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Journal of Consumer Attorneys Associations for Southern California The high cost of arbitration: No longer a bar to justice? If a contract compels arbitration, he who can pay must do so
Advocate Research Jury awards and defendant’s conduct DUI versus DWT — does the nature of defendant’s conduct impact jury awards?
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Contents Volume 40, Number 11, NOVEMBER 2013
Editor-in-Chief Jeffrey Ehrlich Associate Editors Joseph Barrett, Joan Kessler, James Kristy, Beverly Pine, Norman Pine, Rahul Ravipudi, Linda Rice, Ibiere Seck, Geraldine Weiss Editors-in-Chief Emeriti Kevin Meenan, William Daniels, Steven Stevens, Christine Spagnoli, Thomas Stolpman Publisher Managing Editor Richard Neubauer Cindy Cantu email@example.com firstname.lastname@example.org Copy Editor Art Director Eileen Goss David Knopf Consumer Attorneys Association of Los Angeles President Treasurer Lisa Maki Ricardo Echeverria President-Elect Secretary Geoffrey Wells Michael Arias First Vice President Immediate Past President Joseph Barrett Michael Alder Second Vice President Executive Director David Ring Stuart Zanville
Board of Governors Martin Aarons, Mike Armitage, Shehnaz Bhujwala, Todd Bloomfield, John Blumberg, Michael Cohen, Scott Corwin, Jeffrey Ehrlich, Mayra Fornos, Stuart Fraenkel, Scott Glovsky, Steve Goldberg, Jeff Greenman, Christa HaggaiRamey, Genie Harrison, Arash Homampour, Neville Johnson, Bill Karns, Aimee Kirby, James Kristy, Lawrence Lallande, Anthony Luti, Shawn McCann, Minh Nguyen, Linda Fermoyle Rice, David Rosen, Jeffrey Rudman, Ibiere Seck, Douglas Silverstein, Armen Tashjian, Kathryn Trepinski, Geraldine Weiss, Jeff Westerman, Ronnivashti Whitehead, Andrew Wright, Dan Zohar Orange County Trial Lawyers Association Secretary President Geraldine Ly Scott Cooper Treasurer President-Elect Casey Johnson
First Vice President Ted Wacker
Second Vice President Vincent Howard Third Vice President H. Shaina Colover
B. James Pantone
Parliamentarian Jonathan Dwork Immediate Past President Douglas Schroeder
Executive Director Janet Thornton
Board of Directors Melinda S. Bell, Gregory G. Brown, Anthony W. Burton, Brent W. Caldwell, Cynthia A. Craig, Jerry N. Gans, Robert B. Gibson, Paul E. Lee, Kevin G. Liebeck, Christopher E. Purcell, Solange E. Ritchie, Sarah C. Serpa, Adina T. Stern, Douglas B. Vanderpool, Janice M. Vinci, Atticus N. Wegman Periodicals postage paid at Los Angeles, California. Copyright © 2013 by the Consumer Attorneys Association of Los Angeles. All rights reserved. Reproduction in whole or in part without written permission is prohibited.
ADVOCATE (ISSN 0199-1876) is published monthly at the subscription rate of $50 for 12 issues per year by the Consumer Attorneys Association of Los Angeles, 800 West Sixth Street, #700, Los Angeles, CA 90017 (213) 487-1212 Fax (213) 487-1224 www.caala.org
Send address changes to ADVOCATE
c/o Neubauer & Associates, Inc. P.O. Box 2239 Oceanside, CA 92051 6 — The Advocate Magazine
infallibility of liability 14 The The U.S. Supreme Court issues yet another anti-consumer decision on products liability, this time on generic-drug warnings. Brian S. Kabateck, Lina B. Melidonian, and Heather Hassan
the product 24 Beyond The evolution of California’s strict-liability rule and a review of the case law from 2004 to present. Shawn Khorrami and Santo Riccobono
liability jury instructions: Blurred lines 32 Products Consumer expectations test versus the risk-benefit test in designdefect cases. Thomas H. Peters
for component-part liability in defective 40 Looking products
Proving liability against both the manufacturer and its subcomponent suppliers requires looking beneath the surface. Brian D. Chase
Motor Vehicle Safety Standards and 56 Federal auto-defect litigation
Strategies for when the mention of FMVSS is detrimental to the automotive-defect case. David R. Lira and Nicole DeVanon
stipulated protective order and defendant’s 64 The document production
How to navigate the protective-order process in order to secure one that does not hinder your case or hurt consumers in the future. Adam Shea and Ryan A. Casey
your product-liability case from 82 Protecting government-contractor immunity
Determine if contractor immunity applies to products sold to local and state governments. Alan Van Gelder
high cost of arbitration: No longer a bar 92 The to justice?
Arbitration agreements that split the costs of arbitration can have a chilling effect on due process for litigants who can’t afford the cost. A recent decision provides a remedy. Jim P. Mahacek
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Submitting articles for publication: Check the annual editorial calendar at www.theadvocatemagazine.com to see when your legal topic would be most appropriate. Articles on time sensitive matters are welcome throughout the year, as are opinion columns, humor pieces, human-interest stories, lifestyle and personality features. Send your article as a WordPerfect or Word document attachment to e-mail: firstname.lastname@example.org. Please check the website for complete editorial requirements. Reprint permission: E-mail written request to Managing Editor Cindy Cantu: email@example.com
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Research 96 Advocate Jury awards and defendant’s conduct
DUI versus DWT — does the nature of defendant’s conduct impact jury awards? Chris Denove
A BOUT T HIS I SSUE Products liability Strategies to win cases today.
Opening the statute of limitations for victims of child abuse and keeping discovery rules fair.
Appellate reports and cases in brief Reid v. Mercury Insurance Holds that an insurer is not obligated to initiate settlement negotiations on behalf of its insured or offer its policy limits in order to avoid a claim for bad-faith failure to settle.
E XECUTIVE D IRECTOR
Consumer Attorneys Association of Los Angeles
The MICRA debate: It’s coming and you will be part of it.
CAALA R ESOURCE C ENTER Resource Libraries: Available 24/7 @ caala.org Affiliate Vendors Directory Your resource for legal service providers.
Jeffrey Isaac Ehrlich
G OVERNMENT R EL ATIONS B ULLETIN Political Updates from Sacramento and Washington
D IRECTORY OF A DVERTISERS C ALENDAR OF E VENTS
CAALA C ONNECTION C ENTER Welcoming the newest members to CAALA
Orange County Trial Lawyers Association
Come celebrate the Top Guns John Adams, Theresa Barta, Steve Young, William Shapiro and Greg Bentley to be honored.
Consumer Attorneys Association of Los Angeles
Whom do you believe? Lisa Maki
On the cover: Main Image: Man Being Electrocuted | iStock | www.thinkstockphotos.com
The Advocate Magazine — 7
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Products liability Strategies to win cases today By James R. Kristy Associate Editor Our CAALA products liability practitioners have stepped up to contribute great articles that review the state of the products liability law. They offer practical strategies for fighting restrictive protective orders and defeating government contractor immunity; discuss the “compliance” and “industry standards” defenses and the use of safety standards in auto cases; and review the evolution of product liability law as it applies to component-parts’ makers and drug manufacturers. Thom Peters examines the choice of jury instructions in a design-defect products liability case. The consumer expectations test determines whether a product failed to perform as safely as an ordinary consumer would expect; if it did, the defendant designer is strictly liable. The more complex risk-benefits test weighs the product’s benefits and risks of use, but also imposes a complicated analysis on the jury that shifts the focus from the injury. Peters analyzes the appellate decisions that bear on the question of which test applies, and provides very helpful guidelines for use in your products liability cases. Shawn Khorrami and Santo Riccobono present the evolution of the strict liability rule in California products’ cases. They trace a line of decisions that considered whether manufacturers of component parts can be liable in varying factual contexts. Is a manufacturer whose product contains no asbestos liable when, used in conjunction with another product, asbestos is released? The authors discuss the Court of Appeal’s decisions in cases presenting this question. And they analyze the California Supreme Court’s “semi-bright-line rule” in last year’s O’Neil v. Crane Co. Strict liability continues to evolve in products’ cases, but courts employ the same policies that gave birth to the rule to restrict its expansion. Brian Chase navigates through two types of defenses you may encounter in a products liability case. First, the defendant manufacturer of a component of a defective product may assert the “component-parts supplier’s defense.” This defense is limited to makers of generic, off-the-shelf products and raw-materials suppliers. It does not apply when a component part contributes to the plaintiff ’s harm – either directly or in combination with other components of the finished product. Chase also explains why Proposition 51 does not result in apportionment of liability in products cases: all defendants in the chain of distribution
8 — The Advocate Magazine
are jointly and severally liable for all damages caused by a defective product. David R. Lira and Nicole DeVanon caution on the use of Federal Motor Vehicle Safety Standards in an automobile-defects case. Plaintiffs sometimes use the Standards to their advantage. But Lira and DeVanon provide strategies for the plaintiff attorney when the Standards may be harmful to her case. They review the history of the Standards and their status as minimum safety standards. They explain how to preempt the “compliance” defense – where the defense counsel argues to the jury that the vehicle complies with or exceeds the Standards. They counsel that California law supports motions in limine to exclude evidence of compliance with Standards in strict liability cases. The plaintiff can also present evidence that the applicable Standard is out of date, and that other countries’ safety standards are stricter. Similarly, evidence of an “industry standard of care” is not relevant in strict products liability cases. Brian Kabateck, Lina Melidonian and Heather Hassan trace the recent history of U.S. Supreme Court decisions on preemption of prescription drug cases. Preemption is prescribed by the U.S. Constitution, vitiating state laws that are contrary to federal law. But the Court has expanded the preemption doctrine greatly in recent years in prescription-drug cases. The authors review the tests for whether state law is preempted in such cases. They discuss Wyeth v. Levine, the 2009 case upholding state failure-to-warn laws; PLIVA, Inc. v. Mensing, preempting state failure-to-warn laws as to generic drug makers; and this year’s Mutual Pharmaceutical Co., Inc. v. Bartlett, protecting generic-drug manufacturers from state laws that conflict with FDA regulations. The FDA may yet revise regulations to allow generic manufacturers to warn consumers of known risks. Adam Shea and Ryan A. Casey arm us to fight the “stipulated protective order” offered by defense counsel in products liability cases. Under the guise of making it convenient for the plaintiff and quickly providing defendants’ records, protective orders offered by defendants are often inordinately restrictive. Defendants use them to restrict their records’ use at trial and to prevent them from being shared with other plaintiffs suing them. But, Shea and Casey remind us, the defendant bears the burden of proving that a protective order is necessary. The authors show how to limit the scope of defense protective orders through negotiation and motion work. And they provide strategies for negotiating advantageous provisions, such as
the automatic authentication of all documents produced under the protective order. Alan Van Gelder reviews defendants’ use of government contractor immunity in products cases. A product of federal law, this narrow immunity shields federal contractors who provide products to the federal government – usually the military – from certain state-law product liability claims. Yet even municipal defendants sometimes raise government contractor immunity as a defense. Van Gelder offers strong legal arguments against the extension of this immunity to claims against state and local governments. He reviews the applicable CACI instructions and case decisions that have limited this immunity to claims against the federal government; even then, it is applicable in relatively narrow circumstances. The author also analyzes the elements of the immunity under Boyle v. United Technologies Corp., the 1988 U.S. Supreme Court case that still governs the use of the government contractor immunity. Stepping aside from products-liability law, we have the latest in the Advocate Research series, written by trial lawyer and research guru Chris Denove. We all know that there are certain types of defendants that juries love to hate, but are there certain types of wrongs that juries love to punish? Denove turns his analytical eye on this question. If you have a client who is forced by contract into arbitration but can’t afford the cost of that arbitration, there may be a solution. Orange County appellate attorney Jim P. Mahacek looks at a case he recently handled in which the court of appeals said that the party compelling the arbitration would have to pay for it. The case is made all the more interesting as it involves a plaintiff ’s firm and its clients. Whether you practice only products liability law or handle the occasional case, I hope you find this issue useful. I thank our authors very much for their contributions and wish all of you success in your cases. James R. Kristy founded The Kristy Law Firm in 2003. For 20 years before he became a lawyer, Mr. Kristy held finance positions in major corporations. In 2000, he earned a J.D. from Whittier Law School where he served as editorin-chief of the law review. His trial practice represents consumers against insurers, employers, medical practitioners and medical institutions. Since 2005 he has served on the CAALA Board of Governors and was chairman of the Education Committee. He is also a member of the Consumer Attorneys of California and the American Association for Justice.
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Brian S. Kabateck
Lina B. Melidonian
Infallibility of liability The U.S. Supreme Court issues yet another anti-consumer decision on products liability, this time on generic-drug warnings In line with its other recent-track anti-consumer decisions, on June 24, 2013, the U.S. Supreme Court issued its decision in Mutual Pharmaceutical Co., Inc. v. Bartlett (2013) ___ U.S. ___ [133 S.Ct. 2466] (Bartlett), making it that much more difficult for consumers to hold generic drug companies liable for the harm caused by their products. In yet another 5-to-4 split decision, the Supreme Court held that product liability suits focusing on adequacy of warnings against generic drug companies are preempted by federal law. The ruling has left a lot of open-ended questions. Will injured consumers be able to recover from generic drug companies, and if so, how? What is the role of the Food and Drug Administration (FDA) in all of this? In order to appreciate the magnitude of the Bartlett decision, it is important to understand the concept of preemption and the difference between generic and brand-name drugs. Preemption is the issue at the heart of Bartlett and recent troublesome pharmaceutical-litigation decisions issued by the Supreme Court. As for the difference between generic and brand-name drugs, the FDA has very different regulations for each and these differences critically matter. Also, because Bartlett is just one in a series of Supreme Court decisions relating to pharmaceutical litigation, it is important to flesh out previous jurisprudence to appreciate its magnitude. Article VI, section 2 of the Constitution deems that state laws are without effect when they are contrary to a federal law and that federal law is to be the governing force. 14 â€” The Advocate Magazine
When is a state law contrary to a federal law, and when is a federal law valid? A federal law is valid if it is created pursuant to the enumerated powers allotted to the federal body or agency creating that law. State laws can be preempted either expressly or impliedly. Express preemption occurs when a federal law explicitly states that state regulation is prohibited, thereby making any state laws contrary to that federal law null and void. Implied preemption is slightly trickier. Implied preemption is prescribed when the federal law is silent on whether or not states can act, but either (1) the context and nature of the federal law is one which makes it impossible for a state and federal law to act simultaneously, (2) state law conflicts with or frustrates Congressâ€™s purpose in making the federal law, or (3) the federal law is so comprehensive that any state involvement would be contrary to federal regulation, and there is no room for supplemental state regulation.
Generic drug vs. brand name: What is the difference?
The FDA approval process for generic drugs and brandname drugs is very different. Brand-name manufacturers (who are essentially the creators of the drug) must apply for a newdrug application. New-drug applications must contain all information on the drug, including the scientific background, research, and critical data that went into the creation of the
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Products Liability — continued
drug; thus they commonly end up being thousands of pages long and take years to compile.
Thanks to the Hatch-Waxman Act, generic drugs are approved with much less scrutiny, as long as they are identical
to their brand-name counterparts. To be approved, a generic drug must contain exactly the same active ingredients as the brand-name drug; the same strengths; the same modes of administration; (e.g., pill, liquid, injection, etc.); the same dosage forms; and the same rate and extent of absorption. No less, the same label used on the brand-name drug must be used on the generic drugs – with the same warnings.
Conte’s expansion of the duty of care in California In Conte v. Wyeth (2008) 168 Cal.App.4th 89, the plaintiff alleged injuries relating to her use of metoclopramide, a generic version of Reglan. She sued the brand-name manufacturer, Wyeth, along with the generic manufacturers, for her injuries. The trial court granted summary judgment in favor of all defendants. However, while the appellate court affirmed that the plaintiff had failed to demonstrate that there was reliance on the generic labels, the court allowed the plaintiff to go forward with her negligence claims against Wyeth. Conte’s reasoning turned on whether Wyeth owed a duty to consumers who received a generic drug, since the case dealt with negligence claims instead of strict liability. The court allowed the negligence claims against Wyeth to go forward because it found that it was foreseeable that a physician would prescribe a generic version in reliance on Wyeth’s representations about Reglan. The court explained that a brand-name manufacturer’s duty is extended to those whose doctors foreseeably rely on the brandname manufacturer’s product information when prescribing a medication, despite the fact that it is filled with the generic version. Courts have routinely rejected the expansion of a brand-name manufacturer’s duty of care announced in Conte, which has been further limited by a series of rulings by the U.S. Supreme Court.
Infallibility continues 16 — The Advocate Magazine
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Wyeth v. Levine and PLIVA, Inc. v. Mensing Every other year since 2009, the Supreme Court has issued a critical decision relating to the pharmaceutical industry and its liability. In recent years, however, these decisions have been increasingly manufacturer-friendly and anti-consumer. In 2008, the Supreme Court heard Wyeth v. Levine (2009) 555 U.S. 555, where the issue was whether FDA regulations preempted state law pertaining to inadequate labeling. The plaintiff sued the manufacturers of an anti-nausea medication for failing to warn consumers of the possibility of irreversible gangrene if the medication reached an artery. As a result, the plaintiff had to have her forearm and hand amputated. All lower courts ruled in favor of the plaintiff. The Supreme Court affirmed that state regulations that were stricter than federal regulations were not preempted, pursuant to the intention of Congress. As such, Levine held all prescription drug manufacturers to a clearly defined duty that could expose them to state failure-to-warn claims if violated. In 2011, a whole different can of worms was opened when the Supreme Court heard PLIVA, Inc. v. Mensing (2011) ___ U.S. ___ [131 S.Ct. 2567], a case in which plaintiffs alleged that metoclopramide – the generic version of Wyeth’s Reglan – caused them to develop tardive dyskinesia, a neurological disorder that is often very difficult to treat and results in involuntary repetitive movements. Plaintiffs initially pursued state product-liability claims against generic manufacturers for failure to adequately warn consumers about such possible side effects. The generic manufacturers argued that federal law required them to use the same warning labels as their brand-name counterparts and that plaintiffs’ claims were preempted by federal law. Once Mensing made its way to the Supreme Court it was decided that plaintiffs’ claims of failure to warn were indeed preempted by federal law. Given
Infallibility continues 18 — The Advocate Magazine
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Infallibility — continued
that FDA regulations require generic drug manufacturers to use the same label as their brand-name counterpart, any modifications of the generic label, albeit in line with state law, would violate federal law, and thus were deemed preempted. In 2013, the Supreme Court heard Bartlett and issued yet another gamechanging decision.
Mutual Pharmaceutical Co., Inc. v. Bartlett
In 2004, plaintiff Bartlett had pain in her shoulder and was prescribed, in New Hampshire, Clinoril, a non-steroidal anti-inflammatory drug. Bartlett was instead given sulindac, the generic form of Clinoril, manufactured by defendant Mutual Pharmaceutical Co. Inc. As a result of taking sulindac, Bartlett developed a severe case of toxic epidermal necrolysis, an awful, life-threatening skin condition which caused the top layer of her skin to detach from the bottom layers. Bartlett also went nearly blind and developed severe disfigurements and physical disabilities. At the time, there was no warning on the label pertaining to toxic epidermal necrolysis. However, in 2005 the FDA had recommended that all labeling for non-steroidal anti-inflammatory drugs contain more explicit warnings regarding the severe syndrome. As such, Bartlett sued Mutual Pharmaceutical Co. Inc.,
alleging design-defect claims. The jury found in favor of Bartlett for more than $21 million dollars at the conclusion of the district court trial. The First Circuit Court affirmed, concluding that generic drug manufacturers could comply with both state and federal laws by choosing not to manufacture the drug in the first place. Nevertheless, defendants appealed to the Supreme Court, which overturned both the First Circuit’s decision, and held that, pursuant to Mensing, state designdefect claims pertaining to the adequacy of a drug’s warnings were preempted by federal law. Justice Alito wrote the majority opinion, stating that it was impossible for the generic-manufacturer defendants to simultaneously comply with New Hampshire state law and FDA regulations while changing the label of sulindac to include toxic epidermal necrolysis as a side effect. New Hampshire law requires manufacturers to take corrective action when they manufacture an unreasonably dangerous product, as determined through analysis of whether the usefulness of the product outweighs its potential harm. Federal regulations, on the other hand, strictly prohibit generic drug manufacturers from altering the chemical compound of a generic prescription from its brand-name counterpart. Furthermore, in Mensing, the Supreme Court had noted that generic prescription manufacturers are prohibited, pursuant to federal law, from changing a drug’s label to anything different than that of its brand-name counterpart. Because of these conflicting rules and regulations, the Court ruled that it would be impossible for defendants to simultaneously abide by New Hampshire state law and federal law.
Is there a light at the end of the tunnel for consumers?
Although both Bartlett and Mensing have proven to be anti-consumer decisions, it seems apparent that the FDA is not willing to leave consumers without remedy. Shortly after the Supreme Court decided Bartlett, the FDA submitted 20 — The Advocate Magazine
“Supplemental Applications Proposing Labeling Changes for Approved Drugs and Biological Products,” a new rule that, if implemented, would allow a genericdrug manufacturer to submit a petition to change the label of its drug before the brand-name counterpart does so. The idea is that generic-drug manufacturers are better equipped to respond to information that is uncovered post-production and post-distribution. As such, generic-drug manufacturers are able to more quickly respond to possible issues with the drugs and are able to warn consumers more quickly. By providing an avenue for generic-drug manufacturers to modify and update their labels, consumers injured by generic prescriptions will be able to recover from generic manufacturers. Luckily for California consumers, in Conte v. Wyeth the court held that consumers injured by generic drugs are able to recover from the brand-name counterpart manufacturers, despite not being able to recover from generic drug manufacturers. The reasoning in Conte was that although generic-drug manufacturers are not able to alter labels or chemical compounds of a medication, brand-name manufacturers are, and have a duty to protect consumers of both their brandname drug and the generics. There is certainly hope that with the proposed FDA rule, consumers across the nation will enjoy a safer environment and a level playing field in pharmaceutical litigation to come. Brian Kabateck is the managing partner of Los Angeles-based Kabateck Brown Kellner, LLP, the 2013 president of the Consumer Attorneys of California and has been named one of the top 100 lawyers in California on numerous occasions. Lina Melidonian’s practice focuses on mass tort litigation and other complex litigation. She is the lead senior attorney managing the mass torts department at Kabateck Brown Kellner LLP. Ms. Hassan is a Juris Doctor Candidate, class of 2014, at Loyola Law School, Los Angeles. She began her career in plaintiff-side litigation as a law clerk at Kabateck Brown Kellner, LLP.
