Is Rule 30(b)(6) A Plaintiff’s Best Friend?

Rule 30(b)(6) of the Federal Rules of Civil Procedure provides an efficient means of identifying the corporate representative with the most relevant knowledge concerning particular subjects at issue in a case. When a requesting party cannot identify the appropriate corporate witness to testify about particular activities or documents, Rule 30(b)(6) can be an invaluable tool.

The corporate deposition may be fraught with risk, however, especially in a case involving skillful plaintiff counsel. This is particularly the case where testimony of the corporate representative may have importance in future or parallel litigation. Thus, If Rule 30(b)(6) is plaintiff’s counsel’s best friend, it is imperative that the corporate witness be properly prepared in the first instance. In a program titled, “Preparing the Corporate Witness,” which was presented to the attendees at the IADC’s 2013 Annual Meeting, Kay Barnes Baxter of Swetman Baxter Massenburg, LLC, Elizabeth Haecker Ryan of Coats Rose, and Terrence M.R. Zic of Whiteford Taylor Preston LLC provided an excellent overview of potential Rule 30(b)(6) pitfalls and how good preparation may help avoid them.

Upon receipt of the Rule 30(b)(6) notice, the first decision to make is whether to object to the notice. Is the notice overly broad and burdensome? Is the notice so vague that it is unclear precisely what information will be elicited at the deposition? Prior to discussing with the client what witness or witnesses to produce, it is imperative that both counsel and the client have a clear idea concerning the scope of the notice. The failure to timely object to the notice may come back to haunt the unwary defense counsel.

The second decision to make is critical – who should be designated as the corporate representative? The rule does not require the person designated to be the individual “most knowledgeable” about the subject matter. However, there is nothing to prohibit the corporation from designating that person. Moreover, the rule does not require that the witness be an employee of the corporation. The rule indicates that a corporation may designate “other persons who consent to testify on its behalf.”  On occasion, a former employee or a consultant may have the best information concerning the information at issue.

Perhaps the biggest challenge in preparing the corporate witness for deposition is that he or she must testify to “information known or reasonably available to the organization.” Thus, the corporate witness often is required to testify beyond his or her personal knowledge. The plaintiff generally wants to have it both ways. During the deposition, the plaintiff will seek to elicit hearsay testimony from the corporate witness. However, should the same corporate witness appear at trial, plaintiff’s counsel will most likely object to the admission of testimony unfavorable to the plaintiff on the ground that the witness does not have personal knowledge of the information.

 Therefore, it is often a good strategy to consider conducting your own direct examination of the witness at the end of plaintiff’s examination so that you can make counter-designations of that testimony in the event that plaintiff’s counsel designates any portion of the witness’ testimony for trial. It is difficult for plaintiff to object to testimony on hearsay grounds if plaintiff has designated testimony from the same deposition for use at trial.

Every defense counsel has suffered through a deposition in which the client has seemingly forgotten everything that was painstakingly discussed during a prep session.  Hopefully, if counsel has prepared the client well, her corporate witness will hopefully not give answers like:

"I don’t know what ABC Company thinks of what is written in this company document, although I know what I think it means."  or

"This is me speaking, not the Company."

Of course, all answers are on behalf of the corporation and have the potential to be used against it , regardless of how the witness attempts to qualify an answer. 

It is sometimes difficult to anticipate exactly what strategy plaintiff’s counsel will adopt in taking the deposition of a corporate witness. One good tip offered at the IADC program– If you know which plaintiff attorney will be taking the deposition, get a transcript from one of this attorney’s prior corporate depositions and go over with your witness the types of questions that will be asked and the phraseology that the attorney favors. Practice those questions and answers with the corporate witness. Your client should be prepared in the event she is asked what a witness might have been thinking when she wrote a particular document or if she is asked to provide a legal conclusion.  


Hydrofracking And The Debate Over Municipal Infrastructure

On February 11, 2013, the IADC conducted a lively, interactive panel discussing the risks and benefits of shale oil and gas extraction at the IADC Mid-Winter Meeting. The panel represented the spectrum of political, regulatory and scientific views on the issue and debated perceived potential risks to human health and the environment.

