Product Liability Review: A Compendium Of Recent Decisions Of Importance To The Legal And Business Community

PENNSYLVANIA

Supreme Court of Pennsylvania
 

Barnish v. Kwi Bldg. Co., 980 A.2d 535 (Pa. 2009)

For the first time in 20 years, the Supreme Court of Pennsylvania revisited the "malfunction theory" of products liability, which allows a plaintiff to prove a strict product liability claim with circumstantial evidence only.

The defective product in Barnish was a spark detection system that failed to sound and to trigger a water deluge in response to the presence of a glowing ember on a conveyor belt.  This, in turn, caused an explosion that injured the plaintiff.  The plaintiff sued the manufacturer of the spark detection system.  The defendant moved for summary judgment, claiming that under Pennsylvania law, a plaintiff cannot invoke the malfunction theory to prove his product liability claim when the product functioned normally before the injurious event.  In plaintiff's case, the spark detection system that allegedly malfunctioned had worked for ten years without incident.

The Pennsylvania Supreme Court disagreed with the manufacturer's contention that evidence of prior successful use requires a court to grant, as a matter of law, a defendant's motion for summary judgment in a malfunction-theory case.  As long as the plaintiff can explain how the product could have been defective when it left the manufacturer's control, yet still function successfully prior to causing the plaintiff's harm, the claim can survive a motion for summary judgment.

However, because the plaintiff in Barnish had not presented such an explanation at trial, a reasonable jury could not have found that a defect existed when the spark detection system left the manufacturer's control.  Accordingly, the Supreme Court upheld the grant of summary judgment.

Superior Court of Pennsylvania
 

Sedlacek v. A.O. Smith Corp., 990 A.2d 801 (Pa. Super. 2010)

In recognition of their 2009 decision in Ranalli v. Rohm and Hass Co., 938 A.2d 732 (Pa. Super. 2009), the Superior Court of Pennsylvania has again held that an individual diagnosed with mesothelioma (and the executor or executrix of the estate of an individual who dies from mesothelioma) is precluded from recovery from his/her employer when suing under the theory that negligent occupational exposure to asbestos caused his/her injuries.

The plaintiffs in Sedlacek were the executrices of the estates of two men who died shortly after being diagnosed with mesothelioma, which the plaintiffs claimed was caused by negligent workplace exposure to asbestos.  Each man had worked for ALCOA for at least thirty years, but neither was diagnosed with mesothelioma until several years after leaving the company.

In barring the plaintiff's recovery against ALCOA, the court concluded that a tort suit involving negligent occupational exposure to asbestos is precluded by the exclusivity of the administrative compensatory process available under the Workers’ Compensation Act (WCA) and/or the Occupational Disease Act (OCA), even though the Sedlacek plaintiffs' claims were barred by the Acts' relatively short period of repose (300 weeks for the WCA and four years for the OCA), because the deceased men's mesothelioma symptoms had taken decades to manifest.  The import of the Sedlacek decision, as expressly recognized by the Superior Court, is that "[g]iven the nature of the insidious disease which mesothelioma is, and its inherent lengthy period of latency, many individual who have or will become afflicted with this disease will find no monetary recovery from their employer under the WCA or ODA or in common law tort despite the almost unavoidable conclusion that the disease will have been precipitated by their occupational exposure to asbestos."  The Court noted, however, that the Sedlacek plaintiffs were not without remedy inasmuch as they had already settled with other defendants, and that the issues presented in Sedlacek and Ranalli would ultimately have to be decided with finality by the Pennsylvania Supreme Court.

Kiak v. Crown Equip. Corp., 989 A.3d 385 (Pa. Super. 2010)

In Kiak, the Superior Court of Pennsylvania held that a claim that a forklift should have a backing alarm which sounds when the vehicle is coasting backwards, with the throttle disengaged, is not preempted by an OSHA regulation requiring a manufacturer to equip forklifts with "a warning horn, whistle, or gong, or other device."  The case overruled Arnoldy v. Forklift L.P., an opinion issued just two years earlier, which held that a rule of state tort law imposing a duty on manufacturers to install additional safety devices is preempted by an OSHA regulation placing the responsibility of the determination of situation specific safety devices on the user of the equipment.

