Starting New Blog – LawRiskGov – Please Follow Me There

I will be switching over to a new blog, http://lawriskgov.com. The new blog exists but I am working on the look, format and color. Future posts will be to the new blog. I may not be able to carryover the posts from this blog to the new blog, but this blog will still exist. Please follow me to the new blog. Thank you.

Dave Tate, Esq. (San Francisco)

Holding the Line on Charging Older People Higher Insurance Rates Under the Patient Protection and Affordable Care Act

Limit on health insurance rates for older (over age 50) adults limited to 3 times the rates for younger adults under the Patient Protection and Affordable Care Act, Click Here for Article.

Companies Reporting Hacking

Companies are more often publicly reporting hacking, according to article, Read Here.

Persuade With Participation, Part One: Learn from Early Rhetoric – From the Persuasive Litigator

An interesting discussion about persuasion from the Persuasive Litigator, Click Here.

Failed Bank Litigation Against Officers and Directors- D&O Diary Link

The following is a link to the D&O Diary for February 18, 2013, re failed bank litigation update including actions against officers and directors, Click Here.

Dave Tate, Esq. (San Francisco)

Daily Updates: Privacy, Product Liability & Accident; Employment; Governance, Risk & Liability; & Nonprofit; Board & Director Responsibilities Video

For your information, please click below for daily updates on various legal topics, and also the Board and Director Responsibilities video:

– Privacy & Information Update, Click Here.

– Product Liability & Accident Update, Click Here.

– Employment Law & News Update, Click Here.

– Governance, Risk & Liability Update, Click Here.

– Nonprofit Update, Click Here.

– Board and Director Responsibilities video:

LINKS TO GOVERNANCE, RISK AND LIABILITY UPDATE; ST. VINCENT DE PAUL SOCIETY SAN FRANCISCO

1. More depositions in Salt Lake City today.

2. The following is a link to my daily updated governance, risk & liability paper, Click Here.

3. And the following is a link to the St. Vincent de Paul Society in San Francisco, of which I am a board member, Click Here. This is a great nonprofit organization, helping people in need.

Off to work. Regards, Dave Tate.

New Ninth Cir. Case – Taser Product Liability – No Failure To Warn – Risk Not Knowable

Rosa v. Taser International, Inc. (Ninth Cir., No. 09-17792, filed July 10, 2012, Appeal from the United States District Court for the Northern District of California Case No. 5:05-cv-03577-JF)

The following summarizes and condenses pertinent parts of the Court’s decision. You need to read the Court’s entire decision for a complete understanding whether the case is applicable in your circumstance. This summary does not provide legal or other professional advice.

Police officers tasered Michael multiple times during their subdue and arrest. “Until the handcuffs were in place, Michael continued to struggle and did not appear to be in medical distress. After officers had Michael in restraints, they rolled him onto his side. At this point, Michael slumped, his lips blue, his breathing erratic. He quickly stopped breathing entirely. Officers were unable to find a pulse and immediately began resuscitation efforts. Michael was transported to the hospital, where resuscitation efforts continued. But Michael’s heart went into atrial arrhythmia (a form of irregular heartbeat), tachycardia (accelerated heartbeat), and finally asystole (cardiac arrest). He was pronounced dead at about 12:30 a.m. on August 30, 2004. [Doctor] performed the autopsy. Discovering high levels of methamphetamine in Michael’s blood, [Doctor] concluded that his cause of death was ‘ventricular arrhythmia . . . due to methamphetamine intoxication.’  He listed ‘Taser application and arrest by police’ as contributing conditions. Michael’s death was subsequently linked to metabolic acidosis, a condition under which lactic acid—a byproduct of physical exertion—accumulates more quickly than the body can dispose of it, causing the pH in the body to decrease. The condition makes sudden cardiac arrest more likely.”

Following Michael’s death, Michael’s parents and his daughter Holly sued TASER, as manufacturer of the M26 Taser, “asserting that Michael died because it had provided an inadequate warning of the dangers of the product to the officers who used it. They pursued both strict liability and negligence theories underCalifornialaw based upon this failure to warn. At the times in question, TASER provided warnings that read in relevant part:

While the medical evidence strongly supports the [M26] will not cause lasting effects or fatality, it is important to remember the very nature of physical confrontation involves a degree of risk that someone will get hurt or may even be killed due to unforeseen circumstances and individual susceptibilities. Accordingly, the [M26] should be treated as a serious weapon and should only be deployed in situations where the alternative would be to use other force measures which carry similar or higher degrees of risk.”

