Massachusetts state and federal courts issued a number of important product liability decisions in 2017. The Product Liability and Toxic Tort Litigation Group at Nutter recently reviewed these cases. Highlighted below are some of the key cases and issues decided in the past year.
Summary: Plaintiff Bernardino Santos-Rodriguez (“Santos”) was driving a boat (owned by a third party) in a bay near Guayama, Puerto Rico. The boat was equipped with a hydraulic steering system manufactured by the defendant, Seastar Solutions. The ball-joint at the end of the rod, connecting the steering system to the boat’s right motor, broke while the boat was in motion. This caused a loss in steering function, and Santos was ejected from the boat. Santos suffered extensive injuries, which ultimately resulted in paraplegia. Subsequent examination of the boat revealed that rod end failed because of corrosion.
Santos and several of his family members (who were not on the boat at the time of the accident) sued Seastar for failure to warn and design defect. The District Court, after deciding that federal maritime law—rather than Puerto Rico law—applied, granted summary judgment in favor of Seastar. The plaintiffs appealed both the decision to apply federal maritime law and the grant of Seastar’s motion for summary judgment. Without addressing whether federal maritime law or the substantive law of Puerto Rico applied, a First Circuit Panel affirmed, holding that plaintiffs’ claims did not hold water even under Puerto Rico law.
Causation in failure to warn claims: One of the requirements for alleging failure to warn is that “‘the absence of adequate warnings or instructions was the proximate cause of plaintiff’s injury.’” Santos-Rodriguez, 858 F.3d at 697 (quoting Cruz-Vargas, 348 F.3d 271, 276 (1st Cir. 2003)). The First Circuit noted that, on appeal, the plaintiffs summarized evidence showing only that the steering mechanism’s manual did not include any warnings about corrosion of the rod end and that the corrosion is what caused the steering mechanism to fail. Id. But the First Circuit held that “[u]nless someone read the Manual, no warnings in it could have prevented Santos’s injuries.” Id. at 698. Thus, even if the manual’s warnings were inadequate, the plaintiffs could not demonstrate that the inadequacy of the manual was the proximate cause of Santos’s injuries.
Expert reports in defective design cases: Although plaintiffs had an expert, his report concluded only that the corrosion of the rod end was the main cause of the failure of the steering system. His report did not state that a defect in the design caused the corrosion or made it particularly susceptible to the corrosion. Santos-Rodriguez, 858 F.3d at 698. The First Circuit held that the plaintiffs’ only showing regarding defective design was that “something was wrong—the rod end failed” and that that was insufficient to establish defective design. Id. The First Circuit therefore affirmed summary judgment in favor of Seastar on the defective design claim.
Importantly, the District Court declined to consider the deposition testimony of the expert that the material of which the rod was made was particularly susceptible to corrosion, holding that it was inadmissible because that opinion was not disclosed in his report. The plaintiffs did not appeal this ruling.
Summary: Monsanto was the sole manufacturer of PCBs in the United States from 1935 through the late 1970s, when the EPA banned their manufacture and most uses following the passage of the Toxic Substances Control Act of 1976, 15 U.S.C. § 2601 et seq. Monsanto produced PCBs for use in both enclosed applications (most commonly transformers and lighting ballasts) and non-enclosed building materials, such as caulks, paints, and sealants. The Town of Westport detected PCBs in its schools in May 2011, including its middle school, which was built in 1969. PCBs were detected in the window glazing, exterior window caulking, and interior door caulking of the middle school building. The town then undertook a multi-million dollar remediation project to remove the PCBs.
The town filed suit against Monsanto and two affiliates, including defendant Pharmacia Corporation, in the United States District Court for, among other things, breach of the implied warranty of merchantability (based on failure to warn) and negligent marketing. The defendant moved for, and the District Court granted, summary judgment in favor of Monsanto. The town appealed, and the First Circuit affirmed the lower court’s rulings.
Foreseeability and breach of the implied warranty of merchantability: The First Circuit held that Monsanto did not breach the implied warranty of merchantability because it was not reasonably foreseeable in 1969 that there was a risk that PCBs would volatize from caulk at levels requiring remediation due to their risk to human health. Monsanto, 877 F.3d at 65-66. Under Massachusetts law, a plaintiff must establish that a product was defective and unreasonably dangerous for its intended purposes when it was distributed by the supplier, and a supplier can be held liable if it failed to warn end-users of the product’s “foreseeable risks” of harm. Id. at 65 (citing Evans v. Lorillard Tobacco Co., 465 Mass. 411 (2013)). The town argued that all it needed to demonstrate was that as of 1969, it was foreseeable that there was a risk that PCBs would volatize out of caulk, and that it did not need to further establish that such a process would cause risks to human health. Id. The First Circuit disagreed and further noted that the town failed to proffer any scientific studies from 1969 or indeed, at any time before or after, evidencing that PCBs would volatize from caulk at harmful levels, and had failed to show that the defendant was aware of any such risk. Id. at 66-67. Lastly, the Court summarily rejected a related breach of warranty claim that the defendant had violated its “post-sale” duty to warn, affirming the District Court’s judgment that the Westport Middle School was not an identifiable end-user to whom the defendant could have provided a warning after having sold its products. Id. at 67-68.
Negligent marketing: With respect to the town’s negligent marketing claim, the First Circuit concluded that, under Massachusetts law, the claim could not be maintained independent of a design defect claim—and in this case, the town had failed to challenge the entry of summary judgment against its design defect claim. Monsanto, 877 F. 3d at 68. The Court rejected the town’s arguments pointing to dicta in some state court decisions suggesting that absent a design defect, a manufacturer might still be liable if it intentionally targeted children. Id.
Liu v. Boehringer Ingelheim Pharmaceuticals, Inc.
Summary: Dr. Zhensheng Liu was prescribed Pradaxa (a brand name anticoagulation medication) after he was diagnosed with atrial fibrillation. Dr. Liu was in his eighties at the time he began taking Pradaxa. A year and a half after starting the drug, Dr. Liu fell, sustained a head injury, and experienced continued bleeding. As a result of the continued bleeding, doctors attempted to remove Pradaxa from Dr. Liu’s system. Ultimately, Dr. Liu died of cranial bleeding. The personal representatives of Dr. Liu’s estate sued Pradaxa’s manufacturer for negligent design defect, negligent design and testing, and negligent failure to warn. The defendant-manufacturer filed a motion for summary judgment, which the court granted in part and denied in part.