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T Shawn Khorrami
Beyond the product The evolution of California’s strict-liability rule and a review of the case law Shields v. Hennessy Industries, Inc. When a person is injured while using a defective product, it is common to assert strict-liability claims against any party who participated in the design, manufacture, distribution or sale of the product. In California, strict liability is premised on harm caused by defects in the defendant’s own product. The policy behind allowing liability without showing negligence is to ensure that the manufacturers who place defective products in the “stream of commerce” bear the costs of harm caused by such products, rather than placing that burden on the unfortunate consumer. But in some cases, the 24 — The Advocate Magazine
manufacturer of a dangerous or toxic substance may prove to have no liability because other parties actually cause the toxic exposure. This was the situation addressed by the court in the case of Shields v. Hennessy Industries, Inc. (2012) 205 Cal.App.4th 782 (hereafter Shields). The plaintiffs in Shields suffered illness as far back as the 1990s when they used the Hennessy Industries, Inc. brakearcing machines to grind brake linings manufactured by other companies. While the Hennessy machines themselves contained no toxic substances, the brake linings contained asbestos that was released during the grinding process and made
the operators sick after they inhaled it. In a June 2010 judgment, the trial court found in favor of Hennessy on the ground that the brake arcing machine was not the direct cause of asbestos exposure. On April 30, 2012, the Court of Appeal in Shields found that defendant Hennessy Industries, Inc. failed to protect users from the asbestos fibers because Hennessy manufactured and designed machines intended for use in grinding asbestos brake linings. (Shields, supra, 205 Cal.App.4th at p. 782.) Hennessy knew the linings contained asbestos, which was not a hazard until the
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Beyond — continued
machines released the fibers into the air. The court found the product was defective essentially because its design did not include appropriate features to effectively collect asbestos fibers or convert them into non-harmful materials.
Evolution of the strict-liability rule
• Tellez-Cordova v. Campbell-Hausfeld/ Scott Fetzger Co. In Tellez-Cordova v. CampbellHausfeld/Scott Fetzger Co. (2004) 129 Cal.App.4th 577 (Tellez-Cordova), a lamp maker, Gill Tellez-Cordova, brought suit against the manufacturers of the power tools he used to perform his job. These tools were used in conjunction with various wheels, discs, and belts to sand down component parts. When the defendants’ tools were used in this manner, airborne toxins were released, which eventually led to plaintiff ’s interstitial pulmonary fibrosis. In his complaint, Tellez-Cordova alleged that the manufacturers of the tools should be strictly liable for harm caused by the airborne toxins because they knew there was only one use to which the tools could be put, and that this single use would foreseeably lead to the inhalation of toxic substances. The trial court disagreed, finding that this products liability claim failed to state a cause of action. The trial court granted defendants’ demurrer, reasoning that it was not their power tools that caused the plaintiff ’s harm, but rather the belts, wheels, and discs that plaintiff used in conjunction with those tools. Tellez-Cordova appealed this decision. The appellate court in Tellez-Cordova first addressed the component-parts doctrine, which states that “an entity supplying a nondefective raw material or a component part is not strictly liable for defects in the final product over which it had no control.” (Tellez-Cordova, supra, 129 Cal.App.4th at p. 581.) This rule is in part based on a desire to preclude manufacturers from having to retain experts in a vast number of areas for the purpose of ensuring there are no foreseeable final products in which a component part could lead to liability. Further, 26 — The Advocate Magazine
the manufacturer who combines component parts to make a finished product is clearly in a better position to determine if the completed device is suitable for particular uses. This doctrine applies solely to generic products that can only be used in conjunction with other products. The Court of Appeal found that the component-parts doctrine had no application to Tellez-Cordova’s complaint, reasoning that the power tools in question were designed to be used with abrasive wheels and discs to sand down materials; that the tools had to be used in conjunction with such abrasive components; and that when the tools were used for the only purpose intended by the defendants, they produced airborne toxins that would not have been created otherwise. (Tellez-Cordova, supra, 129 Cal.App.4th at p. 582.) The court maintained that the defendants would not need to retain a vast number of experts because there was only one use for the product, and only the risks associated with that one use must be accounted for. In addition, there was no finished-product manufacturer in a better position to warn: there was only the plaintiff, putting the power tools to their intended use. Thus, the court reversed the sustaining of the demurrer by the lower court and held that the plaintiff stated a cause of action for strict liability. The decision in this case led to a series of cases in which plaintiffs attempted to circumvent the component-parts doctrine, with varying success. • Taylor v. Elliott Turbomachinery Co. Inc. In Taylor v. Elliott Turbomachinery Co. Inc. (2009) 171 Cal.App.4th 564 (Taylor), the wife of a deceased naval officer brought suit against the manufacturer of several components of the engines used on the ship on which her husband served. The complaint alleged that her husband died from inhaling asbestos while working with these engines. Although the asbestos in question was not contained in the defendant’s products, the plaintiff claimed that the defendant should have warned of the risk of
asbestos inhalation because it was foreseeable that its product would be used in a way that would cause asbestos to be released. In upholding the trial court’s grant of summary judgment in favor of the defendant, the Taylor court addressed the holding in Tellez-Cordova. The Taylor court found several bases for distinguishing the facts at issue from those of Tellez-Cordova. The primary difference was that in Tellez-Cordova, the defendant’s product caused harm by releasing airborne toxins, whereas in Taylor, the asbestos was contained in products manufactured by someone other than the defendants. The Taylor court found that the primary reason behind the ruling in Tellez-Cordova was that the defendant’s tools created the toxic dust, and that here the asbestos was contained wholly in another’s product, which did not cause plaintiff ’s injury. In other words, because the asbestos came from another product and was not “created” by defendant’s product, the defendant could not be strictly liable. Further, the court found that unlike in Tellez-Cordova, the product in Taylor with which defendant’s devices were used was itself inherently dangerous. The court found that plaintiff sought to hold defendant liable for not warning of hazards caused solely by another’s product. It appears that the court in Taylor was wary of creating a rule that would allow for a dramatic increase in the reach of California’s strict liability laws. Rather, the court cited policy reasons for limiting such liability that were very similar to those given as the basis for the component-parts doctrine. Thus it was that the California Supreme Court came to hear a case that allowed for the creation of a concrete, semi-bright-line rule that would allow for recovery in a case like TellezCordova, but prevent liability from attaching in a fact pattern analogous to Taylor. • O’Neil v. Crane Co. In O’Neil v. Crane Co. (2012) 53 Cal.4th 335 (O’Neil), the California Supreme Court recognized two exceptions to the general rule that manufacturers are not strictly liable even if they
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know their products are being used by third parties in a hazardous manner. A manufacturer may be liable for defects in
another’s product if “ the defendant’s own product contributed substantially to the harm, or  the defendant partici-
pated substantially in creating harmful combined use of the products.”(Id. at p. 342.) In O’Neil, a navy officer, much like the deceased husband in Taylor, died from exposure to asbestos while he was stationed on a naval ship. Defendants Crane Co. and Warren Pumps LLC supplied valves and pumps, respectively, used in conjunction with the vast expanse of pipes necessary to contain the immense amounts of steam the vessel generated. Plaintiff alleged strict liability on the ground that it was foreseeable plaintiff would be exposed to asbestos in products used in connection with the valves and pumps. Plaintiff did not claim that defendants’ products themselves contained asbestos. The trial court granted a motion for nonsuit. It reasoned that the componentparts doctrine shielded defendants from liability because their nondefective products were integrated into a larger system they did not control. The Court of Appeal reversed, rejecting both the component-parts argument and defendants’ argument that “they did not manufacture or supply the asbestos-containing products that caused O’Neil’s mesothelioma.” In so holding, the Court of Appeal created an expansive definition of strict products liability, which provided that “a manufacturer is liable in strict liability for the dangerous components of its products, and for dangerous products with which its product will necessarily be used.” (O’Neil v. Crane Co. (2009) 177 Cal.App.4th 1019, 1035, revd. (2012) 53 Cal.4th 335.) In reversing the appellate court, the California Supreme Court reaffirmed the rule that a manufacturer is generally liable only for those injuries caused by its own products. (O’Neil, supra, 53 Cal.4th at p. 362.) The Court observed that plaintiffs sought to extend strict liability “when it is foreseeable [defendants’] products will be used in conjunction with defective products or replacement parts made or sold by someone else.” (Ibid.) However, the Court stated that the foreseeability of injury is not enough, by
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itself, to impose strict liability on the manufacturer of a nondefective product, or on one whose product arguably did not cause the harm at issue. The Court went on to say that any attempt to expand strict liability must be contemplated in light of the policies underlying the doctrine. Here, the Court stated that it was not the intent of those who created the doctrine to make manufacturers the “insurer of the safety of their products. It was never their intention to impose absolute liability.” (Id. at p. 363.) Once again, the same policies that brought about the component-parts doctrine came into play to limit the reach of strict liability as a whole. As illustrated by the O’Neil decision, courts are extremely hesitant to expand the scope of strict liability, and any attempts to do so must overcome what is seemingly a presumption against expansion. The fact that this presumption is based almost entirely on policy concerns explains why the cases that follow produced contradicting results, despite the clearly stated rule in O’Neil that “a product manufacturer may not be held liable in strict liability or negligence for harm caused by another manufacturer’s product unless the defendant’s own product contributed substantially to the harm, or the defendant participated substantially in creating a harmful combined use of the products.”(O’Neil, supra, 53 Cal.4th at p. 342.) • Cases after O’Neil v. Crane Co. Since O’Neil, three decisions involved claims against Hennessey Industries, Inc. (a manufacturer of brake-arc machines) for plaintiffs’ asbestos-related injuries. In these cases, plaintiffs alleged that Hennessey’s machines caused the release of friable asbestos fibers when applied to other manufacturers’ asbestos-containing brakes. In Bettencourt v. Hennessy Industries Inc. (2012) 205 Cal.App.4th 1103 and Shields v. Hennessy Industries Inc. (2012) 205 Cal.App.4th 782, the First District Court of Appeal reversed the trial courts’ rulings in favor of Hennessy. The appellate court found 30 — The Advocate Magazine
that Hennessy’s machines were specifically designed to work with brake shoes that, at the time, all contained asbestos. Hennessy was liable as long as it was shown that their product was a substantial factor in causing plaintiff ’s injuries. However, in Barker v. Hennessey Industries Inc. (2012) 206 Cal.App.4th 140 [ordered not to be officially published Aug. 29, 2012], Division 2 of the Second District Court of Appeal, upheld the trial court’s ruling in favor of Hennessy, even though the facts and allegations were essentially the same as in Bettencourt and Shields. In Barker, the court relied heavily on the expert testimony of a products engineer who worked at Hennessy for more than 30 years. The expert testified that the design and use of defendant’s machine did not depend on the presence of asbestos. The court said that because Hennessy’s machines did not contain asbestos and could be operated without asbestos-containing materials, Hennessy could not be held liable – even though it knew that its products were designed to be used with asbestos-containing brake pads. The fact that the Supreme Court depublished that decision suggests that it did not agree with the decision.
California was the first state to apply what is now the well-established doctrine of strict products liability. (Greenman v. Yuba Power Products, Inc. (1963) 59 Cal.2d 57, 63). From its genesis, this doctrine had to overcome the reticence of the legal system to dramatically increase the potential for liability with regard to the manufacture and supply of defective products. Based soundly on the idea that no one wants to deter manufacturers from continuing to make and distribute affordable products, plaintiffs have struggled mightily to fit the actions of manufacturers into the ambit of strict liability. But the same policies that pushed back against the introduction of the concept to California in Greenman remain firmly rooted in the minds of the judges in this state. Those same reasons explain
the California Supreme Court’s holding in O’Neil, and one can infer that the ruling was a reaction to the expansion proposed by the appellate court. Moreover, as such, this holding should be seen as a narrow exception that will be applied sparingly, and thus it is likely that the decision of the court in Barker is more indicative of what the California Supreme Court had in mind. Therefore, although the Court in O’Neil carved out an exception, it really was making sure that cases like Tellez-Cordova were confined to a very specific set of circumstances, and not used to create a dramatic change to strict products liability law. However, the ruling did reaffirm the decision in Tellez-Cordova and allowed for a new means by which plaintiffs in California can pursue claims against the manufacturers and suppliers of products that cause them harm. Shawn Khorrami is the founding partner of Khorrami Boucher Sumner Sanguinetti, LLP. He founded the firm in February, 1996, just two months after being admitted to practice law, and has grown it from a solo practice to one of the largest plaintiff-only law firms in California. A graduate of Pepperdine University and an active member of the CAOC, CAALA, and AAJ, he is known throughout the legal community for litigating class and individual actions against some of the largest U.S. corporations. Accolades for his work as a trial attorney include the AAJ Heavy Lifting Award, and Daily Journal’s Top 20 Attorneys under 40 (2008). Santo Riccobono is an attorney at KBSS focusing on individual and consumer rights. Admitted to practice in 2007, he worked at one of the largest Southern California defense firms, where he litigated a variety of cases including toxic tort, general liability, construction defect and catastrophic injury.
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Thomas H. Peters
Member, CAALA Board of Governors
Products liability jury instructions: Blurred lines The consumer expectations test versus the risk-benefit test in design-defect cases In a products liability design-defect case under California law, the court is allowed to provide the jury with either of two liability instructions. California plaintiffs’ attorneys generally prefer that the jury receive the relatively simple consumer-expectations-test instruction. It is found in CACI No. 1203. Under this test, the jury is asked to evaluate whether an ordinary consumer would have expected the product to perform as it did under the circumstances at issue. CACI No. 1203 asks the jury to undertake a straightforward evaluation of the product and ask: Did it perform as safely as one would have anticipated? If it did not, the product was defective. This instruction requires no more from the jury than the application of common sense. Without expressly requiring it, the instruction invites the fact-finder to step into the plaintiff ’s shoes and evaluate whether, from that perspective, the product’s failure and the consequent injuries were reasonably foreseeable. Knowing this, defense attorneys almost always argue for the jury to be instructed with the more complicated risk-benefit test found in CACI No. 1204. That instruction requires the jury to undertake a balancing test, in which the product’s positive aspects are compared to its negatives. Under this test, evidence of the benefits of the product, the frequency and severity of past failures, the cost and mechanical feasibility of a safer alternative design, and even the product’s history of safe performance become relevant. Thus, the range of witnesses, particularly experts, is much broader under CACI No. 1204 than under No. 1203, meaning the length and cost of trial is much greater than under the consumer-expectations test. More significantly, because the focus is placed on the pros and cons of the product in the 32 — The Advocate Magazine
abstract as opposed to its performance at the time it injured the plaintiff, the riskbenefit test tilts the fact finder’s thinking towards a negligence-like analysis rather than the strict-liability evaluation that the law claims to require. Courts have provided clear definitions of each test, and those definitions are fairly encapsulated in CACI. Yet, whether it is appropriate for the court to apply No. 1204 instead of No. 1203 must be decided on a case-by-case basis, with the court enjoying abuse-of-discretionlevel deference. Thus, even if the trial court gives the wrong instruction, such is not considered to be reversible error per se. That said, when is it improper to give CACI No. 1203 and when may a defendant succeed in requiring the use of No. 1204?
The consumer expectations test
CACI No. 1203 states: 1203. Strict Liability – Design Defect – Consumer Expectation Test – Essential Factual Elements [Name of plaintiff] claims the [product]’s design was defective because the [product] did not perform as safely as an ordinary consumer would have expected it to perform. To establish this claim, [name of plaintiff] must prove all of the following: 1. That [name of defendant] [manufactured/distributed/sold] the [product]; 2. That the [product] did not perform as safely as an ordinary consumer would have expected it to perform when used or misused in an intended or reasonably foreseeable way; 3. That [name of plaintiff] was harmed; and 4. That the [product]’s failure to perform safely was a substantial factor in causing [name of plaintiff]’s harm.
In connection with the consumer expectations test, the California Supreme Court has stated: At a minimum . . . a product is defective in design if it does fail to perform as safely as an ordinary consumer would expect. This principle . . . acknowledges the relationship between strict tort liability for a defective product and the common law doctrine of warranty, which holds that a product’s presence on the market includes a representation “‘that it [will] safely do the jobs for which it was built. [Citations omitted] Under this [minimum] standard . . .an injured plaintiff will frequently be able to demonstrate the defectiveness of the product by resort to circumstantial evidence, even when the accident itself precludes identification of the specific defect at fault. [Citation.] (Soule v. General Motors Co. (1994) 8 Cal.4th 548, 562.) The consumer expectations test thus sets a floor on product performance: the product must perform as safely as an ordinary consumer would expect it to perform when used in an intended or reasonably foreseeable manner, including a reasonably foreseeable misuse. The jurors may look to their own life experiences and consider how they would have expected the product in question to behave, and, of course, to do so with the benefit of hindsight. CACI No. 1204 presents a tougher path to a plaintiff ’s verdict.
The risk-benefit test
CACI No. 1204 states: 1204. Strict Liability - Design Defect Risk-Benefit Test – Essential Factual Elements – Shifting Burden of Proof [Name of plaintiff] claims that the [product]’s design caused harm to [name
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Blurred — continued of plaintiff]. To establish this claim, [name of plaintiff] must prove all of the following: 1. That [name of defendant] [manufactured/distributed/sold] the [product]; 2. That [name of plaintiff] was harmed; and 3. That the [product]’s design was a substantial factor in causing harm to [name of plaintiff]. If [name of plaintiff] has proved these three facts, then your decision on this claim must be for [name of plaintiff] unless [name of defendant] proves that the benefits of the [product]’s design outweigh the risks of the design. In deciding whether the benefits outweigh the risks, you should consider the following: (a) The gravity of the potential harm resulting from the use of the [product]; (b) The likelihood that this harm would occur; (c) The feasibility of an alternative safer design at the time of manufacture; (d) The cost of an alternative design; [and] (e) The disadvantages of an alternative design; [and] (f) [other relevant factor(s)]. While the instruction does saddle the defendant with the burden to prove that the product’s benefits outweighed its risks, the risk-benefit test involves a much more complicated analysis for the jury and shifts the arena of dispute away from the specific incident at issue and towards a more academic inquiry concerning the product in general. As the California Supreme Court states: [A] product may be found defective in design, even if it satisfies ordinary consumer expectations, if through hindsight the jury determines that the product’s design embodies ‘excessive preventable danger,’ or, in other words, if the jury finds that the risk of danger inherent in the challenged design outweighs the benefits of such design.
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[Citations.] . . . [A] jury may consider, among other relevant factors, the gravity of the danger posed by the challenged design, the likelihood of a safer alternative design, the financial cost of an improved design, and the adverse consequences to the product and to the consumer that would result from an alternative design. (Barker v. Lull Engineering Co. (1978) 20 Cal.3d 413, 430-31.) Rather than looking to their own everyday experience, jurors engaged in the weighing process required by the consumer expectations test must ascribe comparative value to often arcane pros and cons, many of which will have nothing whatsoever to do with the particulars of how the product acted at the time it injured the plaintiff.
The blurred lines: When to apply each test
The California Supreme Court sets forth a deceptively easy mechanism for determining whether a jury should be instructed on the consumer expectations or risk-benefit test. “The crucial question in each individual case is whether the circumstances of the product’s failure permit an inference that the product’s design performed below the legitimate, commonly accepted minimum safety assumptions of its ordinary consumers.” (Soule, supra, 8 Cal.4th at p. 568.) Unfortunately, applying this analysis to any given situation is much harder than it sounds. Indeed, the courts draw seemingly indiscriminate lines. For example, one court held: The deployment of an air bag is, quite fortunately, not part of the ‘every day’ experience of the consuming public. Minimum safety standards for air bags are not within the common knowledge of lay jurors. Jurors are in need of expert testimony to evaluate the risks and benefits of the challenged design. (Pruitt v. General Motors Co. (1999) 72 Cal.App.4th 1480, 1484.) In Pruitt, the plaintiff alleged that the air bag deployed in a low-speed collision, causing her injuries. The jury
was instructed on the risk-benefit test; the plaintiff lost at trial and appealed, contending that the jury should have been instructed on the consumerexpectations test. Yet in Pruitt, the Court of Appeal, Fourth District, held that the trial court correctly refused to give the consumer-expectations instruction. A reasonable attorney with a designdefect case involving an air bag might therefore think, after reading Pruitt, that the jury could only be instructed on the risk-benefit test in her case. Yet, in reversing a trial court’s decision to grant a defense summary judgment in another air bag case, the Court of Appeal, Second District held: [The plaintiff] provided sufficient evidence for a jury to infer that the nondeployment of an air bag, in the context of the high-speed, ‘head-on’ collision described by [plaintiff], violates minimum safety expectations of the ordinary consumer. Indeed, the consumer expectation theory, rooted as it is in a warranty heritage. . .would seem necessarily to encompass a case in which it is alleged the product failed to perform in accordance with the representations contained in the owner’s manual. (McCabe v. American Honda Motor Co., Inc. (2002) 100 Cal.App.4th 1111, 1125.) The trial court had granted summary judgment, reasoning that the plaintiff did not present any triable issue of fact as to whether, in the context of a frontal collision, an air bag is the kind of product about which consumers can form minimum safety assumptions. Therefore, the consumer expectations test could not apply. But the Court of Appeal disagreed, holding that the consumer expectations test did in fact apply, reversing the judgment. (Id. at p. 1127.) Pruitt and McCabe demonstrate that an attorney cannot automatically place even common, everyday products into the consumer-expectations category. Indeed, a different test may be applied to the same product, under different factual circumstances.
