Australian Company Prevails in Products Liability Case

October 1, 2002

Friedrich W. Seitz and Eric P. Weiss of the Los Angeles office represented Action Sports Equipment Pty, Ltd., an Australian manufacturer of sporting goods and equipment in a product liability action. Action Sports manufactured mini-trampolines in Australia, which were distributed to the United States through Sports Supply Group, Inc. located in California. An Illinois school district purchased the mini-trampolines through Sports Supply Group for use at its schools.

During a gymnastics class, Ryan Murray, a student in the Illinois school district, attempted a flip on the trampoline and suffered a severe spinal cord injury. He sued Sport Supply and Action Sports in Illinois state court, his claim being valued in the $8-10 million range. Since Action Sports is an Australian company with no ties to the state of Illinois, it was dismissed from the Illinois action for lack of personal jurisdiction.

Thereafter, and during the pendency of the Illinois action, Sports Supply brought an action in California state court against Action Sports for indemnity, apportionment of fault and declaratory relief. Action Sports successfully demurred to the indemnity and apportionment causes of action on the grounds that they were not ripe (i.e. the causes of action did not accrue until Sports Supply paid a judgment or settlement to plaintiff in the Illinois action). That left declaratory relief as the sole cause of action. In essence, Sports Supply was asking for a judicial determination that if it was to be found liable on a products liability theory in the Illinois action, it would be entitled to indemnity from the manufacturer, Action Sports. In defense, Action Sports argued that in order for the court to make such a determination, certain factual issues would have to be decided in the Illinois action. In particular, the Illinois jury would have to determine whether Sports Supply altered, modified or assembled the trampoline prior to delivery to the school district. If so, Sports Supply would not be entitled to full indemnity.

The matter was tried before the California state court, without a jury. After reviewing the evidence and argument of counsel, the court ruled in favor of Action Sports finding that Sports Supply did not meet its burden of showing that it had not modified, altered or assembled the trampoline. Thus, the court could not make a determination as to the respective rights and liabilities of the parties.