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                I suggest the following simple ten ways to avoid malpractice in litigation:

                         PRODUCT LIABILITY
                       PRODUCT LIABILITY


                                                       February 2009
                                                       February 2009

                                                  IN THIS ISSUE
                                                  IN THIS ISSUE


                                                                                    Protection Safety Act
High profile recalls of Chinese imports and the implementation of the Consumer Protection Safety Act of
High profile recalls of Chinese imports and                       of the
     highlight the               companies to diligently address liability issues        importing products
2008 highlight the necessity for companies to diligently address liability issues before importing products
                                          into the United States.
                                          into the United States.


Made in China: Consumer Product Lawsuits Imported
Made in China: Consumer Product Lawsuits Imported

                to the United States
                to the United States



                                          ABOUT THE AUTHOR
                                          ABOUT THE AUTHOR

                   Gregory Shelton is an Of Counsel attorney the Seattle offices Williams Kastner.
                   Gregory Shelton is an Of Counsel attorney in the Seattle offices of Williams Kastner.
                   Mr. Shelton concentrates his practice on mass torts, products liability, and commercial
                   Mr. Shelton concentrates his practice on mass torts, products liability, and commercial
                   litigation, and has represented clients
                   litigation, and has represented clients in the manufacturing, pharmaceutical, biotech, lead-
                                                                                 pharmaceutical,          lead-
                   paint, consumer healthcare, medical device, and education industries.
                   paint, consumer                                and

                                       ABOUT THE COMMITTEE
                                       ABOUT THE COMMITTEE

The Product Liability Committee serves all members who defend manufacturers, product sellers and
      Product Liability Committee serves all members who defend manufacturers, product sellers and
product designers. Members publish newsletters and Journal articles and present educational seminars
         designers. Members publish newsletters and Journal articles and present educational seminars
                                        mini-seminars for the Committee membership.
for the IADC membership at large and mini-seminars for the Committee membership. Opportunities for
    the IADC membership at large
networking and business referral are plentiful. With one broadcast e-mail, members can obtain
networking and business referral are plentiful. With one broadcast e-mail, members can obtain
information on experts from the entire Committee membership.
information on experts from the entire Committee membership.

           about the Committee at www.iadclaw.org. To contribute a newsletter
Learn more about the Committee at www.iadclaw.org. To contribute a newsletter article, contact:

                   Amy Sherry Fischer
                        Chair of Newsletters
                   Vice Chair of Newsletters
                   Foliart, Huff, Ottaway & Bottom
                   (405) 232-4633
                   amyfischer@oklahomacounsel.com
                   amyfischer@oklahomacounsel.com


   The International AssociationDefense Counsel serves a distinguished, invitation-only membership ofof corporate and
   The International Association of of Defense Counsel serves a distinguished, invitation-only membership corporate and
insurance defense lawyers. The IADC dedicates itself to enhancing the development of skills, professionalism and camaraderie in the
insurance defenselawyers. The IADCdedicates itself to enhancing the developmentof skills, professionalism and camaraderie in the
          practice of law in order to serve and benefit the civil justice system, the legal profession, society and our members.
          practice of law in order to serve and benefit the civil justice system, the legal profession, society and our members.

