A woman who was rendered quadriplegic as result of injuries sustained in a rollover accident filed suit against a California Highway Patrol officer who had responded to scene, asserting that his negligence contributed to her injuries. The plaintiff alleged that when officers arrived at the scene, she was on the ground outside of the vehicle and able to move her arms and legs, but an officer ordered her and her companions to leave the scene, and that when one of them carried her away, her initial injuries were aggravated, resulting in severe spinal cord damage. The plaintiff further alleged that one of the officers breached a duty of care toward her by failing to conduct a reasonable assessment of her medical condition despite her denial of an injury at the scene, by not ordering an ambulance for her because she was not competent to decline medical care, and by ordering her to leave the accident site.

The jury returned a verdict in favor of the plaintiff against the State of California and against the CHP officer. However, the court of appeal reversed, holding that the officer’s conduct amounted to nonfeasance that did not alter the risk of harm to the plaintiff, and therefore he owed no duty to her:

For these reasons, we conclude Lewis owed no duty of care in “managing” the accident scene, in assessing Camp's physical condition after the accident, or in ordering her to leave the accident site. Because there was no misfeasance by Lewis he owed no duty to her."

The heirs of a man who died when he ran out of air while scuba diving near Catalina Island filed an action for wrongful death against the business which had rented the dive equipment to the decedent and his son for the day. The defendant moved for summary judgment, asserting that exculpatory language in the rental agreement provided a full defense. In the form rental agreement signed by the decedent, there was a lengthy liability release which was preceded by bolder underlined print which stated: “Equipment rental agreement, liability release and assumption of risk of scuba & snorkel gear for boat dives or multiple day rentals”.

Although it was undisputed that the decedent and his son did not rent the equipment for a boat dive or multiple day rental, the trial court found the exculpatory language provided a complete defense. However, the court of appeal reversed, holding that a person renting equipment for a single day could have reasonably concluded that the language did not apply:

Respondent offers an argument that would rewrite the agreement to exclude its language limiting the release by characterizing it as a caption, and not part of the agreement. We disagree with this interpretation of the agreement. The relevant language is not a mere caption, but an integral part of the exculpatory paragraph, emphasized in boldface and underlined. A person reading the rental agreement who is neither a boat diver nor multiple day rentor could reasonably conclude that the exculpatory language following the limiting language did not apply to him or her.
. . .
Here, the broad release language follows the enumeration of boat divers and multiple day renters as the classes of persons to whom it applies. Under this principle, respondent's suggestion that the exculpatory language applied to all renters is not reasonable.
. . .
As we have observed, a person renting equipment for a single day, not to be used on a boat dive, would read the emphasized language and reasonably determine that it did not apply to him or her, and conclude that by signing the agreement, he or she had only agreed to the rental terms with no release of liability intended.

Finally, even if it could be said some ambiguity lurked in the wording of the clause, that fact would not support summary judgment. As the Cohen court observed, “ ‘To be effective, such a release “must be clear, unambiguous, and explicit in expressing the intent of the subscribing parties.” ‘ “ (Cohen, supra, 159 Cal.App.4th at p. 1485.) An ambiguous exculpatory clause does not satisfy this requirement."

A bank customer who was victimized by a “Nigerian-style” email scam, was sued by his bank for $458,782.60, the total of three wire transfers made to China at the customer’s request after depositing fraudulent checks from third parties. When the bank sought to attach the customer’s assets, he asserted that he had been duped into participating in an email check cashing scam by a person who claimed to be a citizen of Malaysia seeking assistance in transferring funds from third parties in the United States and Canada who owed him money. The defendant had agreed to deposit the checks in his account and then wire transfer the funds in exchange for fifteen percent of the money, and the bank had confirmed that two of the checks had cleared before wiring the sums. However, all three checks were eventually dishonored and the account was overdrawn in the amount of $458,782.60.

The trial court granted a right to attach against the defendant’s property, reasoning that the customer had been negligent and therefore had the burden of proving that the bank had been negligent. The court of appeal affirmed, holding that under the California Uniform Commercial Code the customer had the burden of proving that the bank acted negligently, and that he had failed to do so:

Under section 3406, subdivision (b), however, if the Bank failed to exercise ordinary care, and if that failure contributed to the loss, the loss must be allocated between the Bank and Peters. Significantly, even if the Bank was negligent, it is not wholly precluded from recovering against Peters. Its recovery is merely reduced, in accordance with principles of comparative negligence.
. . .
Peters argues that the trial court used the wrong bur-den of proof: it required him to prove the Bank's negligence, when it should have required the Bank to disprove its own negligence. As we have already discussed, however, under section 3406, subdivision (c), Peters did have the burden of proving the Bank's negligence.

Alternatively, Peters also argues that there was evidence that the Bank was, in fact, negligent. Basically, he claims it was negligent to allow Faux to make wire transfers to China totaling $468,000 when the balance in the account had historically been between $3,000 and $5,000.
. . .
The California Uniform Commercial Code defines “ ‘[o]rdinary care’ in the case of a person engaged in business [as] observance of reasonable commercial standards, prevailing in the area in which the person is located, with respect to the business in which the person is engaged. In the case of a bank that takes an instrument for processing for collection ..., reason-able commercial standards do not require the bank to examine the instrument if the failure to examine does not violate the bank's prescribed procedures and the bank's procedures do not vary unreasonably from general banking usage not disapproved by this division or Division 4....” (Cal.U .Comm.Code, § 3103, subd. (a)(7).)

There was absolutely no evidence that prevailing commercial standards required the Bank to question the wire transfers. The Bank even presented some evidence that it acted in accordance with prevailing commercial standards (although that evidence went largely to its acceptance of the checks for deposit, rather than to its making of the wire transfers). Even assuming the trial court could have concluded that the Bank was negligent, in the absence of any evidence that the Bank actually violated prevailing commercial standards, it was not required to do so."

Blue Shield moved for summary judgment, asserting that its underwriting process was reasonable as a matter of law. The trial court granted summary judgment but the court of appeal reversed, holding that the facts failed to establish as a matter of law that Blue Shield made reasonable efforts to ensure that the application was accurate and complete, and that a reasonable trier of fact could conclude from the evidence that the plaintiffs did not willfully misinform the carrier in their application:

We are not persuaded. If Blue Shield's theory were correct, then it would mean that anyone who did what plaintiffs claim to have done-namely, rely on an insurance broker to ask them the necessary questions and record the information correctly-would have willfully made any resulting misrepresentations. Such a result would actually punish applicants who, because of their lack of education, English language skills, and familiarity with insurance forms, reasonably conclude that the best way to avoid making any material misrepresentations or omissions on their applications is (1) to trust an expert (an insurance professional) to guide them through the process, and (2) not to second-guess the expert's work. We cannot believe the Legislature intended the term “willful misrepresentation” in section 1389.3 to apply to errors or omissions produced by such applicants, who on the contrary are actively, innocently, and reasonably endeavoring to avoid making any material misrepresentations.""

