As products liability claims arising from the overheating or combustion of electronic cigarettes, vaporizers, vape pens, and other electronic nicotine delivery system (ENDS) products (“e-cigs”) become more common, it is helpful to consider ways to limit exposure to these types of claims. One such way is to consider other potentially responsible parties, which can include those in the chain of distribution of the e-cig and its component parts, as well as the end user. This law alert discusses issues relevant to this analysis.
1. Potentially Responsible Parties in the Chain of Distribution
Although product liability law varies by jurisdiction, generally speaking, any party in the chain of distribution of a product could potentially be liable. Therefore, we recommend identifying all parties in the chain of distribution for the e-cig device and each of its component parts early on, including manufacturers, wholesalers, distributors, and retailers, since these parties may be a source of contribution.
Generally, a design or manufacturing defect can be traced back to the device manufacturer. If defects exist, the manufacturer is likely to be allocated a significant portion of liability for any resulting injury. While manufacturers can thus be fruitful sources of liability allocation, a significant portion of e-cig manufacturing is located overseas, specifically in China.[1] Obtaining jurisdiction over these companies can be difficult [2] and enforcing a judgment against them can be even more difficult.[3] Complicating matters further, the e-cig industry has a fair amount of international “fly-by-night” organizations, which frequently shut down operation without notice.[4] Thus, while all sources of potential contribution are worth investigating, it is important to understand the practical difficulties associated with involving certain e-cig manufacturers.
Distributors and wholesalers should also be considered as potentially responsible parties. While a distributor often will not be found liable when it did not create and was not aware of the alleged defect, and when it exercised no control over the design, manufacturing or labeling of the product, in some jurisdictions a distributor can be held liable when a manufacturer is not subject to the court’s jurisdiction.[5] Given the practical difficulties regarding foreign e-cig manufacturers, and the fact that U.S.-based distributors and wholesalers may be more likely to have insurance coverage, distributors and wholesalers should also be considered as potential sources of contribution.
In addition, the retailer may be the easiest party to identify in the chain of distribution, and should also be considered as a potentially responsible party. Retailers may sometimes be subject to liability even where they did not know of the risks and were not in a position to have taken action to avoid them, so long as a predecessor in the chain of distribution could have acted reasonably to avoid the risks.[6] While retailers are thus important parties to consider for any products liability claim, their practical ability to contribute should also be considered, as many e-cig retailers are small “mom and pop” operations that may not carry significant insurance coverage or have substantial assets. When faced with such situation, it is worth considering whether such a party should be named in the lawsuit, or whether it would be more helpful to use them as a source of discovery.
Taking the time at the early stages of a claim to consider these issues is important in connection with potentially limiting exposure in the event of an adverse verdict, as well as obtaining contribution for any settlement negotiations that may occur beforehand.
2. Parties Responsible for Other Component Parts
E-cigs are comprised of a number of component parts, including an atomizer, which heats the e-liquid into a vapor for the user to inhale, and a battery which powers the atomizer.[7] Oftentimes, especially in the context of a customizable mod, such parts are manufactured, distributed, and sold by different parties. Because any one of the component parts could potentially cause or contribute to a failure in the assembled device, it is important to identify each distinct component part and all parties in the chain of distribution for each part.
Engaging an experienced expert early can assist in evaluating whether an error in a particular component part could have contributed to a device malfunction. This, in turn, can help to not only identify other important parties to limit exposure, but also to narrow the scope of discovery, thereby reducing costs.
