June 18, 2019

Colorado Court of Appeals: Jury Instructions on Implied Warranty of Suitability Insufficient

The Colorado Court of Appeals issued its consolidated opinion in Rogers v. Forest City Stapleton, Inc. and Rogers v. Forest City Stapleton, Inc. on Thursday, November 19, 2015.

Implied Warranty of Suitability—Developer—Homeowner—Vacant Lot—Nuisance—Sanctions—Discovery Violation.

Defendants (collectively, Forest City) served as the master developer for the redevelopment of the old Stapleton International Airport. Forest City sold the vacant residential lot at issue here to a homebuilder, with which plaintiff Rogers contracted to build a home. Rogers paid the builder an extra fee to include a basement that could later be finished. After learning that his lot was not suitable for a home with a basement that could be finished, Rogers brought claims for breach of implied warranty, nuisance, and negligent misrepresentation.

On appeal, Forest City argued that the trial court erred by instructing the jury that it could find that an implied warranty runs from a developer to a homeowner under the circumstances of this case. An implied warranty of suitability exists between a developer of a vacant lot and the owner of a home on that lot who is not the first purchaser if (1) the developer improves the lot for a particular purpose, and (2) all subsequent purchasers rely on the developer’s skill or expertise in improving the lot for that particular purpose. Here, the trial court did not adequately instruct the jury on this law. Consequently, the judgment was reversed and the case was remanded for a new trial on the implied warranty claim.

Forest City also argued that the trial court erred in denying its motion for judgment notwithstanding the verdict on Rogers’s nuisance claim, arguing that there was insufficient evidence to support the nuisance verdict as a matter of law. Because the jury was instructed that Forest City placing RABC in the roads was a necessary element of the nuisance claim, and the record reveals no evidence that Forest City placed RABC, or anything else, in the roads in Stapleton, the evidence was insufficient to support the jury’s nuisance verdict. The trial court therefore erred by denying Forest City judgment notwithstanding the verdict on that claim pursuant to CRCP 59(e)(1).

Rogers argued that the trial court erred in the amount of sanctions awarded to Rogers and against Forest City’s counsel for the late disclosure of discovery documents. Because the trial court found that (1) the late disclosed documents were of “slight use” to Rogers, (2) Forest City’s counsel acted with “candor and professionalism,” and (3) the violation was an unintentional “oversight,” the trial court acted within its broad discretion by awarding only $10,000 of the $90,000 that Rogers requested.

Summary and full case available here, courtesy of The Colorado Lawyer.

Tenth Circuit: Claims Against Drug Manufacturers Preempted, Time-Barred; State Law Would Not Impose a Duty to Consumers

The Tenth Circuit Court of Appeals published its opinion in Schrock v. Wyeth on Wednesday, August 28, 2013.

Susan and Steven Schrock filed suit against brand-name and generic manufacturers of the drug metoclopramide, alleging that Susan Schrock’s use of generic metoclopramide caused her to develop tardive dyskinesia, a neurological disorder characterized by involuntary body movements. The district court dismissed all claims in favor of the manufacturers in a series of orders. On appeal, the Schrocks challenged the dismissal of their claims against PLIVA USA, Inc. (“PLIVA”), Qualitest  Pharmaceuticals, Inc. (“Qualitest”), Schwarz Pharma, Inc. (“Schwarz”), and Wyeth, Inc. (“Wyeth”).

The court concluded that the Schrocks’ breach-of-warranty claims against PLIVA and Qualitest, the generic drug manufacturers, were preempted by federal law. The Schrock’s warranty claims were based on the theory that Qualitest provided improper descriptions or warnings in the labeling and packaging of metoclopramide or that the content of the metoclopramide Qualitest sold rendered it unreasonably dangerous or unmerchantable. In advancing their warranty claims, the Schrocks alleged that Qualitest had a duty under state law to alter either the composition or the labeling, as broadly defined by the FDA, of its generic metoclopramide. Because Qualitest could not have taken either action without violating federal law pursuant to Mutual Pharmaceutical Co., Inc. v. Bartlett, 133 S. Ct. 2466 (2013) and PLIVA, Inc. v. Mensing, 131 S. Ct. 2567, 2574 (2011), the court concluded these claims were preempted.

The Tenth Circuit also agreed with the district court that the Schrocks’ non-warranty claims against the generic manufacturers were barred by Oklahoma’s two year statute of limitations. Oklahoma follows the “discovery rule,” under which the statute of limitations in product liability cases does not begin to run until the plaintiff knows, or as a reasonably prudent person should know, that he has the condition for which his action is brought and that the defendant caused it. It was undisputed that in May of 2005 Susan Schrock’s doctor informed her that metoclopramide was “quite possibly” responsible for her symptoms. Yet the Schrocks did not file suit until April 30, 2008, nearly three years later.

With respect to the Schrocks’ claims against Schwarz and Wyeth, name-brand manufacturers of metoclopramide, the Tenth Circuit was in accord with the district court’s determination that Oklahoma tort law would not provide a remedy. Given prior Oklahoma precedent and the clear consensus of courts in other jurisdictions, the court predicted that Oklahoma would not impose a duty on brand-name drug manufacturers to consumers of a generic manufacturer’s products. Schwarz and Wyeth did not owe a duty to the Schrocks because Susan Schrock used only generic versions of metoclopramide.

The court recognized the catch-22 situation in which existing jurisprudence placed the Schrocks and similarly situated consumers of generic drugs. The court stated if consumers of generic drugs are to obtain federal relief, it must come from Congress.