Market Intelligence Industry Report
Products Liability Cases Still Represent a Booming Business
The year may have changed, but the outlook remains the same for products liability case filings at the federal level since Counsel to Counsel last explored the topic. In 2003, experts predicted an explosion in products liability-personal injury cases (see “Corporations Stung by Surge in Products Liability Filings,” November 2003, p. 12).
Indeed, the number of federal products liability filings has soared even higher in the last several years. In 1999, there were more than 5,000 federal lawsuits filed under NOS 365, the nature of suit 365, the designation for personal injury-products liability, according to data from LexisNexis Market Intelligence. By 2002, that number had more than doubled to just over 13,000 cases filed. Another two years, and another doubling– in 2004, the total of cases filed reached almost 28,000. A slight falloff occurred last year, when the number of suits slipped down to just under 24,000 (see An Encouraging Trend). As of March 1, 2006, there had been 3,204 filings; if those numbers continue on pace, this year the federal courts can expect to see almost 20,000 cases filed. But the dip may be more of a blip, according to trend watchers who don’t pre- dict a significant falloff in products liability suits anytime soon.
The trends of products liability cases as a percentage of federal filings followed similar patterns; in 2001, products liability cases represented 3 percent of total federal filings. In 2004 and 2005, that number was 10 percent.
“Products liability litigation filings came down a bit in 2005, but it is still high,” says Mason White, vice president and gen- eral manager, LexisNexis Market Intelligence. “It will remain high, but it will be volatile as it relates to specific claims.”
White points to several particular products that sparked massive products liability lawsuits in recent years, including: the cholesterol-lowering drug Baycol, which Bayer AG recalled in 2001; diet aid fenphen, which the U.S. Food and Drug Administration withdrew from the market in 1997; and Firestone tires, which Ford Motor Co. replaced on SUVs and trucks in 2000 and 2001. These particular cases doubtlessly helped spur the explosion in lawsuits.
“Cases come in waves when plaintiff’s counsel are ready,” agrees Gary J. Spahn, a partner at Troutman Sanders LLP in Richmond, Va. “I don’t see any letup anytime soon in products liability cases,” says Spahn, who is also co-chair of the American Bar Association’s products liability committee..
Certain Cases for Certain Jurisdictions
The wave of suits also explains why some jurisdictions have been particularly popular arenas for products liability case filings. While federal jurisdictions are less likely to become so-called “judicial hellholes” than state courts—a term White dislikes
there are reasons that certain cases gravitate toward certain places.
The Eastern District of Pennsylvania, for example, has been the most popular or second-most popular federal jurisdiction in the country in which to file a federal products liability claim since 2003. Two companies that have faced major products liability lawsuits in the last several years are based in Pennsylvania—the U.S. division of Bayer, which is headquartered in Pittsburgh, and Wyeth, whose pharmaceutical