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                         International Association of Defense Counsel
                         International Association of Defense Counsel
                         PRODUCT LIABILITY
                         PRODUCT LIABILITY NEWSLETTER                                                           February 2009
                         NEWSLETTER
        Chinese imports accounted for over 60%
        Chinese imports accounted for                            swallowed.             the products were
                                                                                 All ofof the products were
of all recalls administered by the Consumer
    all recalls administered by the Consumer                                   in China. In the United States, the
                                                                 manufactured in China. In the United States, the
                                                                 manufactured
Products Safety Commission in 2007. High
Products Safety Commission       2007.                                        recalls were followed by
                                                                 tire and toy recalls were followed by civil suits
                                                                      and                                    suits
profile recalls of pet food, toothpaste, toys, and
         recalls of pet food, toothpaste, toys, and              against American companies that imported the
                                                                 against American companies that imported the
milk products have increased awareness and
milk products have increased awareness and put                   products; the toothpaste seizure resulted
                                                                 products; the toothpaste seizure resulted in
plaintiff lawyers and consumer groups on alert.
plaintiff lawyers and consumer groups         alert.             criminal charges against American executives.
                                                                 criminal charges against          executives.
At the same time, American importers of Chinese
At the same                              of Chinese
                                                                           Most recently, melamine, a chemical used
                                                                                recently, melamine, a chemical used
products must address their increased
products must address their increased risk and  and
exposure to product liability
exposure to product liability lawsuits.                          to make plastics and fertilizers (and the same
                                                                     make plastics and fertilizers (and the same
                                                                 chemical that was
                                                                 chemical that was in the contaminated pet food)
                                                                                         the contaminated pet
         On October 14, 2008, the United States
              October       2008, the United States                                   Chinese-made infant
                                                                 was discovered in Chinese-made infant formula.
                                                                 was discovered
District Court for the District of New Jersey held
          Court for the District of New Jersey held              Melamine artificially inflates the reading
                                                                 Melamine artificially inflates the reading for
a fairness hearing and approved the class action
  fairness                 approved      class                   protein levels when the formula is tested.
                                                                 protein levels when the formula is tested. Until
settlement of In Re: Pet Food Products Liability
settlementof In Re: Pet Food Products Liability                  now, formula was not tested for melamine
                                                                 now, formula was not tested for melamine
Litigation, MDL Docket No. 1850, Civil Action
Litigation,         Docket        1850,        Action            because regulators did        suspect the
                                                                 because regulators did not suspect the ingredient
     07-2867 (NLH)
No. 07-2867 (NLH) (D. N.J.). The lawsuit arose
                            N.J.). The lawsuit arose                   being added. Tens of thousands
                                                                 was being added. Tens of thousands of infants
                                                                 was                                          infants
      Chinese, American           Canadian pet
after Chinese, American and Canadian pet food                    around the
                                                                 around the world have been sickened and four
                                                                                     have been sickened and
makers recalled pet food that was manufactured
makers recalled pet           that was manufactured              died.      The United States Food and Drug
                                                                            The United States Food and Drug
with contaminated wheat gluten and/or rice
with contaminated wheat gluten and/or rice                       Administration has recently increased inspections
                                                                 Administration has recently increased inspections
protein concentrate. Thousands of cats and dogs
         concentrate. Thousands of cats and dogs                 and product testing in response to the melamine
                                                                 and product           in response     the melamine
         the United States and Canada suffered
across the United States and Canada suffered
across                                                           contamination. As a result of the increased
                                                                 contamination.           a result of the increased
kidney disease, which was sometimes fatal, after
         disease, which         sometimes                        scrutiny, FDA has found melamine in a number of
                                                                            FDA has
consuming the contaminated food.
consuming the contaminated food.                 The
                                                 The             products, including Blue Cat Flavor Drinks,
