Presenting a live 90-minute webinar with interactive Q&A Prevailing Trends in Consumer Product Liability: Allegations of Fraud Navigating Aggregate Damages, Expert Scrutiny, and Other Evolving Practice Issues TUES DAY, FEBRUARY 21, 2012 1pm East ern | 12pm Cent ral | 11am Mount ain | 10am Pacific Today’s faculty features: Robert o A. Rivera-S ot o, Part ner, Ballard Spahr , Cherry Hill, N.J. Neal Walt ers, Part ner, Ballard Spahr , Cherry Hill, N.J. Dr. Richard S emenik, Professor Emerit us of Market ing and Consumer Behavior Expert , Montana State University , Bozeman, Mont . The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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Prevailing Trends in Consumer Product Liability: Allegations of Fraud Strafford Publishers Webinar February 21, 2012 Neal Walters Ballard Spahr LLP WaltersN@ballardspahr.com Dr. Richard Semenik Montana State semenik@montana.edu Justice Roberto Rivera-Soto Ballard Spahr LLP RiveraSotoR@ballardspahr.com February 21.2012
Speakers – Neal Walters • Partner at Ballard Spahr LLP and head of its Product Liability and Mass Tort Group • Defends consumer product class actions • Tried two consumer product class actions to jury verdict • Experience addressing some of the unique developments that occur later in a class action, including post-trial decertification of a class and complex issues surrounding post trial claims proceedings • Substantial experience counseling clients on product and class-action- related risks before they reach litigation, including regulatory, advertising and risk management • Graduate of Rutgers College and Rutgers School of Law 6
Speakers – Richard J. Semenik, Ph.D. • Expert in advertising, branding, consumer decision making and consumer behavior analysis • Former Dean Montana State University College of Business • Former Assoc. Dean for Research, Eccles School of Business, University of Utah • Co-Author of one of the leading advertising texbooks in the world used in 500 universities in 6 countries • Author of over 40 articles on branding, advertising and consumer behavior. Presentations to academic and professional audiences across the United States and in Belgium, France, Ireland, Scotland, Netherlands, Mexico, Finland, Hungary, and Italy • Expert witness services in over a dozen class action litigations since 1991 • Undergraduate degree University of Michigan, MBA Michigan State University, Ph.D. from Ohio State University • Graduate of Rutgers College and Rutgers School of Law 7
Speakers – Justice Robert Rivera-Soto • After serving a seven-year term as a Justice of the Supreme Court of New Jersey, Justice Rivera-Soto returned to the practice of law, joining Ballard Spahr LLP as a partner in its litigation practice • Prior to his service on the Court, Justice Rivera-Soto was a partner in a national law firm, and had been general counsel of two major gaming and entertainment companies • He started his career as an Assistant United States Attorney assigned to the Criminal Division of the U.S. Attorney's Office in Philadelphia, Pennsylvania. During his career, he has received a number of awards and is a Fellow of the American Bar Foundation • He is a graduate of Haverford College (B.A. 1974; with departmental honors) and the Cornell University School of Law (J.D. 1977) 8
Overview Background Consumer Behavior Anatomy of CFA Product Appellate Litigation Issues Why Product Companies? 9
Background • States passed Little FTC Acts in the 1970s. • Originally designed to enable Attorneys General to prosecute and enjoin unfair trade practices without a showing of actual damages. • Nearly all such statutes were amended to enable private rights of action by individual consumers. Many such laws enable companies to pursue companies on unfair competition claims. • When the statutes were amended to require a damages element, i.e., ascertainable loss, it was believed that this would control the expansion of relief available. • But ascertainable loss has been construed broadly. • And the availability of attorneys fees has spawned several decades of active litigation in all product industries. 10
Different Plaintiffs • State Attorneys General – occasionally • The FTC pursuant to the FTCA – not so much • Companies v. Companies – Competition and Disparagement Claims – Not uncommon • Individuals v. Companies – Class actions – the most prevalent 11
A Broad Range of Products • Pharmaceuticals • Medical Devices • Electronics • Appliances • Automobiles 12
Anatomy and Elements of CFA Product Claim • Something is undesirable about a product’s performance or official statements about the product’s capabilities are inaccurate. • The buyer contends that – if they had been properly informed -- they would not have purchased the good, or that he or she would have paid less for it; or that they have incurred consequential out of pocket repair costs for its non-performance. • The consumer similarly contends that there was pre- existing knowledge of the problem, thus characterizing the concern as a traditional fraud theory. 13
The Elements of a CFA Product Claim • An unlawful or unfair trade practice. • A misstatement, either in the form of an untruthful, materially inaccurate or misleading description of the product and its capabilities. • An omission about the product’s problem or limitations. • Causation or reliance • This is the most hotly contested issue in consumer product litigation. • Damages in the form of ascertainable loss. 14
Examples of Product Fraud Claims • Moulton v. LG USA Electronics, Inc., et al. , 2:11-cv-04073-JLL (DNJ) – Putative plaintiff class claims that defendant’s LCD and plasma televisions are subject to premature degradation. • Montich v. Miele USA, Inc. , 3:11-cv-02725-FLW (DNJ) – Putative plaintiff class alleges that the design of defendant’s washing machines causes mold build-up. • In re: Onstar Contract Litigation , MDL 07-md-1867 (ED Mi.) – Putative plaintiff class alleges consumer fraud against OnStar and several auto manufacturers for allegedly failing to disclose impact of switch from analog to digital cellular service on telematics equipment. • DeBenedetto v. Denny’s, Inc ., MID-L-6259-09 (NJ Super. Ct.) – Putative plaintiff class alleges that restaurant chain’s menus failed to disclose food’s unhealthy sodium levels. • Stewart v. Beam Global Spirits and Wine, et al , 1:11-cv-5149-NLH (DNJ) – Putative plaintiff class alleges that beverage falsely claimed to be all natural 15
Examples of Product Fraud Claims • Little v. Kia Motors America, Inc. , UNN-L-800-01 (N.J. Super. Ct.) – Plaintiff class alleges that defendant failed to disclose premature brake degradation • Oshana v. Coca-Cola Co. , 225 F.R.D. 575 (N.D. Ill. 2005) – Putative plaintiff class alleged defendant failed to disclose additive in Diet Coke • Debbs v. Chrysler Corp. , 810 A.2d 137 (Pa. Super. Ct. 2002) – Plaintiff class alleged defendant failed to disclose potential injuries that could result from airbag deployment • Lee v. Carter-Reed Company , 4 A.3d 561 (N.J. 2010) – Plaintiff class alleges that nutritional supplement was not effective at inducing weight loss or other health benefit • Gale v. IBM Corp. , 781 N.Y.S.2d 45 (App. Div. 2004) – Putative plaintiff class alleged defendant misrepresented capabilities of computer 16
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