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Generally, neither drug manufacturers nor manufacturers of implanted prescription medical products may be held strictly liable for injuries caused by such products. “[A] manufacturer is not strictly liable for injuries caused by a prescription drug so long as the drug was properly prepared and accompanied by warnings of its dangerous propensities that were either known or reasonably scientifically knowable at the time of distribution.” (Brown v. Superior Court (1988) 44 Cal.3d 1049, 1069.) “[A] manufacturer is not strictly liable for injuries caused by an implanted prescription medical product which has been (1) properly made and (2) distributed with information regarding risks and dangers of which the manufacturer knew or should have known at the time.” (Hufft v. Horowitz (1991) 4 Cal.App.4th 8, 11).) In order to figure out which test should apply to your case, it is useful to follow these steps: 1. Is the plaintiff able to demonstrate the products’ defects through circumstantial evidence (see Barker v. Lull Engineering Co., supra, 20 Cal.3d at p. 430)? If so, then use the consumer-expectations test. In other words: If the facts permit an inference that the product at issue is one about which consumers may form minimum safety assumptions in the context of a
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particular accident, then it is enough for a plaintiff, proceeding under the consumer expectation test, to show the circumstances of the accident and ‘the objective features of the product which are relevant to an evaluation of its safety’ leaving it to the fact finder to ‘employ “[its] own sense of whether the product meets ordinary expectations as to its safety under the circumstances presented by the evidence.”’ [Citations.] (McCabe, supra, 100 Cal.App.4th at p. 1120.) 2. Even if the product is complex or used uncommonly, is the accident particularly bizarre or unexpected? Akers v. Kelly Co. (1985) 173 Cal.App.3d 633 (disapproved on another ground in People v. Nesler (1997) 16 Cal.4th 561, 582, fn. 5) involved a “dockboard,” which is a spring-loaded plate that attaches to a loading dock and adjusts to form a bridge between the dock and truck beds of different elevations. The prongs of a forklift struck the dockboard, and several hours later the dockboard collapsed and injured a worker. (Id. at pp. 641-44.)The court held that the consumer expectations test …is entirely appropriate in a case such as this one. There are certain kinds of accidents – even where fairly complex machinery is involved – which are so bizarre that the average juror, upon hearing the particulars, might
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reasonably think: ‘Whatever the user may have expected from that contraption, it certainly wasn’t that.’ Here, a dockboard flew apart and injured [plaintiff]. A reasonable juror with no previous experience of dockboards could conclude that the dockboard in question failed to meet ‘consumer expectations’ as to its safety. (Id. at p. 651.) In other words, even if a product is outside of the typical juror’s experience, if the accident is so unusual that it does not pass the “smell test,” then the consumer-expectations test should apply. 3. The use of expert testimony does not preclude the consumer-expectations test While defense counsel may try to argue otherwise, the use of expert testimony does not preclude the consumer expectations test. Many attorneys interpret a certain case, Campbell v. General Motors Corp. (1982) 32 Cal.3d 112, as prohibiting the use of expert testimony regarding consumer expectations in cases proceeding under what is now CACI No. 1203. The Supreme Court itself has noted that such an interpretation of Campbell is cryptic, stating that, “dictum in . . . Campbell injected ambiguity.” (Soule, supra, 8 Cal.4th at p 564.) The Court further noted that “Campbell does not preclude the consumer expectations test in complex cases involving expert testimony.” (Id. at p. 565, citing with approval West v. Johnson & Johnson Products, Inc. (1985) 174 Cal.App.3d 831, 867.) Thus, in Rosburg v. Minnesota Mining & Mfg. Co. (1986) 181 Cal.App.3d 726, for example, the court held that breast implant performance is beyond common experience, and that expert testimony on what the consumer should expect was therefore relevant and admissible. (Id. at p. 733, fn. 4.) Similarly, West v. Johnson & Johnson Products, Inc. involved a case where a plaintiff became seriously ill during her menstrual period. (West, supra, 174 Cal.App.3d at pp. 841-43.) At the time, doctors were only just realizing that tampon use sometimes causes toxic shock
syndrome (TSS). (Id. at pp. 843-44.) At trial, numerous experts testified regarding the nature of the plaintiff ’s illness and whether the product had a causal link to TSS. (Id. at pp. 848-53.) The appellate court nonetheless upheld the use of the consumer-expectations test. (Id. at pp. 866-67.) As the Supreme Court stated in Soule: West agreed with Akers that Campbell does not preclude the consumer expectations test in complex cases involving expert testimony. In a time before general awareness and warnings about TSS, the court reasoned, plaintiff ‘had every right to expect’ that use of this seemingly innocuous product ‘would not lead to a serious (or perhaps fatal) illness. . . .’ Hence, the consumer expectations instruction was appropriate. (Soule, supra, 8 Cal.4th at p.564, citing West, supra, 174 Cal.App.3d at p. 867.) The California Supreme Court thus sanctions the use of expert testimony concerning what an ordinary consumer would expect even in cases proceeding under CACI No. 1203. 4. Technically or mechanically-detailed products require the risk-benefit test In Soule, the court held that because the plaintiff ’s theory of design defect was one of technical and mechanical detail, the risk-benefit test should have applied. (Soule, 8 Cal.4th at p. 570.) As the Court stated: [The plaintiff ’s theory] sought to examine the precise behavior of several obscure components of her car under the complex circumstances of a particular accident. . . . An ordinary consumer of automobiles cannot reasonably expect that a car’s frame, suspension, or interior will be designed to remain intact in any and all accidents. Nor would ordinary experience and understanding inform such a consumer how safely an automobile’s design should perform under the esoteric circumstances of the collision at issue here. . . . Therefore, injection of ordinary consumer expectations into the design defect was improper. (Ibid.) Therefore, in cases that will involve detailed, technical expert testimony
regarding obscure parts, the risk-benefit test is more appropriate.
Giving the wrong instruction is not reversible error per se
What happens when a jury is instructed on the consumer expectations test, but should have been instructed instead on the risk-benefit test, or viceversa? This issue was presented in Soule, and the Court held that erroneously giving the consumer expectations instruction was harmless because it was not reasonably probable that the defendant would have obtained a more favorable result under the risk-benefit test. (Id. at p. 583.) The Court noted that “it does not follow that courts may ‘automatically and monolithically’ treat a particular category of civil instructional error as reversible per se. Article VI, section 13 of the California Constitution requires examination of each individual case to determine whether prejudice actually occurred in light of the entire record. [Citations.]” (Id. at p. 580.) Therefore, improperly giving CACI No. 1204 instead of No. 1203 does not render the verdict automatically reversible; the traditional analysis of whether actual prejudice occurred must be performed.
Determining whether to use the consumer expectations or risk-benefit test requires an in-depth analysis on a caseby-case basis. Generally speaking, however, the consumer expectations test is typically applied in situations where the jury can decide whether the product was defective based upon their ordinary experiences as consumers. Thomas H. Peters is a partner at Kiesel Law LLP in Beverly Hills. He concentrates in major injury, wrongful death and consumer fraud and wage/hour class action litigation. He is a long-time member of the CAALA Board of Governors and the L.A. Bar Association Board of Trustees. He has been named a Southern California “Super Lawyer” numerous times and is a frequent lecturer. NOVEMBER 2013
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Looking for component-part liability in defective products
Proving liability against both the manufacturer and its subcomponent suppliers By Brian D. Chase Often, in the autodefect case (and other products-liability cases), the defect that your client is basing his claim on arises from a defect in a Chase component part, or even a subcomponent part, that failed or was otherwise defective in and of itself and thus a legal cause of your client’s injury. An auto manufacturer is clearly responsible for any defects contained within its vehicle, notwithstanding the fact that the defect may be in a component part manufactured or supplied by someone else. California courts adhere to the rule that the manufacturer of a completed product cannot escape liability by tracing the defect to a component part supplied by someone else. (Blackhawk v. Gotham Insurance Company (1997) 54 Cal.App.4th 1090, 1100.) 40 — The Advocate Magazine
But this rule does not shield the component-part manufacturer or supplier from its own liability for having supplied the defective part, for two reasons: (1) the so-called “component part defense” is related to fungible or multiuse products that can be purchased off the shelf by any consumer to use in any manner she deems fit; and (2) regardless of the generic nature of the product, the defense is not applicable since a component-part manufacturer may be held liable for damages caused by a component part which, itself, was defective at the time it left the component-part manufacturer’s factory. (Wiler v. Firestone Tire & Rubber Co. (1979) 95 Cal.App.3d 621, 629.) Accordingly, when you have a clear defect in the vehicle and can causally trace the defect to a defective part manufactured or supplied by a componentpart supplier, your client has a viable claim against both the auto manufacturer and the component-part seller.
There are two types of arguments you may have to deal with when bringing a claim against the component-part supplier, which are the main focus of this article. First, the component-part manufacturer will often claim that it is not legally liable for your client’s injuries and will assert it is protected from liability by the “component parts doctrine.” If the component-part supplier supplied a defective part or parts that were incorporated into the original design of the vehicle, and they had a causal link to the accident or injuries, then that defense will fail for reasons detailed below. Then, if you settle your claims against the car manufacturer and the case goes to trial solely against the component parts suppliers, you can expect them to argue that they are entitled to apportion fault to the manufacturer on the verdict form. In California this argument is erroneous.
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This article is intended to help you draft the appropriate trial briefs and in limine motions to address these sometimes complex and poorly understood issues, so you can explain to the court why your client is entitled to full recovery of damages against all of these contributory participants in the vehicle’s design and manufacturing chain.
The component-part supplier’s defense
There is no blanket tort immunity under California law for a subcomponent manufacturer merely because it did not manufacture a finished product. The subcomponent part maker is considered to be within the chain of distribution of its final product and potentially subject to strict product liability. As our Supreme
Court recently stated, “Strict liability encompasses all injuries caused by a defective product, even those traceable to a defective component part that was supplied by another.” (O’Neil v. Crane (2012) 53 Cal.4th 335, 348 (“O’Neil”).) “Regardless of a defendant’s position in the chain of distribution, ‘the basis for his liability remains that he has marketed or distributed a defective product’ (Daly v. General Motors Corp. [(1978)] 20 Cal.3d [725,] 739), and that product caused the plaintiff ’s injury.” (O’Neil, supra, 53 Cal.4th at 348.) This leaves open a defense known as the “component part” doctrine or defense for the maker of a so-called “offthe-shelf ” component part that is not otherwise defective, or where the component part manufacturer has had no
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involvement in its integration into the final product. (O’Neil, supra, 53 Cal.4th at 348.) The doctrine applies to “‘generic’ or ‘off-the-shelf ’ components, as opposed to those which are ‘really a separate product with a specific purpose and use.’ [Citation.]” (Springmeyer v. Ford Motor Co. (1998) 60 Cal.App.4th 1541, 1554 (hereafter Springmeyer); see also Tellez-Cordova v. Campbell-Hausfeld/Scott Fetzger Company (2004) 129 Cal.App.4th 577, 582 (hereafter Tellez-Cordova).) The policy reasons behind the component parts doctrine are well established: [M]ulti-use component and raw material suppliers should not have to assure the safety of their materials as used in other companies’ finished products. First, . . . that would require
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suppliers “to retain experts in a huge variety of areas in order to determine the possible risks associated with each potential use. [Citation.]” A second, related rationale is that finished product manufacturers know exactly what they intend to do with a component or raw material and therefore are in a better position to guarantee that the component or raw material is suitable for their particular applications. [Citations.] (Springmeyer, supra, 60 Cal.App.4th at p. 1554; see also TellezCordova, supra, 129 Cal.App.4th at p. 582.) Strict product liability will attach, however, “when the defendant bears some direct responsibility for the harm, either because the defendant’s own product contributed substantially to the harm . . . or because the [subcomponent-part
44 — The Advocate Magazine
maker] defendant participated substantially in creating a harmful combined use of the products.” (O’Neil, supra, 53 Cal.4th at p. 362.) This restatement of the exception to the doctrine recently set forth by the Supreme Court in O’Neil was a long-overdue effort to harmonize a vast body of frequently inconsistent appellate cases, which approached the doctrine on essentially a fact-specific, case-by-case basis. O’Neil subsumes the conclusions of prior cases that the subcomponent-part supplier cannot invoke the component part defense where its component part’s individual defective design or manufacture has a causal relationship to the injuries sustained by the plaintiff; i.e., it was itself defective. (See Jimenez v. Superior Court (2002) 29 Cal.4th 423, 480 and Taylor v. Elliott Turbomachinery Co.,
Inc. (2009) 171 Cal.App.4th 564, 585 [“California law makes the liability of a component-part manufacturer dependent on two factors: (1) whether the component itself was defective when it left the component manufacturer’s factory, and (2) whether these defects caused injury”].) The chief example cited in O’Neil for proper application of the exception to the component-part defense involved a component-part manufacturer’s liability for its abrasive grinding wheels, destined for inclusion in final grinder products which, when used for their intended purpose, gave off dangerous and harmful, toxic dust regardless of the mode of operation of the final product. (O’Neil, supra, 53 Cal.4th at pp. 358-61.) “[I]t was
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the action of the [end-product] power tools . . . that caused the release of harmful dust [from the component parts], even though the dust itself emanated from another substance [i.e., the component part].” (Id. at p. 361.) “‘[T]he tools had no function without the abrasives which disintegrated into toxic dust,’ and ‘the abrasive products were not dangerous without the power of the tools.’ [Citation.]” (Id. at p. 360.) Similarly, the Court cited, as another example, Wright v. Stang Manufacturing Co. (1997) 54 Cal.App.4th 1218 (hereafter Stang). In Stang, plaintiff, a firefighter, “was injured when a deck gun he was using broke loose from its mounting assembly under high water pressure.” (O’Neil, supra, 53 Cal.4th at p. 360.) “Even though the deck gun itself did not break
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or ‘fail’ in the accident, the Court of Appeal found a triable issue as to whether the gun was defectively designed because it did not include a ‘flange’ mounting system and was not compatible for use with this safer mounting system.”(Ibid.) “[Plaintiff ’s] injury was not traceable to a single product made by another manufacturer; it was allegedly caused by a foreseeable failure of the entire system to withstand high water pressure.” (Ibid.) These examples of appropriate exceptions to the component-part defense provide useful and analogous guidance in your auto-defect case for finding and imposing liability on component-part manufacturer defendants, especially where the component part is a critical crashworthiness safety system. In each instance, whether “the defendant
bears some direct responsibility for the harm, either because the defendant’s own product contributed substantially to the harm . . . or because the [subcomponent part maker] defendant participated substantially in creating a harmful combined use of the products” is squarely a factual issue that cannot be decided as a question of law. (O’Neil, supra, 53 Cal.4th at p. 362; see also Gonzalez v. Autoliv ASP, Inc. (2007) 154 Cal.App.4th 780, 791 [summary judgment on the component part defense is unavailable where plaintiffs’ expert opined that a vehicle’s subcomponent safety system’s parts were defective and a cause of plaintiff ’s injury].) The simplest real-world example is where the forensic or other post-crash physical evidence shows that the
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subcomponent was defectively manufactured; e.g., a microscopic metallurgical crack in the steel in the fork of a bicycle manufactured by a component-part maker, which caused a catastrophic failure and crash, severely injuring its rider. (Wimberly v. Derby Cycle Corp. (1997) 56 Cal.App.4th 618 (hereafter Wimberly).) And with respect to more complex design-defect cases, in Gonzalez the defendant component-part maker of an airbag package that failed to deploy under substantial accident impact forces was held properly the subject of strict liability under the exception to the component parts doctrine, where plaintiff ’s evidence established that the airbag safety system was defectively designed under the risk-benefit test, and was a cause of the plaintiff ’s injuries. (Gonzalez, supra, 154 Cal.App.4th at p. 791.) Likewise, a seat belt/shoulder harness assembly that fails to restrain an occupant in an accident, or a seat back recliner mechanism that fails (permitting a seat to collapse rearward and injure an occupant during a foreseeable rear-end impact), similarly fall comfortably within the scope of the exception as articulated in O’Neil. In each of these cases, because the component parts are safety systems designed to prevent or mitigate autoaccident injuries, they do not become dangerous without the operation of the vehicle into which they are finally installed. (See Tellez- Cordova, supra, 129 Cal.App.4th at pp. 358-361.) Further, if the occupant of the vehicle is injured by the defectiveness of such a subcomponent safety system during a crash, “[h]is injury [i]s not traceable to a single product made by another manufacturer; it was allegedly caused by a foreseeable failure of the entire system [i.e., the vehicle] to withstand high water pressure.” (O’Neil, supra, 53 Cal.4th at p. 360.) The defective subcomponent part was also obviously “incompatible with the mounting system.” (Ibid.; Stang, supra, 54 Cal.App.4th at p. 1229.) If you have decided to sue a component-part maker along with the vehicle’s manufacturer, it is probably because you and your expert(s) have already concluded
that the component part was a subsystem of the vehicle that was independently defectively designed or manufactured. If so, your expert should be in a position early in the case to easily identify and explain the subcomponent’s failure mechanism, as well as its causal link to the accident. This expert evidence is more than sufficient to establish inapplicability of the component-part doctrine, both on summary judgment and through trial.
Non-apportionment of liability with the auto manufacturer
Assuming the trier of fact finds that the component part at issue was itself defectively designed or manufactured and a cause of plaintiff ’s injury, the subsequent line of defense asserted by nonsettling component-part manufacturers is that they are entitled to apportionment of fault with the settling manufacturer in the concluding portion of the special verdict form. This is a common legal misperception by non-settling strict-productliability component makers at trial. Under the California rule, Proposition 51 does not apply to strict products liability where the plaintiff ’s injuries are caused solely by a defective product. (Bostick v. Flex Equipment Co., Inc. (2007) 147 Cal.App.4th 80, rev. den. Apr. 18, 2007 (hereafter Bostick), and Wimberly v. Derby Cycle Corp., 56 Cal.App.4th at p. 624.) As a result, the non-settling component-part supplier is not entitled to apportion fault against the manufacturer and does not have the right to place the manufacturer’s name on the special verdict form. The reasons for this are somewhat complicated, and understanding this rationale (in order to explain it to a judge unfamiliar with the law, as well as to opposing counsel) requires a close look at the courts’ explanation of the reasoning in these cases. As articulated by the Court of Appeal, Second District in Bostick, “in a strict products liability action involving a single defective product where all of the defendants are in the same chain of distribution, Proposition 51 does not eliminate the liable defendants’ joint responsibility for noneconomic damages
because each defendant’s liability is not based on fault but rather is imposed by a rule of law as a matter of public policy.” (Bostick, supra, 147 Cal.App.4th at p. 95, italics added.) The majority in Bostick based its ruling on the prior decision of the Court of Appeal, Fourth District, in Wimberly. (Ibid.; but see id. at p.109 (conc. opn. of Croskey. [“[I]t is my view that pursuant to Proposition 51, in a strict products liability action, a defendant’s liability to the plaintiff for noneconomic damages caused by a defective product is several only . . .”]).)
The Wimberly decision
In Wimberly, plaintiff settled before trial with a subcomponent manufacturer of a defective front bicycle fork that was ultimately incorporated into the final product and sold by the bicycle’s manufacturer, defendant Derby. (Wimberly, supra, 56 Cal.App.4th at p. 624.) Trial proceeded solely against the non-settling defendant, Derby. (Ibid.) Prior to submission of the case to the jury, the trial court declined to permit Derby to apportion fault to the component manufacturer, although the court reduced the resulting judgment for plaintiff against Derby by the amount of the prior settlement, under Code of Civil Procedure section 877, subdivision (a) (hereafter section 877(a)). (Ibid.) Wimberly held that Proposition 51 should not apply to strict product liability cases “where . . . the plaintiff ’s injuries are caused solely by a defective product.” (Wimberly, supra, 56 Cal.App.4th at p.632.) The Wimberly court reasoned that, as in respondeat superior cases, in which a defendant employer’s joint and several liability is not based on its own negligence but on vicarious liability, a defendant in the chain of distribution of a defective product cannot invoke Proposition 51 to reduce or eliminate responsibility for plaintiff ’s noneconomic damages. (Id. at pp. 629-30.) The Wimberly court analogized the roles of the manufacturer and its component-parts suppliers to respondeat superior cases: [Respondeat superior] [l]iability is imposed on the employer as ‘“a rule of NOVEMBER 2013
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policy, a deliberate allocation of the risk.”’ . . .The entire liability of the employer and its employee to the
plaintiff is co-extensive. The employer nonetheless enjoys Proposition 51’s benefits because its liability for noneco-
nomic damages is limited to its percentage of fault allocated to its employee. (Id. at p. 629.) The court reiterated: “While strict liability is not commonly referred to as vicarious liability,” the concepts are similar: “[T]he modern justification for vicarious liability closely parallels the justification for imposing liability on the nonnegligent manufacturer of a product: ‘What has emerged as the modern justification for vicarious liability is a rule of policy, a deliberate allocation of risk. . . .’” (Id. at p. 630.) The Wimberly court also reasoned: “Strict liability is imposed ‘in order to relieve injured consumers “from problems of proof inherent in pursuing negligence . . . and warranty . . . remedies....” [Citations.]’” (Wimberly, supra, 56 Cal.App.4th at p.632.) And Wimberly held: In sum, the retention of joint and several liability of parties in a defective product’s chain of distribution for the plaintiff ’s full damages without a showing of negligence is essential to the theory of strict product liability. . . . The parties in a defective product’s chain of distribution are not joint tortfeasors in the traditional sense; rather, as a matter of law their liability to plaintiff is coextensive with others who may have greater fault, as in other instances of statutorily or judicially imposed vicarious, imputed, or derivative liability. [¶] Accordingly, we hold Proposition 51 has no application in a strict liability case where, as here, the plaintiff ’s injuries are caused solely by a defective product. (Id. at pp. 632-633.) The court reasoned that potentially reducing or eliminating the defendant’s responsibility for noneconomic damages would thwart the public policy of insuring that the costs of injuries caused by defective products are borne by those putting them on the market, rather than by the injured persons who are powerless to protect themselves. (Wimberly, supra, 56 Cal.App.4th at p. 632.) “[I]f parties in the chain of distribution can escape
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liability for noneconomic damages, which are frequently much greater than economic damages, they will avoid risks incident to their businesses, losses will not be spread throughout society and incentives for promoting safety will significantly decrease.” (Id. at p. 633, citing Vandermark v. Ford Motor Co. (1964) 61 Cal.2d 256, 262-63.)
