Subject: California

Ninth Circuit Adheres to Precedent and Finds That Subverting Express Warranties Simply Does Not Compute

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On May 19, 2022, in an unpublished decision, a Ninth Circuit panel reaffirmed that under California law manufacturers do not have a duty to disclose defects in their products that manifest after the expiration of the product’s warranty unless the defect poses an unreasonable safety risk.  Taleshpour v. Apple, Inc., 2022 WL 1577802 (9th Cir. May 19, 2022).  The court affirmed dismissal of a proposed class action against Apple Inc., holding that California consumer protection laws were not violated as a matter of law because the alleged defect in MacBook Pro laptop computers arose after the expiration of the warranty and the complaint did not allege any safety issue.  The court followed existing Circuit precedent, even though there is some conflicting authority in the California courts of appeal.

Plaintiffs alleged that in certain MacBook Pro models, the backlight ribbon cables used to connect the display screen to the display control tear because the cables do not provide enough slack when the laptops open and close.  Apple agreed to replace the display of all 13-inch MacBook Pros that suffer from the alleged defect, but not the 15-inch model or any model released after 2016.  Plaintiffs alleged on behalf of the class that the excluded models suffered from the same backlight defect as the pre-2016 13-inch version.  Plaintiffs conceded the backlight ribbon issues arose after the expiration of Apple’s one-year warranty.

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Ninth Circuit Asks California Supreme Court to Clarify the Causation Standard Applicable When the Learned Intermediary Doctrine Applies

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How demanding is the causation standard in a California failure to warn claim when a learned intermediary testifies that he would have read and incorporated more stringent warnings if they had been available? Is the plaintiff required to show that the stronger warning would have altered the physician’s decision to prescribe the product? Or may the plaintiff establish causation by showing that the physician would have communicated the stronger warnings to the patient and that a prudent person in the patient’s position would have declined the treatment as a result?

The Ninth Circuit isolated this undefined causation standard in Himes v. Somatics, LLC, and certified the question to the California Supreme Court. After confirming that the learned intermediary doctrine is alive and well in California and that a failure to warn claim cannot survive when the learned intermediary does not read the warnings at all, the Ninth Circuit stopped short of defining the causation standard that applies when a learned intermediary does read the warnings.

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The California Supreme Court Shrugs Off a Settlement to Provide Important Guidance on Admissibility of Former Deposition Testimony by Company Witnesses

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We reported back in December [California Supreme Court Set to Decide How Defense Counsel Approach Defending Company Witness Depositions] on a case then pending before the California Supreme Court, Berroteran v. Superior Court. The case involves the former testimony exception to the hearsay rule, Evidence Code section 1291(a)(2), as applied to the deposition testimony of company witnesses taken in prior litigation. [Disclaimer: I wrote an amicus brief in support of the petition for review and another on the merits.]

Oral argument did not go well for the plaintiff. Consequently, it was not surprising that within a few days the parties notified the Court that they had reached a settlement. The Supreme Court could have dismissed the appeal at that point and left the issue unresolved. But because its core mission is “to secure uniformity of decision” and to settle important questions of law, Cal. Rule of Court 8.500(b), the Court went ahead and decided the appeal. 2022 WL 664719 (Cal. Mar. 7, 2022). And, as Larry David might say, the decision is pretty, pretty good.

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California Supreme Court Set to Decide How Defense Counsel Approach Defending Company Witness Depositions

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The California Supreme Court will soon decide an evidentiary issue that could significantly impact how company witnesses are defended at deposition.

The Court heard argument December 7 in Berroteran v. Ford Motor Co., No. S259522, a class action opt-out case alleging consumer fraud claims based on purported defects in a Ford truck engine. The appeal involves interpretation and operation of California Evidence Code section 1291 — an exception to the hearsay rule for former testimony — and specifically how it applies to the deposition testimony of company employees taken in prior cases.

Ford moved in limine to exclude as hearsay the deposition testimony of nine current and former Ford employees taken in similar cases. In response, Plaintiff relied on section 1291.

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Amazon Notches Another Win on Personal Injury Liability Relating to Third-Party Seller Products

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For some time, we have been following the emerging case law on whether companies, such as Amazon, that create an online marketplace for other sellers, may be held liable when products supplied by those sellers cause injury. The cases have gone both ways, but on November 30 Amazon added another ruling to its win column when a New York appellate court upheld a ruling dismissing negligence and breach-of-warranty claims based on injuries allegedly caused by a defective service from a third-party provider on a product sold by a third party on Amazon’s website.

In Wallace v. Tri-State Assembly LLC (Case No. 2020-04820), the First Department of New York’s Appellate Division affirmed an order dismissing claims against Amazon by an individual who was injured after the handlebars on his electric bike came apart, causing him to fall. His father ordered the bike on Amazon’s website from a third-party seller in China, and at the same time purchased an assembly option from an Amazon-approved service provider, Tri-State. Plaintiff alleged that Amazon and its “agents” were negligent and breached warranties of fitness and merchantability.

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Challenging Price Premium Allegations Can Pay Off for Defendants

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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.

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