|Falling merchandise specialist Jeffrey Hyman stands in front of Wal-Mart's 'Falling Prices' sign.|
By Christa Zevitas
Jamie Isaacs was out doing a little shopping, perhaps dreaming of what color she would paint her child's room once he was born. As the mother-to-be browsed about a Home Depot in Boise, Idaho, what she was definitely not imag- ining was that her life, as well as that of her unborn child, could be in imminent danger.
But Isaacs was suddenly jolted out of lullaby land when a 5O-pound hot water heater fell off a 16-foot shelf and struck the side of her head. Although the mother and child both survived (today Isaacs has a healthy four-year-old boy), Isaacs continues to suffer from chronic migraines as a result of the 1995 incident.
Tom Morely's story closely mirrors Isaacs'. The thirty-something Morely was strolling through a Las Vegas, Nev., Home Depot in May 1997, licking a lollipop and checking out the merchandise. Just as he was leaving, 3,000 pounds of asphalt roofing shingles that were stacked 15-feet high collapsed and buried him. The accident caused brain damage, various orthopedic injuries requiring surgery, as well as neck injuries and a crushed foot.
"High-stacking" of merchandise has become a trademark of retail superstores. From a business standpoint, America's mass merchandisers - such as Wal-Mart, K-Mart, or Home Depot - are quite savvy. By creating stores that resemble mini-warehouses and stacking goods as high as 18 feet, they virtually eliminate warehouse costs and save millions of dollars. But according to Denver attorney Jeffrey Hyman, these business savings often come at the customer's expense.
Since 1994, Hyman has specialized in suing mass merchandisers on behalf of consumers and employees who have been hit on the head by falling toys, power drills, pet food, and other goods. In fact, he settled Isaacs' case against Home Depot in August 1998 and clinched what he calls a "huge" settlement for Morely that same month. Both settlements were confidential.
Hyman, who is special counsel at a 14-lawyer Denver firm, heads a falling mercharidise team that includes another attorney and a paralegal. He says all three devote about 90 percent of their time to falling merchandise suits, with the remainder going to personal injury and employment law cases.
Strong Cases Before a Jury
Hyman has won all of the seven falling merchandise suits he's tried over the past six years - six against Wal-Mart and one against K-Mart - with verdicts averaging about $1 million. From barbecue grills to toy ponies, goods that are falling and striking unsuspecting shoppers are also bringing Hyman an average of 10 lucrative settlements per year.
Unlike the plaintiffs in some "slip-and- fall" lawsuits, he says those hit by falling merchandise are difficult for corporate lawyers to brand as gold-diggers. "
The problem with high-stacking is that 95 percent of the time the superstores don't have any restraining devices to prevent merchandise from falling," says Hyman. Yet they know that even if a box weighing two pounds falls off a high shelf, it could cause serious injuries."
Hyman says the absence of safety measures, coupled with the practice of high-stacking in the warehouse shop- ping environment, has led to tens of thousands of falling merchandise accidents and injuries across the country over the past decade (see pie chart). Chaotic aisles and leaning towers of merchandise create precarious conditions that are ripe for lawsuits, he says.
And the defense, at least in Hyman's eyes, is flimsy.
"In every case that I've been involved in, the retailer takes the position that the consumer has the duty to be aware of the potential for merchandise failing off high shelves," he says. "But jurors don't believe that premise - they think it's a bunch of hogwash. I've never talked to a juror after any case that hasn't been appalled by the lack of safety concerns and provisions."
Attorney Todd Norton echoes Hyman's thoughts. "The success rates in falling merchandise cases are higher than in premises liability cases because there's less of an element of fault on the plaintiff's part," says Norton, partner in a three-lawyer firm in Encino, Calif. Norton is currently working on what he says is "one of the larger falling merchandise suits that southern California has seen."
Defense lawyers say the cases are rarely that one-sided.
"I start with the premise that nothing falls on its own - it's Newton's Law of Physics," says Steve Scholl, a defense lawyer with a 10-lawyer firm in Albuquerque, N.M. "Either you brought it down yourself or someone else made it fall on you."