Negligent and defective design claims: The plaintiffs alleged that Pradaxa was defective in design because there were safer alternative designs, that Pradaxa was not as safe as other drugs in the same class, and that the manufacturer negligently tested and designed the drug. Liu, 230 F. Supp. at 6-7. Without much detail, the court held that the plaintiffs had not produced any evidence to support these claims and granted summary judgment in favor of the manufacturer. Id.
Negligent failure to warn: The plaintiffs claimed that the manufacturer knew of an increased risk of major bleeding for patients over 80 years old and that it failed to include that risk in the drug’s warning label. Id. at 8. In support of their motion for summary judgment, the defendants made two arguments.
First, the defendants argued that, under the learned intermediary doctrine, it is the responsibility of the doctor to communicate relevant warnings and side-effects to his or patients—not the manufacturer. Id. at 8. The plaintiffs argued that the learned intermediary doctrine did not apply to this case because Dr. Liu and one of the plaintiffs had the necessary knowledge and medical training to assess whether Pradaxa would be appropriate for Dr. Liu in light of his age and condition. Id. The court rejected the plaintiffs’ argument because there was no evidence that either Dr. Liu or the plaintiff played any active role in the decision to use Pradaxa. Id.
Second, the defendants argued that the alleged failure to warn was not the proximate cause of Dr. Liu’s injury. Id. at 9. The court found that the plaintiffs had carried their initial burden of showing that the drug’s warnings were inadequate through the affidavits of two physicians (including one of the plaintiffs). Id. This showing, the court held, raised a rebuttable presumption that, had the prescribing physician been aware of the inadequacies of the warning, he would not have prescribed Pradaxa. Id. But the court held that the defendant rebutted this presumption by pointing to the prescribing physician’s deposition, during which he testified that, had he been aware of a clinical study showing that Pradaxa was associated with a higher incidence of major bleeding, he would not have changed his decision to prescribe Pradaxa. Id. As the court put it, the prescribing physician, “as a learned intermediary, breaks the chain of proximate causation.” Id.
Meijer, Inc. v. Ranbaxy, Inc.
Significant Holding: District Court certified its denial of the defendants’ motion to dismiss—holding that claims for fraud on the FDA arising under federal antitrust and racketeering statutes were not preempted under Buckman Co. v. Plaintiff’s Legal Comm., 531 U.S. 341 (2001)—for interlocutory appeal to the First Circuit. (Gorton, J.).
Summary: Purchasers of two generic drugs filed antitrust and racketeering claims against the drugs’ manufacturers, under the Sherman Act and Racketeer Influenced and Corrupt Organizations Act. The claims alleged that the drug manufacturers made fraudulent representations to the FDA prior to entering the drugs on the market.
The defendant-drug manufacturers moved to dismiss the claims under the Supreme Court’s decision in Buckman Co. v. Plaintiff’s Legal Comm., 531 U.S. 341 (2001), which held that federal law preempted state-law tort claims for fraud on the FDA. The defendants argued that the Court’s reasoning in Buckman equally applied to federal law claims predicated on fraud on the FDA and, therefore, plaintiffs’ claims were preempted by the Federal Drug and Cosmetic Act.
The District Court disagreed. Instead, the court agreed with the plaintiffs’ argument that POM Wonderful LLC v. Coca-Cola Co., 134 S. Ct. 2228 (2014) applied. In POM Wonderful, the Supreme Court held that, when two federal statutes complement each other, it would “show disregard for the congressional design to hold that Congress nonetheless intended one federal statute to preclude the operation of the other.” Id. at 2236. The District Court held that, because the FDCA did not conflict with the Sherman Act or RICO, the plaintiffs’ claims could proceed.
The defendants then filed a motion asking the District Court to certify the order denying its motion to dismiss for interlocutory appeal to the Frist Circuit. The court granted the motion.
Preemption of federal law claims predicated on fraud on the FDA is an issue of first impression: A factor that federal district courts must consider in deciding whether to certify an interlocutory order for appeal to the First Circuit is whether “there are grounds for a substantial difference of opinion.” Meijer, 245 F. Supp. 3d at 315. Although the plaintiffs relied on Pom Wonderful, which addressed the intersection of two federal statutes as a matter of statutory interpretation, Pom Wonderful made no reference to Buckman and did not involve fraud on the FDA. Id. Thus, the court held that whether the FDCA precluded claims based on two other federal statute presented a “sufficiently novel” question to warrant certification for interlocutory appeal. Id. at 316.
This case is now pending before the First Circuit.
Gustavesen v. Alcon Laboratories, Inc.
Summary: This is a putative class action in which the plaintiffs allege that manufacturers of prescription eye drops violated state consumer protection laws by intentionally designing eye droppers to dispense more liquid than a human eye can absorb. Excess liquid is wasted by rolling down users’ cheeks or draining through their tear ducts. The defendants allegedly designed the droppers this way to cause consumers to buy eye drops more frequently than necessary, which would drive up profits.
The defendants moved to dismiss on a number of grounds, including that the doctrine of impossibility preemption barred the plaintiffs’ claims because the Food Drug and Cosmetic Act and FDA regulations prohibit the defendants from changing the dropper design without FDA re-approval. The court agreed that impossibility preemption applied, granted the motion to dismiss on that basis, and did not address the other arguments.
Impossibility preemption: The contours of impossibility preemption are set forth in three recent Supreme Court cases. In Wyeth v. Levine, the Court held that state law claims related to allegedly insufficient warnings on a prescription drug label were not preempted by FDA regulations allowing the manufacturer to strengthen warnings without pre-approval. 555 U.S. 555 (2009). In Pliva, Inc. v. Mensing, state laws requiring generic drug manufacturers to strengthen label warnings were preempted by FDA regulations requiring a generic’s label to match the corresponding brand-name drug’s label. 564 U.S. 604 (2011). And in Mutual Pharmaceutical Co. v. Bartlett, a state law requiring a generic manufacturer to make a drug safer by altering its composition or label was preempted by FDA regulations requiring a generic to have the same composition, dosage form, strength, and labeling as the corresponding brand-name drug. 570 U.S. 472 (2013).
