NOTE FROM THE EDITOR:
The biggest news of 2023 impacting product liability claims is surely the veto of the Grieving Families Act. In June 2022, both the NY Senate and Assembly passed the Grieving Families Act, legislation that would completely overhaul wrongful death claims in New York by permitting recovery for emotional damages and expanding the class of persons (“close family members”) who can seek recovery for a fatality. The bill was delivered to the Governor at the very end of 2022, and expired on January 30, 2023, without the Governor signing the bill into law.
The Governor cited the burden and increased costs on families, small businesses, and New York’s health care industry as reasons for not signing this monumental legislation in its current form. The Governor has voiced support for a more limited reform of New York’s Wrongful Death Statute, which may include limiting claims for grief and emotional damages to parents who suffered the loss of a child, implementing a cap on emotional damages, not applying new legislation retroactively to pending claims, not extending the statute of limitations, and excluding claims for medical malpractice. It is anticipated this issue will remain a legislative priority in 2023. We will continue to monitor this legislation and provide updates as they become available.
As discussed below by our Long Island products expert Jesse Siegel, there were three substantive changes to New York’s Pattern Jury Instructions applicable to product liability claims. The manufacturing defect charge was modified to “clarify” that the plaintiff need only to prove that the product was defectively manufactured, and that actual or inferred knowledge of the defect is not an element of proof. The damages charge was notably changed to now explicitly give jurors the discretion to not award damages even if there is a liability verdict. Further changes were also made to the language of the charges dealing with proximate cause.
Mike Williams addresses some creative bankruptcy tactics that backfired in some high-profile mass tort litigation.
Kara Eyre discusses a case involving the substantial modification defense to a product defect claim.
Mark Nemeth also brings a report on the uber busy New York asbestos docket, along with a couple interesting appellate decisions on the sufficiency of product identification testimony and the nexus required to confer New York jurisdiction for out-of-state exposures.
And now for this month's St. Patrick's Day dad joke:
What happens when you call a leprechaun short?
He gets O'ffended.
V. Christopher Potenza ■ Member
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By: Jesse L. Siegel
Each year, New York's Pattern Jury Instructions are examined, and revisions made to keep current with recently enacted statutes and prevailing caselaw, as well as address both general and specific concerns of judges and litigators alike. There were three specific changes that can impact the litigation of product liability claims. For 2023, specific attention has been brought to PJI 2:120 concerning “Strict Products Liability” and, more aptly, a strict products liability claim based upon a manufacturing defect. In addition, the pattern jury instructions on damages are constantly being tweaked, and this year is no exception. Below we will also discuss a change made to PJI 2:30, which now instructs jurors that they have discretion to award no damages for past pain and suffering even if there is a liability verdict. There were also changes to the charges involving proximate cause, with the language “caused or contributed to” replacing “substantial factor,” and the language of “causing injury” being replaced by “bringing about the accident, injury or other appropriate characterization of event.”
THE FOLLOWING CHANGES HAVE BEEN MADE TO
THE PATTERN JURY INSTRUCTIONS
PJI 2:120 – Strict Products Liability
The pattern jury charge for strict products liability incorporates three possible bases for liability:
Failure to Warn
The thrust of strict liability law originally was to relieve plaintiff of the burden of proving that the defendant was negligent in manufacturing a defective unit. Under strict liability, if the product is defective, plaintiff has established the basis for liability without proving fault.
To establish a strict products liability claim based on a manufacturing defect, plaintiff must prove that the product did not perform as intended and that it was defective when it left the manufacturer’s control. In other words, the particular unit of the product differs from the manufacturer’s own internal quality standards. Where a manufacturing defect is alleged, plaintiff must establish that the product was not built to specifications or that the product, as constructed, deviated from any such specifications or design.
The 2023 version of the charge has been modified to make it clear that when the claim is solely a manufacturing defect, the plaintiff need only prove that the product was defectively manufactured. Actual or inferred knowledge of the defect is not an element of proof.
For 2024, the PJI Committee has discussed making three separate charges under topic of products liability for each category of liability.
PJI 2:301 – Damages
This revision was made to remedy a conflict in the language of this particular charge, versus the instructions given on the jury verdict sheet.
The language of the prior charge was unclear as to whether a jury could give an award of “zero” or “none” for past pain and suffering.
The new charge is consistent with prevailing Appellate law. An award for past pain and suffering is not mandatory. Jurors have discretion to NOT award past pain and suffering, even if rendering a liability verdict in favor of the Plaintiff.
The new charge reads:
If you decide for the plaintiff on the question of liability, you must next consider past and future damages, including an award for past and future pain and suffering, if any.
* * *
For both past and future damages, the new charge provides: If you decide not to make an award as to any item, you will insert the word “none” as to that item.
The proximate cause charges and their sequella are among the most controversial and talked about charges in the entire PJI. For this year, there has been a continued attempt to make these charges consistent, particularly with regard to language.
In PJI 2:36, 2:90 and 2:126, the language “caused or contributed to” has replaced “substantial factor.”
