Cal Biz Lit

Ford's Petition for Review in Buell-Wilson Punitive Damages Case

I blogged in March, here, on the Court of Appeals' decision in Buell-Wilson v. Ford (2008) ___ Cal.App.4th ___ (Fourth Dist., D045154).  There, after the Cal Supremes remanded so the court could take another look at the $55 million punitive damage award, the court of appeals did.  And affirmed it again.  I looked in my crystal ball at the time, and wrote that this might be the end of the road for Ford, because "[t]he Court of Appeal seems to have set up enough procedural obstacles that the Supremes won’t get involved unless they really, really, really are determined to slap down excessive punitive damages awards."

Well, we'll find out.  Not unexpectedly, Ford has petitioned the California Supreme Court yet again.  The California Supremes do not accept cases to correct error:  instead, under California Rules of Court, rule 8.500(b)(1), that court generally grants review in civil cases "When necessary to secure uniformity of decision or to settle an important question of law."

Ford is contending that both reasons are present here.  Interestingly, its third basis for requesting review has to do with proffered evidence of government and industry standards and custom and practice in this product liability suit.  While Ford's immediate quarrel is that the trial court excluded this evidence as irrelevant to the punitive damage claim, Ford seems to go farther, suggesting that if it conformed to such standards, customs and practices, punitive damages would be barred as a matter of law.  The chances of ever establishing that proposition seem pretty slim, but if Ford ever carried this off, it would be about the biggest event in the California history of punitive damages / product liability jurisprudence.

Anyway, the Supreme Court has sixty days from April 28 in which to grant review, or ninety days if it grants itself an extension, so we'll know by this summer what the Court has in mind.
 

California Supreme Court Adopts Sophisticated User Defense

This is the biggest decision we've seen in a product liability case in quite some time.  Today, in Johnson v. American Standard (April 3, 2008) ___Cal.4th___ (S139184), the Cal Supremes squarely adopted the sophisticated user doctrine as a complete defense in strict liability failure to warn and negligent failure to warn cases.  The court adopted the doctrine right out of Restatement, Second of Torts, Section 388, subd.(b) comment (k).  And under the newly declared California rule, it doesn't matter whether or not the particular plaintiff is a sophisticated user: 

"A manufacturer is not liable to a sophisticated user of its product for failure to warn of a risk, harm or danger, if the sophisticated user knew or should have known of that risk, harm or danger.  It would be nearly impossible for a manufacturer to determine whether a given user or member of the sophisticated group actual has knowledge of the dangers because of the infinite number of user idiosyncrasies. . . .individuals who represent that they are trained or are members of a sophisticated group of users are saying to the world that they possess the level of knowledge and skill associated with that class.  If they do not actually possess that knowledge and skill, that fact should not give rise to liability on the part of the manufacturer.

The court leaves open one important question:  what if the manufacturer sells to the employer, and it is the employer who is alleged to be the sophisticated user?  While that was not the scenario here, it was in In re Related Asbestos Cases (D.C. Cal. 1982) 543 F.Supp. 1142, where Federal District Court Judge Peckham held that the Navy's status as a sophisticated user was an affirmative defense in product liability matters brought by its former employees.  In today's Johnson decision, the Supreme Court cited Judge Peckham's decision repeatedly.

Cal Court of Appeal to US Supremes: Here’s a Thumb In Your Eye

    Today we discuss punitive damages.  But this post is not about your routine, garden variety, might I say even conservative $1 million or $5 million punitive damages award.  Rather, this is about mega-punitive damages, as in Buell-Wilson v. Ford Motor Company (March 10, 2008) ___ Cal.App.4th___ (Fourth App. Dist. D045154, D045579) (Buell-Wilson II).   Specifically, the question is, what does the Court of Appeal do when the US Supremes tells it to re-analyze a $55 million punitive damages award, already reduced twice, in light of Philip-Morris USA v. Williams (2006) 549 US ___?   The short answer:  spend some forty pages re-analyzing it and reach exactly the same result it did before.  And, more importantly, build a legal wall designed to keep the Supremes from touching the decision.

More after the jump.

California -- Not a Judicial Hell Hole?

In April, the Chamber of Commerce published its list of judicial hellholes, giving California sixth place for the worst in the country, as I reported here.

At year end, here comes the judicial hellhole listing from the American Tort Reform Association.  I don't know what's happening here, but California didn't even make the hellhole list.  The best the golden state could do was number six on the "watch" list, based on ADA accessibility litigation.