Based on this Supreme Court trilogy, the Gustavesen court held that the plaintiffs’ claims that state laws required the defendants to use droppers that dispense less liquid would be preempted by federal law. Specifically, the FDA has three categories of changes to previously approved drugs: major, moderate, and minor changes. Minor and moderate changes do not require FDA approval, so a state law requiring such changes would not be preempted. But the FDA must approve major changes before they are implemented and brought to market. Thus, a state law requiring a major change would be preempted.
FDA guidance provides that “‘[c]hanges in the size and/or shape of a container for a sterile drug product’ are major changes requiring preapproval.” Gustavesen, 2017 WL 4374384 at *8 (quoting Guidance for Industry Changes to an Approved NDA or ANDA (2004)). The court held that changes to the dropper tip, which dictates the amount of liquid dispensed, would be major changes because they would entail changing the size and/or shape of the container. As a result, the defendants could not change the dropper design without the FDA’s approval, making it impossible to comply with federal law and state consumer protection statutes.
The court further rejected the plaintiffs’ argument that the defendant manufacturers should have submitted a differently-designed product for FDA approval in the first instance. Relying on the rationale in a Sixth Circuit case dealing with a similar issue, the court found that the plaintiffs' position was akin to the argument that a manufacturer could have stopped selling the product, which would have allowed it to comply with both federal and state law. Gustavesen, 2017 WL 4374384 at *10 (citing Yates v. Ortho-McNeil-Jansen Pharm., Inc., 808 F.3d 281 (6th Cir. 2015)). But in Bartlett, the Supreme Court rejected just that argument. Accordingly, the Gustavesen court held that defendants “could not have marketed droppers that complied with state consumer protection and unjust enrichment laws in the manner plaintiffs advocate without the FDA’s prior approval. It is irrelevant that the defendants could have designed an entirely different product before they sought approval, which may never have been granted.” Id. at *11.
Informal agency action does not take precedence over official agency guidance: The plaintiffs argued that the FDA does not require preapproval of all container closure systems. They pointed to three occasions where the FDA permitted manufacturers to change containers or closures without preapproval.
The court rejected this argument. The plaintiffs did not cite any law indicating that an agency action, rather than the agency’s official position, is relevant to interpreting a regulation. And instead, the Supreme Court has declined to follow an agency’s practice rather than the agency’s official standards. Further, the evidence the plaintiffs provided of occasions where the FDA purportedly permitted changes to containers was not convincing. Some of the plaintiffs’ exhibits did not actually contradict the FDA’s preapproval requirement, nor did they demonstrate that the FDA did not require preapproval in those cases. And other exhibits merely provided evidence of the FDA having failed to strictly follow its own guidance. The FDA failing to follow its own guidance did not cause the court to doubt the meaning of that guidance, which requires preapproval for changes to the size and/or shape of a container.
The plaintiffs appealed this opinion, and the case is pending before the First Circuit. See Gustavesen v. Alcon Laboratories, Inc., No. 17-2066 (1st Cir.).
Summary: This is a multidistrict litigation involving injuries allegedly due to Zofran. The FDA approved Zofran to combat nausea and vomiting for patients undergoing chemo therapy or radiation or for patients who recently had surgery.
The plaintiffs alleged that GlaxoSmithKline (“GSK”), Zofran’s manufacturer, pursued an off-label marketing campaign for Zofran to treat pregnancy-related nausea and vomiting. Zofran’s prescribing information contained a section on pregnancy, which stated that studies using pregnant rats and rabbits showed no evidence of impaired fertility or birth defects, but that there were no well-controlled studies with pregnant women. The section concluded with the following warning: “Because animal reproduction studies are not always predictive of human response, this drug should be used during pregnancy only if clearly needed.” In re: Zofran (Ondansetron) Products Liability Litigation, 261 F.Supp.3d at 66. But animal studies conducted for GSK had allegedly shown “clinical signs of toxicity, intrauterine fetal deaths, stillbirths, congenital heart defects, craniofacial defects, impairment of ossification (incomplete bone growth), and other malformations in fetuses exposed to Zofran during gestation.” Id.
Parents and guardians of children born with birth defects brought these cases, alleging that GSK is liable for birth defects caused by the birth mothers’ ingestion of either Zofran or its generic equivalent. The plaintiffs had two theories of liability with respect to the generic version: (1) GSK made misrepresentations and omissions in Zofran’s label resulting in injuries due to the ingestion of the generic version that would not have been prescribed absent the misrepresentations and omissions; and (2) GSK intended to create a market for the use of Zofran to treat pregnancy-related nausea and vomiting, and GSK knew generic manufacturers would be required to use Zofran’s label. The defendants moved to dismiss the claims related to women who took the generic drug. The court granted the motion, and dismissed those claims.
Innovator liability: The majority of courts to consider innovator liability—whether a brand-name drug manufacturer is liable for harm caused by a generic equivalent—have rejected it. That conclusion is based on the bedrock principle that a manufacturer is not liable for harm caused by a different company’s product. A few courts, though, have taken the opposite view and extended liability for harm caused by generic drugs to brand-name manufacturers.
The plaintiffs here brought claims under six states’ laws: Georgia, Indiana, Kentucky, Massachusetts, New York, and Oklahoma. None of the highest courts of those states have squarely addressed the issue of innovator liability. Thus, the court assessed the plaintiffs’ theories of liability using relevant cases from lower courts and federal courts in those states.
The court concluded that each of the states would likely adopt the majority position and decline to hold brand-name manufacturers liable for injuries caused by generic equivalents. In particular, with respect to Massachusetts, the court analyzed two Massachusetts Superior Court cases directly addressing the issue of innovator liability. See Rafferty v. Merck & Co., No. 2013-04459, 2016 WL 3064255 (Mass. Super. Ct. May 23, 2016) [Rafferty was included in Nutter’s 2016 Year In Review]; Kelly v. Wyeth, No. 200303314B, 2005 WL 4056740 (Mass. Super. Ct. May 6, 2005). In both cases, the Superior Court declined to adopt the doctrine.