Three men who were attacked, beaten and stabbed by a group of unknown individuals while attending a party at a private residence filed suit against the homeowner on various theories including negligence, premises liability and public nuisance. The plaintiffs alleged that the defendant had advertised the party using an open invitation on the social networking website, MySpace.com, and that the use of the internet to promote his party had constituted an unlimited, unrestricted and widely broadcasted invitation to the general public to converge at his property. The plaintiffs further alleged that the defendant was negligent in actively creating an “out-of-control and dangerous public MySpace party” in that the unrestricted invitation exposed the plaintiffs and other guests to an unreasonable risk of bodily harm arising from an unregulated publically advertised event involving consumption of alcohol without restriction on the number or identity of persons attending.

The trial court sustained a demurrer to the first amended complaint without leave to amend, and the court of appeal affirmed, concluding that the defendant had no legal duty, since the facts involved neither misfeasance nor a special relationship with the plaintiffs:

Since defendant did not engage in active conduct that increased the risk of harm to plaintiffs, there is no basis for imposing a legal duty on him to prevent the harm inflicted by unknown third persons.
. . .
According to the complaint, the MySpace.com website has tools that permit users to limit invitations to “friends” only, which defendant did not use. Plaintiffs repeat that refrain in their opening brief, saying: “Defendant could have limited the scope and audience of the party invitation.”
. . .
We disagree with plaintiffs' assessment of the burden of limiting the guest list. In our view, the proposed measure is objectionable on several grounds, including vagueness, lack of efficacy, and burdensomeness in terms of social cost.
. . .
Here, as defendant aptly observes, “plaintiffs would effectively prevent [him] from networking ... both socially and professionally as well as promoting his latest endeavor.” The proposed precaution thus represents a weighty social burden.
. . .
Under all of the circumstances presented here, the foreseeability of the criminal conduct that injured plaintiffs “does not outweigh the high burden the proposed duty would place” on defendant and on other private hosts “to prevent such conduct.”"

According to California Lawyer, "the 4-3 holding breathed new life into Unfair Competition Law class actions in which consumers allege they relied on misleading statements and advertising. Under Proposition 64, passed in 2004 to curb such litigation, plaintiffs must show they lost money or property as a result of the unfair competition. Some courts had interpreted this to mean that each class member—not just the lead plaintiff—would need to show he or she suffered an injury."

"But in Tobacco II, the state Supreme Court held that so long as the representative plaintiff meets the standing requirements of an injury, the claims of the entire class may survive. The ruling allows that some individuals may be members of a class even if they do not have standing to file suit on their own. Previously, a number of courts had denied class certification without a showing that all class members relied on the false claims."

RC&R attorney Karen L. Karavatos was also a member of the team that worked on the appeal, along with Sharon Arkin of the Arkin Law Firm and and Tom Haklar of Dougherty, Hildre & Haklar.

INTRODUCTION
An essential function of product liability laws is to compensate the unfortunate victims of defective and unreasonably dangerous products. However, in addition to providing remedies to those who have been injured, the ever-evolving body of statutory and common laws governing liability for defective products benefits society as a whole, in that litigation premised on these laws often serves as a vital force for change, resulting in safer products, improved warnings, better regulation of product safety, and greater public awareness of product hazards. Over the last several decades litigation involving defective products has caused significant changes in the way manufacturers do business and in the way consumer products are regulated. In the process, these changes have saved lives here in the United States and abroad, and prevented countless injuries.

Broadly speaking, product related injuries and deaths in the U.S. have been declining for some time. According to the Consumer Product Safety Commission, since the 1970’s there has been a substantial reduction in the rate of deaths and injuries associated with consumer products. (U.S. CPSC 2008 Performance and Accountability Report, November 2008) Meanwhile, traffic fatalities in the United States have fallen to record lows. (http://www.bloomberg.com/apps/news?pid=20601103&sid=a9SowGrPI4JM, Keane, Angela G., U.S. Road-Death Rate Fell to Record Low in 2007, 8/14/08 (Bloomberg)) Between 1966 and 2004, the fatality rate per million vehicle miles travelled has declined more than 70%. (Vernick, Jon S. and Teret, Stephen P., Making Vehicles Safer, Am J Public Health. 2004 February; Johns Hopkins Bloomberg School of Public Health, Department of Health Policy and Management) There is widespread agreement that these reductions can be credited in part to safer products, better regulation and increased public awareness. To what extent has products liability played a role?

Although there has been debate about the extent to which liability litigation has affected the safety of products, a number of consumer advocates, engineers, public health and safety experts, legal scholars, government agencies and economists have concluded that products liability is definitely a factor. Even industry groups and manufacturing executives have acknowledged and reluctantly conceded that litigation has enhanced product safety by changing the way they do business. Surveys and interviews of corporate executives have shown that many manufacturers have instituted programs specifically for the purpose of reducing liability, including improving quality control, labeling and design, and that many have redesigned products as a result of potential liability. (Vernick JS, Mair JS, Teret SP, Sapsin JW. Role of litigation in preventing product-related injuries. Epidemiol Rev. 2003;25:90-98)

While the effects are difficult to quantify, there is substantial evidence that products liability litigation has made products safer. Experts in a variety of disciplines have identified several factors which work together directly and indirectly over time to bring about safer products, and the evidence shows that tort litigation involving product related injuries is a major part of that process. Some even say it is arguably the primary mechanism for regulating product safety complementing the efforts of government regulatory agencies. (Lytton, Timothy D., Using Litigation to Make Public Health Policy: Theoretical and Empirical Challenges in Assessing Product Liability, Tobacco, and Gun Litigation The Journal of Law, Medicine & Ethics, January, 2004., p. 12) This article will discuss how products liability litigation has deterred the production of defective products and caused many manufacturers to be more conscious of safety in developing, designing, testing, marketing and labeling their products, to consider and utilize safer alternative designs and warnings, to test for and disclose hazards, to exceed the minimal standards imposed by government agencies, and to recall or withdraw dangerous products from the market.

REGULATORY AGENCIES AND THEIR LIMITATIONS

There are inherent limitations hindering the work of the government agencies which are charged with regulating the manufacture of various consumer goods, such as the U.S. Food and Drug Administration, the Consumer Product Safety Commission and the National Highway Traffic Safety Administration. These agencies have tremendous responsibilities, but they have limited resources and inadequate funding and staffing, and suffer from information deficits, all of which can prevent them from fully realizing their legislative mandates.