Why Corporate Defendants Like the Federal Courts

I blogged not long ago (and there's also a discussion in my product liability white paper) on Lockheed Litigation Cases, a Court of Appeal decision upholding a California trial judge for performing something that looked a lot like Daubert gate-keeping when it came to renowned junk scientist Daniel Teitlebaum.  The case went to the Cal Supreme Court, then disappeared from the books when the majority of the Supremes disqualified themselves.

In a part of the case I didn't discuss, the trial court had held that epidemiology (as relevant here, the study of occurrence or non-occurrence of disease or its absence in persons who are or are not exposed to alleged toxins) was only admissible to prove causation if the "relative risk" exceeded 2.0 -- i.e., when the occurrence of the disease in the exposed persons was at least twice that in the unexposed.  The Court of Appeal held that was going too far, and that the 2.0 standard was not required.

Monday, Judge Charles Breyer of California's Federal Northern District (and brother of U.S. Supreme Court Justice Breyer) issued a Daubert ruling in the Pfizer Celebrex litigation.  The decision followed three days of hearings including examination and cross-examination of proposed expert witnesses.   

In dictum (but dictum he's pretty clearly going to follow in the future) Judge Breyer stated that epidemiological evidence cannot be used to prove "specific causation" -- whether the exposure caused the disease in a specific individual -- when the relative risk is less than 2.0.  There is an excellent discussion of statistical significance and confidence intervals, with the Judge excluding evidence which epidemiologists and statisticians would hold to be not statistically significant.

There's more on the ruling at the Wall Street Journal Law Blog, Legal Pad, and Drug and Device Law.

This is the sort of process I really wish we had in California -- it gives both sides a fair trial while substantially increasing the likelihood that case outcomes will be based on real science.

Cal Supremes Dismiss Potential Major Case Re: Science and the Law

In early 2005, the California's Court of Appeal for the Second District issued a fascinating (and highly favorable for defendants) decision in the toxic tort, solvent-exposure case Lockheed Litigation Cases, B166347.  In a case involving the admissibility of the opinions of the notorious and well-traveled  Dr. Daniel Teitelbaum , the Court of Appeal held that California Evidence Code section 801(b) allowed the trial court to act as a gate-keeper -- much as in Federal Court under Daubert --and excluded Teitelbaum's opinions because they were based on epidemiological studies of multiple solvent exposures, with no indication that there was a risk posed by the specific solvents involved in this case.  The Court also found no error in excluding expert opinion based on case reports, animal studies and toxic registries.  In short, the decision answered all kinds of frequently encountered toxic tort evidentiary questions, moved California a bit closer to Daubert, and contained much anti-junk science ammunition for defendants in these cases.

The California Supremes granted review a couple of months later, and under California law, this made the decision unciteable, and not authority for anything.  But it did look as though we would see some really useful evidentiary authority from the Supreme Court once the case was briefed and argued at that level.

No such luck.  Last week, the Supremes dismissed the review under very unusual circumstances:  that a majority of the members of the seven-justice court had been required to recuse themselves.  This despite the fact that rules of court (and common practice) provide for appointment of "pro tem' justices when members are disqualified, and on at least two past instances -- none recently -- all seven justices have been recused and replaced by pro tems.

So the current situation is that the Lockheed decision has no effect on anyone but the immediate parties, and the law on admissibility of expert testimony remains as wide-open as ever. 

(N.B.:  For more on expert testimony in a world without Daubert, see the Adams Nye white paper on product liability law starting at page 9, or my post here.)

(More N.B.:  The link to Dr. Teitelbaum above is to news about another California case where he testified, a case where the plaintiffs -- his clients -- lost.)

Medical Monitoring in California

Monday's Wall Street Journal Law Blog discusses the Mattel recall of toys from China containing lead paint, and muses on the potential of parents suing for "medical monitoring" damages on behalf of children who were exposed to lead paint from toys but who have no injury.  The same subject is covered more extensively in the Wall Street Journal's on line (paid subs. req'd) and paper versions.  LawBlog quotes "legal experts" in support of the contention that "[a]bout 15 states, including California and Illinois, would likely allow such lawsuits."

Well, wait a minute.  In California, the governing authority is Potter v. Firestone Tire & Rubber Co. (1993) 6 Cal.4th 965 , 25 Cal.Rptr.2d 550; 863 P.2d 795, and the neither the holding nor its effect are quite that simple.  As defined by the Supreme Court, "a claim for medical monitoring seeks to recover the cost of future periodic medical examinations intended to facilitate early detection and treatment of disease caused by a plaintiff's exposure to toxic substances." 

