Not manufacturer's duty to retrofit accident-prone forklift

April 1, 2004
Ostendorf v. Clark Equipment Corp., 122 S.W.2d 531 (Sup.Ct.Ky. 2003), Supreme Court of Kentucky, Dec. 18, 2003.

Clark Equipment Corp.,
122 S.W.2d 531
(Sup.Ct.Ky. 2003),
Supreme Court of Kentucky,
Dec. 18, 2003.

Michael Ostendorf, an employee of Delta Airlines at the Greater Cincinnati-Northern Kentucky International Airport, was injured in 1994 when the forklift he was driving was hit by a baggage tug vehicle. The forklift overturned pinning Ostendorf's right foot to the ground.

Ostendorf filed a lawsuit against Clark Equipment Corp., the manufacturer of the C-300 forklift, charging the forklift was dangerous because it had no restraint to keep the operator from falling out if it tipped over. Ostendorf also said Clark breached a duty to retrofit the forklift with an operator restraint.

The Kentucky trial court granted summary judgment for Clark on all claims, and Ostendorf appealed. The Court of Appeals reinstated his claims for negligent design and product liability, but held that Kentucky law did not recognize a common-law duty by a seller to retrofit a product that was not defective at the time it was manufactured. The forklift in which Ostendorf was injured was made in 1980. At that time, its design complied with Occupational Safety and Health Act and American National Standards Institute standards.

In 1983, in response to incidents in which forklift operators were killed or injured when their machines turned over, Clark developed a new safety seat for its forklifts, which incorporated an operator restraint. Clark also voluntarily implemented a retrofit program to provide owners of its C-300 and C-500 forklifts with the opportunity to have the new restraint system installed, free of charge. The forklift operated by Ostendorf did not have an operator restraint. Clark said it mailed a notice to its customers, including Delta, advising them of the availability of the retrofit. Delta said it never received the notice.

Ostendorf appealed the retrofit decision to the Supreme Court of Kentucky, arguing that Clark had a common-law duty to retrofit its forklifts and negligently conducted its retrofit program. The state's high court noted courts in some states have found a duty to retrofit. But the court concluded a manufacturer had no duty to retrofit a product that was not defective when sold. According to the court, a court ruling requiring a retrofit would be akin to having it impose a recall. The court pointed out, "A retrofit campaign can be a costly, complicated undertaking and the decision to retrofit should be left to governmental bodies more suited to the task, rather than the courts."

The court also reasoned that Ostendorf's claim that the C-300 forklift was dangerous and defectively designed because it did not have operator-safety restraints would be resolved in his negligence and product-liability claims, which the appellate court had reinstated.

Group boycott of distributor is illegal

Southern Tool & Supply Inc.
Beerman Precision Inc.,
862 So.2d 271
(La.App. 2003),
Louisiana Court of Appeal,
Nov. 16, 2003.

Southern Tool & Supply Inc. sells power tools, saw blades, grinding wheels, drill bits, and other equipment to contractors in the New Orleans area. When the company started in 1996, it applied to be a distributor of Black & Decker products, including the DeWalt line of tools. When Black & Decker denied Southern Tool a distributorship, the company believed it was because of opposition from two other distributors, Beerman Precision Inc. and Industrial Welding & Supply Co.

In the fall of 1999, Black & Decker's regional sales manager agreed to let Southern Tool be a distributor, allowing the company to order DeWalt and Black & Decker products at distributor prices. Southern Tool began telling its customers that it would be a Black & Decker/DeWalt distributor. On Dec. 22, 1999, Black & Decker's representatives met with the principals of Southern Tool and told them that Black & Decker was canceling their distributorship contract because a market survey showed that Black & Decker already had enough distribution in the New Orleans area.

The principals of Southern Tool later found out there had been no market study. They said they learned that Beerman and Industrial Welding had complained to Black & Decker about Southern Tool's distributorship and, in an effort to force Black & Decker to cancel Southern Tool's newly acquired distributorship status, had returned their inventory to Black & Decker.

Southern Tool brought an antitrust action against Black & Decker, Beerman, and Industrial Welding, charging restraint of trade and unfair trade practices under Louisiana law. According to Southern Tool, the defendants had agreed Southern Tool would not be allowed to have a Black & Decker distributorship. The company also claimed the cancellation damaged its business reputation. When the trial court denied the defendants' request to dismiss the case, they appealed to the state Court of Appeal that ruled that Southern Tool had a right to pursue its claim. According to the court, the allegations of Southern Tool met the criteria for an illegal "group boycott." Although Black & Decker argued it had a right to deal with whomever it liked, Southern Tool alleged a conspiracy among the defendants to eliminate Southern Tool as a competitor on an equal footing. Citing a 1979 federal-court decision, the court stated, "Group boycotts or concerted refusals to deal are unlawful under the antitrust laws 'because their purpose and effect is to reduce competition by driving the plaintiff from the market.'"

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