No remedy for injuries caused by generic drugs: This case implicates the issues in Pliva, Inc. v. Mensing, 564 U.S. 604 (2011): a generic manufacturer must use the same drug composition and label as were approved for the brand-name version, and a plaintiff cannot recover against a generic manufacturer on a state law claim based on the generic manufacturer’s failure to provide different warnings. The court in In re: Zofran acknowledged that a person harmed by a generic drug generally cannot sue either the generic or the brand-name manufacturer. The court explained, though, that a tort system must balance fairness and the appropriate allocation of risk. It is not clear that it would be fair or wise to impose 100% of the liability on brand-name manufacturers who many control only a small percent of the market. And, as the court noted, adopting the doctrine of innovator liability could have a negative impact on the development of new drugs.
In an earlier opinion in this case, the court held that Federal Rule of Procedure 9(b)’s particularity requirements for pleading fraud apply to complaints filed in multidistrict litigations as they apply to any other action. See In re: Zofran (Ondansetron) Products Liability Litigation, No. 1:15-md-2657-FDS, 2017 WL 1458193 (D. Mass. Apr. 24, 2017). As the court explained, “it is not appropriate to plead fraud claims in general terms, in the hope that discovery will reveal greater particularity as to the actual misrepresentations.” Id. at *5.
Pantazis v. Mack Trucks, Inc.
Summary: Mack Trucks manufactured “incomplete vehicles” that have only a chassis, cab, and engine. Components and equipment are added to these incomplete vehicles to create many types of trucks, including dump trucks, flatbed trucks, and fire trucks. The plaintiff’s late husband purchased a Mack Truck incomplete vehicle in 1987 and had it transformed into a dump truck. Certain components of the mechanism that tilts the body of the truck were exposed—which created considerable risk to someone working under the truck—even though the tilt system could have been installed with guards. Mack Trucks included warnings in its manual about the dangers of equipment installed as part of the tilt system. The manufacturer of the tilt system component included general warnings in its manual about the dangers of exposed, unguarded equipment. It also distributed warning stickers to be affixed to the truck with information for preventing “possible injury or death,” including how to avoid getting caught or entangled in the machinery. In 2009, the plaintiff’s husband was found dead under the truck, and his clothes were caught in the tilt system.
His wife brought a wrongful death action against Mack Trucks and the company that now owns the assets of the entity that manufactured a component of the tilt system. The plaintiff did not allege that the incomplete vehicle or the tilt system component were defective. Instead, she claimed that both manufacturers had a duty to warn installers and end users of the risks of an unguarded tilt system because such future use was foreseeable. In the alternative, she argued that even if component manufacturers do not have such a duty, in this case they voluntarily assumed a duty to warn because they provided certain warnings about such use.
The trial court entered summary judgment in favor of both defendants. The Appeals Court affirmed, holding that component manufacturers do not have a duty to warn of the risks of a system in which the components are used, and the manufacturers here did not assume that duty by issuing some warnings.
Component parts doctrine: The Appeals Court followed the Massachusetts Supreme Judicial Court’s use of the component parts doctrine from Mitchell v. Sky Climber, Inc., 396 Mass. 629 (1986). In Mitchell, the Court held that a component part manufacturer has no duty to warn “of a possible risk created solely by an act of another that would not be associated with a foreseeable use or misuse of the manufacturer’s own product.” Id. at 632. In applying the component parts doctrine from Mitchell, the Appeals Court here concluded that the assembly of the exposed tilt system by downstream actors (not the defendants) gave rise to the potential dangers. And because the defendants manufactured components that were not defective, they did not have a duty to warn installers or end users of the risks of the unguarded tilt system.
The Appeals Court also found that the defendants had not assumed a duty to warn based on having provided some warnings. The warnings the defendants provided did not suggest that it would be safe to be under the truck while the tilt system was engaged. And the Restatement of Torts specifically uses the example of a chassis that can be turned into any type of truck to underscore that the chassis manufacturer does not have a duty to warn of the risks of particular potential adaptions made by downstream actors. See Restatement (Third) of Torts: Products Liability § 5, comment d.
Clairmont v. Amer Sports Winter & Outdoor Co.
Summary: Defendant Amer Sports manufactured Solomon Gore-tex Contragrip ankle high hiking boots. The boots featured a “speed lacing" design, which included a J-shaped hole through which the boots’ laces passed. Plaintiff Francis Clairmont was wearing the boots during a shopping trip to the Derby Street Shoppes in Hingham, Massachusetts, when the lace of her left boot caught on the J-shaped hook of her right boot. Clairmont’s legs became tangled and she fell forward, injuring herself.
Clairmont sued Amer Sports for negligence, defective design, breach of warranty, and failure to warn. When Amer Sports filed for summary judgment, the primary issue was whether the plaintiffs were required to present expert testimony on whether the design of the speed laces was defective and whether there was a reasonable alternative design. The Superior Court, noting that whether the plaintiff’s case required expert testimony was a question of law that it could resolve, held that expert testimony was required and granted Amer Sports’ motion for summary judgment primarily on that basis.
Requirement of expert testimony in defective design claims: To establish a claim for defective design in Massachusetts, a plaintiff must show that the manufacturer “‘failed to exercise reasonable care to eliminate avoidable or foreseeable dangers to the user of the product.’” Clairmont, at *2 (quoting Morrell v. Precise Engineering, Inc., 36 Mass. App. Ct. 935, 936 (1994) (Rule 1:28 opinion)). Further, in claims alleging negligence in the defective design of the product (including claims of breach of the implied warranty of merchantability premised on defective design), the plaintiff must prove the existence of a reasonable alternative design that would have reduced the risk of injury, without undue cost or interference with the performance of the product. Id. (quoting Evans v. Lorillard Tobacco Co., 465 Mass. 411, 443-44 (2013)).
The plaintiff presented no expert testimony on whether the boots’ speed-lace design was defective or whether there was a reasonable alternative design, and argued that they did not need expert testimony to support their claim. The Superior Court disagreed, noting that “Massachusetts courts have routinely held that expert testimony in design defect cases is required.” Id. (and cases cited). The court noted that it is only in rare cases, where the alleged design defect is so simple or obvious that the jurors do not need technical assistance, that expert testimony is not required. Id. Because this case would have required the jury to consider, among other things, the biomechanics of a person walking in the boots, the Superior Court held that expert testimony was required to support the plaintiff’s negligence, defective design, and breach of warranty claims. Because the plaintiff presented no expert testimony, the Superior Court granted summary judgment in favor of Amer Sports on those claims.
