Practice Tip: Evaluating Products Liability Risks at the Corporate Level
Conducting a due diligence review has long been standard practice for anyone considering the purchase of a company's stock or assets or a piece of real estate. In some disciplines, such as environmental law, the potential imposition of strict liability for contamination or the threat of third-party lawsuits has resulted in comprehensive environmental due diligence becoming an essential part of any pre-acquisition review. The same is the case with respect to product liability. Given the proliferation of product liability lawsuits, due diligence should no longer be thought of as a tool used exclusively in mergers and acquisitions ("M&A"). Rather, it should become an integral part of the corporate culture.
Where the Buck Stops: Court Ruling Finds CPSC Settlements 'Unreviewable'
On Sept. 30, 2004, the Federal District Court for the Eastern District of Pennsylvania (Kelly, J.) dismissed an attempt to challenge a settlement reached by the U.S. Consumer Product Safety Commission ("CPSC"). <i>Jerome Mahoney and Rebecca G. Mahoney v. U.S. Consumer Product Safety Commission,</i> U.S. D.C. (E.D. Pa.), Civil Action No. 04-1833, Sept. 30, 2004. The 2001 administrative action against Daisy Manufacturing Company ("Daisy"), the manufacturer of the Daisy air rifle, is one of its most controversial cases. In that action, announced by outgoing Chairman Ann Brown over the vigorous dissent of Commissioner Mary Sheila Gall, the CPSC charged that some 7.5 million Daisy Powerline Airguns were defective due to alleged design defects that created a "substantial product hazard" under Section 15(a)(2) of the Consumer Product Safety Act and that the guns presented a "substantial risk of injury" to children under Sections 15(c)(1) and (c)(2) of the Federal Hazardous Substances Act. The complaint alleged, among other things, that design defects could cause BBs to become lodged in the gun's magazine, even though the gun might appear to be empty. As a consequence, the Commission stated, it is reasonably foreseeable that consumers, most of whom are children or young adults, are likely to be less careful when handling the gun, and that BBs are "likely to be fired at and strike the consumer or another person in the vicinity."
Case Notes
Highlights of the latest product liability cases from around the country.
Online: Discover Technical Standards Online
ASTM International, originally known as the American Society for Testing and Materials (ASTM), was formed more than a century ago. One of the largest voluntary standards development organizations in the world, it is a trusted source for technical standards for materials, products, systems, and services. For more than a century, ASTM has met the technical needs of commerce. ASTM International provides a forum in which stakeholders from both the supply and demand sides of the marketplace come together and produce documents for trade and best business practices that are used around the globe. ASTM's market extends over 100 industrial and management sectors, ranging from construction materials and environmental assessment to medical devices and property management systems. More than 100 nations are represented in ASTM International. It's worth a visit to the Web site, <i>www.astm.org</i>, on a periodic basis, to see what's new.
Philadelphia Mass Tort Program: Alive and Well
Status report from Philadelphia: The Mass Tort Program is alive and well. A recent decision by Judge Norman Ackerman of the Philadelphia Court of Common Pleas sent a message to pharmaceutical giant Wyeth (formerly American Home Products) that the court would not require persons injured by diet drugs to refile their lawsuits in the states where they live. Instead, by denying Wyeth's Motion to Dismiss on the Basis of <i>Forum Non Conveniens,</i> Judge Ackerman allowed roughly 50 drug cases to remain in Philadelphia County. More importantly, with approximately 12,000 diet drug cases still pending in Philadelphia, the decision means that thousands of other litigants will likely not have to face dismissal and refiling in their home states.
Cutting Edge Litigation Support Services
A progressive court reporting agency should be considered a part of the litigation team, and strive to not only produce a perfect record, but to help attorneys get the most value from that record. As soon as attorneys are exposed to a few choice tools on the technology frontier, they are hooked. Those critical tools are based upon the Internet, video recording services, conferencing capabilities, and software developed for transcript and discovery management. Attorneys have discovered how easy these technologies are to use, and they enjoy adopting new practices to make them more efficient, more astute, and more competitive. Whether they tackle one frontier at a time, or all at once, the technology ends up being entrenched in their routines.
Case Briefs
Highlights of the latest insurance cases from around the country.
Equipment Leasing as a Current Financing Strategy for Middle Market Companies
Equipment leasing remains a viable tool for middle market companies in today's environment. The Equipment Leasing Association of America (the "ELA") estimates that of the $668 billion spent by U.S. business on productive assets in 2003, $208 billion, or 31.1%, was acquired through leasing, and for 2004 the ELA projects that leasing activity will grow to $218 billion, or 30.7 cents of every dollar American businesses will invest in equipment.
