BSCR Firm News/Blogs Feed

John Watt Accepted into Product Liability Advisory Council

23 Apr 2024

Baker Sterchi Member John Watt has been accepted as a Sustaining Member into the Product Liability Advisory Council (PLAC). Sustaining members, comprised of top regulatory, trial and appellate legal professionals from leading law firms worldwide, undergo thorough vetting by the organization's Board of Directors before receiving invitations to join.

Established in the 1980s, PLAC is dedicated to keeping product manufacturers and suppliers informed about industry-related issues and fostering collaboration with outside legal counsel to mitigate risk across the product life cycle. Corporate participants include individuals from the legal, regulatory, technical and risk departments of each member company.

Based in Kansas City, Watt defends businesses in multi-million-dollar litigation cases involving product liability, construction and toxic torts. With extensive experience as a lead attorney in trials at both state and federal levels, Watt has also conducted hundreds of expert witness depositions, presented arguments before appellate courts in Missouri and Kansas, and represented clients in arbitration and mediation proceedings.

As a steering committee member of ALFA International’s Construction Practice Group, Watt served as a co-chair for both the 2022 and 2023 ALFA Construction Practice Group Seminars. Additionally, he is a regular contributor to the Missouri and Kansas sections of ALFA’s Construction Law Compendium. Watt is recognized in the 2024 edition of The Best Lawyers in America for his Construction Law practice in the Kansas City Metropolitan Area.

Baker Sterchi Obtains Dismissal under Missouri's Innocent Seller Statute

23 Apr 2024

Baker Sterchi lawyers obtained dismissal of their national food distributor client under Missouri’s “innocent seller statute.” Plaintiff alleged personal injuries related to consumption of a chicken meal that contained a chicken bone, which he claimed became lodged in his throat and resulted in multiple surgeries. Plaintiff originally named the restaurant where the meal was ordered as a defendant. The restaurant then sought and was granted leave to file a third-party petition against the purported manufacturer of the chicken. Plaintiff followed suit and filed an Amended Petition asserting a claim against the purported manufacturer and also added claims based on breach of warranty and negligence against our client, the distributor. We preserved the innocent seller defense in our answer by pleading R. S. Mo. §537.762, the “innocent seller statute,” as an affirmative defense on the grounds that liability against the distributor was solely based on its status as a seller in the stream of commerce and should be dismissed.

In 1987, the Missouri legislature enacted the “innocent seller statute”. A final report issued in January 1987 by the Missouri Interim Task Force on Liability Insurance indicates that the legislation was designed as a method by which sellers may be released from products liability suits at an early stage of the litigation. § 537.762 states in pertinent part:

A defendant whose liability is based solely on his status as a seller in the stream of commerce may be dismissed from a products liability claim as provided in this section. This section shall apply to any products liability claim in which another defendant, including the manufacturer, is properly before the court and from whom total recovery may be had for plaintiff’s claim.

Thus, a seller wishing to avail itself of the statute must establish two things. First, the asserted liability must be based solely upon its status as a seller in the stream of commerce. Second, a defendant from whom total recovery may be had must be before the court.

There was a question of fact as to the identity of the manufacturer of the chicken at issue, which had to be resolved before a motion to dismiss could be filed. Through discovery this entity was identified, and the restaurant brought this “new” manufacturer into the case. Once the proper manufacturer was before the court, we moved to dismiss under the innocent seller statute. We satisfied the first prong by establishing that the distributor played no role in the manufacturing, production, testing or individual packaging of the chicken. Its only role was distributing chicken to the restaurant. While plaintiff asserted various product liability claims against the distributor, all were based solely upon its status as a seller. The second prong was satisfied because two defendants were before the court from whom total recovery could be had, the restaurant and the proper manufacturer. We anchored this argument to the declaration page of the restaurant’s commercial general liability policy and the Hold Harmless Agreement between the manufacturer and the distributor. Under this agreement, the manufacturer had contractually agreed to maintain insurance coverage for liability claims, including product liability claims for both the manufacturer and the distributor.

Finding both prongs of the innocent seller statute satisfied, the court entered an order dismissing the distributor from the case.

