Defective Product

As a Christmas present, our client bought their developmentally delayed adult son, a two wheel electric scooter. She made the purchase from an independent seller who set up a seasonal kiosk in a large local shopping mall. The retailer had purchased a small number of scooters from a small independent importer who had purchased several containers directly from a manufacturer in Shenzhen, China. On Christmas morning our client’s son was riding his new gift in his neighborhood development when the front wheel simply fell off the fork. He was propelled over the handlebars and struck his chin on the ground causing his neck to hyper-flex and fracture. He was left paralyzed from the neck down.

We quickly learned that the kiosk retailer closed after Christmas and that neither it nor the importer carried any type of insurance. Initially we were able to identify the Chinese manufacturer and a contact it had in Burbank, California. After months of investigating we learned that this California Company was importing the same or similar scooters, which our client had purchased, and selling them to a large US retailer, the Target Corporation. The California Company denied it had any affiliation with the Chinese manufacturer and that it had no connection with or knowledge of the scooter purchased by our client. We identified a former director of sales from Target who agreed to meet us in Minneapolis Minnesota. From that meeting we were able to obtain extremely valuable information that at least circumstantially connected the California Company with the Chinese manufacturer and ultimately to our scooter. We also learned that as a requirement of their business relationship with Target, the California Company was obligated to purchase product liability insurance coverage in the amount of $3 million. After 3 years of investigation and litigation against the California Company we still had no direct evidence linking the California Company and it’s insurance coverage to our scooter. In a last ditch effort we hired a Chinese lawyer in Shenzhen China to obtain and deliver to us the available public corporate information for of the Chinese manufacturer. Several boxes of documents, all in Mandarin Chinese, arrived at our office. We were given estimates to translate these documents in the tens of thousands of dollars. Our gut instinct told us that our missing link was buried somewhere in these boxes. We took the leap of faith and agreed to pay the translation fees. After 3 weeks of daily transcripts of the translated documents being provided we found what we were looking for, a joint venture agreement between the California Company and our Chinese manufacturer to make these scooters. Unfortunately, the case did not end there. The California Company’s insurance company raised an exclusion defense to coverage. We retained separate insurance counsel and after several months of litigating the insurance matter in Federal court, the insurance company finally capitulated and agreed to pay the full policy limits to settle the case.

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