Like the plaintiff in Arnoldy, Kiak brought a claim for defective design against the manufacturer of a forklift, seeking recompense for the injury he suffered when the forklift pinned him between boxes and almost amputated his foot. His defective design claim was based on the Crown Equipment's failure to include an alarm that also sounded when the forklift coasted backwards in neutral, as opposed to only when the forklift was actually shifted into reverse.

Crown Equipment claimed that Arnoldy barred the plaintiff's claim, but the Kiak court disagreed with Arnoldy and ultimately overruled that opinion.  The Superior Court instead held that imposing liability on manufacturers for the injuries caused by the non-inclusion of certain safety devices on forklifts, like an alarm that sounds while the vehicle is coasting backwards, does not directly conflict with the language of OSHA requiring a manufacturer to equip forklifts with "a warning horn, whistle, or gong, or other device" and that the Arnoldy decision was based upon an inapplicable standard not incorporated in the OSHA regulation.  Consequently, the court reversed the trial court's grant of summary judgment in favor of Crown Equipment and remanded the case for further proceedings.

Schaffner v. Aesys Techs., LLC, 2010 WL 695275 (Pa. Super. Jan. 21, 2010)

A defendant that neither manufactured nor supplied a product containing asbestos is not liable under theories of strict liability or failure to warn concerning asbestos-containing component parts manufactured and supplied by others and added later.  In Schaffner, the wife of a man who died from exposure to asbestos brought suit against a manufacturers of boilers and a floor tile manufacturer.  The plaintiff had been exposed to asbestos fibers and dust when he removed and serviced the boilers on numerous occasions during the course of his employment, and worked with the floor tiles during a home renovation project.

The Superior Court of Pennsylvania affirmed the trial court's grant of summary judgment in favor of the boiler manufacturer because the asbestos-containing parts (furnace cement and insulation) were added to the boilers only after the boilers left the manufacturer's control and were not manufactured or supplied by the boiler manufacturer, non-asbestos-containing components could have been used, and the choice to use asbestos-containing components was not made by the boiler manufacturer.  Accordingly, the boiler manufacturer could not be held liable under the principles of Section 402A of the Restatement (Second) of Torts.

The court also affirmed summary judgment in favor of the manufacturer of the floor tiles used by the plaintiff in this home renovation project.  To support its decision, the court invoked the Pennsylvania Supreme Court's recent reaffirmation that the "frequency, regularity and proximity" analysis, rather than the "substantial factor" analysis, is the appropriate analysis to apply in a mesothelioma case.  The Superior Court reasoned that in many instances, a plaintiff may have been exposed to asbestos fibers only briefly, or may have been exposed to another source of asbestos for a longer period of time.  According to the Court, under either of these scenarios, the source of asbestos exposure that is the actual subject of the lawsuit would thus merely be de minimis.  Indeed, the plaintiff in Schaffner had only worked with the floor tiles for one month, whereas his exposure to the asbestos in the boiler parts came over a 33-year-period of employment, both prior and subsequent to working with the floor tiles.

Though it does not create new law, the Schaffner opinion is significant because it illustrates a fundamental divergence between Pennsylvania and New Jersey product liability law in certain asbestos-related cases.  As the New Jersey Supreme Court made clear in the Buttitta case discussed below, New Jersey does apply the "substantial factor" test in mesothelioma cases.  Because the disease can develop from exposure to even a de minimis number of asbestos fibers, including just one, New Jersey has deemed the "frequency, regularity and proximity" inquiry inapplicable in many mesothelioma cases.

Gaudio v. Ford Motor Co., 976 A.2d 524 (Pa. Super. 2009)

The Superior Court of Pennsylvania recently reaffirmed the viability of the “crashworthiness doctrine” in Pennsylvania product liability law.  Under the crashworthiness doctrine, a manufacturer is held strictly liable for defects that cause an increase in the severity of injuries that were not initially caused by the defective product.  The plaintiff in Gaudio argued that her husband's death resulted from the defective design of the airbags in the husband's Ford truck.  Though acknowledging that his accident was not actually caused by the defect, the plaintiff claimed that her husband would not have died had the airbags been designed correctly; if the air bags had not deployed at all, or had timely deployed, he would have suffered at most only minor injuries.

