PLAINTIFFS CANNOT RELY ON EXPERTS TO SAY WHAT AN ORDINARY CONSUMER’S EXPECTATIONS WOULD BE IN A PRODUCTS LIABILITY CASE

    In Mansur v. Ford Motor Company, the Court of Appeal ruled that a trial court did not have to instruct the jury that it could use the “consumer expectations test” to determine if a vehicle design was defective in a products liability case, because there was not enough non-expert evidence as to what an ordinary consumer would have expected of the safety of the vehicle.

    Omeedeh Mansur was killed when her 1996 Ford Explorer rolled over, causing the vehicle’s roof to be crushed and pushed against her head during the accident.  Ms. Mansur’s family sued Ford for strict product liability and other claims. The jury returned a verdict for Ford Motor Company, and prevented Ms. Mansur’s family from using the consumer expectations test to prove that the Explorer was defectively designed.

    The consumer expectations test is one method by which a plaintiff can prove that a product was defectively designed.  This test requires a jury to simply ask whether the product performed as safely as an “ordinary consumer” would expect when it was used in an intended and reasonably foreseeable manner.  Ford argued that Ms. Mansur’s family could not be allowed to rely on this test because a vehicle’s stability, roof strength, and other characteristics are beyond the experience of an ordinary consumer.  Ms. Mansur’s family argued that Ford was trying to improperly limit what it could present at trial.

    The Court of Appeal agreed with Ford.  If a product is one that is “within the experience of ordinary consumers,” then a plaintiff can establish a design defect by presenting evidence about (1) the consumer’s use of the product, (2) the circumstances surrounding his or her injury, and (3) the objective features of the product relating to its safety.  While this test obviously relies on what a jury would consider to be the experience of “ordinary consumers,” expert witnesses cannot be used to prove what a non-expert, “ordinary consumer” would or should expect of a specific product.

    Here, plaintiffs did not present sufficient evidence from non-experts about the objective safety features of the Explorer, therefore, the consumer expectation test would not apply.  Although Ms. Mansur’s family argued that Ford had advertised the Explorer as a “family vehicle,” this marketing strategy was simply too vague to give a consumer any insight as to the “objective features of the product which are relevant to an evaluation of its safety.”  The mere fact that the Explorer was described as handling differently than an ordinary car was not enough to make an ordinary consumer think that the Explorer would never rollover, or that its roof was designed to handle a rollover accident.

    Manufacturers of products, from automobiles to appliances to sporting equipment, can protect themselves from having a jury decide if their products are defectively designed based on a plaintiff-friendly, “consumer expectation” test at trial.   By avoiding any puffery statements regarding the safety features of their products, and by including clear warnings regarding their use, manufacturers can help prevent questions of what an “ordinary consumer” would expect from arising in a product liability claim. 

Tick-Tock—Tick Tock : Scheduled Overnight Shifts Not Entitled To Split Shift Pay

In Securitas Security Services USA, Inc. v. Superior Court (Holland) B227950 (July 7, 2011), the California Court of Appeal recently (and rationally) held that employees who work overnight shifts that begin on one workday and conclude on the next – but which are not interrupted by unpaid, non-working periods—are not working “split shifts” as defined by the applicable Industrial Welfare Commission Wage Order. As such, they are not entitled to overtime pay.

The plaintiffs are security guards who alleged a failure to pay split shift pay, among other violations. The alleged split shift at issue was: Working consecutive overnight shifts starting in the evening, and ending in the morning. Securitas (the employer) defined its workday to begin at midnight each day and ending the following midnight. As a result, the employees argued that by starting one shift in the evening (e.g., 10:00 p.m.) and ending the shift in the morning (e.g., 6:00 a.m.); they were working “split shifts.” Thus, if the employee again began work the next evening (albeit on the same workday some 16 hours later), they should be entitled to overtime pay.

The Court of Appeal appropriately rejected the plaintiff’s interpretation and held that split shift pay need not be paid in such circumstances involving “cross-over” or consecutive overnight shifts.

This is good news for California employers, such as security companies, who utilize a 24-hour workforce.

Under California law, employers must pay an additional hour’s pay for workdays where employees work a “split shift”. Wage Order No. 4 defines a “split shift” as “a work schedule” that is interrupted by non-paid nonworking periods established by the employer, other than bona fide rest or meal breaks. (Cal. Code Regs., tit, 8 Sec. 11040, subd.2(Q).)

A “shift” is defined as “designated hours of work by an employee, with a designated beginning and quitting time.” (Cal. Code Regs., tit.8 Sec. 11040, subd.2(P).)

A “workday” is defined as “any consecutive 24-hour period beginning at the same time each calendar day.” (Id., sub. 2(T).)

In this case, the plaintiffs’ filed a class action and alleged that Securitas failed to pay mandatory split shift time. Securitas moved for summary adjudication and argued that an uninterrupted work shift spanning from midnight and falling on two days was not a split shift. The trial court denied Securitas motion, and Securitas appealed. The Court of Appeal agreed with Securitas and held that “work schedule” is not tied to the definition of “workday.” Instead, a work schedule “simply means an employee’s designated working hours or periods of work.” Accordingly, consecutive overnight shifts that overlap a defined “workday” do not create split shift because the “shift” is a contiguous block, even though it overlaps a “workday.”

