Drayton v. Jiffee Chemical Corp.

KEITH, Circuit Judge,

concurring in part and dissenting in part.

While I fully agree with the majority’s holding that the defendant was in breach of its express warranty and with the majority’s affirmance of the district judge’s award of $500,000 for Terri Drayton’s pain and suffering; I respectfully dissent from its disposition of the future earnings, psychiatric treatment and punitive damages issues.

I agree with the majority that the evidence as to future loss of income has some troubling features. The problem is obvious; Terri Drayton was only one year old at the time of her injury. No one knows with any certainty what her earning capabilities would have been. However, nothing in the majority opinion convinces me that its determination is any better than the district judge’s. In light of the ogreish conduct which took place here, and of the district court’s earnest efforts to deal with the loss of future income problem, I would affirm that part of the judgment as not clearly erroneous and within the bounds of discretion.

The danger of appellate fact finding is well demonstrated by the majority’s handling of the damages award for future psychiatric treatment. The majority discounts the psychiatric testimony on two grounds. First, because the testimony did not come from a treating psychiatrist, but from a psychiatrist whose opinion was based upon data he received concerning the child, and who had only interviewed the child at most a half hour. Second, the majority appears to be greatly influenced by the apparent fact that as of the date of trial, Terri Dray-ton had not received any psychiatric treatment.

At the time of trial Terri Drayton was seven years old. The fact that she had not yet received psychiatric treatment says nothing about her need for it in the future. While it is true that great strides have been *371made in child mental health, psychiatric treatment of children is still difficult. Further, psychiatrists have long recognized that counseling a maimed seven year old’s parents is as important as counseling the seven-year old herself. Terri Drayton’s parents may well have decided not to subject themselves and their daughter to treatment out of fear, ignorance or a reasoned decision to postpone therapy. Further, for all we know, Terri Drayton has not received psychiatric treatment because her parents cannot afford it. I would not hold her parent’s possible penury or ignorance against her to minimize her future needs.

Similarly, the fact that the psychiatric witness saw Terri for only one half hour, and relied extensively on information given him about Terri, is irrelevant. One does not take a seven-year old child, put her on a couch and proceed to diagnose her. An adult can tell a therapist what is wrong, a child speaks to a psychiatrist largely through its behavior. Plaintiff’s witness in this case, Dr. Norman Bernstein of Harvard, is a leading authority on disfigured children and their psychiatric problems. A review of Terri’s medical records, interviews with her family, followed by a brief meeting with the child herself was ample basis for his testimony.1

Although the majority opinion correctly outlines the facts of this case, word’s cannot describe the shocking appearance of the child. The Liquid-plumr has horribly mutilated this little girl for life. There exist very real grounds for the trial judge’s award of damages for her future psychiatric needs. This case is plainly unlike Petition of United States Steel Corp. (I), 436 F.2d 1256, 1265 (6th Cir. 1970), where Judge Peck noted the flimsy and self-serving basis of the psychiatric testimony there. Here, the expert psychiatrist’s testimony was soundly based. I see no exaggeration in this record; one can readily perceive the severe problems this child will have coping with our acutely appearance-conscious society.

The majority agrees that some psychiatric treatment is needed because it awards Terri $30,000 for such treatment. However, if the testimony in the record is as bad as the majority makes it out to be, then no basis exists for its award either. It is difficult for me to understand how the majority can attack the testimony in the record, proceed to make the unsupported lay diagnosis that Terri Drayton will not need concentrated psychiatric treatment, and then arrive at a figure of $30,000 to compensate her for any treatment she does need. If the majority is unhappy with the psychiatric testimony, the prudent course of action to take would be to remand for further proceedings at the trial level. Since I am of the view that the original award was not clearly erroneous, I would affirm it in full.