He says that in many cases, either the plaintiff or another customer causes the accident.
Defense attorney Peter Burg agrees.
There are a lot of occasions where the situation is safe except where the plaintiff does something foolish or inappropriate, says Burg, who works for a 28-lawyer firm based in Denver. "If, for example, a customer climbs a ladder when signage specifically instructs the customer not to use the ladder, that tends to diminish jury sympathy. On the other hand, there's a lot of jury sympathy where the general public thinks products were stacked too high or products haven't been properly secured."
While Hyman boasts a 100 percent win record to date, so does Scholl on the defense side. He's won defense verdicts in eight of his 10 falling merchandise trials and claims the other two as victories since the plaintiffs won nothing more than their medical expenses.
Picking the Winners
Plaintiffs' lawyers caution against jumping into what Hyman calls "deceptive litigation."
What looks like a case that could be easily handled, isn't, he says. "To litigate against Wal-Marts and Home Depots is very expensive and very difficult. They stonewall the litigation and it drags on for years and years."
It's also important to keep in mind that the Wal-Marts of the world have little incentive to settle.
From an economic point of view, I get a $2 million verdict and it takes me two more years to get that money from them, says Hyman. "[In the meantime] they make money off of that $2 million. Even though they have to pay me interest, they know they're going to make 30 percent on that $2 million over those two years.
And even when they finally do pay, a couple million dollar loss is a flea bite to these companies.
One multi-million dollar verdict is very small in relation to the [profits] of a company that is doing billions in sales, he says. "Although a multi-million dollar verdict should send a message that the community doesn't think they're doing things right, I don't think they've gotten the message. We keep getting multi-million dollar verdicts."
Karen Zaman, a Charlotte, N.C., solo, notes that there were no settlement offers in a $2.3 million suit she tried against Wal-Mart.
Ron Williams, assistant general counsel for Wal-Mart, declined to comment for this story.
Hyman estimates that an average case lasts for three to five years and costs anywhere from $30,000 to $70,000 to litigate - not including the lawyers' time - so he says lawyers need to be both mentally and financially prepared to handle protracted litigation.
The most important single factor in separating the good cases from the bad, is the seriousness of the injuries.
"Due to the time, money and effort involved, I don't take $5,000, $10,000 or $20,000 cases because we can't afford to try them", says Hyman. He says a lot of the cases that involve minor injuries are lost because the lawyers cannot afford to conduct thorough discovery or hire adequate safety experts. As a rule, Hyman does not accept cases unless thay have more than $30,000 in damages.
It is also helpful to have independent witnesses to the accident, although he says that if the case is worth enough, the absence of witnesses can often be made up for with a thorough investigation.
To ensure he has a winner, Hyman does an enormous amount of investigation up front.
"I'd rather spend six months investigating a case before we file it" than take on a loser, he says. "We talk to safety experts and as many witnesses as we can find and use the historical information that we have from trying these lawsuits to determine which clients we can effectively represent.
"Then we have sessions in the office; we put the case before three or four [of our] attorneys and go through the positives and the negatives. A lot of attorneys see Wal-Mart as a deep-pocket defendant and so they don't conduct the up-front investigations that we do."
For every 100 falling merchandise injury claims that he reviews, Hyman chooses five or six as his winners.
"When I take a case, I assume we're going to trial", he says. "I don't run a high-volume practice."
He also emphasizes that about half of the cases he tackles are shared with other firms.
This type of litigation is so difficult that a sharing of resources and expertise is the waytogo,"headvises. "You also need the staff and the staying power, soldon't see how a small firm could do it alone."
Defense lawyers litigate these cases based ona three-part strategy; according to Sholl.
The best scenario is if they can establish that the company had no liability for the accident. If that's not possible, then they try to demonstrate that someone else - either the plaintiff or a third party-shared responsibility for the incident.
"Obviously if the plaintiff's conduct is contributory, I try to politely and respectfully get that information to the jury," say Burg.
"I don't worry about public sympathy," says SchoIl. The jury is as likely to send a 78-year-old grandmother with a broken bone home if it wasn't the defendant's fault as they are to send anyone else home. I've actually seen that happen."
