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Morris Manning & Martin, LLP

Limiting Potential Liability for E-Cig Claims at the Point of Sale

03.10.2021

As e-cigarette/vape products (e-cigs) continue to enjoy widespread popularity around the country, plaintiffs continue to file product liability claims that arise from the overheating or combustion of these products.  Therefore, it is imperative for those in the chain of distribution of these products to consider ways to proactively limit their liability before they are faced with a claim. This legal update discusses measures that can be taken at the point of sale to limit a retailer’s potential exposure to product liability claims.

Protection from Suppliers

As an initial matter, retailers can protect themselves when contracting with their suppliers. For example, retailers can request that their suppliers provide written assurances or certificates of authenticity for the products to mitigate against the sale of knock-offs, which is a common practice in the industry. In addition, retailers can seek to add indemnity language in their contracts or invoices with their suppliers under which the supplier indemnifies the retailer for claims relating to products sold by the supplier. Retailers can also request that they be named as additional insureds under their suppliers’ insurance policies. Finally, contracting with domestic suppliers can reduce the retailer’s risk for various reasons, including the challenges related to bringing foreign distributors and manufacturers into a lawsuit.

Customer Identifying Information

Plaintiffs in e-cig product liability cases are frequently unable to determine who sold them the product at issue because they purchased from multiple vape shops/retailers during the relevant timeframe and paid in cash. As a result, retailers are often named without any evidence that they sold the product.  

Accordingly, it is important for retailers to have measures in place to investigate whether they could have sold the product. For example, retailers can require customers to provide their contact information at the point of sale, use loyalty programs, or implement other processes to track the purchaser for every sale regardless of payment type. If a retailer has strong evidence that the plaintiff never made any purchase from them or never purchased the type of product at issue, the plaintiff may agree to voluntarily dismiss the retailer early on in the litigation process. On the other hand, if a retailer cannot refute that a plaintiff purchased from them because they sold the type of product at issue at the relevant time and did not track cash purchases, the retailer may be forced to go through the entire litigation process at a significant cost. The retailer also may find itself a target in future cases.

Liability Waivers

Another way retailers can attempt to limit their exposure to product liability claims is by requiring customers to sign waivers at the point of sale. This way, the retailer is not liable for certain claims (e.g., negligence, breach of contract, breach of warranty) or injuries resulting from the improper use or storage of these products. For online sales, retailers can use click-wrap agreements to require a customer to read and accept the safety terms and conditions, as well as electronically sign a waiver, before the customer can complete the purchase.

Retailers can also request customers to acknowledge they understand the risks associated with the product, as well as how to properly use, store, and charge the product to minimize those risks. Even if the waivers do not entirely preclude liability as a matter of law due to the applicable jurisdiction or type of claim alleged, at a minimum such acknowledgments can provide additional evidence that the plaintiff was contributorily or comparatively negligent and/or assumed the risks associated with the use of the product, thereby potentially limiting or barring the plaintiff’s recovery. For more on contributory/comparative negligence click here.  

Warnings on Vape/Battery Safety

Retailers can also attempt to limit their liability by regularly providing warnings or safety-related information to their customers, whether online or in-store. Evidence of such warnings or precautionary information could likewise demonstrate the customer was contributorily or comparatively negligent and/or assumed the risk of the injuries. Examples of such warnings include those related to the potential risks of improper battery storage, building your own vape devices, and sub-ohm vaping. These warnings can be included in written materials provided to the customer, such as receipts, warning sheets, or pamphlets. They can also be posted in the store on signs and display cases. Finally, store employees can provide verbal warnings. Properly training employees and documenting the training and warnings provided to customers is imperative.

Notably, retailers providing warnings or safety-related information for products that they do not otherwise alter in any way, depending on the jurisdiction and various “innocent seller” statutes, could have the unintended effect of subjecting the retailer to additional claims, including strict liability, that typically can only be asserted against product manufacturers. Accordingly, it is important to consult counsel in connection with developing warnings.

Conclusion

Due to the likely prevalence of e-cig product liability claims for years to come, it is never too late for retailers to become proactive and consider implementing protective measures at the point of sale. While these measures may not entirely shield them from liability, they should help limit the retailers’ exposure.

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.