Finally, I disagree with the majority’s determination of the punitive damages issue. The district court denied punitive damages on the grounds that 1) they were not available as a matter of law and 2) they should be unavailable in the exercise of discretion on the facts of this case. The trial court’s threshold determination that punitive damages were unavailable was made without the benefit of this court’s decision in Gillham v. Admiral Corporation, 523 F.2d 102 (6th Cir. 1975), cert. denied, 424 U.S. 913, 96 S.Ct. 1113, 47 L.Ed.2d 318 (1976), and cannot survive that decision.

The majority affirms the judgment of liability on the narrow ground of breach of express warranty, and then goes on to conclude that denial of punitive damages was not an abuse of discretion. The majority does not reach the Strict Liability issue, fearing that to find that this product was properly labeled, but unreasonably dangerous, is to judicially ban it from the marketplace.

I am at a loss to explain the majority’s reluctance to squarely hold to this effect. The evidence is clear that regardless of *372labeling,2 this product was unreasonably dangerous for intended use —that is, household use. The Liquid-plumr with the old 30% formulation could have been marketed — with proper warnings — for professional use. The Jiffee Corporation made a conscious decision to market this product to the bigger — and more profitable — consumer market. This should not have happened, the product was inherently too dangerous for that market. This is not my conclusion, it is the conclusion of the defendant’s witness, Vernon Summerfelt who, as manager of specialty products for the Clorox Company, supervises the current sale of (reformulated) Liquid-plumr. The stunning cross-examination of Mr. Summerfelt deserves reproduction in full.3

*373This product squarely falls within the following language by two leading products liability commentators:

“Sometimes the product is so inadequate that the defect cannot be remedied by instructions or warnings. Some drugs, for example, prove to have such grave side effects that they must be completely withdrawn from the market. Likewise if machinery is so designed that it is likely to give way under strains reasonably to be expected, a mere warning of the weakness, as distinguished from its correction, ordinarily will not prevent the product from being classed as dangerously defective. This may happen even though the warning to the purchaser might be emphatic enough to preclude his recovery because of his contributory negligence or voluntary assumption of risk. Inadequacy regardless of warning may also be claimed if a dangerous product is likely to be used or misused by children, especially if the danger can be reduced by improved design or manufacturing methods.” Noel and Phillips, Products Liability, p. 160 (West, 1974).

As the Restatement of Torts 2d § 291 points out, tort law involves a careful weighing process. On balance, does a product’s utility outweigh the risk created by its use? The answer here is clearly that it does not. Unlike the lifesaving but unavoidably dangerous drugs mentioned in the Restatement of Torts 2d § 402A, comment k; the old Liquid-plumr was a mere household convenience. Further, as Mr. Summerfelt admitted, the product could have been — and later was — reformulated to be both safer and more effective. Whether styled as a design defect or as a failure to warn, this *374product’s shortcomings were such that liability should clearly attach. See Barker v. Lull Engineering Co., 20 Cal.3d 413, 143 Cal.Rptr. 225, 573 P.2d 443 (1978); Cepeda v. Cumberland Engineering Co., 76 N.J. 152, 386 A.2d 816 (1978); Wade, On the Nature of Strict Tort Liability for Products, 44 Miss.LJ. 825 (1973); Keeton, Product Liability and the Meaning of Defect, 5 St. Mary’s L.J. 30 (1973). See also Phillips, The Standard for Determining Defectiveness in Products Liability, 46 U.Cin.L.Rev. 101 (1977). See generally Calabresi, The Costs of Accidents (1970); Fletcher, Fairness & Utility in Tort Theory, 85 Harv.L.Rev. 537 (1972).

The evidence in the record that defendant marketed this product without bothering to even try to make it safe, and then advertised it as safe despite being aware of its highly dangerous formulation is conduct so egregious as to support an award of punitive damages. The facts here are certainly as compelling as the facts in Gillham, supra.4

The defendant’s callous argument that “only” 59 other Liquid-plumr injuries were reported to the defendant is further proof of the need for punitive damages. It is miraculous that in the 15 years of marketing Liquid-plumr with the old 26-30 percent lye formulation, only 59 injuries came to the defendant’s attention. Had Liquidplumr caused massive injuries to thousands of Americans there is little question that the product would have been banned at once, either by an appropriate federal or state agency ( i. e. the Consumer Product Safety Commission under 15 U.S.C. §§ 1261 et seq.), or by special legislation. For reasons unknown, this product did not cause massive disfigurement to large numbers of people. Accordingly, defendant was in the happy position of being able to profitably market a highly dangerous product and simply pay off the few people who suffered severe injury.

