Co-authored by Brian Gross 

Over the top warning labelAs a defense attorney, one of the most common allegations my product liability clients face is a claim that the company “failed to warn” the end user of a potential defect in its product.  With the Christmas season upon us, and due to the fact that so many of the products we purchase for our friends and family contain a wide variety of warning labels to avoid such a lawsuit, I felt it prudent to address this rather important issue in this week’s blog installment.

A warning is a statement which is meant to make someone aware of a potential danger associated with a particular product or action.  A manufacturer must provide a warning when the product has a danger that cannot be removed.  Generally, however, a manufacturer is not required to provide a warning for dangers which are obvious and understood.  Despite that fact, due to the increase in product liability lawsuits over the past few years, manufacturers are taking care to add warnings that may seem a little outrageous – even downright laughable – to their products to avoid ending up in litigation for “failure to warn.”  Some of these over-the-top warnings include:

Label: May cause drowsiness.
Product: Nytol sleeping pills.

Label: Do not use while sleeping.
Product: Vidal Sassoon hair dryer.

Label: This product is not intended for use as a dental drill.
Product: Dremel Multipro’s rotary tools.

Label: This product moves when used.
Product: Razor scooter.

Why are manufacturers taking such steps to warn the consumer of the such obvious dangers or potential dangers associated with such obvious misuse of their products?  Much of it has to do with the plaintiff’s bar and the endless supply of consumers willing to sue.  Even “questionable” product liability cases can lead to costly legal fees and damages.  Bloomberg recently analyzed the 50 largest jury verdicts over the past few years. In 2010 alone, 15 verdicts involving “failure to warn” claims topped $25 million (up 7 from the previous year).  In fact, juries in the five largest product liability cases awarded damages of $1.1 billion, a substantial increase from previous years.  Several factors can be attributed to this increase in damages awarded by jurors, such as:

  • The public’s view of “Big Business” and its failure to protect Joe Consumer (think BP oil spill and the recent massive Toyota automobile recall).
  • High unemployment rates.
  • Instability of the stock market.
  • America’s stagnant real estate sales.
  • America’s struggling banking industry.
Arguably many factors have driven our current “crisis of confidence” in Corporate America, some rightly deserved and some perpetuated by the media. Nevertheless, a case can be made that as a result of these feelings, jurors are using the courtroom as a vehicle to right the perceived wrongs of Corporate America.  Of course there are plaintiffs’ counsel ready, willing and able to show them how, supporting the contention that levying astronomical verdicts will “punish” big business.  In doing so, juries are hurting these companies right where it counts

Continue Reading Warning: Reading This Blog Post May Stimulate Brain Cells

Co-authored by Brian Gross

Chances are, if you watch television, you’ve seen them – commercials in which attorneys promise financial compensation for those who have been diagnosed with an asbestos-related disease.  In their efforts to fulfill these promises, plaintiffs’ attorneys can pursue claims not only against solvent companies through the court system, but can also pursue claims against an ever-growing group of asbestos bankruptcy trusts.  These asbestos bankruptcy trusts – more than fifty in all – have billions of dollars with which to compensate asbestos claimants, and are becoming an increasingly important source of compensation for plaintiffs.  Just how important these trusts are as a source of compensation in each individual case, however, remains a mystery.  That is due to the fact that the current asbestos bankruptcy trust rules do not require the trusts to make public the payments they make to claimants.  That, combined with the fact that many courts have failed to require plaintiffs to disclose any information concerning trust claims, has resulted in a lack of transparency between the trusts and the tort system.  This lack of transparency creates an atmosphere for potential fraud, as it may allow a plaintiff to recover more than they would otherwise be entitled to collect from solvent companies in the tort system.  In an effort to combat this alleged “double recovery,” defendant companies in asbestos litigation, as well as their attorneys and insurance carriers, have called upon the federal government to take steps to create more transparency between the trusts and the tort system.

