As the use of electronic cigarettes, vaporizers, vape pens, and other electronic nicotine delivery system (ENDS) products (“e-cigs”) increases, so too have product liability claims arising out of the overheating or combustion of e-cigs, their batteries, or chargers. This client alert provides recommendations for manufacturers, distributors, retailers, and others in the chain of distribution of e-cigs for developing an early defense strategy when faced with an e-cig product liability claim.
1. Identify the Product and Your Relation to It
The e-cig industry currently is largely unregulated and many manufacturers are foreign, presumably based in China. This can make identifying the proper parties in the chain of distribution difficult for plaintiff’s lawyers, who frequently will name any and all possible parties as defendants in the lawsuit, correctly or not (including those who may have had no connection to the product). Accordingly, it is critical to determine at the outset of the case whether you are a properly named party.
In this regard, it is important to investigate whether the product and its component parts are authentic. Many manufacturers include unique product ID numbers on their products, which allow you to identify the products on their websites through the use of those numbers. This should help determine whether a particular product might be counterfeit.
Even if a product is authentic, you should understand whether it was a product sold, distributed, or otherwise related to you. This can be accomplished in a number of different ways. Many retailers and distributors use the unique product ID numbers that appear on each product to track who distributes and sells each product. Some retailers require their customers to provide contact information or use customer codes at the point of purchase, which also can be used to verify a plaintiff’s allegations. Early in a case, through formal or informal discovery requests, a plaintiff should be asked to provide receipts and proofs of purchase for their e-cig, battery, and other device components, some of which may contain waivers of claims/limitations of liability related to the purchase and/or use of the product.
Taking the time to determine the authenticity of a product and whether you were involved in the chain of distribution at the outset of the case is one of the best ways to save time and money in connection with defending an e-cig claim. Often it becomes apparent that a plaintiff erred in naming a defendant, and a plaintiff may agree to dismiss that defendant early on, before they are forced to incur the expense associated with expensive discovery and motion practice.
2. Identify Other Potentially Responsible Parties
If you establish that the product was manufactured, distributed, sold, or otherwise connected to you, it is important to then consider other potentially responsible parties. As e-cigs have grown in popularity, so have their complexity. Many e-cigs are made up of a number of component parts, which can be purchased separately and assembled at home. Understanding which entity manufactured, distributed, and sold each of the component parts of the product, as well as its battery and charger is key. While it may be difficult to obtain jurisdiction over (and thus recover from) certain foreign manufacturers, other U.S.-based retailers and distributors in the chain of distribution may be brought into a suit via a third-party claim.
Identifying other potentially responsible parties early is advisable for a number of reasons. This enables you to notify them of the proceeding and take steps to preserve relevant information. Securing their participation and cooperation in any testing of the subject e-cig and battery also can be helpful in connection with comparison testing to exemplar products and spreading out the cost of the defense. These parties can often assist in determining your connection to the subject product through, for instance, their tracking data or purchase records. You may also have agreements with these parties that contain indemnification clauses or other provisions that impact your liability. Ultimately, if the case goes to trial or proceeds to a settlement, having identified other potentially responsible parties helps to spread potential risk among the various responsible parties.
3. Engage an Experienced Expert Early
We also recommend promptly engaging a knowledgeable expert with experience in e-cig and battery malfunction investigation. Doing so, and conducting certain preliminary testing at the outset of the case can determine whether the malfunction was caused by a problem internal to the battery or whether it was caused by an external force, including those attributable to the user, such as the use of an incompatible battery charger. Understanding these issues at the outset can help narrow the scope of discovery, resulting in savings of time and money. It also can inform potential settlement negotiations. Experts can also frequently identify the manufacturer of the subject e-cig and battery, which can assist in understanding both your connection to the subject product as well as other potentially responsible parties.
As e-cig product liability cases become more common, having a proactive early litigation strategy is essential to understanding risk while managing cost. It also allows you to focus your defense on the key issue of causation, which in turn allows for more narrowly tailored and efficient discovery, and a stronger overall understanding of the facts in connection with evaluating potential settlement offers and other resolution strategies.
For more information about how this may affect your business and/or current or pending litigation, please contact one of the attorneys in the E-Cigarette/Vape Team.