Professional Documents
Culture Documents
615
616 Tort Trial & Insurance Practice Law Journal, Winter 2007 (42:2)
B. Pharmaceuticals....................................................................... 628
C. Tobacco.................................................................................... 629
IV. Product Liability Class Action Developments ............................. 629
A. CAFA Does Not Shift Burden to Prove Federal
Jurisdiction Is Proper .............................................................. 629
B. Party Seeking Remand Has Burden to Prove
CAFA’s Exceptions ................................................................... 630
1. Local Controversy Exception ............................................ 630
2. State Action Exception....................................................... 631
V. Consumer Law Issues.................................................................... 632
A. State Lemon Laws ................................................................... 632
1. Automobile Leases and Lemon Laws ................................ 632
a. Lessee as a Qualifying Consumer ................................. 632
b. Previously Leased Cars Are New Motor Vehicles ........ 633
2. Purchase Price of Vehicle Does Not Include
Inflated Value Under Installment Contract ....................... 633
3. Defect Need Not Exist at Time of Trial/Arbitration ........ 634
4. Arbitration Is Prerequisite to Suit ...................................... 635
5. Arbitration Does Not Limit Other Remedies ................... 635
6. Right to Appeal Cannot Be Conditioned on
Paying Attorney Fees.......................................................... 636
B. Arbitration Provisions in Automobile
Purchase Agreements .............................................................. 636
1. Arbitration Provision Held Unenforceable ....................... 636
2. Nonsignatory to Purchase Agreement Can Compel
Arbitration .......................................................................... 636
3. Third-Party Beneficiaries Bound by Arbitration
Agreement .......................................................................... 637
VI. Restatement (Third) of Torts: Products Liability ................................ 638
A. Section 1: Liability of Commercial Seller/Distributor .......... 638
B. Section 2: Design, Warning, and Manufacturing Defect ....... 638
C. Section 3: Inference of Causation ........................................... 639
D. Section 5: Liability of Component Part Supplier
for Defects in Integrated Products.......................................... 640
E. Section 6: Liability of Commercial Seller or
Distributor of Prescription Drugs or Medicine ..................... 642
F. Section 19: Definition of Product ........................................... 642
i. introduction
This article reviews and summarizes the major developments and cases in
the areas of products liability, general liability, and consumer law between
September 2005 and September 2006.
Recent Developments in Products, General Liability, and Consumer Law 617
2. Failure to Warn
A New York federal district court noted in Henry v. Rehab Plus, Inc.8 that
the risk utility balancing test in failure to warn cases “is the same as the in-
quiry in a traditional negligence action where the reasonableness of the
actor’s conduct is considered in light of a number of situational and policy
driven factors.”9 A Sears employee whose job included heavy lifting sued
the manufacturer of the back support belt he wore on the job after he in-
jured his back while wearing the belt.10 There was evidence that the manu-
facturer included no warnings with its support belts, despite studies from
the mid-1990s finding use of a back support belt may falsely lead a worker
to believe that he is protected. This belief may in turn cause him to lift
more weight than he would have without a belt, thereby subjecting him-
self to even greater risk.11 The court held that a jury could find this to be
a foreseeable risk of latent danger of which the manufacturer had a duty
to warn. For that reason, the court denied summary judgment on both the
negligence and strict liability failure to warn claims.12
Wisconsin law also draws no distinction between negligence and strict
liability when it comes to claims complaining of an inadequate warning.
Michaels v. Mr. Heater13 involved a propane gas heater that exploded and
killed the plaintiff’s husband. The plaintiff alleged that the heater was un-
reasonably dangerous because, among other things, it lacked adequately
placed warnings explaining the danger of potential gas leakage.14 The court
observed, “Wisconsin permits plaintiffs to bring both strict liability and
negligence claims premised upon the inadequacy of a product’s warnings . . .