The Bostick decision
In Bostick v. Flex Equipment Co., Inc. (2007) 147 Cal.App.4th 80, the Court of Appeal, Second District followed the court’s reasoning in Wimberly. In Bostick, the plaintiff was seriously injured when a defective weight machine failed while plaintiff was using it at the gym. Plaintiff settled with the gym and proceeded to trial, where he obtained a large judgment
against the manufacturer. (Bostick, supra, 147 Cal.App.4th at pp. 83-87.) The trial court applied Wimberly, finding that Proposition 51 was inapplicable and apportionment of fault among defendants improper because plaintiff ’s “injuries were caused solely by a defective product and [both defendants] were in the same chain of distribution.” (Bostick, supra, 147 Cal.App.4th at p. 87.) However, the trial court reduced the resulting judgment against the non-settling manufacturer by the full amount of the pretrial settlement against the gym, including both economic and noneconomic damages. (Ibid.) Plaintiff ’s argument on appeal – that the trial court erred in reducing the judgment by the amount of both the economic and non-economic damages, because
Proposition 51 should have been applicable – was rejected. The Court of Appeal concluded that because Proposition 51 did not apply, all damages included in the prior settlement were fully joint and several, and the total amount of the prior settlement with the gym was properly deducted from the resulting judgment, pursuant to section 877(a). (Bostick, supra, 147 Cal.App.4th at p. 95.) Also instructive is Arena v. OwensCorning Fiberglas Corp. (1998) 63 Cal.App.4th 1178, in which the court held that the focus of a Proposition 51 allocation in an asbestos case is on each specific product, not each specific defendant. The court noted that “there is longstanding Supreme Court authority allocating fault between strictly liable [on the
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one hand] and negligent [on the other] defendants.” (Id. at p. 1193, italics added.) The court affirmed, however, that no Proposition 51 allocation can be made between defendants involved in the chain of distribution for a specific product. (Id. at p. 1992.) It also noted, “[D]efendants within a chain of distribution are free to adjust liability among themselves in an indemnity action.” (Id. at. p. 1197, fn. 13, italics added.) These cases therefore firmly establish that where all of the defendants in a strict product liability action are in the same chain of distribution, and where the plaintiff ’s injuries are caused solely by a single defective product, a non-settling defendant cannot apply Proposition 51 and therefore may not apportion fault to the settling defendants within the same distribution chain. Of course, it’s imma-
52 — The Advocate Magazine
terial whether the non-settling defendants in such a chain are subcomponent manufacturers or the final product’s manufacturer.
As shown above, in most automobile-defect cases where your client’s injuries can be attributed to one or more specific subcomponent safety system failures, you probably want to sue both the manufacturer and the subcomponentpart maker, for all of the reasons discussed above. Since you need your experts to lay out the step-by-step causal link between the defect(s) and the accident injuries (usually sufficient to negate the component-part defense through trial), there is really no downside to naming all of the identifiable subcomponent part makers as co-defendants at an
early point in the case. If you plan carefully in advance and play your tactical cards right, you may end with a very satisfying “gestalt” outcome: the totality of piecemeal product liability settlements may end up being greater than the whole, had you decided to sue the manufacturer alone. Brian Chase is a partner at Bisnar | Chase, which specializes in auto products liability and serious personal injury litigation. Brian Chase is a past-President of the Orange County Trial Lawyers Association and is currently a Vice-President of Consumer Attorneys of California. He was recognized as Products Liability Trial Lawyer of the Year by OCTLA in 2004. He personally argued the landmark nonretained expert witness case of Schreiber v. Estate of Kiser before the California Supreme Court in 1999.
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David R. Lira
Federal Motor Vehicle Safety Standards and auto-defect litigation Strategies for when the FMVSS is detrimental to the automotive-defect case Automotive defect litigation is extremely expensive, complex and document-intensive. In addition to dealing with challenging engineering concepts, sophisticated experts and often confusing jury instructions, another issue “in the tall weeds” is the role, if any, of the Federal Motor Vehicle Safety Standards (“FMVSS”) in the case. In some cases, reference to the FMVSS could be beneficial to the case but in others the admissibility of the FMVSS at trial could adversely impact the case. This article discusses various strategies to employ when the mention of the FMVSS is detrimental to the case.
FMVSS legislative history
vehicles that do not comply with the applicable FMVSS in effect at the time of manufacture. (49 U.S.C. § 30112(a).) Compliance with the FMVSS is a selfcertification program. That is to say, the manufacturer certifies the vehicle for compliance by filing certification papers with the Office of Vehicle Safety Compliance (“OVSC”) within the NHTSA. (49 U.S.C. § 30115.) Through the OVSC, the NHTSA does not “approve” or “certify” that the vehicles are safe. Unlike the Food and Drug Administration (“FDA”), which approves drugs and medical devices before public consumption, the NHTSA does not play such an active role as to automotive products.
The National Highway Traffic Safety Administration (“NHTSA”) of the United States Department of Transportation (“DOT”) is the federal agency responsible for the promulgation and enforcement of the FMVSS. NHTSA’s legislative mandate is set forth in Title 49 of the United States Code, Charter 301 of the Motor Vehicle Safety Act of 1966 (“Safety Act”). The purpose of the Safety Act is “to reduce traffic accidents and deaths and injuries resulting from accidents.” (49 U.S.C. § 30101.) FMVSS No. 209 (seatbelt assemblies) was the first standard to become effective, on March 1, 1967. Currently, there are 56 standards applicable to vehicles enforced by the NHTSA. The process of enacting or amending a safety standard is a slow and arduous process. A Notice of Proposed Rulemaking (“NPRM”) precedes every proposed new safety standard or amendment thereto. The NPRM invites comments from the industry, citizens and interest groups. During the comment phase, various interest groups (primarily automotive industry advocates) submit scientific studies in support of or against the proposed rule or amendment. The Safety Act prohibits an automotive manufacturer from selling new
FMVSS are minimum performance standards. (49 U.S.C. § 30102(a)(9).) That section reads: “‘motor vehicle safety standard’ means a minimum standard for motor vehicle or motor vehicle equipment performance.” A manufacturer’s compliance with the FMVSS does not release it from any duties or responsibilities under common law to design safe vehicles. Congress has provided in the Safety Act that compliance with an FMVSS does not exempt a manufacturer from liability at common law. (49 U.S.C. § 30103(e); see also H.R. No. 1776, 89th Cong., 2d Sess., p. 24 (1966) [“It is intended, and this subsection [§ 108(c) of the original Safety Act] specifically establishes, that compliance with safety standards is not to be a defense or otherwise to affect the rights of parties under common law particularly those relating to warranty, contract and tort liability”].) In analyzing the facts of your case with the FMVSS, a plaintiff ’s lawyer must be mindful of the doctrine of preemption. The doctrine of preemption can be a potent defense to an automotive claim if not pled correctly. Recent case law, however, has favorably clarified the doctrine
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FMVSS are minimum standards
of preemption as it relates to the FMVSS. (See Lira & Buchanan, Preempting Preemption: Williamson v. Mazda Motor of America, Inc. (Nov. 2011) Advocate 44.)
Preempting the “compliance” defense If given the opportunity, every defense lawyer representing an auto manufacturer will state to a jury during voir dire, opening statements and the case in chief that “the vehicle complies with or exceeds the safety standards set by our great federal government.” That statement will often be followed by a cynical comment or innuendo that “Plaintiff ’s counsel and team of paid experts are asking you to impose a different standard.” Jury projects have confirmed that the “compliance” defense can be lethal to the plaintiff ’s case. So, how to deal with the “compliance” defense? First, determine whether any FMVSS apply to the vehicle in question. For example, FMVSS No. 216 (roof crush resistance) only applies to vehicles with a Gross Vehicle Weight Rating (“GVWR”) of 6,000 lbs. or less. Most big SUVs such as the Navigator, Expedition and Escalade exceed that threshold and, thus, FMVSS No. 216 does not apply. In those cases, the automobile manufacturer typically adopts FMVSS 216 requirements or a modified version as its own internal standard. If the FMVSS do not apply to the defect alleged, then no mention of the FMVSS should be allowed. If an FMVSS is applicable to the vehicle, then a motion in limine to exclude compliance should be seriously considered. California case law supports such a motion to exclude. (See BuellWilson v. Ford Motor Co. (2006) 141 Cal.App.4th 525, 563, disapproved on another ground in Ford Motor Co. v. BuellWilson (2007) 550 U.S. 931; see also Esner & Spagnoli, A Cite For Sore Eyes: Why Buell-Wilson I Remains Valid Authority (Aug 2010) Advocate (hereafter BuellWilson I); Ketchum v. Hyundai (1996)
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49 Cal.App.4th 1672, 1677-80; and Buccery v. General Motors Corp. (1976) 60 Cal.App.3d 333, 540-41.) In Buell-Wilson I, the plaintiff was rendered a paraplegic as a result of
injuries she sustained in a rollover crash in her Ford Explorer. (Buell-Wilson I, supra, 141 Cal.App.4th at p. 531.) After receiving a substantial jury verdict, Ford appealed. One of Ford’s contentions on
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appeal was the trial court’s refusal to admit evidence of the Explorer’s “real world” safety record. (Ibid.) In affirming the trial judgment, the Court of Appeal reaffirmed the propositions set forth in Grimshaw v. Ford Motor Company (1981) 1991 Cal.App.3d 757: “Ford asserts that expert testimony concerning the Explorer’s comparative rollover rate was admissible to demonstrate that the Explorer ‘is a reasonably safe vehicle that is not usually prone to rollover in comparison to other vehicles.’” (Buell-Wilson I, supra, 141 Cal.App.4th at p. 544.) “A manufacturer cannot defend a product liability action with evidence it met its industry’s customs or standards on safety.” (Id. at p. 545, citing Grimshaw, supra,119 Cal.App.3d at p. 803 and Foglio, supra, 56 Cal.App.3d at p. 477.) In refusing to admit the evidence, the court concluded that evidence regarding the industry standard of care was improper because in a strict liability action the issue is not whether the “defendant exercised reasonable care.” (Id. at p. 545, citing Foglio, supra, 56 Cal.App.3d at p. 477). Ford’s arguments that the evidence went toward the risk/benefit analysis were ultimately rejected by the Court of Appeal. (Id. at p. 545.) In Buccery, the plaintiff suffered head injury while driving a truck after a lowimpact collision, due to the lack of a head rest or padding to prevent his head from hitting the window behind him. (Buccery, supra, 60 Cal.App.3d at p. 537. On crossexamination, plaintiff ’s expert testified that the FMVSS that required head cushions did not apply to trucks. (Id. at p. 538.) In granting defendant’s motion for non-suit, the Court stated that “those charged with the responsibility for adopting standards have done so; General Motors complied with those standards. General Motors has done nothing wrong in this case.” (Id. at p. 539.) In reversing the trial court, the Court of Appeal relied upon 15 U.S.C. § 1397(c), which provides that “compliance with any federal motor vehicle safety standard issued under this subchapter does not exempt any person from any liability under the common law.”
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(Buccery, supra, 60 Cal.App.3d at p. 540.) Thus, FMVSS compliance did not preclude defendant from liability and granting of nonsuit on those grounds was improper. If the court denies your motion in limine to exclude compliance evidence, then it is the plaintiff who must mention the FMVSS as “minimum standards” at first opportunity. The plaintiff should also ask the judge to pre-instruct the jury on this point before opening statements. The following jury instruction was one actually read to a jury: You will hear reference to the Federal Motor Vehicle Safety Standard or ‘FMVSS.’ This is a minimum safety standard. Therefore, the Nissan Defendants’ compliance with any FMVSS does not create a presumption that the vehicle is not defective. If the court permits the defense to mention compliance with the FMVSS in light of the foregoing pre-instruction, expect a brisk response from the defense, as this passage from an actual opening statement illustrates: The evidence will be that the 301 standard is the toughest crash standard of any standard of any country in the world. It’s hardly a minimum standard. It is a minimum with respect to, you have to pass that standard to sell the vehicle, but it is the toughest crash standard in the world.
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In response to the “compliance” defense, plaintiff ’s counsel should also mention the fact that most FMVSS are antiquated and do not reflect current engineering principles or technologies. For example, FMVSS No. 216 became effective in 1973 and its requirements have never been amended. It should be argued that FMVSS 216 does not reflect “real-world” crash scenarios and that safer roof design technologies exist. Finally, another potential counterargument to the “compliance” defense is reference to safety standards of other countries. Most domestic automobile manufacturers produce vehicles in other countries such as the European Union. These countries often mandate compliance with safety standards that may be more rigid or strict than the FMVSS. It is worth the effort to determine: 1) whether the U.S. automobile manufacturers produce vehicles in other countries; 2) what safety standards exist in those foreign countries; and 3) whether the foreign safety standards mandate higher standards than those in the United States. This type of evidence will support technical-feasibility arguments on behalf of the consumer. An example of foreign standards relates to seat-belt requirements in buses. As stated below, FMVSS No. 208 exempts vehicles with a GVWR of 10,000 lbs. or more. The European Union has mandat-
ed seat belts in such vehicles since 1997. (ECE No. 80.) Similarly, Australia’s Australian Design Rule No. 68 has mandated seat belts in all seating locations since 1994. Your attempt to admit such foreign standards will be met with stern opposition but is worth the effort.
Addressing the “industry standards” defense
Another defense tactic of the automobile industry is introducing evidence that its testing methods, manufacturing processes or components met “industry standards.” In other words, “we do what the industry does.” This phenomenon is often called “norm bias.” Industry-standards evidence is most likely to be part of the defense case when no FMVSS are applicable or where no other manufacturer is using such technology or safety enhancement. Jury research has shown that if everyone is doing it (or not doing it) jurors are always hesitant to find fault. As stated above, FMVSS No. 208 exempts vehicles with a GVWR of 10,000 lbs. or more from having to install seatbelts, except for the driver seat. Most multipurpose passenger vehicles (shuttle van) and buses fall into this category. Having been granted this exemption from FMVSS 208, the bus manufacturers will assert that the lack of seatbelts complies with “industry standards” – in other words, that the federal government and the industry do not call for seatbelts, based on research conducted at the university level and analysis of bus-accident statistics. Such evidence is difficult to counter, especially when the federal government defers to the industry. A motion in limine to exclude “industry standards” evidence is one strategy to consider before trial. Authorities suggest that such a motion is more persuasive if all negligence counts are dismissed. It is well-settled law that evidence of industry standards and customs is inadmissible in a product liability action. (See Grimshaw v. Ford Motor Co., supra, 119 Cal.App.3d at p. 803; Foglio v. Western Auto Supply (1976) 56 Cal.App.3d 470; and Heap v. General Motors Co.
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(1977) 66 Cal.App.3d 824, 831.) This rationale is perfectly logical since in a products liability case, the issue is not whether the defendant exercised reason-
able care but, rather, whether the product failed to perform as the ordinary consumer would expect. (Foglio, supra, 56 Cal.App.3d at p. 477.)
In Foglio, a minor brought suit after losing an eye when he was struck by a projectile discharged from a lawnmower. (Foglio, supra, 56 Cal.App.3d at p. 477.) After a defense verdict, plaintiff appealed, contending a jury instruction on industry standards was improper. The Court of Appeal agreed and reversed. (Id. at p. 477.) The following instruction on custom and practice in the trade industry was given at trial: Evidence as to whether or not the defendant conformed to a custom or practice that had grown up in a given business at the time the lawnmower was manufactured ought to be considered on the question whether or not the defendant exercised reasonable care in the design of the subject lawnmower. (Foglio, supra, 56 Cal.App.3d at p. 477.) In reversing the trial court, the Court of Appeal stated: “In a strict liability case based on a defect in design, the issue is not whether the defendant exercised reasonable care in designing the product.” (Ibid.) Thus, the above instruction was improper and the verdict was reversed. (Ibid.)
While challenging cases, productdefect cases often influence manufacturers’ business conduct going forward. Case verdicts have forced manufacturers to develop safer products and new technologies. To prevail over the numerous defenses asserted by the manufacturers, it is critical that the plaintiff ’s lawyer know industry regulations, the legislative history of those regulations, and the potential impact of the regulations on a jury if allowed by the Court. David R. Lira is a trial lawyer at Girardi | Keese, Los Angeles, specializing in product liability lawsuits. He is a Fellow in the International Academy of Trial Lawyers and a member of ABOTA. Nicole DeVanon is an attorney at Girardi | Keese. Admitted in 2012, she is a graduate of the University of Colorado at Boulder and Southwestern University School of Law. 62 — The Advocate Magazine
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The stipulated protective order and defendant’s documents Protecting the plaintiff’s interests during the protective-order process If you are handling a products-liability case, then you will undoubtedly encounter a crossroad during discovery in which the defendant politely informs you that it is prepared to produce documents responsive to your requests, but first you need to sign a “stipulated protective order.” At this point you have two choices: 1) take the easy road: sign the defendant’s protective order and receive the documents; or 2) take the road less traveled: fight for an agreement that benefits your client and will not hinder your administration of the case. Road number one may seem like the better option, but the chances are that the defendant’s proposed protective order, provided to you seemingly out of convenience and courtesy by the defendant will, in fact, tie your hands as to how the documents can be used, as well as restrict whom you can share them with and what must be done with them after the case concludes. 64 — The Advocate Magazine
Option number two is not an easy road: it is a tough fight. You do not have to sign the defendant’s stipulated protective order, and, at the very least, you should negotiate terms that are reasonable and appropriate. If the defendant refuses to incorporate appropriate provisions, then a round of law-and-motion is warranted. Keep in mind that the burden is on the party seeking to “protect” the documents to move for a protective order. Do not allow the defendant to refuse to produce documents until a protective order is entered. That process can drag out discovery for months or more. If the defendant will not negotiate fair terms for a stipulated protective order and will not produce documents, then file a motion to compel production of documents. It is not a proper “excuse” for the defendant to say it will not produce documents because the plaintiff refuses to sign a stipulated protective order. What
often happens is that if the parties are unable to reach an agreement on the terms of an acceptable stipulated protective order, then the plaintiff will file a motion to compel production of documents, and the defendant will file a motion for protective order. Beware that if you take the easy road and sign the defendant’s version of the stipulated protective order, a few things will happen. First, you can expect that the defendant will designate every single document as being subject to the protective order, even if the documents clearly do not meet the standard for warranting protection. Even if your case is dealing with a ten-year-old product that is outdated and incorporates no proprietary technology that any competitor would ever consider stealing, you can be sure the defendant will claim every document, every
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consumer complaint, and every prior lawsuit should be covered by the protective order. And, every deposition taken that discusses a “protected” document will also be covered by the protective order.
Second, you can expect that the protective order will impose unnecessary and unreasonable procedural obstacles in your case that you should not have to deal with, but you will be forced to because you took the easy road.
Third, you can expect the defendant to celebrate another victory in the ongoing quest to hide documents and narrow the scope of what it produces in similar other lawsuits, thereby hurting all consumers. And, last, you can expect the defendant will file away that stipulated protective order you signed without a fight so that if you ever decide to refuse to sign a stipulated protective order with the same terms, that old stipulated protective order will be used against you. The purpose of this article is to help you navigate and negotiate the protective order process in order to obtain one favorable to your client, one that does not hinder your practice or hurt consumers in the future.