These changes would appear to move against the defense bar, as “causing or contributing to” an accident seems like a less steep hill to climb than an event being a “substantial factor” in bringing about an accident.
In PJI 2:90, 2:91, 2:275 and 2:126, the language of “causing injury” has been replaced by “bringing about the accident, injury or other appropriate characterization of event.”
Likewise, “bringing about” an injury can be viewed as being a less demanding standard than “causing” an injury.
Failure to Warn
By: Kara M. Eyre
On these cold and dreary winter days in Western New York, I sometimes feel as though February’s only redeeming quality is the long weekend to celebrate Presidents’ Day. Speaking of Presidents, it’s that time of the month again for . . . Lady Facts, a lesser known but nonetheless inspiring fact about women in history. Did you know that the U.S. has already had a woman president? It’s true . . . sort of! Edith Wilson, Woodrow Wilson’s second wife, is often described as America’s first woman President because of the active and influential role she had in managing her husband’s administration after he suffered a severe stroke in 1919.
This month we discuss a case in which a company that distributed a meat grinder is granted summary judgment despite the plaintiff suffering a grave injury stemming from its use because plaintiff’s employer substantially modified the product by removing its safety guards.
2/6/23 Khusenov v. Prokraft, Inc.
United States District Court, Eastern District of New York
Product distributor granted summary judgment on substantial modification defense after employer removes safety guard from meat grinder.
Plaintiff was employed in the butcher shop of a grocery store where a “Pro-Cut” meat grinder distributed by defendant was in use. As shipped by defendant, the grinder had warning labels with text and pictograms, in addition to a permanently affixed safety guard. Plaintiff’s employer removed the safety guard, and plaintiff’s sleeve became caught in the grinder, resulting in his right arm requiring amputation just below the elbow.
Plaintiff asserted claims against Prokraft based upon theories of negligence and strict products liability for an alleged design defect of the meat grinder. The District Court granted defendant’s motion for summary judgment dismissing these claims, finding that plaintiff failed to satisfy the substantial likelihood of harm and proximate cause elements required to sustain a design defect claim. As the Court explained, plaintiff failed to demonstrate that the meat grinder, as designed with the safety guard, posed a substantial likelihood of harm. Moreover, the removal of the safety guard amounted to a substantial modification to the meat grinder, and a manufacturer cannot be held liable under strict liability or negligence theories when there is a subsequent modification to its product that is the proximate cause of the alleged injuries. Based upon this same rationale, the Court dismissed plaintiff’s claim for breach of implied warranty, holding that plaintiff could not show that the meat grinder was not minimally safe for its expected purpose when shipped.
Plaintiff also asserted claims based upon defendant’s alleged failure to warn of the potential dangers of the meat grinder. The meat grinder contained labels with text and pictograms warning against operating the product if the safety guard is removed, which the District Court held was adequate as a matter of law and granted defendant summary judgment dismissing these claims.
Although the District Court, in its decision, noted that it was mindful of the “grave injury” the plaintiff suffered, which would permit the defendant to assert a third-party claim against the employer pursuant to Section 11 of New York Workers' Compensation Law, the Court held that it was not the fault of the manufacturer that the plaintiff’s employer removed the safety guard and permitted its employees to use the grinder without it for over a year. Plaintiff’s injury, the Court stated, was not a result of the meat grinder’s flawed design or failure to warn, but rather, from the plaintiff’s employer’s disregard for the safety warnings and their substantial modification of the product. As the claim against the primary defendant was dismissed, the third-party claim for contribution and/or indemnity against the employer is thereby extinguished.
By: Michael J. Williams
Limitations breed creativity. Our profession is bound by rules and responsibilities that empower our creative expression within that framework. This edition’s mass tort offerings involve extremely talented legal artists who tested the limitations of our judicial system, bringing bankruptcy tactics into litigation of global importance which the courts deemed to be in “bad faith” to the ultimate detriment of their clients.
In re: 3M Combat Earplug Products Liability Litigation, MDL 2885, N.D.Fl. 3:19-md-2885, Docket No. 3610, describes federal litigation, and particularly multidistrict litigation, as “not for the faint of heart “ and “a taxing, rough and tumble business.” Here, 3M was faced with 328,056 historical actions involving its CAEv2 combat earplug product design which it litigated for three and one-half years, worked up a Wave 1 of 500 exemplar cases, tried 16 bellwether trials over 14 months resulting in 19 verdicts (13 for plaintiffs, 6 for defense) for nearly $300,000,000 in jury verdicts.
3M devised a clever plan to escape this and further liability: it executed a funding and indemnity agreement with another entity, collectively referred to as the Aero defendants, to which it allocated 100% of its liability for CAEv2 claims in exchange for 3M funding all of Aero’s liabilities and costs in bankruptcy. The bankruptcy court rejected staying all CAEv2 litigation on the basis of this artificially manufactured identity of interest between 3M and Aero, and the MDL litigation continued unabated.
