Thursday, November 11, 2010

Ready for Redhibition

We were dealing recently with a case from Louisiana and we found ourselves once again confronted with that peculiar cause of action, “redhibition.”  A redhibition claim is something like an implied warranty claim, see Gomez v. St. Jude Medical Daig Division Inc., 442 F.3d 919, 931 (5th Cir. 2006) (describing redhibition as “Louisiana's equivalent to a breach of implied warranty”), and a little like a consumer fraud action, but not really either.  It’s neither fish nor fowl. Hence our reaction when, over a decade ago we first encountered this type of claim – whiskey tango foxtrot?

Redhibition is a Louisiana peculiarity (like the Napoleonic Code, elections that ignore political parties, and parasol twirling football fans shouting "who dat?"), and the folks way down yonder liked it enough that they excepted redhibition from the Louisiana Product Liability Act, which subsumes just about every other product liability cause of action known to man (and some - "unreasonably dangerous per se" - that aren't).  See La. Rev. Stat. §9:2800.53(5) (defining “damage” to include economic loss except for amounts recoverable as “redhibition”); Aucoin v. Southern Quality Homes, LLC, 984 So.2d 685, 691 n.8 (La. 2008) (redhibition survives LPLA).  However, redhibition survives only as to economic losses in products cases.  Pipitone v. Biomatrix, Inc., 288 F.3d 239, 251 (5th Cir. 2002) (LPLA “preserve[es] redhibition as a cause of action only to the extent the claimant seeks to recover the value of the product or other economic loss”) (applying Louisiana law); Nelson v. Mylan Pharmaceuticals, Inc., 2010 WL 3339274, at *3 (W.D. La. Aug. 3, 2010) (same).

Redhibition is one of those claims that’s often pleaded (at least in Louisiana) but rarely pursued or proven in prescription medical product cases.  But every so ofteh, one must vote for the crook, it's important.

Since others are no doubt in the same boat, we thought we’d offer a little primer on redhibition.  First of all, redhibition is a form of statutory warranty that effectively cancels a sale for “redhibitory defects”:

The seller warrants the buyer against redhibitory defects, or vices, in the thing sold.

A defect is redhibitory when it renders the thing useless, or its use so inconvenient that it must be presumed that a buyer would not have bought the thing had he known of the defect. The existence of such a defect gives a buyer the right to obtain rescission of the sale.
A defect is redhibitory also when, without rendering the thing totally useless, it diminishes its usefulness or its value so that it must be presumed that a buyer would still have bought it but for a lesser price. The existence of such a defect limits the right of a buyer to a reduction of the price.
La. Civ. Code. Ann. art. 2520.

Thus, the product must not only be “defective” in the product liability sense (of being unreasonably dangerous), but must also be totally or partially useless.  Sheridan v. Merck & Co., 2003 WL 22902622, at *3 n.3 (E.D. La. Dec. 8, 2003).  The plaintiff has the burden of proving a redhibitory defect.  Grenier v. Medical Engineering Corp., 243 F.3d 200, 207 (5th Cir. 2001) (applying Louisiana law).  Failure to distinguish between a product liability defect and a redhibitory defect is grounds for reversal of a redhibition verdict.  Safeco Insurance Co. v. Chrysler Corp., 834 So.2d 1026, 1044 (La. App. 2002).

The statute describes a contract, not a tort, cause of action.  Nelson Radiology Associates, LLC v. Integrity Medical Systems, Inc., 16 So. 3d 1197, 1210 (La. App. 2009).  Despite the nature of the redhibition action, there’s no requirement of contractual privity.  Aucoin, 984 So.2d at 692.  Because it’s a contractual action, redhibition is essentially a form of strict liability.  Nelson, 16 So. 3d at 1209 (“manufacturer of product with redhibitory defects is “conclusively presumed to have knowledge of defects in the object it produces,” and is “deemed to be in bad faith in selling a defective product”).

Like strict liability, a plaintiff who did not use the product has no redhibition claim.  Leblanc v. Wyeth, Inc., 2006 WL 2883030, at *4 (W.D. La. Oct. 5, 2006).  Also like strict liability, a redhibition plaintiff has the burden of proving causation.  In re Vioxx Products Liability Litigation, 2010 WL 2649513, at *21 (E.D. La. June 29, 2010); Maurer v. Heyer-Schulte Corp., 2002 WL 31819160, at *5 (E.D. La. Dec. 13, 2002).

The legal elements that the courts have developed for a redhibition claim largely track the statute but add a notice and opportunity provision.

