Products Liability Law Reporter

A federal district court held that a products liability suit against an electric bicycle manufacturer had been improperly removed to federal court.

Carol Penkert purchased a fully assembled Phantom Swirl eBike from Costco Wholesale Corp. While she was riding the bike near her home, she pressed the bike’s right-handed lever as she approached a speedbump. The lever engaged the front brake instead of the back brake, and Penkert was hurled over the handlebars and onto the roadway. She suffered permanent injuries, including loss of her right eye.

She sued manufacturer Phantom Bikes, Inc., and Costco Wholesale Corp. in California state court, alleging negligence, strict liability design and manufacturing defects, and strict liability failure to warn. The plaintiff asserted that her injuries resulted in part from Phantom’s design of the braking system and that the company had failed to comply with 16 C.F.R. §1512.5(b)(8), which covers hand lever locations for bicycles.

Phantom filed a notice of removal to federal district court, arguing the action presented a federal question and warranted diversity jurisdiction.

The plaintiff moved to remand.

Granting the motion, the district court noted that the fact that a federal statute has been violated and this caused someone to suffer harm does not automatically give rise to a private cause of action. Here, the court said, section 1512 does not confer any substantive federal rights on individuals and does not provide a method for those aggrieved to recover. Moreover, the court said that Congress has not authorized private citizens to sue for violations of federal bicycle regulations, opening the door to federal suits sounding in negligence and products liability. Converting the plaintiff’s suit to a federal case would disrupt the balance between state and federal judiciaries, the court found.

Concluding that the plaintiff’s claim did not implicate a federal right or present a substantive federal question, the court remanded.

Citation: Penkert v. Phantom Bikes, Inc., 2022 WL 1515522 (S.D. Cal. May 13, 2022).

Plaintiff counsel: AAJ member David S. Casey, San Diego; and Satyasrinivas Hanumadass, Los Angeles.