ALI Meeting:

·         J. Ginsberg – Keynote Address: Federal Preemption

·         Law of Restitution

·         In addition to the Restatements; Principles Doctrine – Aggregate Litigation (class action)

Week 3

Instead of a Public Nuisance claim being brought by some arm of the government, can a private person bring a claim?

P57, HN2: Special Injury. How have you been impacted qualitatively differently than other people so that you can bring a claim?

§ 821 Comment b: (three principals and terms of art)

(a)          Has defendant interfered with public right?

(b)          Was interference unreasonable?

(c)           If a plaintiff is seeking compensatory (money) damages for the commission of a public nuisance,              plaintiff has to show that he or she suffered special injury. This is the most vexing requirement.        Most of the case law pivots on the special injury requirement.

(b) Was the interference unreasonable?

One of the classic ways in which to satisfy that unreasonableness standard is statutorily.

P58: Many states have statutes which declare that certain conduct – such as polluting the public waters of the state – constitutes a public nuisance for which the actor is liable for a penalty to the state (ARS 36-601(A). Analogous to negligence per se.

P59:

One commentator captured the affinity between statutory law and public nuisance in these words:

Environmental law today is heavily statutory but don’t underestimate or undervalue the ongoing importance of these common law theories that either supplement or in some cases stand alone as theories of recovery in these kinds of matters.

P99

Again, there is a notion that a regulatory body may or may not address the harm. If it doesn’t address the harm, we need the common law of nuisance to fill in the gaps. There is an interplay between common law and statutory rights.

(a) What is a Public Right?

“The public right is one ‘common to all members of the general public,’ such as the right of all members of the public to fish in a navigable stream in the state without interference in the form of pollution that kills the fish. It is not necessary that all members of the public be adversely affected by the nuisance ‘so long as the nuisance will interfere with those who come in contact with it in the exercise of a public right or it otherwise affects the interests of the community at large.”

A handful of 20 riparian land owners that lose some right because of pollution would probably not be large enough to constitute an interference with a public right; however, if an entire community is no longer able to fish a navigable river because of pollution, then that would be a right common to the general public. 

Of the three principles, this one is the least significant.

Nashua Corp v. Norton Co. (1997) P61

Two issues:

1.            Public Right

2.            Special Injury Requirement

Plaintiff purchases facility in 1974. The prior owner has contaminated the site with various chemicals that leaked into the ground. The problem manifests itself 14 years after the initial purpose in 1988.

We now have a cleanup action as well as a claim of diminution of property value. The first issue in the case is whether or not the contamination of this soil constitutes an interference with a public right.

Public Right

Under NY law, the release or threat of release of hazardous waste into the environment unreasonably infringes upon a public right and thus is a public nuisance as a matter of law.

The contamination of soil, groundwater, or an aquifer are prima facie interferences with a public right. If the groundwater is contaminated for a long time, that temporal issue is also very significant when we talk about whether or not a public right has been interfered with. Is the contamination fleeting or longstanding if not permanent? The more you can argue longstanding or permanent, the better your argument for violation of a public right. 

Special Harm/Injury

Nashua argues that they are on the hook for remediation and cleaning costs. Moreover, as the owners of this facility, we have now suffered a diminution in property value. The issue becomes, is the responsibility for remediation a special injury that allows Nashua to sue in public nuisance? The court says yes. The court also goes on to say that P should not be limited for recovery of remediation cost but also be able to recover for diminution in property value. D had argued to the extent that P should recover should be an either/or and only recover that which was cheaper. The court rejects that and allows for both measures of recovery – the correct decision.

If a statute is violated, that is prima facie unreasonableness for public nuisance.  

Strict liability and agency principals – Different legal remedies P64, N3: This is a common issue in this context. Schenectady Chemicals (1984). Generally, people who hire independent contractors are not vicariously liable for the independent contractor’s negligence. Exceptions: if the independent contractor is engaging in an inherently/abnormally dangerous activity then the principal may be responsible for that activity. Second Issue: Negligent Hiring. What if Schenectady negligently hired a bad contractor? You may be able to get to Schenectady if you can show that they were negligent in hiring the independent contractor.   

(c) Action for Public Nuisance – The Special Injury Rule

This is where most of the public nuisance cases are litigated. How can you show that you have been qualitatively harmed in a different way? Why is your injury so special that you should be able, as a private person, bring a public nuisance claim?

At common law, three reasons were offered to justify this special injury requirement:

1.            Only the sovereign should maintain actions for harm suffered by the public;

2.            Courts should protect defendants from a multitude of actions by private parties and from           the potential of harassment; and

3.            Courts did not wish to be burdened with many suits for trivial damages.

Restatement § 821C. Who Can Recover for Public Nuisance

Damages: One must have suffered harm of a kind different from that suffered by other members of the public exercising the right common to the general public that was the subject of the interference.            

Injunction: If P is seeking injunctive relief, the special injury rule evaporates. In contrast, a private individual seeking to enjoin a public nuisance is conferred the necessary standing, acting as a public official or suing as part of a class action.

1. If you are a representative of a class action seeking to enjoin a public nuisance, as a practical matter, your position is analogous to that a public official. Why require a member of a class action to show special injuries, when what they are doing is pursuing the greater good anyway?

2. If you are seeking money as a remedy, fundamentally that is a more intrusive remedy than injunctive relief from the standpoint that if you are asking the D to reach into their pocket and give you money. That is different from enjoining an activity. It makes a lot of sense that we take the special injury requirement seriously when the remedy is money and we relax it or eliminate it altogether when the remedy is injunctive relief. Analyze the special harm requirement in the context of compensatory damages.

Economic Harm Rule

Here’s the bottom line: Your complaint in a toxic tort case is likely to have many counts, i.e. trespass, nuisance, negligence, strict liability, CERCLA, etc. Your negligence claim may run into difficulty because of the economic loss doctrine. You may have a client who is seeking some kind of lost profits because of an outbreak of pollution. And yet your client may be somewhat removed from the source of the pollution. Under the economic loss doctrine their recovery may be thwarted because they cannot show personal injury or property damage – that’s the economic harm doctrine.  

Strategic Approach to the Lawsuit. You’re a clever lawyer in an environmental tort case, anticipating that you might run into that argument. You say to yourself, I will also include a count for public nuisance and I’ll try to get around the economic harm problem by characterizing my client’s loss as a special injury. You are anticipating a potential weakness in your negligence claim, i.e. the economic harm doctrine so you pursue the claim under public nuisance and special injury.

In Re The Exxon Valdez; Alaska Native Class v. Exxon Corp. (1997)

Issue: Whether native peoples had suffered a special injury as a result of the interference with their subsistence lifestyle. Did this pollution qualitatively impact them differently than other people?

Fishing Interest = Direct Harm

Subsistence Lifestyle = Indirect Harm

P69

“There is no dispute concerning Alaska Natives’ right to recover economic damage flowing from loss of fishing resources. The district court held that the Alaska Natives who fished for subsistence were entitled to the benefit of the exception (recover) for special injury. But whatever injury they suffered (other than the harvest loss), though potentially different in degree than that suffered by other Alaskans, was not different in kind.”

The 9^th Circuit rejects that the interference with subsistence lifestyle constitutes a special injury.

P70

“Admittedly, the oil spill affected the communal life of Alaska Natives, but whatever injury they suffered (other than the harvest loss), though potentially different in degree than that suffered by other Alaskans, was not different in kind.”

With special injury, typically a P must show that they have been injured not to a higher degree than the next person, but their injury is of a different kind (qualitative vs. quantitative). Have they suffered a different kind of injury as opposed to simply a higher degree of the same injury?

Testbank case (1985): Too remote to justify recovery in negligence except for commercial fisherman. The 5^th Circuit held that summary judgment was properly granted to D shipowner against all claimants who suffered purely economic losses, except those of commercial fisherman, oystermen, shrimpers, and crabbers who make commercial use of the waters. As to the other enterprises not connected with fishing, i.e. marina and boat operators, seafood restaurants, bait and tackle shops, etc., the court applied the economic loss doctrine to rule that negligent interference with contractual or economic relations is not actionable barring some physical injury to property or person.

Pruitt v. Allied Chemical (1981). To justify why fisherman recover and others don’t the court said, “The entitlement given these fisherman presumably arises from a constructive property interest in the bay’s harvestable species. In other words, the court is saying if you’re a fisherman or the owner of a bait and tackle shop, when those fish are killed, you in essence suffer a property loss. It’s a legal fiction – nobody owns the fish. Once we give them a property interest, we get around the economic harm rule. They can recover because they have suffered property damage. But the court draws a line in the sand.

This is a negligence theory. The court also says that if we analyzed this case on proximate cause; the bay is polluted, who is going to suffer loss? It’s totally foreseeable that people other than fisherman will lose business. But the court says we feel this need to cut off liability. How do we do that? With the economic harm rule. Either you have property damage or personal injury or you don’t. The case was ultimately dismissed on governmental immunity grounds.

Burgess case (1977): Different in Kind instead of Constructive Property Trust – Opposite of Pruitt. The court rejects the constructive property notion as a remedy, but gets to a remedy in a different way by saying that the losses by clam diggers and fisherman are qualitatively different from the rest of the public, thus they have satisfied the special injury requirement.  