Evidence of foreseeability in failure to warn claims: A manufacturer has a duty to warn only against “a foreseeable use of its product involving a hazard not apparent to the user.” Id. at *3 (citing Fegan v. Lynn Ladder Co., Inc., 3 Mass. App. Ct. 60, 63-64 (1975)). The Superior Court held that the plaintiff did not present any evidence that the speed laces posed a foreseeable risk, or a risk that could have been discovered through additional testing of the boots, and granted summary judgment for Amer Sports on the failure to warn count.


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Despite the federal policy favoring arbitration, prospective plaintiffs continue to push courts to reexamine the enforceability parameters of arbitration agreements. These efforts have met with some success in cases where the arbitration agreement designates a particular ·arbitral institution to resolve a dispute between the parties, and the designated institution no longer exists at the time an actual dispute arises.
This factual scenario has unveiled a degree of uncertainty in the meaning of the Federal Arbitration Act (“FAA”). The FAA provides that if “there shall be a lapse in the naming of an arbitrator … or in filling a vacancy, then upon the application of either party to the controversy the court shall designate and appoint an arbitrator[.]” 9 U.S.C. § 5. It is unclear from the statute whether the non-existence of an arbitral institution designated in an arbitration agreement to resolve disputes between the parties constitutes a “lapse in the naming of an arbitrator” such that the court is authorized to appoint a substitute arbitrator. If the designated institution’s nonexistence does not fall within the dictates of 9 U.S.C. § 5, then the court does not have the power to appoint a substitute. To do so would violate the long-established contractual principle that a party cannot be compelled to arbitrate a dispute that he or she has not agreed to submit to arbitration.
No definitive answer to this question has yet been reached. Some circuits have ruled that the choice of a designated arbitral forum is a material part of the agreement to arbitrate and, therefore, the court cannot legitimately appoint a replacement. See Flagg v. First Premier Bank, 644 F. App’x 893, 897(11 th Cir. 2016); Ranzy v. Tijerina, 393 F. App’x 174, 176 (5th Cir. 2010). Other circuits have reached the opposite conclusion and ruled that the unavailability of a named arbitral institution constitutes a lapse within the meaning of 9 U.S.C. § 5, and the court may, therefore, appoint a substitute. See Green v. US. Cash Advance Ill., LLC, 724 F.3d 787, 7 93 (7th Cir. 201 3); Khan v. Dell Inc., 66 9 F.3d 350, 356 (3d Cir. 2012).
In Moss v. First Premier Bank, 835 F.3d 260,265 (2d Cir. 2016), the Second Circuit ruled that the arbitral institution named in the parties’ arbitration agreement was the exclusive forum for arbitration regardless of whether the named institution was in existence at the time of the actual dispute. The contract’s mandatory language indicated that the parties contemplated arbitration only before the named institution. Id.
According to the Moss court, the language of 9 U.S.C. § 5 did not alter this conclusion because a “lapse in the naming of an arbitrator” refers only to a mechanical breakdown in the arbitrator-selection process, such as a time lapse in the naming of an arbitrator or in the filling of a vacancy on an arbitration panel. The statutory language could not be stretched so as to cover the non-existence of a designated arbitral institution. Moss, 835 F.3d at 266. To extend the statute in such a fashion would result in the court’s circumventing the parties’ contractual designation of an exclusive arbitral forum and wrongfully coercing a party to arbitrate a dispute which he or she had not agreed to so submit. Id. As a result, the court concluded that the nonexistence of the designated arbitral institution at the time of the parties’ dispute served to void the mandatory arbitration requirement. Id.
As Moss demonstrates, courts in several circuits do not allow the federal policy favoring arbitration as a means of dispute resolution to override the bedrock principle of freedom of contract. Counsel for prospective plaintiffs who seek to set aside a mandatory arbitration clause should keep this line ofreasoning in mind when formulating a litigation strategy.

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Decided December 5, 1978. Rehearing and Rehearing En Banc Denied December 28, 1978.
Randall D. B. Tigue, Minneapolis, Minn., for appellant.
Donald F. Paar, Asst. U.S. Atty., Minneapolis, Minn., for appellee; Andrew W. Danielson, U.S. Atty., Minneapolis, Minn., on the brief.
Before GIBSON, Chief Judge, LAY, Circuit Judge, and VAN PELT, Senior District Judge.
Appellant was convicted on two counts of a three count indictment alleging that he willfully and knowingly filed false income tax returns for the years 1971 and 1972 in violation of 26 U.S.C. § 7206(1). He appeals claiming error in various trial and post-trial rulings by the district court. We affirm.
Defendant-appellant admitted that he was a gambler-bookmaker in the Minneapolis-St. Paul area. The government alleged defendant failed to report income from his gambling activity for the years 1971, 1972 and 1973. Since the defendant had destroyed the records of his gambling activities, the government reconstructed his income through the use of the bank deposit-currency expenditure method. This method analyzes the deposits to both checking and savings accounts to determine whether they are income or non-income, then looks for indications of gambling receipts or moneys not deposited in such accounts but used to purchase various goods, and finally subtracts out cash withdrawals where there is no indication how the withdrawn money was spent. Using this method, the government alleged that defendant's taxable income for 1971 should have been $15,523.57 instead of the $6,520.77 reported by him, for 1972 should have been $25,848.82 instead of $12,462.00, and for 1973 should have been $41,004.17 instead of $10,367.00. The defendant alleged that he had accurately reported his gambling income on Schedule C of his tax return as miscellaneous income, that certain deposits to his parents' bank account represented repayments of loans, and that the $25,000 paid by his parents in cash to purchase a Dairy Queen in 1973 was not financed by him but was saved by his father from income never reported to the Internal Revenue Service. The jury was unable to reach a verdict at the first trial. A second trial was held and the jury found defendant guilty of filing a false return for the years 1971 and 1972, but was unable to reach a verdict with regard to Count III alleging unreported income for the year 1973.
5. Denying a motion for new trial on the basis of newly discovered evidence.
2. During the preindictment delay the only two witnesses who could have testified from direct knowledge as to defendant's father's financial status died.
