In a decision that effectively spells the death of so-called no-injury product liability class actions under Minnesota law, the U.S. Court of Appeals for the Eighth Circuit recently affirmed dismissal of a lawsuit brought by plaintiffs who claimed that they had suffered economic injury from their purchase of an allegedly defective crib. The court dismissed plaintiffs' claims on the grounds that the alleged defect had not manifested itself in the crib that they owned, even though the defect had allegedly resulted in several serious injuries and led the manufacturer to institute a recall.

Plaintiffs John and Jill O'Neil purchased a crib manufactured by defendant Simplicity in 2003. The crib was designed with a drop side that allowed the user to lower one side of the crib to make it easier to lift a child into and out of the crib. The O'Neils used their crib without incident for approximately four years.

In 2007, after reports of three infant deaths, seven nonfatal injuries and 56 other incidents, the Consumer Product Safety Commission and Simplicity announced a voluntary recall of approximately one million cribs, including the crib model purchased by the O'Neils. The recall was prompted by concerns that a potential defect in the hardware used to assemble the crib made it possible for the drop side to detach from the crib frame, creating a gap in which a child could become entrapped. As part of the recall, Simplicity offered to send owners a retrofit kit, including new hardware and installation instructions, which had the effect of immobilizing the drop side. The O'Neils claimed that they stopped using their crib after hearing about the recall because of concerns about the safety of their crib. They did not order the retrofit kit because they claimed that Jill O'Neil could not use the crib without a functional drop side.

The O'Neils brought a class action suit in federal court in Minnesota, seeking to represent a class of all persons in Minnesota who had purchased a recalled crib. The proposed class specifically excluded individuals who had suffered a personal injury while using the crib. The complaint included claims for breach of express and implied warranties under both Minnesota and federal laws, violations of various Minnesota consumer protection laws, unjust enrichment and declaratory relief. Before discovery commenced, Simplicity moved to dismiss the case arguing that because the O'Neils' crib had never malfunctioned, they had not suffered a legally cognizable injury. The district court agreed and dismissed the entire lawsuit, and the O'Neils appealed.

In a unanimous decision, the U.S. Court of Appeals for the Eighth Circuit on July 22 affirmed the district court's dismissal. Noting that the drop side of the O'Neils' crib had always functioned properly and had never separated, the court held that it was not enough for the O'Neils to allege that similar products purchased by others contained a defect or that their product was at risk for manifesting a defect; instead, the court held, they needed to allege that their own crib actually exhibited the alleged defect. Because they made no such allegation, the court found that the O'Neils had not suffered a compensable injury. The O'Neils argued that they suffered economic injury because they did not receive the benefit of their bargain—they had paid for a safe crib with a functioning drop side but received a crib without one. The court rejected this argument as well, finding that because the O'Neils' crib had not exhibited the alleged defect, they had necessarily received the benefit of their bargain and could not support their claim based on the performance of cribs purchased by others.

The court's decision represents the strongest repudiation to date of no-injury product defect class action cases decided under Minnesota law. The decision makes clear that a generalized defect in a product line—even a potentially serious defect that causes injury to others or results in a product recall—will not support class-wide claims for economic loss absent allegations that the plaintiff's product has actually malfunctioned or manifested the specific defect.

The Eighth Circuit decision is reported at O'Neil v. Simplicity, Inc., et al., No. 08 2278,___ F.3d ___ (8th Cir. July 22, 2009). Leonard, Street and Deinard served as co-counsel to Simplicity in the district court action