[but] has not distinguished between the liability standards that govern each
claim.”15 The court ultimately denied summary judgment for the defen-
dant, and its holding turned on causation—specifically, whether causation
may be inferred if a warning is found to be inadequate. Recognizing that
Wisconsin appellate courts have decided the issue differently, the court
held that once a plaintiff proves the warning was inadequate, the jury may
infer that an adequate warning would have been heeded.16
3. Use of Product
The Indiana Supreme Court held in Vaughn v. Daniels Co. (West Virginia),
Inc.17 “that ‘use’ of a product under the Indiana Products Liability Act18 does
not include assembly and installation where the seller retains an obligation
. . . to deliver a fully assembled and installed product.”19 Daniels agreed
“to design and install a heavy media coal sump” for Solar Sources. Daniels
contracted with Trimble to assemble and install the sump. The plaintiff,
a Trimble employee, was assembling the sump when he fell and was in-
jured.20 He sued Daniels for strict products liability, among other things.21
The plaintiff could not be a “user” or “consumer” of a product whose as-
sembly was not complete and where the product was to be delivered and
assembled.22 That is, “use and consumption may include assembly and
installation of a product, but only if the product is ‘expected to reach the
ultimate user or consumer’ in an unassembled or uninstalled form.”23
Pennsylvania Department of General Services v. United States Mineral Prod-
ucts Co.24 involved governmental entities’ claims against chemical compa-
nies regarding PCB contamination discovered after a fire. Testing during
the cleanup phase following the fire revealed the presence of PCBs.25 The
chemical manufacturer requested a jury instruction that a manufacturer
is not liable for injuries resulting from the unintended use of its product,
even if such unintended use was foreseeable, and that subjecting a product
to a fire is an unintended use.26 The trial court refused the instruction,
but the state supreme court held that the refusal was erroneous.27 Recog-
nizing that it was reasonably foreseeable that building materials might be
subjected to a fire, the court nonetheless reasoned that foreseeability has
no place in the strict liability arena.28 Justice Newman dissented as to this
issue only, analogizing the legal principle in this case to the crashworthi-
ness doctrine. That is, it may be true that the PCBs were not intended to
be subjected to a fire, but because it is foreseeable that they might be, the
manufacturer has a duty to ensure reasonable safety in that situation.29
4. Defenses
In Hadar v. Avco Corp.,30 a Pennsylvania appellate court considered the
scope of the assumption-of-the-risk defense. A farmer was using a corn
picker machine and noticed that the corncobs were getting stuck in the
machine’s rollers. He tried using a three-foot cornstalk to push the corn-
cobs through the rollers while the machine was still running, but the
rollers pulled both the stalk and the plaintiff’s hand into the corn picker.31
The trial court decided that the plaintiff “voluntarily assumed the risk of
the specific injury he suffered when he attempted to unclog the corn picker
by using the 3-foot corn stalk and by . . . doing so while the tractor was still
in operation with the power takeoff engaged.”32
The appellate court disagreed, stating that although Hadar knew that
placing his hands near the husking rollers was dangerous, he did not ap-
preciate the specific risk of trying to clear the husking rollers with a three-
foot-long cornstalk.33 “Whether or not he knew of the specific danger in
light of his experience and assumed the risk or whether he acted as a rea-
sonable person under the facts of this case is a jury question.”34 The court
reversed the summary judgment granted to the defendant.35 One justice
dissented, agreeing with the trial court that the plaintiff “voluntarily and
knowingly assumed the risk of the injury he sustained.”36
County of Santa Clara v. Atlantic Richfield Co.37 involved an interesting
twist on the statute of limitations defense: the court held that not only were
the plaintiffs’ claims not time-barred, they had not yet accrued.38 Gov-
ernmental entities filed a class action against lead manufacturers alleging
several causes of action in connection with the dangers of lead paint.39 The
damages sought were
(1) costs that had been incurred to educate the public about the hazards of
lead and the steps to take to minimize the risk; (2) costs incurred to inspect
and test property and the environment for the presence of lead; (3) costs in-
curred to train and fund staff to investigate and respond to lead-contaminated
properties and lead-exposed children; and (4) costs incurred for “Property
Damage,” which was identified as “abatement, removal, replacement, and/or
remediation of Lead in private, county, and city owned, managed, leased, con-
trolled, and/or maintained properties.”40
32. Id.
33. Id. at 229.
34. Id. at 230.
35. Id.
36. Id. at 231 (Orie-Melvin, J., dissenting).
37. 40 Cal. Rptr. 3d 313 (Ct. App. 2006).