What about other people on the shoreline? They complain of loss indirectly resulting from pollution. The court rejects their claim. In most of these cases the bottom line tends to be this: if you have water pollution and you have various categories of plaintiffs, the people whose interests are in the water will typically recover either because they get around the economic harm rule (because they suffered property damage) or they can show public nuisance because they have a special injury (Burgess). But, when it comes to those people with interests just off the water – i.e. the bed and breakfasts, restaurants, bait and tackle, etc., those folks will tend to lose. They do not have a special injury nor have they suffered property damages to get around the economic harm rule.

Terms of Art

Direct Loss = the fisherman

Indirect Loss = parties on the shore

Once you are categorized as indirect, it’s pretty much over for you no matter what the theory is.

P73: More on Exxon Valdez and the Oppen case. If these courts were to have second thoughts about these types of cases, the implications of such a change of direction would be of monument proportions (floodgates argument). Where do we draw the line? Are they drawn to the limits of a company’s wherewithal? In some jurisdictions the special injury rule is codified and not just a common law principal.

Deterrence

Do the remedies in cases like Testbank, Pruitt, and Burgess (1) sufficiently deter; and (2) do they create a sufficient incentive to act more carefully going forward? There are no answers to those questions.

A Civil Action: if you can show that kind of personal injury, it almost prima facie satisfies the special injury requirement. P77, N2: “Chemical nightmare.” Plaintiffs who suffered exposure to asbestos that came from an asbestos mill were entitled to recover on a public or private nuisance theory for discomfort, inconvenience, annoyance, and property damage. Real property damage satisfies the special injury requirement. 

Equitable Actions for Public Nuisance

P78

If you are seeking injunctive relief as opposed to damages, you need not show special injury, e.g. citizens’ suits, class actions, private Attorneys General, etc. All of those circumstances allow you to seek injunctive relief without showing special injury.

Fee Shifting: Attorneys’ fees are quite common for plaintiffs acting as private attorneys general.

PRIVATE NUISANCE

Private Nuisance: Substantial interference with one’s use and enjoyment of property that results in significant harm.

P80

Distinguishing Trespass from Private Nuisance

For a trespass claim, many courts add the substantial harm requirement. For a private nuisance claim it is critical. You must show substantial or significant harm.

San Diego Gas & Electric v. Covalt (1996): Life in the modern society. “It is an obvious truth that each individual in a community must put up with a certain amount of annoyance, inconvenience, and interference and must take a certain amount of risk in order that all may get on together.” The point is this: private nuisance does not compensate for de minimis annoyance – you’ve got to show substantial harm.

What constitutes an intentional invasion?

STRICT LIABILITY IN TORT CONTINUED

P134

RII

This is like a balancing test that you are accustomed for a negligence analysis or in a nuisance analysis. If D fails the 520 test, strict liability is appropriate but question again, how strict is strict liability when we have this balancing going on?

P135

Anyone of the a-f factors is not necessarily sufficient of itself in a particular case, and ordinarily several of them will be required for strict liability. On the other hand, it is not necessary that each of them be present especially if others weigh heavily. As a practical matter in a 520 analysis, you are talking about some but not necessarily all the factors. If doing a 520 analysis and have not discussed factor (c), I would be concerned. That is almost always something that is an issue. Is this an activity that could have been conducted safely with reasonable care? If reasonable care could have been exercised to avoid the harm then it may be a negligence analysis.

Those jurisdictions that do not use the 519, 520 models instead use absolute nuisance. It’s a different term for the same thing. They may very well embrace it in fact.

P136

A small probability of great harm could yield a finding of abnormally dangerous activity. When you are analyzing factors (a) and (b), the small possibility of a catastrophic harm may be a lot more compelling for strict liability than a large probability of a de minimis harm. Even if the possibility of harm is relatively low, if the ensuing harm is catastrophic that may tip the scale toward the strict liability/abnormally dangerous scale.  

P138

Fletcher v. Conoco Pipe Line (2001)

Stray electricity from cathodes in D’s pipelines damaged P’s land and chattels.  

The failure to satisfy factor (c) has been the reason why § 520 has not gained as much traction in environmental tort cases.

P140

Strict liability has been narrowly applied by Missouri courts. The court does a factor (c) analysis.

P142

“The court finds as a matter of law, the operation of a cathodically-protected petroleum pipeline is not an abnormally dangerous activity.”

Indiana Harbor Belt R.R. Co. v. American Cyanamid Co. (1990) (Posner)

Factor (c) case

This acrylonitrile was making a labyrinthine route on its way to New Jersey. It starts out with North American Car Corp, then Missouri Pacific, switches lines in Indiana Harbor and makes its way up to New Jersey. Somewhere in that exchange we’ve got a leaking valve and this stuff spills out. Property damage is $981,022.75 and now the property (P) seeks compensation under § 520. 

The case sites the Guille (Crashing balloon) case. The technology at the time did not allow for Guille to make a precise landing and he crashes into a garden. No amount of care would have insured a safe landing. Indiana Harbor Belt on the other hand could have exercised reasonable care to make sure there wasn’t a leak.

Judge Posner spends a lot of time talking about factor (c) of § 520 of the Restatement:  The inability to eliminate the risk by the exercise of reasonable care.

No matter how much reasonable care is exercised by the balloonist in Guille, he cannot insure a safe landing.  On the other hand if somebody checks this railcar and tightens the valve, there will be no leak.  It’s one of the critical distinctions between the two cases.  Certainly I will tell you that factor (c) is a very common consideration in these cases.  To what degree can the exercise of reasonable care insure a safe operation?  Posner talks about that a lot.         

Posner also analyzes the factors in (d), (e), and (f). Judge Posner talking about factor (e) says, “Brutal though it may seem to say it, the inappropriate use to which land is being put in the Blue Island yard and neighborhood may be, not the transportation of hazardous chemicals, but residential living. The analogy is to building your home between the runways at O’Hare.” That may be the inappropriate activity for the location as opposed to the hauling of substances. 

What would happen if there was rerouting in less populated places?  The rail is not as good and there may be more accidents but maybe less costly. 

The plaintiff in this case is so desirous of a strict liability claim versus a negligence claim.  It’s not about the merits; it’s about the appropriate theory of recovery.  The actuality of proving negligence in this case is going to be very, very difficult. 

The plaintiff overlooks the fact that ultra-hazardousness or abnormal dangerousness is, in the contemplation of the law at least, a property not of substances, but of actives. Henke: Not of its chemical but of its transportation.

Posner in a sense is chastising the plaintiff’s lawyer for trying to pull one over on the court.  For in essence trying to say, I’m making a 520 argument but I’m really trying to get thru the back door of a 402A argument (Products Liability). Do not confuse the two.  

Whatever the situation under products liability law, the manufacturer of a product is not considered to be engaged in an abnormally dangerous activity merely because the product becomes dangerous when it is handled or used in some way after it leaves his premises, even if the danger is foreseeable. 

Henke:  When analyzing strict liability on an EXAM, students sometimes flip-flop between strict liability for products and the strict liability for activities.  YOU HAVE TO KEEP THEM SEPARATE. 

This is a 520 case and not a 402A products liability trial on the dangerousness of this particular chemical. 

Allocative vs. Distributive

The emphasis is on picking a liability regime that controls this class of accidents most effectively rather than on finding the deepest pocket. The choice between negligence and strict liability is the choice we make to allocate who is in the best position to most cheaply avoid the accident. Does this actor need the threat of strict liability to conform their behavior or is negligence sufficient to allocate the risks accordingly? Posner says that’s what we are talking about here. This is not about insuring that your client gets a remedy – that would be the distributive concern. This does not concern redistributing wealth from Cyanamid to your client’s pocket.

Your strict liability count is gone. Could P prove negligence on these facts? If you represented P in this case, do you remember how many entities touched this product? You may not get to res ipsa loquitur. The point is, strict liability often gives the P a more congenial environment in which to operate.

P160: Value to the Community – Factor (f). Henke: Value of the enterprise to the community may play a role. It is certainly the case in nuisance law. If an activity employs half the town, even though they are a nuisance, they can pay their way and continue to operate.

P163: The abnormally dangerous doctrine enables the parties to secure a determination of whether it applies at the summary judgment stage of the case.

If you are the owner or operator of a landfill you are probably subject to an abnormally dangerous activity but, what if the disposal of hazardous waste is incidental to your enterprise? P164, p2: A landfill that accepts hazardous materials for purposes of disposal stands on a different footing than a machine shop whose purpose is to repair engines, and whose storage and use of hazardous materials is incidental to that repair business. Negligence is going to be the regime here. On the other hand, if the essence of your business is running a landfill and you cause pollution, it will be a strict liability claim.  

P165: Sale of a Product. Typically does not lead to a strict liability claim

T&E Industries v. Safety Light Corp. (1991)

Negligence as a theory is fundamentally all about knowledge. When we try and determine whether an actor has breached a duty in negligence, we say: based upon the knowledge that you possessed, did you act reasonably? The question many times in strict liability is, do you have to show knowledge? Is the requirement of proving knowledge something that should be confined to the negligence regime or does knowledge of danger also apply as a prerequisite to holding someone strictly liable.

