topics devoted to South Carolina's products liability law and defending these claims.  This CLE is available to members of SCDTAA, attorneys associated with a firm that is a member of SCDTAA, and individuals who work in claims management.  All of the information and registration can be found at this link.  A cut and paste of the agenda and speakers is below.

2012 SCDTAA Products Liability Continuing Legal Education Program:
Defending Products Liability Claims and the
Future of South Carolina’s Products Liability Law
August 24, 2012
Marriott Columbia

8:00 to 9:00 a.m.          Registration and Continental Breakfast

9:00 to 9:15 a.m.          Welcome and Introduction
Brian A. Comer, Collins & Lacy, P.C.
Molly Craig, President of SCDTAA

9:15 to 10:00 a.m.        Defending the “Defective Condition, Unreasonably Dangerous” Requirement in South Carolina Products Liability Cases
Sam Sammataro and Curtis Ott
Turner Padget Graham & Laney, P.A.
Columbia, South Carolina
·        Manufacturing Defect: Consumer Expectations Test
·        Design Defect: Risk Utility Test and Necessity of Feasible Alternative Design after Branham v. Ford Motor Co.
·        Proof of Defect in Warnings Cases

10:00 to 10:45  a.m.     Expert Issues in Products Liability Cases
Griffith Sadler & Sharp, P.A.
Beaufort, South Carolina
·        Do I have to have an expert in a products liability case?  Implications of Watson v. Ford Motor Co., 5-Star v. Ford Motor Co., and the role of expert testimony in warnings cases.
·        South Carolina Law Concerning Expert Testimony Generally
·        Qualification and Reliability of Opinions post-Watson

10:45 to 11:00  a.m.      Morning Break

11:00 to 11:45  a.m.     Using the Evidentiary Rules to Your Advantage
Bowman and Brooke, LLP
Columbia, South Carolina
·        Keeping Out Post-Distribution Evidence
·        Admissibility of Other Similar Incident Evidence
·        Dealing with Recalls
·        Advancing Safety Themes        

11:45 to 12:30 p.m.      The Power of Demonstrative Evidence in the Products Liability Case: A Demonstration of Trial Graphics and How to Teach the Jury Visually
                                    Stephen G. Morrison and John F. Kuppens
Nelson Mullins Riley & Scarborough, L.L.P.
                                    Columbia, South Carolina

12:30 to 1:30 p.m.        Lunch and Speaker

                                    The Latest from the Consumer Product Safety Commission: What’s Going On and How it Impacts Products Liability Defendants
Kenneth R. Hinson, Executive Director
United States Consumer Product Safety Division
Washington, D.C.  

1:30 to 2:15 p.m.          How the Second and Third Restatements of Torts Affect Product Liability Law in South Carolina
USC School of Law
Columbia, South Carolina
·        Restatement (2d) of Torts § 402A and the South Carolina Defective Product Act         
·        Branham v. Ford Motor Co.’s Movement Toward Restatement (Third) of Torts
·        Differences in the Restatements and Implications for Litigation

2:15 to 3:00 p.m.          The Economic Loss Rule in South Carolina Products Liability Law
Moore and Van Allen PLLC
Charleston, South Carolina

3:00 to 3:15 p.m.          Afternoon Break

3:15 to 4:00 p.m.          Jury Selection and Cross Examination of Experts in the Products Liability Case
                                    Richard A. Bowman
Bowman and Brooke, LLP
                                    Minneapolis, Minnesota

4:00 to 4:30 p.m.          Apportioning Liability in South Carolina Products Liability
                                    Elizabeth M. McMillan and Andrew L. Richardson, Jr.
McAngus Goudelock & Courie, LLC
                                    Columbia, South Carolina
·        Apportioning Liability Between Strictly Liable Sellers
·        Apportioning Liability Between a Strictly Liable Retailer(s)/Distributor(s) and Negligent Manufacturer(s)
·        Application of Comparative Negligence in the Strict Liability Setting After Berberich v. Jack, 392 S.C. 278, 286, 709 S.E.2d 607 (2011)
4:30 to 5 p.m.   TBD

I am hoping to have a great turnout because we have a "superstar" group of speakers from a cross section of the legal profession.  I am also looking for potential sponsors for the event, so if you have any interest in sponsorship, please contact me for details.

Hope to see you there!

Wednesday, July 4, 2012

Fourth of July Case Brief: Hatfield v. Atlas Enterprises, Inc.

Wherever you are spending your Fourth of July holiday, it is likely in close proximity to some fireworks.  This made me wonder: are there any South Carolina products liability cases involving fireworks?  I did the obligatory electronic searches: "products liability" and . . . "fireworks," "roman candles," "bottle rockets," "m-80s" . . . you get the idea.  I am sure I missed some terms, but I found one case, and it makes for a very short case brief.  So, enjoy Hatfield v. Atlas Enterprises, Inc., 274 S.C. 247, 262 S.E.2d 900 (1980), the "lone fireworks products liability case" (I have found) in South Carolina.

Factual Background: Plaintiff was injured at father's fireworks store when a spark allegedly ignited fireworks.

Procedure: Plaintiff (through her guardian ad litem) brought suit against fireworks manufacturers for negligence, strict liability and breach of warranty.  Defendants filed a demurrer to Plaintiff's strict liability claim on grounds that South Carolina did not recognize strict liability at the time the cause of action arose (i.e., December 17, 1970).  The trial court sustained the demurrer.

Issues:  Whether the trial court erred in sustaining the demurrer.

Disposition:  Affirmed and remanded for further proceedings.

Rules and Procedure: The doctrine of strict liability in tort, imposed as a result of a product's defective condition, did not emerge until the South Carolina Legislature enacted S.C. Code sections 15-73-10 (1976) et seq.  Because Plaintiff's injury pre-dated the enactment, strict liability in tort was not recognized as the common law of South Carolina at the time.  The court also held this provision should not be applied retrospectively based on reasoning in Hyder v. Jones, 271 S.C. 85, 87-89, 245 S.E.2d 123 (1978).  Finally, while those engaged in abnormally dangerous activities have been held strictly liable for damages, this doctrine has not been extended to the manufacturers or distributors of ultrahazardous products outside of the context of Restatement of Torts (Second) section 402A.  Therefore, the court declined to extend it in this case.

Happy Fourth of July!

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