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April 1, 2012

This article was originally published in the Subrogator, a publication by the National Association of Subrogation Professionals, Spring/Summer, 2012. © Copyright 2012 by NASP. All rights reserved. Republished by Butler with permission from NASP.

This past legislative session, Alabama passed significant tort reform bills – something that has not been done since 1999. The legislative changes discussed below particularly affect subrogation rights and include changes to the laws affecting admission of expert testimony, product liability claims, and construction defect claims.

Senate Bill 187
Change in the Standard Applied for Admission of Expert Testimony

Alabama state courts have long applied the Frye (1) standard to the admission of expert testimony. Under Frye, expert scientific testimony is admissible if the methodology used by the expert is “generally accepted” in the scientific community. This new legislation will alter Alabama law so that courts will now apply the more restrictive Daubert (2) standard applied by Federal Courts in admitting expert scientific evidence.  The change results in a more stringent requirement on expert testimony in the State of Alabama and it is limited specifically to scientific evidence.  The U. S. Supreme Court mandated the Daubert standard in all federal courts in 1993.  However, prior to enactment of SB 187, Alabama remained one of the only states that still had not adopted the rule.  As a result of this act, we can expect Alabama Courts to become more stringent on the requirements of expert testimony. 

This new law will apply prospectively to all actions filed after the effective date of the act, January 1, 2012, and all proceedings pending upon the effective date of this act “if it is just and practicable” to so apply it.

Senate Bill 184
Change in Products Liability Law Shielding Retailers and Distributors

New legislation prohibits products liability claims against certain sellers/distributors of a defective or dangerous product.  Specifically, a claim may only be brought against a retailer/distributor where the seller/distributor is also the manufacturer or assembler of the final product; exercised substantial control over the design, testing, manufacturer, packaging or labeling of the product; and/or altered or modified the product (but only where the alteration was a substantial factor in causing the harm).  This Bill is aimed at protecting local retailers, wholesalers and other distributors of products from being sued where the product comes in a “sealed container” and from situations where the distributor is only the “innocent conduit” of a defective product. Prior to enactment of the legislation, “sealed container” and “innocent conduit” were defenses available to a seller/distributor.  Now, as a result of the new legislation, claims against sellers/distributors that fit within the definition of an “innocent conduit” or “sealed container” will be subject to dismissal.  In situations where the manufacturer cannot be identified, even after exercising due diligence, there exists a carve-out where a plaintiff may pursue the retailer/distributor.  

One impact of this legislation will be reducing the instances in which plaintiffs are able to defeat removal to federal court by suing a local seller.  Further, given that many products are now manufactured abroad, we can look to see increased litigation costs complications to the plaintiff or subrogor who may be forced to name and serve a foreign company.

Application of this bill is prospective and will only apply to actions filed on or after the effective date of the act. 

Senate Bill 59
Change in the Statue of Repose on Construction Claims

SB 59 decreases the Statute of Repose contained in Ala. Code (1975) § 6—5—221 for commencing a civil action against an architect, engineer or builder related to the construction of buildings from 13 years to 7 years from the date of substantial completion.  This section applies to claims against “any architect or engineer performing or furnishing the design, planning, specifications, testing, supervision, administration, or observation of any construction of any improvement on or to real property, or against builders who constructed, or performed or managed the construction of, an improvement on or to real property designed by and constructed under the supervision, administration, or observation of an architect or engineer, or designed by and contracted in accordance with the plans and specifications prepared by an architect or engineer.”  Id.  Incidentally, a builder is defined as a company who at the time of the construction was licensed as a general contractor in the State of Alabama. § 6-5-220 (A).  Therefore, this Statute does not apply to claims involving defects in improvements by subcontractors. 

Application of this bill is prospective and will only apply to actions filed on or after the Act’s effective date of September 1, 2011.

(1) See standard for expert testimony established in Frye v. United States, 293 F. 1013 (D.C. Cir. 1923).

(2) See standard for expert testimony established in Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993) and Fed.R.Evid. 702