One frequently cited case in point is the Food and Drug Administration. The agency is responsible for regulating over 11,000 drugs and overseeing the approval of approximately 100 more each year, and covers approximately 25% of all consumer spending, including food, drugs, vaccines, and medical devices, “making it virtually im¬possible to monitor comprehensively the performance of all drugs on the market.” (Gostin, Lawrence O., The Deregulatory Effects of Preempting Tort Litigation: FDA Regulation of Medical Devices, 299 JAMA 2316 (2008)) Problems with insufficient resources were identified as far back as 1955, when an FDA advisory committee concluded that “the budget and staff of the Food and Drug Administration are inadequate to permit the discharge of its existing responsibilities for the protection of the American public.” (Citizens Advisory Committee on the FDA, Report to the Secretary of Health, Education, and Welfare, H.R. Doc. No. 227, 84th Cong., 1st Sess., 53)

A 2006 report on drug safety released by Institute of Medicine of the National Academies found that the FDA cannot ensure the safety of new prescription drugs because of inadequate funds, cultural and structural problems, and “unclear and insufficient regulatory authorities.” (“The Future of Drug Safety: Promoting and Protecting the Health of the Public,” Institute of Medicine of the National Academies Committee on the Assessment of the United States Drug Safety System, Sept. 26, 2006) The report noted that “FDA does not have adequate resources or procedures for translating preapproval safety signals into effective post-marketing studies, for monitoring and ascertaining the safety of new marketed drugs, for responding promptly to the safety problems that are discovered after marketing approval, and for quickly and effectively communicating appropriate risk information to the public." (Id. at S1-2-1-3c) The IOM also found that the "FDA lacks the clear unambiguous authority needed to enforce sponsor compliance with regulatory requirements and instead relies on the prospect of productive negotiations with industry,” a process which “leaves potentially critical regulatory action vulnerable to a subjective and highly variable process of exercising individual or agency influence, and to the vicissitudes of changing politics and attitudes toward regulation." (Id at S-9)

Aside from inadequate funding, regulatory agencies have limited access to information in the possession of manufacturers due to political restraints. Private parties are generally not required to volunteer all relevant information on the risks of their products, and government agencies tend to use their powers to access information conservatively. Moreover, they often capitulate to requests to classify information as trade secret, confidential and therefore unavailable to the public. (Wagner, Wendy E., When All Else Fails: Regulating Risky Products Through Tort Litigation, 95 Georgetown Law Journal 693, 698-700, March 2007) Yet another weakness reducing the effectiveness of regulatory agencies in protecting consumers from defective products is that the standards they promulgate are often excessively lenient. Again, because of political constraints as well as budget shortfalls, federal agencies are more likely to react after the fact, often choosing to remedy defects through the use of ad hoc recalls, rather than engaging in a preventative strategy of pursuing improved safety standards. (O’Reilly, James T., Dialogue with the Designers: Comparative Influences on Products Design Norms Imposed by Regulators and by the Third Restatement of Products Liability, 26 N. Ky. L.Rev. 655 (1999))

Regulations of the CPSC, NHTSA and the FDA are by definition minimal in nature. (See e.g. Colon ex rel. Molina v. BIC USA, Inc., 136 F.Supp.2d 196, 207-208 (S.D.N.Y. 2000) (Consumer Product Safety Commission) (“The CPSC regulations establish general, rudimentary and minimal requirements.”… "In establishing the federal standard the CPSC expressed its desire to reduce by the least burdensome means the substantial number of injuries caused by children playing with disposable lighters. Viewed in this light, it is difficult to construe these regulations as anything but a mandatory minimum standard with which all manufacturers or importers must comply.FN16 By no means, however, should compliance with this minimum standard automatically relieve a manufacturer or importer of state common law liability."); (Geier v. American Honda Motor Company, Inc. (2000) 529 U.S. 861, 868, 120 S.Ct. 1913, 146 L.Ed.2d 914) (National Highway Traffic Safety Administration) “[A] reading of the express pre-emption provision that excludes common-law tort actions gives actual meaning to the saving clause's literal language, while leaving adequate room for state tort law to operate-for example, where federal law creates only a floor, i.e., a minimum safety standard.”; Caraker v. Sandoz Pharm. Corp., 172 F.Supp.2d 1018, 1033 (S.D.Ill.2001)(Food and Drug Administration) (“FDA’s drug labeling decisions impose only minimum standards that are open to supplementation by state law through a jury’s verdict enforcing a manufacturers common law duty to warn....”)) As a consequence, some standards are woefully inadequate for their intended purposes.

For example, Federal Motor Vehicle Safety Standard (FMVSS) 216, which governs roof structure crashworthiness in most automobiles, is so weak many vehicles which comply with the standard will sustain severe roof collapse when subjected to a one-foot inverted drop, or the equivalent force of a 5 mph parking lot collision. Because of this, roof crush in rollover collisions often results in serious head, neck and spinal cord injuries, including quadriplegia. (Friedman, Donald and Nash, Carl E., Advanced Roof Design for Rollover Protection, Paper No. 01-S12-W-94 ; http://www.suvdriving.net/References/Nash.pdf ; See also DOT Docket No. NHTSA 1999-5572, Comments of Public Citizen Regarding 49 CFR Part 571, Federal Motor Vehicle Safety Standards: Roof Crush Resistance) Likewise, FMVSS 207, the standard for automobile seatback strength, requires that folding forward backrest locks of seats withstand a load of only twenty times the weight of the entire seat, which is well below the forces encountered in typical rear end collisions. In fact, the standard is so minimal that many folding lawn chairs will pass the test. While some manufacturers have internal standards which far exceed this, others have seats which are so weak they will collapse rearward in rear end collisions, resulting in occupant excursion or ejection from the vehicle, causing severe and sometimes fatal injuries in otherwise survivable collisions. (See e.g. Flax v. DaimlerChrysler Corp., 272 S.W.3d 521, (Tenn. 2008))

Weak regulations, along with other limitations on the effectiveness and the authority of agencies responsible for policing product safety can create a disincentive for manufacturers to pursue optimal safety for their products, and make them reluctant to seek or disclose all necessary information regarding risks associated with their use. As a consequence, some manufacturers have been able to undermine product safety efforts in a number of ways, including:

1. Persuading government officials to delay or weaken proposed safety standards. In Ford Motor Company v. Durrill, 714 S.W.2d 329, 338 (Texas App.1986),a wrongful death action arising from a crash related fire, evidence at trial showed Ford’s influence on delaying safety standards, including the deposition testimony of the acting head of the National Highway Traffic Safety Administration (NHTSA) concerning a meeting with President Nixon in 1971 “regarding the need of the government to be aware of costs and problems involved in implementing government regulations.” The deposition included testimony: “. . . that Iaccoca and Henry Ford II had expressed to him many times that ‘safety has really killed all of our business’. They had also expressed to him the notion that the Japanese were a threat to the automobile business. They had told him that they wished the government was not as stringent regarding safety.” (714 S.W.2d at 339)