The first step after receiving any proposed protective order is to read it carefully and redline it. Chances are that the Protective Order provided to you contains a non-sharing provision that prevents you from disclosing the information obtained in discovery to third parties, utilizing the information in future cases, and requires you to obtain signed confidentiality agreements from any person, including experts, whom you share the information with. These provisions severely restrict your ability to use the information you obtain during discovery and will make the administration of your case burdensome. It is clear that the goal of manufacturers in product-liability cases, through the use of non-sharing protective orders, is to limit the plaintiff ’s attorney’s ability to know what other claims involving the same or similar products have been made against the manufacturer, and further, to use that same protective order as a barrier to prevent attorneys with similar claims from getting discovery and depositions produced in other cases. By trying to force plaintiffs’ attorneys to agree to protective orders without sharing provisions, the manufacturers hope to severely restrict the ability of
Protective Order continues 66 — The Advocate Magazine
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plaintiffs’ attorneys and experts to communicate, gather important discovery, and ensure that the manufacturer is being completely truthful with discovery. You cannot let this happen. If the Order does not include a sharing provision, you should not sign it and you must choose road number 2. The good news, however, is that in California the law is on your side. The most pertinent case in this arena is Raymond Handling Concepts Corp. v. Superior Court (1995) 39 Cal.App.4th 584 (“Raymond”). Raymond was a personal-injury action arising from a forklift accident in which the court issued a protective order permitting plaintiffs’ counsel to disseminate confidential discovery to counsel in similar litigation pending against defendants. (Raymond, supra, 39 Cal.App.4th at pp. 586, 590-91). The order provided that
discoverable information that was designated as a trade secret or other confidential research, development, or commercial information could be disclosed upon execution of a stipulation by counsel in the other litigation agreeing to be bound by the protective order. (Id. at pp. 590-91.) This order accommodated the public interest in allowing the sharing of information with litigants in similar cases, as well as the defendant’s interest in protecting confidential information and trade secrets from disclosure to its competitors. (Ibid.) In ruling, the Raymond court analyzed Garcia v. Peeples (Tex. 1987) 734 S.W.2d 343 (“Garcia”), which focused on the benefit provided by sharing provisions in ensuring efficient and full exchange of information in product liability actions. The plaintiffs in Garcia sued General Motors Corporation
(GMC) for injuries suffered when their 1982 Buick burst into flames after being struck in the rear by another vehicle. (Id. at pp. 344-47.) The plaintiff alleged that the fuel-fed fire was the result of a design defect in the Buick’s fuel system. (Id. at p. 344.) The plaintiff protested a discovery order that would have precluded him from sharing confidential information, including alleged trade secrets, in other cases similar to his action. (Id. at pp. 345-47.) GMC contended it would be injured if competitors gained access to the information it sought to protect. (Id. at pp. 347-48.) The reviewing court in Garcia held that the trial court abused its discretion in the blanket order. (Ibid.) It balanced the legitimate need of GMC to protect its trade secrets against the public policies favoring the exchange of
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(M.D.N.C. 1987) 115 F.R.D. 188, 190 [“the sharing of information between even diverse plaintiffs promotes speedy, efficient and inexpensive litigation by facilitating the dissemination of discovery material necessary to analyze one’s case and prepare for trial”]; Kamp Implement Co., Inc. v. J.I. Case Co. (D. Mont. 1986) 630 F. Supp. 218, 219 [“of the courts that have considered protective orders of the nature proposed by defendant, an overwhelming majority have refused to grant any type of protection from dissemination”]; Wolhar v. General Motors Corp. (Del. 1997) 712 A.2d 464, 467 [“The great weight of authority in other jurisdictions holds that such sharing is not only theoretically sound but also justified as an efficient use of the resources of the courts and the parties”]; Grange Mut. Ins. Co. v. Trude (Ky. 2004) 151 S.W.3d 803, 814 [“That discovery might be useful in other litigation or other proceedings is actually a good thing because it furthers one of the driving forces behind the Civil Rules by allowing the cost of repeating the discovery process to be avoided and thereby encouraging the efficient administration of justice”]; Patterson v. Ford (W.D. Texas 1980) 85 F.R.D. 152; and Koval v. General
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action. These allow sharing of information in similar cases in order to ease the tasks of courts and litigants in the discovery process. (Kraszewski, supra, 139 F.R.D. at p.159.) As to State Farm’s argument that some of the information covered by the protective order constituted trade secrets important to State Farm, the Kraszewski court again relied on the Ninth Circuit’s discussion of trade secrets in Olympic, where the court stated that no rule or statute “authorizes a district court to protect trade secrets and sensitive competitive information from such disclosure as is relevant to the subject matter involved in a pending action. All that may be done is to afford such protection from disclosure as is practicable, consistent with the right of access thereto for purposes of litigation.” (Olympic, supra, 332 F.2d at p. 265.) California is not alone in its approval of “sharing” protective orders in the discovery process. For many decades, federal courts across the country have overwhelmingly and decisively come down on the side of liberal sharing of protective orders as a sound and effective means of ensuring a speedy, just, and less expensive determination of products liability actions. (Burlington City Board of Education v. United States Mineral Prods. Co.
information; i.e., full disclosure and efficiency in the trial system. (Ibid.) The Garcia court concluded its discussion of this issue by remarking: “Out of an abundance of caution, the trial court, after determining which documents are true trade secrets, can require those wishing to share the discovered material to certify that they will not release it to competitors or others who would exploit it for their own economic gain. Such an order would guard GMC’s proprietary information, while promoting efficiency in the trial process.” (Garcia, supra, 734 S.W.2d at p. 348.) Other persuasive authorities supporting sharing provisions include Kraszewski v. State Farm General Ins. Co. (N.D.Cal. 1991) 139 F.R.D. 156 (“Kraszewski”). In Kraszewski, the court was asked to modify a protective order that requires any document marked confidential to “be used only for the purposes of this litigation and not for any other purpose whatsoever” to allow discovery to be used in a similar sexdiscrimination suit against State Farm. (Id. at p. 158). The court analyzed the issue in reference to the principles applied by the Court of Appeals, Ninth Circuit in Olympic Refining Company v. Carter (9th Cir. 1964) 332 F.2d 260 (“Olympic”), an antitrust
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Protective Order — continued Motors, (Com. Pl. Ohio 1990) 610 N.E.2d 1199.) As can be seen above, there exists extensive law supporting the inclusion of a sharing provision in a protective order, law that you must apply in your case to fight any non-sharing protective order. In addition to the legal issues involved, you may discover that the defendant has previously entered into stipulated protective orders that included sharing provisions. Maybe the case was from a different state involving different counsel, but the critical issue is whether the same defendant previously agreed to a sharing provision. If it had previously agreed, then the defendant will be hard pressed to tell your court why it now cannot agree to a sharing provision. In addition to the fight for a sharing provision, when reviewing a proposed protective order you should also pay attention to whether the following provisions are included in the order, and, if not, counter with an order that includes them: • An authentication provision; • A reasonable challenge provision; • A provision that the protective order does not apply to use of documents at trial; and, • An express good-faith provision.
An authentication provision simply says that any document produced by the defendant subject to the protective order is a business record. Some defendants will fight this provision, but logic is on your side: if the document allegedly constitutes a trade secret or otherwise contains allegedly proprietary information, then it must be a business record. Remember, you are not under any obligation to sign a stipulated protective order. But, if you do agree to do so, then the defendant should remove the hurdle of laying a foundation that a document produced pursuant to a protective order is a business record. This does not mean the document is admissible at trial, it simply establishes the foundation. (Evid.Code, § 803(6).)
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California law states that the burden is on the moving party to show by a preponderance of the evidence that the issuance of a protective order is proper. (Stadish v. Superior Court (1999) 71 Cal.App.4th 1130, 1144.) Despite this, defendants will often propose a protective order that shifts the burden for challenging whether a document is truly deserving of protected status to the party doing the challenging. That is not the law in California. If a stipulated protective order is agreed to, and a defendant is afforded the benefit of having the protective order in place, which allows it to unilaterally designate vast “collections” of documents as protected, then under California law it should bear the burden of proving that the documents are entitled to such tradesecret protection should their designation be challenged. From a practical standpoint, the way this works is as follows. Suppose the defendant designates its entire production of documents as being covered by the protective order in place, but after reviewing the documents, plaintiff ’s counsel believes many of the documents should not be protected. Plaintiff ’s counsel can then notify defense counsel in writing which specific documents he believes should not be protected. Defense counsel then has a specified period of time – such as 30 days after the initial notification by plaintiff ’s counsel – either to justify why the challenged documents should remain protected or to file a motion with the court to establish why the challenged documents should remain protected. In addition to the fact that there may not be any legitimate basis for the documents to be protected, a few other circumstances may cause plaintiff ’s counsel to challenge whether the documents should be protected. One circumstance is where plaintiff ’s counsel learns from other sources that the documents in question were produced by the defendant in other litigation and were not subject to a protective order. If the documents were previously
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produced to third parties and were not deserving of protected status in prior litigation, the defendant will be hardpressed to justify why now in your case the documents should be protected. A second circumstance is one where the documents may be important to government authorities, such as the Consumer Product Safety Commission or the National Highway Traffic Safety Administration, but the plaintiff ’s attorney is prevented from sharing those documents with government authorities because the protective order prevents doing so. A third circumstance is one where the documents were entered as exhibits at a trial, and the trial court’s rules dictated that any document used in open court is not protected. If that is the case, then there would be no basis for the
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defendant in your case to claim that the documents must be protected.
Use of documents at trial provision
Use of documents during trial involves circumstances much different than the pre-trial arena. If this is not contemplated in a protective order, then the terms could make it difficult for you to use documents during trial. Therefore, if a protective order is entered, it should include a provision stating that the protective order does not apply to the use of documents at trial. Most courts have rules governing how documents used during trial are to be handled.
Last, although this may seem redundant, and the defendant will often argue that it is, you should request that a protective order include an express Good-Faith Provision. A Good-Faith Provision states that the defendant must not designate a document as confidential without first having made a good-faith determination that a factual and legal basis exists to assert a specific identified privilege applicable to that particular document. It is also good to include express language that the document being marked does not include information that has been received from or disclosed within the public domain, such as advertising materials, customer complaints, materials submitted to the government, or that have not otherwise received confidential treatment. (Contact the authors for samples of any of the provisions referenced above.)
As always, the goal is to resolve things informally and negotiate an acceptable order through the meet-andconfer process. However, if it becomes clear that the defendant in your case will not agree to include a sharing provision, then the discussion should end there. Tell counsel to file the motion and proceed to the outline below. If they will agree to include a sharing provision, but are fighting you on other provisions, then you must make a careful balancing to determine what provisions are most important
in your particular case before you agree to a stipulated protective order. Once it is clear that law-and-motion is inevitable, do not concede that a protective order is warranted. Simply because you were discussing reaching an agreement to a stipulated protective order, once it comes to law and motion then the first question to ask is whether a protective order is even necessary. Undoubtedly, the defense will say it is, but you must carefully analyze your case, and, based on the facts, determine if it truly is. Ask whether the product at issue constitutes an old design that has been on the marketplace for years where it has been reviewed, studied, and even reverse-engineered. Remember California law states that the burden is on the moving party to show by a preponderance of the evidence that the issuance of a protective order is proper. (Stadish, supra, 71 Cal.App.4th at p. 1144.) The Stadish Court set forth that the moving party has in fact a “substantial burden” to meet in requesting a protective order and must demonstrate both “good cause” and that “justice requires” the issuance of the protective order. (Ibid.) Therefore, while the defendants would like it to appear that they are relieving you of a burden by “drafting” the protective order for you, in reality, it is they who are seeking to have you relieve them of a very significant burden by agreeing to one. Do not let them off the hook lightly. The law is clear that it is the obligation of the party requesting the protective order to prove a trade secret exists and to offer evidence to the Court that each document it seeks to protect truly qualifies as a bona fide trade secret. (Bridgestone/Firestone, Inc. v. Superior Court (1992) 7 Cal.App.4th 1384.) A trade secret or proprietary information is not simply any material the withholding party would prefer to keep confidential, but is “secret information essential to the continued operation of a business or industry [that] may be afforded some measure of protection against unnecessary disclosure.” (Law Revision Comment to Evid. Code, § 1060 (1995), italics added.) Furthermore, the owner of a trade secret has a privilege to prevent another
Protective Order continues
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from disclosing it only “if the allowance of the privilege will not tend to conceal fraud or otherwise work injustice.” (Evid. Code, § 1060, italics added.) The test a defendant must pass in order to establish this prima facie burden is set forth in Bridgestone/Firestone, Inc. v. Superior Court (1992) 7 Cal.App.4th 1384, and requires proof that: • The information claimed as trade secret is not generally known or readily ascertainable; • That it derives independent economic value from the secrecy of the information; and • That it has made reasonable efforts to maintain its secrecy. (Id. at p. 1393, fn. 3, citing Civ. Code, § 3426.1, subd.(d).)
At this stage you must now pay particular attention to the circumstances of the product that the defendant is claiming is entitled to privilege protection. Courts have held that facts such as product age, product dispersal, and how well known a product is are all facts demonstrating a likelihood of greater dissemination of the product, and weigh against the imposition of a protective order. (See Nestle Foods Corp. v. Aetna Cas. & Sur. Co. (D.N.J. 1990) 129 F.R.D. 483.) “The purported need for protection is substantially diminished where the passage of time has made such documents stale.” (Id. at p. 485). Furthermore, situations in which a product has been available and sold to the general public for a longer period of time demonstrate that the product was avail-
able for disassembly and inspection, and could therefore be purchased and reverseengineered by the precise audience that is supposed to be excluded from knowing the purported confidential information, providing additional weight against the need for protection. Another key issue to note during the law-and-motion stage is that the defendant bears the burden to prove it is entitled to trade-secret protection by presenting “competent” evidence. Often the only evidence accompanying a motion for protective order will be one or more declarations from various company representatives, all attesting to the need for a protective order. Case law exists supporting the argument that this type of “evidence” is wholly conclusory and insufficient to establish a prima facie case of trade secret protection: As noted at the outset, the party seeking protection has the burden of establishing that (1) the information is a trade secret or confidential commercial information and (2) that disclosure would cause a significant identifiable harm. . . . This showing requires specific demonstrations of fact, rather than broad allegations of potential harm. Raychem has not met its burden. Raychem’s statement that disclosure of the end results of testing will necessarily reveal their systems, techniques, and methods of testing is wholly conclusory. (Culinary Foods, Inc. v. Raychem Corp. (N.D. Ill. 1993) 151 F.R.D. 297, 303.)
Give the court options
If the facts warrant it, and should you find yourself embroiled in the lawand-motion phase, then begin your opposition by applying the above principles and arguing that no grounds for a protective order even exist. However, this should constitute only one portion of your opposition and thus, you should next present in the alternative the more reasonable protective order you have proposed during negotiations with defense counsel. Lay out concisely the additional provisions discussed earlier that you wish the court to review and include.
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Members Make get connected today
Grow your practice Advance as a trial lawyer Develop new partnerships join the CAALA community at
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Protective Order â€” continued
Remember, this is your opportunity to show the court the reasons your proposed protective order is the reasonable
alternative, and the alternative that truly balances the purported needs for privacy claimed by the defendant, while still pre-
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serving the policy of shared discovery favored by multiple courts across the nation. Suffice to say, this opposition can become quite lengthy and vary in complexity depending on the issues in your case; however, it is a necessary battle to pursue if negotiations break down with defendants, in order to preserve the documents you fight so hard to obtain in a products liability case. (For a sample Opposition to a Motion for Protective Order please contact the authors).
4 Corne ADR Se Advanc Advant Advoca Allen M Alpha O Altern Ame Am Atk At B
By applying the principles in this article, you will often be able to negotiate an acceptable stipulated protective order and avoid law and motion. However, when it does get to that phase, it is important to force the defendant to establish why a protective order is truly justified, and if it is, make sure the terms of the protective order are fair, reasonable, and consistent with the law. Adam Shea is a partner at Panish Shea & Boyle LLP, and specializes in automotive and tire product liability cases, trucking accidents, and other high value personal injury and wrongful death cases. He is a member of ABOTA, and has been on the Board of Governors of the Consumer Attorneys Association of Los Angeles for several years. He is also on the Board of Advisors of the Loyola Law School Advocacy Institute. He earned his undergraduate degree from UCLA and his law degree from Loyola Law School.
Define your case.
Ryan Casey is an associate at Panish Shea & Boyle LLP, in Los Angeles. He specializes in complex catastrophic personal injury, product liability, and wrongful death cases and in 2013 he was selected to the Super Lawyers Southern California Rising Stars List. He earned his undergraduate degree from UCLA and his law degree from Loyola Law School Los Angeles, where he participated in National Trial Competitions and was awarded the Karl Seuthe Trial Advocacy Award. He remains an active participant in the Loyola Trial Advocacy Program.
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Alan Van Gelder
Protecting your product-liability case from government-contractor immunity How to determine if government-contractor immunity applies to products sold to local and state governments A firefighter on a city fire truck is injured due to a design defect in the truck. Under California law there is no question that the firefighter can sue the manufacturer and retailer of the defectively designed fire truck. After all, firefighters are entitled to the same protections from defective products as the citizens they protect. Suddenly, the manufacturer of the defectively designed fire truck drops a massive motion for summary judgment on your desk, claiming it is immune from product-liability claims. The manufacturer argues that, because it built the fire truck pursuant to a contract with a government entity (in this case a city), it is entitled to a special immunity from product-liability claims. The manufacturer points to a narrow immunity outlined by the United States Supreme Court in Boyle v. United Technologies Corp (1988) 487 U.S. 500 (hereafter Boyle).What do you do now? This article will walk you through the basics of the government-contractor immunity and, more importantly, provide you some ways to defeat it.
The basics of the immunity
Government contractor immunity is purely a creature of federal law. (Boyle, supra, 487 U.S. at pp. 504-06.) It is a narrow immunity that was created to protect federal contractors who provide products to the United States government from certain state-law product-liability claims. The defense is most commonly invoked by federal contractors providing products to the U.S. military. But product manufacturers have been trying to improperly extend this immunity to cases involving products sold to state and local governments. As discussed below, it is improper under California law to apply federal-contractor immunity to products sold to state and 82 — The Advocate Magazine
local governments. The immunity is not applicable and actually conflicts with California law. Nor should you panic if your manufacturer turns out to be a federal contractor. In order for the manufacturer to establish federal contractor immunity under Boyle, the manufacturer still has the affirmative obligation to prove that 1) the government approved reasonably precise specifications for the product; 2) the product performed to those specifications; and 3) the manufacturer warned the government about dangers in the use of the product that were known to the manufacturer but not the government. (Boyle, supra, 487 U.S. at pp. 51213.) The burden on the manufacturer to meet elements 1 and 3 is especially high. Federal contractor immunity does not apply in cases involving state and local government. In the example involving the injured firefighter, the fire truck was built for and owned by a city. The United States had absolutely nothing to do with the truck. There was no way that the manufacturer could claim it was a federal contractor. As such, federalcontractor immunity does not apply. Federal-contractor immunity as outlined in Boyle is reserved exclusively for products that were provided by federal contractors to the United States. Although there are multiple state court decisions that discuss the immunity, all of those cases involved federal contractors providing products to the United States. (See, e.g., Jackson v. Deft, Inc. (1990) 223 Cal.App.3d 1305 (hereafter, Jackson.) Although there are two CACI jury instructions devoted to the immunity, CACI No. 1246 and No. 1247, the instructions are specifically limited to products provided to the United States by federal contractors. In fact, the CACI instructions are further limited to
products sold to the U.S. military. (The use notes explain that while the defense might go beyond military contracts and that other courts have found that it goes beyond military contracts, no California court has expressly expanded the defense beyond military contracts.) Two strong reasons exist which prevent extending federal contractor immunity to products sold to state and local governments. The first reason is that federal contractor immunity is a unique creature of federal law that cannot be extended into state and local government product-liability cases. The second reason is that an application of the federal contractor immunity actually conflicts with existing California product-liability law.
A uniquely federal interest
The Court in Jackson described the immunity as follows: In Boyle, the United States Supreme Court clarified at least to some extent the circumstances when a contractor providing military equipment to the federal government can be held liable under state tort law for injury caused by a design defect. After a Marine helicopter copilot drowned because he could not escape when his helicopter crashed into the sea, his father sued the helicopter manufacturer, alleging defective design of the escape hatch. The manufacturer urged that because it had built the aircraft according to military specifications, it was protected from liability by the military contractor defense. (Jackson, supra, 223 Cal.App.3d at pp. 502-03.) Initially, the Boyle court explained the common-law basis of the defense. The court instructed that a few areas involving “‘uniquely federal interests’”
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are so committed to federal control under the Constitution and federal law that state law is preempted by federal common law. It then concluded that the procurement of equipment by the United States from independent contractors is of uniquely federal interest so that under some circumstances, state law attempting to impose tort liability on such contractors may be displaced. (Boyle, supra, 487 U.S. at pp. 504-506.) But the court then cautioned: That the procurement of equipment by the United States is an area of uniquely federal interest does not, however, end the inquiry. That merely establishes a necessary, not a sufficient, condition for the displacement of state law. Displacement will occur only where . . . a ‘significant conflict’ exists between an identifiable ‘federal policy or interest and the [operation] of state law,’ [citation], or the application of state law would ‘frustrate specific objectives’ of federal legislation [citation]. (Boyle, supra, 487 U.S. at p. 507, fn. omitted, italics added.) Essentially, federal-contractor immunity developed because federal courts did not want state product-liability rules to be used to second guess certain decisions made by the United States military about how it procured and designed its products. While the federal courts and the United States do not have direct jurisdiction over state product-liability claims, they have unique jurisdiction over claims concerning the U.S. military that could in theory preempt the state product-liability claim. Because the underpinning of federal-contractor immunity is essentially federal preemption, it does not logically extend or apply in cases involving state or local governments. State and local government already exist within the framework of state product-liability law. They simply do not have the same powers as the federal government to preempt state product-liability claims. Furthermore, federal-contractor immunity was only designed to address a “significant conflict” between an identifiable federal policy or interest and the
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operation of state law. A federal contractor does not automatically qualify for immunity. To illustrate the limits of the immunity, the Boyle court offered the following example: If . . . the United States contracts for the purchase and installation of an airconditioning unit, specifying the cooling capacity but not the precise manner of construction, a state law imposing upon the manufacturer . . . a duty of care to include a certain safety feature would not be a duty identical to anything promised the Government, but neither would it be contrary. The contractor could comply with both its contractual obligations and the state-prescribed duty of care. No one suggests that state law would generally be pre-empted in this context. (Boyle, supra, 487 U.S. at p. 509.)
On the other hand, the Jackson court explained, when the state-imposed duty of care that is the basis of the contractor’s liability under state tort law is precisely contrary to the duty imposed by the federal contract, there may be a “‘significant conflict’” between the state law and the federal interest. (Jackson, supra,223 Cal.App.3d at p. 1314.) In Boyle, the Supreme Court reasoned that the selection of the appropriate design for military equipment involves the balancing of technical, military, and social considerations. (Boyle, supra, 487 U.S. at pp. 51112.) The Court noted that the United States government is normally immune from judgment for the appropriate design of military equipment. “In sum, we are of the view that state law which holds Government contractors liable for
design defects in military equipment does in some circumstances present a ‘significant conflict’ with federal policy and must be displaced.” (Id. at p. 512.) In a case involving a defective city fire truck, there is no conflict between a unique federal interest and state law. There is no conflict between state law and the city. There is no unique state interest that would act to insulate a state or local government from liability. It is totally inappropriate to apply Boyle to a case involving state and local government.