And if that defense falls through, defertse lawyers concentrate their efforts on minimizing the size of the damage award.
As for jury selection, Hyman says that while the company generally tries fill the jury box with business owners and managers, he aims to keep these people off the jury.
"We look for customers. I'll take the American consumer no matter what age, class or ethnicity," he says. "We look for people who work in the mass-merchandising industry because they know that stuff [happens]."
The Birth of a New Specialty
It was Jan. 8, 1994, when Phillip Scharrel and his wife Joyce went to a Wal-Mart in Littleton, Colo., to buy a power ice drill. The tool they wanted was stored in boxes on a shelf about nine feet off the ground. When a salesman climbed a ladder to retrieve one of the 40-pound augers, he lost his balance and fell, pulling two of the boxes from the shelf.
Eighty pounds of merchandise hit Mr.Scharrel in the head, while other items that had been stacked on lower shelves
landed on him as well, causing a concussion, a mild dosed-head injury and neck and head damage. The couple filed
a negligence claim, contending that Wal-Mart breached its duty to provide a hazard-free shopping environment.
During discovery in Scharrel v. WalMart Inc., Hyman won a court order requiring Wal-Mart to produce a list of all claims in which customers were injured by falling merchandise at their stores nationwide. The result was a 300-plus page report which revealed that from 1989 to 1994 there had been 17,180 claims of falling merchandise injuries against the company.
Gary M. Bakken, Ph.D., of Analytica Systems International, Inc., in Tucson, Ariz., analyzed the first 7,036 of those claims and concluded:
"...33.66% of the analyzed records involved an impact to the head. That statistic alone could and should have alerted Wal-Mart management to the seriousness of the problem. Head injuries present a high probability of permanent and serious, if not fatal, injuries."
Of the remaining injuries, 26 percent involved the lower extremities, 10 percent involved multiple injuries, 7peitent involved the upper extremities and the remainder were divided up amongback, shoulder, neck, and torso.
Hyman says the report and the arialysis gave Scharrel immense credibility. The fact that more than a third of the injuries were to the head illustrated to the jury that merchandise was falling from high places, notes Hyman.
In 1995, a jury awarded the Scharrels a total of $3.3 million. The verdict - the largest personal injury verdict in Colorado history at the time - received national publicity, including a 1997 story on "Inside Edition." That publicity increased consumer awareness, says Hyman.
"The consumer is not aware of high-stacking until he actually looks at it", he adds. "But once you're aware of it, you think, 'Why aren't there some restraining devices to hold merchandise on the shelves?"'
Scharrel gave Hyman a solid reputation and calls started coming in from consumers, employees and other attorneys across the country. A practice niche was born.
Among the other top victories in this burgeoning field have been:
- $4 million inJune 1995: Shafer v. WalMart Stores Inc.
A Nevada man was permanently disabled after boxes fell on him from a high shelf in a Las Vegas Wal-Mart.
The boxes knocked Todd Caranto to the floor; he hit his head and was left with a seizure disorder. Milwaukee attorney James Murphy won $3 million in damages for Caranto and $1 million for his wife Michelle, in a suit brought by Caranto's guardian, Jaredd Shafer.
The Ninth Circuit recently heard an appeal of the case and held that "WalMart had a duty to take reasonable precautions to protect its customers from foreseeable dangers." The decision went on to say that Caranto has "no reasonable expectation of ever engaging in gainftil employment. He will require medical treatment and medication for the remainder of his life."
In fact, the appeals court concluded that Caranto may not have been awarded sufficient damages to fully compensate for his injuries and remanded the case "for further findings and, if necessary, a recalculation of damages."
- $2.3 million in November 1988: Kilgo v. Wal-Mart Stores Inc.
North Carolina truck driver Louis Kugo was injured when a 1,000-pound avalanche of fax paper and other goods fell on him when he opened the door of his tractor-trailer. Kilgo was knocked unconscious and suffered head injuries and several broken bones.
Although the case did not occur inside a Wal-Mart, Hyman says the truck was loaded by Wal-Mart employees and involved the same kind of unrestrained high-stacking as his other falling merchandise cases.