Plaintiffs claimed that TASER also should have warned that repeated exposure to the M26 carried its own risks, particularly the risk that it can cause fatal levels of metabolic acidosis.

After the conclusion of discovery, the District Court awarded summary judgment to the defendant. Summary judgment was affirmed on appeal to the Ninth Circuit.

In pertinent part, the Court held “Californialaw places a duty on manufacturers to warn of a ‘particular risk’ if it is ‘known or knowable in light of the generally recognized and prevailing best scientific and medical knowledge available at the time of manufacture and distribution.’ (Citations omitted). Thus, this case turns on what was ‘knowable’ by a manufacturer of electronic control devices in December 2003. The [Plaintiffs’] argue essentially that any risk that was discoverable through modern technology, no matter how unsubstantiated, was knowable by TASER. We do not interpret the standard so broadly.

Though theCaliforniacourts have never announced a comprehensive standard of when a particular risk is ‘knowable,’ a few key considerations are clear. ‘[A] manufacturer is held to the knowledge and skill of an expert in the field; it is obliged to keep abreast of any scientific discoveries and is presumed to know the results of all such advances.’ (Citations omitted). A manufacturer cannot defeat liability because it did not review the relevant scientific literature.

But a manufacturer is not under a duty to warn of ‘every report of a possible risk, no matter how speculative, conjectural, or tentative,’ because ‘inundat[ing the public] indiscriminately with notice of any and every hint of danger’ would ‘inevitably dilut[e] the force of any specific warning given.’”

Tate Comment: Interesting that in this important area of law and liability the California courts have not announced a comprehensive standard of when a particular risk is knowable so that designers and manufacturers can be more certain that they have satisfied their responsibilities.  Of course, it can also be argued that it is better to have such a standard determined on a case by case basis.  But in this case you can be sure that both the plaintiffs and the manufacturer expended considerable time and resources both at the trial court level and on appeal, and that absent some agreement of the parties plaintiffs might be looking at a large costs bill from the defendant.

Plaintiffs primarily relied on four peer-reviewed articles to establish that the risk that TASER’s products could cause fatal levels of metabolic acidosis was knowable by December 2003. The Court concluded that the articles did not present a triable issue of fact that the risk was more than purely speculative.  The first two articles contained no causation link between acidosis and the use of electronic control devices.  In the third article or study “[Doctors] hypothesized that electronic control devices may contribute to the condition by ‘affect[ing] acid-base balance’ of the individuals exposed to them. (Citations omitted). However, they made no attempt to test the hypothesis and noted that there was ‘no adequate information’ to link these deaths to exposure to TASER’s products. This sort of hypothetical side effect is insufficient to require a warning under Californialaw.’”  The fourth article was a study that was performed on behalf of the Department of Defense in 1999, but that did not become publicly available until after Michael’s death.  “Assuming that a document that is not publicly available can constitute generally accepted medical knowledge—which we doubt—this study suffers the same problem as the article from The Lancet. It merely states that ‘deaths following Taser use may be due to acidosis.’ (Citations omitted). It does not purport to establish that causal link and explicitly limits the reach of its findings due to its small data set.’”  The Court also ruled the fourth article inadmissible to establish what was knowable in December 2003.

Similarly, the Court concluded that Plaintiffs failed to establish a triable issue of fact on their separate negligence claim, and that summary judgment was also properly awarded to defendant on that claim.

 * * * * *

Director and Auditor Responsibilities re Executive Compensation and Related Risks

The following link is to an interesting BankDirector.com article discussing enhanced Director responsibility for oversight of executive compensation and related risks that can arise from that compensation, Click Here.  The PCAOB also has a proposed new auditing standard that in part contains provisions relating to the evaluation of executive compensation, broadly stated: 3. Obtaining an understanding of a company’s financial relationships and transactions with its executive officers that is sufficient to identify risks of material misstatement, Click Here.  Possible evaluation of executive compensation and tone-at-the top are two topics that are relevant for discussion as potential corporate and audit risks that can arise from or relate to these areas have long been discussed and recognized.  However, what more to do in those areas in terms of audit, Director oversight, evaluation or disclosure are issues that raise significant questions, perhaps including whether is it possible to develop recognized criteria or standards.