D argues that when the radium was first dumped, the state of the art knowledge at the time didn’t allow for an indication of how dangerous this might be. P says that shouldn’t matter. If the standard is strict liability and you engaged in an abnormally dangerous activity that caused harm – pay up. Should knowledge matter?

Prof. Boston’s law review article P 26: Once radium or mercury is dumped into the soil or groundwater, reasonable care cannot eliminate the high degree of risk.

The State of the Art Defense

1.            D’s argument poses an interesting question. The risk of the activity was scientifically unknowable. Should the SOTA defense apply in a strict liability claim, meaning must have D known at the time that D engaged in the activity – is that proof of knowledge a prerequisite or should a SOTA defense only apply in a negligence setting? The court said that it is a question we need not resolve here because SOTA becomes an issue only if we agree that knowledge is a prerequisite and if we accept D’s narrow view of what knowledge means.

Even if they didn’t have actual knowledge, they had constructive knowledge. We need not determine whether SOTA as a defense would apply in a strict liability claim under 520.

2.            Henke: In almost all jurisdictions today if you as a P are making an argument under § 520, you will have to prove that D had actual or constructive knowledge of the hazards at the time of the activity.  If that knowledge was scientifically unknowable at the time, the court is not going to impose strict liability. That wouldn’t be strict liability – that would be absolute liability. If we hold a D liable for knowledge of hazards that are unknowable, how do you plan for that? What is the burden of a company to engage in safety precautions for hazards that are unknown?

Cambridge Water Co. (1994)

A D is not liability to a damages claim under the rule in Rylands for harm of a type that the D could not reasonably foresee. This requires more of a specific foreseeability than the NJ Supreme Court suggested in T&E. In this setting you want to make the argument that any harm be foreseeable for strict liability. Instead the D should have to have knowledge of the precise and actual type of harm that is likely to ensue.

TOXIC PRODUCT CLAIMS BY TYPE

1. Asbestos

2. Pharmaceutical and Medical Devices

3. Chemical

ASBESTOS

Cancers from exposure to asbestos: Mesothelioma. The signature disease of asbestos exposure is a cancer called mesothelioma. It has the longest latency period between exposure and manifestation of disease. The latency period can be up to 40 years and there is no dose relation.

Asbestosis is an irreversible scarring of the lung. When asbestos enters the lung it never disintegrates. It becomes calcified into what are known as asbestos bodies. If you get pulmonary asbestosis over time you can no longer breathe as it incapacitates the lungs until you suffocate. The latency period is much shorter than mesothelioma.

Pleura asbestosis is a more mild form of asbestosis. A person with plural asbestosis may have shortness of breath but they can function. 

Regular lung cancer: There are a lot of causation issues because some guys smoked and had exposure to asbestos and you try to figure out what was the proximate cause of the lung cancer. You had to prove that asbestos was “a” proximate cause.

Other cancers: Exposure to asbestos may cause colon cancer, laryngeal cancer, and esophageal cancer. Those cancers are Daubert cases.

Makeup Class 5-6 PM

TOXIC PRODUCT CLAIMS BY TYPE (CONTINUED)

ASBESTOS

Borel v. Fiberboard Paper Products (1973)

1.            State of the Art defense: Beshada/Feldman – manufacturer as expert in the field.

2.            Non-delegable duty to warn

3.            No open and obvious danger to warn

4.            Heeding presumption

1.            State of the Art Defense In Warning Cases

In a failure to warn claim, very often one of crucial issues is state of the art. When did a company become aware of the hazards of their product, thus creating a duty to warn?

The court in Borel talks about the SOTA argument by the asbestos manufacturers saying that we didn’t put a warning on our product until the 1960s because we did not know about the hazards of asbestos. That is false. Judge Wisdom talks at length about the extensive knowledge that the asbestos industry had of the hazards of its product long before actual warnings were put on the products. 

Note Cases Beshada and Feldman

Beshada v. Johns-Manville Prod. Corp. (Supreme Court of New Jersey, 1982)

30 Seton Hall Law Review, Page 174 by Professor Henke

Striking the SOTA defense

Asbestos Litigation

“The sole question here is whether defendants in a products liability case based on strict liability for failure to warn may raise a ‘state of the art’ defense.”

The state of the art defense: Should the manufacturers of asbestos be entitled to argue that it was scientifically unknowable that asbestos caused these various diseases and therefore we did not put a warning on the raw fiber or insulation?

The late Justice Pashman and the New Jersey Supreme Court take up the issue of whether the state of the art defense is appropriate in claims based upon strict liability. The New Jersey Supreme Court does something which I find to be intellectually disingenuous but a good decision anyway.

Imputation of Knowledge of Danger

Scienter is applied as a matter of law. In the 1960s and 1970s when courts were wrestling on how to distinguish strict liability and negligence, a lot of went through what the New Jersey Supreme Court does now. The court says strict liability is about the safety of the product, negligence is about the defendant’s conduct. In order to distinguish the two, we will assume the defendant knew about the danger. The plaintiff will be relieved of the burden of showing actual knowledge.

What knowledge is being imputed? Is it knowledge of dangers as they existed at time of manufacture or at time of trial?

In Beshada, the New Jersey Supreme Court opted for the latter. They imputed upon the defendants knowledge of the hazards of asbestos as they existed in 1982 – not in 1952 when their products were out there.

There is only one other jurisdiction that agrees with Beshada – Montana. Virtually all jurisdictions focus upon knowledge at the time of manufacture. When you are thinking, what did the company know? – Think in terms of what was knowable at the time of manufacture – that’s your standard.

How can you plan for hazards on something that is unknowable?

Two notes on this case:

1.            This case, although on its face seems offensive, is made far less offensive by the fact that            in reality the asbestos companies knew about these hazards for generations. For the               asbestos companies to argue they didn’t know about the hazards of asbestos is false –    they       did know. 

2.            I think Justice Pashman betrays himself on the fact finding issue. Bottom Line: 1982 NJ is               facing an avalanche of asbestos cases never before seen. If state of the art is in the case,     it’s a 2-3 week trial. You take state of the art out of the case, and the trial is 3-4 days. I have no          doubt that there was a strong utilitarian aspect to the last part of this decision. This is the
                Supreme Court eliminating a defense that will make the trial a fraction of the time that they       otherwise would be.

Even though this case seems pretty bizarre, don’t forget about the fact that they knew and you are eliminating half of the time of trial.

Feldman v. Lederle Laboratories (Supreme Court of NJ, 1984) 

Two years later, this issue comes up again. Feldman was a case having to do with tetracycline. The side effect is when the adult teeth come in, the teeth are discolored. She brings a products liability action. The drug manufacturer says, we did not know of the side effect. She says, read Beshada – state of the art is no longer a defense.

The New Jersey Supreme Court says, oops. We didn’t think about drugs when we were socking it to the asbestos companies. What now?

The New Jersey Supreme Court says that “The rationale of Beshada is not applicable to this case. We do not overrule Beshada, but restrict Beshada to the circumstances giving rise to its holding.

In other words, state of the art defense is out for asbestos, but state of the art still matters everywhere else.

Feldman really was an egg on your face decision. The New Jersey Products Liability Act codifies state-of-the-art as an affirmative defense.

What you should take away from all of this is, at a minimum you should treat state of the art as an important part of your risk-utility test in design defect when you are talking about reasonable alternative design. You should also be aware of the fact that New Jersey and a number of other states goes beyond that and makes state of the art a total defense in some circumstances.

In warning defect cases you should think about state of the art information at the time of manufacture – don’t be fooled by Beshada – keeping in mind that a manufacturer is deemed to be an expert in their field. If state of the art information exists at the time of manufacture, either the manufacturer is actually aware of it or they are constructively aware it because they are deemed to be an expert in the field. 

Resume Discussion

P408 of Borel

“The manufacturer is held to the knowledge and skill of an expert.” We assume that the manufacturer is an expert; therefore, if that scientific information exists, they are either on actual notice if they have read it, or they are on constructive notice if they haven’t. You should not charge the D with what is scientifically unknowable. 

2.            Non-delegable Duty to Warn

P408

“The D’s assert that it is the responsibility of the insulation contractors, not the manufacturers to warn insulation workers of the risk of harm. We reject that argument. We agree with the Restatement: a seller may be held liable to the ultimate consumer or user for failure to give adequate warnings.”

In most circumstances a manufacturer of a product has a non-delegable duty to provide a warning directly to the end-user of a product.

3.            No Open and Obvious Danger to Warn 

The next argument of the manufacturer’s is that exposure to asbestos was an open and obvious danger. That’s a disingenuous argument. First the dangers were scientifically unknowable, now it was open and obvious? 

In most jurisdictions, a manufacturer does not have a duty to warn of something that is objectively an open and obvious danger.

4.            Heeding Presumption

“Had adequate warnings been provided, Borel would have chosen to avoid the danger.”

§ 402A Comment j: “Where a warning is given, the seller may reasonably assume that it will be read and heeded;…” A defendant is entitled to a presumption that if a warning is put on a product, it will be read and it will be heeded.

