Minnesota Supreme Court Decision Impacts Liability Exposure
On September 3, 2009, the Supreme Court of Minnesota issued its opinion in Fleeger v. Wyeth, et al., Case No. A08-2124 (771 N.W.2d 524). The decision impacts the liability exposure of product manufacturers when a claim is brought in Minnesota.
In its opinion, the Minnesota Supreme Court determined that in a case commenced in Minnesota, the state’s statute of limitations applies to the personal injury claims of a non-Minnesota resident against a defendant not a resident of Minnesota, where the events giving rise to the claims did not occur in Minnesota and took place before August 1, 2004. The decision allows the named plaintiff, Rachel Fleeger, as well as and thousands of other plaintiffs, to remain a party to the underlying multidistrict litigation, In re Prempro Products Liability Litigation, MDL-1507.
Hinshaw & Culbertson LLP filed an amicus brief with the Minnesota Supreme Court on behalf of the Product Liability Advisory Council (PLAC) in support of defendants’ position that the mechanical application of Minnesota’s six-year statute of limitations as a procedural rule is out of step with modern choice-of-law analysis and is contrary to the approach advocated by the Minnesota legislature. The Supreme Court disagreed.
The Minnesota Supreme Court’s decision impacts the underlying multidistrict litigation to the extent that the thousands of plaintiffs who took advantage of Minnesota’s six-year statute of limitations will not be dismissed on statute of limitations grounds and will continue as plaintiffs in that action. However, the decision's impact on liability exposure in general is limited because Minnesota’s current borrowing statute became effective August 1, 2004. Minnesota’s six-year statute of limitations will apply in cases properly commenced in Minnesota where the injury arose prior to August 1, 2004 and the suit commenced prior to August 1, 2010.
In re Prempro Products Liability Litigation involves a class of plaintiffs who allege that hormone therapy drugs manufactured by defendants caused their breast cancer. Between 1995 and 2001, Fleeger took two hormone therapy drugs manufactured by defendants while she resided in Pennsylvania. In 2001 she was diagnosed with breast cancer. In 2002, a study published by the Woman’s Health Initiative linked hormone therapy to an increased risk for breast cancer. For purposes of the Minnesota action, the parties agreed to assume that Fleeger’s claim accrued in 2002.
Fleeger, a Pennsylvania resident, filed her complaint in the U.S. District Court for the District of Minnesota. Her case was subsequently transferred to an MDL court. Fleeger filed her claim in Minnesota, which has a six-year statute of limitations, rather than in Pennsylvania, where the two-year statute of limitations would have time-barred her claim. More than 4,000 other plaintiffs in the MDL proceedings have filed their claims against defendants in Minnesota, despite being non-Minnesota residents. The Minnesota Supreme Court accepted the certified question to determine whether Minnesota’s statute of limitations applied.
The Minnesota Supreme Court provided a brief review of its prior case history in an effort to establish that Minnesota’s common law is “clear” with respect to the issue of statute of limitations. Although the Court acknowledged that there are “strong policy reasons” to alter Minnesota’s common law rule, it ultimately concluded that there is no “compelling reason to overrule our long-standing precedent that the Minnesota statute of limitations applies in cases properly commenced [in Minnesota].”
The Minnesota legislature repealed the state’s borrowing statute in 1977 to enable the court to apply a modern choice-of-law analysis. In 2004, the legislature enacted a new borrowing statute that applies to claims arising from incidents occurring on or after August 1, 2004. Because Fleeger’s claim arose in 2002, the court declared that Minnesota’s common law governed.
The Minnesota Supreme Court stressed that its prior decisions reflect an unwavering consistency in considering statutes of limitations as procedural. In Milkovich v. Saari, 295 Minn. 155, 203 N.W.2d 408, the court departed from the rule of lex loci – applying the law of the location where the injury occurred – in favor of the more modern five-part Lefler test.
In 1983, the Minnesota Supreme Court declined to apply the Milkovich test in Davis v. Furlong, 328 N.W.2d 150 (Minn. 1983). In considering whether to apply Minnesota or Wisconsin law, the court asserted that for procedural conflicts, the lex fori rule – applying the law of the forum – should be applied. The Court acknowledged that in Davis it did not address whether statutes of limitation were procedural or substantive.
The Court declared that “[w]hen directly faced with the issue, we have considered statutes of limitations to be procedural without exception.” The opinion cites a number of prior decisions wherein the Court described statutes of limitations as procedural. Although the Court conceded that on several occasions it has noted that statutes of limitations have both substantive and procedural aspects, it dismissed these comments as merely dicta.
For further information, please contact Melissa J Lauritch, Jeffrey S. Fertl, Shushanie E. Kindseth or your regular Hinshaw attorney.
Defense Counsel’s Uphill Battle
By the time a products liability case is set to be tried, both sides have likely expended substantial time and money to acquire evidence supporting both sides’ theories. When the case involves a serious, debilitating injury, the defendant’s ability to present and support its theories becomes particularly critical. A recent Hawai’i case exemplifies the problems defense counsel may face.
In Udac vs. Takata Corporation, 121 Hawai’i 143, 214 P.3d 1133 (2009), plaintiff, Dason Udac, and his passenger were riding in a 1987 Nissan Pathfinder. The vehicle left the road at a speed of approximately 55 m.p.h.. The automobile struck a lava rock outcropping and rolled approximately 186 feet away from the point of impact. Both the driver and the passenger were ejected from the vehicle. The driver suffered spinal cord injuries that rendered him a paraplegic. There were no witnesses to the accident, and no other vehicles were involved. Neither plaintiff nor his passenger had any memory of the accident.
