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Trump Judge Tries to Dismiss Claim Against Corporation for Renting Defective Product that Caused Serious Injury: Confirmed Judges, Confirmed Fears

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Trump Judge Tries to Dismiss Claim Against Corporation for Renting Defective Product that Caused Serious Injury: Confirmed Judges, Confirmed Fears

Confirmed Judges, Confirmed Fears” is a blog series documenting the harmful impact of President Trump’s judges on Americans’ rights and liberties. Cases in the series can be found by issue and by judge at this link.

Trump Seventh Circuit judge Michael Scudder argued in dissent that the court should affirm a grant of summary judgment against a corporation charged with causing serious injury to a consumer by renting him a product that was not in good working condition.  The majority rejected Scudder’s argument, reversed the lower court, and sent the case back to the lower court so the consumer could try to prove his claim at trial in its February 2021 decision in Horne v Electric Eel Manufacturing Co., Inc.

Calvin Horne went to Home Depot to rent an electric drain cleaning device, as he had before, to clean the clogged main sewer drain for his house. The machine looked “kind of old” to Horne, but a Home Depot employee had picked it out for him and the rental agreement expressly warranted that it was in “good working condition.”

In fact, it later appeared that the machine was not in good working condition, because when Horne began to use it, a cable “wrapped around his right arm and forearm” and threw him to the ground. Horne’s right hand was “badly injured” and, after the “wound became gangrenous,” most of “his right index finger had to be amputated.”

Horne sued Home Depot and the product’s manufacturer in state court, but the case was removed to federal court. After some discovery but before a trial, the court granted summary judgment against Horne. With respect to Home Depot, the court relied on a “broadly drafted exculpatory clause” in its standard rental agreement that purported to excuse the corporation for any injury suffered by Horne due to the machine he had rented.

On appeal, although all three judges on the Seventh Circuit panel agreed with the district court’s dismissal of the claims against the manufacturer, a 2-1 majority reversed the lower court as to the claims against Home Depot. In an opinion by George HW Bush nominee Ilana Rovner, the majority explained that according to established precedent, Home Deport could not rely on the exculpatory clause because there was a disputed issue of fact on whether the corporation had committed a “material breach” of its “core” obligation to provide Horne with a machine that was “in good working condition.”  In particular, the majority continued, Horne had evidence of three “flaws” in the “basic functioning” of the machine that he contended caused his injuries, and he is “entitled to take his case against Home Depot to trial.” There were also “disputed issues of material fact,” Rovner explained, as to whether Home Depot was negligent in “inspecting the machine” it rented to Horner, and “only a jury can resolve those issues.”

Trump judge Scudder dissented from the decision concerning Home Depot. He argued that under the contract, there was only a “limited” remedy available to Horne – refund of the rental fee, which was only $68.30. He also argued that the exculpatory clause did apply and excused Home Depot from liability for any claim that it was “negligent” in renting a defective product to Horne. He concluded by arguing that such exculpatory and limited liability clauses are beneficial because they “help keep the price of the rentals affordable.”

Judge Rovner explained what was wrong with Scudder’s arguments. She pointed out that the corporation had “waived any reliance” on the limited remedy provision of the contract, and it would “risk our role as neutral arbiters” to “save” Home Depot, especially since it was possible that the corporation may have decided not to pursue that defense for “business reasons.” According to prior precedent, Rovner continued, “return of the rental fee” would provide “no compensation” for the company’s “breach of the express promise to provide the machine in good working order.” In fact, Rovner wrote, Scudder’s theory would allow Home Depot to “knowingly” rent the drain cleaning machine in “dangerous condition” and then “limit any damages claim to $68.30.” Contrary to Scudder’s claim, Rovner wrote, “nothing” in the contract “limits remedies for the company’s negligence” in “failing to supply a machine in good working condition.”

As a result of the majority’s decision, therefore, Calvin Horne will have the chance to prove to a jury that Home Depot rented him a machine that was not in good working condition and caused him serious injury, for which it should compensate him. If it had been up to Trump judge Scudder, however, not only would Horne never get such a chance, but corporations like Home Depot would also be able to rely on favorable interpretations of language they insert into rental agreements to escape responsibility, all in the name of allegedly keeping rentals “affordable.”