38. Id. at 335.
39. Id. at 319.
40. Id. at 321.
41. Id. at 323.
42. See id. at 335.
Recent Developments in Products, General Liability, and Consumer Law 621
that because the plaintiffs had not alleged any physical damage to property,
i.e., damage to the homes or buildings caused by the lead paint, their claims
had not yet accrued.43 It would be different, the court said, if the plaintiffs
were suing for personal injuries due to the lead:
While a human being who had suffered lead poisoning as a result of exposure
to deteriorating lead paint in plaintiffs’ buildings might have a viable negli-
gence or strict liability cause of action that is not vulnerable to a statute of
limitations defense, plaintiffs, as the owners of structures simply containing
deteriorating lead paint, do not.44
Finding that the plaintiffs’ causes of action had not accrued, the court
reversed the summary judgment.45
5. Damages
The Supreme Court of New Hampshire considered the application of
the economic loss doctrine in Kelleher v. Marvin Lumber & Cedar Co.46 The
plaintiff’s home windows rotted, so the homeowner sued the window man-
ufacturer.47 The defendant asserted that the plaintiff’s strict liability claim
was barred to the extent it sought damages for economic loss.48
In this case, the court observed, “economic losses encompass both dam-
age to the defective product itself and the diminution in value of the product
because it is inferior in quality.”49 When a defective product accidentally
causes harm to persons or property, the harm is treated as personal injury
or property damage, not economic loss.50 The plaintiff had alleged that
the water leakage from the defective windows caused substantial property
damage to his home, and the court held that the plaintiff had produced
sufficient evidence of these noneconomic losses to survive summary judg-
ment.51 The court also noted that a plaintiff’s general duty to mitigate
damages coexists with the economic loss doctrine. A plaintiff may recover
reasonable mitigation expenses he incurred in order to retard the defec-
tive product’s damage.52 The plaintiff purchased new windows to stop the
damage to his home. To the extent that the new windows were reasonably
required to prevent further water leakage and related property damage, the
plaintiff was entitled to recover the costs of the new windows.53
The First Circuit predicted Puerto Rico would apply the economic loss
doctrine in a products liability case in Isla Nena Air Services, Inc. v. Cessna
Aircraft Co.54 A commercial airline sued the aircraft and engine manufac-
turers for damage to the aircraft arising out of an accident in which there
were no injuries.55 The First Circuit noted that the Puerto Rico Supreme
Court consistently looks to California law for its strict liability jurispru-
dence and in part because California follows the economic loss doctrine,
Puerto Rico probably would as well.56
B. Particular Products
1. Cigarettes
In Estate of Schwarz v. Philip Morris,57 the Oregon Court of Appeals held
that a low tar cigarette manufacturer was not entitled to a directed ver-
dict on the plaintiff’s products liability claim.58 The plaintiff alleged that
the defendant’s cigarettes were “defective and unreasonably dangerous”
in part because (1) “the cigarettes contained added ammonia to increase
the effects of nicotine,” and (2) “the cigarettes or their smoke contained
altered pH so as to increase the effects of nicotine.”59 Oregon’s products
liability statute60 incorporates § 402(a) of the Restatement (Second) of Torts;
and the defendant argued that, under comment i to § 402(a), good tobacco
is not defective just because the effects of smoking are dangerous.61 The
court agreed in principle, but found that the plaintiff had adduced evidence
that the defendant’s cigarettes were not unadulterated but rather contained
added ammonia; in other words, they did not contain the “good tobacco”
contemplated by comment i.62
The defendant also argued that its cigarettes could not have caused the
plaintiff/decedent’s injuries because the evidence was undisputed that the de-
cedent was addicted to tobacco well before she started smoking the defen-
dant’s brand of cigarettes.63 The court rejected that argument because the
jury could have found that the decedent switched to the defendant’s low
tar cigarettes as an intermediate step to quit smoking or that the dece-
dent could have smoked more if she thought the low tar cigarettes were
safer.64
65. No. CV-04-0292-LRS, 2005 WL 2757243 (E.D. Wash. Oct. 25, 2005).
66. Id. at *2 (quoting Wash. Rev. Code § 7.72.060(2)).
67. See id.
68. See id. at *3.
69. 425 F. Supp. 2d 1172 (D. Nev. 2005).
70. Id. at 1177–78.
71. See id. at 1192.
72. 41 Cal. Rptr. 3d 389 (Ct. App. 2006).
