Class Actions

Published on: November 12, 2015

NHTSA Fines Defective Airbag Manufacturer Takata $200 Million

The National Highway and Traffic Safety Administration (“NHTSA”) has released a statement indicating that it has fined Japanese airbag manufacturer Takata $200 million for mishandling the recall of its airbag inflators, which have been linked to at least seven deaths of Americans. On May 19, 2015, the United States Department of Transportation (“DOT”) issued a statement indicating that Takata had identified a number of defects in some of its airbag inflators. According to reports, the affected inflators were constructed with a propellant that is subject to degrading over time, leading to ruptures that can cause serious injury or even death.

On June 5, 2015, the NHTSA initiated a formal administrative proceeding against Takata, referred to as the Coordinated Remedy Program Proceeding. The purpose of this action was to determine whether the NHTSA should implement an accelerated remedy approach to addressing the millions of defective Takata airbag products contained in American vehicles. The NHTSA has the authority to require vehicle manufacturers to accelerate repairs on recalled vehicles pursuant to the TREAD Act, passed in 2000. The acceleration can only be ordered when the agency determines that there will be a risk of serious injury or death if the remedy process is not accelerated.

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Published on: November 9, 2015

California Court Dismisses Class Action Alleging Use of Term “Handcrafted” Was Misleading

By Moll Law Group

Earlier this month, a California federal court dismissed a class action lawsuit seeking to recover damages from the makers of Jim Bean, claiming that the company violated state consumer protection laws by labeling some of its whiskey and bourbon products as “handcrafted.” Dating back to the 1820s, bourbon is a type of whiskey. The term bourbon reached pervasive usage during the 1870s. Today, the Kentucky Distillers’ Association reports that roughly 95 percent of the world’s supply of bourbon is produced in Kentucky.

In Welk v. Beam Suntory Import Co., the plaintiffs’ complaint asserted claims under California’s consumer protection laws, including the False Advertising Law (FAL) and the Unfair Competition Law (UCL). In response to the complaint, the defendant filed a motion to dismiss, claiming that under the state’s safe harbor doctrine, the company is insulated from state law claims due to its compliance with federal labeling laws. The company also alleged that the plaintiffs failed to state a claim because the plaintiffs did not allege any facts showing that a reasonable consumer would find the label misleading. Also, the defendant contended that the economic loss doctrine prevented the plaintiffs from pursuing the claim for negligent misrepresentation.

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Published on: November 6, 2015

Colorado Court Considers First Cannabis Product Liability Lawsuit

By Moll Law Group

While a number of states are moving to legalize the use of cannabis, manufacturers of products containing marijuana may not be entirely clear when it comes to understanding how product liability rules will apply to them. In the recent case of Flores v. LivWell, Inc., two marijuana consumers sued the defendant, claiming that a fungicide known as Eagle 20, a petroleum-based product, was used during the marijuana growing process. The plaintiffs sought to certify a class action against the Colorado-based defendant, one of the largest producers of cannabis in the state.

The plaintiffs alleged specifically that the company used Eagle 20 without adequately warning consumers of the potential side effects and dangers associated with the insecticide. According to their complaint, however, neither of the two plaintiffs alleged that they became ill or experienced any of the potential side effects after ingesting cannabis products they purchased from the defendant.

Eagle 20 is a controversial substance, especially when it comes to cannabis cultivation. The product is used to kill pests and mites that destroy crops. One of the main ingredients in the product is Myclobutanil, which breaks down into hydrogen cyanide–a poison–when subjected to heat. The product is permitted for use in vegetation that will not ultimately be inhaled. As a result, the Colorado Department of Agriculture has banned the use of Eagle 20 for tobacco crops because the end use for tobacco and similar plants is inhalation.

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Published on: October 30, 2015

Ohio Supreme Court Reverses Certification of Class Containing Members Without Damages

By Moll Law Group

Last month, the Ohio State Court handed down a decision holding that courts cannot certify proposed class actions that include members who have not suffered any injuries. In Felix v. Ganley Chevrolet, Inc., the trial court granted class certification to a proposed class defined as including all consumers who purchased vehicles from a specific dealership subject to a contract including an arbitration provision that was unenforceable.

At the time the trial court granted the motion for class certification, there was no evidence that any of the class members, besides the representative, had an actual dispute with the defendant dealership or even suffered injuries as a result. Ultimately, the trial court awarded each class member $200 as damages.

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Published on: October 27, 2015

First Circuit Rejects Defendant’s Offer of Settlement as Mooting Plaintiff’s Claims

By Moll Law Group

In many class action cases, the defendant will attempt to render the action moot by offering a settlement to the lead plaintiff. Last month, the First Circuit Court of Appeals rejected one such attempt to moot in Bais Yaakov of Spring Valle v. ACT, Inc. In this case, the plaintiffs alleged that the defendants sent unsolicited faxes informing the plaintiffs and the proposed class of testing deadlines and test locations in violation of the Telephone Consumer Protection Act (“TCPA”) and analogous New York state laws.

After the suit was filed, the defendant made an offer for judgment pursuant to Federal Rule of Civil Procedure 68. The defendant then moved to dismiss the lawsuit, claiming that the Rule 68 offer that it sent, which the plaintiffs did not accept and the defendant later withdrew, fully resolved the parties’ case or controversy, rendering the plaintiffs’ claims moot.

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