Failure-to-warn rule tightened in van case

A change of heart by a single justice has brought an end to a short-lived “relaxed” standard for failure-to-warn claims under Virginia products liability law.

After rehearing a products liability case, Virginia Supreme Court Justice LeRoy F. Millette Jr. switched his position on the standard for use of similar incidents in product failure cases, dashing hopes for recovery for a couple that lost a three-year-old daughter in a fire in a Ford Windstar van.

The four-to-three decision handed down Jan. 10 in Funkhouser v. Ford Motor Co. (VLW 013-6-004) reverses a previous four-to-three decision in June. The June opinion was withdrawn when the court granted a motion for rehearing.

Business groups and defense attorneys requested the rehearing, arguing the June opinion marked an “inadvisable doctrinal sea change” in Virginia law.

Emerging as the winner is Ford, maker of a Windstar minivan that caught fire on May 4, 2006, while Stephen Funkhouser’s three-year-old twins were sitting inside. Severely burned, Emily Funkhouser died the same day.

The engine was off and the key was not in the ignition when the fire broke out.

“When the case first came in, my reaction was, ‘This should not happen,’” said J. Gregory Webb of Charlottesville, one of the lawyers for Funkhouser. “A van should not spontaneously combust when it had not been in operation for 12 hours and the keys were not in the ignition.”

Nevertheless, Webb acknowledged, his expert could not explain exactly what started the fire. “The van was pretty much destroyed by the fire. A lot of the evidence went up with the fire,” he said.

Funkhouser’s expert would have testified it was an electrical fire that started in the passenger area of the van, said Kyle McNew, another of the plaintiff’s lawyers.

Suing Ford in Albermarle County Circuit Court, Funkhouser sought to use evidence of seven other incidents when fires started in the dashboard area of Windstar vans while the keys were off. Ford argued there was no proof the causes of the seven other fires were substantially similar to the cause of the Funkhouser fire. Funkhouser said those seven other fires served to notify Ford of a Windstar wiring problem and Ford then failed to warn users of a known fire hazard.

Judge Paul M. Peatross Jr. refused to admit the evidence of other incidents and ruled that Funkhouser’s experts could not rely on the excluded evidence. Because Funkhouser conceded he could not prove Ford had notice of a problem without evidence of the prior incidents, Peatross dismissed the lawsuit.

The first Supreme Court opinion reversed Peatross and would have sent the case back to Albemarle County for trial, with the plaintiff’s experts allowed to make use of some of the inadmissible evidence. The decision on rehearing upholds the exclusion of the similar incident evidence, leaving the case as a defense win for Ford.

The Supreme Court’s new majority said “all Funkhouser can show is that the incidents occurred under substantially the same circumstances; he cannot show that the fires were caused by the same or similar defects.”

Funkhouser argued for a “relaxed substantial similarity test” for failure to warn cases, but the court did not agree. Funkhouser would have to demonstrate the other fires were caused by the “same or similar defect,” the majority decided.

Funkhouser could either identify an accident’s cause or eliminate other potential causes in order to meet the test, but – in the case of the Windstar fires – he could do neither, the court said.

The court also barred experts from offering testimony based on evidence that fails the substantial similarity test. Any expert testimony “would necessarily be based on assumptions that have an insufficient factual basis,” wrote Justice Cleo E. Powell for the majority.

The majority crafted “a new standard for admission of similar occurrences proof,” according to the dissent authored by Justice Elizabeth A. McClanahan and joined by Justices Donald W. Lemons and William C. Mims. “Funkhouser was not required to allege a specific mechanical defect to establish the similarity of the fires,” McClanahan wrote.

Four of the seven fires met the appropriate test for substantial similarity, the dissenters said.

The court’s initial decision to allow a trial on the failure to warn claim brought dire warnings from business interests, including the Virginia Chamber of Commerce, Philip Morris USA Inc., E.I. Du Pont De Nemours and Co., the Product Liability Advisory Council, and from the Virginia Association of Defense Attorneys.

The initial opinion created a “perfect storm” that defied the traditions of the court, according to the brief on behalf of the Chamber, Philip Morris and DuPont. The decision “opened the door for plaintiffs to broadly introduce evidence of other occurrences based simply on similarity of circumstances rather than similarity of defect, which had previously and properly been the law,” wrote Mark A. Behrens of Washington for the business trio.

The initial opinion would have brought an “unintended and inadvisable doctrinal sea change,” wrote Eric C. Tew of Washington on behalf of the Products Liability Advisory Council, a coalition of 100 product manufacturers.

“Virginia will in an instant become the most liberal jurisdiction in the country for this type of claim. In addition to a flood of new suits, the decision will inevitably have the effect of driving up the cost of doing business in Virginia, and inducing companies to locate elsewhere if they can,” the manufacturers said.

The initial decision could have had “far-reaching and unintended consequences for tort and civil actions across the Commonwealth,” wrote Elizabeth G. Robertson of Glen Allen on behalf of the VADA. The organization said the June opinion would have altered the burden of proof in tort law and would have marked a “departure from decades of case law” in the products liability realm.

McNew, one of Funkhouser’s lawyers, said the reversal now gives an unfair advantage to defendants in some instances.

“Requiring that specificity of evidence, the result is that when a manufacturer’s product destroys itself catastrophically, they get a pass,” he said.

Funkhouser’s attorneys noted Millette’s 180-degree turn came without any new evidence or previously overlooked issue in the arguments of counsel. The new element appeared to be the public policy warnings of the amici. “It can reasonably be assumed it carried some weight with the justice,” Webb said.

“The Virginia Supreme Court’s decision, and its careful analysis of this important issue, is exactly right,” said a Ford spokesperson. “Courts have a duty to make sure that juries hear all relevant evidence—and only the relevant evidence—about the causes of accidents and injuries,” wrote Ford’s Kristina Adamski in an email.

Ford was represented by J. Tracy Walker IV of Richmond, who referred our inquiry to the Ford communications office.
Victor E. Schwartz of Washington, a co-author of the Chamber’s brief, said the decision sets out a fairly fine distinction in evidence law, when reading the majority and the dissent together. “The potato chip gets sliced pretty thin here,” he said.

The case is notable for the court’s decision to reconsider, Schwartz said. “Once they decide something, usually that’s it,” he said. Reversing course on reconsideration is even rarer. “It’s very, very, very unusual,” Schwartz said.

Funkhouser’s lawyers said the court’s original decision would not have mandated any recovery for the victim’s family; it would only have afforded the opportunity of a trial. “It would not have guaranteed a win. It would not have prevented an appeal by Ford if we won,” Webb said.

“For this family, it’s hard for them to understand as lay people why they don’t get a day in court,” Webb said.