In addition to me,  the panel consisted of Blaine D. Edwards, Assistant General Counsel at Superior Energy Services, Inc.; Raymond G. Mullady, Jr., a partner at Blank Rome LLP in Washington, D.C.; and Niall A. Paul and Nathan D. Atkinson, partners at Spilman Thomas & Battle PLLC. Eric Lasker at  Hollingsworth LLP in Washington, D.C. assisted in the preparation and coordination of the event.

Ray Mullady presented his paper, “Defending Marcellus Shale Groundwater Contamination Claims: The Case Against Class Actions and Other Theories of Liability,” which he co-authored with other lawyers at his firm. I presented my paper titled, “Shale Oil and Gas Development: The Stakeholder Perspective.”

My paper concerning stakeholder perspectives was presented against the backdrop of the debate in New York concerning whether to permit fracking to occur. In researching this issue, I learned that some stakeholders representing county and municipal interests expressed deep concern regarding perceived secondary societal impacts of fracking, including diminution of property value; increased demands placed on community infrastructure, particularly roads; increased crime rates and rental prices associated with an influx of out-of-state workers; and the fragmentation of rural landscapes with pipelines, roads and staging areas. Surprisingly, for these stakeholders, these concerns outweighed environmental or health concerns.

These stakeholders express deeply held fears – whether rational or not – that gas exploration will be detrimental to their established way of life in rural upstate New York.
The natural gas industry possesses both the science and the practical know-how to be confident that fracking can be performed without causing the contamination of groundwater and surface water. However, social concerns raise questions beyond purely environmental issues. In a largely rural region that is unaccustomed to the perceived sprawling industrial impact of natural gas drilling, unlike other parts of the country, there is apprehension that adverse societal effects may outweigh the predicted economic benefits.

There are a number of tools an industry can utilize to address concerns over infrastructure impacts of hydrofracking. Better public relations to win over the hearts and minds of upstate New Yorkers is paramount.  Perhaps because public relations efforts have not been necessary in other areas of the country long accustomed to natural gas exploration, there may not have been a perceived need for PR in upstate New York.  

Explaining how horizontal drilling works is an important first step in reassuring folks that gas exploration will not bring about an end to their semi-agrarian way of life.  For example, there is a superb animation that explains how horizontal drilling works on the website of the Oklahoma Oil & Natural Gas Producers & Royalty Owners.  In the immediate vicinity of drilling operations, companies can provide, among other things, Value Assurance Programs (“VAPs”) to homeowners to protect them against diminution of property value as a result of their living in an area where industrial activity is taking place. As discussed in other articles on this blog, a VAP is a contractual commitment to the community that assures homeowners that the proposed activity will not result in loss of investment in their homes.  

Any day now, the blue ribbon panel appointed by NYS Health Commissioner, Dr. Nirav Shah, to assist in the NYSDOH’s consideration of the health risks of fracking, will issue its report.  The panel experts – Lynn Goldman, dean of George Washington University’s School of Public Health and Health Services; John Adgate, chair of the Environmental and Occupational Health Department at the Colorado School of Public Health; and Richard Jackson, chair of the Department of Environmental Health Sciences at UCLA’s Fielding School of Public Health – are among the foremost experts in the country in their respective fields and in the field of health impact assessment. Environmental advocacy groups, including NRDC, were extremely pleased with these appointments. It is likely that the issuance of the panel’s report will re-energize the hydrofracking debate.

The Product Liability Dilemma: Product vs. Service.

Courts have long struggled with hybrid fact scenarios that  involve both a product and a service. When a corporate defendant is sued for personal injury, is it more advantageous for the defendant to be characterized as a service provider rather than a product manufacturer? The knee jerk reaction of some defense lawyers is that they would prefer their client to be cast as service providers. After all, who wants their client to be subjected to a strict liability product claim if it could be avoided, right? Not so fast. The answer to this question may be more complicated that it appears at first blush.

In an article titled, “The Shirt Off My Back: Using the Relationship Between a Product and a Service to Your Advantage,” Brigid M. Carpenter and Caldwell G. Collins, lawyers at Baker Donelson Bearman Caldwell & Berkowitz, P.C., weigh the product versus service dilemma in a thoughtful article that appeared in the IADC Product Liability Committee Newsletter (November 2012).

Carpenter and Collins point out that there are many reasons why a plaintiff or defendant might want to fall within or avoid the products liability statutory schemes that exist in many jurisdictions. On the one hand, strict liability is liability without fault. In those cases, plaintiff has to prove the product is defective and unreasonably dangerous, but there is no burden of proving fault on the part of the manufacturer or seller.

On the other hand, depending upon the circumstances, the authors point out that it might be easier for a plaintiff to prove a defendant breached the duty of reasonable care with regard to its behavior than to proffer credible expert testimony about the defective nature of a product. One factor to be considered is that in negligence actions, sellers and manufacturers may have the advantage of certain defenses not available in product liability cases, such as contributory negligence. However, another consideration is that product liability statutes often carry different damages caps and statutes of limitations, depending upon the jurisdiction.

 Equally important, the authors provide a valuable discussion of how courts tend to resolve the product versus service issue. Their litigation  tip: based upon their survey of the case law, courts tend to focus on the relationship between the product and service in question. Therefore, in the Hathaway v. Cintas Corporate Services case involving a plaintiff burn victim who alleged that the defendant uniform rental company was responsible for his injuries, either as a service provider or a product seller, the authors analyze how the Indiana federal district trial court, in denying summary judgment, focused on the “service” aspects of the uniform rental company’s contract, which provided for the cleaning and maintenance of uniforms provided. 

Hydrofracking And The Battle Over Water In South Texas

In an article titled, “Introduction to Hydraulic Fracturing Natural Gas Exploration,” Rebecca Jo Reser, an IADC member and partner at the San Antonio, Texas law firm of Davidson Troilo Ream & Garza, discusses the potential burden that hydraulic fracturing imposes on water resources in South Texas.  In areas of South Texas stricken by drought, the issue of water allocation balances signficant strides in economic development and employment attributable to energy exploration and the interests of growers and others who fear that fracking activity may draw down too large a share of scarce water resources.

According to Reser, hydrofracking drilling and production companies compete for scarce water supplies in areas of South Texas,particularly in the Eagle Ford Shale, where drought has resulted in widespread pasture losses, crop failures and shortages of water in reservoirs, rivers and wells.   Based upon the tone of the article, it would appear that the battle lines are being drawn in Texas along the fault lines of this issue.

 Reser writes, "In an area known for drought and scarcity of water, the fact that this much valuable water will be pumped out, used and then disposed of forever in deep injection wells is something every South Texas resident should be concerned about."

But Chesapeake Energy, an energy company involved in deep shale development in the Eagle Ford Shale, strongly disputes that industry is using too much of the area’s water supply. According to a Chesapeake Energy Fact Sheet, the volume of water necessary to drill and fracture Eagle Ford deep shale wells represents a very small percentage of the total water resources used in the Eagle Ford Shale.

Citing Texas Water Development Board statistics, Chesapeake Energy states that the primary water users in Eagle Ford Shale are irrigation (approximately 70%) and municipal/public water supply (approximately 26%). Moreover, the company observes that its operations differ notably from other uses because it is temporary, occurring only once during the drilling and completion phase of each well. Unlike agricultural uses, use of this water does not represent a long term commitment of the resource.  According to a San Antonio Express-News article, last year, the Eagle Ford contributed $25 billion in total economic output in a 20-county South Texas region and provided 47,097 full-time jobs, according to statistics provided by UTSA. Thus, the econoimic benefits of drilling in Eagle Ford Shale are both measurable and significant.

Closer to home, in and around the Marcellus Shale region, the impact of water withdrawals for hydraulic fracturing on the Upper Delaware River and in the Delaware River Basin is the subject of ongoing investigation; however, the discussion has largely focused on environmental issues rather than on competition over scarce  resources.

Texas Adopts Learned Intermediary Doctrine

The Texas Supreme Court rendered judgment in favor of Centocor, Inc., the pharmaceutical manufacturer subsidiary of Johnson & Johnson, in a landmark decision involving the learned intermediary doctrine, Centocor, Inc. v. Patricia Hamilton, Thomas Hamilton and Michael G. Bullen, M.D. (No. 10-0223). The International Association of Defense Counsel (IADC), which often weighs in on signficant jurisprudential issues before appeals courts, filed an amicus brief requesting that the Court reject the direct-to-consumer advertising exception to the learned intermediary doctrine that had been recognized by the intermediate appellate court.  Porter Hedges LLP  filed the brief on IADC’s behalf.