The actual text is pro-defendant. The defendant gets a presumption that if the manufacturer puts a warning on a product, it will be read and it will be heeded. Plaintiffs in warning defect cases over the last number of years have been arguing for what we might call the inverse proposition of Comment j as in Borel:

Does failure to rebut result in a directed verdict for the plaintiff?

The answer typically is yes. If the plaintiff is given a presumption that he would have read and heeded a better warning and the defendant cannot point to anything in this guys character that rebuts that presumption – if I represent a plaintiff in a warning defect case in that circumstance, I’m asking for a directed verdict because by definition, the inadequate warning then has to be a cause of his accident. If you can’t rebut this presumption, as a defendant, I think you are in big trouble; however, the title to my Law Review article is: The Heeding Presumption in Failure to Warn Cases: Opening Pandora's Box?

Give me a call the first time you represent someone who is perfect. That person will of course have a flawed character as we all do. He or she will have all kinds of personal habits and traits that suggest that in fact he or she is not the most cautious person in the world. The question then becomes, what is fair game to rebut this presumption?

P967

Does asbestos generally cause lung cancer? Sure, but can we take notions of general causation and extrapolate it to individuals who might have been smokers with other risk factors? It becomes awkward.

“Statistics are human beings with the tears wiped off.”  - Outrageous Misconduct

PHARMACEUTICALS AND MEDICAL DEVICES

§ 402A Comment k – Unavoidably unsafe products

Brown v. Superior Court (1988)

Strict liability and Prescription Drugs

Issue: Should strict liability apply to the manufactures of DES or should the P have to prove a negligence claim. Stated in a different way, does Comment k insulate pharmaceutical manufacturers from SL treatment?

The California Supreme Court, as most courts have done, has said that in the context of pharmaceuticals, the P must prove negligence.

If the SOTA defense applies and we allow a manufacturer to bring in SOTA, pharmaceutical cases and warning cases in general are negligence cases. There is no functional difference between SL and negligence as theories in a warning defect case if D is permitted to bring up SOTA. When did the company become aware of a side effect of their drug or when should have they become aware of it (constructive standard) and based upon that knowledge did they act reasonably in either not providing a warning or was the warning they provided adequate to convey the magnitude of the known risk. That is a knowledge-based negligence case.

Under Comment k, SL does not apply to those products deemed unavoidably unsafe – but it doesn’t matter as practitioners. You can either prove your negligence claim or your can’t, and if you can’t you’re done. 

Design Defect – could DES have been redesigned?

Two Tests:

1.            Consumer Expectation Test

2.            Risk-Utility Test

P430

Consumer Expectation Test. The CE test is inapplicable in the context of pharmaceuticals. Justice Mosk points out that if the warning is being given to the doctor, conceptually it makes no sense to look at a design defect from a consumer expectation standpoint. A consumer doesn’t have an expectation.

Learned Intermediary Doctrine – The Exception to the Duty to Warn

In most circumstances, a manufacturer of a pharmaceutical product discharges its duty to warn by warning the prescribing physician, who acts as a learned intermediary between the pharmaceutical company and the patient. For a long time most courts in the nation have allowed pharmaceutical manufacturers to delegate their duty to warn to the prescribing physician who is deemed to be a learned intermediary between the patient and the drug company.

Risk-Utility Test. In a pharmaceutical case, the RU Test may be perfectly appropriate to apply in design defect, but the case will rise or fall on the ability of the P to prove a RAD. 

Exceptions to Learned Intermediary Doctrine:

1.            Mass Immunizations. The most common exception was the mass immunization principal. In that circumstance where there is no expectation of any real dialogue with a health-care provider, courts have always required the pharmaceutical company to warn people directly (no one on one contact with a doctor). Send out representatives, take out a full-page ad in the local paper, hand out pamphlets and information to people when they get there that day, etc.

2.            Oral Contraceptives. The Massachusetts Supreme Court said that in that particular context the patient who is more active or controls the course treatment than you would otherwise be in most circumstances. In MacDonald v. Ortho, the court believed that that particular dynamic was not the type of passive patient dynamic that should give rise to the exception. The court also went on to say, after getting the birth control prescription most women would not visit the gynecologist again for 6-12 months. The physician would not have as close and continuing relationship and control over that continuing course of treatment. This exception would perhaps apply in any situation where the patient is much more active participant in the process – a patient going to a doctor and saying, this is what I want you to do.

3.            Direct to Consumer Advertising. As discussed in Perez.

Perez v. Wyeth Laboratories, Inc. (Supreme Court of NJ, 1999)

This was a case having to do with the Norplant birth control implant device. It is a series of time released capsules that a woman would have implanted into her arm. The litigation arose on an inadequate warning theory.

The theory was that the warning didn’t really provide sufficient information about side effects and about the pain associated with explant. The inadequate warning was brought and the plaintiff’s lawyer argued that this case should be another exception to the learned intermediary doctrine. This exception pivots on the issue of direct to consumer advertising.

Direct to consumer advertising: If these companies are going to spend this much money to get us to use these products, they could spend a little more to also directly tell us more about the warnings of side effects and the like. The third exception that comes out of this case is a general one – in this new marketing milieu, if a company uses this amount of direct to consumer advertising circumventing a physician to create a demand for their product, why can’t they come out at us directly to give us good warnings?

The decision in Perez is a modern adaptation and a bringing forward of those Henningsen principals. This is not the Normal Rockwell world anymore. 

Under the New Jersey Product Liability Act, which Justice O’Hern discusses, FDA approval of the warning language accompanying a drug creates a rebuttable presumption of its adequacy. Most jurisdictions have statutes or common law that creates this kind of rebuttable presumption.

As the dissent points out, the discussion about the FDA approval was really not a part of the record below in this case.

BIOLOGICAL AND BLOOD PRODUCTS

McKee v. Miles Laboratories (1987)

Decedent suffered from hemophilia and received a blood transfusion from which he contracted AIDS and died. 

The critical issue in this case was when did these blood companies know or should have known that the blood supply was become contaminated by the AIDS virus.

Almost every jurisdiction in the nation by statute insulates blood suppliers from SL. Besides a public policy reason, there is a sales vs. service dichotomy. The essence of the transaction at the hospital is the provision of professional services. The receipt of blood is ancillary to the transaction – services dominate the transaction; therefore, a hospital or blood bank is not deemed to be a seller for purposes of SL.

That leaves us with the negligence claim. It is brutally contested. It was not until 1984 that the medical community reached a consensus that the AIDS was transmittable by blood.

The court talks about reasonable care. Compliance with custom in the industry in a product liability case is routinely found to be only some indication of reasonableness. Justice Pollock in O’Brien said that custom in the industry often lags behind SOTA technology. Yet in this case, compliance with custom was dispositive of the would-be negligence claim. No SL because of the blood shield statute and no negligence because it was custom in the industry.

Be careful the court’s tremendous reliance on compliance with custom as being dispositive of this lawsuit because quite often it is only some indication of reasonableness.

Statute of Repose

P438, N5: GA has a five-year statute of repose governing med mal actions even though AIDS doesn’t manifest itself within the window.

Cry Bloody Murder by Elaine DePrince

“The FDA failed my children, the blood banking industry failed them, government agencies failed them, and the law failed them.”

“Anyone can find themselves on the receiving end of a stranger’s blood.”

In 1996 a settlement was reached to pay $100,000 to every hemophiliac infected with HIV or to the estates of those who died of the disease.

Exxon Shipping Co. v. Baker, 07-219. (June 25, 2008) (Supreme Court)

Henke: Disturbing

Justice Souter writes the majority. He is joined by Kennedy and Roberts. They get a concurrence from Scalia and Thomas to get them five votes. There are three separate dissents written by Stevens, Ginsberg and Breyer

The Three Legal Issues on Appeal:

1.            The appropriate standard in a maritime punitive damages case: In maritime law, is the ship          owner vicariously liable for the actions of its captain? Typical maritime rules of vicarious liability      do not apply to ship owner-captain situations; however, the 9^th Circuit determined that the                appropriate standard for vicarious liability in this context was § 909 of the RII for vicarious               liability (same standard the court used in the Pinto case). The Supreme Court split 4-4 on   whether that was the appropriate standard in a maritime setting. Since the Supreme Court was                split on that issue, § 909 is loosely the law on that issue of maritime law.

2.            Whether or not the Clean Water Act preempted the state tort law claim for various injuries. The              verdict on punitive damages was rendered on September 16, 1994. The parties stipulated that       all post-trial motions would be filed by September 30. Exxon submitted 11 and all were denied.         October 23, 1995, Exxon raised the issue of preemption with the Clean Water Act. The District    Court refuses to hear their arguments (timeliness) and Exxon appeals to the 9^th Circuit. The         Court decided that the claim should not be treated as waived because Exxon had “consistently                 argued statutory preemption throughout the litigation and the question was of mass     significance.” The Court, however, rejected Exxon’s claim on the merits – the CWA did not            preempt state tort law and the Supreme Court agrees with the finding, but takes the 9^th Circuit                to task for trampling over the District Court judge.