Nick Ruble Co-Presents at 2024 ALFA Gig Economy Regional Seminar

22 Apr 2024

On April 18, Baker Sterchi Member Nick Ruble co-presented a session titled “State Law Data Privacy Harmonization, BIPA Litigation And Cybersecurity Issues In The Gig Economy Space” at the 2024 ALFA International Gig Economy Regional Seminar. The session covered data privacy strategies across multiple states, addressed recent litigation trends under the Illinois Biometric Information Privacy Act (including the Illinois Supreme Court’s “annihilative” damages decision), and reviewed other data privacy and cybersecurity trends affecting the gig economy.

Ruble, a civil litigation defense attorney based in Kansas City, has extensive experience in employment, labor, business and personal injury law. He serves as vice chair of the Baker Sterchi Employment & Labor Practice Group and contributes to the firm’s Employment Law Blog. Outside of the firm, he is a steering committee member of the ALFA International Labor & Employment Practice Group, co-chair of the Kansas City Metropolitan Bar Association Labor & Employment Law Committee, and a frequent speaker on employment and labor issues. He earned his law degree from the University of Missouri-Kansas City School of Law and is licensed to practice in Missouri and Kansas.

Baker Sterchi is the Kansas City, Missouri and Overland Park, Kansas, member firm of ALFA International, a premier global legal network of 140 independent law firms. The network provides educational programs across various practice areas for attorneys and clients associated with its member firms.

Kara Stubbs Recognized Among Top Product Liability Lawyers in WWL: Life Sciences 2024

18 Apr 2024

Baker Sterchi Member Kara Stubbs has once again been recognized as a leading lawyer in the Product Liability section of the 2024 edition of Who’s Who Legal: Life Sciences. This publication provides a comprehensive analysis of the leading lawyers around the world handling complex patent litigation, product liability cases, and regulatory and transactional matters within the life sciences sector.

Stubbs has extensive product liability experience, particularly in defending pharmaceutical and medical device manufacturers. She serves as co-chair of Baker Sterchi’s Pharmaceutical and Medical Device Practice Group and frequently authors papers and speaks at conferences around the country on issues of interest to these industries. She is a past chair of the Board of Directors for ALFA International (ALFA), a legal network comprised of 150 domestic and international law firms, and a past chair and current steering committee member of ALFA’s Product Liability Practice Group. She has also been active and held a variety of leadership roles on pharmaceutical and medical devices committees within the American Bar Association, DRI and the International Association of Defense Counsel.

Published by Law Business Research Limited, inclusion in Who’s Who Legal publications follows a rigorous selection process involving feedback from general counsel and private practice attorneys worldwide. Attorneys are chosen based on independent international research criteria and the highest number of recommendations from peers and clients.

Right to Repair Laws: An Overview and Legislative Update

09 Apr 2024

ABSTRACT: As manufacturers seek to limit the ability of consumers and third parties to repair their products, state and federal legislators introduce "right to repair" legislation that would loosen those restrictions.

Repairing complicated digital equipment has become increasingly difficult in recent years. In most instances, a consumer in need of a repair of any digital equipment has few, if any, choices for where and how the equipment is repaired. The original equipment manufacturer (OEM) will typically only offer the tools, parts, and information necessary to make those repairs through the OEM itself or a licensed dealer. As a result, consumers and independent repair providers lack the tools and expertise necessary to make these repairs. Further, many products’ warranties are voided if a piece of equipment is repaired by someone other than the OEM or an officially licensed dealer.

There is now a growing effort to enact “right to repair” laws to give consumers more flexibility to repair their own equipment. Generally, these laws grant consumers and independent repair companies access to the tools, parts, documentation, and software required to diagnose, maintain, and repair certain types of equipment. These laws typically require the OEM to provide manuals with specifications, schematics, and software updates to consumers at no cost, to allow the devices to be repaired without voiding the warranty, and to give independent repair companies access to the same tools and repair parts as the OEM on “fair and reasonable terms.” These laws are primarily introduced in the digital equipment industry (typically defined as anything requiring a computer chip), motor vehicles, and the agricultural and construction equipment industry. There have also been attempts to introduce similar legislation covering medical equipment, wheelchairs, educational devices, and motorcycles.