73. Id. at 393.
74. Id. at 396.
624 Tort Trial & Insurance Practice Law Journal, Winter 2007 (42:2)
C. Entities
1. Professional Vendors
The question in Adams v. Owens-Corning Fiberglas Corp.76 was whether one
of the defendants was a manufacturer, a professional vendor of asbestos-
containing gaskets, or just a nonmanufacturer seller of the gaskets. The
defendant argued that the only element that might have made the gaskets
hazardous was the existence of asbestos in the gasket material from which
they were cut and that because the defendant did not put the asbestos in
that material, it could not be strictly liable.77 The court found that this
argument ignored the possibility of professional vendor liability, by which
the initial manufacturer as well as the seller can be strictly liable, even if the
seller merely passes on the finished product without making a modifica-
tion that renders the product defective.78 Although the court of appeals did
not hold that the defendant was a manufacturer or professional vendor as
a matter of law, it did hold that the plaintiffs produced sufficient evidence
to withstand summary judgment.79
2. Auctioneers
In Gomez de Hernandez v. New Texas Auto Auction Services, a Texas appellate
court held that an auctioneer could be held strictly liable for alleged defects
in the vehicle it auctioned.80 The court based its holding on the established
Texas law that merely introducing a product into the stream of commerce
subjects that person to strict liability.81 Finding that the auctioneer was not
entitled to judgment as a matter of law, the court reversed the summary
judgment granted to the auctioneer.82
75. Id.
76. 923 So. 2d 118 (La. Ct. App. 2005).
77. Id. at 124.
78. Id.
79. Id. at 125 & n.9.
80. 193 S.W.3d 220 (Tex. App. 2006).
81. Id. at 225–26.
82. Id. at 226.
83. No. 5:04-CV-1477, 2006 WL 2038436 (N.D.N.Y. July 19, 2006).
Recent Developments in Products, General Liability, and Consumer Law 625
4. Successor Entities
In Semenetz v. Sherling & Walden,90 New York joined the majority of states
in rejecting the product line exception, which allows a successor manufac-
turer to be held liable for its predecessor’s torts if the successor continues
the output of the predecessor’s line of products.91 The court reasoned that
(1) the successor manufacturer, often a small business, may have difficulty
obtaining insurance coverage if it will be held responsible for another man-
ufacturer’s products; (2) the product line exception “threatens ‘economic
annihilation’ for small businesses”; and (3) extending liability to the suc-
cessor “places responsibility for a defective product on a party that did not
put the product into the stream of commerce.”92
The Supreme Court of South Carolina answered a federal district
court’s certified questions in Simmons v. Mark Lift Industries93 and stated
that a successor corporation that acquired the assets of its bankrupt prede-
cessor may be held liable for one of the predecessor’s defective products,
but only if “(1) there was an agreement to assume such [liability], (2) the
circumstances surrounding the transaction warrants [sic] a finding of a
consolidation or merger of the two corporations, (3) the successor . . . was
a mere continuation of the predecessor, or (4) the transaction was entered
into fraudulently for the purpose of wrongfully defeating . . . claims.”94
These exceptions stem from the court’s 1924 decision in Brown v. American
D. Legislation
The Help Efficient, Accessible, Low-Cost, Timely Healthcare (“HEALTH”)
Act of 200599 prohibits punitive damages in a product liability suit concern-
ing a medical product if the product is approved by the Food and Drug
Administration (“FDA”) or is generally recognized among qualified experts
as safe and efficient pursuant to the conditions established by the FDA.100
The punitive damages provision is part of a broader tort reform bill that
caps noneconomic damages in medical malpractice cases at $250,000,101
establishes limitations on attorney fees,102 requires future damages to be
reduced to present value, allows providers to annuitize awards in excess
of $50,000,103 and revises statutes of limitations to three years from the date
of injury for minors and to the ninth birthday for those under six.104 As of
the writing of this article, the bill has passed in the House of Represent-
atives and has been referred to the Senate Committee on the Judiciary.105
The Bioterror and Pandemic Preparedness Protection Act106 provides
“liability protections for certain pandemics, epidemics, and security coun-
termeasures.” If approved, the act will amend title 28 of the U.S. Code
to establish an exclusive federal cause of action against only the United
States for all claims related to a qualified pandemic or epidemic product.107
The U.S. District Court for the District of Columbia would have exclu-
sive jurisdiction over these claims, and no claims would be allowed against
manufacturers, distributors, and/or health care providers.108
Effective September 1, 2005, chapter 90 of the Texas Civil Practice and
Remedies Code sets new standards for claims involving asbestos and silica.