The decision is significant because it the first time that the Texas Supreme Court has expressly recognized the learned intermediary doctrine. Texas now joins the vast majority of states that have adopted the learned intermediary rule. In a press release issued yesterday, IADC reported that the Court declined to create a direct-to-consumer advertising exception to the learned intermediary rule, despite the fact that two other states had done so. The Court also recognized that a plaintiff cannot plead around the learned intermediary rule by asserting causes of action such as fraud in what is, at its core, a failure to warn case. Significantly, the Court also recognized that the learned intermediary rule is not an affirmative defense, but a legal doctrine that is part and parcel of the plaintiff’s burden of proof. Further, the Court determined that where a prescribing physician is aware of a drug’s risks, "any inadequacy of the product’s warning, as a matter of law, is not the producing cause of the patient’s injuries."

In the opinion, the Court indicated that "Under the learned intermediary doctrine, the manufacturer of a pharmaceutical product satisfies its duty to warn the end user of its product’s potential risks by providing an adequate warning to a ‘learned intermediary,’ who then assumes the duty to pass on the necessary warnings to the end user." The Court held that "the doctrine generally applies within the context of a physician-patient relationship and allows a prescription drug manufacturer to fulfill its duty to warn end users of its product’s potential risks by providing an adequate warning to the prescribing physician."

Notably, the Texas Supreme Court was critical of the lower court’s opinion, which had attempted to carve out an exception to the learned intermediary doctrine for direct-to-consumer advertising. Although plaintiff Hamilton alleged various common law causes of action, all of her claims pivoted on the issue of whether the Centocor had provided an adequate warning to her physician in its prescribing information.  Therefore, the Court ruled,  the learned intermediary doctrine applied to all of Hamilton’s claims. It was incumbent upon plaintiff to demonstrate that an inadequate warning to her prescribing physician was responsible for her injury.  Because plaintiff failed to present any evidence that the purportedly  inadequate warning was at the root of the physician’s  decision to prescribe the medication, her claims failed as a matter of law."

Daubert On The Defense?

We discussed in an earlier article how the Reference Manual for Scientific Evidence, published by the Federal Judicial Center, has become an indispensable tool for judges in managing cases involving complex scientific and technical evidence. The manual describes key scientific fields from which legal evidence is typically derived, and judges often refer to the manual to help them better understand and evaluate the relevance, reliability and usefulness of the evidence being proffered. It has been suggested by some practitioners that the Third Edition, published in 2011, retreats from the rigorous Daubert standards set forth in the Second Edition, and thus will assist the plaintiff’s bar.

A distinguished panel comprised of members of the International Association of Defense Counsel (“IADC”) will examine this issue at IADC’s upcoming Annual Meeting in a program titled, “Reference Manual on Scientific Evidence: Take 3.” The moderator of the panel will be Bruce R. Parker, a partner at Venable LLP in Baltimore, Maryland. The panel members will include James F. Rogers, a partner with Nelson Mullins Riley & Scarborough LLP in Columbia, South Carolina; James W. Shelson, a partner with Phelps Dunbar LLP in Jackson, Mississippi; and Jessalyn H. Zeigler, a partner with Bass Berry & Sims PLC in Nashville, Tennessee.

The panelists have jointly authored a paper titled, “Changes in the Reference Manual on Scientific Evidence (3rd Ed.)” (“RMSE Third”). The authors discuss some of the changes to RMSE Third that suggest a weakening of the Daubert standard for the admissibility of expert testimony. In particular, there is significant concern that the First Circuit’s decision in Milward v. Acuity Specialty Products Group, Inc., 693 F.3d 11 (1st Cir. 2011) will undermine Supreme Court precedent requiring that expert testimony be admitted only when it is based on sound science.

The Milward case involved a plaintiff who alleged that his Acute Promyelocytic Leukemia (“APL”), an extremely rare disease, was caused by his exposure to benzene. The key issue on appeal was whether the expert opinion of plaintiff’s toxicology expert, Dr. Martyn Smith, was admissible on the issue of general causation.

In reversing the district court, which had excluded Dr. Smith’s testimony, the First Circuit held that the district court had erred in treating the separate evidentiary components to Dr. Smith’s analysis “atomistically” in “reasoning that because no line of evidence supported a reliable inference of causation, an inference of causation based on the totality of evidence was unreliable.” The First Circuit concluded that Dr. Smith’s “weight of the evidence” approach was acceptable because Dr. Smith reasoned, “to the best explanation for all of the available evidence.”

According to the IADC panel authors, Milward is bad law because: (1) its application of the “weight of the evidence” methodology permits an expert’s opinion to be admitted solely on the basis of the ipse dixit of the expert – i.e., a statement that rests solely on the authority of the expert who made the statement. This is expressly contrary to Joiner  which cautioned that the ipse dixit of the expert does not transform the expert’s opinion into a reliable methodology; (2) reasoning to “the best explanation for all of the evidence available” is not alone sufficient because an expert’s opinion must be excluded when the underlying scientific data do not permit a conclusion beyond hypothesis or speculation; and (3) the First Circuit was wrong to criticize the district court for “atomistically” or, separately, reviewing each evidentiary component of Dr. Smith’s analysis.

Rule 702 requires that expert testimony be “based on sufficient facts or data” and a gatekeeping court must inquire into the data and reasoning underlying an expert’s testimony.  For more information concerning the legal discussion, you can look to the Defendants/Appellees’ Petition for Rehearing and, best of all,  the Petition for a Writ of Certiorari to the US Supreme Court,  which did not accept cert.  This issue may ultimately be taken up by the Supreme Court, however, because the First Circuit’s decision is at odds with the Daubert jurisprudence of all of the other circuit courts of appeal that have considered these issues

RMSE Third frames the issue of “atomization” by asking, “When there is a Daubert challenge to an expert, should the court look to all the studies on which the expert relies for their collective effect or should the court examine the reliability of each study independently?” RMSE Third incorrectly suggests that the former approach may be the more appropriate.

Although the “weight of the evidence” approach may be used by regulatory agencies to assess the risk of chemicals, that does not render this approach reliable and relevant under Daubert. It is well known that regulatory agencies will often err on the side of caution without clear scientific evidence, but that Daubert requires that testing and validation occur before evidence is admissible in court.


Challenging Plaintiff’s Proof of Reasonable Alternative Design

In the majority of jurisdictions, to establish a claim for design defect in a product liability action, the plaintiff must present some proof of a “feasible alternative design” or “reasonable alternative design.” 

In an article published in the IADC Product Liability Committee Newsletter (February 2012), "No Other Alternative: Challenging Plaintiff’s Proof of Reasonable Alternative Design",  Elbert S. Dorn, a partner at Nexen Pruet, LLC, in South Carolina, provides valuable tips to the defense practitioner concerning how to agressively press legal and factual points to test plaintiff’s proof of reasonable alternative design.   

According to Dorn, legal arguments on reasonable alternative design should be included in Daubert or other motions to exclude or limit the plaintiff’s expert testimony, motions for summary judgment, motions in limine to challenge evidence of proposed design alternatives, and in oral and written motions for judgment as a matter of law at the close of plaintiff’s case, at the completion of the defense case, and after any adverse verdict. Additionally, the defense position on reasonable alternative design should be articulated clearly in proposed requests to charge (or jury instructions).

In challenging plaintiff’s proof or evidence of a reasonable alternative design, the following factors and issues should be considered:

• whether the reasonable alternative design is being presented through expert testimony, and, if so, is the expert qualified to present reliable evidence of a design alternative?

• Is the design merely conceptual or theoretical in nature?

• Has the design been reduced to scale drawings fully illustrating its dimensions, characteristics and mechanics?

• The existence of a prototype or model demonstrating or incorporating the proposed design.

• Is the alternative design subject to a U.S. or foreign patent – has the proponent or anyone else sought patent protection?

• Has the alternative design been the subject of peer-reviewed articles or treatises or otherwise reviewed in the scientific community?

• Has the proposed design ever been incorporated or utilized by another manufacturer in a real-world setting – while not a totally decisive factor, it is powerful to establish that which plaintiff proposes as an alternative design has never before been utilized in the particular industry.

• Has the proposed design been subjected to testing to measure its effectiveness, functionality, and performance?

• What is the effect of the reasonable alternative design on the utility and functionality of the product – does the proposed design compromise or diminish the utility of the product – this is an overarching issue and should be fully explored.

• What analysis has been performed of the adverse or increased safety risks of the alternative design – does it potentially affect the relative safety of other components or the overall safety of the product?

