Dechert Re:Torts - Key Developments in Product Liability and Mass Torts

Issue 3 - March 2023

Dechert Re:Torts is a monthly newsletter covering news and developments related to product liability and mass torts litigation.

In this issue:

PFAS Litigation Continues to Expand
EPA Proposes National Drinking Water Regulation for Six PFAS Compounds
Supreme Court Debates Section 230 Immunity in Algorithm Use and Liability of Tech Companies
EU Digital Services Act: Product Liability Considerations for Online Intermediaries
January 2023 JPML Hearing Rulings
Supreme Court Asked to Review Finding of Specific Personal Jurisdiction Over Out-of-State Company

Environmental Edit

PFAS Litigation Continues to Expand

In recent months, state attorneys general have filed lawsuits seeking natural resource damages for historical releases of per- and polyfluoroalkyl substance (“PFAS”) to the environment. These actions are the latest examples of a broadened focus on environmental PFAS from all sources.

Since 2018, more than two dozen lawsuits have been filed by attorneys general—or county district attorneys—alleging PFAS contamination in 20 states. Actions by additional states are reportedly on the horizon. These complaints typically allege that aqueous film forming foam (“AFFF”) manufacturing or use resulted in the release of PFAS into the local or wider environment, thereby harming public property and natural resources. Last November, California’s attorney general sued to obtain, among other things, natural resource damages and an injunction to “prevent further pollution, impairment and destruction” of state natural resources from PFAS releases. California v. 3M Co., No. 4:22-cv-9001 (N.D. Cal. 2022) (Doc. 1-1). In January, the attorney general of Illinois filed a lawsuit for natural resource damages and remedial action from multiple large companies that “manufactured PFAS and PFAS-containing products.” Illinois v. 3M Co., No. 1:23-cv-1341 (N.D. Ill. 2023) (Doc. 1-2). The lawsuit alleges “contamination to Illinois’ environment and natural resources” from PFAS but expressly excludes AFFF. Id.

These actions, along with the passage of state laws to restrict the sale of PFAS-containing products, reflect state officials’ growing interest in sources of alleged PFAS contamination. This expanded focus raises the possibility that additional industries will be targeted, particularly those involved in more widely used products that allegedly contain PFAS.

Takeaway: State attorney general actions for alleged environmental contamination caused by PFAS continue to rise. Companies should remain informed of potential litigation and compliance risks from the evolving legal developments and regulatory scrutiny.

Learn more about PFAS development on Dechert’s PFAS website.

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EPA Proposes National Drinking Water Regulation for Six PFAS Compounds

EPA has announced proposed national drinking water standards for six PFAS compounds, including PFOA and PFOS. The regulation would create enforceable Maximum Contaminant Levels for these PFAS, and states would be required to implement the same or a stricter standard.

Please see our OnPoint for further information on this proposed regulation and a discussion of the importance of this proposal.

Hot Topics

Supreme Court Debates Section 230 Immunity in Algorithm Use and Liability of Tech Companies

The Supreme Court of the United States (“SCOTUS”) recently heard arguments in two cases that accuse social media companies of aiding and abetting terrorism by hosting content posted by terrorists to their platforms and directing viewers to that content through recommendation algorithms.

On February 21, SCOTUS considered the scope of Section 230 of the Communications Decency Act for the first time in Gonzalez v. Google. Enacted in 1996, Section 230’s key provision says no provider of an “interactive computer service,” such as a website, “shall be treated as the publisher or speaker of any information provided by another information content provider.” Federal courts quickly reached a consensus that Section 230 grants internet platforms broad and robust immunity for user-generated content. Over the past three years, however, the plaintiffs’ bar has been experimenting with ways to get around Section 230, including treating websites as “products,” accusing websites of human trafficking (which can fall within an exception to Section 230), or arguing that these platforms actively participate in the development of third-party content.

In Gonzalez, the family of a woman shot by Islamic State (“IS”) gunmen in 2015 alleged that Google’s YouTube platform materially supported terrorism because its algorithms recommended videos IS used to recruit terrorists. The plaintiff argues these recommendations constituted Google’s own speech, which falls outside the protections of Section 230, as opposed to mere republication of third-party speech. The Justices’ questions at oral argument focused on, among other topics, whether any editorial choice constitutes separate speech, whether it matters that the algorithm is “content-neutral,” the impact changing Section 230 could have on the Internet, and whether changes to the status quo should be left to Congress.