3.            Was the number appropriate? By this time, Exxon had already spent $1B in cleanup. The original              punitive damages verdict was $5B. The 9^th Circuit remitted the number to one half or $2.5B. The                 compensatory award for the 32,000 fishermen and native Alaskans was $506M. The ration was    5:1. The Court determines whether $5.5B in punitive damages is…Justice Souter

Justice Kennedy in Campbell v. State Farm: There are no mathematical lines, but then he drew three:

1)            If compensatory damages are reasonable, then a ratio of 9:1 or less is appropriate.

2)            If compensatory damages were small, but the conduct was outrageous, double digits are            defensible.

3)            Then he said the opposite is true – if the compensatory damages were huge, then maybe a ratio             of 1:1 would pass constitutional muster.

Justice Souter in his opinion latches onto that final statement in State Farm and holds in Exxon that at least in regards to maritime law (a critical limitation – maritime law is federal common law plus federal statutory law). So the Supreme Court in a maritime case acts like an appellate tribunal essentially. Souter said that an appropriate ratio in a maritime case is 1:1 citing the proposition in State Farm. The $2.5B award is knocked back to $500M. In real terms, each of the victims of the Exxon Valdez spill go home with $15,000 in compensatory damages and $15,000 in punitive damages.

J. Souter

States have adapted ratio caps. Because of unpredictability, the appropriate ratio at least to a maritime claim is 1:1.

J. Scalia with J. Thomas concurring

I join the opinion of the court including the portions that refer to constitutional limits that prior opinions have imposed on punitive damages. While I agree with the argumentation based upon those prior holdings, I continue to believe that those holdings were in error.

Dissents (The three dissenting justices dissent only on the 3^rd issue of number appropriateness)

J. Stevens (the most scholarly opinion)

Point 1 (a very good one): Yes, a number of states have passed ration caps, but today’s decision is the first time that a court has imposed a ratio cap. Whatever you think about punitive damages, we’re not the right body to make this call. If Congress wants to pass a statutory cap in maritime claims with a 1:1 ratio, let them do so, but to do this judicially is unacceptable.

Point 2 (a thoughtful one): How paradoxical that we are creating a 1:1 cap in the maritime setting when this is an area where we need punitive damages the most. The compensatory remedy is often under compensatory in maritime law. How odd that we create a 1:1 ration when by statute the remedy available in these cases is often very low.   

J. Ginsberg

Point 1 (she brings it down to its realist terms): Juries are well equipped and we should have more faith in juries to do the right thing in a punitive damages case. We shouldn’t assume that they always screw it up and not matter how closely we instruct them, the go haywire.

Point 2 (this is the question): In the end, is the court only holding that a ratio 1:1 is the maritime law ceiling, or is it also signaling that any ratio higher than 1:1 will be held to exceed constitutional outer limits? On next opportunity will the Court rule definitively that 1:1 is the ceiling that due process requires in all the states and for all federal claims?

Henke: The Supreme Court has granted certiorari for the second time in the Williams case ($79.5M in punitive damages). Justice Ginsberg’s question will be answered this fall. Will five unelected justices opine that no punitive damages award higher than a 1:1 ratio be supportable? Justice Ginsberg has asked the right question.

J. Breyer

Justice Breyer wrote the majority opinion in Williams. He wrote a somewhat anti punitive damages decision. I was very surprised to see his dissent here. He says, if this conduct doesn’t justify this award, then what the hell does? He is blown away by the level of reprehensibility of what Exxon did and what they knew about Hazelwood. An award of $2.5B is defensible.  

Henke: This court is in the business of tort reform. The left-leaning judges are commonly referred to as “activist judges.” If anybody with a straight face can tell me that this isn’t the most activist opinion out of the Supreme Court as I have read in a very long time, I welcome that opinion because this is as activist a decision as you can imagine.  

In most jurisdictions including the Supreme Court’s jurisprudence, in a punitive damages case the jury takes into account the wealth of the defendant. Exxon’s profits in 2004 were $40B. A $500M punitive damage award is a drop in the bucket.

TOXIC PRODUCT CLAIMS BY TYPE CONTINUED

Pharmaceuticals

There are two very significant Supreme Court developments:

Levine v. Wyeth (VT Supreme Court decision, US Supreme Court granted cert.)

QUESTION PRESENTED:

Whether the prescription drug labeling judgments imposed on manufacturers by the Food and Drug Administration ("FDA") pursuant to FDA's comprehensive safety and efficacy authority under the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq., preempt state law product liability claims premised on the theory that different labeling judgments were necessary to make drugs reasonably safe for use.

Up until now in most jurisdictions, FDA approval of a warning either constitutes some evidence of reasonableness or it creates a rebuttable presumption that the warning is adequate. The state of MI states that an FDA approval preempts a failure or inadequate warning claim. What is being considered in Levine is whether the MI approach to this issue is the appropriate one.

Medical Devices

Hegna v. Du Pont

Du Pont is a supplier of a component part of the TMJ implant medical device. The issue is, to what extent does a bulk supplier of a component part like this have a duty to warn the end user or can the bulk supplier rely upon the end-product manufacturer as an intermediary to warn the consuming public?

The court found that Du Pont was justified in delegating that duty to the end-product manufacturer Vitek, Inc. Because the court determined that the bulk supplier defense applied, they never got to the other issue in the case.

P441

Du Pont contends that Hegna’s claims are preempted by 21 USC § 360k of the Medical Device Act. The court determines that it need not consider Du Pont’s other basis’ for summary judgment.

The preemption decision that came out of the Supreme Court this term was a medical device (balloon catheter) case called Riegel. It had been approved by the FDA and the manufacturer claimed that any product liability claim was therefore preempted. J. Scalia wrote the majority and found federal preemption. The case does not overturn Lohr v. Medtronic as the facts are different than in this case, i.e. the testing was more rigorous. Nevertheless, if you are a product liability lawyer doing medical device or pharmaceutical cases you are maybe thinking about diversifying.

Chemicals

Werckenthein v. Bucher Petrochemical (1993) – good for defenses

P is a quality control chemist suing multiple chemical companies and suppliers for failure to warn about the dangers arising out of his quality control analysis of the chemicals.

P444

The D makes five arguments for summary judgment which are typical in a case like this.

1.            Warning the Intermediary. As bulk suppliers, their duty to warn extends only to the purchaser                 Ashland and not to P. A bulk supplier satisfies their duty to warn by warning the intermediary              – P’s employer.

2.            Sophisticated User. Ashland was a sophisticated user and as such, needed no warning and could             be relied upon to warn and protect its employees. Jurisdictions routinely say that the level of       sophistication of a party is germane to the duty to warn in the sophisticated user defense.

3.            P received warnings. Even if they did owe P a duty to warn, he had received the warnings and they were adequate.

4.            Open and Obvious Danger. The dangerous propensities of the chemicals were obvious and well               known to both Ashland and P. Jurisdictions routinely say that there is no duty to warn of open       and obvious danger.

5.            Causation. Even if our warnings were inadequate, their inadequacy was not the cause of P’s      injuries. This is   a very common argument in warning defect cases. Yes the warning was   inadequate but did the                 inadequate warning cause the injury or was there some intervening act         on the part of the P, e.g. using filter paper instead of sniffing directly? He is a chemist – he’s sophisticated. Was the inadequate warning a cause in fact or a proximate cause of his injury? Or was his sophistication and his knowledge, and his proceeding in the face of that known           danger – does that become an intervening cause of his injury? The D in this case covers all the          bases. They raise every possible defense in this situation to defeat this warning claim.  

P446

Adequacy of warnings generally is a question of fact. Accordingly, it is an issue inappropriate for summary judgment unless the movant demonstrates conclusively that there remains no triable question.

Although adequacy of warnings is generally a fact question reserved for the jury, under the circumstances here the circuit court correctly held that D’s were entitled to summary judgment. Henke: I cannot give you another case where the adequacy of a warning was taken from the jury.  

No MSDS’s were kept on hand or made accessible to P; and few of Ashland’s high-ranking employees had any knowledge of the products at issue, much less their effects on health. In a 1982 memo, a manager commented that the vapor level in the laboratory had never been measured, commenting that “this might be in order sometime in the future.”

P447, N2: Dougherty v. Hooker Chemical Corp. (1976): workers used D’s industrial solvent which posed a latent, potentially lethal hazard; that no warnings of this risk were communicated by the employer or by the manufacturer to the workers who were being exposed and that there was no reasonable basis on which the manufacturer could rely upon the employer-purchaser to give “appropriate information to the employees of all the hazards of working with the product.”

Go to P448, N6: Henke: when we allow a pharmaceutical manufacturer to discharge their duty to warn by warning the prescribing physician, who then warns us as patients makes sense. Hopefully we can rely on our physician as a learned intermediary. But as the other notes point out, to give that same status to an employer could be questionable. We know the conditions under which many people labor. The notion in the case law that we allow these employers to have the same exalted standard that we would afford a physician troubles me. If someone is injured in the workplace (or did not receive an adequate warning), in most circumstances, unless that worker could show that he was the victim of an intentional wrong, he cannot sue his employer in tort.

