Product Liability Update - January 2013

First Circuit Holds Unfair and Deceptive Practices Claim Precluded by Judgment for Defendant in Earlier Product Liability Action in Which Plaintiff Did Not Appeal Denial of Leave to Assert Claim and Which Involved Same Issues and Evidence

In Hatch v. Trail King Industries, Inc., 699 F.3d 38 (1st Cir. Nov. 2, 2012), plaintiff was paralyzed after a hydraulically operated drop gate on the trailer he operated fell on him, and sued the trailer manufacturer in the United States District Court for the District of Massachusetts alleging negligence, breach of the implied warranty of merchantability (the Massachusetts near-equivalent of strict liability) and loss of consortium. After the deadline for completing fact discovery and after defendant moved for summary judgment, plaintiff moved to amend the complaint to add claims under Mass. Gen. L. ch. 93A, § 9 (the Massachusetts unfair and deceptive practices statute) based on defendant's alleged breach of warranty and other conduct. The court denied plaintiff's motion as untimely. Shortly thereafter, plaintiff filed a new action in Massachusetts Superior Court asserting the same ch. 93A claims. Defendant removed the case to federal court and moved to dismiss based on the proceedings in the original action or, alternatively, to stay the new action pending resolution of the original one. With plaintiff's assent, the court granted a stay, the original action proceeded to trial and the jury returned a defense verdict. Plaintiff appealed the judgment, but not the court's denial of his motion to amend the complaint, which was affirmed by the United States Court of Appeals for the First Circuit (see October 2011 Foley Hoag Product Liability Update).

The district court then turned its attention back to plaintiff's stayed ch. 93A action in which defendant's motion to dismiss was still pending. The court granted the motion, holding plaintiff had engaged in impermissible claim-splitting and that, in any event, there was no basis for the court to find plaintiff's ch. 93A claims had merit when the same evidence and issues had been presented to and rejected by the jury in the original action. Plaintiff appealed, arguing that ch. 93A, § 9(8) - which provides that “failing to recover an award of damages or other relief in any . . . judicial proceeding, except proceedings authorized by this section, . . . shall not constitute a bar to . . . relief authorized by this section” - excludes claims under ch. 93A, § 9 from the normal rules of claim preclusion.

The First Circuit affirmed, holding that, under either federal or state law, plaintiff's ch. 93A claim was precluded on account of his failure to appeal the district court's denial of his motion to amend the complaint in the original action to add that claim. Under federal law, the denial of a motion to amend constitutes a binding adjudication on the merits of the claims that were the subject of the proposed amended pleading. Here, plaintiff made strategic choices to try to add the ch. 93A claim more than eight months after the deadline for amending the pleadings and four months after discovery had closed, and not to appeal the district court's denial of his motion to amend, and plaintiff was required to live with his choices absent a strong countervailing interest not present here. Plaintiff's ch. 93A claim also was precluded under Massachusetts law, notwithstanding the language of ch. 93A, § 9(8). Although the Massachusetts Supreme Judicial Court had never interpreted that language, the First Circuit held that nothing in the subsection operated as an exception to the normal rules of claim preclusion, especially where plaintiff had been given ample opportunity to amend his complaint but failed timely to do so, and did not appeal the denial of his untimely motion.

Finally, the court rejected plaintiff's argument that defendant acquiesced to the separate ch. 93A action through its efforts to keep the ch. 93A claim out of the original action, and thus should be estopped to assert a preclusion defense. The court found defendant's positions were neither inconsistent nor designed to mislead the district court.

First Circuit Holds Indemnity Judgment Against Supplier of Tainted Meat Supported by Sufficient Evidence, Including Videotaped Deposition Testimony of Supplier's Former Expert ThatSupplier Was “Probable” Source of the Meat

In Long v. Fairbank Reconstruction Corp., 2012 WL 5871043 (1st Cir. Nov. 21, 2012), thirty-two people in the northeastern United States were sickened by an outbreak of E. coli that was traced to defendant's meat processing facility in...