The Court heard a companion case, Twitter v. Taamneh, the following day. The question in Taameh is whether, Section 230 aside, social media companies “aided and abetted” terrorism under the Antiterrorism Act by allowing (or failing to remove) IS content on their platforms. The claim involves general IS content and the functions of the overall terrorist organization, not content tied to a specific terrorist act that harmed the plaintiff. At oral argument, the Justices appeared divided on how courts should determine when one “knowingly” provides “substantial” assistance under the Antiterrorism Act and drew analogies to other general services terrorists could seek from other kinds of companies, such as bank accounts and cell phones.

The Court is unlikely to issue a ruling in either case before June.

Attorneys at Dechert LLP served as counsel to an amicus curiae in Gonzalez v. Google.

Takeaway: A ruling against the tech companies in either of these cases could expose many other Internet platforms to liability, regardless of their efforts to remove offending material. While the question in Taameh is specific to international terrorism, Section 230 is at issue in Gonzalez and applies to almost all claims arising out of third-party content posted on websites. The Justices’ nuanced questions indicate SCOTUS understands the importance of these issues to the Internet and the digital economy, which may make them hesitant to make sweeping changes independent of the legislature.

Learn about Dechert's Product Liability and Mass Torts services.

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EU Digital Services Act: Product Liability Considerations for Online Intermediaries

On November 16, 2022, the European Union adopted the Digital Services Act (“DSA”)— a significant new regulatory regime that applies to online intermediaries who offer their services within the EU, regardless of where they are established. Online intermediaries include search engines, online marketplaces, and social media platforms. Special rules and regulations, including under the DSA, apply to online platforms or search engines that reach 45 million users, known as “Very large online platforms” (“VLOPs”) and “Very large online search engines” (“VLOSEs”). Some of the DSA’s requirements took effect as early as February 2023, with others taking effect in February 2024 or, for VLOPs and VLOSEs, within four months of their designation as such.

In recent years, online platforms have increasingly become the target of product liability claims based on alleged harm from products they sell or promote or from use of the platform itself. Often, product liability claimants contend that defendants failed to comply with applicable regulations to bolster their claims that defendants breached a duty owed directly to them. Accordingly, the DSA provisions may have broader implications for product liability claims that merit close attention.

For example, the DSA requires online platforms to have an internal complaint-handling system that, among other things, tracks complaints about site content and permits users to challenge the platform’s decision regarding content takedowns. In addition, all online platforms must publish reports at least once a year (more frequently for VLOPs/VLOSEs) that detail their content moderation efforts, and VLOPs and VLOSEs must also undergo regular risk assessments and independent external audits relating to illegal content.

As another example, the DSA imposes elevated monitoring and notice obligations on online marketplaces. Online marketplaces must obtain certain information about traders and use reasonable efforts to perform random checks on products and services sold on their websites to determine whether they have been identified as illegal in any official online database. If the marketplace becomes aware (through any means) that a product or service sold there is illegal, it must inform EU consumers who have purchased that product or service within the past six months (if the provider is aware of the consumer’s contact details), or inform the public (if the provider does not have the contact details of the recipient of the services in question).

Takeaway: As the DSA takes effect, online intermediaries should consider the potential product liability implications and any changes that may be needed to their current systems.

Learn more about the DSA from Dechert’s publication series on the EU Data and Digital Drive: “An Overview of Forthcoming Litigation” and “10 Things to Know About the Digital Services Act.”

Learn about Dechert's Product Liability and Mass Torts services.

MDL Minute

January 2023 JPML Hearing Rulings

At its latest sitting, the Judicial Panel on Multidistrict Litigation (“JPML”) created six new multi-district litigations (“MDLs”) with a mixture of cases in antitrust, product liability, and data security:

Harley-Davidson, Judge William Griesbach (E.D. Wis.) – putative antitrust class actions alleging Harley-Davidson unlawfully tied its two-year warranty to consumers’ exclusive use of the company’s replacement and repair services. In re: Harley-Davidson Aftermarket Parts Marketing, Sales Practices and Antitrust Litigation.
Syngenta Corp., Corteva, Inc., and other crop protection product (pesticide) companies, Judge Thomas Schroeder (M.D.N.C.) – antitrust claims of anticompetitive conduct involving customer loyalty programs. In re: Crop Protection Products Loyalty Program Antitrust Litigation.
L’Oréal and other cosmetic companies, Judge Mary Rowland (N.D. Ill., first MDL assignment) – personal injury actions alleging that hair-straightening products caused uterine, breast, and ovarian cancers and other injuries. In re: Hair Relaxer Marketing, Sales Practices, and Products Liability Litigation.
Beyond Meat, Judge Sara Ellis (N.D. Ill., first MDL assignment) – putative consumer class actions regarding claims about protein content, quality, and nutritional benefits of Beyond Meat’s plant-based meat substitutes. In re: Beyond Meat, Inc., Protein Content Marketing and Sales Practices Litigation.
KeyBank and Overby-Seawell Company, Judge Steven Grimberg (N.D. Ga., first MDL assignment) – putative class actions involving a security breach of Overby-Seawell Company’s network and theft of customer information. In re: Overby-Seawell Company Customer Data Security Breach Litigation.
Samsung, Judge Christine P. O’Hearn (D.N.J., first MDL assignment) – putative class actions involving a security breach of Samsung’s U.S. systems. In re: Samsung Customer Data Security Breach Litigation.