(1) the thing sold is absolutely useless for its intended purposes, or that he would not have bought it had he known of the defect; (2) that the defect existed at the time that he purchased the thing, but was neither known nor apparent to him; and (3) that the seller was given the opportunity to repair the defect.
Alston v. Fleetwood Motor Homes of Indiana, 480 F.3d 695, 699 (5th Cir. 2007) (applying Louisiana law).  The defect at the time of sale requirement was applied in a device case in Zachary v. Dow Corning Corp., 884 F. Supp. 1061, 1067 (M.D. La. 1995).

By the way, the “absolutely useless” language sounds something like the design defect claim for prescription medical products that was recognized by the Restatement (Third) of Torts, Products Liability §6(c) (1998) (no “reasonable health-care provider” would prescribe “for any class of patients”), although we haven’t seen any cases making that analogy.

Why else do plaintiffs like redhibition?  Importantly, uselessness/reduction in worth is determined by an objective reasonable man standard divorced from any particular buyer.  “[T]he inquiry under a redhibition claim does not involve the buyer’s subjective knowledge or reliance, but rather is an objective inquiry into the deficiency and whether it diminishes the product’s value or renders it so inconvenient that the reasonable buyer would not have purchased it had he known of the deficiency.” Mire v. EatelCorp., Inc., 849 So.2d 608, 614 (La. App. 2003).  Thus, it has potential as a basis for class actions, since it’s an economic loss cause of action.  But if the product isn’t totally useless a “seller may be allowed credit” for the value that was provided. La. Civ. Code Ann. art. 2545.  Since most drugs and medical devices aren’t totally useless – demonstrated over and over again in other economic loss contexts – the availability of an individualized credit works against class actions.

Not only that, but like a consumer fraud statute, redhibition allows recovery of “attorney fees, in addition to the purchase price and expenses occasioned by the sale.”  Nelson, 984 So.2d at 1211.  Fortunately, attorneys’ fees are recoverable only “insofar as those fees relate to the recovery of purely economic loss.”  Id.  Because manufacturers of products with redhibitory defects are deemed to be in bad faith, the plaintiff may also recover loss of income as an element of damages.  Gaston v. Bobby Johnson Equipment Co., 771 So. 2d 848, 854-55 (La. App. 2000).

As far as defenses, we can tell you that the learned intermediary rule applies in warning-based redhibition cases.  Cobb v. Syntex Laboratories, Inc., 444 So.2d 203, 205-06 (La. App. 1983).  Redhibition claims are expressly preempted in cases involving PMA medical devices.  Gomez, 442 F.3d at 931; Lemelle v. Striker Orthopaedics, 698 F.Supp.2d 668, 674-78 (W.D. La. 2010).  A feasible alternative design requirement has been imposed in design-based redhibition claims.  Brown v. Brown & Williamson Tobacco Corp., 479 F.3d 383, 390-91 (5th Cir. 2007) (applying Louisiana law).

Makers of non-defective component parts are not liable for redhibitory defects in a finished product.  Longo v. E.I. Dupont De Nemours & Co., 632 So.2d 1193, 1197 (La. App. 1994) (TMJ implant case); Klem v. E.I. DuPont De Nemours & Co., 19 F.3d 997, 1003 (5th Cir. 1994) (applying Louisiana law) (same).

The statute of limitations (known in Louisiana as “prescription”) for redhibition is “one year from the day the defect was discovered by the buyer.”  La. Civ. Code Ann. art. 2534(B); Lanzas v. American Tobacco Co., 46 Fed. Appx. 732, 733 (5th Cir. 2002) (applying Louisiana law).

Sharp-eyed readers may note that we haven’t mentioned punitive damages. That has nothing to do with redhibition, as such.  Rather, Louisiana does not allow punitive damages generally, unless statutorily provided – which is not the case with redhibition.  Ivory v. Pfizer Inc., 2009 WL 3230611, at *8 (W.D. La. Sept.30, 2009); Cheeks v. Bayer Corp., 2003 WL 1748460, at *1 (E.D. La. March 28, 2003).  Punitive damages?  Who dat?

Anyway, after four years, we've finally managed to write a post on a Louisiana topic.  Laissez les bon temps rouler.

2 comments:

excessive sweating said...

The thing sold is absolutely useless for its intended purposes, or that he would not have bought it had he known of the defect. Makers of non-defective component parts are not liable for redhibitory defects in a finished product.

Mike said...

Redhibition in case people are confused is simply a civil action specially under Louisiana law against a company for a product that isn't working. I hope that makes it easier for people to understand.