Burn Victim Sues Sunbeam & Target Following Crock-Pot Incident

Georgina Perez purchased a Crock-Pot pressure cooker from Target in 2018. In June 2019, she was hospitalized for severe burns after the lid came off of the appliance while she was opening it. She proceeded to file a personal injury suit again the manufacturer, Sunbeam Products, its parent company Newell Brands, and Target.

Background

In November 2018, Ms. Perez purchased a Crock-Pot-branded "Express Crock Multi-Cooker" at a Target store in Colorado. The Multi-Cooker was manufactured by Jiangmen Nanguang Electrical Appliance Co., Ltd., with a date code indicating production on September 14, 2018.

In June 2019, Ms. Perez sustained burns when the Multi-Cooker lid came off while she was opening it to prepare food. She called an ambulance and was admitted to Swedish Hospital with severe burns.

Analysis

Ms. Perez asserted multiple claims against all defendants for strict products liability design defect; strict products liability manufacturing defect; strict products liability failure to warn; negligence; breach of implied warranty; breach of express warranty; violation of the Colorado Consumer Protection Act; and fraud.

Newell moved for summary judgment, arguing it cannot be liable under Colorado law as it is not a "manufacturer" or "seller" under the products liability statute, nor is it the alter ego of its subsidiary, Sunbeam. Perez responded Newell participated in designing changes to the cooker's lid and lock, so there is a dispute of fact on whether it is a “manufacturer.”

“Manufacturer” Definition

Newell argues it is not a "manufacturer" under the Colorado Products Liability Act because it did not manufacture or design the Multi-Cooker, stating that Sunbeam designed it and Jiangmen manufactured it. The Act defines a manufacturer as an entity involved in production or controlling the process, and its intent is to extend liability to those involved in production or control.

Perez argues Newell is a manufacturer due to its involvement in the design process and redesigning the product to address defects. She cited evidence Newell approved design changes to address safety issues, including internal documents from the company showing planned changes to the lid lock material, length, and tolerances. Another Newell internal document titled “VoC Feedback and QA Activities” highlighted customer complaints about the Multi-Cooker.

The "Product Start Authorization Form" for the Multi Cooker lists a the project manager who identified himself as a Newell employee on LinkedIn. Furthermore, Newell logos appear on various “Test Data Sheets” and design reports.

The evidence creates a dispute of fact over whether Newell participated in designing and producing the Multi-Cooker, specifically the lid and lock mechanism. This is sufficient to potentially consider Newell a manufacturer under the statute. The dispute of fact precludes summary judgment.

“Seller” Definition

Newell argued that it cannot be held liable as the seller of the allegedly defective Multi-Cooker because they are not defined as a seller under the Colorado Product Liability Act. The act defines a seller as any individual or entity engaged in selling or leasing products for resale, use, or consumption. Newell claims it is evident that Ms. Perez bought the Multi-Cooker from Target and has not shown any proof that Newell sold the product. Ms. Perez failed to address this argument in her response.

As it is undisputed that Ms. Perez purchased the Multi-Cooker from Target and could not provide evidence that Newell sold or leased the product, the Court granted this part of Newell's motion, indicating that they cannot be held liable as a "seller" of the Multi-Cooker under the Colorado statute.

Alter Ego Doctrine

Newell argued it couldn't be liable under alter ego because Perez hadn't pled or established facts suggesting Newell was an alter ego of Sunbeam. To hold a parent corporation liable for a subsidiary's actions under Colorado law, a plaintiff must show the corporate structure was used unjustly. Courts evaluate 10 factors to determine if a parent company should be liable under the "alter ego" doctrine: 1) Parent owns all or most of subsidiary's stock; 2) Parent and subsidiary have common directors/officers; 3) Parent finances subsidiary; 4) Parent incorporates subsidiary; 5) Subsidiary has inadequate capital; 6) Parent pays subsidiary's expenses/losses; 7) Subsidiary does mostly business with parent; 8) Subsidiary referred to as a department of parent; 9) Subsidiary directors don't act independently; 10) Subsidiary doesn't observe formal legal requirements.

Perez did not respond to Newell's alter ego arguments or present any evidence related to the 10 alter ego factors. Under 10th Circuit precedent, a plaintiff's failure to address a claim or theory in response to summary judgment is grounds to grant summary judgment for the defendant. Here, Perez failed to address alter ego in response to Newell's motion, so the Court properly granted summary judgment for Newell on alter ego liability.

Ruling

The court denied Newell's motion on whether it is a "manufacturer," finding a factual dispute over its role in designing the lid and lock. But it granted the motion on Newell not being a "seller" and on the alter ego theory.