What the United States Supreme Court’s Decision in DirecTV v. Imburgia Means For Your Consumer Agreements and Arbitration Clauses

shutterstock_216196921Last week, the United States Supreme Court issued its opinion in DirecTV v. Imburgia, 577 U.S. ___ (2015).  This decision is important for manufacturers of consumer products because it fortifies the ability to incorporate and rely upon arbitration clauses as a way to reduce risk and overall litigation cost.

As most are well aware, arbitration clauses push contractual disputes and related claims out of court and into the realm of alternative dispute resolution.  If binding and enforced, such clauses can provide faster adjudication and reduce litigation costs.  With the increasing trend in class action consumer product litigation, arbitration agreements have evolved to include class arbitration waivers.  Some states however, like California, prohibited such waivers. The Supreme Court in Imburgia made clear, once and for all, that the enforceability of unambiguous arbitration clauses is not a decision that is left to the states, but one that is governed by the Federal Arbitration Act. Read more ›

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Texas Court’s Writ of Mandamus Relieves Discovery Pressures on Tire Manufacturer

shutterstock_258758675A court in Harris County, Texas provided relief to Michelin North America Inc. in a case involving allegedly defective tires when it threatened to issue a writ of mandamus in favor of the tire manufacturer. The Texas appellate court conditionally granted Michelin’s request for the extraordinary relief on November 24, 2015, ordering a district judge to vacate an order granting plaintiff’s motion to compel permitting an inspection and videotaping of the defendant’s tire manufacturing plant. Although this Texas state appellate decision lacks precedential value beyond the state, it can be used as a guidepost for the type of arguments a court may find compelling when a manufacturer resists discovery regardless of venue.

In the underlying case, plaintiffs allege that rapid air loss in an allegedly defective tire caused a driver to lose control and veer into oncoming traffic, leading to a serious collision. The tire in question was manufactured at Michelin’s Fort Wayne plant. The August 2014 collision resulted in the death of a driver of a nearby vehicle, as well as serious injuries to the occupants of the vehicle that crossed the centerline. Read more ›

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A Step by Step Guide To Maximizing The Use of Social Media In Defending Product Liability Claims

shutterstock_186292982As most people are aware, social media has become pervasive in the daily lives of the vast majority of Americans.  Social media provides us with an instantaneous way to share our thoughts and experiences with others.  Doing so creates an electronic history that is stored and preserved, and, as the majority of courts have made clear, is ripe for discovery.

Like an accident scene that is subject to spoliation, investigation and review of all available social media must be done immediately upon receipt of a claim to best guard against deletion.  Prompt attention and preservation of this information may provide grounds for early resolution, or even withdrawal, of claims.  Here is what you need to do to identify and make the best use of social media information in your next product claim: Read more ›

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Posted in Social Media

Whose Choice Is It Anyway? Split Decisions Over Choice of Law and The Impact On Your Defense Strategy

Janssen Pharmaceuticals Inc., a unit of Johnson & Johnson, has been embroiled in a mass tort MDL in Philadelphia for its anti-psychotic drug, Risperdal, for almost a year now.  So far in 2015, the juries have split – three in favor of plaintiffs one in favor of the defense, and the issue that appears to have divided the juries is causation.

More interesting than the widely reported courtroom antics, and even the ultimate resolutions of these matters, is how choice of law principles were utilized to dismiss the punitive damages claims.  Last month, Judge Arnold New explained his decision to bar punitive damages in nearly all of these pending claims, holding that each case must subscribe to the law of the state in which the alleged punitive conduct occurs.  Specifically, New applied New Jersey law to preclude punitive damages in the Risperdal cases.  Read more ›

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Posted in Choice of Law, FDA

When Good Food Goes Bad: Contamination and Product Liability

Last week, lunch came back to bite dozens of unsuspecting diners throughout Washington and Oregon. Something in Chipotle’s fresh, healthy, and responsibly-sourced fast food caused uncharacteristic sickness for those partaking. The likely culprit, E. coli bacteria, left Chipotle patrons seriously ill and angry. Ironically, the fresh food that Chipotle bases its reputation on may also swiftly produce its demise.  In this year alone, Chipotle and its fans have suffered several outbreaks. Nearly 100 Californian customers became ill with norovirus after dining at Chipotle in August of this year. Soon after, several dozen people were infected with salmonella from tomatoes at Chipotle restaurants in Minnesota.

The contamination could haunt Chipotle for years to come. Chipotle may need to expend an enormous effort repairing its reputation, but could also face significant litigation resulting from these food contamination incidents.  Indeed, the recent E. coli outbreak in the Pacific Northwest has already led to the filing of two lawsuits.  Read more ›

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Posted in FDA, Food

Litigation In The Marijuana Industry Lights Up

Marijuana

The country’s first products liability class action has hit the marijuana industry with the filing of various tort, strict liability and contract claims against LivWell, Inc. in Colorado state court last month.  The complaint purports to define two classes—a medical class and a recreational class.  LivWell operates eleven retail marijuana dispensaries and one of the world’s largest grow facilities in Colorado.