• What cost analysis or economic impact of the alternative has been performed?

• What analysis or testing supports the durability of the proposed alternative – will it require additional maintenance and repair or affect product longevity?

• The effect of the alternative design on compliance with governmental regulations and standards.

• Would the alternative design have prevented the specific harm or injury which is the subject of the case?

• Was the technology supporting the alternative design readily available to the manufacturer at the time the subject product was designed or manufactured? 

Fundamentally, the defense against plaintiff’s argument that there existed a reasonable  alternative designr resonates with a basic human emotion – “don’t criticize the way I do things unless you can do it better” or “do not criticize my play-calling and execution, if you have never played the game.”  If this notion can be conveyed to judge and jury, all the better in establishing the defense to plaintiff’s contentions. 

Forum Non Conveniens: Be Careful What You Ask For

In defending a United States defendant in an action involving a foreign accident and foreign claimants, it is almost a knee jerk reaction to file a motion to dismiss on forum non conveniens grounds. In a thought provoking article, “Be Careful What You Ask For – the Forum Non Conveniens Dilemma,” Cozen O’Connor lawyersRichard Dunn and Raquel Fernandez bring this practice into question. Mr. Dunn and Ms. Fernandez urge a different standard for analyzing whether to file the motion. The question that should be asked is whether it is beneficial for the U.S. defendant company to be subject to the laws and procedures in the foreign jurisdiction.

Thus, it is critical to understand the foreign jurisdiction’s law before your client is stuck there in litigation. A few of the considerations to think about include:

(1) Can your client get out of the case on summary judgment? Many foreign jurisdictions do not provide for summary judgment. Therefore, all matters before a court must be tried to conclusion, which may potentially lengthen and increase the cost of proceedings;

(2) How much time will your client have to prepare its case? Some foreign jurisdictions allow a short time for defendant to mount its defense, which may be an important consideration in a complex product liability case where it is necessary to hire and prepare appropriate experts. Moreover, the documentary evidence that supports your client’s case has to be translated into the foreign jurisdiction’s official language; 

(3) Will discovery be allowed? In some foreign jurisdictions, there is nothing akin to the discovery procedures that benefit parties in the United States;

(4) Will expert testimony be allowed? Often, the foreign court will place great emphasis on the government accident investigation report rather than on the expert evidence. In some jurisdictions, your client’s liability may be determined by the government authorities charged with investigating the accident, although they may not be competent;

(5) What is the role of the judge? Is the court the sole trier of fact?;

(6) Are there multiple claimants? You should determine whether all of the claimants involved in the incident can be consolidated before the same tribunal. If each claimant is able to file suit in his or her own locale, the client may need to defend numerous actions before numerous judges in different locations; and

(7) What are the attitudes towards the United States and American businesses in the foreign jurisdiction?

Anti-American bias and corruption figured prominently in Chevron’s environmental litigation in Ecuador. In the early 1990’s, Ecuadorian claimants filed suit in the United States alleging that Texaco’s operations polluted the rain forests and rivers in Ecuador, resulting in environmental and personal injury damages. The lawsuit was dismissed in 2002 on forum non conveniens grounds and the case was refiled in Ecuador the following year. In February 2011, an Ecuadorian court entered an $18,000,000,000 judgment against Chevron (which had earlier acquired Texaco).

Scott A. Edelman, a partner at Gibson Dunn in Los Angeles, made a compelling presentation at a recent IADC meeting concerning serious irregularities and a lack of impartiality in the conduct of that case. Chevron alleges that the plaintiffs’ lawyers are guilty of fraud and misconduct and have filed a civil lawsuit under RICO in New York federal court against the trial lawyers and consultants involved. Chevron’s suit alleges that these attorneys and consultants used the Ecuador lawsuit to threaten Chevron, mislead U.S. government officials, and harass and intimidate Chevron employees, to extort a financial settlement from the Company. Chevron further alleges that plaintiffs built their case through fabricated evidence and a campaign to incite public outrage.

It is likely that the pervasive fraud that permeated the Ecuador litigation would not have occurred in a U.S. federal court. As a result of Chevron’s experience, a U.S. defendant would have to think twice about filing a forum non conveniens motion if there was any likelihood that the case would end up in Ecuador or somewhere similar.


