Hunton Business Tort Liability Report : Product Liability Lawyers & Attorneys : Hunton & Williams Law Firm : Updates on Litigation & Damages

As previously reported here, in July the Eleventh Circuit Court of Appeals handed down a decision taking a novel approach to jurisdiction under the Class Action Fairness Act of 2005.  In Cappuccitti v. DirecTV, Inc., the Court found that in addition to the requirements expressly set out in 28 U.S.C. § 1332(d), at least one member of a class must allege an individual amount in controversy in excess of $75,000 for original jurisdiction to exist under CAFA.

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Until recently, the rule in California seemed to be clear: private counsel representing a public entity in a public-nuisance action could not receive a contingent fee. The traditional rationale for this bar is that potentially lucrative contingent fee recoveries creates a built-in conflict between private attorneys and the public they represent in public suits. See, e.g., People ex rel. Clancy v. Superior Court, 39 Cal.3d 740 (1985) (barring contingency fees in public nuisance suits).   In a controversial decision handed down last month by the California Supreme Court titled County of Santa Clara v. Superior Court, Chief Justice Ronald George both acknowledged the opportunity for conflict between private attorneys interested in maximizing contingency fees and the public’s interest in rational resolution and tempered the outright ban on contingency fees where, “neutral, conflict-free government attorneys retain the power to control and supervise the litigation.”

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The attorney-client privilege has long been held to apply to in-house counsel, just as it does to outside counsel.  But in Gucci America, Inc. v. Guess?, Inc., 2010 U.S. Dist. LEXIS 65871 (S.D.N.Y. June 29, 2010), a copyright infringement case in federal court in New York, Gucci found out the hard way that if an in-house attorney is not an active member of the bar, his communications probably are not privileged. 

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Last week a three-judge panel of the Eleventh Circuit issued Cappuccitti v. DirecTV, Inc., No. 09-14107 (11th Cir. July 19, 2010) (Tjoflat, J.), addressing the jurisdictional requirements for a putative class action filed in federal court or an “original CAFA action.”  It held that in an original CAFA action, the plaintiffs must allege the $5 million aggregate amount in controversy and at least one plaintiff must allege an individual amount in controversy over $75,000.  Though Cappuccitti is arguably limited by its facts to original CAFA actions, it suggests in dicta that its holding would extend to actions removed under CAFA.  This would effectively eliminate CAFA jurisdiction over consumer class actions filed in the Eleventh Circuit.

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Effective as of September, 2008, Assembly Bill 1879 mandates that California’s Department of Toxic Substances Control (“DTSC”) issue regulations that could ban the sale of certain consumer products based on the chemicals used in those products.  On June 23, 2010,  the DTSC issued draft regulations pursuant to Assembly Bill 1879.  Under the draft regulations, product manufacturers, importers and private labelers will be jointly and severally responsible for assessing the risks and possible alternatives for chemicals in their products.  Both the production and the end-of-life management of certain products will be governed by the regulations once they become final.  The regulations are scheduled to take effect on January 1, 2011.

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The question of when an inadvertent disclosure of material protected by the attorney-client privilege should constitute a waiver of the privilege is one that has troubled courts (to say nothing of parties) for probably as long as the privilege has existed.  In recent years, there has been a concerted effort to set out in rules and statutes the principles governing waiver so that they can more easily be applied in a predictable fashion.  In recent months, both Virginia’s General Assembly and its Supreme Court have taken up the issue – and seem not to have reached exactly the same conclusion.

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The last few years have been challenging, to put it mildly, for asbestos plaintiffs in Texas.  A recent decision by the Fort Worth Court of Appeals in Smith v. Kelly-Moore Paint Company, Inc. certainly won’t make things any easier.  If you have been following the recent developments, you are probably aware of the Texas Supreme Court’s Borg-Warner decision, in which the court clarified the causation test for asbestos plaintiffs.  In that case, the Court explained that establishing causation requires a plaintiff to prove more than just exposure to an asbestos containing product.  The Court stated that, as a starting point, a plaintiff must satisfy the Lohrmann test, showing frequent, regular, and proximate exposure to the defendant’s product. But the Court further held that in order to establish causation, a plaintiff also must (1) present expert testimony quantifying the dose of asbestos to which he or she was exposed, and (2) demonstrate, through the use of epidemiological studies, that such a dose was sufficient to cause the disease in question.   Smith v. Kelly-Moore Paint Company, Inc. adds another causation hurdle.

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As noted last week, state courts have continued to weigh in – and diverge – on the extent of a premises owner’s duty to protect off-site individuals from exposure to materials inadvertently carried off the premises by third parties (such as employees).  As discussed in the earlier post, on June 10 the Illinois Fifth District Court of Appeals split with its sister district on the "take-home" duty issue.  Interestingly, on the very same day, the Ohio Supreme Court, entered the fray, holding that premises owners do not owe a duty to household members of employees.  Boley v. Goodyear Tire & Rubber Co., Slip Op. 210-Ohio-2550 (June 10, 2010). 

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On June 18, 2010, a Florida family was awarded $2.47 million in the first Chinese drywall case to go to a jury.  The jury found that Banner Supply, the drywall distributor was negligent in selling a defective product and violated the Florida Deceptive and Unfair Trade Practices Act.  The verdict includes $492,000 in compensatory damages for remedying the problems in the plaintiffs’ home and $1.7 million for loss of enjoyment of the home, as well as diminished value due to stigma.  In reaching its decision, the jury assigned 55% of the blame to named defendant Banner Supply, while finding manufacturer Knauf Plasterboard Tianjin 35% responsible and the importer and exporter of the drywall 5% responsible each.

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