e e n St er St ate J. B P o

Transcription

1 cl mi cn E s f in Act y u j N In 18 s s Cla ss P t d uct u D

2 P n C St at id T. M ill Und sum cts P f atuts t is J. B and tk Da v by td t i c n St t Rcnt yas hav witnssd a plifatin f putativ n injuy class actins bught by uninjud puchass f allgdly dfctiv pducts und stat cnsum-ptctin statuts. Plaintiffs in ths cass sk cvy f cnmic lss du t th allgd pduct dfct: Th dfctiv pduct, as sld, was wth lss than th dfct-f pduct allgdly pmisd. Evy pduct manufactu is vulnabl t ths n injuy actins,1 and thy can ps significant financial isks. Th tial cut in Pic v. Philip Mis USA, Inc., f xampl, ntd a vdict aft a bnch tial f $10 billin v th allgdly fals and mislading makting f light cigatts in Illinis. Pic v. Philip Mis USA, Inc., 2003 WL (3d Jud. Ci., Madisn Cty., Ill. 2005). 19

3 Th Pic vdict subsquntly was vtund n appal t th Illinis Supm Cut, Pic v. Philip Mis USA, Inc., 848 N.E.2d 1 (2005), and an vwhlming majity f cuts hav dismissd ths n injuy actins sht f tial. But, as this aticl suggsts, th atinals xpssd by th cuts, whil sufficint t disps f th cass bf thm, gnally d nt dvlp th lag plicy and lgal issus that shuld sv t dfat all f ths n injuy class actins. Th Naw Bass f th Cuts Dcisins Tw pincipal atinals hav bn aticulatd by th cuts t dfat n injuy class actins sht f tial. N Actual Damags. Mst stat cnsum-ptctin statuts pmit puchass f pducts t cv actual damags. A significant numb f cass hav asnd that plaintiffs in n injuy class actins cncning allgd pduct dfcts hav yt t sustain actual damags. Aft all, th pduct has nt yt malfunctind it has, s fa, pfmd xactly as th plaintiffs allgdly xpctd and plaintiffs accdingly hav civd th bnfit f thi bagain. S,.g., Riva v. Wyth-Ayst Labs., 283 F.3d 315, 320 (5th Ci. 2002) ( [Plaintiff] paid f an ffctiv pain kill, and sh civd just that th bnfit f h bagain. ); Bihl v. Gnal Mts Cp., 172 F.3d 623, 628 (8th Ci. 1999) ( Wh, as in this cas, a pduct pfms satisfactily and nv xhibits an allgd dfct, n caus f actin lis. ); In Cann Camas, 237 F.R.D. 357, 360 (S.D.N.Y. 2006) ( A plaintiff wh puchass a digital cama that nv malfunctins v its dinay pid f us cannt b said t hav civd lss than what h bagaind f whn h mad th puchas. ); Fank v. DaimlChysl Cp., 292 A.D.2d 118, 128 (N.Y.A.D. 1st Dpt. 2002) ( In sum, plaintiffs hav nt bn invlvd in any accidnts and hav nt suffd any psnal injuis ppty damag. Mv, plaintiffs d nt allg that any sat has faild, bn tfittd paid, n hav plaintiffs attmptd t sll, sld an autmbil at a financial lss bcaus f th allgd dfct. ); Wilsn v. Styl Cst Pds., Inc., 627 S.E.2d 733, 736 (S.C. 2006) ( Th is n vidnc that th [mbil hm] anch systms hav nt, t dat, bn xactly what th Hmwns bagaind f. ); Titswth v. Haly-Davidsn, Inc., 677 N.W.2d 233, 240 (Wis. 2004) ( [A]n allgatin that a pduct is diminishd in valu bcaus f an vnt cicumstanc that might might nt ccu in th futu is inhntly cnjctual and ds nt allg actual bnfit-f-th-bagain damags.... ). Cmpa,.g., Cllins v. DaimlChysl Cp., 894 S. 2d 988, (Fla. Dist. Ct. App. 2005) ( W s n quimnt in [th Flida Dcptiv Tad Pactics Act] that a dfct manifst itslf by failing t pat in an mgncy by causing injuy.... [Plaintiff] has allgd m than a pssibl injuy. Sh claims an actual injuy in th fm f insufficint pduct valu. In th wds, sh cntnds that sh did nt gt what sh bagaind f. ). 2 N Mispsntatin. An ssntial lmnt und mst stat cnsum-ptctin statuts is that th dfndant has ngagd in an unfai pactic. In mst class actins bught v allgd pduct dfcts, th allgd unfai pactic was an implicit mispsntatin. Cuts hav dismissd cass wh th allgd implid mispsntatin cnstitutd m puffing. Titswth v. Haly-Davidsn, Inc., 677 N.W.2d 233, (Wis. 2004) (advtising a mtcycl ngin as a mastpic f pmium quality that is filld t th bim with tqu and ady t tak yu thunding dwn th ad was m puffy, nt an actinabl psntatin that th ngin was dfct-f); s als 63 Am. Ju. 2d Pducts Liability 685 (1997) (cllcting cass gading puffing in th cntxt f waanty claims). Whlly apat fm pcdnt und stat cnsum-ptctin statuts, dfns cunsl als might cnsid aguing that th cuts shuld b luctant t adpt an xpansiv dfinitin f what cnstituts an implicit mispsntatin f tw asns. Fist, adpting an xpansiv dfinitin f what cnstituts an implicit mispsntatin impmissibly wuld tansfm manufactus int insus against cnmic lss f mst pduct dfcts. It is n answ f plaintiffs cunsl t asst that stat cnsum-ptctin statuts w intndd t mak it asi f cnsums t cv f fals and mislading businss pactics. Thy hav. At last sm stats dispns with th ncssity f pving bjctivly asnabl lianc, scint, pivity f cntact, and ctain th cmmn-law quimnts. Davis v. Pwtl, Inc., 776 S. 2d 971, (Fla. Dist. Ct. App. 2000); Olivia v. Amc Oil C., 776 N.E.2d 151, 164 (Ill. 2002); Gnnai v. Wicht, 691 A.2d 350, 366 (N.J. 1997); Stat x l. Wbst v. Aac Inv. C., 756 S.W.2d 633,

