New Mexico Injury Attorney Blog

The New Mexico Court of Appeals addressed for the first time in under New Mexico law whether modifications to a product by the user provides a complete defense to a product liability claim. The court in Chairez v. James Hamilton Construction Co. held that it did not and that a seller could be held strictly liable under product liability law for injuries caused by the product when the modifications to the product were foreseeable.

The case involved the modification of a rock crushing machine. The user, the deceased plaintiff's employer, had removed a metal plate covering a flywheel to facilitate removing debris and obstructions in the machine that occurred during operation. The metal plate was a safety feature designed to prevent users from being caught in the flywheel and crushed by the machine. This is in fact what happened to the deceased plaintiff. In addition, the deceased had been removing a jam while the machine was operational despite clear warnings in the user's manual against such behavior.

The plaintiff was prevented from bringing a claim against the clearly negligent employer due to the exclusive worker's compensation remedy under New Mexico law. The plaintiff did bring an action against the defendant manufacturer under a product liability theory. The defendant argued that the modifications to the machine provided a complete defense to the product liability claim. The defendant filed a motion for summary judgment on this ground. The district court granted the defendant's motion and dismissed the claims.

A number of states do indeed hold that alteration or modification of a product by an end user does provide a complete defense. However, as noted by the Court in Chairez, "Most states will not absolve a manufacturer or seller from liability as the result of an alteration or modification that was reasonably foreseeable." The court stated that New Mexico would follow the majority position.

The defendant had further argued that the modification was not foreseeable as a matter of law The court again disagreed holding that the issue of the foreseeability of the modification was an issue that should be left to the jury. The New Mexico Court of Appeals therefore reversed the district court's grant of summary judgment. The court was careful to add that it was by no means suggesting that the modification was foreseeable. Instead, the court reiterated that this was a question of fact best determined by a jury.

Likewise, the issue of the comparative negligence of the employer would need to be addressed by the jury. Assuming the jury did award damages to the plaintiff, the total amount of the award would then be reduced by the percentage of fault attributed to the employer. Unfortunately, the deceased plaintiff would be out of luck for this portion of the damage award due to the exclusive workers compensation remedy against the employer.

Collins & Collins, P.C.
Albuquerque Attorneys
www.CollinsAttorneys.com

Punitive damages are a hot topic both for businesses and for individuals harmed by the conduct of businesses. Punitive damages are just that, "punitive". They are awarded above and beyond compensatory damages to punish outrageous and dangerous corporate behavior. More importantly, they serve the purpose of deterring future bad behavior. Punitive damage are relatively rare awarded only in cases of extreme behavior. They come into play only when the safety of the public is at stake.

In light of the rarity of punitive damages awards and the purpose that they serve which is to protect the public from reckless and irresponsible corporate behavior, the bill moving through South Carolina is pretty remarkable. The South Carolina House approved, by a vote of 104-9, a tort reform measure which would limit punitive damages across the board to $350,000.

The rationale for the bills is faulty on several grounds. The primary argument is that it is an economic development tool made necessary because nearby states, including Florida, Georgia and North Carolina, have passed similar measures. It is argued that businesses will not locate in South Carolina without the $350,000 cap. The implicit suggestion is that punitive damages are out of control in the State.

The reality could not be further from the truth. The South Carolina Trial Lawyers Association found 136 personal injury verdicts in South Carolina's 3 largest counties in all of 2007 and 2008. Of these, only seven included punitive damges, and only 2 of the 7 included punitive damages greater than $7000. This reinforces the fact that punitive damage awards are both rare and stingy. If a company has engaged in such outrageous behavior to incur punitive damages at these odds, is this the kind of business that South Carolina or any other state would want to attract?

Secondly, it is argued after all, "Isn't $350,000 really enough to deter bad behavior?" Ask Toyota this question. Apparently, Toyota saved $100 million by limiting the recall on its vehicles leaving millions of defective vehicles on the roads. In the meantime, uncontrolled and sudden acceleration of Toyota and Lexus vehicles led to 2000 accidents and over 30 deaths.