- $435,000 in March 1996: Truillo v. Wal-Mart Stores Inc.
A Denver woman suffered back injuries when a 30-pound box stacked high on a cart fell seven feet and landed on her. Barbara Trujillo, then a registered nurse, alleged a loss of earning capacity.
- $110,000 in May 1999: Stone vs. K-Mart Corporation
A Colorado woman was shopping in the toy section of the Arapahoe County K-Mart when a seven-pound box fell from a high shelf and hit her on the head. Teresa Stone required surgery for her head injury and continues to suffer from chronic headaches, according to Hyman.
Although the Stone verdict stands as one of Hyman's smallest financial ti-iumphs, he emphasizes that the ruling was significant because the judge rejected K-Mart's assertion that the shopper has a duty to be aware of the entire physical condition of the shopping environment, including "high-stacked" merchandise.
"The Judge distinguished that merchandise falling from a high shelf is very different, for example, from water on the floor where the customer has the duty to look for a wet surface," says Hyman.
The customer isn't obligated, however, to watch for falling merchandise.
- Settled for a "significant amount" March 1998: Koepnick v. Wal-Mart Stores Inc.
Kamillia Koepnick, 23, was shopping at a Cottonwood, Ariz., Wal-Mart when four 40-pound gas grills that were stacked on a display fell and crushed her. Koepnick suffered brain damage, permanent migraine headaches and injuries to both breasts. The mother of three underwent three breast surgeries before a March 1998 trial in Phoenix.
"Because of the breast injuries, it was a very embarrassing trial", says Hyman. "The case settled on the fifth day. Her awards and damages were pretty significant - we asked for quite a bit."
Deep-Pocket Superstores Make Discovery Difficult
Hyman and other plantiffs' lawyers contend that Wal-Mart has concluded that it's more cost-effective to pay large verdicts than to improve store safety. As a result, the multi-billion dollar super-store settles few cases. In contrast, Hyman settles approximately 10 cases a year against other warehouse retailers.
Although settlements are typica]ly lucrative, he warns that these retailers are cagey when it comes to the discovery process. Wal-Mart is particularly difficult, he says.
Zaman agrees, saying the company bordered on discovery abuse in the Kilgo case.
"I asked for other incidents of loads that fell out of trucks when drivers opened truck doors", she says. "I was led
to believe that there was no centralized computer that categorized claims, when in fact there is a wholly owned corporation whose function is to store and categorize that kind of information and which has in excess of 50,000 claims.
"I had also asked relatively early on for the incident report, and they produced a redacted version which omitted a statement from an assistant manager that implicated Wal-Mart," she continues. According to Zaman, the full report finally surfaced during trial in response to a subpoena by Hyman, who served as co-counsel in the case.
Hyman noted a half dozen court sanctions against Wal-Mart for discovery abuse including an $18 million sanction in April -Meissner v. Wal-Mart Stores Inc., April 1999- for engaging in a pattern of false and misleading discovery answers in a Texas premises liability case.
The remaining five sanctions Hyman cited ranged from $5,000 to $120,000.
When issuing the $18 million sanction, Texas District Court Judge James Mehaffy slammed Wal-Mart, saying that the store has a corporate policy of obstructirig plaintiffs' discovery efforts.
Not only in this court but in other courts [Wal-Mart] has demonstrated a clear pattern of desiring to flaunt the rules...to hide, to cheat, to give false answers under oath, said the judge at the April 8 hearing, according to a report in Texas Lawyer. "The fact that they concealed something of that magnitude is, standing alone, evidence of their intent to conceal."
According to media reports, Wal-Mart attorneys maintain that the company willingly produces information that is relevant to lawsuits. Company lawyers contend that plaintiffs' lawyers repeatedly ask for unreasonable amounts of information about Wal-Mart in hopes that the company will be sanctioned if it does not meet all discovery requests.
According to Hyman, the discovery tactics of the large chain stores are one of the primary reasons falling merchandise litigation remains costly and lengthy.
"You really have to be prepared to slug it out in the discovery process", he says.
© 2000-2003 by Lohf Shaiman Jacobs Hyman & Feiger PC