In a step it rarely takes, the CPSC recently initiated separate administrative enforcement proceedings against two manufacturers of desktop magnets alleging that its products contain defects that can pose serious risk of injury. The CPSC sued the makers of Buckyballs and Zen Magnets seeking an order from an Administrative Law Judge directing them to cease all manufacture and distribution of their products (and other relief) after discussions with the companies failed to result in a voluntary recall plan.

The core issue is that these magnets can be dangerous if swallowed because the magnets can bind together and become lodged in the body, posing a risk of harm and perhaps a need for surgical intervention.  The companies currently have warnings stating, among other things, that the products are not for use by children and that they should not be swallowed, but the CPSC alleges that the warnings and labeling do not effectively communicate the hazard associated with ingestion of the product.  The CPSC continues to receive reports of injuries involving use of the product by children.  

Given that most CPSC actions (e.g., recalls, civil penalties) are the result of agreements reached with manufacturers, these matters provide the public a rare opportunity to get a glimpse of a contested lawsuit regarding the justification for a recall.  This case sets up as a classic battle that features competing themes of child protection vs. personal responsibility.  On the one hand, the manufacturers say that the CPSC’s actions raise questions about when the government has the authority to stop companies from selling products that are reasonably safe if used properly.  On the other hand, the CPSC alleges that injuries continue to occur, which suggests that the warnings in place are inadequate – and that perhaps no warning is adequate.  For more information, click on the links below.





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Porsche Puts Out Fires Before they Start

Posted on March 29, 2012 02:01 by Jeff Curran

Porsche AG issued a recall today for 1232 of its 2012 911 Carrera S Coupes, stating that a fuel line could become disconnected due to its proximity to a coolant line.  The result could be fuel leakage, causing the engine to stop or possibly to catch fire.  So why is this important?  Companies issue recalls every day – why should you (or anybody else) care about this one?    

I’ll tell you why.  Porsche issued this BEFORE any fires were caused, property was damaged or lives were even potentially lost.  They just thought it MIGHT happen, and they did something about it before something actually happened.  I just figured more people needed to realize that car companies aren’t  actually the greedy, heartless things they are portrayed to be.  The kicker is that car companies do stuff like this all the time – it’s just that nobody ever pays attention to these because they don’t “sell”.  I realize nobody is going to jump on this nationally, because it’s not “news” in the popular sense.  But the next time you hear somebody deride “Big Auto”, at least think of this.  Granted, there aren’t a lot of cars involved (and yes, they are very, very nice cars), but it really is the thought that counts here.  

And if you want to learn more really interesting stuff about the finer points of Automotive product litigation, come see us at the Automotive SLG Breakout session Wednesday afternoon at the DRI Product Liability Conference in Las Vegas April 11-13.   The best part? It’s 100%  free with your registration – you do not pay one extra dime for the intellectual genius that will be provided. Remember where you heard it, and we’ll see you in Vegas.  

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What Happens in Vegas...

Posted on March 23, 2012 02:21 by Jeff Curran

Actually, it’s what’s happening in Vegas.   It’s spring, and we’re beginning to see a light at the end of the winter tunnel.  Grass is starting to grow, trees are beginning to bud, flowers are blooming, etc.  What better way to celebrate the annual coming of Spring than at DRI’s Product Liability Seminar in Las Vegas?  OK, I confess that Spring and Las Vegas are not “causally connected”, as we DRI-ers like to say.  You can actually go out to Vegas any time of year, and they will welcome you with open arms no matter what the season.  But, what you can’t do just any time of year is go out there and get both the camaraderie of your DRI friends AND the CLE education from leading product liability lawyers and experts from around the country.  So, if you’ll join us April 11-13 at the Venetian for the DRI Product Liability Seminar, you’ll get networking, friends, education, Vegas AND Spring, all at the same time.  You don’t want to be the one who has to hear about it after the fact,  so make plans to join us.  And if you want some really good Automotive CLE, come to the Automotive SLG Breakout session Wednesday afternoon where you’ll hear Neal Walters (the guy who puts the “class” in “class action”) Tracy Ferak (the component part liability guru) and Chris Massenburg (who will tell you all about where the Big Auto companies find themselves economically these days) present some seriously useful stuff.  I’ll see you there – I’ll be the tall guy in the suit.  

Jeff Curran is Of Counsel with Gable Gotwals in Oklahoma City. Jeff focuses his practice primarily in the areas of product liability, insurance matters, entertainment law and commercial litigation.


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Legacy Equipment Challenges

Posted on March 19, 2012 02:07 by J.K. Leonard

We are witnessing advances in technology and machine design at a dizzying rate.  Products that were purchased new can literally be “old” within months, as new features and enhanced safety and utility features are rolled out.  What, then, is one to do with true “legacy equipment” – machines that have been in place for years and, often times, decades?  When accidents occur on this equipment, or when manufacturers are called upon to repair them, questions about retrofitting, warnings and/or recommending the equipment be taken out of service often arise.  This can be a tremendous challenge for defense counsel in defending legacy equipment – even more so for in-house counsel that must answer the calls from service personnel in multiple jurisdictions.   Also, what is it that in-house counsel really need, want and appreciate from their outside lawyers in defending and reporting cases?