REMEDIES AND COMPENSABLE INTERESTS

INJUNCTIVE RELIEF

P244

The standards for the imposition of injunctive relief

Four Possible Solutions in a Nuisance Setting:

1.            Injunctive Relief. Hold that the P is to be relieved from the harm by an injunction. Henke:           despite whatever merits this enterprise might have, it’s too dangerous, too offensive, and we’re                 going to shut it down.

2.            Permanent Damages. Hold that there is a nuisance for purposes of a damage action, but              refusing the injunction – that               is, the P must bear the harm but will receive compensation.        Henke: Boomer case – damages arrived at after a balancing test. Yes it’s a nuisance but it               employs half the town; there were significant capital investments to build the plant; and as    long as the plant pays its way, we will allow it to operate.  

3.            No Remedy. Hold that there is no actionable nuisance and that the P must simply bear the harm              as a consequence of living in an industrial society. Henke: in other words, if you want to build             your house next to a landfill or a chemical plant, knock yourself out. But don’t try and get an                injunction to shut them down especially if they are in an area that is zoned for heavy industrial         use. 

4.            Grant Injunctive Relief, But Make P Pay (Spur case). There is a perfectly appropriate feedlot and             a developer comes along and puts in retirement communities that grow closer and closer to the        feedlot. The developer says I want an injunction. The feedlot says I was here first and my   activities are appropriate. Both are fair arguments. The court fashions the remedy of I’m going             to shut you down, but I’m going to make the developer move you. Grant injunctive relief but             shift burden to P to move what has become an inappropriately placed enterprise.

P245 together with P89-90

We balance the gravity of the harm versus the utility of D’s conduct (RII § 828)

Exam: As you start a discussion of nuisance and what the appropriate remedy might be, incorporate §§ 827 and 828 and talk about those factors on P89-90.

Dan B. Dobbs, Law of Remedies

Break down into two steps:

1.            Whether the activity even constitutes a nuisance – a substantial interference with the use and                 enjoyment of property. Make sure you have a nuisance, and then be guided by the Restatement   factors.

2.            If you get past your definition, the most important balancing is what is the most appropriate      remedy? At the remedy stage is where you get into §§ 827 and 828. And then based upon an     827 and an 828 analysis, use them to ascertain the appropriate remedy because if the utility of            the enterprise is especially high then you may determine that the enterprise may continue to       operate so long as it pays its way, but if you determine that the gravity of the harm is so great            that it outweighs the utility of the enterprise, then you must conclude that injunctive relief is    appropriate and warranted.  

Boomer v. Atlantic Cement (1970)

The threshold question raised on appeal is whether the court should resolve the litigation between the parties now before it as equitably as seems possible; or whether seeking promotion of the general public welfare, it should channel private litigation into broad public objectives.

What the NY Court of Appeals is saying here is, it’s 1970, and a new day is here. The court is saying that for a long time the common law of nuisance has regulated these kinds of disputes. But maybe right now air pollution and other environmental concerns are increasingly becoming the province of both Congress and state legislatures.

P249

The ground for denial of injunction, notwithstanding the finding both that there is a nuisance and that P’s have been damaged substantially, is the large disparity in economic consequences of the nuisance and of the injunction. 

P113, N5 Jost was decided one year before Boomer. “Where the harm to P’s land is substantial, many courts have declined to permit D’s to exculpate them by showing that the value of its conduct outweighed the gravity of the harm.” Henke: I look at that as a threshold test of nuisance and injunctive relief. Under Jost, if a P made out the prima facie elements of nuisance, i.e. substantial interference with use of enjoyment leading to substantial harm – you got an injunction – no balancing.  

Exam: It is still fair today to mention that even though most jurisdictions today do a balancing formula under the Restatement, there is a handful of jurisdictions that essentially will grant injunctive relief if you can persuade them there is a nuisance. 

P250

The court grants an injunction but it’s not a real injunction that will be lifted when damages are paid.

Look at the utility – this is the classic balancing case in nuisance law and the balance is in favor of the D due to its socially useful position in this community, i.e. employing lots of people and generating capital investment. The casebook sanitizes just how bad a polluter Atlantic Cement really was, e.g. houses shaking, debris flying, layers of soot and dust on cars, children scared, etc.

P251: The impact of the injunction is a permanent “servitude on land.”Yes members of the community, you are subject to a permanent servitude on your land but as long as they pay damages, you have to live with it.

P253-254, N7: The rarity of Boomer. The environmental statutory law has displaced or become a substitute for the common law remedies under nuisance. Henke: it’s a bit of an overstatement.

N8: Modern Injunctions. Courts simply decline to issue injunctive relief because the requirements for irreparable injury or the balancing of the equities point against it. Irreparable Injury Rule:  A P must show an imminent threat of irreparable injury. Injunctive relief may be denied not because of balancing, but because you can’t get past the threshold showing of irreparable injury. It’s not just environmental regulations that may knock this out. Bottom Line: Nuisance should be your friend – know its elements and its tests for potential imposition

Coming to the Nuisance

It can be either an affirmative defense or comparative fault. P90: The harm to a residential P in a residential area will be considered more serious than the harm to a resident whose home is located in a predominately business or commercial community, not because the harm is less in some objective sense, but because public policy demands that the character of the uses in the area be assigned some weight in the process. For example, zoning ordinances can be relevant in examining this factor. Exam: be alert to the zoning issue. If I suggest to you that a particular locality is zoned heavy industrial and P has decided to build his home there, the zoning will impact them.

P277

PERSONAL INJURY

Emotional Distress

The very nature of an environmental tort injury conjures up difficult damage issues beginning with emotional distress.

Metro-North RR v. Buckley (1997) (Supreme Court)

Emotional Distress from Asbestos Exposure Case

You worked with asbestos for a period of time. You have dozens of friends and ex-coworkers who have gotten sick and have died. You go for your chest x-ray every year and the doctor says no asbestosis, no lung cancer yet – you’re good for another year. You feel like a time bomb. (Esposito twin brothers example in Johns-Mansville litigation – tumors in the exact same places)

This is a FELA case but that doesn’t matter. The bottom line is this: If you are exposed to asbestos fiber and you are currently asymptomatic, is exposure sufficient to satisfy what Justice Breyer calls a physical impact test for the recovery of emotional distress. No, exposure is not enough.

Physical Manifestation Requirement

In order to recover for NIED you must show that the emotional distress must cause or be caused by underlying bodily injury. Unless you have a physical manifestation of injury, you cannot recover for what is sometimes called the “parasitic claim.” Henke: if you don’t think that this is real emotional distress and fear, then I don’t know what the hell is.  

P280

J. Breyer has never worked in a plant with dangerous substances. I’ve had 10 years to think about this opinion, and I’m still pissed off!

P303, N2: Bodily Harm Test. Simmons v. Pacor, Inc. (1996) Pleural thickening is a classic marker of asbestos exposure. The court held that asymptomatic pleural thickening is not a sufficient physical injury. In Buckley, exposure was not enough, now a PA supreme court is saying exposure plus a trigger or the first marker of asbestos disease is not enough to get past the Restatement requirement. 

Medical Monitoring

This is another area of compensatory damages that is very common in this field. You are exposed today; you are at an increased risk of future harm so let’s take prophylactic measures and get a physical every year.

P284

Justice Ginsberg’s Dissent in Buckley: “A medical monitoring action has been increasingly recognized by state courts as necessary given the latent nature of many diseases caused by exposure to hazardous materials and the traditional common law tort requirement that an injury be manifest”.

Justice Ginsberg may have the better of the argument that the clear trend is toward recognizing a remedy of medical monitoring in toxic exposure litigation. Exam: if you are doing a medical monitoring medical analysis for me, you should be guided by the factor set forth in Ayers v. Township of Jackson (1987) (NJ Supreme Court).

The cost of medical surveillance is compensable where the proofs demonstrate reliable expert testimony predicated upon:

1.            The significance and extent of exposure to chemicals. Henke: You’d better have a heavy,           prolonged, and concentrated exposure and not a fleeting one;

2.            The toxicity of the chemicals;

3.            The seriousness of the diseases for which individuals are at risk; Henke: The majority of             medical monitoring cases are about trying to prevent or catch early cancers.

4.            The relative increase and the chance of onset of disease in those exposed. Henke: The greater               the probability of the ultimate cancer, the stronger the argument for medical monitoring.  

5.            The value of early diagnosis. Henke: Is this the kind of future disease that could be remedied or              eliminated if we have prophylactic measures taken? Mesothelioma: a fatal diagnosis. Is medical          monitoring going to be helpful?

6.            (Henke) The harm must be linked to exposure. You can’t use D as a private insurer to get a free               physical every year. The course of monitoring must be independent of any other that the P         would otherwise have to undergo. The Paoli Test: a reasonable physician would prescribe for P       monitoring different than a one prescribed in the absence of that particular exposure. 

Fear of Future Disease

Isabel v. Velsicol Chemical (2004)

Citizens in TN bring a class action for elevated levels of Dieldrin, a known carcinogen, in their soil.