The majority’s argument that the old formula Liquid-plumr was as safe and effective as other drain cleaners sold at the time, to me, further demonstrates the need for punitive damages. If an entire industry monolithically markets a dangerous product instead of competing to make a safer product, the deterrent effect of punitive damages is vitally needed. Indeed, Mr. Summerfelt indicated on direct examination that even today, drain cleaners as dangerous as the old-formula Liquid-plumr are still being marketed. (J.A. at 668).

That the Clorox Company reformulated Liquid-plumr after acquiring the Jiffee Corporation is to be highly commended. However, I would not go overboard, as the district court did, and immunize the successor corporation from punitive damages. The conduct here was too wanton and the need for deterrence and public protection is too great.

Punitive damages are needed in cases such as this to put lawless corporations on notice that profitable but highly dangerous products cannot be marketed in the expectation that they will cause injuries to a few persons who can be cheaply compensated. It is only when the profit is taken out of the manufacture of hazardous substances that future horrifying injuries such as the one here can be averted. See Owen, Punitive Damages in Products Liability Litigation, 74 Mich.L.Rev. 1258 (1976).

In a society which unfortunately places high value on personal appearance — especially in women- — defendant’s conduct in marketing this dangerous product has turned a little girl’s bright future into that of a withdrawn, terrified leper, doomed to a life of unceasing agony. To be sure, the majority is not insensitive to her plight, but unfortunately, reaches a result which does not adequately compensate her nor adequately deter the wanton corporate behavior which took place.

*375I would affirm the judgment below in favor of Terri Drayton5 with the exception of the punitive damages ruling and would remand for determination of punitive damages.

. Notably absent from the majority opinion is any citation of psychiatric authority. Even a cursory examination of such authority reveals the majority’s mistaken assumptions. See Gardner, Psycotherapeutic Approaches to the Resistant Child (1975); Kanner, Child Psychiatry (1957).

. While I believe that no label would be adequate, I note that a label which states “Danger, causes severe burns” is not the equivalent of a label which states “Danger, causes severe, irreversible burns, first aid is of minimal value.”

. THE COURT: Proceed.