Proponents of these bills argue these laws provide consumers with more freedom to repair their own equipment or choose their own repair shop. They further argue these laws will drive repair costs down by increasing competition and will reduce electronic waste. The opponents of these laws, including the OEMs themselves, argue providing detailed specifications and schematics to consumers and third-party repair companies would reveal valuable trade secrets and proprietary information. They argue this would disincentivize innovation, research, and development of new products. Further, allowing the consumer full repair and maintenance access could lead to modifications that would make the product unsafe or non-compliant with applicable safety or emissions regulations, potentially leading to more injuries or liability to the OEMs.

To date, six states have passed right to repair laws. Massachusetts was the first, passing a motor vehicle right to repair law in 2012 and another in 2020, which required vehicle manufacturers to provide a standardized open data platform to vehicle owners and independent repair facilities. Since 2022, Colorado, New York, Minnesota, Maine, and California have passed various right to repair laws. Currently, approximately twenty-seven states have some form of a right to repair law introduced or pending.

Federal efforts to pass right to repair laws have so far been unsuccessful, although one bill is still active. Rep. Joseph Morelle (D-NY) introduced the “Fair Repair Act,” which would apply to digital electronic equipment, in June 2021. It was referred to the House Energy and Commerce Committee in June 2021 and died shortly thereafter. Sen. Ben Ray Lujan (D-NM) introduced the Fair Repair Act to the Senate in March 2022. As with the House bill, it was referred to committee, where it did not advance. Most recently, Rep. Neal Dunn (R-FL) introduced the “Right to Equitable and Professional Auto Industry Repair Act” or “REPAIR ACT”, seeking to require motor vehicle manufacturers to provide the vehicle’s owner with direct, real-time data related to diagnostics, repair, service, wear, and calibration of parts and systems of the vehicle. It has 50 bipartisan co-sponsors. It was referred to the House Energy and Commerce Committee, where it was most recently forwarded to the full committee for a voice vote in November 2023. The result of that vote has not been reported.

Missouri, Kansas, or Illinois have yet to pass any right to repair legislation. Certain Missouri legislators have attempted to pass these bills on multiple occasions. House Bill No. 975, introduced by Rep. Barry Hovis (R-Cape Girardeau County), would have guaranteed the right to repair any “construction machinery, any mobile heavy equipment or heavy machinery designed for construction or earthwork tasks[.]” The bill was introduced in January 2021 and died in committee in May 2021. Rep. Hovis re-introduced the same bill two more times, HB 2402 and HB 698, in January 2022 and January 2023, respectively. They suffered the same fate, dying in committee shortly thereafter. The Missouri Chamber of Commerce and Industry, a private organization, officially spoke out against HB 2402, arguing it would “threaten [agricultural equipment manufacturers and dealers] security, intellectual property and warranty agreements—not to mention opening them up to undue liability.” Missouri Senator Tracy McCreery (D-St. Louis County) introduced Senate Bill 554 in January 2023. Senate Bill 554 was significantly broader than the house bills, covering all electronic equipment. This also died in committee in May 2023.

Missouri currently has five proposed right to repair bills: 1) HB 1618, introduced by Rep. Brian Seitz (R-Taney County), would protect the right to repair any products “that depend on digital electronics embedded in or attached to them” (excluding motor vehicles); 2) HB 2041, introduced by Rep. Emily Weber (D-Jackson County), would guarantee consumers the same rights to diagnostic and repair information as independent repair providers and authorized repair providers for any electronic product; 3) HB 2475, introduced by Rep. Hovis, seeks the same protections as his earlier bills; 4) SB 1472, introduced by Sen. McCreery, seeks the same protections as her prior SB 554; and 5) HB 2800, a motorcycle right to repair bill introduced by Rep. Seitz. All the proposed bills would make any violation an unlawful practice under the Merchandising Practices Act. These bills are currently in committee and have not received a vote.