Lone Pine Orders–Shutting The Door On Frivilous Toxic Tort Suits

A Lone Pine Order is a case management tool that requires toxic tort plaintiffs to produce credible evidence to support a key legal component of their claim prior to the commencement of pre-trial discovery.  As Niall A. Paul and Timothy D. Houston of Spilman Thomas & Battle write in a recent IADC Newsletter article titled, "Checking Meritless Mass Tort Claims at the Door–Lone Pine Case Management Orders Reinforce the Obligation of Plaintiffs’ Counsel to Have a Case Before Filing Suit," a Lone Pine Order should be designed to weed out frivolous claims "before a defendant is forced to undergo the financial rigors of protracted discovery and invest hundreds of thousands of dollars and irrecoverable time only to face the stark reality that plaintiffs are devoid of credible evidence–to establish exposure, injury or causation."   In light of the the enormous defense costs consumed in document production and pretrial and the increasing emphasis by in-house counsel on cost control in toxic tort litigation, it is surprising that Lone Pine Orders are not sought by defense counsel more frequently than they are.  A Lone Pine Order can require the plaintiffs to produce credible evidence on the issues of (1) exposure; (2) causation; and (3) damages.  However, that may impose a greater burden on plaintiffs’ counsel than some courts, particularly state courts, may be willing to require early in a litigation. However, I have had success in identifying a single issue–my client’s best issue–and seeking a Lone Pine Order on that sole issue rather than on multiple issues.  For example, in the Happyland Social Club Fire Litigation, which case arose from the deaths of some 87 people at an illegal social club in New York City on March 23, 1990 (see photo above), defendants obtained a  Lone Pine Order on the sole issue of product identification.  Plaintiffs’ theory of the case was that the defendants’ products were fire initiators, fire promoters or, alternatively, emitted toxic fumes when burned.  The contents of the social club were stored by Plaintiffs Steering Committee in a huge warehouse in lower Manhattan.  The Catch-22 for plaintiffs was that if a  product was in the warehouse more or less intact, it could not  have burned and contributed to the deaths of the plaintiffs.  On the other hand, if the product was consumed in the fire, there was no way of identifying the product or its manufacturer.  As a result, plaintiffs were not able make a proper product identification in many instances, pursuant to the Lone Pine Order and, consequently, many defendants were dismissed from this Bronx state court case. It is unlikely that a state court judge in the Bronx would have entered a more onerous order.  In every instance were they are employed, Lone Pine Orders foster judicial economy and substantially reduce the litigationn costs for all parties. In In re Vioxx, 557 F.Supp. 2d 741 (E.D.La. 2008), the federal district court in Louisiana observed that Lone Pine Orders also reduced the litigation expenses incurred by plaintiffs’ counsel in prosecuting mass tort actions. 

Don’t Blame Chinese Imported Products!

In his  recent article, "Made in China: Consumer Product Lawsuits Imported to the United States", Seattle defense lawyer and IADC member Gregory Shelton offers American importers several good suggestions for avoiding potential liability from imported products.  These include: (1) requiring the exporter to comply with all applicable U.S. product quality standards and product safety regulations; (2) obtaining legal counsel in the exporter’s home jurisdiction; (3) requiring the exporter to obtain appropriate insurance coverage from an American or international insurer that will protect the importer in the event of a recall or lawsuit; and (4) retaining good legal counsel early.  I would add to Greg’s checklist: (5) having an independent U.S. consultant available to test, if necessary, the components of imported products, particularly if an American consumer reports a complaint to the company or to the CPSC.  Early independent product evaluation can be critical for an importer in planning its next steps, such as whether to perform a recall or halt future shipments until an issue can be addressed.  There are many good consultant firms to chose from. One excellent consultant up-to-speed on the new CPSC requirements is Exponent.

However, we disagree with Mr. Shelton when he argues that Chinese imports are more likely to result in lawsuits or recalls than imports from other countries.  There is simply no empirical evidence to support this assertion.  To the contrary, China has made enormous progress, particularly over the last year, to police its domestic suppliers.  To blame China for the spate of recalls over the last couple of years is to ignore the past lack of adequate funding for the CPSC, the agency that provides regulatory oversight of consumer products.  Moreover, blaming China results in Americans turning a blind eye to problems in our domestic product supply chain.