By Mr. Swartz:
Q Mr. Summerfelt, you started with Clorox when, just for the record, so we can get a frame of reference.
A October 25, 1969.
Q And immediately, you undertook the duties that you described with respect to a product called Liquid-plumr?
A Yes.
Q And incident to those duties, you reviewed the practices of the Jiffee Corporation which have now been acquired by Clorox, did you not, with respect to its manufacture, testing, suitability of the product, et cetera?
A Well, as well as we could, yes.
Q And you learned, did you not, to save time, that in the 15 years, approximately, that Jiffee Corporation was manufacturing Liquid-plumr, they had no research and development program?
A Yes, not to my knowledge.
Q And you also learned that in those 15 years, they conducted no tests on the formulation with a view toward reducing its causticity?
A. Not to my knowledge.
Q Now, Mr. Summerfelt, to save time, I’m sure you have reviewed it. You gave a speech that has now become famous. You know which one I’m referring to; correct?
A I think so.
Q And what am I referring to, your famous speech that you told about the properties of old Liquid-plumr?
A Yes.
Q Mr. Summerfelt, to save time, I’m going to read to you a quote from that speech. That was given to you previously. This is quoting from you.
It said, “Old Liquid-plumr was a hazardous product. It said right on the label that it causes severe burns on contact.”
I’m still quoting.
“That means if old Liquid-plumr was accidentally ingested or splashed in the eye or on
the skin, it could cause severe, irreversible damage and first aid was of minimal value.”
Is that your statement there?
A Yes, it is.
Q And that is still true today with respect to the old formulation; correct?
A Yes.
Q Now, you found when you took over this Liquid-plumr project — and you recall you gave a previous deposition in another case, and please forgive me. I’m going to try to save time by condensing it.
You found the Liquid-plumr, the old formulation, to be ineffectual and that is why you looked for a new formulation; correct?
A Yes, ineffectual on the grease.
Q For the general purposes sold, you found that for some of its major applications, it was ineffectual; correct?
A Yes.
Q In addition to finding that the old Liquid-plumr formulation was ineffectual, you were concerned, as you say right in the patent, with the problem of safety?
A Oh, yes.
Q In other words, you wanted to find some way, if possible, to reduce the causticity of the product if you could while increasing its effectiveness; correct?
A Yes.
Q And you did this primarily by using a potassium hydroxide solution in water, basically, in layman sense; is that correct?
A All right. Yes.
Q Now, potassium hydroxide was a well-known chemical known to chemists for hundreds of years; correct?
A Yes.
Q And potassium hydroxide is 30 percent, approximately, less caustic than sodium hydroxide, approximately; is that not right?
A Yes. It is less alkaline.
Q So the new Liquid-plumr solution had approximately 5 percent potassium hydroxide in it; is that correct?
A. Yes.
Q And if you had reduced that by 30 percent, you got about a 3 percent causticity factor as compared to the old sodium hydroxide if we are using 5 percent sodium hydroxide; correct?
A. Yes.
*373Q And one of the reasons that you immediately, as soon as you got the problem, engaged in this research and development program which never existed with respect to this product prior thereto was that you were concerned about consumer protection and consumer safety, were you not?
A Also the consumer ads, substantiation, my own professional pride.
Q And a major part of it was your desire and your company’s desire to protect consumers from foreseeable circumstances of harm?
A That was one part. It was really a two-pronged thing.
Q There were other parts; right?
MR. MULLIGAN: Let him finish.
Q Was that at least one major part?
A. That was one of them, yes.
MR. MULLIGAN: May the witness finish the answer?
THE COURT: Yes.
Q What is the other part?
A The other part, as previously mentioned, was to approve [sic] the efficacy.
Q Yes. And the third reason, was it not, was at this time the Food and Drug Administration, as you indicated in your deposition, was getting very interested in this problem and you were aware, based upon your conversations and correspondence — I say “you.” The corporation was — of their interest in reducing causticity and changing the packaging of the old Liquid-plumr formulation?
A That really didn’t take effect till late ’70.
Q So your efforts in the area of consumer protection and consumer safety here with respect to this area really, and admirably so, preceded the efforts of the Food and Drug Administration?
A Yes,
Q You found, as testified to previously, interestingly enough, that lesser concentrations of a caustic for the general purposes for which Liquid-plumr was sold would do a better job, as you indicated, a more effectual job, than the higher concentrations; correct?
A On the grease mainly. Not so much for the hair.
Q But generally speaking that is true, correct?
A Yes.
Q And not only would it do a better job from the point of view that you just described, it was a far safer product, was it not?
A It was certainly going in the right direction.
Q Yes. You would like to go a little beyond, but certainly far safer when you compare it to the 30 percent sodium hydroxide; correct?
A. Yes. It was safer than that.
Q Very little more, sir.
You were asked a question — and this may be my last question. You were asked a question that based on your training and experience and the work you did in research and development, do you agree with the conclusion of the Government that liquid drain cleaners, including the old Liquid-plumr, should be banned as a hazardous substance under the “Banned Hazardous Substance Act,” and at that time your answer was yes.
Is that still your answer?
A Yes.

. In Gillham, the manufacturer sold TV sets despite knowing they were a fire-hazard. The company neither redesigned them nor informed the public of the danger, but continued to assert that the TV’s were safe.

. I concur in the majority’s disposition of the mother’s claim for loss of services.