(However, the Court did not find that Securitas was entitled to summary judgment after all, because there were triable issues of act as to whether some putative class plaintiffs had worked split shifts in other circumstances falling within the IWC wage order definition.)

LESSON: It is okay to have your employees work a regular 8 hour shift, even if the shift crosses over to the new workday. So long as the employee only works 8 hours during that shift, there is no need to pay for overtime.

Bradley & Gmelich
700 N. Brand Blvd.
10th Floor
Glendale, CA 91203
T. (818) 243-5200
http://www.bglawyers.com/

*BREAKING NEWS: CALIFORNIA SUPREME COURT UPHOLDS HANIF DECISION REGARDING MEDICAL DAMAGES*

Under the earlier decision in Hanif v. Housing Authority (1988) 200 Cal.App.3d 635, a plaintiff could not collect damages for incurred medical expenses which were in excess of the amounts actually paid by a plaintiff’s health care insurers.  In that case, the Court of Appeal ruled that “[t]o be recoverable, a medical expense must be both incurred and reasonable.”

The plaintiffs’ bar challenged the longstanding Hanif rule in the case of Howell v. Hamilton Meats & Provisions, Inc. (August 18, 2011), arguing that a plaintiff should be entitled to recover the full amount of medical costs billed, regardless of whether that amount was actually paid by his health care insurer (whether government or private).   Earlier today, the Supreme Court rejected this argument, and upheld the Hanif decision.

In Howell, plaintiff Rebecca Howell was seriously injured in an automobile accident which had been negligently caused by a driver for defendant Hamilton Meats & Provisions, Inc.  At trial, Ms. Howell’s husband and her surgeon testified that Ms. Howell had been billed a total of $189,978.63 for her medical care.  The jury awarded Ms. Howell the identical amount in damages for her past medical expenses.  Defendant Hamilton then asked the trial court to reduce this damages award by $130,286.90, and presented evidence that plaintiff’s health care provider, PacifiCare, had paid only $59,691.73 as full payment for her treatment.  The trial court reduced the judgment, but the Court of Appeal reversed the trial court’s order.

Plaintiff argued that the Hanif ruling did not apply to situations involving private health insurance, and the Supreme Court rejected her argument.  Because her health care providers had accepted discounted amounts as full payments of the medical costs billed pursuant to preexisting agreements with PacifiCare, the Court ruled that Ms. Howell “cannot meaningfully be said ever to have incurred the full charges.” 

The Supreme Court held that “an injured plaintiff whose medical expenses are paid through private insurance may recover as economic damages no more than the amounts paid by the plaintiff or his or her insurer for the medical services received or still owing at the time of trial.”  Also, the Court ruled that evidence of such lower amounts is relevant to prove a plaintiff’s damages for past medical expenses and, assuming it satisfies other rules of evidence, is admissible at trial. Further, “evidence of the full billed amount is not itself relevant on the issue of past medical expenses,” and if a jury hears evidence of the actual amount paid and awards a greater sum, the defendant may move for a new trial based on an excessive damages award.

With this ruling, defendants in personal injury lawsuits should continue to investigate the true extent of medical damages claimed by personal injury plaintiffs.  If a plaintiff or a plaintiff’s health care insurer has enjoyed the benefit of a discount from a medical care provider, then a defendant can reap the benefits of that discount, as well.   Defendants will continue to be able to use the lesser amount to their advantage in settlement negotiations and trial.

Bradley & Gmelich
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Floor 10
Glendale, CA 91203
Phone (818) 243-5200
Fax (818) 243-5266

EMPLOYMENT CASE NOTE: TRADE SECRET AGREEMENTS

If you own a business in California, you likely already know that, generally speaking, non-competition clauses are unenforceable in the employment context.  However, employers could usually find solace in trade secret and non-solicitation agreements.  These agreements are designed to prevent current and former employees from stealing trade secrets and contacting your clients in an attempt to divert business.  Unfortunately, in the recent case of The Retirement Group v. James Galante, et al. the California Court of Appeals dealt another blow to the business community trying to protect its intangible assets by placing limits on the enforceability of such agreements.  

            There are two competing concepts under California law regarding protection of businesses trade secrets and client lists.  First, California courts refuse to enforce most "noncompetition" agreements.  However, California courts have also held that a former employee may be barred from soliciting existing customers to redirect their business away from their former employer to the employee's new business if the employee is utilizing trade secret information to solicit those customers.

           

            In the Retirement Group case, the former employer was attempting to enforce an injunction preventing the employee from contacting former clients.  The court determined that the issue was not whether the employee was contacting former clients, but rather whether he misused trade secrets in doing so.  Accordingly, the courts are indicating that the only circumstances under which it will issue an injunction to stop employees from contacting former clients to solicit their business is when the employee is violating trade secret laws to do so.  Note that the term “trade secret” has a very specific definition under California law (a trade secret is information that derives independent economic value from not being generally known to or discernable by the general public or to persons skilled in the trade).  Additionally, employers must take affirmative steps to protect their trade secrets.  Not all client lists are considered trade secrets.

            As usual, the best offense is a good defense.  It is time to review your trade secret and non-solicitation agreements to ensure you can get the maximum protection provided under the law.  Contact our business consultants to schedule a review of your current business and employment practices.

Bradley & Gmelich

700 N. Brand Blvd.

Glendale, CA 91203

(818) 243-5200

www.bglawyers.com