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Immunity — continued
and local government violates existing state law. The law in California is that if a manufacturer produces a defectively designed product, the manufacturer is liable for injuries caused by the design defect. (See CACI No. 1200). Beyond manufacturers, anyone identifiable as “an integral part of the overall producing and marketing enterprise” is subject to strict liability. (Arriaga v. Citi Capital Commercial Corp. (2008) 167 Cal.App.4th 1527, 1534, citing Vandermark v. Ford Motor Co. (1964) 61 Cal.2d 256, 262.) There is nothing in California law that provides immunity for a manufacturer simply because the product was built at the request of a state or local government. The following two California cases (both of which were decided well after Boyle) are examples showing that product-liability cases may go forward even though the products were manufactured for use by a city. In Wright v. Stang Manufacturing Co. (1997) 54 Cal.App.4th 1218 (hereafter Wright), a fireman employed by the City of Glendale was injured when the water cannon on his fire truck broke loose, threw him to the ground, and then landed on him. The plaintiff brought a
product-liability claim against the manufacturer of the water cannon. One of the issues in the case concerned whether or not the water cannon should have been attached to the fire truck via a flange system. On appeal, the parties conceded that the water cannon had been “manufactured in accordance with the requests of the Glendale Fire Department.” Among other things, the manufacturing defendant complained that it should not be held liable for failing to include a flange system in the water cannon because the City of Glendale specifically declined the option of using a flange system to attach the water cannon to the fire truck. In rejecting this argument, the Court wrote that there were triable issues of fact on whether the deck gun was defectively designed. “We also note that in their moving papers below, Stang failed to cite any authority on the issue of the manufacturer’s liability even assuming that the Glendale Fire Department specified that it intended to use the threaded pipe attachment instead of a flange mounting system, which the parties admitted was available for use by the fire department. In other words, Stang
failed to provide sufficient authority or evidence to negate the design defect theory of product defect.” Wright was decided nearly a decade after Boyle. Despite the involvement of the City of Glendale in the installation of the water cannon and Glendale’s decision not to use a flange system, the federal contractor immunity did not stop the case from going to the jury. In Chavez v. Glock, Inc. (2012) 207 Cal.App.4th 1283 (hereafter Chavez), the plaintiff was a Los Angeles Police Department (LAPD) officer who was accidentally shot by his three-year-old son. The plaintiff brought a claim against the manufacturer of the gun (a Glock 21). The plaintiff claimed that the Glock’s light trigger pull system and gun’s safety system were defective. The gun manufacturer and retailer moved for summary judgment. They complained that the Glock’s design specifications had been approved by the LAPD for use in the field by its officers. The LAPD’s evaluation of the Glock’s light trigger and lack of a manual safety or grip system on the gun were some of the reasons the LAPD approved the use of the Glock. (Ibid.) In fact, Glock had
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offered the LAPD a gun with a heavier trigger. The LAPD rejected such designs in favor of a design with a lighter trigger. (Ibid.) Various LAPD divisions spent years testing and evaluating the Glock before approving the gun for use in the field. Before the plaintiff could use the Glock as his service weapon, the LAPD had to approve the gun for use by police officers in the field. The Chavez Court ruled that plaintiffs’ design-defect claims could proceed. The Court rejected the contention that a product-liability claim could not be asserted against a gun that was requested and approved for use by the LAPD: Without a doubt, Glock and Revolver Club proffered substantial expert evidence establishing the merits of the Glock 21 and supporting the Department’s decision to select the weapon for general agency use. Nevertheless, Chavez provided his own expert evidence that there are safer designs that would accomplish the Department’s goals without adversely impacting safety or accuracy. For example, Lord opined the inclusion of a grip safety on a gun with the 5.5pound connector trigger pull of the
Glock 21 and lack of manual safety would minimize the risk of accidental discharge without undermining performance because ‘[n]o additional thought or hesitation is required in a high stress situation’ to knowingly and intentional fire the gun. (Chavez, supra, 207 Cal.App.4th at p. 1309.) Federal contractor immunity also clashes with the non-delegable-duty principles of California product-liability law. In California, the manufacturer of a product cannot escape a product-liability claim by arguing it was merely carrying out the express orders of a third party. Manufacturers have an “an independent duty” to assure the product is adequately designed and has adequate warnings. (Crane v. Sears Roebuck & Co. (1963) 218 Cal.App.2d 855, 859.) The duty to manufacture a safe product is non-delegable. (Hasson v. Ford Motor Co. (1982) 32 Cal.3d 388, 405-06.) “A manufacturer cannot delegate responsibility for the safety of its product to dealers, much less purchasers.” (Springmeyer v. Ford Motor Co. (1998) 60 Cal.App.4th 1541, 1562-63, citing Ford Motor Co. v. Robert J. Poeschl, Inc. (1971) 21 Cal.App.3d 694, 698); see
also Southern Pacific Company v. Unarco Industries, Inc. (1974) 42 Cal.App.3d 142, 151 [“the obligation of a manufacturer to the ultimate user is such that it cannot delegate to its purchaser responsibility for the final inspection, corrections and adjustments necessary to make the product ready for use, and that the manufacturer cannot escape liability on the ground that the defect in the product was caused by something the purchaser did or failed to do. . . .”].) Stripped to its essential core, the federal contractor immunity is for a defendant who says, “Don’t blame me, the Federal Government made me do it.” (Prewett v. Goulds Pumps (IPG) (W.D. Wash. Sept. 9, 2009) U.S. Dist. LEXIS 91732, 12.) Such a defense does not exist under California product-liability law. The manufacturer is not permitted to shift the duty of manufacturing a safe product to a consumer, even if the customer is a government entity.
Defeating the immunity
Even if the fire-truck manufacturer could overturn California law and apply federal-contractor liability to the case, it still has to overcome the high hurdles
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Immunity — continued
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set out in Boyle. In order to satisfy the elements of federal contractor immunity, the manufacturer would still have to demonstrate that: 1) the city approved reasonably precise specifications for the fire truck, 2) the fire truck performed to those specifications, and 3) the defendant warned the city about dangers in the use of the fire truck that were known to the defendant but not the city. (Boyle, supra, at 512-13.) One of the areas of hottest contention is the “reasonably precise specifications” prong of Boyle. A manufacturer seeking to invoke Boyle will often produce a thick design file for the product that details extensive specifications requested by the government and extensive backand-forth between the government and the manufacturer. The manufacturer will argue that this extensive back-and-forth over the design of the product as a whole means that it has satisfied the first element of Boyle. Do not let the size of the design file or the amount of back-and-forth between the government and the manufacturer fool you. The size of the design file and the size of the back-and-forth do not mean anything if they do not concern the product defect at issue in your case. It does not matter that the government actually accepted the product as a whole that was built by the manufacturer. Mere participation by the government in the design process or approval of the design specifications is not enough to invoke the first element of Boyle. Satisfying the first element of Boyle – government approval – “requires more than a rubber stamp” of the contractor’s work by the government. (Snell v. Bell Helicopter Textron (9th Cir. Cal. 1997) 107 F.3d 744, 748 (hereafter Snell), citing Trevino v. General Dynamics Corp. (5th Cir. 1989) 865 F.2d 1474, 1480 (hereafter Trevino).) “The mere signature of a government employee on the ‘approval line’ of a contractor’s working drawings, without more, does not establish the government contractor defense.” (Ibid.) Snell involved the crash of a Marine helicopter. Plaintiffs alleged that design
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defects in the helicopter’s transmission mounts and the drive shaft coupling caused the helicopter to crash. The defendants invoked Boyle and submitted evidence that the Navy was significantly involved in approving precise specifications for the helicopter. The Defendant showed lengthy meetings between the Navy and contractors, detailed specifications, detailed back-and-forth on the specifications, and even a line-by-line review of the specifications and signatures on all Bell drawings by a representative of the government. In refusing to apply Boyle, the Snell court noted that, while the defendant had established that the Navy was significantly involved in and approved specifications for the design of the entire helicopter, the defendant “failed to address,” as Boyle requires, whether “the design feature in question [i.e., the drive shaft and its components] was considered by a Government officer, and not merely by [Bell] itself.” (Snell, supra, 107 F.3d at p. 747.) The Snell court noted: [T]he Detail Specification for the helicopter left the design and placement of the drive shaft and its components to Bell. It provided: The transmission shall
be mounted on a suitable vibration isolator. A lift link shall be attached to the structure to carry rotor thrust loads. . . . A transmission input drive installation shall be provided. This installation shall consist of a shaft assembly to carry rotor thrust loads. . . . .The Detail Specification would not support application of the defense as a matter of law. ‘When only minimal or very general requirements are set for the contractor by the United States the [military contractor defense] is inapplicable.’ (Id. at p. 748.) Federal contractor immunity failed in Snell because, even though the Navy had approved detailed plans for the helicopter and had been involved in significant “back-and-forth” about the design of the helicopter, the defendant failed to establish that the Navy had engaged in detailed analysis of the defective design at issue in the litigation. (Snell, supra, 107 F.3d at p. 748.) In Trevino, ante, two Navy divers were killed by defects in the design of a submarine diving chamber. The contractor argued federal contractor immunity. In addressing the first prong of Boyle, the court held:
The government exercises its discretion over the design when it actually chooses a design feature. The government delegates the design discretion when it buys a product designed by a private manufacturer; when it contracts for the design of a product or a feature of a product, leaving the critical design decisions to the private contractor; or when it contracts out the design of a concept generated by the government, requiring only that the final design satisfy minimal or general standards established by the government. If the government delegates the design discretion to the contractor, the exercise of that discretion does not revert to the government by the mere retention of a right of ‘final approval’ of a design nor by the mere ‘approval’ of the design without any substantive review or evaluation of the relevant design features or with a review to determine only that the design complies with the general requirements initially established by the government. The mere signature of a government employee on the ‘approval line’ of a contractor’s working drawings, without more, does not establish the government contractor
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Immunity — continued defense. . . .If the government contractor exercised the actual discretion over the defective feature of the design, then the contractor will not escape liability via the government contractor defense — the government’s rubber stamp on the design drawings notwithstanding. (Id. at p. 1480, italics added.) *** The requirement that the specifications be precise means that the discretion over significant details and all critical design choices will be exercised by the government. If the government approved imprecise or general guidelines, then discretion over important design choices would be left to the government contractor. (Id. at p. 1481.) *** If the government has so delegated its discretion to the contractor, mere government acceptance of the contractor’s work does not resuscitate the defense unless there is approval based on substantive review and evaluation of the contractor’s design choices. (Id. at p. 1486.) Trevino also noted that the Navy’s use of individuals not qualified to review or approve the contractor’s design work may be considered evidence that the Navy did not intend to exercise design discretion and is merely rubber-stamping the design specifications. Trevino rejected the defendant’s attempt to invoke federal contractor immunity. The court found that the contracts left the design to the discretion of the defendant and that the Navy only set general performance standards, leaving the details to the defendant. The court noted that the specifications promulgated by the Navy were silent on the key design defect questions in the case. “The evidence shows that such determinations were left to the discretion and expertise of the defendant’s designers assigned to prepare the working drawings. Thus, even though the Navy participated in the design and approval of the design, the court concluded that Boyle did not apply.
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In addition, the manufacturer will fail the Boyle test if it cannot establish a conflict between what was requested by the government and state product-liability law. Recall the example in Boyle of the federal contract to purchase and install the air conditioner. The federal contract specifies the cooling capacity of the air conditioner but not the precise manner of construction for the air conditioner. A product-liability claim under state law that the manufacturer left off a key safety feature from the air conditioner would not conflict with the federal contract because the contract was silent as to how the air conditioner would actually be constructed. Because there is no conflict with the federal contract and the state product-liability claim there would be no federal contractor immunity. The contractor could comply with both its contractual obligations and the state-prescribed duty of care. Finally, it is easy to overlook the third element of Boyle. In order to invoke federal-contractor immunity the manufacturer must establish that it warned the government about dangers in the use of the product that were known to the manufacturer but not the government.
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Manufacturers are always looking for ways to immunize their conduct. Federal contractor immunity is a narrowly defined creature of federal law that has no business being extended into cases involving state and local contractors. However, if you find yourself staring down the defense, remember it is an affirmative defense. Just because a government approved a design for a product does not automatically mean that the defendant is immune from the productâ€™s design defects. Alan Van Gelder is an associate at the law firm of Greene Broillet & Wheeler LLP in Santa Monica, California. He is a graduate of Southwestern University School of Law (2002) and California State University Northridge (1999). Since 2002 he has been representing plaintiffs in severe personal injury cases, wrongful death cases, productsliability cases, business litigation cases, and legal malpractice cases.
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Jim P. Mahacek
The high cost of arbitration – no longer a bar to justice? Arbitration agreements that split the costs of arbitration between the parties can have a chilling effect on due process [Editor’s Note: The author served as appellate counsel for the consumers in the matter discussed below.] Doctors, brokerage houses, banks, auto dealers and lawyers routinely demand that clients sign arbitration agreements without regard to the client’s ability to afford the cost of arbitration. But now, a California appellate court has reopened the door to fundamental due process.
Here is the premise. A financial giant that provides essential services to consumers has a standard contract requiring a disgruntled consumer to arbitrate any disputes rather than going to court. But behind the scenes, the financial giant knows that the consumer cannot afford the high cost of arbitration and thus the corporation can avoid ever answering for its misconduct. The courts will enforce the arbitration agreement. The arbitration service demands to be paid a substantial up-front fee and refuses to proceed without a substantial “estimated” payment of the costs of arbitration. The financial giant refuses to pay more than one-half of the up-front fee. Without full payment, the arbitration service refuses to proceed. The average consumer never has a forum to present his case – no matter how meritorious.
In Roldan v. Callahan and Blaine, (2013) __Cal.App.4th __, Division 3 of the Fourth District Court of Appeal has now provided one solution for this recurring problem: If the consumer does not have the financial means to pay for arbitration, then the financially superior party must exercise a choice: (1) pay for the arbitration itself or (2) waive arbitration and proceed to trial. 92 — The Advocate Magazine
A look at the history of arbitration If we turn back the clock to the day of the Magna Carta, we remember that the English King’s law was absolute and unforgiving. But it did not always achieve fairness, so the English developed a new system of equity: the Court of Chancery. From the concept of equity came the companion notion that parties should be able to resolve their disputes outside the formal legal system, i.e., arbitration, if they so agreed. How did the courts have the power to enforce arbitration agreements? They hit on a fundamental mode of relief: the equitable concept of “specific performance.” That’s right – the King’s courts would order parties to specifically perform their arbitration agreements – for it was the equitable thing to do. The United States quickly approved the concept. The Congress adopted arbitration under the Federal Arbitration Act and the Supreme Court has interpreted that act broadly. Every state in the Union followed suit – although exact enforcement procedures vary. And in California we find a statutory basis of arbitration in Code of Civil Procedure section 1280 et seq. The Legislature requires Courts to enforce arbitration agreements unless grounds exist to hold them unenforceable as other contracts. But the Legislature did not directly address what happens if one of the parties cannot afford arbitration. So today’s question arose. From the judicial perspective, the Supreme Court found that California has a strong public policy in favor of arbitration. (Moncharsh v. Heily & Blase (1992) 2 Cal. 4.) The problem is that a factual premise that may well have existed in 1992 is no longer necessarily true today. Moncharsh discussed the concept that arbitration is generally faster and more cost-efficient than a judicial proceeding. We quarrel not with the concept that
arbitration is generally faster – but we can question whether it is more cost-efficient. In the days preceding Moncharsh, arbitration was most often conducted by the American Arbitration Association or some similar non-profit organization. And following its charter, it strove to keep costs low and often used nonlawyers to conduct the arbitration in a “fairness” setting. After all – arbitrators are free to ignore the law and rules of evidence in their search for an equitable result. Hearings were short – most lasting less than one day.
The death of “inexpensive” arbitration
But what has happened in the last 25 years? The concept of quick, relatively informal, equitable hearings has given way to today’s modern “alternative dispute resolution” provider programs. We now find arbitrators who are legally trained – a very high percentage being former judges or highly experienced lawyers. The old concept of a relatively modest arbitration fee to walk in the door is now supplemented by the providers not only charging that initial fee – but the arbitrators charging anywhere from $600 to over $1,200 dollars per hour! The proceedings themselves have taken on a new character. Retired judges and attorneys have now understandably brought their training and experience to the halls of arbitration. The process now tends to resemble a bench trial rather than an informal equitable hearing. Legally trained arbitrators feel comfortable basing the process “in the law.” The concept that arbitration does not require the arbitrators to follow the law nor apply rules of evidence is honored more in its breach than its application. Legal principals such as “motions for summary judgment”– a decidedly non-equitable
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concept – have established a strong beachhead in the arbitrator’s arsenal. As we examine “cost efficiency” it does not stretch the imagination to note how a financially superior party can use this expensive process to ply its might in the arbitration office just like it did in the judicial court room. Even though the arbitrator can ignore the law if he/she finds no contested issue of fact, few do. From the financially superior party’s point of view, it is worth the try. Let us then look at the hearing. No longer is it a fairness hearing – but has all the trappings of a bench trial. Something akin to the same formalities apply, and the hearings often drag on for days, if not more – all with the arbitrator’s time clock ticking at $600 to $1,200 per hour. Pre briefs; trial briefs; and extensive post-hearing briefs – all with attendant costs occur with uncommon frequency. Cost containment? Scarcely a thought. After all, the parties agreed to arbitration. Yet in court, the costs are now dramatically less. The people pay the judicial officer’s salary; motion fees are rarely cost prohibitive; and an indigent consumer can always seek and receive in forma pauperis status, incurring no judicial costs at all.
Today’s facts: Good facts do make good law
So we set the stage for the Roldan case. Attorney Richard Quintilone represented several indigent persons living in a “Section 8” housing complex replete with toxic-mold problems. As a solo practitioner, he was overwhelmed by the demands of the case, so he convinced his elderly clients to also hire the law firm of Callahan and Blaine (Callahan.) Callahan’s role was to fund the upcoming expensive costs associated with expert witnesses and the like, as well as supply its expertise in complex litigation cases, including toxic mold. Callahan’s own retainer agreement contained an arbitration clause on page eight; a clause that the Appellate Court said was “…to say the least, awkwardly incorporated into the nine page retainer agreement.”
The matter proceeded, and Callahan’s clients would later allege that Callahan attempted to pressure them into an unfair settlement so it could avoid paying the expensive costs of going to court. The Court noted that Callahan unsuccessfully attempted to withdraw from the case and then unsuccessfully sought to have the Court appoint a guardian ad litem for all of the clients. Callahan’s three clients finally accepted settlements totaling $292,300. After the settlement, the clients sued Callahan on a variety of legal theories including elder abuse and breach of fiduciary duty. Callahan filed a petition to compel arbitration – which the trial court granted. The arbitration provider would not proceed without a substantial up-front
payment. While Callahan agreed to pay one-half of the up-front costs, the clients could not afford to pay a proportionate share. The court case could not proceed because this matter was now in arbitration. Both parties moved to break the stalemate. Callahan sought an order dismissing the case due to the clients’ failure to pay their share of arbitration fees. The trial court denied this request. The clients asked the Court to require Callahan to pay the arbitrator’s fees because they could not afford it. The trial court also denied this motion, thus leaving in place the status quo of stalemate. The clients appealed. Justice Rylaarsdam recognized the core problem. If the clients could not afford arbitration, then they would have
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No Longer — continued
no forum in which to present their complaints. This concept flew in the face of the principle that financial indigence should never bar a party from having a forum. (Gov. Code, § 68630, subd. (a.) Martin v. Superior Court (1917) 176 Cal. 289; Gutierrez v. Autowest, Inc. (2003) 114 Cal.App.4th 77.) Equity must frown. While not critical to the final answer, the Court noted that Callahan knew that the clients were indigent when they signed the arbitration agreement, failed to explain its consequences to them, could never have reasonably expected the clients to proceed in arbitration, and took affirmative action (the Court’s words) to take advantage of the situation it created by moving to dismiss their claims in toto. Today’s solution does not require the Court to find the arbitration “unconscionable.” All the court must do is examine the anticipated costs of the arbitration and the financial ability of the client to pay such costs. If the court finds that the client cannot afford to pay his/her share, then the court simply shifts the payment obligation to the financially superior party.
State and federal precedent
While some case law exists that would authorize the court to hold the arbitration “unconscionable” under these facts and
thus not enforce it, such a remedy is somewhat draconian in light of California’s public policy supporting arbitration and the equitable principles of specific performance. So Roldan took a middle ground that was consistent with the principle of arbitration but would provide them a forum. Let the party seeking arbitration pay for it or waive arbitration. This was a remedy our court embraced. Roldan did not totally write on unprecedented grounds. In Spencer v. Omnibus Industries (1975) 44 Cal.App.3d 971, the court discussed an arbitration agreement between consumers and a contractor. The clause was buried on a back page and the court stated it would be surprised if 1 in 1,000 read it or understood it. So it totally voided the arbitration clause although the up-front fee was only $75. Here Callahan’s retainer was some nine single-spaced pages; the arbitration provision was on page eight, and this was the only page that Callahan did not have its clients separately initial or sign. Next we can examine Parada v. Superior Court (2009) 176 Cal.App.4th 1554. Again the consumers claimed an inability to pay – a plea the court found compelling. Thus the court reversed an order compelling arbitration based on
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unconscionability grounds because the consumers could not afford arbitration. We also find the same result in Cinel v. Christopher (2002) 203 Cal.App.4th 759. The whole issue of payment became convoluted so the trial court vacated an arbitration order and proceeded to jury trial. The Court of Appeal affirmed. Nor can a valid plea be made that the Court is illegally rewriting the parties’ arbitration agreement. California jurisprudence has a rich base of precedence that courts can and regularly do modify arbitration agreements to validate arbitration itself while negating the unfair elements of a particular agreement. Under California law, if the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made, the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result. (Civ.Code, §1670.5(a); Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114; Murphy v. Check ‘N Go of Calif., Inc. (2007) 156 Cal.App.4th 138, 141, see also Ontiveros v. DHL Express (USA), Inc. (2008) 164 Cal.App.4th 494.)