There must be proof of actual prejudice before an indictment will be dismissed. United States v. Stacey, 571 F.2d 440, 443 (8th Cir. 1978). Proof of prejudice alone is not sufficient for dismissal of an indictment without consideration of the reasons for the delay. United States v. Lovasco, 431 U.S. 783, 790, 97 S.Ct. 2044, 52 L.Ed.2d 752 (1977).
It is questionable how much, if any, prejudice actually accrued to the defendant by the loss of these two witnesses. Defendant's father was an upholsterer who worked for a company during regular business hours and had a shop in his garage where he worked evenings and weekends. Appellant alleges that these witnesses were the only persons who had direct knowledge of how much money the shop in the garage brought in. Since part of defendant's defense was that deposits to his parents' account were the repayments of loans and that the $25,000 in cash paid by his father to purchase a Dairy Queen did not come from him, it was necessary to show that his parents could afford such expenditures. This was difficult where the father's Social Security earnings showed he had never reported more than $6,500 in any one year from his regular occupation. The first alleged material witness was Nicholas DeGidio. An affidavit from his wife indicated that DeGidio worked off and on for defendant's father for two years, primarily around holidays, for as long as a week at a time. The second alleged material witness was Leonard Schwartz. An affidavit from an acquaintance established that Schwartz did sewing work for defendant's father. Defendant produced approximately eighteen witnesses who testified concerning defendant's father's occupation, the long hours he worked, how fast he could work, the number of pieces they saw delivered per week, the number of frames sitting in his shop, the quality of his work, and the approximate price per piece which he might receive. In addition to this testimony, there were also witnesses who testified as to the type of furniture in the father's house, the meals which were served, and the toys which the children had as indicative of the family's wealth. It is difficult to conclude that these two witnesses would have been other than cumulative. Even the defendant's mother did not know their financial situation and was aware only that her husband kept a money box with cash in it which was found empty upon his death. Any prejudice to defendant was speculative at best. Further, the government presented the lower court with additional information regarding the delay. Judge Larson's Memorandum Order indicated that although the initial report was completed in October of 1975, further investigation occurred apparently during the first half of 1976 and the file was reviewed by regional counsel and by the Tax Division in Washington, D.C. before the government officially decided to prosecute the case. Lovasco, supra, drew a distinction between allowing the prosecutor leeway in deciding whether there is sufficient evidence to proceed and governmental delay which is undertaken to gain a tactical advantage. There is no indication here that the government intentionally sought to prejudice defendant's case. The fact that the defendant kept no records of his gambling activity and after an initial interview refused to talk with investigators upon the advice of his attorney, only served to lengthen the investigation and make the presentment of the case more difficult. We see nothing to indicate that this is the type of case which should be dismissed for preindictment delay.
Defendant made a motion for acquittal at the end of the government's presentation and at the close of all the evidence and renewed these motions after the jury's verdict. On appeal, he argues that the jury verdicts as to Counts I and II were not supported by the evidence and should be reversed. The evidence must be viewed in a light most favorable to the government, and we accept as established all reasonable inferences which support the conviction. United States v. Scholle, 553 F.2d 1109, 1118 (8th Cir.), cert. denied, 434 U.S. 940, 98 S.Ct. 432, 54 L.Ed.2d 300 (1977); United States v. Frazier, 545 F.2d 71, 74 (8th Cir. 1976), cert. denied, 429 U.S. 1078, 97 S.Ct. 823, 50 L.Ed.2d 798 (1977).
to the instant case, in which the prosecution's own expert conceded that the system would not be accurate, if the fact situations testified to by all witnesses at trial were in fact true.
Actually, all this amounts to is a credibility question which was resolved by the jury in favor of the government. As in United States v. Todwick, 410 F.2d 1202, 1204 (8th Cir.), cert. denied, 396 U.S. 841, 90 S.Ct. 105, 24 L.Ed.2d 92 (1969), which also involved a violation of 26 U.S.C. § 7206(1), the government presented substantial evidence which, if believed by the jury, would support the conviction. The defendant offered testimony which, if believed, would preclude the conviction. We have examined the record thoroughly. Without detailing all of the witnesses and exhibits, the record in general shows the government presented evidence that checks from several different sources were deposited to defendant's account or that of his family, including his future wife. At trial, some makers of these checks could not remember the circumstances under which they had given the check to defendant and some claimed not to know him at all. However, others admitted that the checks represented payment to defendant of a gambling loss. In computing the unreported income, the government included all of the checks deposited to various accounts by defendant unless the maker of a check specifically stated that it was repayment of a loan. In showing the volume of gambling business the defendant handled, the government presented a summary (which was not evidence or used to compute income) extracting all of the checks which were cashed by defendant at a certain restaurant and bar where the defendant accepted gambling bets. Between September and December, 1972, which is during the football season, defendant cashed over $11,000 worth of checks at the restaurant. It should also be pointed out that most gambling transactions are in cash, not checks, so the difficulty of pinpointing any specific amount of unreported income was enhanced. Defendant argues that only 10% of the checks should have been included as income since a bookmaker generally tries to even out his bets and after paying the winners he is left with the 10% "juice" fee charged losers. However, as the Internal Revenue Service agent explained at the trial, the money defendant paid out to winners was not shown anywhere as income, so if it were added in and then subtracted as a business expense, and then the losers' payments were added as income, the net result would be exactly the same.
Several witnesses, including defendant, testified that if a person placed a $50 bet with a bookmaker and lost, he would be required to pay $55, or 10% more than the bet. Defendant argued that in some instances a bookmaker might lose money because of uneven betting on events or simply because the losers did not pay, so the income would be even less than 10%.