                                                                 products, including Blue Cat Flavor Drinks, Mr.
defendants in the lawsuit
defendantsin the lawsuit collectively agreed to
                                           agreed                                            milk tea
                                                                 Brown instant coffee and milk tea products, White
                                                                 Brown instant
contribute $24 million to the settlement. With
contribute $24 million to the settlement.                        Rabbit Creamy Candies, YILI Brand Sour Milk
                                                                 Rabbit Creamy Candies, YILI Brand Sour Milk
certain limitations, eligible class members may
certain limitations, eligible class members may                  Drink, and Koala’s March Crème filled Cookies.
                                                                          and          March Crème filled Cookies.
receive a cash payment of up to 100% of their
receive a cash payment of up to 100% their                       All of the products, including any Chinese-made
                                                                 All of the products, including any Chinese-made
substantiated economic damages related to
substantiated economic damages related to their                  infant formula, are under recall
                                                                 infant formula, are under recall in the United
                                                                                                          the United
pet’s consumption of the recalled products,
pet’s consumption of the recalled products,                      States.
                                                                 States.
including veterinarian bills and other expenses
including veterinarian bills and other expenses
related to the pet’s illness.                                                  parents of some of the
                                                                           The parents of some of the children who
related
                                                                 died filed lawsuits in China against the state-
                                                                 died         lawsuits in China against the state-
        Shortly after the pet food recall occurred
                      the pet food recall occurred               owned company, Sanlu, that apparently made
                                                                 owned company, Sanlu, that apparently made
in 2007, FDA seized an import of toothpaste that
   2007, FDA seized an import of toothpaste                                    tainted product. So far, the Chinese
                                                                 most of the tainted product. So far, the Chinese
                                                                 most
was contaminated with Diethylene glycol
was contaminated with Diethylene glycol (DEG),                                                  hear the lawsuits.1
                                                                 courts have refused to hear the lawsuits.1
                                                                 courts have refused
also known as “diglycol.” aapoisonous chemical
also known as “diglycol.” poisonous chemical                     Frustrated with the Chinese courts, on October 22,
                                                                 Frustrated with the Chinese courts, on October 22,
used in antifreeze and as solvent. About the
used in antifreeze and as aa solvent. About the                  2008, one family announced that they may
                                                                 2008, one family announced that they may
same time, RC2 Corporation, a
same time, RC2 Corporation, a toy distributor,
                                         distributor,            sue a U.S.-based subsidiary of
                                                                 sue a U.S.-based subsidiary of one of the Chinese
                                                                                                         the Chinese
recalled 1.5 million Thomas & FriendsTM
recalled 1.5 million Thomas & FriendsTMwooden                    infant formula manufacturers in the United
                                                                 infant formula manufacturersin the United
wooden vehicles that contained lead paint. The
railway vehicles that contained lead paint. The                  States.2 Such a case would face an enormous
                                                                 States.2 Such a case would face an enormous
National Highway Traffic Safety Administration
National Highway              Safety Administration              jurisdictional hurdle, as the only connection to the
                                                                 jurisdictional hurdle, as     only connection
then forced a New Jersey firm to recall 450,000
then forced a         Jersey firm to recall 450,000              United States is the subsidiary’s alleged presence
                                                                          States the subsidiary’s alleged presence
defective light truck tires. Less than two months
defective light               Less than two months               in Maryland.
                         recalled nearly one million
later, toy maker Mattel recalled nearly one million
toys in the United States because the toys were
      in the United States because the          were
decorated with lead paint. Days later, Mattel
decoratedwith lead paint. Days later, Mattel                     1
                                                                 1Edward Wong, Courts Compound Pain of China’s Tainted
                                                                                      Compound Pain
recalled another 9 million toys, citing problems
recalled another 9 million toys, citing problems                 Milk, N.Y. Times, Oct. 17, 2008 at A1.
                                                                 Milk, N.Y. Times, Oct. 17, 2008
related to small, powerful magnets in the toys
related to small, powerful magnets in the toys                   2 Parents
                                                                 2Parents May Sue in U.S., RADIO FREE ASIA, Oct. 22, 2008,
                                                                           May Sue in U.S., RADIO FREE ASIA, Oct. 22, 2008,
which can cause injuries when more than one is
         can cause injuries                   one                http://www.rfa.org/english/news/milk-
                                                                 10222008050819.html.



