Samsung Wins US E-Cigarette Battery Explosion Lawsuit; Judge Rules It Didn’t Enter Consumer Market

Key points:

·Samsung SDI wins lawsuit in e-cigarette battery explosion case, US court finds it not liable. 

·The court emphasized that Samsung SDI did not supply the batteries for the unauthorized e-cigarette market. 

·The ruling could have significant implications for legal responsibility in the e-cigarette industry and battery manufacturers.

【2Firsts News Flash】Samsung SDI has been found not liable in a lawsuit involving an e-cigarette battery explosion that injured a teenager in Indiana, according to a report from Law360 on July 11th. The U.S. Seventh Circuit Court of Appeals unanimously ruled that the battery manufacturer had no direct connection to the e-cigarette market in the state and did not intend for its batteries to be used in personal e-cigarette devices, therefore they cannot be held responsible.

The lawsuit stems from an incident in 2020 where a 13-year-old boy (pseudonym B.D.) suffered third-degree burns when a 18650 lithium-ion battery in his pocket exploded. The battery was purchased by his stepfather at a local e-cigarette store. The boy required medical treatment, including skin grafts.

B.D. and his family have filed a lawsuit against South Korean company Samsung SDI, which manufactures batteries for devices such as laptops and power tools. The lawsuit claims that there are defects in the battery design and that Samsung should be held responsible for any injuries. However, Samsung argues that they have never sold batteries for personal consumer use, especially for e-cigarettes, and have taken measures to prevent their products from being used for this purpose.

The Seventh Circuit Court of Appeals agreed with this viewpoint. Judge Michael Brennan, representing a panel of three judges, pointed out that Samsung SDI sells batteries to mature manufacturers who assemble them into specific device battery packs. The company explicitly prohibits the sale of individual batteries to the public and does not market or distribute them for use in e-cigarettes.

Samsung has taken steps to prevent everyday consumers from purchasing individual batteries in Indiana. Third-party actions have made individual 18650 batteries available for consumers in Indiana. Samsung SDI has not introduced individual 18650 batteries into Indiana.

Judge Brennan wrote in the court's opinion.

The court emphasized the distinction between the "terminal product" market (selling batteries as part of finished products such as laptops) and the "derivative product" market, such as selling individual batteries for use in e-cigarettes. Since Samsung operates only in the terminal product market and actively takes measures to avoid entry into the consumer market, the court found that there was no basis for personal jurisdiction.

The case was initially dismissed by the Indiana District Court, but the plaintiff appealed, arguing that because Samsung's battery ultimately ended up in the state, they should still be held liable. The appellate court disagreed, stating that merely having a product present in the market is not enough to establish jurisdiction unless the manufacturer intentionally placed it there.

Legal observers have pointed out that this ruling could have a significant impact on the nicotine and e-cigarette industry, especially in cases involving battery-related injuries. While manufacturers can avoid liability by restricting distribution channels and including proper warnings, retailers and distributors selling individual lithium ion batteries may now face greater legal risks.

In recent years, battery explosions related to e-cigarette devices have been a persistent issue due to the improper use or lack of adequate casing protection for high-capacity lithium-ion batteries. The US FDA has issued multiple warnings about battery safety and cautioned about the dangers of using unregulated components in e-cigarettes and e-cigarette products.

The plaintiff's legal team argues that Samsung should have known that its batteries were being used for unauthorized purposes and should have taken more measures to prevent such usage. However, the court did not find any evidence that Samsung had any connection to the Indiana market or the retail sellers of the battery.

Samsung's victory is consistent with other federal appellate courts, including the Ninth Circuit, but is not in line with the ruling of the Fifth Circuit, which tends to give more weight to jurisdiction in product liability cases involving third-party sales.

This case highlights the importance of clear supply chain control for component manufacturers, especially for those producing products used in high-risk consumer applications (such as e-cigarettes). For the nicotine industry, it reveals the responsibility gap between core component manufacturers and retail sellers who distribute them to end-users.

Although Samsung SDI was absolved of responsibility in this case, the ruling still does not address the broader issue of how to regulate the aftermarket sale of high-capacity batteries. E-cigarette stores and online retailers that sell 18650 batteries without safety mechanisms in place may still face legal ramifications in the future.

The US FDA has not yet established any specific battery standards for e-cigarette devices, but several states are considering regulations aimed at limiting the sale of single lithium-ion batteries.

The plaintiff's legal team has not yet announced whether they will appeal the decision of the Seventh Circuit Court to the US Supreme Court. Currently, the ruling represents a clear victory for Samsung SDI and could serve as a precedent for other battery manufacturers defending similar lawsuits.

It is worth noting that this case is not the same as the e-cigarette battery explosion case that occurred in Georgia in 2019. In the other case, the Georgia Court of Appeals ruled that Samsung Electronics America must pay $10.9 million in damages to a man from Georgia.