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Businesses are smart and often will do anything to avoid litigation. Many businesses now include an arbitration clause in their contracts—requiring claims to be resolved out of court. However, in a recent case, a state’s supreme court found that even though a contract included an arbitration clause, it would not be enforced because the business waived its right to arbitration.

A woman placed her mother in a nursing home. When she enrolled her mother, she signed an arbitration agreement with the home. Later, she requested access to her mother’s medical records. The nursing home refused, citing privacy laws. The two parties continued the dispute in court. Two years later, her mother passed away.

After her mother’s death, the woman filed a notice of intention to file a wrongful death action against the nursing home. The nursing home asserted arbitration as a defense but did not require that the case be moved to arbitration at that time. Instead, it continued with the case in court, including appearing in court several times and responding to discovery. The plaintiff responded that the home had waived its right to arbitration because it had never requested arbitration during her case requesting her mother’s records. Soon afterward, the home argued that the case had to be moved to arbitration. The plaintiff argued that the home waived its right to arbitration by participating in discovery and appearing multiple times in court.

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In June 2016, an appellate court in Pennsylvania ordered a lower court to reverse its order granting $28 million in damages to a plaintiff who sustained injuries associated with a Zimmer-Biomet brand knee implant device. According to the complaint, the plaintiff was injured when she filmed a promotional video for Zimmer. She had received a knee replacement in 2006, using one of its Gender Solutions devices. In the video, she was instructed to engage in a variety of physical activities, including riding a bike and running on a treadmill.

The complaint contained causes of action for negligence, alleging that as a result of the commercial the plaintiff required three revision surgeries. Her husband also filed a cause of action for loss of consortium. To prevail in a cause of action involving a medical device on a negligence theory, the plaintiff must demonstrate that the manufacturer owed the plaintiff a duty of care, that the manufacturer breached that duty, and that the plaintiff suffered injuries as a result of the breach. In general, product manufacturers owe a duty to consumers to use reasonable care when designing, manufacturing, and marketing their products. This includes providing appropriate warnings and instructions about the safe use of a product.

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The first batch of cases in the Xarelto multi-district litigation are set to go forward in early 2017. Situated in the Eastern District of Louisiana, the multi-district litigation includes numerous cases from plaintiffs alleging that they suffered serious injuries as a result of taking Xarelto, an anti-coagulant drug manufactured by Johnson & Johnson. A multi-district litigation, or MDL, is similar to a class action in that multiple claims are grouped together when there are sufficient similarities. Unlike in a class action, however, the plaintiffs in an MDL maintain their status as separate cases, and each plaintiff must still prove his or her individual case. Damages are not awarded to the class in general but are awarded to each plaintiff depending on the strength and merit of each individual case.

In early 2017, about four so-called bellwether cases will be tried. A bellwether case is a term used in MDL actions to describe the initial test cases that are litigated in the action. These cases typically represent common factual scenarios and damages suffered by the broader group of cases in the MDL. The outcome of these bellwether cases will serve as guidance for the parties as they negotiate a global settlement of the claims. The first two cases will be tried in Lousiana, with the third trial taking place in Mississippi and the final bellwether trial for 2017 taking place in Texas during late spring 2017. These dates are tentative and could be revised or canceled during the coming months as the parties perform discovery and prepare for the trials.

The drug was intended to serve as an alternative to Warfarin and was initially prescribed in cases involving patients who received knee surgeries or hip replacements. It was also prescribed as a way to fend off deep vein thrombosis and to prevent strokes in patients experiencing atrial fibrillation. A number of reports quickly arose indicating that patients suffered serious complications after taking Xarelto. As a result, the U.S. Food and Drug Administration issued multiple black box warnings for the drug.

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In a case that was decided earlier this year, a man was killed after he became intoxicated at a restaurant and got into a car accident. The man was driving 79 miles per hour in a 30-miles-per-hour zone when he crashed his car. After the accident, the man’s family brought suit against the restaurant, alleging that the restaurant engaged in negligent, willful, wanton, and reckless conduct by selling and serving alcohol to the man, and that their conduct caused his death. That evening, the man had been at the restaurant from about 2 PM until almost 9 PM. Witnesses observed him being loud and slurring his words. He bought 12 drinks at the restaurant that day.

The plaintiff, a representative of the man’s estate, filed a complaint and an affidavit, as required by the state’s law. The affidavit had to describe the facts upon which the case was based, and the plaintiff based it on information gathered in the investigation. The defendants argued that the affidavit was insufficient because it was not based on personal knowledge. The plaintiff, the administrator of the man’s estate, was not present at any time during the incident. However, the court found that the plaintiff’s affidavit was based upon “information and belief” from information gathered from witness statements, a police report, and a toxicology report—and that this knowledge was sufficient.

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Court Upholds $3 Million Verdict for Failing to Warn of Birth Defects

According to one news source, a court of appeals recently upheld a $3 million verdict against a subsidiary of Johnson & Johnson after a baby was born with severe birth injuries as a result of medication taken during the mother’s pregnancy. The baby’s parents brought a claim against the company, and the jury found the company liable for failing to warn the mother’s doctors of the risk of birth injuries if she took Topamax during her first trimester.