The Court held as follows: 

the cost of medical monitoring is a compensable item of damages where the proofs demonstrate, through reliable medical expert testimony, that the need for future monitoring is a reasonably certain consequence of a plaintiff's toxic exposure and that the recommended monitoring is reasonable. In determining the reasonableness and necessity of monitoring, the following factors are relevant: (1) the significance and extent of the plaintiff's exposure to chemicals; (2) the toxicity of the chemicals; (3) the relative increase in the chance of onset of disease in the exposed plaintiff as a result of the exposure, when compared to (a) the plaintiff's chances of developing the disease had he or she not been exposed, and (b) the chances of the members of the public at large of developing the disease; (4) the seriousness of the disease for which the plaintiff is at risk; and (5) the clinical value of early detection and diagnosis. Under this holding, it is for the trier of fact to decide, on the basis of competent medical testimony, whether and to what extent the particular plaintiff's exposure to toxic chemicals in a given situation justifies future periodic medical monitoring.

We've had this rule in California for more than ten years now, and it hasn't resulted in a flood gate of litigation for plaintiffs seeking medical monitoring damages without proof of injury.  Why not?  QED:  What might the cost of medical monitoring be in a case involving no provable damages and exposure to lead paint in toys?  $5,000?  $10,000?  Maybe $20,000 tops for testing for lead burden and intelligence tests?  How many plaintiff attorneys file $20,000 toxic tort cases?  Not many -- like none.  And the California Supreme Court has stood quite firm in rejecting class actions in personal injury cases (See: Lockheed Martin Corp. v. Superior Court (Carrillo) (2003) 29 Cal.4th 1096 , 131 Cal.Rptr.2d 1; 63 P.3d 913, so these cases would have to proceed one at a time.  The result is that when we see a claim for medical monitoring -- and we see plenty of them -- it's just about always an appendage to a case involving a claim of real injury or disease, not a stand-alone claim.  Mattel has plenty of things to worry about right now, but an onslaught of California medical monitoring claims is likely not one of them.

August 22 update:  Well, that didn't take long.  Today's Recorder, the SF Bay Area legal paper and part of ALM Legal Division reports "Class action filed in L.A. over Mattel toys."  And the same story appears in Law.Com and  The Legal Intelligencer.

According to the complaint, "the potential class is not seeking any damages for personal injury,"  no doubt to try and circumvent California's prohibition of class treatment for personal injury cases.  But I still say this is a non-starter.

White Papers Available

I'm introducing something new today.  Bearing in mind that this site is designed for companies, in-house and outside counsel whose involvement in California litigation is infrequent, but painful, and bearing in mind that the blogging format doesn't really lend itself to lengthy, detailed exposition, I'm adding a feature.  From time to time, our firm generates "white papers," detailed, non-technical and somewhat irreverent discussions of California law that may be of interest to our firm's clients and our out-of-state co-counsel.  Beginning today, I'm going to start making some of these available on CalBizLit.com.  Over on the side bar is a new list, where I've included links to our Proposition 65 white paper (which has been available from a couple of earlier posts) and a new Product Liability white paper.  Both are downloadable pdfs, and I hope they are helpful.  I'll be adding more in the coming months.

San Francisco Tobacco Verdict: $2.5 Million; Punitives Yet to Be Decided

In 2000, Leonard and Leslie Whiteley recovered a verdict of $1.7 million in compensatory damages and $20 million in punitive damages against R.J. Reynolds and Philip Morris in San Francisco Superior Court.  Ms. Whitely (whose smoking-related injuries were the basis of the case) died in the summer of 2000.  In 2004, the Court of Appeal took the verdict away, holding that the California immunity in effect for tobacco companies between 1988 and 1998 meant that no evidence of conduct during that ten year period was admissible to prove fraud by the tobacco companies.  Whiteley v. Philip Morris Inc. (2004) 117 Cal.App.4th 635.

The case has just been retried.  A new jury has awarded Mr. Whitely about $2.5 million in compensatory damages and found that R.J. Reynolds acted with malice.  The jury will shortly be considering whether to award punitive damages against Reynolds, and if so, how much.  Further report here at Law.com.

What Does American Business Think About the Golden State?

The US Chamber of Commerce's Institute for Legal Reform is out with its annual state-by-state rankings of "state liability systems."  I'm not sure this is the right name for it -- it's more a combination of rankings of systems, the players (i.e., judges and juries) and outcomes.  Nonetheless, it will come as no surprise that California doesn't fair well in the eyes of in-house counsel.  Overall, California ranked sixth worst (or 45th best, depending on your level of optimism), ahead of only Illinois, Alabama, Louisiana, Mississippi and West Virginia. 

More after the jump.