Articles Posted in Product Liability

In a recent case filed in the Northern District of California, Gyorke-Takatri v. Nestle USA, Inc., the court concluded that a party to a class action case who seeks removal to a federal court must offer sufficient admissible evidence to show that there is an adequate jurisdictional basis for removal. The underlying case involved a plaintiff’s allegations about the defendant’s Gerber Graduates Puffs product, which bears a label depicting a variety of fruit and vegetables. The plaintiffs sought to represent a class of in-state consumers who claim that these images were misleading by leading consumers to believe the products were healthier than they actually are. Ultimately, based on its conclusion, the Northern District of California granted the plaintiff’s motion to remand.

In their motion for remand, the plaintiffs alleged that the defendant failed to meet its burden, which required it to show by a preponderance of the evidence that the amount in controversy in the case exceeded five million dollars. This requirement is part of the federal Class Action Fairness Act (“CAFA”), 28 U.S.C. 1332(d). In order to prove that the amount in controversy requirement under CAFA has been satisfied, the party must show that the total amount of damages sought in the lawsuit, exclusive of attorneys’ fees, costs, and interest, exceeds five million dollars.

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A recent investigative report from the New York Times suggests that many contracts that consumers sign on a regular basis include severe and harsh provisions that effectively abolish the consumers’ rights to combat unfair and deceptive business practices. Most of these contracts are lengthy, complex, and difficult to understand, discouraging consumers from digging too deeply into the provisions and the impact of what they may be signing. Cell phone contracts are one of the most common examples of this type of contract, but they can also come with certain product purchases or even medical services.

The article discusses some specific examples involving credit card contracts, which impose an arbitration requirement on the signing party. Arbitration is a process that supplants the traditional judicial system and right to a jury. In an arbitration, the parties meet with a single, agreed upon arbitrator who is often a former lawyer or judge. The arbitrator’s decision is binding on the parties, and the parties are virtually precluded from bringing an action in court. In many cases, these arbitration requirement provisions will also specify the venue where the arbitration must take place, the set of arbitration rules that will apply, and who will be responsible for the cost of the arbitration.

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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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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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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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