Source: http://www.ettdefenseinsight.com/author/cstrunk/
Timestamp: 2019-04-24 13:48:21+00:00

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Colorado Marijuana Distributor Wins Battle in “First of Its Kind” Pesticide Exposure Lawsuit, But Is the War Just Beginning?
One of Colorado’s largest marijuana distributors and growers, LivWell, Inc., successfully moved to dismiss a “first of its kind” class action lawsuit brought against it for the use of an allegedly harmful petroleum-based fungicide on its marijuana crops. The decision, while favorable to the defense, may also have provided a roadmap for similar suits in the future.
Plaintiffs and putative class representatives Brandon Flores and Brandie Larrabee claimed the pesticide, which contains the active ingredient myclobutanil, emits potentially harmful hydrogen cyanide gas when the marijuana is burned. However, the lawsuit never alleged physical, toxic injury. Instead, plaintiffs asserted causes of action for economic injury (including breach of contract, misrepresentation, and breach of warranty claims), alleging only that they overpaid for the marijuana in light of its “contamination” with myclobutanil.
Citing various cases that a claim of diminished value does not state an injury in fact, including Rule v. Fort Dodge Animal Health, Inc., 604 F. Supp. 2d 288 (D. Mass 2009) and Rivera v. Wyeth-Ayerst Laboratories, 283 F.3d 315 (5th Cir. 2002), the court found unavailing authorities cited by plaintiffs because there was no possibility of reselling the marijuana plaintiffs purchased. As such, the court found that plaintiffs suffered no injury in fact and dismissed the case. Notably, the decision does not represent a substantive finding that the fungicide at issue was safe for human consumption.
A Roadmap for Future Toxic Injury Litigation?
The LivWell suit was dismissed because of a “legal technicality:” plaintiffs lacked standing to proceed in the absence of a legally cognizable injury in fact. However, in so ruling, the court may very well have unwittingly supplied a roadmap for future lawsuits. The court’s explicit statement that plaintiffs made no allegations of physical injury suggests that such an allegation would have been sufficient to satisfy the “actual injury” requirement and would have allowed plaintiffs to proceed with their lawsuit. Thus, future plaintiffs can cure this defect merely by pleading actual injury.
This case highlights a growing area of concern for state governments, and industry participants, involving consumer safety surrounding the use of legalized use of cannabis.
With numerous states now allowing marijuana to be legally sold for medical and/or recreational use, individual state regulations are struggling to keep up. For example, in California, the Department of Pesticide Regulation has published a bulletin called “Pesticide Use on Marijuana,” which states that there are no pesticides registered for use on marijuana and the use of pesticides on marijuana plants has not been reviewed for safety and human health effects. In fact, the only pesticide products not illegal on marijuana are those that contain labels with active ingredients exempt from residue-tolerance requirements and registered for use that is broad enough to include use on marijuana plants. The pesticide at issue in the Colorado case was approved for use on certain foods such as grapes, but banned for use on tobacco, creating confusion for those who are in need for products that control pests on their growing crops.
In 2013, the Journal of Toxicology published an article which attempted to quantify to what extent cannabis consumers may be exposed to pesticide and other chemical residues when they inhaled cannabis smoke. The authors noted that in 2009 the Los Angeles City Attorney’s office had tested medical samples available in California dispensaries and found two of the three samples they tested had extremely high levels of bifenthrin, a chemical used in pesticides. Further, the study found that recovery of pesticides in unfiltered smoking media such as glass pipes and water pipes ranged from 69.5% to 42.2%. Recovery from filtered water pipes was significantly lower – only .08% to 10.9%.
Substantial Litigation Risks For A “Growth” Industry?
As more states allow the legal use of cannabis, the state regulatory agencies are beginning to consider regulations for the industry. Inevitably, this leads to questions as to how existing state and federal environmental laws may apply to plants and their associated fertilizers, pesticides and growth agents. As a result, many producers of legal marijuana may be forced to guess what products may work on their crops, what products are safe when marijuana is smoked, what products are safe on plants ingested in foods, as well as what – if any – warnings may be required when their products are sold. At the same time, emerging businesses in the fledgling industry will likely find themselves beset by the same kinds of toxic tort litigation faced by other manufacturers, including pharmaceutical companies, for various alleged injuries as well as failure to warn of those potential injuries. Thus, as the LivWell case demonstrates, more claims for toxic injury may be on the horizon as the industry grows.