iii. preemption
A. Medical Devices
The Second Circuit joined the Third, Fifth, Sixth, Seventh, and Eighth
Circuits in applying federal preemption for medical devices that have under-
gone the FDA’s premarket approval process.113 In Riegel v. Medtronic, Inc.,114
the court affirmed summary judgment for a catheter manufacturer, hold-
ing that the Medical Device Amendment (“MDA”) to the Food, Drug, and
Cosmetic Act (“FDCA”) preempted the plaintiff’s negligence, strict liabil-
ity, and breach of implied warranty claims to the extent that the plaintiff
alleged liability despite the manufacturer’s adherence to FDA premarket
approval standards for the catheter.115 In Missouri Board of Examiners for
Hearing Instrument Specialists v. Hearing Help Express, Inc.,116 the Eighth
Circuit held that the MDA expressly preempted a Missouri statute prohib-
iting mail order sales of hearing aids without prior fitting and testing by
a specialist, finding that the state statute imposed a requirement “in addi-
tion to” federal requirements.117 In Gomez v. St. Jude Medical Daig Division
Inc.,118 the Fifth Circuit upheld summary judgment for the manufacturer of
a medical device designed to deposit a collagen plug on the outside wall
of the patient’s artery to close a hole that developed following surgery,
holding that the MDA preempted a patient’s state law claims for defective
109. See Tex. Civ. Prac. & Rem. Code §§ 90.003 (asbestos), 90.004 (silica) (Vernon 2005).
110. Id. § 90.006.
111. See id. § 90.007.
112. See id. § 90.010.
113. Horn v. Thoratec Corp., 276 F.3d 163 (3d Cir. 2004); Martin v. Medtronic, Inc., 254
F.3d 573 (5th Cir. 2001); Brooks v. Howmedica, Inc., 273 F.3d 785 (8th Cir. 2001); Kemp v.
Medtronic, Inc., 231 F.3d 216 (6th Cir. 2000); Mitchell v. Collagen Corp., 126 F.3d 902 (7th
Cir. 1997).
114. 451 F.3d 104 (2d Cir. 2006).
115. Id. at 123.
116. 447 F.3d 1033 (8th Cir. 2006).
117. Id. at 1037.
118. 442 F.3d 919 (5th Cir. 2006).
628 Tort Trial & Insurance Practice Law Journal, Winter 2007 (42:2)
design, failure to warn and failure to train, breach of implied and express
warranties, and negligence per se.119
B. Pharmaceuticals
The most significant development in preemption law as it applies to
pharmaceuticals appears to be the FDA’s adoption of its final rule on pre-
scription drug labeling.120 The rule took effect June 30, 2006.121 The FDA
wrote, “FDA believes that under existing preemption principles, FDA ap-
proval of labeling under the act, whether it be in the old or new format,
preempts conflicting or contrary state law.”122 The FDA expressed concern
with state law claims that “rely on and propagate interpretations of the act
and FDA regulations that conflict with the agency’s own interpretations”123
because those claims “frustrate the agency’s implementation of its statutory
mandate.”124 State law actions are also said to “threaten FDA’s statutorily
prescribed role as the expert Federal agency responsible for evaluating and
regulating drugs.”125
Despite this strong language, at least one court has explicitly discounted
the FDA’s apparent intent to preempt the field. The plaintiffs in Jackson v.