On Friday, September 9, 2011, the House Judiciary Committee’s Subcommittee on the Constitution held a hearing entitled, “How Fraud and Abuse in the Asbestos Compensation System Affect Victims, Jobs, the Economy and the Legal System.”  Led by Subcommittee Chairman Trent Franks, R-AZ, the Subcommittee heard testimony concerning alleged abuses associated with asbestos litigation, including forum shopping, witness coaching, and over-expansive legal theories. The heart of this debate, however, focused on the lack of transparency with respect to asbestos bankruptcy trusts, and how that lack of transparency harms companies which face asbestos claims.  Supporters of reform argue that plaintiffs should be required to disclose all bankruptcy trust filings so that payments by solvent defendants can be adjusted to reflect the compensation received from the trusts, and thus prevent double recovery by plaintiffs.

Under the current state of asbestos litigation, it is usually difficult for a defendant to obtain information concerning claims filed with bankruptcy trusts, which may include details of the claimants’ alleged asbestos exposure.  Defense attorneys argue that this information is vital to the defense of asbestos cases because it may uncover inconsistencies in plaintiffs’ testimony and could reduce the amount that a defendant may be required to pay if a plaintiff obtains a judgment.   This is especially true in several-liability states according to the most recent RAND report.

At this point, it is unclear whether Congress will act to help create the transparency sought by defense attorneys, insurance carriers, and asbestos defendants
Continue Reading Congress Taking a Closer Look into Alleged “Double-Dipping” by Asbestos Claimants

Co-authored by Brian Gross

The Texas legislature recently enacted a major tort reform law which would make the losing party pay the opposing party’s “costs and reasonable and necessary attorney’s fees.”  In its true form, this rule, also known as the “English Rule,” requires that a losing party in litigation pay the fees and the costs of the prevailing party.  To date, this law is employed in its “pure” form only in Alaska, but it is common in much of Europe, Great Britain and Canada.  Although the final version of the Texas law differs substantially from the English Rule in that it applies only to a party who prevails on a motion to dismiss, and not to a party who prevails at summary judgment or trial, it may signal a growing trend to punish those who unnecessarily overburden limited court resources.  The current budget crises faced by courts across the country provide strong support for the English Rule, at least in some form, in an effort to streamline courts’ dockets.  And although Texas just recently statutorily adopted a form of the English Rule for all tort cases, a form of the English Rule has apparently already made its way into asbestos litigation.

New Jersey Appellate Court Makes Losing Asbestos Defendant Pay Plaintiff’s Attorney Fees

Last month, a New Jersey Appeals Court ruled that an asbestos defendant who failed to reach settlement, and subsequently lost at trial, is responsible to pay all of plaintiff’s attorney fee related to the trial and appeal.  In Buttitta v. Allied-Signal Inc., et al., No. A-6117-09T4, 2011 WL 3180455 (N.J. Super. Ct. App. Div. July 28, 2011), Susan Buttitta filed a wrongful death lawsuit against multiple defendants in which she alleged that her husband’s mesothelioma was caused by his exposure to asbestos-containing products while employed in a General Motors Corporation warehouse.  Plaintiffs sued several companies, including Asbestos Corporation Ltd. (“ACL”), a Quebec-based asbestos mining company.

Prior to trial, Buttitta settled with or dismissed all of the defendants, with the exception of ACL and Borg-Warner Corp.  Plaintiff subsequently made a settlement demand of $10 million to the two companies, which each rejected prior to trial. Ultimately, the jury returned a verdict of approximately $30 million against the two remaining defendants.

ACL unsuccessfully appealed the verdict, and plaintiff then moved for reimbursement of the costs of trial and appeal, including her attorneys fees and expenses.  The trial judge granted Buttitta’s motion, and awarded $655,000 in attorney fees and $59,000 in expenses against ACL.  ACL appealed.  On appeal, the New Jersey Appellate Court held that New Jersey state law provides for the imposition of reasonable attorneys fees against a losing party that declines to settle a case before trial, and is applicable when a final judgment is more than 120% of the amount of the settlement offer.  The Appeals Court concluded that the plain language of the law required finding ACL responsible for all of Buttitta’s reasonable costs and attorneys fees because of its refusal to
Continue Reading Tort Reform Law And The Controversial “Losers Pay” Provision; A Game Changer For Asbestos Litigation?