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                              International Association of Defense Counsel
                              International Association of Defense Counsel
                              PRODUCT LIABILITY
                              PRODUCT LIABILITY NEWSLETTER                                                           February 2009
                              NEWSLETTER
         According to the U.S. Consumer Product
                    to the U.S. Consumer Product                      fines up to $100,000 per violation, not to exceed
                                                                                  $100,000                not to exceed
Safety Commission (CPSC), in the past decade
Safety Commission (CPSC),         the past decade                     $15,000,000 for series of related violations. 15
                                                                      $15,000,000 for series     related             15
importation of consumer goods to the United
importation of consumer goods to the United                           U.S.C.§ 2069; 69 Fed. Reg. 68884. Criminal
                                                                      U.S.C.§ 2069; 69 Fed. Reg. 68884. Criminal
States has more than doubled.3 Forty-two
Stateshas more than doubled.3 Forty-two percent                       penalties and fines may be imposed for willful
                                                                      penaltiesand fines may be imposed for willful
percent imported products came from China, and
of those
   those                    came              and                     violations. 15 U.S.C. § 2070.
                                                                                  15 U.S.C. § 2070.
the value of imports from China has nearly
the value      imports from China has nearly
quadrupled during this period.                                                  In August 2008, President Bush signed
                                                                                   August 2008, President Bush signed
                                                                      into law the Consumer Protection Safety
                                                                      into law the Consumer Protection Safety
        Today, imports account for 44% of
        Today, imports account             44% of                     Improvement Act
                                                                      Improvement Act (CPSIA). The CPSIA expands
                                                                                                     The CPSIA expands
consumer goods sold in
consumer goods sold in the United States, but
                                 United States, but                                    and enforcement authority the
                                                                      the monitoring and enforcement authority of the
                                                                      the
they make up more than 80%
they make up more than 80% of the recalls that
                                    the recalls that                  CPSC. One of the main components of the
                                                                      CPSC. One of the main components                  the
the CPSC administers each year. The CPSC
the CPSC administerseach year. The CPSC                               CPSIA is stronger regulation of children’s items.
                                                                                 stronger regulation                items.
announced 473 recalls in fiscal
announced 473 recalls in fiscal year 2007 (Oct. 1,                        Act imposes
                                                                      The Act imposes more stringent restrictions on the
2006-Sept. 30, 2007). Of those recalls, 389
2006-Sept. 30,                  those recalls, 389                    amount of lead and phthalate that can be
                                                                      amount of lead and phthalate that can be
(82.4%) were imported products, and nearly
(82.4%) were imported products, and nearly                            contained in children’s products and toys. The
                                                                      contained in children’s products and toys. The
three-quarters of the imported products recalled
three-quartersof the imported products recalled                       CPSIA imposes new labeling requirements related
                                                                      CPSIA imposes         labeling requirements
were from China. Over the past five years, recalls
                   Over the past five years,                          to choking hazards. It also imposes new testing
                                                                                   hazards. It also imposes new testing
of products imported from China have risen
    products imported            China have risen                     requirements, and starting November 12, 2008
                                                                      requirements, and              November 12, 2008
disproportionately to the number of products
disproportionatelyto the number of products                           importers must certify that many imported
                                                                      importers must certify that many imported
imported. It has also risen disproportionately to
imported. It has also risen disproportionately                        product conform to all rules, bans, standards, or
                                                                      product               all rules, bans, standards,
the number of recalls of domestic-made products
    number     recalls of domestic-made products                      regulations enforced by the CPSC.
                                                                      regulations enforced by the CPSC.
     imports          rest of the world.
and imports from the rest of the world.
                                                                               American importers must be diligent
                                                                               American importers must be diligent to
       Whatever        the
                       the     reason
                               reason  for     the
                                               the                    address potential liability issues. Companies
                                                                      address potential              issues. Companies
disproportional relationship, the message is clear
                relationship, the message                             should insure that they have proper insurance and
                                                                                               have proper insurance
               companies that import goods
that American companies that import goods from                        other protections in place.
                                                                      other protections         place.      For instance,
                                                                                                            For instance,
China are under an increasing risk of facing a
China are under an increasing risk of facing a                              importers should
                                                                      U.S. importers should review their contracts with
                                                                                                            contracts
        and product liability lawsuits. Additionally,
recall and product liability lawsuits. Additionally,                        Chinese manufacturers.
                                                                      their Chinese manufacturers. They should require
      law in China has not advanced to point
tort law in China has not advanced to a point                         Chinese exporters to comply with all applicable
                                                                      Chinese exporters to comply with all applicable
where there is meaningful recourse available to
where there       meaningful recourse available                                States product
                                                                      United States product quality and product safety
                                                                                                       and product safety
injured parties in that country. Thus, American
injured parties in that country. Thus, American                              and provide indemnifications if they fail
                                                                      laws, and provide indemnifications if they fail to
                                                                      laws,
importers are both the
importers are both the front line of defense, and
                                line of defense, and                  do so. American companies should consider
                                                                      do so. American companies should consider
the front line of attack.
               of attack.                                                              representation in
                                                                      obtaining local representation in China in order to
         Under the Consumer Protection Safety
         Under the Consumer Protection Safety
                                                                      enforce the indemnifications, if necessary.
                                                                      enforce the indemnifications, if necessary.
                                                                      Obtaining jurisdiction and enforcing judgments
                                                                      Obtaining                and enforcing judgments
Act (CPSA) and related regulations, American
      (CPSA) and related regulations, American                                 Chinese companies (which are often state-
                                                                      against Chinese companies (which are often state-
                                                                      against
importers of consumer goods must notify the
importers of consumer goods must notify the
CPSC they receive information supporting the
CPSC if they receive information supporting the
                                                                      owned) pose numerous jurisdictional and
                                                                      owned) pose numerous jurisdictional and
                                                                      collection problems. American companies should
                                                                                             American companies
conclusion that, among other things, a product
conclusion that, among other things,       product
                                                                      also consider requiring Chinese exporters to
                                                                      also consider requiring Chinese exporters
fails to comply with consumer product safety
fails to comply with consumer product safety
                                                                      obtain appropriate insurance coverage from an
                                                                      obtain appropriate insurance coverage from an
rules, voluntary consumer product safety
rules, voluntary consumer product safety
                                                                                                  insurer that will protect
                                                                      American or international insurer that will protect
standards upon which the CPSC relies, or creates
standards upon which                     or creates
                                                                      the companies in the event of a recall
                                                                      the companies in the event of a recall or lawsuit.
an unreasonable risk of serious
an unreasonablerisk of serious injury or death.
                                          or death.
                                                                      Finally, if an American company is faced with
                                                                      Finally, if an American company          faced
15 U.S.C. § 2064. The importer/distributor may
    U.S.C. 2064. The importer/distributor may
                                                                      exposure due to a recall or notice
                                                                      exposure due to a recall or notice of a defective
                                                                                                               a defective
then be required to implement a recall
then be required to implement a recall of the   the
                                                                      product, the company should seek advice from
                                                                      product, the company should seek advice
dangerous product. Id. An American importer
dangerous product. Id. An American importer                           class action defense counsel regarding steps that
that fails to report a defective product can face                     class         defense counsel              steps
that        to report a defective product can face                    can be taken in the face of a lawsuit.
                                                                      can be taken in the face of a lawsuit.
3
3   United States Consumer Product Safety Commission,
    United States Consumer Product Safety Commission,
Import Safety Strategy, p. 1 (July 2008).
Import Safety