Plaintiff alleged that the seatbelt he was wearing, designed and manufactured by defendant Takata, failed to properly restrain him, resulting in his ejection and subsequent injuries. Takata asserted that the product did not fail and, more importantly, that the evidence taken from the vehicle suggested that the seatbelt was not being worn at the time of the occurrence.
Defense Expert Barred
At trial, plaintiff presented an expert, Dr. Renfroe, who testified that numerous loading marks on the seatbelt webbing were caused when Udac’s body “loaded” the seatbelt during the accident, not by normal wear and tear. Renfroe concluded that Udac was wearing a seatbelt at the time of the occurrence. Plaintiff also presented evidence that, once engaged, the seatbelt would release, allowing him to be ejected from the vehicle.
Takata’s first defense expert, Eddie R. Cooper, stated that he examined the D-ring and latch plate, but not the webbing. He testified that his examination showed that there was no evidence of load bearing on the latch plate, leading him to conclude that the seatbelt was not involved in the accident. He noted that the marks observed were consistent with normal wear and tear.
Takata planned to call a second expert, Robert Douglas Banks, M.D. Dr. Banks, who also has a degree in engineering, had conducted an “Exemplar Surrogate Study,” which in part would explain where marks would have been found on plaintiff if he had been wearing a seatbelt. Dr. Banks would also provide a medical opinion that the injuries observed were consistent with the plaintiff’s impact with the vehicle’s sunroof as he was ejected from the vehicle.
Plaintiff’s attorney, however, objected that Banks’ testimony was cumulative of Cooper’s testimony and that Banks was not qualified to testify about the results of surrogate testing. The trial court sustained the objection and barred the witness.
The jury found Takata 65 percent at fault and plaintiff 35 percent at fault. Plaintiff was awarded $4.45 million in compensatory damages and $12.5 million in punitive damages.
The Appellate Court Reverses
Hawai’i’s intermediate court of appeals agreed with Takata that Dr. Banks’s testimony was not cumulative of Cooper’s. Dr. Banks would have opined that loading marks should have been present in the appropriate location if the seatbelt had been involved in a crash. To support his position, Dr. Banks performed a surrogate study using a human surrogate (matched for height and weight to Udac), two matched vehicles, and a seatbelt system similar to the subject vehicle’s. The purpose of the test was to determine the exact location on the seatbelt webbing where the loading marks would be expected to be found if plaintiff had been wearing a seatbelt at the time of the accident.
Dr. Banks’ surrogate study showed that the loading marks Dr. Renfroe had observed were unrelated to the accident. Further, there were no loading marks on the seatbelt where one would have expected them given the locations found during his testing. Based on his study, Dr. Banks would have opined that plaintiff was not wearing a seatbelt at the time of the accident.
The appellate court concluded that Dr. Banks' proffered testimony was different enough from Cooper's so as not to be cumulative. His proffered testimony concerned the results of his surrogate study, which was based on biomechanics and offered specifically to rebut Dr. Renfroe’s testimony that a mark on the seatbelt webbing was caused when Udac's body loaded the seatbelt. This testimony was distinguishable from Cooper's, which primarily concerned marks on the sliding latch plate and D-ring, not the webbing, of the seatbelt.
The appellate court also agreed with Takata that because Dr. Banks was an engineer trained in biomechanics and a medical doctor, he was qualified to testify concerning both the results of his surrogate testing and the cause of Udac’s injuries. The court vacated the compensatory award and remanded the case for a new trial in which Dr. Banks would be allowed to testify.
Punitive Damages
The appellate court also vacated the order granting $12.5 million in punitive damages. The court noted that punitive or exemplary damages are generally defined as those damages assessed in addition to compensatory damages for the purpose of punishing the defendant for aggravated or outrageous misconduct, and to deter the defendant and others from similar conduct in the future. To justify an award of punitive damages a positive element of conscious wrongdoing is always required.
The trial court had relied on Dr. Renfroe’s testimony that Takata’s conduct was “reprehensible” in that it produced a seatbelt buckle that suffered from several readily apparent safety defects. Dr. Renfroe had also testified that prior to the subject vehicle’s manufacture in 1987, Takata knew that its seatbelt was susceptible to inadvertent release. The trial court further relied upon a subsequent published standard which did not directly criticize the earlier design and on plaintiff’s attempted proof that Takata had notice of the defects due to a prior complaint filed against Takata.
The defense noted that the prior complaint concerned a 1987 Nissan Pathfinder but did not specifically identify the seatbelt system involved in the occurrence. Nothing arising from that complaint provided evidence that a defect existed in the exact same seatbelt system involved in this case. At best, the complaint was nothing more than hearsay. The defense also noted that this particular seatbelt system has been installed in millions of vehicles in the past 20 years and that only one person has alleged a system failure.
The appellate court concluded that taken together, the evidence presented at trial failed to prove prior notice of a defect in the seatbelt system. As a result, the court determined that the trial judge abused his discretion in awarding punitive damages and vacated the judgment.
For further information, please contact Darrell S. Dudzik or your regular Hinshaw attorney.
This newsletter has been prepared by Hinshaw & Culbertson LLP to provide information on recent legal developments of interest to our readers. It is not intended to provide legal advice for a specific situation or to create an attorney-client relationship.
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