4 (M. Ct. App. 1988); Fbs v. Pa Tn Gup, Inc., 394 S.E.2d 643, 651 (N.C. Ct. App. 1990); Stutman v. Chmical Bank, 731 N.E.2d 608, (N.Y. 2000). Expanding th dfinitin f what cnstituts an actinabl mispsntatin, hwv, ffctivly wuld mak mst manufactus insus against cnmic lss du t pduct dfcts, which stat lgislatus culd nt hav intndd. Indd, suppt f th pincipl that a manufactu is nt an insu against all isks f injuy lss assciatd with its pduct abunds in th dcisinal law in mst stats, vn aft nactmnt f stat cnsum-ptctin laws. 63 Am. Ju. 2d Pducts Liability 4 (2006 Supp.). 3 Scnd, an xpansiv intptatin f what cnstituts an actinabl, implicit mispsntatin may un aful f th Fist Amndmnt. Ths n injuy pduct-dfct cass gnally challng cmmcial spch that is nly ptntially mislading, nt inhntly invitably mislading. Bats v. Stat Ba f Aiz., 433 U.S. 350, 372 (1977). Und Cntal Hudsn Gas & Elc. Cp. v. Public Svic Cmm n, 447 U.S. 557, 566 (1980), and its pgny, ptntially mislading cmmcial spch is ntitld t Fist Amndmnt ptctin. S,.g., Biganic Safty Bands, Inc. v. Amnt, 174 F. Supp. 2d 1168, 1180 (D. Cl. 2001). Such spch may b gulatd nly if th plaintiffs shw that sticting th spch wuld (1) futh a substantial gvnmnt intst; (2) advanc that substantial intst dictly ; and (3) d s in a way that is nt m xtnsiv than is ncssay t sv that intst. Cntal Hudsn, 447 U.S. at 566; Masn v. Fla. Ba, 208 F.3d 952, 957 (11th Ci. 2000); Pasn v. Shalala, 164 F.3d 650, 655 (D.C. Ci. 1999); Pak v. Ky. Bd. f Dntisty, 818 F.2d 504, 509 (6th Ci. 1987). Evy pduct manufactu is vulnabl t n injuy actins, and thy can ps significant financial isks. Cnclusin. Bth f ths agumnts dawn fm th cas law a pfctly snsibl, txtual atinals f dnying cvy. 21