In our opinion, in addition to cases where it has previously been allowed, recovery for the negligent infliction of mental anguish should be allowed in cases where, as a result of a D’s negligence, a P has ingested an indefinite amount of a harmful substance. In such cases the finder of fact may conclude that the P has sustained sufficient physical injury to support an award for mental anguish even if subsequent medical diagnosis fails to reveal any other physical injury.

In other words, the de minimus physical injury of ingesting the contaminated water sufficiently satisfied the physical injury or manifestation rule so as to justify the award of emotional distress damages.

Henke: This court is more forgiving to the notion of emotional distress or fear for just exposure alone. If your soil is contaminated and you are walking on the soil, that is close enough for an ingestion.

Sterling v. Vesicol Chemical (1988)

Contaminated aquifer case. The jury awarded the five P’s amounts ranging from $50,000 to $250,000 for the fear and distress of the increased risk of developing cancer (foreseeability).

Potter v. Firestone (1993)

This case commands a lot of authority. You can recover if you can show a substantial exposure and if you can show that it is more likely than not (statistically probable) that you will one day get that cancer.

Hagerty v. L & L Marine Services (1986)

P can claim mental distress from fear where it’s reasonable and related to the negligence and it is up to the jury to determine reasonableness.

Exam: If analyzing basic emotional distress, talk about the basic standard under 436; the emotional distress must cause or be caused by substantial bodily injury. Indicate that in most jurisdictions mere exposure to the carcinogen it not enough. De minimus injury is not enough. The physical requirement is taken seriously in emotional distress claims. As far as fear claims, use the Potter case for exam, i.e. substantial exposure, expert testimony that says more probable than not you will contract cancer in the future.

Increased Risk of Future Disease

P310

Ayers v. Township of Jackson (1989)

Compensatory imperfection and uncertainty

Hypo: The criticism of IROFD: You are an asbestos worker, you are at an increased risk of getting meso. If we give you $100,000 today and that’s all you ever get after signing a full release, then the money is totally off base. If you get meso, your claim is worth $1M. If you don’t get meso, then the $100K was a windfall.

Preserving the Potential Claim: Negotiate a partial release, thereby releasing the D from the current claim, but preserve a future claim if you get the full-blown disease. If you do get the full-blown disease, you come back to the D, but he gets a credit or a set off for what he paid in the original litigation.

Bystander Emotional Distress

Anderson v. W.R. Grace (1986) (A Civil Action)

Parents watched their children get leukemia over time and die. The court rejected the bystander emotional distress claims on the grounds that only distress associated with witnessing a dramatic, traumatic shock would be actionable, but not that associated with a prolonged illness. Henke: apparently you can deal with it over time whereas your child being hit by a bus is more emotionally devastating.

This case is good law. It is very difficult to make out a bystander emotional distress claim for slowly developing diseases.

Two Disease Situations – Asbestosis and Mesothelioma

Toxic exposure may cause more than one disease.

Example: You settle your asbestosis claim but you are at an increased risk of getting meso or lung cancer. How does the settlement impact the secondary case for a separate disease? When you settle the asbestosis claim, the language of the release to D’s will explicitly preserve the entitlement of your client to bring a potential second lawsuit for a second and distinct disease process emanating from the exposure. Otherwise it is malpractice.

Quality of Life (Hedonic) Damages

CAUSATION

Standards of Admissibility

If you are a litigator, you are going to deal with Daubert.

We are talking about two things:

1.            General or Generic Causation

2.            Specific Causation

Epidemiology is the science that studies causation in this capacity. It is a science that attempts to link exposure to certain environmental contaminates to certain disease processes. It is the critical underlying science in these cases.

If you client is exposed to PCB’s, he is generally at risk for colon cancer; however, he is predisposed (genetically or environmentally) to colon cancer anyway. How do you prove that your client specifically has a colon cancer causally related to PCB’s as opposed to lifestyle issues or genetics?

P474

Bonner v. ISP Technologies Inc. (2001)

P was twice exposed to FoamFlush, an organic solvent manufactured by ISP. P’s work station was poorly ventilated at the time of the first exposure, and her protective gear was limited to gloves and goggles. The true tortfeasor is the employer. Unless you can show that the employer engaged in an intentional tort, you never get them into the case.

In this case we are arguing the admissibility of expert testimony.

FRE 104

If your adversary serves an expert report, that you find not to be credible, you are going to make a pre-trial motion under Rule 104 (104 hearing) asking the court to exclude that expert opinion. It is your foundation for pre-trial discussions.

P475

The Issue: to prove causation in a toxic tort case P must show both that the alleged toxin is capable of causing injuries like that suffered by the P in human beings subjected to the same level of exposure as the P, and that the toxin was the cause of the P’s injury.

P505

Ferebee v. Chevron Chemical Co. (1984): In a courtroom, the test for allowing a P to recover in a tort suit of this type is not scientific certainty but legal sufficiency. The fact that another jury might reach the opposite conclusion or that science would require more evidence before conclusively considering the causation question resolved is irrelevant.

There is a tension between the certitude that science requires and the legal system that has to resolve cases on a day to day basis. What the court in Bonner is saying is, this case came up today, not five years from now. Even if the science is not yet air tight, we don’t deny this person their day in court only to say that the victim five years from now, who gets the same problem, but is the beneficiary of a different scientific development. 

P476

When an appellate court is called upon to review the propriety of a District Court judge’s decision to exclude an expert, notice the differential standard; abuse of discretion. The bottom line: if a District Court judge does a 104 hearing and knocks your expert out of the case, you can take it up on appeal, but I wouldn’t feel too confident of getting that decision overturned.

Cause In Fact vs. Substantial Factor

No issue is more difficult in environmental tort litigation than resolving the question of whether the exposure to the toxic substance was the cause in fact of the P’s harm.

Courts differ on how they phrase cause in fact. If you apply a but for test on the PCB client, i.e. but for his exposure to PCB’s he doesn’t get colon cancer – you are not going to get to a jury. If you use the more forgiving, elastic standard of was his exposure to PCB’s a substantial factor, maybe you get over that hump. How we define cause in fact is hugely important in environmental/toxic torts where causation is so bitterly contested.  

P504

Rubanik v. Witco Chemical (1991). In a toxic-tort litigation, a scientific theory of causation that has not reached general acceptance may be found to be sufficiently reliable if it is based on a sound, adequately-founded scientific methodology (what the Supreme Court did in Daubert) involving data and information of the type reasonably relied on by experts in the scientific field.

FRE 403

The balancing rule is often very important in these cases. The Court talks about that in Daubert. In addition to other limitations, if you are trying to exclude evidence perhaps you make a 403 argument, i.e. yeah this may be relevant but its prejudicial impact outweighs its probative value.

The two critical rules of evidence in Daubert are 702 and 703

Credentials and Qualifications

FRE 702 – Testimony by Experts

If scientific, technical, or other specialized knowledge will assist the trier of fact, to understand the evidence or to determine a fact in issue, then a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise.

Rubanik v. Witco Chemical: Courts in Toxic Tort cases have demonstrated considerable flexibility in allowing experts to render opinions as to the cause of P’s injury, even though they were not medical doctors, e.g. an expert with a PhD in biochemistry could testify that P’s workplace exposure to PCB’s had caused his colon cancer.

702 in this context in Toxic Tort is flexible in getting people qualified to potentially testify. 

FRE 703 – Bases of Opinion Testimony by Experts

The facts or data in the particular case upon which an expert bases an opinion or inference may be those perceived by or made known to the expert at or before the hearing. If of a type reasonably relied upon by experts in the particular field (the critical phrase) in forming opinions or inferences upon the subject, the facts or data need not be admissible in evidence.

Methodology and the underlying science have become very, very important.

Daubert v. Merrell Dow Pharmaceuticals (Supreme Court, 1993, Blackmun)

The junk science debate

Bad cases make bad law. Daubert was a bad case. For the Supreme Court to finally take a case on the junk science debate, they took the Bendectin litigation. The allegation in the Bendectin litigation was that Bendectin, which pregnant women took for morning sickness, led to certain types of birth defects, particularly malformed digits or limbs.

Even I would concede that the science supporting a causal relationship between Bendectin and birth defects was dubious. From a plaintiff’s standpoint, you could hardly have picked a less favorable backdrop for the US Supreme Court to make a statement about the admissibility of this kind of science.

The standard in these cases was always the Frye standard. Under Frye (1923), scientific opinions were not admissible unless they had gained general acceptance in the scientific community – the general acceptance standard.

In the intervening years, the Federal Rules of Evidence were drafted, including Sections 702 and 703 which supersede the general acceptance test in Frye.

The Frye standard was really a bean counting approach. How many studies had been done and what percentage of those studies support the plaintiff’s position? If it is only a minority of those studies, it is not generally accepted, and it’s not admissible. 

With Daubert, the Court begins a shift away from simple bean counting and suggests to a trial court judge, who is faced with this determination of admissibility, to look instead at how the scientist/expert arrived at his or her determination. What was his or her methodology? Are their conclusions based upon reliable underlying data? Is this the type of methodology that most scientists would use and would find to be valid?

“Thus when a party proffers expert scientific testimony, the trial court has a vital ‘gatekeeping function’ – a threshold obligation to render a preliminary determination of both the (1) reliability (validity – is it a good methodology?) and (2) relevance (fit) of the expert’s reasoning or methodology underlying the testimony proposed.”