The court allowed the plaintiff's claim to proceed.  In so holding, the court rejected Ford's contention that the crashworthiness doctrine is inconsistent with the Pennsylvania Supreme Court's 2006 opinion in Pennsylvania Dep't of General Services v. United States Mineral Products Co., 587 Pa. 236, 898 A.2d 590 (2006) ("General Services I").  The court clarified that although the Pennsylvania Supreme Court in General Services I had refused to extend the rationale of the crashworthiness doctrine to products other than motor vehicles (specifically, to "fireworthiness" of PCB-containing building products), the Supreme Court had nevertheless "carefully avoided eliminating the crashworthiness doctrine as a cognizable subset of strict liability law . . . ."

The crashworthiness doctrine thus remains a workable exception to the general exclusion of notions of foreseeability from a Section 402A strict product liability analysis.

French v. Commonwealth. Ass'n., Inc., 980 A.2d 623 (Pa. Super. 2009)

The Superior Court of Pennsylvania recently held that while Pennsylvania Rule of Civil Procedure 1042.6 authorizes entry of a judgment of non pros when a plaintiff does not file a certificate of merit in a professional negligence case, entry of such judgment is not appropriate when the plaintiff seeks to recover damages from an engineering firm under theories of strict products liability and breach of warranty.

The plaintiff in French brought the action after her husband was killed during a workplace accident involving an industrial grinder.  The plaintiff did not file a certificate of merit.  The trial court granted the defendants' request for entry of a judgment of non pros, concluding that the plaintiff was required to have filed a certificate of merit before bringing suit because "the entire complaint sounded in professional negligence," and because the plaintiff "would need expert testimony to establish her claims."

The Pennsylvania Superior Court vacated the trial court's judgment, holding that: 1) the complaint potentially included product liability and breach of warranty claims separate from claims for professional negligence, and 2) the need to use an expert to sustain a particular cause of action does not itself mean that the complaint alleges only claims of professional negligence.  The court then remanded the case with instructions for the trial court to strike from the complaint "only those paragraphs actually sounding in professional negligence."  

The reasoning behind the Superior Court's holding reflects Pennsylvania's continued adherence to the Second Restatement theory of strict product liability: a strict product liability inquiry asks only whether a defect rendered the product unreasonably dangerous, not whether the defect resulted from the defendant's negligent conduct.  The trial court's erroneous order of the judgment of non pros thus reveals the difficulty of preventing principles of negligence from entering the strict products liability inquiry.

Eastern District of Pennsylvania
 

Hoffman v. Paper Converting Machine Co., 694 F. Supp. 2d 359 (E.D. Pa. 2010)

The plaintiff in Hoffman was injured when his fingers were caught in the unguarded nip point of a printing press.  He sued the manufacturer of the printing press, asserting strict liability under theories of design defect and failure to warn.  The Eastern District of Pennsylvania applied Pennsylvania law to determine whether to grant the manufacturer’s motion for summary judgment.  While applying state law is usually a straightforward matter for a federal court, the Hoffman court faced the dilemma of choosing between applying the Restatement (Second) of Torts, in line with Pennsylvania state law, or applying the Restatement (Third) of Torts, as the Third Circuit had done in 2009 when determining the applicable standard under Pennsylvania product liability law.

In Berrier v. Simplicity Mfg., Inc., the Third Circuit predicted that the Pennsylvania Supreme Court would abandon its adherence to Section 402 of the Second Restatement and adopt Section 2 of the Third Restatement in the pending case Bugosh v. I.U. North America, Inc.  Instead, the Supreme Court dismissed the Bugosh appeal for “having been improvidently granted,” although the dismissal order did garner a lengthy dissent endorsing the risk-utility approach of the Restatement Third.  The Hoffman court was thus forced to decide whether the appropriate test to use in a product liability claim applying Pennsylvania law was still the Second Restatement, or whether the Third Restatement had become the new standard.

Ultimately, the Eastern District of Pennsylvania applied the principles of the Third Restatement.  The court concluded that it was bound to do so under the Third Circuit’s Berrier precedent because the Pennsylvania Supreme Court’s dismissal of Bugosh was merely procedural.  Interestingly, the Eastern District never considered the Barnish opinion discussed above, issued after the Bugosh order.  In Barnish, the Pennsylvania Supreme Court—while not addressing the specific issue of whether to abandon adherence to the Second Restatement in favor of adopting the Third Restatement—reviewed the malfunction theory of products liability through the lens of Section 402A of the Second Restatement.

NEW JERSEY

Supreme Court of New Jersey
 

Nicastro v. McIntyre Mach. America, LTD, 987 A.2d 575 (N.J. 2010)

The New Jersey Supreme Court recently reaffirmed that its long-arm statute brings a foreign manufacturer within the ambit of New Jersey state courts' personal jurisdiction when the manufacturer: 1) has a nationwide geographical market for its product; 2) places a defective product in the "stream of commerce" somewhere within that geographical market; and 3) the product harms someone within New Jersey.

At issue in Nicastro was whether a New Jersey state court could exercise personal jurisdiction over the U.K.-based manufacturer of an industrial machine that injured the plaintiff.  The manufacturer had sold the machine to its U.S. distributor located in Ohio.  The distributor later resold the machine to the plaintiff's employer located in New Jersey.  The manufacturer itself never sold products to New Jersey, directly targeted business from New Jersey (officials from the manufacturer had attended trade conventions, exhibitions, and conferences in various U.S. cities, but  never in New Jersey), nor had any physical presence in the state.

Yet the Supreme Court still held that the manufacturer was subject to personal jurisdiction in New Jersey.  The court determined that the manufacturer had  purposefully designed its nationwide distribution scheme to allow the stream of commerce to carry its products to all 50 states.  The manufacturer thus knew, or should have known, that any defective product placed in that stream could injure someone located in New Jersey.

The Nicastro opinion represents the first time that the New Jersey Supreme Court has revisited in depth the "stream of commerce" theory of personal jurisdiction since the U.S. Supreme Court's seminal Asahi opinion.  While Nicastro does not change existing New Jersey law, the ruling is quite significant: in reaffirming Charles Gendler—the case in which the New Jersey Supreme Court first adopted the stream-of-commerce theory of personal jurisdiction—and in holding the foreign manufacturer of the machine that injured the plaintiff subject to personal jurisdiction in New Jersey, the New Jersey Supreme Court essentially placed its stamp of imprimatur on Justice Brennen's broader view of the stream of commerce, as set forth in his Asahi concurrence, rather than on the Asahi plurality's more restrictive "stream of commerce plus" doctrine.

Superior Court of New Jersey
 

Fletcher v. Cessna Aircraft Company, 991 A.2d 859 (N.J. Super. 2010)

According to the Superior Court of New Jersey, the General Aviation Revitalization Act's (GARA) statute of repose bars a plaintiff from bringing a products liability action against an airplane manufacturer in New Jersey state court when: 1) the suit is for failure to warn about potential dangers associated with the airplane, as such a claim is brought against the defendant "in its capacity as a manufacturer," and 2) the suit is commenced more than eighteen years after the delivery of the plane to the initial purchaser.

The plaintiff in Fletcher was the wife of an airplane pilot who died when the plane crashed during takeoff because of ice in the plane's fuel system.  She sued the manufacturer of the plane for not providing warnings about the potential for ice to accumulate in the fuel system and the loss of engine power that could ensue.

In dismissing the plaintiff's claim, the Superior Court first noted that the crash had occurred nearly thirty years after the plane was delivered to its initial purchaser, meaning that GARA's period of repose had long expired.  The court then rejected the plaintiff's argument that she was suing the plane manufacturer not in its capacity as a manufacturer, but rather, in its capacity as an entity that services planes or publishes instruction materials.  The court determined that GARA's plain statutory language and the legislative history behind the statute's enactment necessitated the conclusion that GARA is meant to "afford broad protection to manufacturers with narrow exceptions based upon conduct unrelated to their responsibility as the original manufacturer of the aircraft" (emphasis added), as opposed to its involvement in any "new act of manufacturing" or "performance of tasks . . . arising instead from post-delivery conduct—such as flying, servicing, and repairing an aircraft . . . ."  Because the plaintiff's suit was based on the manufacturer's conduct related to the manufacturing of the plane, GARA ultimately barred her claim.

Buttitta v. Allied Signal, Inc., 2010 WL 1427273 (N.J. Super. Apr. 5, 2010)

In an unpublished opinion, the New Jersey Superior Court recently upheld a trial judge's refusal to remit by nearly $10 million a jury's award of $30.3 million to the family of a man who died one year after being diagnosed with mesothelioma.  The man had contracted mesothelioma after being exposed to asbestos-containing automobile clutches when working at a General Motors warehouse, and through contact with his father, who worked for GM.

In affirming the jury's award and the trial judge's decision not to remit, the court made clear that in cases involving the amount of damages awarded to a plaintiff, the court will "defer[] to the [trial] judge's feel of the case."  In this instance, despite the jury's award being substantially more than even the plaintiff's expert's estimation of damages, the court did not feel that the jury's award was "so disproportionate as to shock the judicial conscience."  

Moreno v. American Home Prods., No. A-3935-07T2, slip op. (N.J. Super. July 12, 2010)

The viability under New York law of the market-share theory of liability outside of the DES context has again been rejected.  The Superior court of New Jersey recently examined the state of market-share liability under New York law to determine whether the law is different from that in New Jersey for purposes of a choice-of-law determination.

The plaintiff in Moreno claimed that he suffered permanent disabilities as a result of a brain tumor that he developed after receiving at least one dose of a defective oral polio vaccine.  Because he could not identify the manufacturer of the vaccine he received, he sued several defendants and asserted different theories of collective liability, of which market-share was one.

The Superior Court concluded that New York, like New Jersey, does not support application of market-share liability when the plaintiff cannot identify the manufacturer of the defective vaccine that caused the plaintiff's injuries.  Yet the significance of the Superior Court's holding may be limited to its facts.  The New York Supreme Court has allowed a plaintiff to proceed on a market-share theory of collective liability in certain limited instances, namely where the plaintiff has alleged that a defectively-designed drug—specifically, the drug known as DES—caused her injuries. In contrast, the plaintiff in Moreno was not alleging defective design of the polio vaccine; rather, he claimed that a defectively-manufactured polio vaccine had caused his tumor.

Third Circuit Court of Appeals
 

Travelers Indemnity Company v. Dammann & Co., Inc., 594 F.3d 238 (3d Cir. 2010)

Recently, the Third Circuit scrutinized the state of the economic loss doctrine in New Jersey.  Travelers, a liability insurer, brought an action against its insured, the seller of vanilla beans, and a buyer of the beans, that were contaminated with mercury.  The buyer sought to file crossclaims against the insured seller for breach of express and implied warranty and product liability, for money lost from having to discard the tainted finished product and clean contaminated machines, and from the resultant personnel and administrative costs it incurred.

Before reaching its conclusion, the Third Circuit first noted the absence of any New Jersey state court decision reconciling the tension between the New Jersey Products Liability Act (NJPLA), which explicitly allows a plaintiff to pursue a products liability action to redress harm to "other property," and the New Jersey judiciary's "preference for keeping tort out of contract's hair."  Yet despite acknowledging the "legislative mandate under the NJPLA to treat harm to 'other property' differently from harm to 'the product itself,'" the Third Circuit Court of Appeals predicted that the New Jersey Supreme Court would bar the buyer's action, as the buyer's damages consisted only of pure economic harm, and because the buyer could have bargained for protection from such harm.

The court based this prediction on: 1) New Jersey's incorporating into law the U.C.C., which allows a buyer to recover for reasonable damages incidental and consequential to the sale of the defective product; 2) "[t]he New Jersey's Supreme Court's clear rejection of an approach that would allow tort law to substitute for contract law in cases involving sophisticated parties with equal bargaining power . . . [,]" as demonstrated through judicial opinions written prior to the enactment of the NJPLA; and 3) the Third Circuit's responsibility to restrict liability, rather than increase it, when neither the state's supreme court nor the state's appellate-level court has adopted one of two possible interpretations of state law.

NEW YORK

Court of Appeals of New York
 

Adams v. Genie Industries, Inc., 2010 WL 1849325 (N.Y. May 11, 2010)

A manufacturer of a defective product who consents to additur of damages is no longer barred under New York law from appealing issues separate from the award modification itself. In Adams, New York's highest court abandoned its former adherence to the rule that a party's stipulation to additur forecloses that party's ability to appeal other, unrelated issues.  The court there held that the manufacturer of an allegedly-defective personnel lift was not precluded from appealing the jury's actual finding of liability merely because, when forced to choose between a new trial on the issue of damages for past and future pain and suffering or an increase in the jury's award of $500,000 to $750,000,  it had agreed to the additur, abrogating Batavia Turf Farms v. County of Genesee, 91 N.Y.2d 906, 668 N.S.S.2d 1001, 691 N.E.2d 1025 (1998); and Whitfield v. City of New York, 90 N.Y.2d 777, 666 N.Y.S.2d 545, 689 N.E.2d 515 (1997).

Jaramillo v. Weyerhaeuser Co., 906 N.E.2d 387 (N.Y. 2009)

The Court of Appeals for New York had the opportunity to reexamine New York's casual seller doctrine for the first time since 1993 when it answered a certified question from the Second Circuit Court of Appeals dealing with that issue.

In a case involving a suit against the seller of a used, allegedly-defective machine that was ultimately responsible for the plaintiff's workplace injury, the court in Jaramillo first reiterated the rule that a casual seller cannot be held strictly liable for harm resulting from the sale of a defective product.

The court then turned to the issue of whether a regular seller of used products can be subject to strict product liability.  The Second Circuit had certified this question because of an opinion in which the New York Supreme Court discussed a Fifth Circuit case that had "suggested that a business selling its obsolete assets could be held strictly liable for defects in those products . . . where certain hypothetical circumstances existed . . . ."  Unsure of whether the Supreme Court's discussion of that hypothetical constituted its approval of the potential for such liability, the Second Circuit sought guidance from the Supreme Court itself.

The Supreme Court ultimately answered the certified question by stating that the seller of the defective machine could not be held liable under New York Law.  The court reiterated that the concept of an "ordinary seller of second-hand equipment" is one not yet recognized under New York law, and stated that the facts of Jaramillo did not present the opportunity to resolve that open issue because the defendant was merely a casual seller.  It sold a cardboard folding machine, which it had purchased third-hand, and sold it at an irregularly-scheduled "as is, where is" surplus sale, where a buyer could not reasonably expect it to stand behind someone else's goods.  Significantly, though, the court did reference "some imaginable future case in which the facts justify imposition of strict products liability on a seller of used goods . . . ."

Third Circuit Court of Appeals
 

D.D. v. Idant Labs., 2010 WL 1257705 (3d. Cir. Apr. 1, 2010)

In an unpublished opinion, the Third Circuit Court of Appeals extended New York's refusal to recognize a products liability cause of action for "wrongful life" to shield sperm banks from liability for failing to detect or warn of genetic defects present in sperm. According to the Third Circuit Court of Appeals, New York law does not allow a plaintiff (whether a parent or the child herself) to bring such a products liability claim against a sperm bank because "defective" genetic makeup is not a cognizable injury under New York law.

To support its conclusion that no child has a legal right in New York to be born—and no parent a right to have a child born—without genetic defects, the Third Circuit invoked colorful language from Sheppard-Mobley v. King, a case in which the New York Supreme Court stated that "a cause of action brought on behalf of an infant seeking recovery for wrongful life demands a calculation of damages dependant upon a comparison between the Hobson's choice of life in an impaired state and nonexistence."  In the Supreme Court's view,"[t]his [is a] comparison the law is not equipped to make." Accordingly, the Third Circuit affirmed the dismissal of the plaintiff's claims.

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