News

August 24, 2007

Looking outside Indiana

By Michael W. Hoskins mhoskins@ibj.com


Imagine an electric air freshener malfunctions in one of the rooms in your home and gets blamed for causing a fire that burns down the house. Or that a ladder rung breaks and you fall 25 feet; a plastic toy breaks apart and your child swallows a magnet; or that a medical device sends unwanted shock waves to a family member’s ailing heart.

Lawsuits from each are inevitable. Attorneys can foresee the litigation, though the final outcome is far from predictable. But whether Indiana is an ideal place to initiate suits draws disagreement from attorneys, with those on the defense arguing that the products liability playing field is even while plaintiff attorneys contend state laws are a joke of the nation and they’d rather take the case somewhere else.

“If you can somehow find a law outside of Indiana to apply, go for it,” says Sam Jacobs, a plaintiffs attorney with Mitchell Hurst Jacobs & Dick in Indianapolis. “Changes that have been made here made product-liability cases pretty untouchable. It takes almost a perfect storm of a right case to come out positively for the plaintiffs side.”

Since the Indiana Product Liability Act was amended in the mid-90s through a massive legislative tort reform package, plaintiffs attorneys say the amount of product-liability cases has dramatically decreased in the state. For example, Jacobs said his firm handles very few products liability cases as a result of the legislative changes.

“By the time you add up everything in Indiana, you’re extremely limited here,” he

.

Indiana Code 34-20 governs all productliability actions that are brought by a user or consumer and against a manufacturer or seller. Stephen Arthur, who specializes in products liability and is writing an analysis on the topic through West Publishing Co., said the legislative changes make it more difficult for plaintiffs’ attorneys to pursue marginal products liability claims against manufacturers. The changes came from dissatisfaction with the existing statutory scheme permitting plaintiffs to win large verdicts under a theory of strict liability, Arthur said.

Benefits from the changes more than a decade ago include that a product is not defective where the defect is known to the reasonable user, or where the product is incapable of being made safe, Arthur noted.

“This merely evens the playing field and helps reduce abuses that were evident under the former statutory scheme,” he said. “It’s now much more difficult for plaintiffs to win marginal product-liability cases. But it still makes it possible for credible cases. In that sense, it’s a good thing.”

Through the years, he’s noticed Indiana court decisions holding fast to the statute as it’s written. He’s defended a manufacturer of standup forklift trucks in a number of suits, such as where a plaintiff has alleged the truck was defective because it wasn’t designed with a rear door to guard the operator compartment. Another of his cases involved representing the company that made electrically charged room air fresheners in a property damage action, where the plaintiff claimed the product malfunctioned and caused their home to be destroyed by fire.

“Pretty much any product you can think of, even those where you have some head scratching and wondering how that can be the case,” he said. “They’re all complex and present different challenges, but I’ve found Indiana juries to be very fair in deciding whether to assess fault against product manufacturers.”

Don’t tell the plaintiffs attorneys, though, or those watching Indiana law and court decisions from the business side. Organizations such as the Insurance Institute of Indiana all describe the 1995 law changes as “pro defense.”

That trend carries over to the newer class of products liability cases evolving in the past decade, some attorneys say. Greg Laker and David Cutshaw with Cohen & Malad in Indianapolis note that their cases in recent years have more often involved claims relating to medicine and medical devices. The pair said they take on a new case a week involving a recall or allegation that a product caused damage to the public at large.

They have taken on the now-recalled Duragesic patches, designed to distribute narcotics into the bloodstream to alleviate chronic pain but instead released deadly levels of chemicals into the patients. Another case involves Guidant’s recalled defibrillators, which delivered unwanted shock waves. Many of those cases are now a part of multidistrict litigation centered in Minnesota, they said.

While the firm actively screens plaintiffs in Indiana, Laker and Cutshaw said they’re always looking for ways to file in other states with better product-liability laws. Typically, that’s where a plaintiff is located.

That can be seen in about 60 or 70 cases involving the hormone replacement drug Prempro. Most have been tried in Philadelphia and Arkansas – though the verdicts there are evenly split at three each.

“Sometimes, it just comes down to juries,” Laker said. “A different subset of people can look at same set of facts and reach different conclusions. That’s going to happen anywhere. But all good lawyers try to find the best, most favorable venue – you have to do that for your client. Clearly product liability is different, and there are venues better than Indiana.”

Gordon Tabor, who practices at the Tabor Law Group in Indianapolis, has dealt with the complex product-liability laws recently when battling toy giant Mattel. Starting in 2005, he took a case involving a 7-year-old girl who’d swallowed two tiny magnets that came from her Polly Pocket dolls; they’ve since been made the subject of two recalls, including the most recent one involving 1.5 million Chinese-made toys worldwide that includes Fisher Price .

His client – Paige Kostrzewski, 7 at the time in July 2005 – had swallowed two tiny magnets from the dolls she’d gotten days earlier. The 3-inch tall plastic dolls have magnets inside designed to attach to separate plastic pieces of clothing. Each piece clicks into place, as is referenced in the product name Polly Pocket Quik-Clik Boutique.

The toy doll set sold from May 2003 to September 2006 and was originally marketed toward children ages 3 to 6, Tabor said.

In 7-year-old Kostrzewski’s case, her injuries happened as she put pieces into her mouth to carry them from place to place and inadvertently ingested the 1/8-inch diameter magnets. Within days, she started displaying flu-like symptoms and complaining of abdominal pain, Tabor said. A CAT scan later revealed two magnets lodged in her small bowel, breaking down tissue and causing peritonitis.

Ultimately, Tabor’s case led to a multi-million dollar settlement and a worldwide recall of the toys. But he had to go outside Indiana for that to happen.

He filed the case in California near Mattel’s headquarters in El Segundo, in part because of Indiana’s complex product-liability statute, Tabor said. A lawsuit here would have been required to target everyone in the “chain of commerce,” he said. That includes the product manufacturer in China, the distributor in London, Mattel itself, and the location that sold the product involved in the dispute.

Tabor points to the 1995 tort reform, medical malpractice caps, and the civil jury system that requires a unanimous verdict and puts the burden on the plaintiff.

“Product-liability laws in Indiana are not plaintiff-friendly,” he said. “They’re seen more of a joke across the country.”

The Chinese toy recall lately also brings to mind another issue for attorneys, Arthur added. A trend in recent years by U.S. companies to outsource product manufacturing to foreign countries can raise new and more complex legal issues for plaintiffs, he said. Those foreign countries making products have varying viewpoints on product safety and local laws, such as those in Indiana, and will have to be adapted to make sure those products delivered to the U.S. do protect American consumers.

“The whole point of product cases is that (these companies) put profits over people,” Cohen & Malad’s Laker said. “That won’t change unless product-liability laws put pressure on companies to warn people of the dangers. We need that accountability.”

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