Arguments for caps on punitive damages, like tort reform arguments generally, ignore the fact that there are companies that behave very poorly, motivated only by profit with little or no consideration for the safety of the public. The deterrent effect of punitive damages lies in the possibility of financial hardship for those that ignore the public's safety. Punitive damages are typically calculated as a measure of corporate income. The jury is left, within reason, to determine what amount of a company's annual income would serve to properly punish the reckless corporation while also deterring other like-minded companies in the future. The amount must be significant to serve a deterrent purpose.

Many companies spend significantly more on their corporate retreats $350,000. Is this amount really enough to deter reckless profit only driven corporate behavior to take away a golf outing? South Carolina is known for its golf. Perhaps, now we are have arrived at the real root of the argument.

www.CollinsAttorneys.com

The Albuquerque Journal reports that Toyota officials bragged about the $100 million it saved by negotiating with the government for a limited recall related to the problem with sudden acceleration of its vehicles. It is reported that internal corporate memorandum noted the limited recall of floor mats among "Wins for Toyota - Safety Group." The limited recall was in lieu of the broader recall associated with product and design defects with accelerator pedals and brakes.

The New York times further reported that Leading Democrats on the House Energy and Commerce Committee alleged that Toyota had relied on flawed studies in dismissing the possibility that computer issues were possibly the cause of sticking accelerator pedals on millions of cars. It then issued misleading statements to Toyota owners minimizing the problem.

It is estimated that there have been over 2000 incidents and over 30 deaths involving uncontrolled and sudden acceleration of Toyota and Lexus vehicles. One of the more notable incidents occurred in August 2009 causing the death of a California police officer and three of his family members. This incident led to much of the impetus behind the investigation of the defective vehicles.

Toyota's irresponsible, callous and dangerous indifference to the safety of its consumers points to the flaws in the Tort Reform movement. Tort Reformers cast trial attorneys as a plague on society. In reality, trial attorneys as Toyota will soon find, act as a check on corporate greed. Without product liability law developed compliments of trial attorneys over the past 50 years, corporations would use the same ruthless economic calculus that appears to be at work in the consumer safety decisions of Toyota. Unfortunately, the reality is that purely financial analysis of consumer safety rarely benefits consumers.

In fact, viewing the calculation, 19 deaths might have appeared acceptable from Toyota's math. What is the value of 30 lives? Toyota clearly thought it was less than $100 million. How many lives are worth $100,000 million in savings?

Compensatory damages alone should top the $100 million in savings. But the real problem for Toyota is punitive damages. Punitive damages provide the real deterrent to irresponsible corporate greed that, as in this case, can lead to defective products in the marketplace. Punitive damages are meant to deter future bad behavior both for the defendant and others prone to engage in similar behavior. Punitive damages are a function of bad behavior and corporate income. Punitive damages, where morality fails, dictate that the safety of consumers enter the profit equation. Perhaps Toyota failed to anticipate that its decision-making processes would become public, but it is these processes that justify punitive damages.

Fortunately for New Mexico consumers, New Mexico courts and judges are prone to protect consumers and the general public. In fact, New Mexico has been designated a "judicial hellhole" for corporate defendants, something for which its citizens should be thankful. Though these cases will land in federal court, the federal court will apply New Mexico law on punitive damages. New Mexico's law on punitive damages does not look favorably on corporate behavior that puts the safety and lives of New Mexico consumers at risk.

Assuming the reports of the Albuquerque Journal and New York times are accurate, if there was ever behavior suggesting punitive damages, Toyota's weighing of costs and benefits of fixing known defects in its vehicles demands them.

www.CollinsAttorneys.com

A settlement of $20 million was reached in March 2009 in the a lawsuit against Burger King for the devastating brain injuries suffered by a 12 year old boy in a 2005 fall from a play structure inside a Burger King facility.