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Would this remedy be negated by federal courts? Probably not. The U.S. Supreme Court recognized the issue in Greentree Financial Corporation-Alabama v. Rudolph (2000) 531 U.S. 79, and impliedly suggested that some remedy must be found. It could not reach the heart of the issue because the consumers had failed to provide a factual basis for their indigence claim nor as to the high cost of arbitration in today’s world. More directly the 9th Circuit Court of Appeal did recognize the issue in Lifescan, Inc. v. Premier Diabetic Services, Inc. (9th Cir 2003) 363 F.3rd 1010. Partway through an arbitration, one side ran out of funds. The financially superior party insisted that arbitration proceed with the non-paying party prohibited from attending. The arbitrators refused and stated that if the financially superior party wished to proceed, it must pay the costs of concluding the proceedings. The Ninth Circuit, relying in part on California statutory law, found that there was nothing wrong with the arbitrators shifting the cost of arbitration to the financially superior party.
The equitable conclusion
So we reach today’s result. If a financially superior party wants arbitration, it can have it – it need only pay for it. If it chooses not to pay – it need only proceed as any other litigant in a real courtroom. The power to compel arbitration remains in the hands of the party seeking arbitration. Now the financially superior party needs simply make a choice: (1) pay for arbitration or (2) go to trial. This new arrow provides a remedy that even conservative trial judges reluctant to declare arbitration clauses unconscionable for financial reasons can fairly embrace. The door to justice remains open. Jim P. Mahacek is a Certified Appellate Specialist and former Orange County Trial Lawyers “Business Trial Lawyer of the Year.” He is a frequent lecturer at bar association meetings and discusses both appellate and trial procedures. He may be reached at JMahacek@gmail.com.
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Jury awards and defendant’s conduct DUI versus DWT — does the nature of defendant’s conduct impact jury awards? Do juries subconsciously punish defendants with larger damage awards based on the nature of their negligence? In a previous issue (Advocate Magazine, August 2013, “Quantifying the subconscious bias against corporate defendants”), we presented the results of research that showed how much juries take the “nature of a defendant” into consideration when determining damage awards (big business vs. local business vs. private individual). This month we’ve put a new twist on this same research to investigate how much (if at all) the “wrongfulness” of defendant’s negligence impacts damage awards. To do this we ran three separate online mock trials involving an admitted liability rear-end collision (minimum of 40 jurors participated in each mock trial). Jurors were instructed that their only assignment was to determine the amount of money required to compensate the plaintiff for his injury. Since each trial was admitted liability, 95 percent of the evidence focused on the plaintiff ’s injury (the facts regarding damages being identical in all three mock trials). Each trial began with a very brief explanation of how the accident occurred. The basic accident was the same in each; the plaintiff stopped to avoid a dog that had run into the street, but was struck from behind by the defendant who was unable to stop in time. In fact, the only difference in each trial was a brief statement explaining why the defendant failed to stop in time. In one trial, the defendant was simply negligent (no culpable wrong-doing, he just wasn’t able to stop). In two of the trials, however, some form of “bad behavior” aided the defendant’s negligence: • In the second trial the defendant had been drinking heavily at a bar. The manager offered to call a cab, but the defendant refused, drove off and rear-ended the plaintiff on the way home. 96 — The Advocate Magazine
• In the third trial the defendant was sober, but had glanced down to look at a text message he’d just received from a coworker as the plaintiff hit the brakes in front of him. Since the judge admonished each jury that their only job was to determine the amount of money needed to compensate the plaintiff, the reason for the defendant’s inability to stop in time theoretically shouldn’t impact the damage awards.
Drunk or texting
We wanted to eliminate variables associated with soft tissue injuries of the neck or back because this type of injury introduces biases about the credibility of the plaintiff and his doctors. Therefore, our plaintiff suffered a broken arm that healed leaving some residual effects (loss of range of motion, pain when lifting, etc.). We discussed this test with a number of trial attorneys prior to fielding. The general consensus was the jury presented with the drunk driver would award a somewhat larger verdict than the jury presented with simple negligence. Opinions about the DWT (driving while texting) case were mixed with some pre-
dicting no difference versus the simple negligence, and others predicting that the texting verdict would come in somewhere between the two. The results, which are shown on the chart below, show two important findings. First, juries convincingly consider the defendant’s wrongdoing, even when they are instructed that their only task is to determine compensatory damages. Despite the fact that the acts leading up to the collision were barely mentioned to each group, the juries hearing both the drunk driving and texting cases awarded essentially twice as much money as the case where the defendant was unable to stop because of simple negligence. Even more enlightening (and surprising) is the fact that the jury hearing the texting case awarded as much money as the jury hearing the case where the defendant was not only drunk, but had been offered a cab ride home by the bartender. This provides evidence of just how much the public currently looks down on driving while texting. This is highlighted by the fact that in this case the defendant had only looked down to read a text, and was not actively engaged in texting himself.
Jury Award by Reason Defendant Failed to Stop in Time
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Implications of the findings So, what are the practical implications of these findings? For one it shows the importance of investigating the possibility of any “bad behavior” on the part of defendants, even in cases where liability is not an issue. If the simple act of looking down to read a text can double the verdict, one must question whether the verdict would have been even higher if the defendant had actually been sending a text. This also poses the question of whether the verdict would be higher if the defendant had been on the phone, and if there would be further differences if the defendant had been using a legal hands-free device versus holding the phone up to their ear (subject for future research). Another implication is the importance of a defendant’s bad behavior in soft tissue cases where the credibility of the plaintiff ’s injuries is called into question. Remember that these test cases involved a broken arm where the nature of the injury was not in dispute. The subconscious biases identified above suggest that juries will be more likely to side with plaintiffs on subjective soft tissue injuries, as long as the plaintiff can show some form of culpability to the defendant’s negligence. Of course, the most fundamental conclusion from this study is simply that juries consider a wide range of stimuli when evaluating how best to compensate a plaintiff, much of which is outside the traditional forms of evidence which we expect (or at least hope) will be the focus of their evaluation. Chris Denove is an attorney who formerly practiced at Cheong, Denove, Rowell, Bennett & Karns. He also spent a dozen years at J.D. Power and Associates where as partner and vice president, he designed opinion feedback systems for some of the world’s largest companies. He currently serves as president of Camarillo-based Trial Survey Group, an organization that provides mock trials and opinion research for attorneys and may be reached at firstname.lastname@example.org, or www.trialsurveys.com.
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From the Editor Jeffrey Isaac Ehrlich Editor-in-Chief
Appellate About Reports and cases in brief Issue to members of the plaintiffs’ bar Cases ofthis interest Editor-in-Chief Reid v. Mercury Ins. Co.
Jeffrey Isaac Ehrlich
(2013) __ Cal.App.4th __ (2d District, Div. 8) Who needs to know about this case: Lawyers handling personal-injury cases and lawyers handling cases against insurers for failing to settle within policy limits. Jeffrey Holds Isaac Ehrlich Why it’s important: that an insurer is not obligated to initiate settlement negotiations on behalf of its insured or offer its policy limits, in order to avoid a claim for bad-faith failure to settle. Synopsis: Mercury’s insured, Huang, had an auto policy with limits of By Jeffrey Isaac Ehrlich $100,000 per person and $300,000 per Editor-in-Chief accident. On June 24, 2007, she was involved in a multi-car accident after she ran a red light, colliding with a car driven by plaintiff Reid. Mercury’s adjuster recommended internally that Mercury accept 100 percent of liability for the accident. Within a month after the acci-
About this Issue
dent, Mercury contacted Reid’s insurer and advised it that it was accepting liability, but there might be a “limits issue.” Reid’s son retained West as counsel for his mother. West wrote to Mercury on July 28, 2007, confirming his representation and stating that Reid had been “horribly injured” in the “devastating automobile accident” and that she remained in intensive care more than a month after the accident. He asked for information about Huang’s vehicle and her policy limits. On August 15, 2007, Mercury requested a detailed statement from Reid, signatures on medical-verification forms, and an inspection of her vehicle. West was informed of Reid’s policy limits by Mercury, but he did not send Mercury a letter demanding Reid’s policy limits. He testified that there would have been no point in making a demand because Mercury had been adjusting the case for a month, and was saying it lacked enough information, despite knowing
that its insured ran a red light and that Reid had been hospitalized for over a month. Reid’s son testified that, because his mother had $250,000 in underinsured motorist coverage, which could not be accessed until Reid resolved her claim with Huang, he would have (on her behalf) accepted Huang’s $100,000 policy limits, if it had been offered. Reid sued Huang on October 10, 2007. On October 29, 2007, Mercury wrote to West, stating that to resolve the claim it still needed a recorded interview with Reid and various medical records. On November 8, 2007, a Mercury claims manager approved giving the adjuster on the file authority to offer $100,000. On December 6, 2007, Mercury again wrote to West and asked for a recorded statement and medical records. West sent the records on January 29, 2008. On May 2, 2008, Mercury wrote to West and stated that it had agreed to tender its $100,000 policy limit to Reid to settle the case. Reid rejected the offer.
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More than two years later, Huang was held liable to Reid for $5.9 million. Reid obtained an assignment of Huang’s claim for failure to settle, and then sued Mercury on that claim, alleging that Mercury had failed to make a reasonable settlement offer within a reasonable time. The trial court dismissed the case on summary judgment, finding that there had been no breach of contract because Reid never made a policy-limits demand. Affirmed. “For bad faith liability to attach to an insurer’s failure to pursue settlement discussions, in a case where the insured is exposed to a judgment beyond policy limits, there must be, at a minimum, some evidence either that the injured party has communicated to the insurer an interest in settlement, or some other circumstance demonstrating the insurer knew that settlement within policy limits could feasibly be negotiated. In the absence of such evidence, or evidence the insurer by its conduct has actively foreclosed the possibility of settlement, there is no ‘opportunity to settle’ that an insurer may be taxed with ignoring.” An “opportunity to settle” does not arise simply because there is a significant risk of an excess judgment. Since Reid never
services that Kurwa and Kislinger had previously provided. The HMO then terminated its agreement with the KislingerKurwa corporation and entered into a new agreement with Kislinger’s own corporation. Kurwa sued Kislinger for breach of fiduciary duty and defamation. Kislinger cross-complained for defamation. In pretrial motions, the trial court found that once they had formed a corporation, neither Kislinger nor Kurwa owed the other a fiduciary duty. Kislinger agreed to dismissal with prejudice of his breach-of-fiduciary duty claims. The parties agreed to dismiss their respective defamation claims without prejudice, and further agreed to waive the statute of limitations with respect to those claims. This would allow the parties to obtain an appellate ruling on the breach-of-fiduciary duty issue and to “preserve” the defamation claims until the appeal was resolved. Kurwa appealed the judgment in favor of Kislinger. The Court of Appeal held that the judgment was final and appealable, reasoning that because the defamation counts had been dismissed, they were no longer pending between the parties and the trial court had no jurisdiction to proceed further on any cause
made a settlement demand, and there was no evidence from which any reasonable juror could infer that Mercury knew or should have known that Reid would have accepted a policy-limits settlement, Mercury could not be held liable for failure to settle.
Kurwa v. Kislinger
(2013) __ Cal.4th__ (Cal. Supreme) Who needs to know about this case: Trial lawyers who negotiate settlements; appellate lawyers. Why it’s important: Holds that under the “one final judgment” rule, an appeal will not lie from a judgment that disposes of some of the causes of action by dismissal with prejudice, and the parties have agreed to dismiss the remaining claims without prejudice – but to waive operation of the statute of limitations as to those remaining causes of action. Synopsis: Kurwa and Kislinger were both ophthalmologists. They jointly formed a corporation to provide medical services to patients of an HMO. Years later, Kurwa’s medical license was suspended. Kislinger notified the HMO of the suspension, stated that Kurwa’s participation in their venture was terminated, and that Kislinger would provide the
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Appellate — continued
of action. In reaching this conclusion, the court declined to follow a line of appellate authority beginning with Don Jose’s Restaurant, Inc. v. Truck Ins. Exchange
(1997) 53 Cal.App.4th 115, which held that the parties’ agreement holding some causes of action in abeyance for possible future litigation after an appeal from the
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trial court’s judgment on others renders the judgment interlocutory and precludes an appeal under the one-finaljudgment rule. The Supreme Court granted review to resolve the split of authority, and reversed, finding that the Don Jose rule was correct. The one-final-judgment rule, codified in section 904.1 of the Code of Civil Procedure, allows an appeal from a judgment, “except . . . an interlocutory judgment.” In Morehart v. County of Santa Barbara (1994) 7 Cal.4th 725, 740-741, the Supreme Court held that a judgment that disposes of fewer than all of the causes of action framed by the pleadings is necessarily “interlocutory” and not yet final as to any parties between whom another cause of action remains pending. The Court held that Don Jose’s stated the correct rule, and [t]o permit this kind of manipulation of appellate jurisdiction – in effect, allowing the parties and trial court to designate a substantively interlocutory judgment as final and appealable – would be inconsistent with the one final judgment rule. Accordingly, the Court held that, “When, as here, the trial court has resolved some causes of action and the others are voluntarily dismissed, but the parties have agreed to preserve the voluntarily dismissed counts for potential litigation upon conclusion of the appeal from the judgment rendered, the judgment is one that ‘fails to complete the disposition of all the causes of action between the parties and is therefore not appealable.”
Short(er) takes Respondeat superior, negligence, going-and-coming rule, incidentalbenefit exception to the rule: Halliburton Energy Services, Inc. v. Dept. of Transp. (2013) __ Cal.App.4th __ (Fifth District). Martinez was employed by Halliburton as a driller. He was assigned a company pickup truck to drive. He was permitted to use the truck to commute to and from work, and to run personal errands while en route. Martinez was working on assignment in Seal Beach, got off work, and drove 140 miles to 100 — The Advocate Magazine
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WCAB ATTORNEY for your
THIRD-PARTY CASES Bakersfield, 40 miles from his home in Caliente. He met his wife at a car dealership to purchase a car for her. The deal fell through; he had lunch with his wife and drove back toward Seal Beach. On the way, his truck fishtailed on some gravel on the freeway, became airborne, and caused a serious traffic accident that injured six people. The injured parties’ separate lawsuits against Halliburton, Martinez, and the State of California were consolidated. Halliburton moved for summary judgment, arguing that it could not be held liable under respondeat superior or other theories because Martinez was not acting within the scope of his employment when he was involved in the accident. The trial court granted the motion. Affirmed. The undisputed evidence indicated Martinez was not performing his ordinary duties for Halliburton at its place of business or at his assigned worksite at the time of the accident. The accident occurred when he was between shifts, approximately 120 miles away from his assigned worksite. Under the “going and coming” rule, an employee going to and from work is ordinarily considered outside the scope of employment so that the employer is not liable for his torts. But there is an exception to the rule when the commute involves an incidental benefit to the employer, not common to commute trips by ordinary members of the work force. When the employer incidentally benefits from the employee’s commute, that commute may become part of the employee’s workday for the purposes of respondeat superior liability. Plaintiffs argued that the incidentalbenefit exception applied. The court disagreed, finding that Halliburton presented undisputed facts establishing that Martinez was engaged in purely personal business at the time of the accident, and was not acting within the scope of his employment for purposes of respondeat superior liability. Martinez’s purpose in traveling to and from Bakersfield on September 13, 2009, was entirely personal. He finished his shift and drove the company truck 140 miles to Bakersfield; he intended to meet
his wife at a car dealership and sign the papers to purchase a vehicle for her. Martinez was not performing any services or running any errands for Halliburton. His supervisor was unaware of the trip until after the accident. The trip was not made in the furtherance of any business activity of the employer. The risk of a traffic accident during this personal trip was not a risk inherent in, or typical of or broadly incidental to, Halliburton’s enterprise. Jeffrey Isaac Ehrlich is the principal of the Ehrlich Law Firm, with offices in Encino and Claremont, California. He is a cum laude graduate of the Harvard Law School, a certified appellate specialist by the California Board of Legal Specialization, and a member of the CAALA Board of Governors. He is the editor-in-chief of Advocate magazine.
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From the Executive Director Stuart Zanville
Consumer Attorneys Association of Los Angeles
The MICRA debate From the
Executive It’s coming andDirector you will be part of it, so let’s start talking Stuart Zanville
Over the nextCAALA several months about MICRA, whether it’s with friends there’s going to be a debate over and family, clients or complete whether or not to change the 38-year strangers. And, believe me, in the next old MICRA law. Pundits and advocates few months, there will be a lot more of on both sides will duke it out in the those conversations. media and on theFrom Internet, the but the real Speaking to the public debate will take place in the court of Executive Director public opinion. There will be two I also think you should take the debaters – you and everyone debate to the public by speaking to Stuart Zanville else. If your response groups like service clubs, grassroots CAALAis, “Wait a minute, I’m not the spokesperson for organizations or chambers of comthe campaign to change MICRA,” I merce in your own community. beg to differ. Every reader of this colI’ve long been a fan of CAALA umn, every member of Consumer members making short speeches to Attorneys of Los Angeles and every small groups. I think it is one of the trial lawyer in California is going to be most effective ways for consumer attorpart of this public debate. neys to communicate who they are, You’ll be hearing more about the what they do and what they believe in. Stuart Zanville MICRA campaignConsumer from CAOC, It also introduces you to people in your Attorneys our Association of Los Angeles state trial lawyer association and from community who someday might need consumer groups such as Consumer legal help for themselves or a family Watchdog, but I want you to start member. thinking about your role in the Each of you probably knows about debate. a Kiwanis, Rotary or Chamber of I specifically want you to think Commerce in your own area. Many of about what you should be saying, how you are probably already members. to say it and to whom. Every one of those groups looks for By Stuart Zanville Volumes haveConsumer been written speakers Attorneysabout Association of Los Angeles to fill their weekly meeting the injustices caused by the MICRA law program. I can’t imagine a single one and its $250,000 cap on medical malnot being interested in hearing somepractice damages, but here are four one talk about the MICRA law that will simple talking points for you to interbe a major topic of discussion over the nalize and remember: next several months. MICRA is grossly outdated. Once you identify a local service group or organization and get a speech Individuals (even doctors and hospitals) scheduled, here are a few tips about should be held accountable when they do things to remember about speaking to something wrong, harmful or illegal. small groups: MICRA takes away the rights of people • Be Prepared injured or killed by preventable medical Know your topic and be prepared errors. with answers to the tough questions MICRA discriminates against women, you know you will get. children and seniors. • Know Your Key Messages You should be using these talking Determine your key points to get points every time you have a conversation across and stay focused on them.
From the Executive Director
102 — The Advocate Magazine
Reiterate your key messages at every opportunity. Be disciplined. • Less Is More Even though you have a lot to say, say it with fewer words. I know that’s tough for trial lawyers, but it works in a service club speech. • Make It About Them, Not You Talk about things your audience can relate to that are about them or their families. Don’t whine about your problems as a trial lawyer. • Keep The Speech Short And The Q & A Long The speech should be just long enough to get their attention. Leave plenty of time for questions from the audience. • Don’t Debate One Audience Member When you get a tough question from the audience, answer it sufficiently and move on. Do not let one audience member hijack the presentation by turning a question into an extended debate. The CAALA Web site has some excellent material on it regarding public speaking, including a Speakers Handbook that you can download. If you have specific questions, feel free to contact me in the CAALA office at (213) 487-1212 or by e-mail at firstname.lastname@example.org. The campaign to correct the injustices of MICRA is 38 years in the making, but the real debate is just beginning. Whether or not medical malpractice is part of your practice is irrelevant. Every trial lawyer is affected by the MICRA law and what it represents. Assuming that the debate will not involve you is naïve and short-sighted. If you are a trial lawyer, you will be a participant.