Lured by the promise of huge jury verdicts and favorable laws, out-of-state asbestos plaintiffs and their counsel have flocked to California in increasing numbers since at least 2000 to avail themselves of California courts. To avoid having their cases forcibly returned to their home states on forum non conveniens grounds, plaintiffs have made sure to name defendants in their lawsuits subject to jurisdiction only in California. Although such defendants are characterized as “nominal” or “sham” by others in the litigation, cases such as American Cemwood Corp. v. American Home Assurance Co. (2001) 87 Cal.App.4th 431, 433, hold that an action cannot be dismissed for forum non conveniens unless all defendants are subject to jurisdiction in the alternate forum. Thus, the presence of even one “sham” or “nominal” defendant is sufficient under American Cemwood to defeat a forum non conveniens motion seeking dismissal of the action. Though Hansen v. Owens Corning Fiberglas Corp. (1996) 51 Cal.App.4th 753 still permits a stay, such a stay can be lifted upon a showing that the California-only defendant is not subject to jurisdiction in the alternate forum. Thus, the doors of the “Hotel California” have historically been wide open to out of state litigants, with no meaningful way for a defendant to close them no matter how strongly the public and private interest factors favor transfer to another state.
While the Hotel California has not yet closed its doors, it may have finally hired a doorman. A California appellate court has now ruled that the claims of the California-based “nominal” venue defendant could be severed and the action dismissed on forum non conveniens grounds in favor of the remaining parties.
David v. Medtronic, Inc. was filed in Los Angeles County Superior Court by 37 plaintiffs, none of whom had any connection to Los Angeles. Indeed, 36 plaintiffs lived out of state, and the only California-resident plaintiff lived far from Los Angeles County in Sacramento. Plaintiff sued multiple Medtronic and Wyeth entities, who were sued as manufacturers and sellers of an allegedly defective medical device called Infuse. Neither Medtronic nor Wyeth are California corporations.
The only connection to Los Angeles County was a local physician, Dr. Gary Michelson, who served as plaintiff’s nominal “venue” defendant. Over the course of litigation defendants were, in fact, able to prove that Dr. Michelson was nominal, having had no involvement in the manufacture or marketing of the device. Medtronic then brought a “three pronged” motion seeking to (1) sever the claims of each plaintiff from each other; (2) to dismiss the claims of the 36 out-of-state plaintiffs on forum non conveniens grounds; and (3) to transfer venue of the California-resident defendant to his home county of Sacramento. The trial court granted the motion on all three grounds; plaintiffs appealed the court’s rulings as to the first and second.
On appeal, the David court recognized that “this case squarely presents the issue of whether the existence of a nominal defendant, over whom jurisdiction cannot be established in the proposed alternative forum, can defeat a forum non conveniens motion which should otherwise be granted.” Although David found that the trial court erred in dismissing plaintiffs’ claims against all defendants, including the resident Los Angeles physician, it held that the dismissal of claims against the non-California defendants was proper. In doing so, the court noted that there was no dispute that Dr. Michelson was a nominal defendant, and cited various federal cases supporting the transfer of cases despite the claims of a nominal defendant. While the court stopped short of carving out an exception for nominal defendants, it held that it could properly sever the claim of such a nominal defendant, and dismiss the claims against the remaining non-California defendants on forum non conveniens grounds. Thus, it affirmed the dismissals of the Medtronic and Wyeth entities.
Though not an asbestos case, David will have wide-ranging impact on asbestos litigation, in which individual cases frequently have dozens of defendants, only a handful of which may subject to jurisdiction in California. The David decision returns rationality to a forum non conveniens analysis ripe for abuse, and potentially deprives plaintiffs of a “hook” to keep cases otherwise unconnected to the state from being tried here, thereby discouraging forum shopping. Most importantly, it is a win for California citizens and potential jurors, who will find themselves relieved from hearing cases unconnected to the State and the communities in which they live.
While the Hotel California is still open, perhaps more plaintiffs will be forced to check out.
A causal link between radiation and mesothelioma has been documented in numerous studies over the past decade. Until now, however, no study has specifically analyzed the causal link between radiation therapy for a specific disease and the development of mesothelioma. According to the study, the incidence rate ratios (IRR) for development of mesothelioma was increased for subjects who underwent the radiotherapy treatment when compared to non-irradiated patients, and that the IRR increased with the latency period. The study found an IRR of 1.08 for irradiated patients 0 – 4 years after treatment, an IRR of 1.31 for irradiated patients 5 – 9 years after treatment, and an IRR of 1.59 for patients irradiated 10 years or more after treatment.
The significance of this link is especially important given that both prostate cancers and mesotheliomas are most common in older men. The study notes that “mesothelioma typically presents in the fifth to seventh decades,” and the American Cancer Society notes that prostate cancer is the second most common cancer in men (after skin cancer), with 6 in 10 prostate cancers being diagnosed in men age 65 and older and the median age of diagnosis being 66. Thus, it is not uncommon to see men diagnosed with mesothelioma also having undergone treatment for prostate cancer.
Importantly, the study’s findings note an increased risk of both pleural and peritoneal mesothelioma. Though the lungs may be located outside the irradiated field, “even organs far from the irradiated field can still be significantly exposed due to scattered radiation, as well as leakage from the radiation source.” Moreover, three-dimensional conformal radiation, used frequently during the 1990’s, can expose the pleura to an equivalent radiation dose up to 25 mSv, a dose “far from insignificant if we consider that the effective dose for a standard chest radiograph ranges between .05 and .24 mSv.” Solid cancers are expected to begin forming as early as 5 years after radiation therapy.