To hear the answers to these important questions, you must hurry and register for DRI’s 2012 Product Liability Conference, April 11-13 at the Venetian Palazzo Hotel in Las Vegas and attend the ACMIE (Agricultural, Construction, Mining and Industrial Equipment) SLG break-out session, which will take place on Friday, April 13 at 8:30 a.m. These issues will be discussed by a panel of in-house counsel comprised of Emily Muceus of Deere & Company, Jamie Myers of Caterpillar, Inc. and Diane Scialabba of CNH America, LLC.  The panel discussions will be moderated by Mike McWilliams of Butler Snow O’Mara Stevens & Cannada (Jackson MS) and Kevin Owens of Johnson & Bell (Chicago IL).  We will also hear ACMIE’s annual list of the top 10 cases of the past year, presented by Jennifer Johnson of Ice Miller (Indianapolis IN). We hope to see you there!
 
 

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As required by the Consumer Product Safety Improvement Act of 2008 (“CPSIA”), the Consumer Product Safety Commission published ANSI/SVIA 1-2007 as a mandatory consumer product safety standard for ATVs.  The standard became effective on April 13, 2009.  ANSI/SVIA has since issued a 2010 version of the standard.  The Commission issued a notice of proposed rulemaking on July 25, 2011 and is soon expected to issue a final rule amending the mandatory standard to reference the 2010 version. 

The Commission found that though most of the changes in the 2010 version are relatively minor, merely enhancing the standard’s clarity and consistency, the Commission thought it best to incorporate all of the provisions of ANSI/SVIA 1-2010 in order to avoid any confusion with two slightly different versions of the standard, the current mandatory standard and the revised voluntary standard. 

The most substantive of the changes noted by the Commission in the 2010 version are as follows: (1) elimination from the scope section of a provision calling for expiration of the definition and requirements for the Y-12+ youth ATV age category on July 28, 2011; (2) a change in how to calculate the speed for the braking test of youth ATVs; (3) a change in the force applied to passenger handholds during testing; (4) the addition of a requirement that youth ATVs shall not have a power take-off mechanism; (5) the addition of a requirement that youth ATVs shall not have a foldable, removable, or retractable structure in the ATV foot environment; (6) additional specificity concerning the location and method of operation of the brake control; (7) tightening the park brake performance requirement, by requiring the transmission to be in “neutral” during testing, rather than in “neutral” or “park”; and (8) the requirement that tire pressure information be on the label, when the previous requirement could be interpreted to allow tire pressure to be either on the label, the owner’s manual, or the tires. 

If the Commission issues a final rule, the 2010 standard will become effective 60 days after publication of the final rule in the Federal Register.  The rule will apply to all ATVs manufactured or imported on or after that date.

 

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Italian exotic car maker Pagani has encountered a roadblock in its plan to enter the US market.  Acclaimed for its ultra-fast, ultra-powerful, ultra-light, and ultra-exclusive Zonda models which have not been sold in the US, Pagani sought to bring its new Huayra to the single most lucrative supercar market.  The Huayra raises the already stratospheric performance and price points to new heights.  At an estimated $1 million, the 700-hp, 220-mph Huayra competes in the rarefied arena reserved for cars like the Bugatti Veyron and the Lamborghini Reventon.  But NHTSA has refused to grant Pagani an exemption from the advanced airbag requirement in FMVSS 208.  NHTSA sometimes grants such exemptions to automakers who plan to sell only a few cars, and has done so in cases of, for example, some Lamborghini, Tesla, Panoz and Koenigsegg models.  The Huayra would seem to qualify easily under that criterion, since Pagani's limited production capacity allows it to plan to sell no more than 6-12 cars in the US.  But NHTSA was not convinced that Pagani would suffer undue financial hardship by complying with the advanced airbag requirement. Pagani petitioned for a temporary, two-year exemption to bridge the gap until it produces a fully-compliant Huayra.  NHTSA was not swayed by Pagani's plea that, without the exemption, Pagani would lose 34 million Euros in gross revenues and over 3 million Euros in net revenues, would not be able to enter the US market until 2015, and would be forced to postpone construction of a new factory which is needed to increase the company's production capacity.  NHTSA concluded that the substantial financial hardship threshold was not met because Pagani still projected to earn a profit, although the cost of compliance would result in short-term losses.  Pagani says the Huayra's US debut will be delayed until 2013.

Revealingly, in denying Pagani's petition, NHTSA commented that it would evaluate requests for exemption more critically from now on because the advanced airbag requirement has been in place for more than 10 years (and almost five years for small volume manufacturers).  NHTSA concluded:  "Given the passage of time since the advanced air bag requirements were established and implemented, and in light of the benefits of advanced air bags, NHTSA has determined that it is not in the public interest to continue to grant exemptions from these requirements in the same circumstances and under the same terms as in the past."  NHTSA's decision can be found here. 

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Categories: Automotive | Product Liability | Recalls

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Ferraris Recalled: May Burst Into Flame

Posted on September 3, 2010 02:25 by Roman Lifson

Ferrari announced that it is recalling 1,248 of its recently introduced 458 Italias (303 of which are in the US) due to a risk that the glue securing a wheel arch lining and heat shield will melt and ignite.  Since the 458's release, there have been five reports of fires from customers in the US, France, Switzerland, and China.  The fix simply replaces the glue with metal rivets.  The 570-horsepower, 202-mph 458 replaces Ferrari's highly regarded F430.  The article also mentions that some owners repaired the vehicles for this problem prior to the recall and may be eligible for reimbursement from Ferrari.  What are the company’s obligations toward these reimbursements?

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Categories: Recalls

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