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Regulators’ nod would bar liability for products

By SYLVIA ADCOCK, Staff Writer

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A sweeping tort-reform bill that would have the effect of preventing product-liability lawsuits in cases where the product got a stamp of approval from government regulators was formally introduced in the state House last week.

The bill also incorporates some controversial aspects of a medical-malpractice tort-reform bill under consideration in the Senate.

At a packed hearing last week, Greensboro attorney Janet Ward Black said the product-liability provision in the bill would be the most plaintiff-unfriendly in the country.

She told the House Select Committee on Tort Reform that North Carolina is consistently rated as a conservative jurisdiction because of contributory negligence and other factors – but this new law would put the state in another category altogether.

Only Michigan, she said, has a statute anything like this, and it applies only to pharmaceuticals. “What products are at issue here?” she said, and then held up a set of advertising inserts that had appeared in the Sunday Greensboro News & Record as an illustration.

If tainted baby food were shipped from a plant in another state to grocery stores across the Southeast, families in North Carolina whose children were sickened would not be able to file a claim, she said. The bill “would make North Carolina the most unsafe state in the United States for consumers,” she said.

Frederick Rom, a defense attorney with Womble, Carlyle, Sandridge & Rice, had a different take. Our current system, he said, “goes in the face of the regulatory scheme.” It makes no sense, he said, to put in place complex regulatory authorities over consumer products and then “throw that out the window.”

The bill, H. 542, states that no manufacturer or seller shall be held liable if the product that caused harm “was designed, manufactured, packaged, labeled, or sold, or represented … in accordance with the terms of an approval, license, or similar determination of a government agency” where that agency’s determination is relevant to prevent harm.

The only way a claimant could prove product liability would be if the product were sold after the date of a government order to withdraw, if the manufacturer or seller intentionally withheld or misrepresented information to get the government’s approval, or if the government approval were obtained by bribery.

The bill “would bring regulatory systems and judicial system into accord,” Rom said.

Other aspects of the measure of concern to litigators on both sides of the courtroom include a change in the collateral-source rule. Currently, juries are not allowed to hear information about plaintiffs’ insurance that may cover damages on the theory that the information might influence their decision. H. 542 would allow into evidence, if requested by defendants, information about collateral-source payments.

Samuel Thompson, a defense lawyer at Smith Anderson, said that under the current system, the lack of information about other sources available to plaintiffs “misleads juries into awards that are not real.”

  Gary Clemmons, a plaintiff’s lawyer, disagreed and noted that the bill would “have the jury hear evidence about the plaintiff’s evidence but not the defense evidence.” So while juries might learn about a plaintiff’s insurance payouts, they might not learn that a physician is covered by a malpractice policy.

Other reforms in the bill that are being hotly debated are a cap on noneconomic damages of $250,000 in medical-malpractice cases and a provision that would require a showing of gross negligence in a malpractice case against a health-care provider in an emergency-care setting.

The bill’s primary sponsors are bipartisan: Rep. Johnathan Rhyne Jr. of Lincoln, Rep. Daniel F. McComas of Wilmington, both Republicans; Rep. William D. Brisson of Dublin and Rep. James W. Crawford Jr. of Oxford, both Democrats.

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