Pfizer, Inc.126 alleged that their eleven-year-old son’s suicide resulted from
his use of the antidepressants Zoloft and Effexor. The court rejected the
defendants’ preemption arguments, stating without analysis that “[t]he
recent notice issued by the FDA claiming preemption is not persuasive.”127
Other courts have relied on the FDA’s comments on the new drug labeling
rule in holding plaintiffs’ state law drug claims to be preempted. In Penn-
sylvania Employee Benefit Trust Fund v. Zeneca, Inc.,128 the court held that the
plaintiffs’ consumer fraud claims regarding advertising were preempted to
the extent that they complied with FDA labeling requirements.129 Simi-
larly, in Colacicco v. Apotex, Inc.,130 a district court in Pennsylvania deferred
to the FDA’s interpretation of the FDCA and regulations it administers
and held, in a detailed analysis, that the act impliedly preempted state law
failure to warn claims.131
C. Tobacco
Rulings concerning preemption in tobacco litigation varied over the survey
period. In Philip Morris USA, Inc. v. Arnitz,132 a Florida court held that the
Federal Cigarette Labeling and Advertising Act did not preempt design
defect or manufacturing defect claims against a cigarette manufacturer.133
A New York appellate court also rejected the preemption defense, charac-
terizing the duty underlying the plaintiff’s claim as a “state law duty not
to deceive.”134 However, a Louisiana court held in Badon v. R.J. Reynolds
Tobacco Co.135 that a smoker’s claim that cigarettes were unreasonably dan-
gerous per se was preempted by a conflicting policy of Congress not to
remove tobacco products from the market.136
The Ninth Circuit affirmed the remand.143 The court’s analysis turned on
the language of CAFA. First, “there is simply no such language in [CAFA]
regarding the burden as to remand.”144 Because the statute was “entirely
silent as to the burden of proof on removal,” the court presumed that
“Congress [was] aware of the legal context in which it [was] legislating.”145
Second, CAFA contains other provisions that broaden federal jurisdic-
tion.146 The court concluded that “these broadening provisions indicate
that Congress carefully inserted into the legislation the changes it intended
and did not mean otherwise to alter the jurisdictional terrain.”147
whether the plaintiffs had satisfied their burden as to the local controversy
exception. As evidence of the citizenship of the potential class, the plain-
tiffs relied on an affidavit from their attorney affirming that 93.8 percent
of the known class members are Alabama residents, and thus two-thirds of
the entire plaintiff class are Alabama citizens.154 The court held that this
evidence was insufficient because there was no evidence to show how the
known class members were chosen, nor was there evidence of any effort
to locate potential class members outside Alabama.155 The plaintiffs also
failed to meet the burden of the significant defendant test. A class seeks
significant relief against a defendant when the relief sought is a significant
portion of the entire relief sought by the class.156 Although the plaintiffs
alleged U.S. Pipe was a significant defendant, the court held that without
a comparison of the relief sought among all defendants and each defen-
dant’s ability to pay the judgment, the plaintiffs had not proved U.S. Pipe
was a significant defendant.157
2. State Action Exception
In Frazier v. Pioneer Americas, L.L.C.,158 Louisiana residents sued Pioneer
Americas, a Canadian company operating in Louisiana, and the Louisiana
Department of Environmental Quality (“DEQ”) in state court, alleging
they had been harmed by excessive mercury that Pioneer released into the
environment. They claimed DEQ neglected its statutory duty to moni-
tor Pioneer and to warn citizens of dangerous emissions.159 Without the
consent of DEQ, Pioneer removed to federal court based on CAFA as well
as improper joinder of DEQ.160 The district court denied the plaintiffs’
motion to remand.161
On appeal, the Fifth Circuit held that the plaintiffs had the burden to
prove one of CAFA’s exceptions.162 The court held that the plaintiffs failed
to meet the requirements of CAFA’s state action exception, which excludes
from CAFA jurisdiction “any class action in which . . . the primary defen-
dants are States, State officials, or other governmental entities. . . .”163
The plural term defendants means all primary defendants must be states or
state entities for the exception to apply.164 Because Pioneer was a primary
defendant but not a state entity, the exception did not apply.165
Finally, the court held that the plaintiffs failed to satisfy the local
controversy exception. Under that exception, at least one defendant must
be a citizen of the state in which the action was originally filed. The Loui-
siana DEQ did not qualify because a state has no citizenship for diversity
purposes.166
price and not an inflated value of the vehicle as stated in a retail installment
contract that was calculated based upon the buyer’s “negative equity”
trade-in.188 The new motor vehicle arbitration board had found that the
plaintiff’s vehicle was defective and awarded him $19,002.04 as “purchase
price of vehicle.” This amount was the price listed on the retail installment
contract between the plaintiff and the dealer, but it factored in roughly
$4,000 in negative equity in the plaintiff’s trade-in vehicle.189
The dealer appealed, arguing that the purchase price of the vehicle, for
lemon law purposes, should be the actual price (here, $15,600), not an
inflated price specific to the buyer.190 The trial court upheld the arbitra-
tion board’s award,191 but the supreme court agreed with the dealer and
reversed the lower court’s judgment. The court explained thus:
There is nothing in the plain language of [the lemon law] that suggests that
the legislature intended for a prevailing consumer to enjoy a windfall there-
under. . . . [The board’s] interpretation here, permitting a Lemon Law refund
to be based upon the admittedly inflated figures in the retail installment con-
tract, would be contrary to legislative intent as discerned from the statutory
scheme, as it could place the consumer in a significantly better position than
he or she was in prior to buying the vehicle.192
199. Diaz v. Paragon Motors of Woodside, Inc., 424 F. Supp. 2d 519, 538–39 (E.D.N.Y.
2006).