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From the President Scott Cooper
Orange County Trial Lawyers Association
Come celebrate the Top Guns John Adams, Theresa Barta, Steve Young, William Shapiro and Greg Bentley to be honored As I mentioned in October’s message, the Orange County Trial Lawyers Association is holding its annual Top Gun Dinner and Charity Auction on Saturday, November 23, 2013, at the Montage in Laguna Beach. Last month’s article focused on the charity we’re supporting with the auction proceeds, Operation Veterans Re-Entry, which provides free legal assistance to low-income military veterans to ease their transition back to civilian life. Now, I’d like to give you a sneak preview of our “Top Gun” honorees for the evening – the five local trial lawyers who obtained some of the most significant, noteworthy verdicts over the past year. The first three Top Gun cases discussed below fit squarely into a theme that dovetails with one of CAOC’s top political priorities this year – MICRA reform and patient safety. As most of you know, consumer and patient safety advocates (including the CAOC) are currently fighting to reform MICRA by increasing the cap on non-economic damages in medical malpractice cases. The goal is simply to bring the cap in line with inflation (the $250,000 cap has never increased since it was enacted 38 years ago – in 1975). Raising the cap will allow the most vulnerable victims of medical malpractice to have their day in court and will increase accountability for medical negligence, thereby promoting patient safety. Rial v. Regents of the Univ. of California is a “poster-child” for MICRA reform. In Rial, John Adams (principal at the law firm of Hunt & Adams) selflessly took on and tried a case he knew was worth, at most, $250,000 under MICRA. He represented the parents of Shawn Rial, who died while being treated at UCI Medical Center. At the trial, Adams proved that defendants failed to properly monitor Shawn’s white blood cell count following successful chemotherapy for testicular cancer (which has a 90 percent survival
rate). As a result, Shawn contracted a common staph infection, which proved to be unnecessarily fatal because he had no white blood cells to fight it. An Orange County jury awarded Adams’ clients $2 million for the loss of their son (who was an adult with no dependents), a verdict that was ultimately slashed due to MICRA. Despite the arbitrary and unfair reduction of the award, the Rials were gratified by the fact that the jury recognized the significant value of their son’s life. In Nordella v. Anthem Blue Cross, after a hard-fought 10-year battle, Theresa Barta (principal of the Law Offices of Theresa J. Barta) obtained a verdict for a doctor who was wrongly denied admittance to Anthem’s physician network. Ms. Barta proved that Anthem rejected her client because (1) he had advocated strongly for patients’ rights to treatments and (2) because admitting fewer doctors restricts the insured’s access to care, thereby saving Anthem money. The jury awarded Dr. Nordella $3.8 million in compensatory damages and also found that Anthem had acted with the requisite oppression, fraud or malice to justify an award of punitive damages. The case settled just before the parties were to argue the amount of punitive damages to the jury. In Urga v. Redlands Community Hospital, Steve Young (principal of the Law Offices of Steven R. Young) was brought in to the case shortly before trial, where he represented a class of nurses who were being underpaid and overworked by a hospital focused more on its bottom line than patient safety. After a lengthy trial and post-trial briefing and argument, the Court ultimately awarded the class over $17.5 million due to the hospital’s failure to properly pay the nurses for the overtime they worked. Our other two Top Gun recipients also achieved tremendous verdicts on
behalf of their deserving clients. William Shapiro (partner at Robinson Calcagnie Robinson Shapiro Davis) is being honored for his victory in Cruz v. Environmental Recovery Services. In Cruz, Shapiro’s client was driving on the 10 freeway when he rear-ended a stopped truck that allegedly had its lights and flashers on. Shapiro overcame difficult liability and comparative negligence issues and obtained a verdict of $11.9 million for his client, who had suffered a spinal cord injury. In Evans v. Caltrans, Greg Bentley (partner at Shernoff Bidart Echeverria Bentley) obtained a jury verdict against Caltrans on behalf of a local prosecutor who suffered catastrophic brain and spinal cord injuries as a result of an accident on SR 138. At trial, Bentley established that a “skewed” intersection caused drivers to “cut the corner” and “beat the gap” when making left turns, exposing a substantial risk of injury to oncoming motorists, including his client. The jury returned a $31.5 million verdict, finding that, in addition to the negligent left-turning driver, Caltrans’ intersection constituted a dangerous condition that caused the accident. You can hear the complete stories behind these verdicts and help celebrate the attorneys responsible for them by attending the Top Gun Dinner and Charity Auction on November 23. You’ll also be able to support Operation Veterans Re-Entry and enjoy the food and drinks at the Montage with hundreds of lawyers, judges, and others from outside the legal community. If you are so inclined, you can sponsor the event and/or donate or solicit items for the live and silent charitable auctions. Information on registration, sponsorships, and auction item donations can be found at www.octla.org or by contacting Janet Thornton at 949-916-9577 or email@example.com. I hope to see you there. NOVEMBER 2013
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Sacramento Update By Nancy Peverini CAOC Legislative Director
CAOC’s lobbying efforts prevented anti-consumer bills CAOC once again sported a perfect record in the Legislative session that just concluded: no major tort bill proposed by our opponents was passed this year. The bills listed below, all aimed at limiting your practice and the rights of the consumers you represent, were defeated, thanks to the efforts of CAOC: • CLASS ACTIONS AND BUSINESS AND PROFESSIONS CODE SECTION 17200 (UNFAIR COMPETITION ACT) SB 737 (Huff) Would limit class-action law. AB 167 (Hagman) Would drastically limit cases brought pursuant to the Unfair Competition Act. AB 211 (Wilk) Declared legislative intent to enact legislation to protect businesses from “frivolous” lawsuits. AB 519 (Logue) Would require the court, in a UCA case, to consider all factors in mitigation of both the imposition and amount of any civil penalty.
SB 607 (Berryhill) Also would change the current overtime law for employees. AB 228 (Logue) Would authorize the Department of Industrial Relations to waive penalties against an employer. CAOC also defeated a proposal contained in the state budget that would have severely restricted access to public records. One of this year’s CAOC sponsored bills, SB 315 (Lieu), has successfully prodded state rule makers to initiate considerable changes to the Telephone Appearance Rule (California Rules of Court, rule 3.670). CAOC also continued efforts to lay the groundwork for legislation to increase the minimum financial responsibility laws. California’s current minimum limits of 15-30-5 are among the lowest in the nation and haven’t been increased since 1974. Regarding MICRA: we are still working to bring about a modernization of the cap on noneconomic damages, with the goal of legislative activity after lawmakers return to Sacramento Jan. 6.
Washington Update By Linda Lipsen CEO, American Association for Justice
Removing the reimbursement roadblock • LIMITS ON ATTORNEY FEES AB 1125 (Wagner) Would restrict prevailing plaintiff fee provisions. • GOVERNMENT STANDARDS DEFENSE SB 713 (Correa-Gray) Sponsored by the California Chamber of Commerce; would provide a defense in any action where the defendant has followed a government or department opinion letter. • PUBLIC ENTITY IMMUNITY AND LIABILITY AB 223 (Olsen) Would restrict the rights of disabled persons to sue public entities. AB 738 (Harkey) Would immunize public entities for any injuries or deaths caused to a bicyclist if the public entity provides a bike lane. AB 748 (Eggman) Would change the rate of interest charged on judgments against public entities. AB 1007 (Wagner) Would change the rate of interest charged on judgments against the state from 7 percent to 0.07 percent. AB 1106 (Waldron) Would immunize public entities from liability to an inmate, ward or prisoner at a jail or correctional facility. • EMPLOYMENT SB 554 (Anderson) Would change the current overtime law for employees in California.
104 — The Advocate Magazine
Trial lawyers across the country supported our work for more than four years to advocate for and achieve passage of the SMART Act – a law signed by President Obama – which provides a roadmap for making Medicare Secondary Payer (MSP) reimbursement faster and easier. However, the Centers for Medicare & Medicaid Services (CMS) have now created a roadblock. AAJ is working now on a plan to remove this road block and ensure that the intent of the SMART Act is followed. The SMART Act mandates that CMS issue rules detailing how the act will be implemented. AAJ’s reading of the recently-issued CMS rules reveals that the agency is ignoring the intent of the SMART Act. CMS has left many details unresolved, and has postponed phasing in one section of the SMART Act regarding attorney access to important data (such as provider codes) via the reimbursement Web site. In addition, the expedited claims process mandated in the SMART Act has distinct differences from the claims process developed by CMS. AAJ is writing comments now in opposition to CMS’s rules. These rules are scheduled to take effect in 60 days. We are hopeful that our vigilance on this issue will demonstrate to the agency that it cannot intentionally reinterpret the intent of Congress. If AAJ’s comments are ignored by CMS, we are prepared to take additional action.
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CAALA Resource Center
Resource Libraries: Available 24/7 @ caala.org ■
Sample Documents Library ■ Demand Letters Library
Closing Arguments Library Trial Lawyer of the Year Letters
These online members-only resource libraries were created to provide valuable resources for CAALA members, especially for our New Lawyer members. The documents include law and motion, demand letters and a unique archive of closing arguments from some of the great lawyers of the plaintiffs’ trial bar. The Sample Documents Library gives access to pivotal sample documents you would need to help you litigate the following cases: Employment, Class Action, Medical Malpractice, Premises Liability, Products Liability, and Auto Cases. The Demand Letters Library includes demand letters that have been generously provided by fellow members, respected and prominent trial attorneys.
Trial Lawyer of the Year Advocate Speeches
Closing argument transcripts can be found in the Closing Arguments Library given by Michael Alder, Ricardo Echeverria, Arash Homampour, Brian Panish, Christine Spagnoli, and John Taylor, among others. Read a sampling of Trial Lawyer of the Year Letters from several candidates nominated for the award. The letters are submitted by each candidate to the board describing their most significant verdict of that year and why they are proud of that verdict. You can also hear the Trial Lawyer of the Year Advocate Speeches made on October 18, 2012 by the advocates for the candidates for CAALA’s 2012 Trial Lawyer of the Year Award. These letters and speeches are a valuable resource for members and provide insight about the passion and professional skills of the CAALA members considered for our association’s highest honor.
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Tri-Valley Spine and Pain Centers 1500 S. Central Avenue Glendale, CA 91204 (323) 774-2029 Contact: Hasmik Tolmoyan Email: firstname.lastname@example.org CONTACT: Pain Management/Physical Therapy Vocational Economic Services, LLC 1617 Country Club Drive Glendale, CA 91208 (602) 549-0979 Contact: Dr. David Orlowski Email: DWOrlowski@aol.com CATEGORY: Employability Evaluations | Vocational Rehabilitation | Economic Experts Newly relocated to Los Angeles. Vocational Economic Services, LLC has offered vocational economic testimony in more than 80 trials and 220 depositions. Performs vocational assessments including loss of earning capacity evaluations, household services, future medical lifecare plan costs, all at present value.
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ADR Providers ADR Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52 Carrington, R.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .93 Corcoran, Tim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .72 Daniels, Jack . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .101 Fields ADR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .74 First Mediation Corp - Jeffrey Krivis . . . . . . . . . . . . . .90 Gage, Sandy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 Graver, Darry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .l18 Hanger, Bob . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38 Jossen, Sanford Law Office . . . . . . . . . . . . . . . . . . .100 Judicate West . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16 Mehta, Steven G. Mediation . . . . . . . . . . . . . . . . . . .36 Sepassi & Tarighati, LLP . . . . . . . . . . . . . . . . . . . . . . .19 Announcements and Career Opportunities CAALA Affiliate Membership . . . . . . . . . . . . . . . . . . .81 CAALA Membership . . . . . . . . . . . . . . . . . . . . . . . . . .79 Camerata Pacifica . . . . . . . . . . . . . . . . . . . . . . . . . . .45 Jury Verdict Alert . . . . . . . . . . . . . . . . . . . . . . . . . . . . .83 Attorneys – Appeals Bader, Donna . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .80 Ehrlich Law Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
Expert Witnesses – Medical (cont) Luckett, Karen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38 Physician Life Care Planning . . . . . . . . . . . . . . . . . . . .27 Roughan & Associates at LINC, Inc. . . . . . . . . . . . . .59 Expert Witnesses - Technical & Damages Balian & Associates . . . . . . . . . . . . . . . . . . . . . . . . . .99 Colllins, Kim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .80 Phillips, Fractor & Company . . . . . . . . . . . . . . . . . . . .95 The TASA Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48 Financial Services California Attorney Lending . . . . . . . . . . . . . . . . . . . .85 CPT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .91 Farber, Patrick (Struct. Stlmts) . . . . . .Inside Front Cover Fast Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .89 Fund Capital America . . . . . . . . . . . . . . . . . . . . . . . . .65 RD Legal Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . .62 Ringler & Associates – Manny Valdez . . . . . . . . .12-13 Ringler & Associates – Michael Zea . . . . . . . . . . . . .34 Summit Structured Settlements . . . . . . . . . . . . . . . . . .84 The James Street Group (Structured Settlements) . . .44
Graphics/Presentations/Video Court Graphix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60 CSC Anatomy Arts . . . . . . . . . . . . . . . . . . . . . . . . . . .20 Attorneys - Accepting Referrals Bailey Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .75 Executive Presentations . . . . . . . . . . . . . . . . . . . . . . . . .7 Banifsheh, Danesh & Javid, PC . . . . . . . . . . . . . . .22-23 High Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 Bisnar | Chase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 Juris Productions . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51 Cheong Denove Rowell Bennett & Karns . . . . . . . . . .77 Verdict Videos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18 Cook, David . . . . . . . . . . . . . . . . . . . . . . . . . . . . .86, 87 Dordick Law Offices . . . . . . . . . . . . . . . . . . . . . . .54-55 Insurance Programs Edzant, Barry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .76 Lawyers Mutual Insurance Company . . . . . . . . . . . . .61 Engstrom, Lipscomb & Lack . . . . . . . . . . . . . . . . . . . .73 Lawyer’s Pacific Insurance . . . . . . . . . . . . . . . . . . . . .15 Galipo, Dale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63 Narver Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . .67 Gelber, Bruce . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .101 Girardi | Keese . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37 Investigators Greene Broillet & Wheeler . . . . . . . . . . . . . . . . . . . . . .1 Hudson Investigations . . . . . . . . . . . . . . . . . . . . . . . . .42 Hodes Milman Liebeck Mosier . . . . . . . . . . . . . . . . .28 Shoreline Investigations . . . . . . . . . . . . . . . . . . . . . . .90 Kesluk & Silverstein . . . . . . . . . . . . . . . . . . . . . . . . . . .91 Tristar Investigation . . . . . . . . . . . . . . . . . . . . . . . . . . .95 Law Offices of Lisa Maki . . . . . . . . . . . . . . . . . . . . . .33 Law Office of Philip Michels . . . . . . .Inside Back Cover Legal Marketing Makarem & Associates . . . . . . . . . . . . . . . . . . . . . . . .25 Berbay Corporation . . . . . . . . . . . . . . . . . . . . . . . . . .46 Manly & Stewart . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31 McGonigle, Timothy . . . . . . . . . . . . . . . . . . . . . . . . . .21 Legal Nurse Consultants McNicholas & McNicholas . . . . . . . . . . . . . . . . . . . . .9 Cross, Kathy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60 Metzger Law Group . . . . . . . . . . . . . . . . . . . . . . . . . .53 Nutris Consulting . . . . . . . . . . . . . . . . . . . . . . . . . . . .88 Panish Shea & Boyle . . . . . . . . . . . . . . . . . .Back Cover Randolph & Associates . . . . . . . . . . . . . . . . . . . . . . . .70 Legal Research Richard Harris Law Firm . . . . . . . . . . . . . . . . . . . . . . . .4 Quo Jure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .94 Rizio & Nelson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10 Trial Survey Group . . . . . . . . . . . . . . . . . . . . . . . . . . .34 Shernoff Bidart Echeverria Bentley LLP . . . . . . . . . . .69 Shook & Stone . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57 Legal Support Services Taylor & Ring, LLP . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 4 Corners Deposition Summaries . . . . . . . . . . . . . . . .72 The Traut Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 ABC Virtual Offices . . . . . . . . . . . . . . . . . . . . . . . . . .43 Vartazarian Law Firm . . . . . . . . . . . . . . . . . . . . . . . . .66 USA Express Legal & Investigative Services . . . . . . .98 Court Reporters Jonnell Agnew . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .97 Kusar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35 Parrish Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29 Personal Court Reporters . . . . . . . . . . . . . . . . . . . . . .78 Defense Medical Exam Observation Advantage Representatives . . . . . . . . . . . . . . . . . . .100 Haiby, Michael . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .97 PRIME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .84 Expert Witnesses – Medical Graboff, Dr. Steven . . . . . . . . . . . . . . . . . . . . . .50, 107
106 — The Advocate Magazine
Medical & Dental Service Providers Buena Vista Pharmacy . . . . . . . . . . . . . . . . . . . . . . . .49 Doctors on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 Injury Institute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39 Landmark Imaging . . . . . . . . . . . . . . . . . . . . . . . . . . .58 North Valley Eye Medical Group . . . . . . . . . . . . . . .74 Parehjan & Vartzar Chiropractic, Inc. . . . . . . . . . . . .68 Organizations CAOC – PAC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .88 Polygraph Investigations Trimarco & Associates . . . . . . . . . . . . . . . . . . . . . . . . .71
Consumer Attorneys Association of Los Angeles 800 West Sixth Street,#700 Los Angeles, CA 90017 (213) 487-1212 www.caala.org
ASSOCIATION OF LOS ANGELES
CAALA Consumer Attorneys
November 12, 2013 New Lawyers Roundtable with Gary Dordick 6:00-7:30pm CAALA Office 800 W. 6th Street, Suite 700 Downtown Los Angeles January 18, 2014 CAALA GALA – Annual Installation & Awards Dinner 5:30pm Hosted Cocktail Reception 7:00pm Dinner & Program Beverly Wilshire Hotel 9500 Wilshire Blvd. Beverly Hills Board & Committee Meetings Executive Committee – CAALA Offices Downtown Los Angeles, 6:00pm Nov. 7, Dec. 5 Board of Governors – CAALA Offices Downtown Los Angeles, 6:00pm Dec. 12, Jan. 23 Education Committee – CAALA Offices Downtown Los Angeles, 5:00pm Dec. 12, Jan. 23 New Lawyers Committee - CAALA Offices Downtown Los Angeles, 6:00pm Jan. 21
Orange County Trial Lawyers Assn. 25602 Alicia Parkway, #403 Laguna Hills, CA 92653 (949) 916-9577 www.octla.org November 23, 2013 Top Gun Trial Lawyer of the Year Awards Program & Silent Auction 5:30-9:00pm Montage 30801 South Coast Highway Laguna Beach
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CAALA Connection Center Connect with New CAALA Members: We welcome the following new members who joined CAALA during the month of September
University of La Verne
UCLA School of Law
Law Office of Shea Murphy
Maune Raichle Hartley French & Mudd
CAALA Connection Center
Asher Law Firm
My L.A. Esq., APLC
Attorney at Law
Asher Law Firm
Attorney at Law
Law Offices of Svitlana Sangary
Law Offices of Christopher Workman
Asher Law Firm
Liddy Law Firm
Attorney at Law
The McGuire Law Firm
Waters Kraus & Paul
University of West Los Angeles
Alexis Domb Loyola Law School
Sefyan Law Firm, PC
Yedidsion Seber LLP
Law Offices of James P. Segall-Gutierrez
Law Offices of Kelly A. Knight
Frank Tetley Tetley Law Offices
Orthopedic Expert Witness Dr. Steven R. Graboﬀ, M.D.
Dr. Graboﬀ is a board-certified orthopedic surgeon and forensic-medicine specialist oﬀering: Assn.
• Orthopedic medical-legal consultation • Medical exam of client • Review of medical records and radiologic studies • Expert testimony at mediation, arbitration and trial • Flexible schedule for medical exams, meetings, depositions and telephone conferences
Unparalleled experience: Supporting the Medical Legal Community for Over 20 Years
(714) 843-0019 DrGraboﬀ@gmail.com • www.DrGraboﬀ.com • Huntington Beach, CA NOVEMBER 2013
The Advocate Magazine — 107
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From the President Lisa Maki
Consumer Attorneys Association of Los Angeles
Whom do you believe?
We’ve become a pass-it-on society without regard to the truth of what we are passing on As I write this article, our federal government is shut down because a small group of around 20 legislators have decided that it is more important that they get their way. Many Americans think that the Affordable Care Act and Obamacare are different things. There is a great deal of finger pointing. No one will budge. It appears that the public will believe almost anything that they see on television or hear on the radio, even if it is false and especially if it is repeated over and over again. All of the falsities get to me. Can we believe the mainstream press? Should we? My father is a pretty conservative Republican, from way back when people didn’t talk about who they voted for, and you would never ever ask anyone who they voted for because it was private. This seems to have changed. Sometimes he sends me e-mail chains from some of his friends who served in the war with him. Some of it is racist, some of it is just stupid, and some of these folks just forward a bunch of crap without researching and take it as truth. I think he does this to make me mad. Every once in a while I’ll write to the group with data showing that whomever they were relying on was incorrect. I know my Dad doesn’t believe all of it and he knows that “[i]n the end, as any successful teacher will tell you, you can only teach the things that you are. If we practice racism then it is racism we teach.” Max Lerner said that. I believe it is true. I recently reviewed the California Lawyer Magazine’s “Employment Roundtable.” Basically it’s a group of defense attorneys that sit around the table and talk about the law and then the discussion is put in the magazine. Some of my colleagues and I do not always agree with the legal analysis in the articles. We were disturbed in particular about a recent discussion by the roundtable concerning a class-action case called Comcast Corporation v. Behrend (2013) 133 S.Ct. 1426. In Comcast five members of the United States Supreme Court said the group of cable TV subscribers who accused Comcast of overcharging them as an effort to monopolize the market could not sue as a group. In some ways, the Comcast decision was pretty much the other shoe dropping after Dukes v. Walmart, meaning our citizens have again been gagged in their effort to seek judicial remedies for the destructive and/or discriminatory actions of giant corporations. And, please don’t get me started on pre-dispute arbitration clauses or arbitration in class actions. Might as 108 — The Advocate Magazine
well shut down our state courts along with the federal government, right? Heck, I guess we’ll all be in arbitration or private courts within a few years anyway? So, if you’ve got money, you are OK but if you can’t pay to play…well, quit asking for a handout says the Supreme Court. Back to the employment roundtable: They said that it “is a requirement under Rule 23 of the Federal Rules of Civil Procedure that you be able to have a class-wide solution to the damage calculation. …. Damages are an Achilles heel to many class actions.” Guess what. Comcast did not say that. In Comcast, the parties conceded that damages had to be established by common proof, so the majority opinion decided the case based on the assumption that that was the law. The ordinary and longestablished rule is that class certification can be granted under Rule 23 even if the case presents individualized damages questions. The 9th Circuit, in Leyva v. Medline (9th Cir. 2013) ___ F.3d___, 2013 WL 2306567 confirmed this reading of Comcast in an employment wage-and-hour class action by reversing a federal district court’s denial of class certification, holding that the trial court abused its discretion in concluding that individualized damages calculations precluded certification. So, I just wanted to put that out there if you happened to see the roundtable’s argument in any of your pleadings. I hope that all of you will continue to speak the truth and correct the wrongs and fight for our constitutional right to a jury trial, even when unpopular. Thank you to the CAALA family. You make us all proud.
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PHILIP MICHELS 2011, CAALA President 2003, Trial Lawyer of the Year
JIN LEW 2014, President-elect Korean American Bar Association
ELIZABETH A. HERNANDEZ CAALA Board of Governors
STEVEN B. STEVENS 2001, CAALA Appellate Lawyer of the Year
BRADFORD S. DAVIS, M.D. In-house Medical Director
California’s premier medical malpractice team
OVER TEN FIGURES IN VERDICTS & SETTLEMENTS 8-Figure Verdict
Spinal Cord Injury
7-Figure Arbitration Award
“The Law Offices of Philip Michels & Associates is one of the premier California Med Mal law firms. No stone is left unturned.”
— Michael Bidart, Shernoff Bidart Echeverria Bentley LLP “When it comes to Med Mal, there is no one better. This winning attorney has impeccable trial skills.”
— Brian J. Panish, Panish Shea & Boyle LLP 11755 Wilshire Blvd., #1300 Los Angeles, CA 90025-1540
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