The New Jersey Appellate Division has held that Korean company LG Chem Ltd. (“LG Chem”)will have another opportunity to dispute New Jersey’s jurisdiction over it in a product liability lawsuit concerning a vaping device battery. The decision is based, in part, on the trial court’s failure to order jurisdictional discovery and convene an evidentiary hearing to resolve the disputed jurisdictional allegations before deciding LG Chem’s pre-answer motion to dismiss. This case underscores that in New Jersey, the standard governing motions to dismiss for lack of jurisdiction, unlike other bases, requires the court to look outside the disputed pleadings alone.
The New Jersey plaintiff alleged he was injured when a lithium-ion battery manufactured by LG Chem exploded in his pocket. Plaintiff attempted to serve process on LG Chem through two of its U.S.-based subsidiaries, LG Chem America, Inc. (LGCAI) and LG Chem Michigan, Inc. (LGCMI). The agents of both refused to accept service.
Although product liability actions are governed by state tort law, they frequently find their way into federal court on diversity jurisdiction. In such actions, federal law provides the procedural rules and state law provides the rule of decision. Although the distinction between procedure and substance is often clear, it can sometimes be nuanced and unintuitive; for example, statutes of limitations are typically viewed as procedural, whereas statutes of repose are viewed as substantive. In Love v. United States, — F.4th — (7th Cir. 2021), 2021 WL 5119342, the Seventh Circuit Court of Appeals provides another such illustration of this nuanced distinction and further guidance on the subject in the context of the admissibility of expert opinions.
The Plaintiff in Love brought suit under the Federal Tort Claims Act (FTCA), alleging that a nurse employed by the Veterans Administration negligently failed to order additional tests after receiving the results of a urinalysis. Plaintiff alleged that the lack of testing allowed an infection to go undiagnosed and untreated, leading to a heart attack and extended hospitalization.
In many personal injury cases, including products cases, the most significant exposure is pain and suffering or similar damages that cannot readily be measured in dollars. Juries are usually constrained by specific testimony or documentary evidence in awarding lost income, medical expenses, or other losses that can be measured specifically, but awards for pain and suffering and similar damages are constrained only by jurors’ subjective views (and usually permissive standards of legal review such as whether the award “shocks the conscience”).
Not surprisingly, when large verdicts are appealed, the damages arguments often focus on the excessive amounts of pain and suffering or similar awards. But a recent order from Pennsylvania’s highest court carries a warning for defendants, as the Court agreed to consider whether a failure to demand an itemized list of each category of damages on the verdict sheet waives defendant’s right to challenge the award.
Motions to dismiss in consumer fraud cases often focus on the element of deception—whether a reasonable consumer would be deceived by the statement or practice at issue. But there is another element of statutory consumer fraud claims that deserves closer scrutiny at the pleading stage—injury. Where plaintiffs claim that they were injured because they paid a “price premium” but do not allege facts to support that claim, defendants should consider moving to dismiss for failure to adequately plead injury.
State consumer protection statutes typically include injury as a required element for a private cause of action. New York General Business Law Sections 349 and 350, for example, require a plaintiff to establish that she purchased a product because of the allegedly deceptive business practice and did not receive the full value of the purchase. Similarly, plaintiffs suing under California’s Unfair Competition Law, False Advertising Law, or Consumer Legal Remedies Act must establish that they suffered an “economic injury” caused by the practice or advertising at issue.
Defense attorneys involved in California multi-defendant product liability lawsuits are familiar with the challenge of properly balancing the need to preserve their clients’ defenses with the strategic importance of maintaining cooperation among co-defendants. In many cases, co-defendants’ interests are aligned, and they find the strategic benefits of cooperation outweigh any benefits of finger-pointing amongst one another. Indeed, co-defendant infighting is risky on several fronts—it can help the plaintiffs, increase defense costs, create animosity among possible business partners, and chill future cooperation with defendants who regularly blame their co-defendants. Inevitably, however, cases arise that involve a culpable co-defendant and a client wants to preserve its ability to attribute fault to the co-defendant at trial. This issue becomes complex and the specific language of California Code of Civil Procedure Section 437c(l) comes into play when the co-defendant seeks no-fault summary judgment.
Section 437c(l) operates to limit the extent to which defendants can attribute legal fault at trial to defendants who were dismissed through no-fault summary judgment. Specifically, Section 437c(l) provides that “if a motion for summary judgment is granted on the basis that the defendant was without fault, no other defendant during trial, over plaintiff’s objection, may attempt to attribute fault to, or comment on, the absence or involvement of the defendant who was granted the motion.” Cal. Civ. Proc. Code § 437c(l). In other words, remaining defendants cannot assert the empty chair defense to attribute legal fault to co-defendants who obtained summary judgment.
Faegre Drinker’s snap removal team continuously monitors snap removal updates across the country (for a basic explanation of snap removal and previous updates, see Faegre Drinker’s prior posts here; for a breakdown on how each federal jurisdiction treats snap removal, see Faegre Drinker’s interactive snap removal map here).
The United States District Court for the District of Nevada is no stranger to consideration of the practice of snap removal—indeed, the District of Nevada has issued a number of decisions in 2020 and 2021, all holding that snap removal was improper unless and until at least one defendant has been served. But a recent opinion out of the District rejects the reasoning in those earlier decisions and holds that snap removal is proper even if no defendant has been served.