5 But plaintiffs may agu that thy d nt apply univsally. F xampl: Th n actual damags atinal aguably wuld nt apply wh a pduct has alady malfunctind withut causing any physical injuy ppty damag. And vn f pducts that hav yt t malfunctin, th aguably can b actual damags at last f ths plaintiffs wh, f instanc, allgd that thy sld thi usd dfctiv pduct f lss mny than thy wuld hav btaind f th pmisd dfct-f pduct. Th n mispsntatin atinal wuld nt apply wh an actinabl mispsntatin was mad wh it is a vilatin f th stat statut nt t discls th xistnc f th allgd dfct. Gaham v. RRR, LLC, 202 F. Supp. 2d 483, 491 (E.D. Va. 2002) (th Viginia Cnsum Ptctin Act quis nly that th act pactic cnstitut a fals psntatin f an xisting fact); Tx. Bus. & Cm. Cd Ann (b)(24) ( failing t discls infmatin cncning gds svics which was knwn at th tim f th tansactin if such failu t discls such infmatin was intndd t induc th cnsum int a tansactin int which th cnsum wuld nt hav ntd had th infmatin bn disclsd ). Twad a Bad Viw Th a sund asns f dnying cvy in all n injuy class actins bught v allgd pduct dfcts that ps a isk f futu psnal injuy ppty damag which, s fa, d nt appa t hav bn dvlpd adquatly in th dcidd cass. Th puptd cnmic lsss claimd by plaintiffs must b idntical substantially idntical t th psnt valu f thi xpctd futu psnal injuis ppty damag fm th allgd pduct dfct. In Riva, supa, f xampl, a dug manufactu faild t discls adquatly a dug s isk f causing futu cadivascula disas. What is th allgd diminutin in th pduct s valu? It must b th cnmic valu nw f th incasd isk f futu cadivascula disas. On is had-pssd t cnju up xampls f n injuy cass invlving pduct dfcts in which this is nt tu. Th tu idntity f th damags sught ught t pclud thi cvy by a pspctiv class whs mmbs hav nt yt suffd any actual physical injuy ppty damag, f at last th asns: Fist, vitually all stats pclud cvy f futu psnal injuy ppty damag, xcpt in limitd cicumstancs that a nt psnt in ths cass. 22 Am. Ju. 2d Damags 214 (2006 Supp.). In any vnt, claims f futu psnal injuy ppty damag a unsuitabl f class-actin tatmnt. Scnd, allwing class cvy in n injuy lawsuits v allgd pduct dfcts wuld pmit cvy f ssntially th sam damags twic nc in th guis f cnmic lss and thn again f plaintiffs wh actually suff th psnal injuy ppty damag in th futu. Cnsquntly, th lvl f cmpnsatin is gat than that which is scially ptimal. As Judg Eastbk bsvd in In Bidgstn/ Fistn, Inc., 288 F.3d 1012, 1017 (7th Ci. 2002), sinc tt law fully cmpnsats ths wh a physically injud, any cvis f cnmic lss und stat cnsum-ptctin statuts f allgdly dfctiv pducts by plaintiffs wh hav suffd n physical injuy ppty damag man xcss cmpnsatin. S als Hindl v. Pfiz Inc., 381 F. Supp. 2d 364 (D.N.J. 2004) (dismissing claim f cnmic lss und stat cnsum-ptctin act bcaus psciptin dug psd allgdly undisclsd isk f cadivascula disas, nting that impsing liability wuld man xcss cmpnsatin ); Michal S. Gv, Cnsum Law, Class Actins, and th Cmmn Law, 7 Chap. L. Rv. 155, 171 (2004) ( Th plain fact is this: s lng as th patis actually injud can su, any additinal dtnc is v th tp. ). 4 Thid, th class is ith impmissibly splitting its causs f actin, t th xtnt that futu psnal injuy damag claims by plaintiffs a fclsd, ith lgally pactically, 5 th class psntativs hav ptd f a divisin f damags that cmpnsats vybdy nw f incasd isk f futu injuis but pvids n futh cmpnsatin t plaintiffs wh a actually injud lat. Such intaclass cnflict (btwn a gup wh will nv b injud by th allgd dfct and a small and unidntifid minity wh will b injud) can pvnt class ctificatin. S Amchm Pds., Inc. v. Winds, 521 U.S. 591, 626 (1997) ( Mst salintly, f th cuntly injud, th citical gal is gnus 22

