Vested Interest - Tort Briefs - October 2003 Issue

Abercrombie Sues Rival Over Number 22

Abercrombie & Fitch says its chain of Hollister stores owns the number 22 and has filed suit against retail rival American Eagle Outfitters seeking to prevent it from using the number on its clothing. Abercrombie says Hollister owns the number 22 because it has appeared on the chain’s clothing since the stores opened three years ago, but Hollister never registered a trademark on the number. They claim common-law rights to the trademark because the number is used on Hollister’s merchandise, packaging and website. Federal courts have ruled at least three times in four years that Abercrombie can’t prevent American Eagle from selling clothes that look like Abercrombie’s. (Chicago Daily Law Bulletin – August 25, 2003)

Corel Corporation Agrees to Settle Class Action

Corel Corp., the Canadian software company whose products include WordPerfect, has agreed to settle a class action shareholders’ suit that alleged its stock price plunged in late 1999 and early 2000 when investors learned the truth about its financial health. The suit alleged that Corel hid the truth about its financial problems for several months, all the while misleading investors with positive statements. Plaintiffs’ lawyers said Corel led investors to believe that its Windows business was a "cash cow" that would support its entry into the Linux marketplace. Investors expected Corel to report profits for the final quarter of 1999, but "in a dramatic about face," the suit said, Corel announced it would be posting a loss. (ATLA Law News Digest – August 28, 2003)

Firms Settle Suits on PCBs

A settlement dispatched the claims of more than 20,000 residents of Anniston, Alabama, against three once-related companies: Solutia Inc., Monsanto Co. and Pharmacia, a division of Pfizer Inc. A state circuit judge joined a U.S. District Court judge on his bench to rule together on a historic umbrella deal covering two separate cases, filed years ago, over the contamination of Anniston with polychlorinated biphenyls, or PCBs. More than 30 years ago, an earlier incarnation of Monsanto Co. produced PCBs that spread from an Anniston plant into the community’s creeks, lakes and soil. Residents blame the PCBs for a number of ailments and for destroying the value of their homes. (ATLA Law News Digest – August 28, 2003)

Court Rejects ADA Claim for One-Eye Blindness

Blindness in one eye does not qualify as a disability under the Americans with Disabilities Act unless the plaintiff can also show that the loss of vision has affected his ability to engage in daily activities, a federal judge has ruled. In an 18-page opinion in Congleton v. Weil-McLain, a U.S. district judge found that one-eye blindness, or monocular vision, results in a lack of depth perception and a limited field of vision, but that those who suffer from it are often able to compensate through adjustments in the brain and by turning their heads. As a result, Kauffman found that monocular vision "is not a per se disability," and that plaintiffs therefore have the burden to prove that the evidence of their own experience shows that the condition has substantially limited a "major life activity." (ATLA Law News Digest – August 28, 2003)

Settlement Reached in Wellstone Crash

The families of the late Senator Paul Wellstone (D-MN) and five other passengers have reached a settlement with insurers for the company operating the plane that crashed and killed them last October. Wellstone’s law firm said its investigation showed pilot error caused the crash of the twin-engine Beechcraft King Air A100 as it approached a municipal airport. (Liability & Insurance Week – September 2, 2003)

Breast-Implant Ruling Reversed

The Ninth U.S. Circuit Court of Appeals has reversed a ruling against a plaintiff in a breast-implant case, holding the district judge erred in deciding to give the jury instructions based on the law of negligence rather than strict liability. In Transue v. Aesthetech Corp. et al, the U.S. district judge told the jury it would have to find Bristol-Myers Squibb failed to use ordinary care in designing and manufacturing the implants as well as issuing warnings. But the Circuit panel reversed the jury ruling based on the jury instructions, noting that this case alleges a manufacturing defect, so strict liability applies and negligence needn’t be proved. (Liability & Insurance Week – September 2, 2003)

Arbitration Agreement Enforceable Where Lender Offered to Pay

A lender that offered to pay for the cost of arbitration can enforce an arbitration agreement over the objection of consumers who cannot afford the proceedings, the 7th Circuit has ruled. Arbitration proponents and foes alike are pointing to the decision as an important example of how courts will interpret arbitration agreements in the wake of the U.S. Supreme Court’s 2000 decision in Green Tree Financial Corp. v. Randolph, which held that arbitration agreements may be unenforceable if the costs of arbitration are "prohibitively expensive." (ATLA Law News Digest – September 4, 2003)

