Monday, October 22, 2012

Another Way to Lose Your Shirt . . .

It keeps getting worse for Lance Armstrong.  Another cycling association or agency or union or whatever has just weighed in.  And this one really seems to matter.  It’s goodbye to Armstrong’s seven Tour de France titles.  Armstrong gambled and lost his shirt – er, yellow jersey.  It’s been a very sad story to watch unfold.  But that’s not why we’re mentioning it.  We just want to use it for the segue. 
That’s because in Hathaway v. Cintas Corp. Servs., 2012 U.S. Dist. LEXIS 146233 (N.D. Ind. Oct. 11, 2012), one of the defendants, Cintas, lost its shirt.  Cintas manufactured work shirts and provided them, along with laundering and repair services, to a welding/cutting company.  Id. at *1-2.  While one of the welding/cutting company’s employees was operating a plasma cutter, a spark flew, and his Cintas-made shirt caught on fire, injuring him.  Id.  He and his wife filed warranty, product liability and negligence claims against Cintas, who ultimately moved for summary judgment.  Cintas won for the most part. 
But what’s interesting is not the claims on which Cintas won – warranty and product liability claims.  Those wins were typical.  The warranty claim was subsumed under Indiana’s Product Liability Act (IPLA) because plaintiffs were seeking tort damages, not economic loss damages.  Id. at *5-8.  Plaintiffs had no evidence to support a manufacturing defect claim, and no evidence of a cost-effective alternative design to support a design defect claim.  Id. at *9-15.  And Cintas had a good “sophisticated intermediary” defense to plaintiffs’ failure to warn claim, given that Cintas warned the welding/cutting company about the flammability of the shirts and said that the warning should be conveyed to employees  Id. at *15-22. 
It’s the analysis related to the claim on which Cintas lost – common law negligence – that we find interesting.  Now, you’d think that this claim like the warranty claim would also be abrogated by or subsumed under the IPLA. 
Not so fast.  This is where Cintas lost its shirt.  The shirt became a service.  Or at least it might become a service.  And the IPLA applies only to goods.  So, if a jury decides that Cintas was providing a service, plaintiffs’ common law negligence claims will not be abrogated by the IPLA. 
We can imagine cases in which the defendant would want the IPLA to apply and cases in which it would not.  So we’re looking at this case mostly out of pure interest. 
Here’s what the court thought.  The IPLA doesn’t apply to a transaction that involves “wholly or predominantly a service.”  Id. at *23 (citing Ind. Code § 34-6-2-114.)  And the agreement between Cintas and the welding/cutting company was not just for the shirts.  It was also for shirt repairs and laundering – i.e., services.  So was Cintas providing predominantly a good or a service?
Well, it was definitely providing shirts.  That’s a good.  It’s something that Cintas manufactured.  It’s something that the plaintiff was able to wear.  It’s something that could catch fire.  And, when considering predominance, it’s something that’s necessary for there to be any laundering or repairs.  So the predominant component of the relationship sure seems like shirts. 
But, unfortunately for Cintas, some of the evidence that it presented might have ricocheted.  The court noted that “Cintas put forth evidence outlining the extensive process that the clothing [that the welding/cutting company] employees used went through after being returned to Cintas each week.”  Id. at *27-28.  This lead the court to conclude that the repair and laundering services were not “incidental” and “made up a substantial portion of the relationship.”  Id. at *28.  That was enough for the court to leave for the jury the determination of whether the relationship was “predominantly” a service. 
The court didn’t go into much more factual detail.  Maybe Cintas’s motion would have been helped by facts showing the importance of the shirts to the relationship, or showing that Cintas has other relationships that involve only shirts but no or fewer relationships that involve only the services.  Maybe a comparison of the cost charged for the shirts versus the laundering/repairs would have helped.  Or testimony from representatives of the welding/cutting company on the importance of the shirts to the relationship.  Of course, it’s possible that some or all of this evidence wasn’t available, or that it was presented but the court discounted it. 
The court, however, had been very willing to grant Cintas summary judgment on certain other of plaintiffs’ claims.  And it cited to a couple of precedent opinions – i.e., Great Northern Ins. Co. v. Buddy Gregg Motor Homes, 2002 U.S. Dist. LEXIS 7830 (S.D. Ind. Apr. 29, 2002) and Hill v. Rieth-Riley Constr. Co., 670 N.E. 2d 940 (Ind. Ct. App. 1996) – in which Indiana courts had determined on summary judgment that a particular relationship involved a service.  Yet the court wasn’t so inclined in this case for this particular claim.  Who knows?  Maybe the court was influenced by the fact the words “Cintas” and “Corporate” in Cintas’s corporate name are followed by the word “Services.” 
And so the defendant lost its shirt.  Maybe it can find it again in front of the jury. 

1 comment:

Ron Miller said...

Any chance we are overdoing the effort to be funny in a serious injury case?