6 immdiat paymnts. That gal tugs against th intst f xpsu-nly [and cuntly uninjud] plaintiffs in nsuing an ampl, inflatin-ptctd fund f th futu. ). Ths dctinal and undlying plicy cnsidatins shuld ffctivly pclud cvy in all n injuy class actins v pduct dfcts that allgdly ps a isk f futu psnal injuy ppty damag. 6 n Pt J. Bistk [email protected] David T. Mill [email protected] 1 N injuy class actins hav tagtd manufactus f a wid aay f pducts, including autmbils, mtcycls, lctical cptacls, mdical dvics, psciptin dugs, cmputs, cigatts, gaslin, camas, and mbil hms. 2 Oth atinals hav bn advancd, sm lss gnally applicabl bcaus thy a cas- fact-spcific. Sm cuts, f instanc, hav hld that th is n injuy-in-fact and hnc n justiciabl cas cntvsy. S,.g., Riva v. Wyth-Ayst Labs., 283 F.3d 315, (5th Ci. 2002) (Pspctiv class f puchass f psciptin dug wh did nt xpinc th sid ffct that th manufactu allgdly faild t discls lackd standing. Plaintiffs additinally faild t allg causatin that, had th allgdly nndisclsd sid ffct bn disclsd, plaintiffs wuld nt hav puchasd th dug.); Haisn v. Lvitn Mfg. C., Inc., 2006 WL , *4 (N.D. Okla. 2006) (Putativ class f hmwns with allgdly dfctiv back-wi push-in lctical tminals that w fundamntally unsaf and incasd isk f lctical fis, but wh had nt actually sustaind psnal injuis ppty damag fm th lctical tminals, had n Aticl III standing t su und, int alia, th Oklahma Cnsum Ptctin Act f cnmic injuis, including th cst f placing th lctical tminals, bcaus thy had suffd n actual thatnd distinct injuy. ). Althugh dismissal f failu t stat a claim was an apppiat sult in ths cass, th dcisins fail t distinguish adquatly btwn (1) taditinal cnsum faud cass, such as wh a mchant psnts that a watch is a Rlx whn, in fact, it is a chap imitatin, wh fw wuld disput that standing xists; and (2) claims f cnmic lss basd n th psnc f a pduct dfct that th dfndant allgdly psntd was nt psnt faild t discls. As dvlpd blw, diffnt sults in ths tw cicumstancs a apppiat. Finally, in In Cann Camas, 237 F.R.D. 357, 360 (S.D.N.Y. 2006), th cut initially hld that, und Nw Yk s Cnsum Ptctin Act, plaintiffs had t pv an actual malfunctin. Whil sm mmbs f th ppsd class allgdly had xpincd actual malfunctins, th caus f th malfunctin wuld hav t b shwn individually. Thus, cmmn issus did nt pdminat, and th cut dnid class ctificatin. S als Hustn Cunty Halth Ca Auth. v. Williams, 2007 WL 80797, *12 (Ala. 2007) (n lgal injuy f bast-implantatin patints wh did nt xpinc a fungal infctin undg mval f th implants; as t class mmbs wh did, cmmn issus did nt pdminat). 3 This agumnt is nt t b cnfusd with an attmpt t apply tt-basd limitatins n cvy, such as th cnmic lss ul, t actins bught und stat cnsum-ptctin statuts. Mst cuts hav jctd that appach. S,.g., Titswth, 677 N.W.2d at (cllcting authity). 4 Indd, th is an agumnt t b mad that, t th xtnt manufactus fsaw th cvy f pu cnmic lss, withut any accmpanying psnal injuy ppty damag, th manufactus wuld hav spad th lss by chaging high pics. Cnsquntly, cnsums hav alady civd th bnfit f th bagain in th fm f lw pics. S Min A. Yahya, Can I Su Withut Bing Injud? Why th Bnfit f th Bagain Thy f Pduct Liability Is Bad Law and Bad Ecnmics, 3 G. J.L. & Pub. Pl y 83, (2005) (At : Paadxically, f th n-injuy suit t wk, th manufactu shuld hav chagd m in th fist plac ffctivly ngating th bnfit f th bagain claim. At 131: Bth th cas law and cnmic analysis suggsts [sic] that plaintiffs shuld cv nthing in n-injuy suits. Eith th cnmic lss ul bas cvy... th bnfit f th bagain is qual t z. ). 5 Damags f th isk f futu psnal injuis in th guis f cnmic lss, such as th $10 billin judgmnt in Pic against Philip Mis USA, Inc., in Illinis aln, may b s gat as t thatn th viability f th dfndant and any cvy by ths plaintiffs wh actually sustain psnal injuis in th futu. 6 Ths sam dctinal and plicy cnsidatins ps n bstacl t cvy by plaintiffs in taditinal cnsum faud cass. Thy a nt implicatd wh th claimd cnmic lss bas n latinship t xpctd futu psnal injuy ppty damags. Oth cass dm th allgd cnmic lss du t pduct dfcts t spculativ t suviv. S,.g., Calsn v. Gn. Mts Cp., 883 F.2d 287, (4th Ci. 1989); L v. Gn. Mts Cp., 950 F. Supp. 170, 175 (S.D. Miss. 1996); Yst v. Gn. Mts Cp., 651 F. Supp. 656, 658 (D.N.J. 1986); Wav v. Chysl Cp., 172 F.R.D. 96, 99 (S.D.N.Y. 1997); Titswth v. Haly- Davidsn, Inc., 677 N.W.2d 233, 240 (Wis. 2004). 23