According to the plaintiffs’ allegations, LivWell intentionally used and applied Eagle 20 to its cannabis plants, a fungicide that allegedly releases hydrogen cyanide when ignited. Representative consumers complain they were uninformed of the application of the fungicide, and the dangers and health related consequences associated with the inhalation of its combustible by-product, hydrogen cyanide. Read more ›

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Posted in Duty To Warn, Manufacturer

Click it to Stick it: Guide to Creating Binding Online Agreements

Contract terms and purchaser assent to those terms, conditions, intended use and warning information provided with a purchased product are known fertile ground for defending product claims.

In today’s virtual age, consumers turn to the internet to purchase products, particularly during the holiday season. In this post, we examine the enforceability of online contracts and corresponding reliance upon virtually provided product documentation.

Manufacturers and sellers often rely upon contracts featured on their websites to govern relationships with consumers. These contracts, often referred to as “Terms of Service” or “Terms of Use” agreements, routinely contain terms and conditions regarding their visitors’ access to and use of the website. These agreements commonly include terms such as venue and arbitration clauses, which tend to favor the websites by permitting them to litigate claims in a more convenient and less expensive forum. Hosts of additional information can also be provided to online consumers including terms of product use, warnings and product labeling. Whether websites succeed in holding their users accountable for having received, understood and accepted this information, however, depends on whether courts are willing to enforce the agreement and recognize a consumer “reviewed and understood” information provided online. As recent court decisions demonstrate, by following certain guidelines, manufacturers and sellers can improve the likelihood that their online contracts and attempt to inform consumers will be enforced and upheld by the courts. Read more ›

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Posted in Agreements

FTC Announces Red Light on Unqualified “Green Approved” Seals

Updated to clarify that this post is not about Green Seal, Inc. but the environmental seals or certifications warned against in a recent FTC update.

Manufacturers of consumer products labeled with unspecified environmental certification seals (“green seals”) may find themselves subject to increasing FTC scrutiny and false labeling claims. This past month, the FTC sent warning letters to 32 unidentified manufacturers of consumer products utilizing green seals addressing the Agency’s position that the subject seals may be considered deceptive pursuant to the FTC’s Green Guides.

The FTC’s refreshed “Green Guides” contain a new section on environmental certifications and seals of approval. 16 C.F.R. § 260.6.  The Green Guides distinguish acceptable Seals from potentially problematic seals, and the difference hinges on qualifying language. An “unqualified” general environmental benefit claim, such as “green” or “eco-friendly,” fails to explain why a product earned a green seal. Claims, therefore, must be qualified and provide information to consumers as to why a product earned its seal.  A product can be deserving of a green seal for numerous reasons, but the FTC explained that it is “highly unlikely” that a single product can “substantiate all the attributes” implied by a general claim that it is environmentally friendly. Therefore, a qualifying descriptor is necessary to avoid any deception. Any potential deception is unmasked if the seal is coupled with representations such as “biodegradable” or “compostable.” Such qualifying language should be clearly and prominently displayed on the product packaging. A “Green Approved” seal unaccompanied with any additional description is, according to this new guidance, potentially deceptive. The FTC posted a business blog post, “Performing Seals,” to provide additional assistance to businesses utilizing green seals. Read more ›

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Posted in FTC

Morello v. Kenco Toyota Lift: No Duty to Advise Of Optional Safety Devices

shutterstock_280728110Just last week, the Eastern District of Pennsylvania dismissed plaintiff’s negligence and §402(B) strict liability claims on summary judgment in Morello v. Kenco Toyota Lift, et al.  The court reserved dismissal of the §402(A) and related breach of implied warranty claims pending Daubert hearings.  This decision sharpens Pennsylvania Courts’ interpretation of §402(A), and reinforces that product manufacturers can still secure summary judgment under Pennsylvania law.  Read more ›

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Not Driving in America: Navigating New Territory in Product Liability

shutterstock_151963727Driving in America: It’s a task almost universally reviled by those with hour-long commutes, practically a right-of-way to adulthood, a pastime romanticized in films, and – maybe – a soon extinct activity? Ever since Google debuted the driverless car, people have questioned whether the technology could actually succeed. Now that companies are testing driverless cars out on the open road, the questions have shifted to liability. How will human drivers, driverless car companies, software companies, and insurance companies navigate liability in the event of an accident? Will driverless car companies go bankrupt from product liability lawsuits when the car makes a fatal decision and the human sits idly by? Read more ›

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Posted in Automotive
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Products Liability Prevention & Defense
Our attorneys represent foreign and domestic designers, manufacturers, and distributors of a diverse array of products, from food and drugs to industrial equipment and building materials. We help clients respond to major personal injury and property damage claims in the form of single-product cases, class actions, mass torts, and multidistrict litigation, as well as all types of congressional, regulatory, or criminal investigations. Our team works closely with corporate counsel to minimize a company’s overall liability and establish efficient protocols for fielding claims and advise on labeling, marketing, manuals and instructions, supply and distribution contracts, and insurance and indemnification issues.
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