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                         International Association of Defense Counsel
                         International Association of Defense Counsel
                         PRODUCT LIABILITY
                         PRODUCT LIABILITY NEWSLETTER                                                           February 2009
                         NEWSLETTER




                      PAST COMMITTEE NEWSLETTERS
                      PAST COMMITTEE NEWSLETTERS



Visit the Committee’s newsletter archive online at www.iadclaw.org to read other articles published by
Visit the Committee’s newsletter archive online at www.iadclaw.org to read other
the Committee. Prior articles include:



JANUARY 2009
JANUARY 2009
                Dangerous Intersection of New York Labor Laws and Product Liability and Toxic
The Potentially Dangerous Intersection of New York Labor Laws and Product Liability and Toxic Tort
Cases
Cases
    Allen Cohen and Allen
Roy Allen Cohen and Allen I. Young

DECEMBER 2008
DECEMBER 2008
Witness Manipulation in Product Liability Litigation
Witness Manipulation in Product Liability Litigation
Creighton (Chip) Magid and Joseph Perkovich
          (Chip) Magid and Joseph

DECEMBER 2008
DECEMBER 2008
    “Sophisticated User” Defense in Product Liability
The “Sophisticated User” Defense in Product Liability Actions
         Heermance and Kevin A.
Brian P. Heermance and Kevin A. Hickman

DECEMBER 2008
DECEMBER 2008
    Fifth Circuit Shuts the Door to Economic Loss Doctrine
The Fifth Circuit Shuts the Door to Economic Loss Doctrine Exceptions
Daryl G. Dursum
Daryl

NOVEMBER 2008
NOVEMBER 2008
Civil Law Common Law: Face To Face
Civil Law -– CommonLaw: Face To Face
Emmanuèle Lutfalla
Emmanuèle Lutfalla

OCTOBER 2008
The Proposed Canada Consumer Product Safety Act: Beware the “CPSC of the North”
The Proposed Canada Consumer Product Safety Act: Beware the “CPSC of the North”
Peter J. Pliszka and Richard D. Butler
Peter J. Pliszka and Richard D. Butler




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