200. Irwin v. Country Coach Inc., No. 4:05CV145, 2006 WL 278267 (E.D. Tex. Feb. 3,
2006).
201. Id. at *3.
202. Harris v. Ford Motor Co., 852 N.E. 2d 750 (Ohio Ct. App. 2006).
203. Peters v. AM Gen. LLC, No. 05-72177, 2005 WL 3502268 (E.D. Mich. Dec. 22,
2005).
204. Felton v. World Class Cars, 818 N.Y.S.2d 891 (App. Div. 2006).
205. Id. at 892 (quoting N.Y. Gen. Bus. Law § 198-b[d][2]).
206. Rodgers v. Gen. Motors Corp., 627 S.E.2d 151, 153–54 (Ga. Ct. App. 2006).
207. Gelinas v. Forest River, Inc., 931 So. 2d 970, 975 (Fla. Dist. Ct. App. 2006).
636 Tort Trial & Insurance Practice Law Journal, Winter 2007 (42:2)
231. Agurto v. Guhr, 887 A.2d 159 (N.J. Super. Ct. App. Div. 2005).
232. Id. at 163. The court did not decide whether the defendant qualified as an occasional
seller, finding the record too “murky and contradictory” at this summary judgment stage. Id.
at 164.
233. Vaughn v. Daniels Co. (West Virginia), Inc., 841 N.E.2d 1133 (Ind. 2006); see discus-
sion supra part II.A.3.
234. Id. at 1140 & n.5.
235. Id. at 1140 n.6.
236. Tomasino v. Am. Tobacco Co., 807 N.Y.S.2d 603 (App. Div. 2005).
237. Id. at 605.
238. Id. (quoting Miele v. Am. Tobacco Co., 770 N.Y.S.2d 386, 391 (App. Div. 2003) (quot-
ing Restatement (Third) of Torts, Products Liability § 2 (1998))).
239. No. E2005-01578-COA-R3-CV, 2006 WL 1698971 (Tenn. Ct. App. June 21, 2006).
Recent Developments in Products, General Liability, and Consumer Law 639
that the malfunctioning of the seat . . . was the product of wear and tear
upon it, given its prior use and lack of maintenance.”249
At least two courts relied on § 3 to hold that the plaintiff may estab-
lish product liability even in the absence of the offending product. The
plaintiffs in Moores v. Sunbeam Products, Inc.250 sued the manufacturer of
a heating pad, claiming the pad malfunctioned and caused a fire that de-
stroyed their home. The heating pad was destroyed in the fire. The court
denied the defendant’s motion for summary judgment, concluding under
§ 3 that the plaintiffs had presented sufficient “circumstantial evidence of
malfunction and a lack of evidence of other causes.”251 Although the defen-
dant contended that a cigarette could have caused the fire, the court stated
that it was required to view in the “light most favorable” to the plaintiff
the plaintiff’s testimony that she did not smoke in the area where the fire
originated.252 The court in Drooger v. Carlisle Tire & Wheel Co.253 cited § 3
for the proposition that a plaintiff may establish product liability in the ab-
sence of the offending product on the basis of expert testimony and other
circumstantial evidence.254 The court “affirmatively reject[ed] a ‘no tire, no
case’ rule in this case.”255
260. Federal maritime law, which generally applies common law principles of products
liability, governed Parker Drilling. Id. at *2.
261. See id. at *5–6.
262. Brocken v. Entergy Gulf States, Inc., 197 S.W.3d 429, 436 (Tex. App. 2006).
263. Id. at 433.
264. Id. at 434.
265. Id. at 436. Comment b provides thus: “[W]hen a sophisticated buyer integrates
a component into another product, the component seller owes no duty to warn either the
immediate buyer or ultimate consumers of dangers arising because the component is unsuited
for the special purpose to which the buyer puts it.” Restatement (Third) of Torts, Products
Liability § 5 cmt. b (1998).
266. Brocken, 197 S.W.3d at 436.
267. 194 S.W.3d 466 (Tenn. Ct. App. 2005).
268. Id. at 480.
269. No. Civ. A.3:04:CV2636-R, 2006 WL 522108 (N.D. Tex. Mar. 3, 2006).
270. Id. at *3.
642 Tort Trial & Insurance Practice Law Journal, Winter 2007 (42:2)