2. Withholding critical safety data from regulatory agencies. See Toole v. Richardson-Merrell (1967) 251 Cal.App.2d, 689, 714, 60 Cal.Rptr. 398, wherein a drug manufacturer was held liable for punitive damages for “withholding from the FDA and the medical profession of vital information concerning blood changes and eye opacities in test animals,” while it continued to defend its product and represent to the medical profession that the drug was “remarkably free from side effects, virtually non-toxic having a specific and completely safe action.” (251 Cal.App.2d at 714)

3. Delaying compliance with newer standards as long as possible. In Fair v. Ford, a case involving a school bus accident, 27 people died and 34 other passengers were seriously burned in post-collision fire a fire resulting from a ruptured fuel tank. The evidence showed that Ford was aware of the vulnerability of the unprotected fuel tanks on the sides of its busses, and that Ford had even designed and built protective cages for them, but held back on installing them as standard equipment until after they were required by federal regulations. Kunen, James S., ‘Reckless Disregard- Corporate Greed, Government Indifference, and the Kentucky School Bus Crash.’ Simon and Schuster (1994) pp.173-174.

4. Continuing to market defective products until pressured by the government to withdraw them. See Hilliard v. A.H. Robins Co. (1983) 148 Cal.App.3d 374, 398-399, where despite numerous complaints of injuries, an IUD manufacturer withdrew the products from the market only after being pressured by the FDA : “[T]his evidence has a tendency in reason to prove that Robins, aware of the probable dangerous consequences of the product, willfully and deliberately failed to avoid those consequences until pressured by the FDA. Evidence of any conduct by defendant, in continuing to manufacture and market the Dalkon Shield without change, in the United States, or elsewhere, aware of the probable dangerous consequences of the IUD, is evidence having a tendency in reason to prove Robins willfully and deliberately failed to avoid those consequences.”

5. Ignoring recommendations of employees on safety issues in order to maximize profits. American Motors Corporation v. Ellis, 403 So.2d 459, 467 (Fla.App.1981)(“In the present case, there was evidence educed from which the jury could have found that AMC was aware of the catastrophic results of fuel tank fires in its vehicles from its own crash tests, and that AMC chose not to implement the recommendations of its engineers to relocate the fuel tank in order to maximize profits.”)

These and other practices, which are permitted by deficiencies in the regulatory system, can sometimes only be countered and discouraged by products liability law and the tort system. “[C]oncern for tort liability (and its political and financial impact) may lead industry to adopt safety features that would not be adopted simply because of regulation. This is because regulation tends to close the barn door after the horse has escaped, mandating safety features only after harm has occurred. In contrast, the fear of ex post facto liability created by tort law may induce manufacturers to design and sell safer products even in the absence of specific, explicit regulation.” (Parmet, WE. Daynard RA. The New Public Health Litigation. Ann Rev Pub Health 2000;21:437, 453)

THE FUNDAMENTAL PURPOSES OF PRODUCTS LIABILITY LAW

“One important purpose of defective-product tort law is to encourage the manufacture of safer products. The various tort rules that determine which foreseeable losses are recoverable aim, in part, to provide appropriate safe-product incentives.” (Saratoga Fishing Co. v. J.M. Martinac & Co., 520 U.S. 875, 881, 117 S.Ct. 1783, 138 L.Ed.2d 76 (1997))

Several public policy reasons have been advanced for the statutory and common law governing products liability which has emerged over the last several decades from courts and legislatures around the country. Some of the frequently cited rationales for the doctrine of strict liability have included ensuring that costs of injuries from defective products are borne by the manufacturer rather than by injured persons who are powerless to protect themselves, and ensuring that a manufacturer is held responsible where negligence may be present but difficult to prove. Equally significant, however, are the goals of providing an economic incentive for improved product safety, and inducing the reallocation of resources toward safer products. (Nelson v. Superior Court, 144 Cal.App.4th 689, 696-697 (Cal.App. 2006) See also W. Keeton, D. Dobbs, R. Keeton and D. Owen, Prosser and Keeton on the Law of Torts 692-93 (5th ed. 1984)) According to the Restatement (Third) of Torts: Prod. Liab. § 2 (1998), comment a:
“On the premise that tort law serves the instrumental function of creating safety incentives, imposing strict liability on manufacturers ….encourages greater investment in product safety than does a regime of fault-based liability…. The emphasis is on creating incentives for manufacturers to achieve optimal levels of safety in designing and marketing products.”

One of the earliest statements of the rationale behind modern products liability law is found in the landmark decision Escola v. Coca Cola Bottling Co. of Fresno (1944), 24 Cal.2d 453, 462, 150 P.2d 436, wherein the California Supreme Court commented on the doctrine of strict liability, noting that: “It is to the public interest to discourage the marketing of products having defects that are a menace to the public.” In a passage which is as true today as it was 65 years ago, the court explained why this protection is necessary: “The consumer no longer has means or skill enough to investigate for himself the soundness of a product, even when it is not contained in a sealed package, and his erstwhile vigilance has been lulled by the steady efforts of manufacturers to build up confidence by advertising and marketing devices. . . . Consumers no longer approach products warily but accept them on faith, relying upon the reputation of the manufacturer or the trademark.” (Id at 467. See also Habecker v. Clark Equipment Co., 942 F.2d 210, 215-216 (3rd Cir. 1991)(“This rule can be justified because it provides manufacturers with an incentive to invest, not only in proven safety features, but also in the testing and development of any new feature that may prove superior. “A strict standard of liability offers the strongest possible incentive, an economic one, for the production of safer products.)

As products liability laws have been shaped by the courts to address the continuing stream of unique issues and novel concepts arising in litigation, as well as innovative new products and changing regulations, the goal of encouraging the manufacture of safe products has been a recurring theme. DiCenzo v. A-Best Prods. Co., Inc., 120 Ohio St.3d 149, 897 N.E.2d 132, 143 (Ohio 2007)(““A primary “purpose of the strict liability doctrine is to induce manufacturers and suppliers to do everything possible to reduce the risk of injury and insure against what risk remains.”; Townsend v. Sears, Roebuck, & Co., 227 Ill.2d 147, 316 Ill.Dec. 505, 879 N.E.2d 893, 907 (Ill.2007) (quoting an Illinois appellate court which found “Illinois has a strong interest in applying its products liability law to regulate culpable conduct occurring within its borders, induce the design of safer products, and deter future misconduct”); Coffman v. Keene Corp.,133 N.J. 581, 599, 628 A.2d 710 (N.J. 1993)(“The use of the heeding presumption provides a powerful incentive for manufacturers to abide by their duty to provide adequate warnings.);Savage Arms, Inc. v. Western Auto Supply Co.,18 P.3d 49 (Alaska 2001) (Adopting a “continuity of enterprise” exception to successor nonliability)([T]his new rule will also have the effect of encouraging existing corporations to produce safer products, in keeping with the public policy goals that underlie product liability law generally…); Ghrist v. Chrysler Corp. 451 Mich. 242, 250-251, 547 N.W.2d 272 (Mich.,1996) (“The public interest in assuring that safety devices are installed demands more from the manufacturer than to permit him to leave such a critical phase of his manufacturing process to the haphazard conduct of the ultimate purchaser.”) Recently, the United States Supreme Court in Wyeth v. Levine, 129 S.Ct. 1187 (2009), rejected an attempt to deprive injured consumers of the right to bring actions for defective labeling of prescription drugs, reiterating that state law products liability remedies “further consumer protection by motivating manufacturers to produce safe and effective drugs and to give adequate warnings.” (Wyeth v. Levine, 129 S.Ct. 1187, 1194 (2009))