Defendant also alleges that the government failed to follow all leads which might exculpate him as required by Holland v. United States, 348 U.S. 121, 135-36, 75 S.Ct. 127, 135, 99 L.Ed. 150 (1954). However, the Holland opinion indicates that government agents "did not bother to check petitioners' story . . . ." Id. at 135, 75 S.Ct. 135. Defendant here refused to discuss his gambling and gave very few "leads." An agent had two interviews with defendant during which time the defendant indicated he had received a loan totalling $5,000 from his father during 1970 and 1971 but that he could not remember what he had used the money for and did not think it had been deposited to a savings or checking account. He also mentioned a $5,000 loan from his wife's mother toward the end of 1972 which he used to pay for real estate. He admitted that some checks deposited to his account would have been from gambling and that some checks written to cash might have been to cover gambling losses. Defendant did not wish to further discuss his gambling with the agent. Defendant contended at trial that he had two gambling partners during the fall of 1972 and that he handled all of the money for the operation. The government independently contacted one of the gambling partners, but this person refused to talk with them. It should be noted that the bank deposit method does tend to indicate moneys received solely by defendant because any cash withdrawals are subtracted. In following leads, the government contacted numerous people who had written gambling checks or unexplained checks which the defendant cashed or deposited and several of these people were witnesses at the trial. Defendant maintains the government should have contacted witnesses concerning his father's independent upholstery business and financial affairs. However, none of the witnesses produced by defendant were specific or conclusive on the amount of the income made from this business. The petitioner's conviction related to the years 1971 and 1972. By that time defendant's father was no longer actively in business. His wife testified that after his second heart attack in the mid 1960's defendant's father took it easy. Most of the witnesses were testifying as to a time period in the 1950's or early 1960's. Whether defendant's father would have had any money left in the 1970's, after suffering two heart attacks, was speculation. The investigators had looked at defendant's father's Social Security records, income tax returns, and bank account. These did not reflect any great wealth. As stated by both Holland, supra at 138, 75 S.Ct. 127, and Esser, supra at 217, government investigators are not obliged to track down every remote lead a taxpayer might possibly offer. We believe both the investigation and evidence were sufficient in this case to sustain the conviction.
Defendant called a government witness as his own witness to testify to his character and reputation. This witness testified that defendant had always kept his word and all business dealings with him were honorable. The government was then allowed to inquire whether the witness was aware of whether the defendant had any felony convictions. The witness responded that he was aware that defendant had been convicted of burglary in 1958 in Minnesota and that the maximum penalty was zero to five and that the defendant had been sentenced for three years. Although it was not made known to the jury, the witness and the defendant had served time together in prison. Defendant's counsel was aware that the government was in possession of the information relating to defendant's prior conviction and the witness' knowledge of it.
Defendant had three different felony convictions for burglary. However, the witness was only aware of one, and the government did not inquire about the other two convictions.
Appellant argues that the district court did not make any finding at the trial that the probative value of the cross-examination exceeded its prejudicial impact, and that no cautionary instruction was given by the trial court to indicate that the testimony was admissible for the limited purpose of impeachment.
There is no way I would submit any curative instruction would enable a juror, in his own mind, to separate admitting a conviction for the basis of impeaching Mr. Anderson, and not considering it substantively for the character of the defendant, for which it is clearly inadmissible.
Thus, not only did defendant's counsel not request a limiting instruction, but indicated that such instruction would not be beneficial. The trial court permitted the questioning on the basis of Michelson v. United States, 335 U.S. 469, 69 S.Ct. 213, 93 L.Ed. 168 (1948); United States v. Burgard, 551 F.2d 190 (8th Cir. 1977); and Fed.R.Evid. 405(a). See also United States v. Evans, 569 F.2d 209, 210 (4th Cir.), cert. denied, 435 U.S. 975, 98 S.Ct. 1624, 56 L.Ed.2d 69 (1978); 2 Weinstein's Evidence ¶ 405 at 405-20 and ¶ 405 at 405-40. We believe the questioning which occurred was proper. The trial court recognized in its post-trial memorandum that the better practice is for the court to instruct the jury as to the limited purpose of the conviction even without a motion by the defendant. However, under the specific fact situation occurring here, any error was in large part induced by defense counsel's own actions and a new trial is not warranted.
There is no indication that the trial judge did not weigh the probative value against the prejudice. His post-trial memorandum specifically concluded that defendant's convictions for burglary related to defendant's trustworthiness and the value of the witness' opinion. The court refused to allow the government to introduce copies of the conviction records, and indicated the scope of the inquiry must be limited and directed to the character testimony. We conclude no error occurred in this respect.
Under the Internal Revenue Code, a person's gambling losses are deductible from his income, up to the extent of his gambling gains.
Although not verbatim, this is in substance a provision of the Internal Revenue Code. See 26 U.S.C. § 165(d). The district court in its memorandum opinion said that the requested instruction correctly stated the law but felt that it was unnecessary in light of the government's method of proof. As explained earlier in part II of this opinion, the government's bank deposit-currency expenditure method tended to show only the net income to defendant. Defendant attempted to discredit this method of proof by bringing in a former IRS agent who took out all the items of income he felt were not income, then subtracted out a percentage of items that he considered were questionable. If the items defendant's expert labelled as "nonincome" were subtracted out, defendant was still shown as underreporting his income for all three years. If an additional percentage was subtracted for questionable items, the expert's calculations showed defendant's income underreported for 1971 and 1973 by a total amount of only $3,200. These summaries prepared by defendant's expert were admitted only for illustrative purposes. Defendant's expert testified that he had not considered an alleged $5,000 loan in 1971 from defendant's father and if the loan were made it would decrease the income for 1971 to less than that shown on the tax return. In order to discredit the government's proof, the expert made no use of any theory concerning gambling losses. The defendant took the stand and testified on his own behalf. He at all times maintained that he had accurately reported all gambling income and that he had kept a notebook with a running total of his profits on a back sheet while the weekly records were destroyed. The defense did not turn on specifically claimed losses. Instead, it tried to impress upon the jury that in order for defendant to have made the profit the government claimed, he would have had to have done an enormous business since his income was limited to 10% or less of the total amount of bets placed.
The actual notebook, however, had been destroyed prior to trial. Defendant indicated once his tax return was prepared he threw it away because he had no further need for it and was concerned about being arrested for gambling.
This appears to be a case of first impression regarding whether, in the absence of specific proof of losses, it is reversible error not to have given an instruction dealing with the deduction of losses. We believe that the better practice would have been to give the instruction but in view of the evidence in this case it was harmless error. The defendant's prime defense was that he had always reported all of his income. The bank deposit method of proof is recognized as an appropriate way to show additional income, and it was up to the jury to determine whether these items truly reflected additional income or were questionable as defendant's expert contended. We conclude that defendant received a fair trial, and was not prejudiced.
