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Michigan Manufacturing Insight : September/October 2005

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Cover Story

Three Important Court Cases Will Impact Manufacturers

By Fritz Damm

A number of issues critical to Michigan manufacturers have been before the Michigan Supreme Court and U.S. Supreme Court recently, and the MMA Lawyers Committee is hard at work to ensure that the concerns of Michigan manufacturers are heard.

The MMA Lawyers Committee regularly files amicus curiae, or “friend of the court,” briefs for consideration in important cases. Friend of the court briefs allow nonparties outside the cases to address issues that will affect people other than those in the particular case. Often, arguments made in MMA amicus curiae briefs have found their way into the text of published decisions supporting the result advocated by MMA.

Through its frequent submission of amicus curiae briefs, the MMA’s voice, and that of its membership, is often heard and is well respected in Michigan’s appellate courts and beyond.

In the past year, three cases in particular demonstrate the impact that judicial decisions have on Michigan manufacturers. The MMA Lawyers Committee has been monitoring and participating in these, as well as other, cases.

DaimlerChrysler Corporation v. Cuno

The first, especially significant, case is DaimlerChrysler Corporation v. Cuno. In the case, the U.S. Sixth Circuit Court of Appeals (which is the intermediate federal appellate court for the states of Michigan, Ohio, Kentucky and Tennessee) held that personal property tax exemptions designed to entice specific businesses to invest in the state of Ohio violated the Commerce Clause of the U.S. Constitution and Ohio’s Equal Protection Clause.

This is obviously a matter of great importance to businesses and the general public in the four-state region covered by the Sixth Circuit Court of Appeals, since state governments would no longer be able to constitutionally offer tax incentives to spur economic investment.

The case is now pending before the U.S. Supreme Court, which has yet to decide whether it will hear DaimlerChrysler’s appeal.

An amicus curiae brief filed by MMA Lawyer’s Committee exhorts the Court to hear the appeal and reverse the decision of the Sixth Circuit as to the constitutionality of tax incentives for investment.

The brief argues that, in fact, tax incentives are an appropriate response to the threat of job loss and cites Michigan’s use of such incentives as a progressive response to a real-world problem. Moreover, the Michigan model demonstrates that these incentives are effective in both creating and maintaining Michigan employment.

Henry v. Dow Chemical Company

A second important case is Henry v. Dow Chemical Company. This case, decided favorably by the Michigan Supreme Court, addressed the viability of plaintiff’s actions seeking “medical monitoring” damages for potential future injuries that may arise from an allegedly tortious exposure.

The plaintiffs were a class of residents of the Tittabawasee River floodplain who filed suit against Dow Chemical Company based on Dow’s alleged discharge of dioxin into the river.

While the plaintiffs admitted at the time of filing they had suffered no physical injury, they sought damages which were to compensate them for their increased risk of latent disease associated with dioxin exposure. Specifically, the plaintiffs requested the establishment of a fund to pay for future medical monitoring and potential illnesses or symptoms.

Dow filed a motion, denied at both the trial and appellate level, asserting t hat Michigan law offers no refuge to plaintiffs who are not currently afflicted by an injury, yet speculating that a future injury may occur.

The Michigan Supreme Court granted Dow’s application for leave to appeal to address the question of whether a tort plaintiff may bring a claim for medical monitoring in the absence of a current physical injury.

The Court encouraged the submission of amicus briefs and MMA has answered the call. The Michigan Supreme Court subsequently decided the case against the plaintiffs and, consistent with MMA’s friend of the court brief, held that Michigan law does not recognize any tort claim for potential damages in the absence of a present physical injury.

Why is this an important case for other Michigan manufacturers? First, and foremost, had the Supreme Court found for the plaintiffs in this class action, other similar (and equally costly) claims against large manufacturers would have followed.

Second, the question of tort recovery for “future” injuries is currently a very contentious area of tort law. Not only are plaintiffs suing for medical monitoring costs, they are also seeking emotional distress damages predicated upon fears of developing disease. And, some claims are brought where the alleged injury is an entirely speculative increased risk of future disease.