A number of prominent scholars have touted products liability litigation as an effective tool for making public health policy which creates incentives for making products safer. (Lytton, supra, at 1) They credit liability litigation for substantial reductions in product-related injuries and deaths on the nation’s highways and in other areas as well. For example, in 1990 the Consumer Federation of America found that there had been a dramatic change in the rate of accidental injuries and deaths in the United States, and estimated that “approximately 6,000 deaths and millions of injuries have been prevented on an annual basis now because of product liability and other forces towards greater safety in our society.” (Testimony of Gene Kimmelman, Legislative Director, Consumer Federation of America, at Consumer Subcommittee Hearing on S. 1400, April 5, 1990, transcript at 77-78) Similarly, NTSB data show deaths for general aviation aircraft dropped from 1.75 per 100,000 flight hours in 1986, to 1.35 by 1998. Noting the extensive litigation history and the hundreds of lawsuits resulting from crashes of small planes in the 1970's and 80's, followed by dramatic safety improvements in the aviation industry, Bloom and Gundlach conclude that these improvements were the result of vigilance of the NTSB and the Federal Aviation Administration, and also the impact of product liability claims on manufacturers. (Bloom, Paul N. and Gundlach, Gregory T., Handbook of Marketing and Society, Sage Publications, Inc 2000, pp 438-439)

Although there has been ongoing debate as to the extent to which products liability has resulted in safer products and injury reduction, most studies have found an injury-reducing effect. See Donald P. Judges, Of Rocks and Hard Places: The Value of Risk Choice, 42 Emory L.J. 1, 83-84, n. 277 (1993) (concluding that although some commentators have challenged the assumption that products liability law has a demonstrably positive effect on product safety by arguing that product liability either overdeters or does not effectively deter at all, general concern about tort litigation and liability may affect product safety); Schwartz, Gary T., Reality In the Economic Analysis: Does Tort Law Really Deter?, 42 UCLA L. Rev. 377, 443, December, 1994 (arguing that it is “difficult to believe that tort law deters as effectively as the economic analysis suggests.")) (Parmet and Daynard, supra) There is widespread agreement from experts in a variety of interrelated disciplines that the products liability litigation plays a key role in safer products and injury reduction, and “[i]t is well documented that litigation against motor vehicle and other product manufacturers has made important contributions to public health, providing necessary incentives to make products safer.” (Vernick, et al., Making Vehicles Safer, supra, at 1) Studies by public health advocates, epidemiologists and safety experts have examined the effects of products liability litigation on product safety, and analyzed how it affects and shapes design decisions, as well as its interplay with other factors which influence product design. In one epidemiologic review published by the Johns Hopkins Bloomberg School of Public Health, Vernick, et al. identify several means by which litigation brings about safer products: “Product liability continues to be an important tool for the prevention of injuries. Although it is sometimes difficult to attribute specific changes to specific cases, the weight of the anecdotal and empirical evidence suggests that litigation has made some products safer.” …“Prevention occurs through the imposition of monetary damages, media attention, information gathering, and litigation’s ability to foster subsequent legislative or regulatory change.” (Vernick, et al., Role of litigation in preventing product-related injuries, supra, at 96)

CHANGING THE WAY MANUFACTURERS DO BUSINESS

"Unlike the heavy hand of government regulation, the liability system enforces voluntary safety standards without prescribing every precise operating and technical detail. It dictates results, instead of methods, and thus encourages innovation and self-regulation.” (Hunziker, Janet R. and Jones, Trevor O., Editors, Product Liability and Innovation: Managing Risk in an Uncertain Environment (1994) National Academy of Engineering (NAE) Steering Committee on Product Liability and Innovation)

A study by the RAND Corporation in the early 1980’s found that “product liability appears to powerfully influence product design decisions,” and that “of all the various external social pressure influencing product design decisions, product liability seems to be the most fundamental.” (Designing Safer Products: Corporate Responses to Products Liability and Product Safety Regulation. With P. Reuter. Santa Monica, Ca.: RAND Corporation, 1983, pp. 122-123) The obvious means by which products liability litigation has led to safer products is through economic deterrence. The fear of a damages award affecting profits is a tremendous motivator toward improved product safety (36), and the economic consideration of the aggregated costs of present and future liability induces manufacturers to look for ways of making long-run safety improvements. See Ferebee v. Chevron Chemical Co., 736 F.2d 1529,1541-1542 (C.A.D.C.1984) “[T]he specter of damage actions may provide manufacturers with added dynamic incentives to continue to keep abreast of all possible injuries stemming from use of their product so as to forestall such actions through product improvement.”); Parmet, WE. Daynard RA., supra. “For some time, injury-prevention professionals have recognized that product liability litigation fosters injury prevention by creating a financial incentive to design safer products.” Teret, Stephen P., DeFrancesco, Susan, Hargarten, Stephen W., and Robinson, Krista D., Making Guns Safer, Issues Online in Science and Technology, University of Texas at Dallas, http://www.issues.org/14.4/teret.htm. (Landes, William M. and Posner, Richard A., The Economic Structure of Tort Law 10 (Harvard University Press) (1987). p. 294) While the threat of liability may not be the sole reason behind safety innovations, “products liability doctrine promotes safer product containers, safer product handling, and, in particular, safer automobiles and pharmaceuticals.” (Gavin, Sandra F., Stealth Tort Reform, 42 VAL. U. L. REV. 431, 437-38 (2008))

Economic considerations are precisely why products liability litigation has provided impetus for dramatic changes in the way manufacturers do business, and why some manufacturers have been encouraged, prodded or compelled to put safety ahead of profits rather than the other way around. Since the 1970’s, many manufacturers have placed new or greater emphasis on product safety, and have altered their corporate structure to do so. According to the Consumer Federation of America (CFA) only a small minority of companies had a product safety management position in the early 1970s, but by the end of the 1970’s almost all companies had a very strong product safety presence in their management structure. (Testimony of Gene Kimmelman, supra, at 77-78) In many firms, product safety units have been created to improve design practices, and although this has been in part due to the growth of federal regulation, products liability litigation has also been responsible. As one researcher put it, “product liability litigation caused firms to see that formalization of responsibility for product safety activities made good business sense.” (Designing Safer Products: Corporate Responses to Products Liability and Product Safety Regulation, supra at 148)