Henke: In the aftermath of Daubert, a lot of trial judges have taken very seriously the gatekeeping role that Justice Blackmun set forth.

Daubert Factors:

1.            Testability. Has it been tested, refuted, or verified, or is it just theoretical?

2.            Error rate. An acceptable known or potential rate of error.

3.            Control Standards. The scientific techniques and application was subjected to appropriate           standards of control.

4.            Peer Review. Whether subjected to peer review, scrutiny and publication.

5.            General Acceptance. No longer the sole determinate, but this still matters.

Bendectin is a classic example of litigation driven science. When all you have is poking holes in the existing science, as opposed to doing new work that supports your claim, you are on very thin ice. The plaintiff’s experts could not show a causal connection between Bendectin and birth defects. They could only testify that Bendectin was capable of causing birth defects, not that the drug in fact (or more likely than not) caused the plaintiff’s birth defects. 

The Federal Rule of Evidence 702: The Daubert Amendment

1.            Litigation Driven Science. Whether experts are “proposing to testify about matters growing        naturally and directly out of research they have concluded independent of the litigation, or    whether they have developed their opinions expressly for purposes of testifying.” Is the opinion      based upon preexisting research of the expert or did this expert have any opinion about this until               the litigation began and he was asked to be an expert and put together a theory? Is it        preexisting or litigation driven science?

2.            Whether the expert has unjustifiably extrapolated from an accepted premise to an        unfounded conclusion.

3.            Whether the expert has adequately accounted for obvious alternative explanations.     Negating other causes/possibilities. Has diet or genetics been taken into account?

4.            Whether the expert “is being as careful as he would be in his regular professional work outside                his paid litigation consulting.” Forensic work as opposed to their regular work. Is there some        suggestion that this expert might have a different standard for his or her forensic work than he    or she would have with their patients or with other non-litigation clients? A cynical but realistic   factor.

5.            Litigation Driven Science exists only because of the litigation. Whether the field of expertise       claimed by the expert is known to reach reliable results for the type of opinion the expert         would give. For example, an expert is doing animal studies – are animal studies a     reasonable underlying methodology by which to arrive at the conclusion that is being     offered?  

If you are going to be products liability lawyers or toxic tort lawyers, this is your bread and butter. It is going to be hugely important.

“Abuse of Discretion” standard of review. If a district court judge throws out your expert, and you take that up on appeal, the Joiner case (a Daubert progeny case) does not give you much confidence that the appellate judge is going to reinstate your expert.

Rehnquist’s dissent in Daubert: With all due respect, we are not epidemiologists, toxicologists, or pharmacologists – pick your ologist – we’re not any of them. Rehnquist questions trial court judges having this active gatekeeping function. What about the Seventh Amendment? A right to a jury trial? Access to the court system? To what extent should a trial judge usurp the role of a jury by making this pretrial determination that an expert report is inadmissible as opposed to allowing a jury to asses that expert’s credibility?

Assuming that a trial judge is capable of making a very fact-sensitive determination, I can see the Joiner rationale. Why should an appellate court, who didn’t see the expert testify, be probing of what really happened?

In Kumho Tire v. Carmichael, the Court ruled that Rule 702 should apply to all expert testimony including engineering testimony of the type ordinarily relied upon in products liability cases involving durable products.     

FRE 403

Even if you get past 702 and 703, you might not be home yet because of 403. Judge Weinstein has explained that expert evidence can be powerful and quite misleading. Because of that risk, the judge has the ability to do the balancing under Rule 403.

Rule 104 Hearing (Daubert Hearings, Trial within a Trial)

How this works: You file a lawsuit and file an expert’s report. The defendant receives a copy of the report, says this is junk science and they move to dismiss the report pursuant to Rule 104 or a Daubert Hearing.

The Daubert Hearing and ruling have effectively become virtually as case outcome determinative as a class certification hearing and ruling: once decided, a case either shrivels up and goes away, or becomes more dangerous to try. Practically speaking, they are every bit as case dispositive as a summary judgment hearing.

You are not going to get in front of a jury without an expert and if the judge bounces your report in a Daubert Hearing, it’s all over. If you survive a Daubert Hearing, and your expert report is admissible, the value of your case may have just doubled. Daubert Hearings are a trial within a trial.

Judge Jenkins, Judge Weinstein: hard look strict scrutiny. At that Rule 104 hearing, if you knock out the expert and the case shrivels up, you have taken the case away from the jury. Instead of deferring to the jury’s ability to assess the credibility of this expert, you as a trial judge have arguably usurped the jury’s role to assess the credibility of evidence.

Fleeting Exposure Defense

P528, N3: The Frequency, Regularity, and Proximity Test. In a lot of these cases a P is going to be exposed to multiple of things, e.g. multiple manufacturers’ asbestos products and P is going to sue 40 D’s. If you represent a D to which P had a fleeting exposure, you move for summary judgment because the exposure to D’s product did not occur with the frequency, regularity, and proximity to cause disease. A court will apply some variation of this test.

PLAINTIFF INDETERMINACY

We are talking about specific causation trying to pinpoint this P as someone whose disease was caused by the factor.

Individual Model: Allen case.

Collective Model: Agent Orange litigation

P530

Allen v. United States (1984)

The court applies a substantial factor test of causation. 

The first point relevant for our purposes is the court's description of the meaning of the statement that "radiation causes cancer": "We simply mean that a population exposed to a certain dose of radiation will show a greater incidence of cancer than the same population would have shown in the absence of the added radiation."  Thus, the court adopted an epidemiological definition of causation.

 Next, the court pointed out several reasons why causation is more problematic in these mass exposure cases. First, the long latency periods make causation determinations more problematic because long periods, such as ten, twenty, or thirty years, allow the possible involvement of "intervening causes," which obscure the factual connection between the plaintiff's injury and the defendant's conduct.

Second, the "non-specific nature" of the injury obscures the causal connection and differentiates it from traumatic injuries which have unique characteristics tracing them to an identifiable source. Judge Jenkins further found that radiation-induced cancer cannot be distinguished from cancer in the same organs attributable to natural, unknown, or "spontaneous" causes or sources. To overcome these difficulties, the court relied on an analysis that sought to establish "exclusive factual connections"; for example, that the defendant engaged in particular risk-creating conduct and that the plaintiff's injuries were consistent with the kind of harm that one would predict as one of the risks created. The court adopted this test:

Where the defendant who negligently creates a radiological hazard which puts an identifiable population group at increased risk, and a member of that group at risk develops a biological condition which is consistent with having been caused by the hazard to which he has been negligently subjected, such consistency having been demonstrated by substantial, appropriate, persuasive, and connecting factors, a fact finder may reasonably conclude that the hazard caused the condition absent persuasive proof to the contrary offered by the defendant.

The test could be interpreted as meaning that once the plaintiff establishes generic causation by the appropriate factors, the burden shifts to the defendant to disprove individual causation.

The court stated that the relevant factors included:

(1) That the plaintiff resided in proximity to the Nevada Test Site ("NTS") during the relevant period;

(2) That the plaintiff's injury was of the type consistent with those known to be caused by radiation exposure; and

(3) The probability that the plaintiff was exposed to ionizing radiation from the NTS at rates in excess of the natural background radiation.

 The court also identified other relevant factors such as the time and extent of exposure, age, sensitivity of certain organs or tissues to radiation, estimation of doses of radiation, consistency between latency period and known etiology, and statistical incidence of the injury greater than that which would be expected in the population group.  n507 The court applied a substantial factor test of causation  n508 and treated its "legal connecting factors" approach as embodying that kind of test. With such a test, the plaintiff need not conclusively eliminate all other possible causes of the harm, which would represent a practically impossible burden to satisfy in mass exposure cases.  n509

Despite the application of a substantial factor test, the consideration of multiple factors, the refusal to rely solely on statistical proof, and an obvious distaste for the government’s role in conducting these tests without adequate precautions to the affected populations, it denied recovery to the majority of the twenty-four claimants.

Judge Jenkins rejected a simplistic reliance on statistical proof, even if such proof suggests that a particular plaintiff's disease is more likely than not (greater than 50 percent likely) to have been 8540*321 caused by the defendant's conduct.  n510 He criticized such reliance as refabricating the "but for" test, which he explicitly rejected.  n511 Rather, he concluded, statistical evidence is relevant, but the court must also take into account policy considerations and answer the question of whether the defendant should be liable for risks that its conduct may have created.  n512

The District Court Rulings were reversed by the Court of Appeals on the grounds that the Atomic Energy Commission, in planning, conducting, and monitoring the open air atomic bomb blasts held in NV was engaged in policy judgments and discretionary-decisional actives exempting the government from liability under the FTCA 2680(a) (the tort system cannot second guess).

Congress later passed the Radiation Exposure Compensation Act to compensate the victims (1) if the disease is one specified by the Act, e.g. childhood leukemia, female breast cancer; (2) the exposure occurred at prescribed ages; (3) the claimants resided in a specific area; and (4) non-behavioral factors are met, e.g. not being a heavy smoker.