This study provides additional reason for defense lawyers to focus on medical issues during depositions of mesothelioma plaintiffs, obtaining complete medical histories on any radiation exposures and on prostate cancer treatments in particular. This is especially important given the substantial increase in so-called “low dose” exposure cases in recent years, involving men in their 70’s or 80’s with little to no known history of asbestos exposure and no markers for such exposure on x-ray or HRCT.
The issue in Gottschall came up in a roundabout manner. The plaintiff filed two wrongful death cases: one in San Francisco Superior Court, which named the defendant and appellee Crane Co., and one in the U.S. District Court for the Northern District of California, naming six different defendants. While Crane Co. continued to litigate in San Francisco, the federal case was subsequently transferred to the Eastern District of Pennsylvania, which was assigned to handle multidistrict asbestos litigation. On December 8, 2011, the MDL (Robreno, J.) granted a summary judgment motion filed by defendant General Dynamics Corp., holding that the U.S. Navy was a sophisticated user under California law, and therefore the plaintiffs could not maintain a claim.
Crane Co. filed its own summary judgment motion in San Francisco Superior Court predicated on this ruling, and arguing that the doctrine of collateral estoppel compelled the same result. The court agreed, applied collateral estoppel and granted the motion.
Though Johnson was initially received with much fanfare by the defense bar, Gottschall is only the latest in a string of decisions significantly limiting Johnson’s application. While Gottschall classifies this as an “evolution of California’s sophisticated user defense,” the reality may be that the appellate courts, not the MDL, are the “sophisticated misusers” of Johnson’s holding.
Though Johnson did decide the issue of the application of the defense to a specific HVAC contractor, the decision makes clear that the point of the doctrine is to protect the manufacturer from the need to warn a sophisticated purchaser, and cites with approval Fierro v. International Harvester Co. (1982) 127 Cal.App.3d 862 and In re Related Asbestos Cases (N.D.Cal. 1982) 543 F.Supp. 1142, 1151. Indeed, in In Re Asbestos, the court noted that “the Navy, as an employer, was aware of the dangers of asbestos as were defendants and that the Navy nonetheless misused the products, thereby absolving defendants of liability for failure to warn the Navy’s employees of the product dangers” (emphasis added). The Supreme Court may yet get involved to clarify its application of Johnson.
An Enticement to Double Recovery?
Evidence of claims by plaintiffs to asbestos bankruptcy trusts is critical to the defense of any asbestos case. In California, for example, Volkswagen of America Inc. v. Superior Court (Rusk) (2006) 139 Cal.App.4th 1481, highlighted the importance of the discovery of such claims for purposes of setoffs and establishing a defendant’s proportional share of damages.
Perhaps recognizing the uphill battle they face in protecting such claims from disclosure in discovery, plaintiffs in the litigation have modified their tactics. Instead of making claims to the asbestos bankruptcy trusts prior to or during litigation, many plaintiffs now wait until after their civil case has settled or gone to trial to make these claims. The purpose is deception and double recovery. If no claims have been made, there is nothing to discover, and therefore nothing to offset against a plaintiff’s verdict. So what is a defendant to do?
Paulus v. Crane Co., No. B246505 (2/21/14) considered an appeal that presented two issues, one of which was whether the trial court erred in not reducing the damages awarded against defendant Crane Co. to account for settlements plaintiffs could obtain from asbestos bankruptcy trusts, but had not at the time of trial. The trial court’s decision was affirmed.
A step backward from Volkswagen?
The abbreviated discussion of the bankruptcy trust issue in Paulus masks the significance of its holding, which is effectively that so long as a plaintiff waits to make a bankruptcy trust claim, he may double recover at will. Although Paulus may be technically correct that California Code of Civil Procedure 877 says “before judgment,” it gives short shrift to the court’s broad equitable powers, giving a ruling that is effectively form over substance and frustrates the Volkswagen court’s policy aims of ensuring that plaintiffs are not permitted double recovery.
After Paulus, a defendant would be well advised to look carefully at a plaintiff’s work history in a pending action, and proffer appropriate evidence to the trier of fact relating to claims that could be made but were not.
This is not the first time courts of appeal have failed to award offsets to defendants in asbestos cases, where defendants have not had evidence about future settlements in asbestos cases. See Garcia v. Duro-Dyne 156 Cal.App.4th 92 (2007). Recent efforts by defendants have shown that pursuit of discovery about exposure to bankrupt entities’ products during the case has led to inconsistent claiming patterns.
Defendants can and should make efforts to obtain their own affirmative evidence, rather than rely on the “goodwill” of the court on what might happen. This evidence can support affirmative defenses such as mitigation of damages, or affirmatively support claims for offset, and make it harder for trial courts and courts of appeal to turn a blind eye to these practices.

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