3. User Error
The end user of the device should also be considered as a potentially responsible party because a user can cause or contribute to an e-cig malfunction in a number of ways. For example, charging an e-cig lithium ion battery with an improper charger can cause a battery malfunction.[8] Similarly, using two different batteries within the same device can also cause such a problem.[9]
Unregulated customizable mods present an even greater opportunity for user error. These mods enable users to purchase the various component parts of their device separately, building unique devices tailored to their individual preferences. When users assemble their own mechanical mods, they must ensure that they use the appropriate coil resistance for the battery they are using, typically by using an ohms meter and ohms law calculator.[10] Failing to do so properly can cause the battery to “vent” and explode, releasing hot pressurized chemicals from the battery.[11]
Due to the numerous ways a claimant may have contributed to a malfunction, exposing themselves to a claim of contributory or comparative liability, we recommend considering these issues early in the case. Obtaining discovery regarding the prior e-cig experience and knowledge of the claimant and how the device was ultimately assembled can assist in this endeavor, as can engaging an expert to conduct testing regarding the cause of the malfunction.
4. Proactive Risk Avoidance: Indemnification Clauses
When facing an e-cig products liability claim, it is also critical to review all contracts with other parties in the supply chain to determine whether they contain indemnification language that shifts risk among the parties. Such language can have a significant impact on which party bears the risk for a claim. Before a claim arises, parties in the e-cig industry should consider negotiating an indemnification clause in their favor into their contracts as part of a proactive defense strategy. Engaging experienced counsel in connection with this process can help ensure that indemnification language is enforceable under applicable law.
As e-cig products liability cases become more common, proactively considering ways to limit risk in the face of a claim, including considering other potentially responsible parties, is essential to managing cost and effectively evaluating potential resolution strategies.
[1] Adam Jourdan, “Vaping” a Slow Burn in China, World’s Maker of E-Cigarettes, Reuters (Jan. 15, 2014, 4:10 PM), https://www.reuters.com/article/us-china-smoking/vaping-a-slow-burner-in-china-worlds-maker-of-e-cigarettes-idUSBREA0E1JX20140115.
[2] Gary A. Magnarini, Jurisdiction Over Foreign-Nation Manufacturers Tracking the Resurgent “Stream of Commerce” Theory, 68 Fla. B.J. 38 (1994).
[3] Ryan Hutzler, Building a Different Kind of Relationship: A Suggested Treaty Between the United States and China, 28 N.Y. Int’l L. Rev. 29 (2015).
[4] Federal Government Sends Warning to Vaping Companies, NPR.org (May 2, 2018, 5:09 AM) https://www.npr.org/sections/health-shots/2018/05/02/607466204/federal-government-sends-warning-to-vaping-companies.
[5] Eric Larson Zalud and Clare R. Taft, EXPANSION OF LIABILITY TO THE BORDER AND BEYOND Tracking Foreign Manufacturers to Obviate Liability, 50 No. 12 DRI For Def. 42 (2008).
[6] Restatement (Third) of Torts: Products Liability §2 cmt. o (Am. Law Inst. 1998).
[7] Vaporizers, E-Cigarettes, and other Electronic Nicotine Delivery Systems (ENDS), FDA (May 7, 2018), https://www.fda.gov/TobaccoProducts/Labeling/ProductsIngredientsComponents/ucm456610.htm.
[8] Tips to Help Avoid “Vape” Battery Explosions, FDA (Dec. 12, 2017) https://www.fda.gov/TobaccoProducts/Labeling/ProductsIngredientsComponents/ucm539362.htm.
Eve Wang, Vaping 101: The Do’s and Don’ts for Vaping Battery Safety (Nov. 4, 2016), https://www.vaporesso.com/cloud-community-blog/vaping-101-the-dos-and-donts-for-vaping-battery-safety.
[9] Tim Mechling, Battery Safety: Will You Marry Me?, Mt. Baker Vapor (Oct. 23, 2015) http://blog.mtbakervapor.com/marrying-batteries-vape/.
[10] Imogen Groome, What is Ohms Law And How Can It Keep Your Vape From Exploding, Metro (Jan. 23, 2017, 3:52 PM) https://metro.co.uk/2017/01/23/what-is-ohms-law-and-how-can-it-keep-your-vape-from-exploding-6400343/.
[11] Id.
For more information about how this may affect your business and/or current or pending litigation, please contact one of the attorneys on the E-Cigarette/Vape Team.