A 1988 study regarding the impact of products liability litigation, which surveyed 264 chief executive officers of manufacturing companies, revealed that liability experience had caused 1/3 to improve their product lines, 35% to improve the safety of their products, and 47% to improve warnings. (McGuire, E.P., The Impact of Product Liability, U.S. Conference Board Report No.908 (New York: The Conference Board, (1988)) In another study involving a survey of over 100 senior level executives, over half of those interviewed indicated that their companies had increased their research and development budgets devoted to product safety, and had added safety features to their products as a result of the threat of liability. Two-thirds indicated that "the principal impact of product liability lawsuits has been to force companies to be more careful with their products, not to limit innovation." (Egon Zehnder, Int'l USA, The Litigious Society: Is It Hampering Creativity, Innovation, and Our Ability to Compete?, 2,3 Corp. Issues Monitor 1, 1 (1987).)

Coinciding with these internal changes, products liability litigation has heightened manufacturers' awareness of the importance of safety in their products, and has advanced the safety of not only motor vehicle equipment such as air bags, child car seats, and seat belts, but many other consumer products such as hot water vaporizers, farm machinery and firearms. (Injury and Violence Prevention: Behavioral Science Theories, Methods, and Applications; Andrea Carlson Gielen (Editor), David A. Sleet (Editor), Ralph J. DiClemente (Editor) ISBN: 978-0-7879-7764-1 2006 Publisher: Jossey-Bass p.454) Aside from encouraging the safe design, manufacture and labeling of newer products, liability litigation has also been a factor in forcing or hastening the removal of unreasonably dangerous products from the market, through voluntary and involuntary withdrawals of products such as defective automobiles and pharmaceuticals. Some of the more infamous examples include flammable pajamas and tampons linked to Toxic Shock Syndrome (44), the Ford Pinto, which subjected occupants to risk of injury or death from fire due to fuel system compromise in rear end collisions, and certain Chrysler minivans, which were recalled due to allegations in lawsuits that rear lift-gate latch failures had resulted in dozens of passenger ejections and fatalities between 1984 and 1995. (Report of the Committee on Commerce, Science and Transportation on S.648 Product Liability Reform Act of 1997, June 19, 1997, pp. 76-78, citing Gryc v. Dayton Hudson Corp., 297 N.W.2d 727 (Minn. 1980), cert. denied, 101 S. Ct. 320 (1980) and O’Gilvie v. International Playtex, Inc., 609 F. Supp. 817 (D. Kan. 1985), rev’d, 821 F2d 1438 (10th Cir. 1987), cert. denied, 108 S.Ct. 2014 (1988); Peck, Robert S. et. al., Tort Reform 1999: A Building Without A Foundation, 27 Fla St. U. L. Rev. 397, 440-441 (2000))

From a broader business perspective, there are other reasons for manufacturers to develop safer products, and other incentives beyond avoiding litigation costs and damages awards. Businesses have an economic stake in their reputation and how they are perceived by the public, and in this respect, products liability litigation can have a significant impact on both competitiveness and profitability.

Studies have shown that consumers deterred from buying a product that has been found to be defective, and they are less likely to buy other products of the same firm. (Designing Safer Products: Corporate Responses to Products Liability and Product Safety Regulation, supra at 50) If a manufacturer is forced to recall a product, whether voluntarily or involuntarily, as a result of litigation or disclosures because of litigation, sales opportunities are lost and customers may be induced to shift to alternate brands. (O'Reilly, supra, at 674. ) It therefore stands to reason that manufacturers who invest in product safety in advance, and devote resources to developing innovative safer designs, packaging and labeling, and who monitor product safety, fully disclose hazards and recall hazardous products from the market, will maintain a distinct competitive advantage over those who do not.

Manufacturers have also come to recognize that “safety sells” and that improving product safety will ultimately lead to competitive advantage, and many have incorporated product safety into their business and marketing. (CPSC and Corporate Leaders Forge Creative Partnership To Save Lives: Safety Sells Conference; Office of Information and Public Affairs, Washington, D.C. 20207,Rev.: May 5, 1996. URL: http://www.cpsc.gov/cpscpub/pubs/ success/sells.html) Some manufacturers are even showing signs of a change in institutional mentality. For example, Ford Motor Company’s current "Code of Conduct Handbook Policies and Directives" "Product Quality and Safety" policy provides:

“More than ever before, customers expect our vehicles to contain superior safety features, and so does the Company itself. Policy Letter No. 7, Vehicle Safety, requires that the Company be active and responsible in all areas of automotive safety. ..Our products should be designed not only to meet or exceed applicable laws and regulations, but also to advance the state-of the- art in safety whenever practicable.” (Ford Motor Company November 2007 "Code of Conduct Handbook Policies and Directives, "http://www.ford.com/doc/ corporate_conduct_standards.pdf)

This ostensibly places the safety of the public at a higher priority, and is clearly a step in the right direction if the manufacturer follows through.

COMPLEMENTING THE EFFORTS OF REGULATORY AGENCIES

It has long been recognized that that products liability actions are essentially a complementary form of regulation, assisting in achieving the goals of regulatory agencies. With regard to safer products, “[t]he common law tort system and the governmental safety regulation system serve as parallel and protective deterrents, encouraging the safer design of products.” (O'Reilly, supra, at 655.) The Supreme Court recently acknowledged the importance of this function, in the context of how tort litigation serves to advance the safety of pharmaceuticals:
"[T]he FDA traditionally regarded state law as a complementary form of drug regulation. The FDA has limited resources to monitor the 11,000 drugs on the market…State tort suits uncover unknown drug hazards and provide incentives for drug manufacturers to disclose safety risks promptly. They also serve a distinct compensatory function that may motivate injured persons to come forward with information. " (Wyeth v. Levine, 129 S.Ct. 1187, 1202 (2009))

Products liability law “fills gaps in legislation and regulations” which inevitably exist “where lawmakers do not anticipate ways in which industry can evade regulation within the letter of the law.” (Lytton, supra at 6) It provides a counterbalance to the problems of underfunding and limited resources, which leave agencies incapable of effectively policing product safety, and it places a “complementary discipline … on the market.” See, Kessler DA, Vladeck DC. A critical examination of the FDA's efforts to pre-empt failure-to-warn claims. Georgetown Law J. 2008;96:461.495; See also Bloom, Paul N. and Gundlach, Gregory T., supra, at 451:"Compared to regulatory fines, the tort system provides greater financial incentives/threats for companies to develop safer products. Thus, we have complementary systems for improving product safety..." Additionally, litigation closes gaps in the regulatory process, by providing feedback to government agencies, uncovering poor industry practices, drawing the attention of the public and policy makers, and encouraging regulatory changes. (Gostin, supra, at 2314, calling to tort law “a tool of public health.” )