Having failed before an Article I bankruptcy court, 3M returned to its Article III MDL with a new narrative: Aero was, and had always been, solely responsible for all CAEv2 liability. However, 3M, since a June 2019 Rule 26 preconference, had unambiguously asserted that no such argument would be made and had continued under this premise through all 16 trials. Exercising its inherent authority to sanction 3M for “[m]asquerading as the hapless wrong party defendant and purposefully ambushing the other side with a wholly contrived strategic position,” the court precluded any blame-shifting to Aero throughout all MDL cases.
Along the same lines, Johnson & Johnson (technically a spun off subsidiary, Old Consumer) facing over 38,000 cases alleging that its talcum powder caused ovarian cancer in In re: Johnson & Johnson Talcum Powder Products Marketing, Sales Practices and Products Liability Litigation, MDL No. 16-2738, D. N.J. 3:16-md-2738, engaged in a similar process while facing verdicts such as $4.69 billion to 22 ovarian cancer patients (reduced on appeal to $2.24 billion). Since 2018, monetary awards to plaintiffs that were not reversed averages $39.7 million per claim.
Facing this degree of liability, J&J entered into an arrangement forming LTL Management LLC as a shell corporation to separate its assets from its litigation liabilities. Since 1989, Texas law permitted corporate restructuring that divides a legal entity into two or more new legal entities, neither of which is liable for the debts or obligations of the other. This “divisional merger” has recently been used in litigation to divide an entity in such a way that one successor maintains all assets while the other is burdened by all liabilities. This has become pejoratively known as the “Texas Two-Step.”
LTL Management LLC became J&J’s Aero, an entity to be consumed by debt and, because it could seek repayment from J&J as Aero could of 3M, with an identity in interest justifying a litigation stay. LTL then filed its Chapter 11 petition in the Western District of North Carolina to obtain its stay, prior to attempting transfer to the District of New Jersey, in order to avail itself of the U.S. Court of Appeals for the Fourth’s Circuit’s law greatly limiting the circumstances where a bankruptcy petition might be dismissed. Here is where J&J’s plot unraveled: while a stay issued from North Carolina in November 2021, and the District of New Jersey proved sympathetic to the concept, the North Carolina filing was deemed unjustifiable, and the Third Circuit reversed. The appellate court found both bad faith and no basis for bankruptcy protections before returning the case to New Jersey with the instruction to dismiss.
3M and J&J are only the most recent and prominent examples of these creative maneuvers being deemed bad faith tactics when falling under judicial review. While we can respect the creativity and zealous representation in our colleagues’ approach, good faith attempts to extend the boundaries of existing law can lead to an unfortunate branding of “bad faith,” earning a reprimand from the court, a reversal of temporary gains, and a significant loss for the client.
Toxic Torts, Asbestos, and Lead Paint
By: Mark S. Nemeth
Who said asbestos claims would slow down or be extinct by 2023? Sadly, that prediction is far from the truth as the upstate New York asbestos docket is as busy as ever, with new claims being filed daily.
There is some good news however, and restored faith (at least partially) in our jury system as last month there was a defense verdict in Erie County, with the jury finding that the plaintiff was not exposed to asbestos from the trial defendant’s product.
We have a couple of interesting appellate decisions addressing the sufficiency of product identification testimony and the nexus required to confer New York jurisdiction for out-of-state exposures.
01/05/23 Howard v A.O. Smith
Appellate Division, Third Department.
Plaintiff’s testimony sufficient to create issue of fact as to alleged pump exposure in the Navy.
Plaintiff brought an action to recover for damages from exposure to asbestos, which he alleged occurred during his service in the US Navy on various submarines from 1961 through 1978. Defendant filed a motion for summary judgment arguing that plaintiff could not have been exposed to its products during that time period because defendant did not exist until 1965, which was after the commissioning of the vessels on which plaintiff served. During his deposition testimony, plaintiff identified and described defendant’s pumps among the manufacturers he observed during his service on each of the vessels. The Court found that defendant failed to establish the absence of a material question of fact with regard to the presence of defendant’s pumps on the vessels and determined defendant’s motion had been properly denied by the Supreme Court.
01/31/23 Vavala v A.O. Smith
Appellate Division, First Department.
Defendant’s sales office in New York not sufficient nexus to plaintiff’s asbestos exposure in Connecticut to confer jurisdiction.
Plaintiff sued to recover for personal injuries from his alleged exposure to asbestos while he was employed by defendant as a steamfitter and welder from 1967 to 1989. Defendant, whose headquarters were in Bridgeport, Connecticut, filed a motion to dismiss for lack of personal jurisdiction, and plaintiff cross-moved for jurisdictional discovery. The Supreme Court denied defendant’s motion and granted plaintiff’s cross-motion. On appeal, the Court determined that the limited activity stemming from defendant’s operation of an executive and sales office out of its New York City office was not substantially related to plaintiff's alleged exposure to asbestos while working with and around defendant's valves in Connecticut. In the absence of an articulable nexus to plaintiff’s injury, the Court determined defendant’s motion to dismiss for lack of personal jurisdiction should have been granted. Additionally, the Court found that plaintiff failed to demonstrate that defendant had committed a tortious act in New York, and plaintiff’s cross-motion should have been denied.
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