Consumer Class Actions and Mass Torts : Class Action Lawyer & Attorney : J. Russell Jackson : Skadden Law Firm : Complex Class Actions : Consumer Class Actions & Mass Torts Law Blog

We defense lawyers have grown so accustomed to plaintiffs trying to repackage a products liability claim as one for consumer fraud that we sometimes forget to check a state's products liability statute for potential defenses when the complaint fails to mention it and instead cites the state's consumer fraud act.  But by failing to look at the product liability statute, we may be passing up an important defense, as was demonstrated in Mitchell v. Proctor & Gamble, 2010 WL 728222 (S.D. Ohio Mar. 1, 2010).

The plaintiff in Mitchell brought a putative class action against the maker of an over-the-counter heartburn medicine, Prilosec OTC.  The plaintiff, who said he was the only one who became ill after a buffet-style dinner party, claimed that taking Prilosec OTC predisposed consumers to contracting food-borne illnesses.  His class was defined as all consumers of Prilosec OTC from 2004 to the present.  He asserted causes of action for strict liability failure to warn, negligent failure to warn, violations of Ohio's Consumer Sales Practices Act, breach of express warranty, and breach of implied warranty.

The court first analyzed the defendants' argument that the entire action was preempted by Ohio's Products Liability Act.  The OPLA defined a "products liability claim" as a civil claim seeking recovery for compensatory damages from a manufacturer for death, personal injury, emotional distress, or property damage arising from the product's design, any warning or instruction, or the product's failure to conform to a warranty.  Id. at *2-*3.  The OPLA had eliminated all common-law product liability causes of action.

The plaintiff sought recovery for "treatments for food-borne illnesses," "the purchase price of the product," and the difference between the market value of the product and its actual value.  But the court held that "[plaintiff] cannot separate out his claims from the purview of the OPLA simply by claiming only economic losses.  His claims . . . are products liability claims.  And the injury he is alleged to have suffered relates directly to that product."  Id. at *4.

The court also noted that there was a long line of authority holding that where a plaintiff used the consumer fraud statute (the OCSPA) to assert claims that were primarily rooted in products liability claims, the OPLA preempted those claims, too.  Id.  Accordingly, the court dismissed all of plaintiff's claims without prejudice for him to plead a proper claim under the OPLA, which he had not previously cited.  Thus, an unpled product liability statute proved to be the Defendant's best weapon to defeat a host of consumer fraud claims. 

In dicta, the court also commented on the inadequacy of the factual pleadings under the Rule 8 standard of Twombly/Iqbal.  Plaintiff alleged that he attended a dinner, that he had been taking Prilosec, and that he was the only one who became sick.  That, the court held was not enough:

Nowhere in [plaintiff's] factual allegations does he connect his assertion that Prilosec OTC increase the risk of foodborne illness with the circumstances surrounding his illness.  Thus, his Amended Complaint is full of "naked assertions" that are lacking "further factual enhancement."  This Court cannot make inference upon inferences to provide the factual enhancement to [plaintiff's] claims.

Id. at *5 (citations omitted).

Ultimately, the court held that plaintiff should have another chance to plead an OPLA claim with sufficient factual particularity.  But it was clear from Mitchell that both the common law and OCSPA claims were preempted -- proving once again that it pays to check statutes that are not cited in the complaint when making decisions about motions to dismiss and affirmative defenses.

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A recent report and recommendation from a US Magistrate Judge raises the question:  Does a group of patients who were exposed to pathogens but never developed a disease have a cause of action?

In Descoteau v. Analogic Corp., 2010 WL 325933 (D. Me. Jan. 21, 2010), Magistrate Judge John Rich III suggests that they do, although he clearly seems to stretch Maine law in order to find a cause of action for a bad factual situation.  If this report and recommendation is affirmed by the District Court, it will not be the first time hard facts have made bad law.

The facts are not pretty.  Plaintiff is one of some 23,000 veterans who were potentially exposed to HIV, Hepatitis B, Hepatitis C, and other bloodborne viral pathogens when they underwent diagnostic procedures and biopsies at VA hospitals using a rectal probe made by the defendants.  Both the operation manual for the rectal probe -- as well as the oral instructions from the device representative who demonstrated it at the VA hospital that treated plaintiff -- indicated that the probe could be cleaned by flushing it with a syringe full of detergent and water.  Years after the hospital bought and began using the defendants' rectal probe, the hospital's staff discovered that blood and fecal matter remained in the probe even after it had been cleaned according to the manufacturer's instructions -- without using a brush.  The VA conducted a systemwide review and notified some 23,000 veterans nationwide of the potential exposure and their need to receive testing for bloodborne pathogens and disease.  Plaintiff received his notice on April 14, 2006, was tested on April 27, 2006, and was notified that fortunately his test results were negative on May 11, 2006.  Plaintiff sued on behalf of a class of 528 veterans who were potentially exposed to bloodborne pathogens at the Togus VA Medical Center in Augusta, Maine, asserting causes of action for strict liability and negligent infliction of emotional distress.

The defendants moved to dismiss, asserting Maine's 6-year statute of limitations, arguing that plaintiff's original diagnostic procedure occurred more than six years prior to his filing suit.  The Magistrate Judge easily dispatched of that challenge, holding that plaintiff's cause of action for emotional distress did not accrue until he was notified in 2006 that he might be infected.  Thus, the suit was well within the statute of limitations.

Defendants also moved to dismiss the strict liability count, citing the language of Maine's strict liability statute, which provides:

One who sells any goods or products in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to a person whom the manufacturer, seller, or supplier might reasonably have expected to use, consume or be affected by the goods, or to his property, if the seller is engaged in the business of selling such a product and it is expected to and does reach the user or consumer without significant change in the condition in which it was sold. 

Id. at *5 (quoting statute).

The defendant argued that a prerequisite to a strict liability claim is physical harm or impairment, and that plaintiff -- who contracted no disease and suffered no impairment -- thus could not bring a claim.  Plaintiff argued, however, that the needle stick required for the HIV and Hepatitis testing qualified as "physical harm" sufficient to support a strict liability claim.  The court -- striving to find a cause of action for an obviously-inconvenienced plaintiff -- bought the argument, observing that "[t]he defendants cite no authority in support of the proposition that a needle stick or blood draw constitutes insufficient physical harm, as a matter of law, to support a strict liability claim, and I find none."  Id.

But the rule of strict liability is not available for all types of harm; rather, it is reserved for physical injury and damage to property.  The Restatement defines physical injury as a "detrimental change in the physical condition of a person's body."  Id. at n.4.  The court's stretching of the definition of physical injury to encompass a subsequent needle stick effectively reads the physical injury element out of the statute.  Nevertheless, the court recommended that the strict liability claim should survive the motion to dismiss.

The defendants also moved to dismiss the negligent infliction of emotional distress ("NIED") claim.  The court began by opining that the plaintiff had sufficiently alleged a count for negligence for physical injury (i.e., the needle stick).  But as for emotional distress, the court was bound by Maine precedent that reserves the cause of action for defendants who are in a special relationship with the plaintiff.  Maine courts have found such special relationships in very limited circumstances (e.g., doctor-patient, counselor-patient, hospital-decedent's family).  Id. at *6.  The court held that because its research had not uncovered an instance where the Maine courts had found a special relationship between a manufacturer and an end user, the NIED claim must be dismissed.

It remains to be seen whether the District Court will adopt the report and recommendation in Descoteau, which effectively reads the physical injury requirement out of Maine's strict liability statute and thereby would impose upon manufacturers strict liability for purely emotional harm.  Even if it did, however, it is difficult to fathom how 528 people's emotional harm could be adjudicated on a classwide basis consistent with the requirements of Rule 23.

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American courts generally approach emotional distress claims with caution.  Typically, they require a physical manifestation of the emotional distress, or that the plaintiff have been touched physically by the tortfeasor or been in the "zone of danger," or they require expert proof.

Yesterday the Illinois Supreme Court decided in a medical negligence case that Illinois imposes no such requirement.  See Thornton v. Garcini, Docket No. 107028, Slip op. (Ill. Oct. 29, 2009).  Rather, the rule in Illinois now appears to be that claims for negligent infliction of emotional distress do not require physical symptoms or expert proof.  This holding appears to reverse prior holdings in Corgan v. Muehling, 143 Ill. 2d 296 (1991) and Hiscott v. Peters, 324 Ill. App. 3d 114 (2001), which had seemed to impose the requirement of medical expert testimony in exchange for having abandoned the "physical injury" requirement.  Thornton, Slip op. at 6 ("we overrule the portions of Hiscott limiting Corgan to its facts and requiring all claims for severe emotional distress to be supported by expert proof"). 

Now, Illinois law is that the "absence of medical testimony does not preclude testimony for emotional distress," but rather that it goes to the weight of the evidence.  Id.

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According to the Helena, Montana Independent Record, the makers of the Louisville Slugger line of bats was held liable yesterday for the death of a an 18-year-old pitcher who was hit in the head by a ball that the batter had hit with an approved aluminum Louisville Slugger bat.  Plaintiff's theory was that the aluminum bats were defective because they only give the pitcher an average of 400 milliseconds to respond in a defensive stance.  Plaintiff also argued that the manufacturer failed to warn about this alleged hazard.

In an earlier article, the Independent Record had reported that a defense lawyer said in his opening that the ball that struck the pitcher was traveling at 99.8 miles per hour, and that nearly every home run hit with a wooden bat exceeds 100 miles per hour.

It apparently took the jury 12 hours of deliberations to conclude that the manufacturer failed to adequately warn, that the failure to warn caused the young pitcher's injury, and that the bat itself was not defectively designed.

I'll freely admit that I was not there to hear the evidence and I have not read the warning that was on the aluminum bat, but it is hard for me to fathom any warning that would have changed the conduct of the pitcher or the batter in a way to prevent this tragic injury. 

The jury awarded $792,000 to the pitcher's estate, and $58,000 to the parents for their emotional distress.  The judge is now considering the issue of punitive damages.

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Today we have in our in-box two cases involving disclaimers of liability.

In Stelluti v. CasaPenn Enterprises, LLC, 2009 WL 3353319 (N.J. Super. -- App. Div. 2009), a woman was injured less than an hour after she joined a local gym and signed a release and disclaimer of liability.  During her first-ever spin class, the handlebars came off of the bicycle and she fell to the floor, sustaining longterm injuries.

The "Waiver and Release Form" that she had signed provided:

You . . . agree that if you engage in any physical exercise or activity, or use any club amenity on the premises or off premises including any sponsored club event, you do so entirely at your own risk. . . . You agree that you are voluntarily participating in these activities and use of the facilities and premises and assume all risks of injury, illness, or death. . . .

This waiver and release of liability includes, without limitation, all injuries which may occur as a result of, (a) your use of all amenities and equipment in the facility and your participation in any activity, class, program, personal training or instruction, (b) the sudden and unforeseen malfunctioning of any equipment, (c) our instruction, training, supervision, or dietary recommendations . . .

To the extent that statute or case law does not prohibit releases for negligence, this release is also for negligence on the part of the Club, its agent, and employees.

That would seem to cover it, right?  Not so fast.  The court began its analysis by noting the general legal duty of health and fitness clubs to provide a safe environment for its members.  It then noted the fact that the contract is one of adhesion, which is disfavored generally in the law.  Using a four-part test, the court analyzed whether the contract was unconscionable.  Although the court had concerns about the context in which the contract was presented to the plaintiff -- without any oral description of it being a release of liability -- it nevertheless concluded that the contract was not unconscionable.  In part this was because plaintiff clearly had the ability to walk away and join another gym or exercise at another venue.

Interpreting the contract, the court concluded that it would only operate to release the gym for ordinary negligence; releasing gross negligence, recklessness and intentional torts would be contrary to public policy, the court opined.  The court ultimately affirmed summary judgment for the defendant because there was only evidence of negligence, at best, of the club in failing to check whether the adjustable handlebars had "locked in" to position.

Across the border in New York, a trial court was faced with the issue whether to enforce a waiver and release signed by a participant in a one-day motorcycle "wheelie" school.  See Estate of Duco v. McCabe, 2009 WL 3384461 (N.Y. Sup. Ct. -- Orange Co. Oct. 20, 2009).  In New York, however, Section 5-326 of the General Obligations Law deems waivers of liability for operators of for-pay amusement or recreational facilities to be void as against public policy.  Thus, one of the first issues was whether a motorcycle "school" operating on a closed portion of an airport was an amusement or recreational facility to which the General Obligations Law applies.  The court concluded that it was not; rather, it was an educational program that would benefit motorcyclists in handling their bikes on the roadways.

Accordingly, the court granted defendant's motion to dismiss, enforcing the release.

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The judicial branch is one of three branches of government, and although it has considerable powers, it has inherent limitations, too.  The doctrine of standing -- requiring an injury and causation as a prerequisite to judicial intervention -- is grounded on the practicalities of institutional competence and a recognition that courts do not have the tools to be effective legislators and regulators.

In Rhodes v. E.I. DuPont de Nemours & Co., 2009 WL 3080188 (S.D. W. Va. Sept. 28, 2009), the court was faced with summary judgment motions that raised those fundamental questions of institutional competence.  In Rhodes, the Defendant was alleged to have periodically released perfluroctanoic acid ("PFOA") from its plant in Wood County, West Virginia.  Plaintiffs claimed that the PFOA contaminated the water supply in the Parkersburg Water District, and they brought a class action asserting negligence, gross negligence, private nuisance, public nuisance, trespass, battery, and medical monitoring.  Plaintiffs alleged that they had no present physical injury; rather, they claimed to have an increased risk of disease.

Before conducting its analysis, the court observed that "[i]ssues of institutional competence . . . caution against judicial involvement in regulatory affairs" because "[c]ourts are designed to remediate, not regulate."  Id. at *1.

The court first analyzed whether the plaintiffs had Article III standing to bring their claims where the only injuries alleged were increased risk of disease.  After summarizing the case law, the court noted that "[e]ven courts that express doubt as to whether injuries premised on increased risk constitute an injury-in-fact acknowledge that such claims are cognizable in the context of environmental harms and toxic exposures."  Id. at *4.  The court thus concluded that plaintiffs had standing to bring their claims.

With respect to the merits of the summary judgment motions, the court first looked at negligence.  The court determined that plaintiffs had provided sufficient evidence to create a material fact question on causation in their expert reports.  (The court refused to rule on the motion to strike the reports because of the timing of their filing.)  But it held that the plaintiffs had not alleged injury sufficient to support their negligence claims.  Unlike for standing, negligence requires proof of either a present injury or "'reasonably certain' future injury."  Id. at *11.  Because plaintiffs could not prove that their potential future injuries were "reasonably certain" to occur, their negligence claim for damages failed.

Next, the court analyzed nuisance law.  It held that plaintiffs' private nuisance claim failed because the complaint did not allege an interference with the private use and enjoyment of land, but rather alleged interference with the public water supply.  (The contamination did not reach the groundwater beneath the plaintiffs' property.)  Id. at *11-*12. 

And it held that the public nuisance claim failed because the plaintiffs did not meet the special standing requirement applicable to such claims.  Ordinarily, the government is the one to file and prosecute a public nuisance claim.  West Virginia -- and most other states -- requires that private plaintiffs who seek to assert a public nuisance claim must establish that they have suffered a "special injury" different in type and degree from the segment of the public impacted by the public nuisance.  The court observed that the plaintiffs here only suffered an increased risk of disease, which is the same type of injury allegedly suffered by the other consumers of the municipal water supply.  Thus, they failed to meet the "special injury" standing requirement for public nuisance.  Id. at *13.

The court granted summary judgment on the trespass claim because there was no "invasion" of plaintiffs' property that interfered plaintiffs' use and enjoyment.  The PFOA was not alleged to have actually reached plaintiffs' property.

The court also granted summary judgment on the battery claim because plaintiffs have not alleged a present physical injury, and thus have failed to meet the element of "harmful contact."  The court opined that "[a]bsent any such demonstration that their contact with PFOA caused them harm, or that the PFOA present in their blood has altered the structure or function of some body part, the plaintiffs cannot sustain their battery claim based on the mere presence of PFOA in their blood."  Id. at *16.

But the court refused to grant summary judgment on the medical monitoring claim.  Under the decision in Bower v. Westinghouse Electric Corp., 522 S.E.2d 424 (W. Va. 1999), a medical monitoring plaintiff must prove that:

(1) he or she has, relative to the general population, been significantly exposed; (2) to a proven hazardous substance; (3) through the tortious conduct of the defendant; (4) as a proximate result of the exposure, plaintiff has suffered an increased risk of contracting a serious latent disease; (5) the increased risk of disease makes it reasonably necessary for the plaintiff to undergo periodic diagnostic medical examinations different from what would be prescribed in the absence of exposure; and (6) monitoring procedures exist that make the early detection of a disease possible.

522 S.E.2d at 432-33.

The court discussed the trend after Bower generally rejecting medical monitoring claims, but then applied Bower to conclude that the negligence allegations and the evidence of increased risk of disease created a disputed issue of fact regarding the medical monitoring claim.  Rhodes, 2009 WL 3080188 at *19-*21.  Thus, although plaintiffs lacked an injury sufficient to assert a negligence claim, they could proceed to trial on the medical monitoring claim.

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Increasingly, foreign plaintiffs want to use US courts to adjudicate disputes that arose overseas.  The Texas Court of Appeals' decision in Lalila v. Parker Drilling Co., 2009 WL 618248 (Tex. App. -- Houston [1st Dist.] Mar. 12, 2009), is a good example of a court's use of the doctrine of forum non conveniens to control its docket and avoid adjudication of such disputes.

In Lalila, 766 Bangladeshis sued a number of defendants in Texas state court over two gas well explosions in Tangratila, Bangladesh, asserting causes of action in negligence, nuisance, trespass, and conversion.  The Texas defendants moved to dismiss for forum non conveniens.  The trial court granted the motion, which the appellate court reviewed for abuse of discretion.

Texas is one of the few states to have codified the rules relating to forum non conveniens.  That statute provides that if an act or omission occurring in Texas was a proximate or producing the injury, then forum non conveniens dismissal is not available.  The court noted, however, that both proximate and producing cause require "causation in fact," which "means the defendant's act or omission was a substantial factor in bringing about the plaintiff's injury, which would not otherwise have occurred."  The court reviewed the various acts that plaintiffs alleged occurred in Texas (design of the rig and parts, negligent supervision of the gas well project), concluding that plaintiffs' complaint never connected them up to the injuries suffered in Bangladesh in such a way as to meet the "causation in fact" requirement.

The court then proceeded to evaluate Bangladesh as a forum.  The court rejected plaintiff's criticism of the courts as corrupt, saying the evidence was based on hearsay from only three Bangladeshi attorneys.  The court gave little weight to the fact that Bangladeshi courts do not have a class action procedure, noting that it has joinder and is a judicial system based on English common law that has the types of torts asserted by Lalila.

The court also noted the legal inability and prohibitive costs of bringing witnesses from Bangladesh and translating their testimony, as well as the fact that the vast majority of evidence resides in Bangladesh.  The court concluded that the balance of public and private interests clearly weighed in favor of Bangladesh.  And thus, the court concluded that the trial court did not abuse its discretion in dismissing the case for foreign non conveniens.

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One of the most fascinating things about practicing mass tort litigation is when these cases intersect with international law and policy, as they did recently in O'Bryan v. See, 2009 WL 305342 (6th Cir. Feb. 10, 2009).  There, the Sixth Circuit -- in a precedent-setting opinion -- allowed some mass tort causes of action to be pursued against the highest authority in the Roman Catholic Church.

In O'Bryan, three Kentucky residents brought a class action suit against the Holy See for injuries suffered by all of those who were allegedly "sexually abused, molested and assaulted by a Roman Catholic priest . . . while they were under the care, custody, authority, control and influence of an abusive Roman Catholic priest, which authority was granted to him by the Defendant, Holy See."  Id. at *1.  This lawsuit differed from many previous sexual abuse lawsuits in that it did not bother naming individual dioceses or priests.  Rather, following the advice once given to Bob Woodward, plaintiffs sought to "follow the money" to thereby reach the Big Kahuna. 

There was only one problem:  the Holy See is a State that the United States has recognized as a foreign sovereign since 1984.  Id.  As such, the defendant argued that it was immune from suit (and the court lacked subject matter jurisdiction) under the Foreign Sovereign Immunities Act, 28 U.S.C. sec. 1602.  Even the US government appeared in this lawsuit arguing on the Holy See's behalf.

But, of course, the Holy See is not just a foreign principality.  In a passage that brings to mind the migraine-inducing lessons on the nature of the Holy Trinity that I endured in Sunday School, the Sixth Circuit explained:  "The Holy See is both a foreign state and an unincorporated association and the central government of an international religious organization, the Roman Catholic Church."  Id. 

And that was basically plaintiffs' point:  they were injured not by the way the foreign state ran its consulate, but rather by how an international religious organization ran its churches in the United States.  For purposes of plaintiffs' lawsuit, the Holy See's contemporaries were not Monaco and Liechtenstein, but rather the Episcopalians and the Lutherans -- neither of which are entitled to sovereign immunity for torts they might commit.

Plaintiffs pled their lawsuit carefully.  First, they alleged that each abusive priest was an agent, servant or employee of the Holy See acting with apparent authority arising from his agency or employment relationship.  Second, they premised their causes of action on the so-called "1962 Policy" -- a privately-circulated document allegedly issued by the Congregation of the Holy Office in Rome and specifically approved by Pope John XXIII that expressly required bishops in the United States "to, among other things, refuse to report childhood sexual abuse committed by priests to criminal or civil authorities, even where such failure to report would itself be a criminal offense."  Id. at *2.  Third, they pled the following causes of action:  violation of customary international law of human rights; negligence; breach of fiduciary duty; and the tort of outrage/intentional infliction of emotional distress.

In response to defendant's FSIA jurisdictional argument, plaintiffs pressed their point that their dispute was with the Holy See as the governing body of a religious organization, not a State.  But the Sixth Circuit wasn't buying it.  There can be no dispute that the United States recognizes the Vatican as a foreign state, and thus the FSIA applies.  Period.

But the FSIA has exceptions that might allow for suit:  (1) waiver of immunity, (2) actions conducted in a commercial capacity, and (3) money damages sought for personal injuries stemming from the State's (or its agent's) tortious conduct within the United States.  The Sixth Circuit proceeded to analyze each of the exceptions in turn.

The first exception was a non-starter, as there was no evidence that The Holy See had voluntarily waived immunity.  As for the commercial activity exception, the Sixth Circuit was also unpersuaded.  The court applied two "limitations" on this exception to conclude that it was not relevant here.  First, the activities plaintiffs alleged were not -- according to the court -- "of the type in which private individuals engage" during commercial activity.  Rather, governance of the church was more akin to the actions of a sovereign.  Second, the court looked to the gravamen of the plaintiff's claims.  Because they were not of a type one would expect from commercial activity -- property damage, breach of contract, copyright infringement, etc. -- this also counseled against finding in favor of a commercial activity exception.

But then the court analyzed the elements of the "tortious act" exception, concluding that some -- but not all -- of plaintiffs' claims had correctly survived the motion to dismiss and were properly the subject of federal jurisdiction.  The alleged acts of sexual abuse were not performed while the tortfeasors were acting within the scope of their employment, so the Sixth Circuit concluded that the Holy See could not be sued for sexual abuse conducted in the United States by its clergy.  Similarly, "any portion of plaintiffs' claims that relies upon acts committed by the Holy See abroad cannot survive."  Id. at *16.   Thus, the Holy See could not be sued simply for promulgating the 1962 policy in Rome.

However, the court held that the Holy See could be properly sued under the "tortious act" exception for the supervisory acts or omissions its agents committed in the United States:

All of plaintiffs' claims also advance theories of liability premised on the conduct of Holy See employees in the United States engaged in the supervision of the allegedly abusive priests.  These portions of plaintiffs' claims meet the four requirements for application of the tortious act exception.

First, . . . plaintiffs have pled both that the relevant archbishops, bishops and other Holy See personnel had knowledge of the alleged sexual abuse of priests and that they failed to act on that knowledge.  In doing so, it would seem that the complaint also pleads that conduct of [these people was] a substantial factor in causing plaintiff's damages, satisfying Kentucky's causation requirements.

In addition, . . . tortious acts committed by [these people] while engaged in the supervision of allegedly abusive priests satisfy the requirements of the FSIA's tortious act exception that the tortious act occur in the United States and within the scope of employment.

* * *

Thus, the portions of plaintiffs' claims that are based upon the conduct of bishops, archbishops, and Holy See personnel while supervising allegedly abusive clergy satisfy all four requirements of the tortious act exception:  this conduct served as a substantial cause of the alleged abuse; the conduct occurred in the United States; the conduct was within the scope of employment; and these individuals were, according to the pleadings, Holy See employees.

Id. at *17.

The court then went count-by-count, delineating what claims were cognizable under the FSIA.

1.  International Law of Human Rights -- The claim failed as to the actual promulgation of the 1962 Policy because it occurred abroad, but survived "as it pertains to the conduct of [the Holy See's] employees who, pursuant to the 1962 Policy, violated the terms of the relevant international laws through their tortious supervisory conduct over the allegedly abusive clergy."  Id. at *18.

2.  Negligence -- Claims of negligence against the Holy See for its own conduct (including negligent hiring) did not survive, but claims of  "failure to warn" and "failure to report" premised on the conduct of Holy See employees in the United States did survive.

3.  Breach of Fiduciary Duty -- This claim only survived for the actions of supervisory employees occurring in the United States.

4.  Tort of Outrage/Intentional Infliction of Emotional Distress -- The claim failed as it pertained to the promulgation of the 1962 Policy and as to the priests' abusive conduct, which did not occur within the scope of their employment.  The claim survived, however, as to the conduct of supervisory employees in the United States who abided by the 1962 Policy. 

It is difficult to predict O'Bryan's ultimate impact on mass tort litigation against the Catholic Church in the United States.  The defendant can be expected to seek rehearing en banc and/or a writ of certiorari from the US Supreme Court.  This case also has serious statute of limitations problems, and it seems unlikely that a court considering class certification really could conclude that the predominance and superiority requirements of Rule 23(b)(3) could be satisfied in a case where the sexual abuse at issue for just the named plaintiffs spans from the 1920s to the 1970s.  Individual issues clearly would predominate.  And yet, O'Bryan stands as a roadmap for how to plead a claim against the Vatican itself, even if only in an individual action. 

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In states like Illinois, which have relatively short (2-year) statutes of limitations for strict liability and negligence, there often is a lot of litigation over the "discovery rule."  The discovery rule is designed to relieve the harshness of a tort statute of limitations by essentially tolling the running of the statute until the plaintiff was put on inquiry notice about her cause of action.  Put differently, "the cause of action accrues [and the statute of limitations begins running] when the plaintiff knows or reasonably should know of an injury and also knows or reasonably should know that the injury was caused by the wrongful acts of another."  Nolan v. Johns-Manville Asbestos, 421 N.E.2d 864, 868 (Ill. 1981).

The court in Orso v. Bayer Corp., 2009 WL 249235 (N.D. Ill. Feb. 2, 2009) recently applied the discovery rule to grant summary judgment on statute of limitations grounds.  In Orso, plaintiff had been using Neo-Synephrine on a daily basis since 1990, despite the product's explicit warning that it should not be used for more than three days.  Plaintiff had visited a doctor in 1991, explaining that without Neo-Synephrine, "if someone were to put their hand over my mouth, I would have died . . . [My nose] is so swollen inside, I can't breathe."  Id. at *1.  The doctor recommended other medication and discussed strategies for giving up the medicine, but plaintiff returned to using it even though the doctor "'thought that [plaintiff] shouldn't be using it."

Nearly a decade later, in September 2000, a second doctor consulted with plaintiff.  He described plaintiff as having "'chronic rhinits with likely addiction (physiologic) to nasal decongestant drops.'"  Id.  The doctor prescribed a substitute medication and warned plaintiff of "rebound congestion," namely, that people coming off of medicines like Neo-Synephrine may develop severe congestion. 

Faced with the evidence, the court quickly concluded that plaintiff had been on inquiry notice much more than 4 years before filing suit in 2004:

The record shows that, possibly as soon as 1991 and definitely no later than September 2000, Urso knew that she had a medical condition, namely, a stuffy nose and breathing difficulties, that her condition was relieved only by the use of Neo-Synephrine, and that she felt she was unable to discontinue her use of Neo-Synephrine despite her doctors' advice and prescrptions for other drugs.

Id. at *4.

The court rejected plaintiff's arguments regarding her lack of knowledge, observing that the knowledge necessary to start the running of the statute of limitations does not require an accurate medical diagnosis or a definitive understanding of causation.  Suspicion starts the clock running, and the plaintiff is under a duty to conduct an inquiry to see if she has a cause of action.

Orso is unremarkable jurisprudentially, but it is a good workmanlike example of the discovery rule's application in statute of limitations motions.

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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. 

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Yesterday the California Supreme Court refused to accept review of the nonplussing decision in Conte v. Wyeth, Inc., in which the California Court of Appeal held that a pharmaceutical manufacturer could be liable for failure to warn of risks associated with a generic drug that it neither manufactured nor sold.

Jim Beck and Mark Herrmann give a characteristically thorough and compelling explanation for why the Court of Appeal's Conte decision was wrong as a matter of both law and public policy.  They also point out -- thankfully -- that under California law, the Conte decision has little, if any, stare decisis effect on other panels of the Court of Appeal who consider the same issue.

One wonders, however, whether the Justices ever considered the practical effects of the Conte rule on lawyers' advice to their clients.  After Conte, how do deal lawyers involved in pharmaceutical transactions accurately quantify and evaluate liability risks?  Thoughts, readers?

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