Illinois also has active right to repair laws pending. Illinois SB 2669, introduced by Sen. Jill Tracy (R-Quincy), seeks to protect the right to repair agricultural equipment. It was introduced in January 2024 and is currently awaiting committee assignment. Similarly, SB 2680, introduced by Sen. Laura Fine (D-Glenview), was introduced in January 2024 and is awaiting committee assignment. It seeks to guarantee the right to repair home electronic products or appliances. On the House side, Rep. Michelle Mussman (D-Schaumburg) introduced three right to repair bills in February 2023. HB 3593 seeks to guarantee the right to repair digital electronic equipment. HB 3601 looks to protect the right to repair educational technology, and HB 3602 seeks to protect the right to repair electronically powered wheelchairs. All three of these bills are currently in committee and have yet to receive a vote. Similar to the Missouri bills, the Illinois bills make any violation an unlawful practice under Illinois’s Consumer Fraud and Deceptive Business Practices Act.

Kansas does not currently have any right to repair laws proposed or pending. The most recent attempt was House Bill No. 2122, introduced as a committee bill by the Committee on Federal and State Affairs. It was introduced in January 2017 and ultimately died in committee in May 2018. There have been no official attempts to introduce any right to repair laws since.

As these laws are still relatively new, the total effect they may have on repair prices, competition, and liability remains to be seen.

Defense Victory in Negligent Auto Repair Claim

08 Apr 2024

Our firm was hired to defend a full-service auto repair shop client regarding a negligent repair claim alleged on a pickup truck, which the plaintiff asserted caused engine failure. Our client contended the repairs were made correctly, and the engine failure was caused by other reasons. After a bench trial, the court issued a ruling in our client’s favor.

Legal Administrative Assistant, Kansas City

05 Apr 2024

Our Kansas City office is seeking a highly motivated and skilled legal administrative assistant. View the job description here.

Litigation is not late in challenging new CFPB Rule capping credit card late fees.

04 Apr 2024

ABSTRACT: The banking industry and financial services business groups did not wait long to file litigation challenging a recent rule enacted by the Consumer Financial Protection Bureau looking to limit the fees credit card issuers can charge for late payments.

We have our eyes on recent litigation arising out of the Northern District of Texas. On March 7, 2024, a lawsuit challenging a new rule issued by the Consumer Financial Protection Bureau (“CFPB”) on March 5th, 2024, was filed by the American Bankers Association and other financial services business groups (collectively the “ABA”). The TILA has a statutory requirement that fees, such as late fees, be reasonable and proportional to the omission or violation to which the fee relates, and the CFPB determined current late fees exceeded the reasonable and proportional statutory limit.

Summary of the New Rule

The CFPB issued a final rule amending Regulation Z of the Truth in Lending Act (“TILA”). The new rule caps fees for large credit card issuers, allowing a charge of no more than $8 when a consumer makes a late payment on their credit card. The prior version of Regulation Z capped late payment fees at $30.00 for first time offenses and $41.00 for each subsequent violation. The Final Rule also removes a provision which automatically adjusted the ceiling for late fees to keep pace with inflation. If the rule becomes effective, it will apply to approximately 95% of all credit cards issued in the United States.

The final rule does allow banks to seek to charge a higher fee if they can demonstrate a higher cost in collecting penalties after late payment occurs, but the credit card companies cannot include the cost of collection efforts in making that demonstration.

Litigation Commenced Immediately

The banking industry and business groups did not wait long to challenge the CFPB's Final Rule. On March 7th, 2024, the Chamber of Commerce of the United States of America, The American Bankers Association, and other business groups filed litigation in the Northern District of Texas challenging the CFPB's Final Rule. The ABA alleges that the CFPB's final rule is not only unlawful, but also that the Rule violates the appropriations clause of the United States Constitution and exceeds the CFPB's statutory authority. The ABA has asked the Texas District Court to vacate the Final Rule.