A 1970 document relating to an Internal Revenue audit of defendant's father was produced at the trial which bore the signatures of both defendant's father and mother. Defendant testified his father was not told about the audit because of his health. In closing arguments, the prosecutor pointed out to the jury that both the husband and wife's signatures appeared on the document. The defense counsel then argued that the jury should compare the signatures on the document and urged the jury to find that both signatures were made by defendant's mother. The newly discovered evidence which defendant claims he has is a handwriting analysis which would presumably show the signatures to be made by the same person. Like the trial court, we believe that this does not constitute newly discovered evidence. See United States v. McColgin, 535 F.2d 471, 476 (8th Cir.), cert. denied, 429 U.S. 853, 97 S.Ct. 145, 50 L.Ed.2d 128 (1976), for the five prerequisites which must be met before a new trial can be granted on the grounds of newly discovered evidence. Defendant's theory was before the jury in closing arguments. We do not deem it so crucial a point that it would probably produce an acquittal.
For the foregoing reasons, the judgment appealed from is affirmed in its entirety.


D.C. Law Library - § 47–308.02. Relevant performance measures.
↪ § 47–308.02. Relevant performance measures.
§ 47–308.03. Performance accountability reporting.
(a) Each relevant performance measure must be linked to spending on the relevant activity.
(b) Each relevant performance measure shall represent a significant and realistic challenge for expected performance of the activity.
(c) Each agency shall have at least one relevant performance measure for each activity.
(d) Relevant performance measures for each fiscal year, shall be established by the Mayor or his designee, after consultation with the agency’s stakeholders.
(e) Beginning with fiscal year 2007, and for each subsequent fiscal year, all relevant performance measures for the prior fiscal year shall be provided to the Council in January along with the performance accountability reports submitted pursuant to § 1-614.13, and beginning with fiscal year 2008, and for each following fiscal year, all relevant cost drivers shall be provided with the relevant performance measures in accordance with § 47-308.03(e).
(f) Beginning with fiscal year 2008, and for each subsequent fiscal year, the Mayor, or his designee, shall, in consultation with an agency’s stakeholders, establish relevant performance measures and utilize these performance measures in the agency’s strategic business plan.
D.C. Law 16-191, in subsec. (e), substituted “§ 1-614.13” for “ § 1-614.13 ”.
For temporary (90 day) addition of section, see § 1006(c) of Fiscal Year 2006 Budget Support Emergency Act of 2005 (D.C. Act 16-168, July 26, 2005, 52 DCR 7667).


text:
The mission of EWCA is to integrate universities in Europe into a framework for exchanging ideas and establishing an infrastructure for Writing Center goals, practice and scholarly research.
The European Writing Centers Association [EWCA] was founded in Spring 1998 by Dr. Anna Challenger and Dr. Tracy Santa. As EWCA was the first Regional Affiliate to be added outside of US borders, its formation and recognition contributed to the US-based National Writing Centers Association [NWCA] changing its name to IWCA. The EWCA held its first international gathering in Bulgaria [March 2000] where the focus was on: The Relation of Writing Centers to Writing Across the Curriculum Programs. This event was sponsored by the American University in Bulgaria. Following the Co-project, European Association for the Teaching of Academic Writing [EATAW] & EWCA Conference in Groningen, the Netherlands , in June 2002, EWCA held an international workshop on Writing Centers and Peer-Tutor Training in Halkidiki, Greece, sponsored by the American College of Thessaloniki. Workshop participants were from institutions of higher education in Greece, Turkey, Bulgaria, Sweden, and the United States. This was a search conference for the EWCA Board members. What followed the formation of the first EWCA Board was representation at the EATAW Budapest Conference, Hungary  where EWCA's new action plan, including a revised website, listserv, exchange programs, and small annual international conference/ seminars, was announced.
The first academic event in line with the action plan introduced in Budapest was the Regional Writing Centers Seminar: How Do We Make Writing Centers Matter to Bilingual Communities? hosted by Sabanci University Writing Center in Istanbul, Turkey [April 16-18, 2004]. The EWCA Board members' interaction with the 84 regional and international guests and participants of this seminar served for the design of the EWCA 2005 Conference in Halkidiki, Greece.
EWCA 2005 - Local Practice, Global Vision in Halkidiki Greece [June 17-19, 2005] was again a small conference with high spirits and a meaningful message for fostering our longing and reinforcing our skills to value and honor a uniqueness in every participant of the academic gatherings as well as every member of the writing and Writing Center community [Please click EWCA 2005 for details].
With its same mission to foster Writing Center awareness and institutional collaboration among Writing Centers, high schools, and various communities including the business world, EWCA designed the EWCA 2006 Conference Connecting the Dots, hosted by Bogazici University, Istanbul, Turkey, on June 24-26, 2006 [Please click EWCA 2006 for details on the program. You can find the Press Release for EWCA 2006 with the numbers of participants on this Website’s Archives].
EWCA 2008 - Initiating Writing Center Work - Connecting Secondary, Higher, and Professional Education was hosted by Freiburg University, Freiburg, Germany on June 19-22, 2008. Writing tutors’ contributions in the design of many activities and performance were appreciated by the European and US scholars in the field.
EWCA 2010 which celebrated the EWCA's 12th birthday and our 7th international gathering of a community of scholars, professors, administrators, students, writing center tutors, and professionals, was held at the American University of Paris, France on May 24 - 28, 2010 with important names as keynotes.
EWCA 2012 - Creating Communities of Collaboration: Writers, Learners, Institutions in Blagoevgrad on May 6 - 9 was held at the American University in Bulgaria, where EWCA had its first international gathering in March 2000. This event provided a chance to discuss issues of space, time, vision, and scope, as well as variety of activities from both local and global dimensions within EWCA’s 14 years of growth. Writing peer tutors’ contributions to the spread of the Writing Center phenomena and practice were highlights to make the EWCA Executive Committee think about inviting a peer tutor to the Committee for membership as their voice.
EWCA 2014 - Let’s Peer across Borders - Writing Centers in Motion was hosted by the European University, Viadrina, Frankfurt (Oder), Germany on July 19th - 22nd. A Peer Tutor Day as a pre-conference event, a peer tutor slot, and a keynote of a peer tutor were opportunities to get connected with peer tutors in discussions related to writing. The hosts of the conference share their impressions in their blog.

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