The boy was playing with his 5 year old sister on the play equipment when he fell hitting his head on the tile floor. There was no protective matting below the structure to protect against such injuries. The play structure had monkey bars and a fireman's pole clearing presenting risks of children falling from the structure.

The jury found that the restaurant should have provided some kind of protective covering on the floor rather than the hard tile on which the child fell. In addition, there were no warning signs around the equipment as present in other such facilities. Finally, there had been at least one other fall at the facility showing that the accident and injuries were foreseeable and preventable.

The 12 year old boy suffered severe traumatic brain injury. The injuries are permanent. The child will require a life-time of medical and rehabilitative services. The jury obviously took these permanent injuries and future medical expenses into account in the enormous $20 million verdict.

It is well established under the law of premises liability and negligence that playgrounds must be made safe for children. Parents trust the safety of play equipment every day. The duty to maintain a safe play environment as well as liability and fault for any injuries suffered by the failure to keep this duty lie with the provider of the equipment. This includes restaurants, retail establishments, public playgrounds, and other facilities that offer the use of play equipment to children. In addition to liability for failure to maintain a safe environment for play equipment as was established in this case, manufacturers of play equipment are held to a very high standard of care under products liability law.

If your child is seriously injured in a playground accident, liability for damages may be spread across a number of different parties. It is important to identify all of these the parties from the beginning to avoid possible unexpected apportionment of liability at trial after the statute of limitations has long passed. In case of apportionment of liability to other parties, full recovery for all damages may not be possible if those other parties were not named in the lawsuit.

www.CollinsAttorneys.com

Following a $16 million verdict, Ford Motor Company settles with a woman left paralyzed in an auto accident. The settlement came as the jury considered additional punitive damages against the manufacturer for design defects in the rear seat latch on its Explorer model.

The $16 million verdict came despite the fact that the cause of the accident was the driver of another vehicle that struck the Ford Explorer in which Lynn Wheeler was a passenger in the back seat. Ms. Wheeler was sitting in the center of the back seat between her two grandchildren as the family was en route to church on Christmas Day in 2005. Upon collision with the other vehicle, the rear seat latch failed folding on Ms. Wheeler and slamming her forward into the front console.

Ms. Wheeler suffered spinal cord damage and permanent paralysis from the neck down. The Georgia jury awarded a total of $17.7 million in damages. The jury found apportioned the liability and fault between the driver of the other vehicle that caused the accident holding him liable for $1.2 million for his negligence and Ford liable for the remainder on the products liability claim.

The jury was considering additional punitive damages against Ford at the time of the settlement. The punitive damages could have enormous. Punitive damages typically are based in part on the revenue of the defendant. Punitive damages function to deter future conduct. In this case, it appears based upon the evidence presented by the plaintiff's attorney, that Ford had known about the dangers of the lap only seatbelts for more than 30 years based upon extensive crash testing and research. The knowledge was well documented in Ford's own safety documentation and internal memos.

Despite the obvious dangers presented by the defective design, Ford failed to correct the problem continuing to install the lap belts rather than the safer shoulder belts. As a result of Ford's knowledge of the dangers of its defective design and its deliberate failure to correct the problem, it is likely that the jury would have awarded significant punitive damages. Due to the settlement, Ford will avoid a possibly enormous punitive damages award.

Product liability cases such as these are extremely important for the public safety. Consumers trust their safety and the safety of their families to manufacturers such as Ford. Without product liability suits such as this one, manufacturers would have little incentive to design and manufacture safer products. Indeed, as in this case, the motivation flows in the exact opposite direction as manufacturers would ignore their own safety research and findings in an effort to keep production costs down. It is important that the costs savings associated with cutting costs be weighed heavily against the costs of these suits in the event of their deliberate indifference to the safety of their consumers. Unfortunately, profit alone drives manufacturers such as Ford and the threat of lawsuits if nothing else will hopefully drive them toward more responsible design decisions.

www.CollinsAttorneys.com