History of the TILA and Regulation Z

Congress enacted the credit card Accountability Responsibility and Disclosure Act in 2009. The Card Act includes a series of provisions governing credit card terms and conditions, including penalties or for late fees requiring the same to be reasonable and proportional. Congress delegated to the CFPB the duty to establish standards for assessing whether the amount of any penalty fee is reasonable and proportional. In setting those standards, the CFPB is charged with considering, among other things, the deterrent effect of a late fee, the conduct of the cardholder, and the cost card issuers incur because of late payments. The ABA argues the provisions of the Card Act demonstrate Congress's recognition that for penalty fees to be effective, they must be sufficient to deter late payments, account for the conduct of late payments by consumers, and compensate card issuers for the costs incurred from late payments. The ABA contends of the Final Rule does not satisfy the charge of Congress in delegating the authority to the CFPB to enforce the Card Act. The ABA also argues that the new Rule will harm credit card users who pay their bills on time because of an increase likely to occur in the minimum payments, annual fees, or APRs or for credit card issuers to offer fewer rewards to all customers.

Challenges to the CFPB’s New Rule

The ABA argues the CFPB exercised flawed statutory interpretation and rule-making authority in issuing the Final Rule. Specifically, the ABA argues the CFPB adopted a new standard linked solely to the issuers costs and ignored other requirements. Congress charged the CFPB with considering and making new rules. The ABA also argues that CFPB's flawed statutory interpretation is particularly evidenced in the context of cardholders who are repeatedly late in making their payments. The Final Rule does not allow a higher fee for subsequent late payments and thus has no additional deterrent effect on repeat late payers as opposed to persons who are only late on a single instance.

The ABA also argues that the CFPB improperly relied on non-public data in issuing the Final Rule.

The ABA and other business groups also reiterate a challenge to the CFPB's funding structure, which has been challenged in other litigation. See our prior blog entries on the challenge to the CFPB’s funding structure for additional information.

In addition to the legal challenge brought by the ABA, it is likely that the legislature will seek to repeal the CFPB's new Rule, and Tim Scott, Senator of South Carolina, has already vowed to pursue legislative repeal of the same.

Baker Sterchi attorneys will continue to monitor the litigation arising out of the CFPB's Final Rule. Contact our Financial Services Practice Group for more information.

Jennifer Maloney Accepted into Product Liability Advisory Council

04 Apr 2024

Jennifer Maloney, a Member in Baker Sterchi’s St. Louis office, has been accepted as a Sustaining Member into the Product Liability Advisory Council (PLAC). Sustaining members, comprised of top regulatory, trial and appellate legal professionals from leading law firms worldwide, undergo thorough vetting by the organization's Board of Directors before receiving invitations to join.

Throughout her career, Maloney has advocated for businesses and insurance companies, focusing primarily on product liability, premises liability, personal injury and transportation matters. Actively engaged in the legal community, she is a member of the Bar Association of Metropolitan St. Louis and the Illinois Defense Counsel (IDC).

In recent years, Maloney has been recognized by The Best Lawyers in America for her product liability litigation defense practice. She has also been honored with the Missouri Lawyers Media Up & Coming Award and the IDC President’s Award. Maloney earned her law degree from the Southern Illinois University School of Law and is licensed to practice in Missouri and Illinois.

Baker Sterchi Attorneys Lead and Participate in 2024 MODL Trial Academy

03 Apr 2024

Baker Sterchi attorneys Briana Cowell (Kansas City) and Ruthie Vaughn (St. Louis) participated in the 2024 Missouri Organization of Defense Lawyers (MODL) "John L. Oliver, Jr." Trial Academy at the University of Missouri School of Law in Columbia, Missouri, held from March 27 to 29. Led by a distinguished faculty of 14 seasoned defense lawyers, including Baker Sterchi Members Clayton Crawford (Kansas City) and Joseph Swift (St. Louis), 35 students engaged in the program, assuming the roles of defense lawyers in a mock civil trial.

Cowell practices civil litigation, primarily defending product liability, wrongful death and personal injury cases. She is a member of the Earl E. O'Connor American Inn of Court and Propane Gas Defense Association. Cowell obtained her law degree from the University of Kansas School of Law and is licensed to practice in Missouri and Kansas.

Vaughn focuses on personal injury, medical malpractice and business litigation. She is a member of the Missouri Bar Association’s Young Lawyers Division and the Mound City Bar Association. Vaughn earned her law degree from Saint Louis University School of Law and is licensed to practice in Missouri.

Established in 1984, MODL aims to assist defense attorneys in delivering top-notch representation to clients through continuing legal education programs and various other initiatives.