Moreover, tort litigants are not subject to the inherent political and resource constraints which limit the information access of regulatory agencies. Plaintiffs in actions against manufacturers utilize discovery tools, quick judicial review and the threat of sanctions to gain access to otherwise undisclosed safety information. They are able to subpoena witnesses and documents relating to product safety issues, or demand their prompt production, which can serve as “a potent way to inform the agency and public of undisclosed risks.” (Gostin, Lawrence O., Regulating the Safety of Pharmaceuticals: The FDA, Preemption, and the Public's Health, JAMA. 2009; 301 (1 9):2036-2037, May 19, 2006) Courts are sometimes the only institution “able to penetrate and lower information costs that can otherwise obscure and preclude important public deliberations about health and environmental risks." With streamlined production and the ability to seek orders compelling production, litigants have greater access to information, and are not forced to rely on manufacturers to choose which documents they deem relevant enough to produce. (Wagner, Wendy E., When All Else Fails: Regulating Risky Products Through Tort Litigation., 95 Georgetown Law Journal 693, 698-700, 731-732, March 2007)

Ironically, tort litigants are also sometimes better funded than the government when it comes to product safety related testing or research. Because they are not subject to the same type of budgetary constraints as government agencies, and are able to retain world class experts in fields such as toxicology, epidemiology, pharmacology, biomechanics and engineering, litigants are not forced to rely upon the opinions of manufacturers and their employees, and are able to conduct research and testing which government experts are unable or unwilling to perform. As a result, “[i]ncreasingly, the federal safety agencies appear to be the silent partners of the plaintiff's counsel. A synergy between under-funded regulator and sophisticated litigator has developed, using information access tools.” (O'Reilly, supra, at 655 )

The Supreme Court has also said that state tort suits “can serve as a catalyst” for regulatory action by aiding in the exposure of new dangers, noting that such information may prompt a manufacturer of a federal agency to decide that a revised label is required. (Wyeth v. Levine, supra, at 1194 n.12, Bates v. Dow Agrosciences LLC, 544 U.S. 431, 451, 125 S.Ct. 1788, 161 L.Ed.2d 687 (2005)) Litigation is often the precursor to safety regulation because laws frequently are enacted in response to a number of lawsuits centering on repeated problems with a product. (Bloom, Paul N. and Gundlach, Gregory T., supra, at 436) Because of this catalyst effect, and greater access to information, products liability litigation has exposed evidence of unreasonable product risks, leading to greater regulatory oversight in a number of situations where manufacturers had previously resisted disclosure of such information. Examples include asbestos, tobacco products, ultra-absorbent tampons, the Dalkon Shield, ephedra, the sleeping pill Halcion, and the prescription drugs Vioxx and Prozac. (Wagner, supra, at 711-712)

Vernick et al., reference examples of automotive liability litigation which prompted regulatory action, such as the Bridgestone/Firestone and Ford Explorer litigation and the resulting “Transportation Recall Enhancement, Accountability, and Documentation Act” (or “TREAD Act”), which increased the budget of the NHTSA, enhanced the penalties on automobile manufacturers who fail to report defects, and opened the way to requiring electronic tire pressure monitors. It also addresses tests and ratings for rollover risk and child safety seats, and allows NHTSA to require disclosure of overseas automobile safety recalls: “The response to injuries caused by Ford Explorers equipped with Firestone tires stands as a compelling example of the importance of private tort litigation’s role in identifying dangerous products and promoting safety. The case demonstrates the ability of tort litigation to 1) act in advance of regulators; 2) acquire industry information, through civil discovery, which can inform public health interventions; 3) attract public attention; and 4) ultimately lead to industry, regulatory, and legislative change.” (Vernick, et al., Role of litigation in preventing product-related injuries, supra at 93) Other examples include the October 2000 court-ordered recall of 1.7 million cars and trucks with allegedly defective components which could have caused the vehicles to stall in traffic, (“This became the first time a judge, rather than NHTSA had ordered the recall of a vehicle.”) (Vernick, et al., supra at 91), and the infamous Ford Pinto. Following a substantial jury verdict which included punitive damages, as well as adverse publicity nationwide, Ford recalled and modified the Pinto, conceding that “attacks on the safety of the fuel system of the Pinto . . . had resulted in public concern that Ford wished to put at rest.” See, Vernick, et al., supra at 93. Grimshaw v. Ford Motor Company (1981) 119 Cal. App. 3d 75; The Grimshaw case was selected by TRIAL as one of the 10 most important trials of the past millennium:"The jury’s verdict – more than $3 million in compensatory damages and $125 million in punitives – was stunning, though the punitive award was remitted to $3.5 million. Tort opponents railed against the verdict, but the decision struck a chord. A prizewinning expose by journalist Mark Dowie appeared in Mother Jones magazine. The television show 60 Minutes followed up. Soon Ford recalled the Pinto. Juries do not design cars or issue safety standards. But they can draw a line against disregard for safety that companies ignore at their peril. The California jury sent that message to automakers. Along the auto industry’s long journey from blind belief that safety doesn’t sell to television ads featuring Iacocca bragging about his air bags, this jury’s verdict stands as a milestone."; Important civil trials of the millennium; TRIAL, Association of Trial Lawyers of America, March 2000.

INCREASING PUBLIC AWARENESS

In addition to encouraging manufacturers to produce safer products, and assisting government agencies in their regulation of product safety, products liability litigation has another important role in reducing product related injuries, which is educating the public and increasing awareness. (Parmet and Daynard, supra at 445) Despite the fact products have become safer, there is a continuing need for increased public awareness of product dangers. According to the CPSC "Each year, 33.1 million people are injured by consumer products in the home. Some hazards are from products the Agency has warned about for years; others come from new products and technologies." (http://www.cpsc.gov/cpscpub/prerel/-prhtml07/07256.html, U.S. Consumer Product Safety Commission Office of Information and Public Affairs August 1, 2007 Release #07-256 CPSC Releases the "Top Five Hidden Home Hazards")

The need for safety and risk information is especially significant with the increasing use of prescription pharmaceuticals. As the IOH report concluded, the FDA does not have an adequate mechanism for specific scientific and patient/consumer advice, yet consumers “need timely information about emerging safety concerns or about a drug's effectiveness” to help them make better decisions in collaboration with their health care providers. (“The Future of Drug Safety: Promoting and Protecting the Health of the Public,” Institute of Medicine of the National Academies Committee on the Assessment of the United States Drug Safety System, Sept. 26, 2006, pp. 10-11) Safety related risk information obtained in the discovery process, as well as litigation related publicity regarding products which are defectively designed or manufactured, or marketed without adequate warnings, shapes public opinion, and plays a key role in bringing to light information regarding the hazards of certain products, and in educating the public regarding the nature and causes of risks of injury.