The JPML denied requests to form MDLs on credit reporting claims:

In re: The Litigation Practice Group, PC, Credit Repair Organizations Act (CROA) Contract Litigation – allegations of CROA violations raised factual questions about financial circumstances and representations that were distinct for each plaintiff.
In re: Trans Union, LLC, Balance After Bankruptcy Discharge Fair Credit Reporting Act (FCRA) Litigation – allegations of incorrectly attributing bankruptcy discharges were too straightforward, and involved too many distinct questions of fact, to warrant centralization.

Takeaway: The JPML created six new MDLs in diverse subject matters and assigned four of them to judges who have not previously presided over an MDL. This is consistent with statements that JPML judges have made in legal conferences about seeking to broaden the pool of federal judges who handle MDLs. And though some of the venues are familiar locations, such as Chicago, other locations are less frequently used, which reflects the JPML’s interest in broadening the geographic locations of MDL proceedings. In every new MDL except for In re: Hair Relaxer, the parties agreed to centralize cases in an MDL.

Learn about Dechert's Product Liability and Mass Torts services.

Jurisdictional Jabber

Supreme Court Asked to Review Finding of Specific Personal Jurisdiction Over Out-of-State Company

The U.S. Supreme Court is being asked to accept a case to further resolve when a defendant can be hauled into court in another state for products it allegedly sold there. See Petition for Writ of Certiorari, Murco Wall Prod., Co. v. Galier, No. 22-802 (U.S. Feb. 22, 2023). An Oklahoma citizen sued a Texas-based company in Oklahoma alleging exposure to asbestos-containing products manufactured in Texas and sold to resellers in Oklahoma. The Oklahoma Supreme Court affirmed the existence of specific personal jurisdiction over the Texas company because it sold products to Oklahoma resellers and its sales radius included parts of Oklahoma. Murco Wall Prod. v. Galier, 2022 WL 14558511 (Okla. Oct. 25, 2022).

The petition presents two related issues: First, when a defendant can be said to have “purposefully availed” itself of the privilege of doing business in a forum state based on its sale of products in that state. The Supreme Court has twice addressed the “stream of commerce” theory of personal jurisdiction but did not reach a majority opinion either time. See McIntyre Mach. Ltd. v. Nicastro, 564 U.S. 873 (2011); Asahi Metals Indus. Co. v. Superior Ct., 480 U.S. 102 (1987). The petitioner argues that federal courts are “profoundly divided” on this issue, with some courts requiring that it merely be “foreseeable” that a product ends up in the forum, while other courts require more.

Second, the petition seeks review of whether a plaintiff’s claim can “arise out of or relate to” a defendant’s forum contacts without evidence identifying which of the defendant’s products—here, some of which contained asbestos but some of which did not—he was allegedly exposed to. The Oklahoma Supreme Court ruled that the plaintiff did not need to “trace” the product to which he was exposed to a documented sale by the defendant in the state. This issue implicates the U.S. Supreme Court’s decisions in Bristol-Myers Squibb Co. v. Superior Court of California, 582 U.S. 255 (2017), and Ford Motor Co. v. Montana Eight Judicial District, 141 S. Ct. 1017 (2021), requiring a relationship—but not necessarily a showing of causation—among the defendant’s contacts, the forum state, and the litigation.

If certiorari is granted, this would be the second time this case has reached the U.S. Supreme Court on the issue of personal jurisdiction. The first time, the Supreme Court vacated and remanded the case for further consideration in light of its then-recent decision in Bristol-Myers.

Takeaway: The Supreme Court is being asked to resolve when “minimum contacts” can be satisfied by a defendant’s sales in a forum state and whether such contacts can be sufficient without product identification evidence. If the Court takes this case, its decision could clarify the limits on specific personal jurisdiction for companies facing the threat of litigation across multiple jurisdictions based on their out-of-state sales.

Learn about Dechert's Product Liability and Mass Torts services.

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