The implication of this ruling extended far beyond environmental liability. It has quashed actions ranging from medical malpractice to product liability to asbestos claims that could have cost defendants dearly.

Given the unpredictable and extraordinary advances in medical science, were Henry v. Dow decided differently, it is entirely conceivable that cures could be discovered between the conclusion of the case and the discovery of a medical condition.

This strong statement from the Michigan Supreme Court, reiterating that tort liability is premised on the existence of a present injury, is a key step in the right direction for manufacturers facing the numerous types of claims that are now being asserted that seek present recovery for “future” injuries.

Radeljak v. DaimlerChrysler Corporation

Finally, in the pending case of Radeljak v. DaimlerChrysler Corporation, the Michigan Supreme Court will decide whether a Croatian citizen injured in a car accident occurring on the Island of Brac in the Country of Croatia may properly file a lawsuit against DaimlerChrysler in the Wayne County Circuit Court, based on the fact that DaimlerChrysler manufactures vehicles in Wayne County.

In this case, the plaintiffs were injured (one fatally) when a vehicle in which they were seated allegedly slipped from park into reverse and traveled backwards into a Croatian ravine.

The Wayne County circuit court granted DaimlerChrysler’s motion to dismiss the case on forum non conveniens (an inconvenient forum) grounds but the Court of Appeals reversed, holding that the lower court had abused its discretion because Wayne County was not a “seriously inconvenient” venue for the plaintiffs’ lawsuit.

The Michigan Supreme Court granted DaimlerChrysler’s application for leave to appeal and specifically invited the amicus curiae participation of MMA.

Michigan forum non conveniens law is governed by Cray v. General Motors, which sets forth a number of factors relevant to a determination as to whether a court may resist jurisdiction and dismiss on forum non conveniens grounds. The Cray factors focus on three competing interests: the private interest of the litigant, those matters of public interest and reasonable promptness in raising the plea of forum non conveniens.

When assessing the private interest of the litigant, a court is to consider: personal jurisdiction and logistical issues regarding witnesses; ease of access to sources of proof; distance from the site of the accident or incident which gave rise to the litigation; enforceability of a judgment obtained; inconvenience to either party; possibility of viewing the premises; and other practical problems contributing to the ease, expense or expediency of the trial.

With regard to the public interest, the court examines any administrative difficulties inherent to the plaintiffs’ chosen forum not existing in the alternative forum, state law governing the case and the extent to which the proceeding impacts the chosen forum.

Additionally, under Roby v. Ford Motor Co., courts are to make a threshold determination whether jurisdiction in Michigan is “seriously inconvenient,” based on the Cray factors and any other relevant considerations, before dismissing on forum non conveniens grounds.

In the order granting leave, the Michigan Supreme Court specifically asked the parties to brief the question whether the additional Roby factor is properly part of the forum non conveniens analysis.

This is an important case for manufacturers because companies would benefit from a broad interpretation of the forum non conveniens rule that would allow defendant’s more flexibility in getting tort cases dismissed out of Michigan; Wayne County in particular.

Wayne County is renowned for its plaintiff-friendly verdicts. It is little wonder that the plaintiffs in the Radeljak case have traveled half way around the world to take on DaimlerChrysler on its “home court.”

The fact that the Court has taken the case and asked for amicus briefing suggests that it may intend to revise the forum non conveniens law in Michigan. Because courts in other jurisdictions may be more favorable to defendants than are Michigan juries, the flexibility afforded by a broad rule would directly benefit manufacturers.

Additionally, manufacturers would face a number of practical problems trying to litigate cases in Michigan where key witnesses and evidence is located in foreign jurisdictions. A decision from the Michigan Supreme Court is expected within the next 12 months.

In the coming year, the MMA Lawyers Committee will continue to monitor cases coming before Michigan’s appellate courts, and federal courts as necessary, and advocate on behalf of manufacturers to ensure that industry’s concerns are aired.

Please contact me if you have any question concerning the MMA Lawyer’s Committee or if you have a matter that you believe should be brought to the attention of the group.

Fritz Damm is an attorney with Clark Hill PLC, Detroit, and serves as counsel to the MMA Lawyers Committee. He may be reached at 313-965-8241.

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