The mother took Topamax, a drug prescribed to help prevent seizures and migraine headaches. While she was pregnant, she took the drug to treat migraines—but she did not know of the dangerous effects it could have on her baby. Research has shown that 3.8 percent of children exposed to Topamax in utero during the first trimester have oral birth defects. In particular, cleft lip and cleft palate are known risks.

The couple’s daughter was born with a bilateral cleft palate and lip. The girl has had to undergo over 14 procedures, including surgeries, to treat the birth defects. She has also suffered hearing loss, speech difficulties, and bullying because of her speech and appearance. The parents were awarded $1.5 million for future health care expenses, and their daughter was awarded $1.5 million in non-economic damages.

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California’s Office of Environmental Health Hazard Assessment has released a new set of revisions to its proposed overhaul of the state’s Prop 65 product labeling law. This effort is the first significant modification to the label, which must be appended to certain products and product shelf spaces, in several decades. The new warning label has been under development since 2013.

According to Prop 65, manufacturers must label products that contain a significant level of toxic chemicals deemed to pose health hazards to consumers, particularly cancer. Similarly, retailers must include a notice on shelving next to these products, further alerting consumers about the potential risks. As a result, manufacturers and product sellers doing business in California must conduct thorough tests and investigations into the chemicals that are present in their products.

OEHHA administers Prop 65 in California and maintains a list of the toxic chemicals that will require a manufacturer to include a warning. The list also provides the minimum levels at which a label will be required. In some cases, a trace amount of a toxic chemical present in a product will not require a label. There are a wide variety of chemicals on the list, including both naturally occurring and synthetic ingredients.

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Normally, the only people liable for an abused elder’s injuries are those who engaged in the abuse or were responsible for his or her care. However, a recent case found that even those who were not responsible for the patient’s care but failed to report suspected abuse could still be held liable.

In 2009, an elderly woman died in an adult family home from morphine intoxication. Her death was ruled a homicide, and her estate brought a claim against several people who took part in taking care of her. In addition, they sued two nurses who were not involved in her care but failed to report the suspected abuse.

Evidently, two of the home’s nurses were alleged to have observed signs of abuse and physical assault, which should have been reported to the Department of Social and Health Services and to the police. One of the nurses heard a thud in the patient’s room and saw the patient lying on the floor. She was told by the patient’s caregiver that she “falls a lot” and that she would call the home’s owner. The other nurse was told by another person that the patient’s caregiver was giving her morphine, which she had not been prescribed.

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Pennsylvania- and Germany-based company B. Braun Medical has agreed to pay nearly $8 million after being accused of selling saline syringes fraught with contamination. Braun purchased the syringes from Am2Pat, a manufacturing company, even though it had acquired information prior to the purchase indicating that the syringes suffered from manufacturing issues at the plant in North Carolina where they were produced. Two months after Braun purchased the syringes, it initiated a recall based on information indicating that the radiation sterilization process used caused the saline to develop particulates.

Following the recall, Am2Pat stated that it had not provided correct information to Braun before the sale of the syringes. According to this information, the manufacturing company had installed new equipment at its plant without first ensuring that the equipment was in good working order following the move. Despite this provision of information, Braun started purchasing saline syringes from Am2Pat again and did not conduct its own independent inspection of the manufacturing facility prior to doing so.

Roughly one month later, the syringes were found to contain a dangerous bacteria called Serratia marcescens. Patients in New York, Texas, California, and Nebraska reported experiencing illness and contamination as a result of using the syringes. A second recall of this batch of syringes was also initiated.

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Employers can be held liable for their employees’ actions under the theory of respondeat superior. This theory generally holds that an employer is vicariously liable for the acts of its employees. In addition, employers can also be held liable for negligent hiring, retention, or entrustment involving their employees.

Negligent Hiring

A claim based on negligent hiring is based on the fact that an employer negligently hired or retained an employee. A lawsuit resulting from negligent hiring can arise if an employer hires an employee whom the employer knew or should have known was not fit for the position. That is, the employee was placed in a job that would likely have posed a danger to others. An employer must take reasonable efforts to investigate a potential employee. This depends on the facts and circumstances of each case, but an example might be an employer that hires an individual who has been convicted several times of violent crimes for an armed security guard position.

A negligent hiring claim may be successful even if the act committed by the employee is outside the scope of the employment, which is one aspect that distinguishes it from a general negligence claim. This is because the focus is on whether or not the hiring or retention of the employee was negligent. However, there still must be a causal connection between the employer’s negligence and the injuries that occurred.

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The United States Supreme Court recently handed down an opinion that may have broad implications for class action lawsuits. In Spokeo, Inc. v. Robins, the defendant maintained a search engine that allowed users to search specifically for people through its database. Employers could use the site to gain information about job applicants before deciding whether to hire them. The plaintiff discovered that the profile Spokeo provided for him contained numerous mistakes and other improper information. He brought a federal class action lawsuit against Spokeo, stating that it did not comply with the federal Fair Credit Reporting Act.

The lower court dismissed the lawsuit, stating that he had not adequately pleaded that he had suffered an actual injury as a result of the incorrect information in his profile. According to federal pleading standards, a plaintiff must establish that he or she has suffered a cognizable injury before being deemed entitled to compensation. This is known as the injury in fact requirement.

On appeal to the Ninth Circuit, the court reversed, finding that the plaintiff and other class members had an interest in how Spokeo handled their credit information. This was sufficient to establish an injury in fact, the court concluded.

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