Public awareness is also increased through the strengthening of warnings accompanying products, alerting consumers, patients and prescribing physicians to potential hazards which may have been unknown or previously undisclosed. Increased public awareness can also promote regulatory change by focusing attention on products that endanger the public, and spurring political debate about their regulation. (Parmet and Daynard, supra at 442)

CONCLUSION

There is little doubt that over the past several decades consumer products have become safer and that products liability litigation has been, and continues to be, a significant force influencing positive change. Products liability litigation has encouraged and compelled manufacturers to remove defective products from the market, to develop safer designs and improve quality control, and to provide better warnings to the consumers who use them. At the same it has complemented and provided invaluable assistance to the efforts of regulatory agencies overseeing product safety. Litigation involving defective products has increased access by regulators and the public to critical safety information and heightened public awareness of the dangers involved with certain products, which has led to better, stronger regulations, safer new products, and the removal of dangerous products from the market.

But there is still work to be done. There are far too many product related injuries, and political and budgetary pressures in a struggling economy make the inherent limitations of government regulatory agencies even more acute. Strong products liability laws remain vital to public health and safety, and to protecting consumers from unreasonable risks of preventable injury.

Mark P. Robinson Jr. and Kevin F. Calcagnie are partners in Robinson, Calcagnie & Robinson in Newport Beach, California, specializing in products liability. orangecountylaw.com

A woman who alleged she was wrongfully discharged from her employment because of her medical condition and related disability, filed an action against her employer seeking damages for harassment and discrimination. Following a jury verdict in favor of the plaintiff which included over $3 million in compensatory damages and $15 million in punitive damages, the court of appeal reduced the award of compensatory damages to $1.4 million and the punitive award to $2 million.

The plaintiff petitioned for review in the California Supreme Court, asserting that the jury’s entire $15 million award fell within constitutional limits and should be reinstated. However, the Supreme Court reversed the judgment of the court of appeal and reduced the award of compensatory damages to $1.9 million, concluding that due the relatively low degree of reprehensibility on the part of the employer, a one-to-one ratio between compensatory and punitive damages was the constitutional limit:

Nevertheless, the evidence establishing corporate wrongdoing in regard to supervisor Schoener's unlawful harassment of Roby does not indicate any repeated corporate misconduct. There is no evidence, for example, that Schoener's actions toward Roby were the product of a corporate culture that encouraged similar supervisorial conduct. Rather, they appear to be the isolated actions of a single supervisor, combined with the one-time failure on the part of employer McKesson to take prompt responsive action when these events came to its attention.
. . .
In applying the federal Constitution here, we have taken McKesson's wealth into consideration, and more to the point we have taken into consideration the deterrent effect that is appropriate in light of McKesson's wrongdoing. We nevertheless conclude that punitive damages in an amount equal to compensatory damages marks the constitutional limit in this case and still provides the appropriate deterrence."

The widow and children of a naval officer who died of mesothelioma as a result of being exposed to asbestos while working on an aircraft carrier, filed a wrongful death action against the manufacturers of valves and pumps which contained asbestos and which had been installed on naval vessels. The plaintiffs alleged that the decedent had been exposed to asbestos-containing insulation and packing material in the pumps, which released toxic fibers during routine use of the products when the packing was replaced.

The defendants filed a motion for non-suit, arguing, inter alia, that at the time of the decedent’s exposure, the original asbestos-containing parts had been replaced with new parts, and that the plaintiffs had not attempted to prove that the replacement insulation and packing had been purchased from the defendants.

The trial court granted the motion for non-suit but the court of appeal reversed, holding that under the circumstances, the manufacturers could still be liable even if the original components had been replaced:

A boy who was injured while operating a Yamaha Rhino filed a products liability action against Yamaha Motor Company, Ltd. (Yamaha-Japan), the Japanese entity which manufactured the vehicle, as well as Yamaha Motor Corporation, U.S.A. (Yamaha-America), its wholly owned domestic subsidiary and exclusive importer and distributor in the United States. When the plaintiff attempted to serve Yamaha-Japan by serving Yamaha-America through its agent for service of process, Yamaha-Japan filed a motion to quash service, arguing that Yamaha-America is only a subsidiary of Yamaha-Japan, not Yamaha-Japan’s general manager in California, and therefore service should have been made through the Hague Convention.

The trial court denied the motion, reasoning that Yamaha-America is Yamaha-Japan’s general manager in California. Yamaha-Japan filed a petition for writ of mandate but the court of appeal denied the writ, holding that California law allows service on a foreign corporation by serving its domestic subsidiary:

On review, however, it turns out that, yes, it really is that easy. And not only that, there is nothing this court, as a matter of California common law, can do about it. We are a court under authority, and there is a non-overruled, non-distinguishable California Supreme Court case, Cosper v. Smith & Wesson Arms Co. (1959) 53 Cal.2d 77, 346 P.2d 409, that makes service on the California representative of a foreign parent valid-that is, valid as to the foreign parent-under California law. And not only that, but there is a 1988 federal United States Supreme Court case, Volkswagenwerk Aktiengesellschaft v. Schlunk, supra, 486 U.S. 694, 108 S.Ct. 2104, 100 L.Ed.2d 722(Schlunk ), that says when service is valid under state law on the American subsidiary of a foreign manufacturer, there is no need to serve papers in accord with the Hague Service Convention. Accordingly, we have no choice but to deny the petition for writ of mandate."

Two long-time San Francisco 49er’s season ticket holders who were subjected to patdown searches before they were allowed to enter the stadium for an NFL game, filed suit against the team. The plaintiffs alleged that the 49ers had implemented the patdown policy pursuant to a policy the NFL promulgated by which stadium screeners are supposed to conduct physical searches by touching, patting or lightly rubbing all ticket holders entering every NFL stadium for each NFL game. Contending that the searches violated their state constitutional right to privacy, the plaintiffs sought a declaration that the searches were unconstitutional, as well as an injunction prohibiting any further such searches.

The 49ers demurred to the complaint, contending that it did not state a cause of action, and the trial court agreed, sustaining the demurrer without leave to amend. The court of appeal affirmed, concluding that the plaintiffs could not demonstrate that they had a reasonable expectation of privacy under the circumstances, and that rather than submitting to the patdown, the plaintiffs had the choice of walking away. The California Supreme Court reversed, and remanded the case to the trial court, finding that the 49ers had not demonstrated that the allegations of the complaint failed to state a cause of action: