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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Cars -- like diamonds -- are forever.  Or so we'd like to think.  I used to have a vintage Mercedes that I bought for $4,000.  I loved to sit in that car.  Of course, that's all I could do with it.  It never really ran.  But I looked fantastic in it, sitting in my garage.  My friends used to say it looked like a sedan a Latin American dictator would be assassinated in -- which was fitting, since it killed me to junk that car (which, it turns out, was held together with Bondo).

Gilbert Noble, no doubt, knows what I mean.  He bought a 1999 Porsche 911 Carrera Coupe in 2005.  It was already out of warranty (4 years/50,000 miles).  The 1999 911 was the first year that Porsche began equipping their products with a water-cooled engine.  Gilbert used his car for about a year, when he started noticing smoke billowing from the tailpipe.  It turns out that antifreeze had leaked into the car's oil through a defective cylinder, irreparably damaging the engine.

Gilbert wrote Porsche.  Porsche said, "Sorry, you didn't buy the car from us, and it was out of warranty when you bought it."  So Gilbert sued Porsche, asserting two causes of action:  (1) strict liability, and (2) violation of New Jersey's Consumer Fraud Act.  The court dismissed his claim on the pleadings.  Noble v. Porsche Cars North America, Inc., 2010 WL 606305 (D.N.J. Feb. 19, 2010).

The court made easy work of Gilbert's strict liability claim, holding that it was barred by the economic loss doctrine, which "bars tort claims for harm sustained to the product alone, as opposed to harm to persons or other property damage."  Id. at *3.

The claim under New Jersey's Consumer Fraud Act ("CFA") was more difficult.  There are three elements to a CFA claim:  (1) unlawful conduct, (2) an ascertainable loss, and (3) a causal relationship between the two.  The court held that, under New Jersey law, "a plaintiff cannot maintain an action under New Jersey's CFA when the only allegation is that the defendant 'provided a part -- alleged to be substandard -- that outperforms the warranty provided."  Id. at *4.  To hold that the CFA covers parts failures beyond the warranty period "'would be tantamount to rewriting that part of [the] contract which defined the length and scope of the warranty period . . . [which] would also have a tendency to extend those warranty programs for the entire life of the vehicle.'"  Id. (citation omitted).

Gilbert (and I) learned a valuable lesson:  nothing lasts forever, and when you buy a used product outside of the warranty period, you bear the risk that the product will no longer work.  That's how you can buy a Mercedes for $4,000, or a Porsche 911 for whatever Gilbert paid for it. 

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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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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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