Cruise Line Faces Revived Lawsuit

An appeals court reinstated a medical negligence suit against Carnival Cruise Lines in a case that attorneys say has wide implications for passengers who need medical care aboard ships. The 3rd District Court of Appeals revived a lawsuit by the family of a teenager left infertile when a Carnival ship’s doctor misdiagnosed her appendicitis. The court threw out language in Carnival’s tickets rejecting company liability and limiting medical negligence claims to the ship’s doctor. The decision reinstated Carnival as a defendant in a 1998 lawsuit filed by the parents. (ATLA Law News Digest – September 4, 2003)

Jury Returns Award for Boy’s Pool "Entrapment"

In one of the largest product liability verdicts so far this year, a Florida jury has ordered a Wisconsin pool-pump manufacturer to pay compensatory damages to the family of a boy who sustained permanent brain damage after his arm became stuck in a pool drain three years ago. The judgment against Sta-Rite Industries will be used to help pay the medical expenses of the boy, who was trapped underwater for about 12 minutes when his arm became ensnared by the suction of a pool pump. According to the U.S. Consumer Products Safety Commission, from 1985 through 2002 there were a total of 147 entrapments in hot tubs, pools and whirlpools, including 36 deaths. (ATLA Law News Digest – September 4, 2003)

Doctor Pleads Guilty to Health-Care Fraud

A Florida urologist pleaded guilty to reduced charges for giving about 100 prostate cancer patients lower dosages of a medication than he billed their insurance companies for. The doctor pleaded guilty to 59 counts of unlicensed wholesale distribution of a prescription drug and health-care fraud. In turn, prosecutors agreed to drop a product tampering charge for allegedly diluting the drug. He faces up to four years and three months in prison and will also lose his medical license and pay unspecified fines. He also faces deportation because he is a Canadian citizen. (AP – September 23, 2003)

Excluded Portion of Vehicle Owner’s Manual Relevant as to Air Bag Hazard

In Palmer v. Volkswagen of America, Inc., the Mississippi Court of Appeals ruled that a picture in the owner’s manual for an automobile, showing a small child in a rearward-facing child seat on the front passenger seat, and the caption accompanying the picture were relevant to establish the inadequacy of the automobile manufacturer’s warnings, in a products liability action relating to a ten-year-old front seat passenger’s death from deployment of an air bag. The picture allowed the passenger’s parents to make the reasonable inference that if a small child could safely ride in the front passenger seat in a rearward-facing child seat with its head positioned close to the air bag, a larger, ten-year-old child could safely ride in the front seat. The picture also allowed a reasonable inference that the parents became confused by the manufacturer’s air bag warnings due to the contradiction between the picture/caption and instructions elsewhere in the manual to always place children in the rear. (ATLA Law News Digest – September 4, 2003)

Tobacco Pellets Not Subject to Regulation, FDA Says

Tobacco pellets sold in drugstores and supermarkets as an alternative to cigarettes cannot be regulated under current laws, the Food and Drug Administration concluded. Responding to citizens’ petitions from public health groups and the distributor of FDA-regulated nicotine lozenge products, the FDA said the pellets are a form of "smokeless tobacco" and cannot be regulated under the 2000 Supreme Court order striking down federal regulation of tobacco. The ruling was welcomed by the makers of the pellets, sold in 46 states as Ariva. Public health groups called the ruling dangerous because it allows the mint-flavored and candy-like nicotine products to be sold without regulation. Under the FDA ruling, Ariva can be sold without regulation because it contains tobacco. In contrast, smoking-cessation products designed to provide the same amount of nicotine in lozenge or gum form require lengthy FDA review because they don’t contain tobacco. (ATLA Law News Digest – September 4, 2003)

EPA Sued Over Children’s Exposure to Pesticides

The Environmental Protection Agency was sued by four states and a coalition of conservation, public health and farm worker groups for failing to protect children from unsafe levels of pesticide residue found in food. The plaintiffs, who filed two separate cases in Manhattan federal court, seek court orders forcing the EPA to comply with a 1996 law requiring that the agency set pesticide residue standards 10 times stricter than those considered acceptable for adults. One of the suits was brought by the attorneys general of New York, Connecticut, Massachusetts and New Jersey. The other case was brought by an 11-member group that includes the Natural Resources Defense Council, Pesticide Action Network North America, the Breast Cancer Fund and the Physicians for Social Responsibility. Both cases focus on a group of high-risk pesticides used on fruits, vegetables and nuts commonly eaten by children. (ATLA Law News Digest – September 18, 2003)