As the skipper of a small motorboat myself, my interest was piqued by a recent decision reported by Product Liability Law 360, Kelecseny v. Chevron U.S.A., Inc., Case No. 08-61294-CIV-ALTONAGA/Brown (S.D. Fla. Jan. 20, 2009).
Kelecseny was a copycat action brought after a similar class action had been dismissed in California federal court. In Kelecseny, plaintiffs alleged that ethanol blended gasoline expires more quickly around water, causing damage to boat engines, fuel systems, and fiberglass fuel tanks. According to plaintiffs, the "major gasoline manufacturers" know this fact, yet they have sold and continue to sell ethanol blended gasoline for use by boaters.
Plaintiffs, however, clearly had some severe problems with the case as pled. To begin with, they have extreme difficulty identifying which defendant's product, if any, actually injured them. The court observed that even plaintiffs agreed their strict liability, fraudulent concealment, and Florida Deceptive and Unfair Trade Practices Act claims must be dismissed because the Florida Supreme Court has held that market share alternate liability does not apply to claims of fraud or strict liability. Kelecseny, slip op. at 2-3 (citing Conley v. Boyle Drug Co., 570 So.2d 275, 286 (Fla. 1990)).
That left just one claim: negligent failure to warn. The defendants argued that this state law claim was preempted by the federal Energy Policy Act, which requires refiners to use increasing amounts of so-called "renewable fuels" -- like corn-based ethanol -- from 2006 forward. Kelecseny, slip op. at 7-8. In 2007, Congress doubled its mandate, urging refiners to produce 36 billion gallons of such fuel by the year 2022.
Florida enacted a similar state statute last year, the Florida Renewable Fuel Standard Act. Under that statute, as of 2011, all gasoline offered in Florida will be blended gasoline, except that the statute does not apply to fuel for use in aircraft, boats, collector vehicles, and railroad locomotives.
In analyzing the preemption issue, the Kelecseny court looked to the U.S. Supreme Court's recent pronouncements in Altria Group, Inc. v. Good, 129 S. Ct. 538, 543 (2008). Thus, the intent of Congress is the touchstone of the analysis, and there is a presumption that the State's historic police powers are not superseded by the federal statute unless that was the "'"clear and manifest purpose of Congress."'" Kelecseny, slip op. at 6 (citation omitted). The court held that there was no preemption:
This suit presents no obstacle to attainment of Congress' objectives as contained in the [federal Clean Air Act] and its amendments. If successful, Plaintiff would obtain, among other things, an injunction requiring Defendants to warn customers of the potential dangers of using blended gasoline in boats and requiring Defendants to continue to make unblended gasoline available for purchase by boat owners in Florida. Defendants have cited to no law evidencing an intention by Congress to preempt Florida common law causes of action for property damage caused by defective design of unblended gasoline when used in boats or the failure to warn of possible damage if ethanol blended gasoline is used. Furthermore, no irreconcilable conflict between the federal standards and the claims presented has been shown.
Id., slip op. at 12.
The court distinguished the situation before it from cases like Geier v. American Honda Motor Co., 529 U.S. 861 (2000). There, Congress had intentionally preserved for manufacturers options for meeting federal auto safety standards by allowing manufacturers to choose whether to include airbags or much less sophisticated restraint systems in the car. The proposed the state law causes of action in Geier would have taken away the manufacturer's right to choose, which was a fundamental federal goal under the statute. Here, in contrast, allowing liability for failure to warn about the potential danger from using blended gasoline in marine applications did not impede any statutory goal, according to the court. In short, there was no conflict, and thus no implied conflict preemption, the court reasoned.
Kelecseny is just one more reminder that the Supreme Court's pronouncements in drug and medical device cases -- like the anticipated decision in Wyeth v. Levine, No. 06-1249 -- have far-reaching effects that impact much more than just prescription products.