The opinion within Cybex International Inc. that the court system is running amok can best be summed up by noting that the $19.5 million settlement the fitness equipment manufacturer reached this month with Natalie Barnhard, the physical therapy assistant left a paraplegic by a toppled 25-year-old Cybex leg extension machine, counted as very positive news for the company. On the hook after a 2010 jury verdict for a $49.5 million judgment that could have severely impaired the company, Cybex emerges from the case significantly lighter in the wallet but still in business, its stock price rising out of penny territory and its future prospects excellent.
Its officers, however, remain unsettled by the experience, which began eight years ago when the 105-pound Barnhard, an employee at Amherst Orthopedic Physical Therapy in Buffalo, N.Y. (which was found 20 percent responsible to Cybex's 75 percent and Barnhard's 5 percent), "stood on the weight-stack side of the machine, put her hands on top of it and pulled on it in order to stretch her arms and shoulder," according to the Supreme Court of the State of New York's opinion on appeal. That misuse of its leg extension machine - which the plaintiff never denied, the defendants admitted is common in gyms and the courts determined was therefore foreseeable and grounds for liability - ought to send an unmistakable message to all fitness equipment manufacturers and facility owners, says Art Hicks, Cybex's president and COO. "Tort system excess is a threat to our whole industry," he says. "Many of the players that I have spoken to recognize that that pointer was going around and around, and it probably could have stopped on anybody's business. We just got caught in the crosshairs."
The opinion within Cybex International Inc. that the court system is running amok can best be summed up by noting that the $19.5 million settlement the fitness equipment manufacturer reached this month with Natalie Barnhard, the physical therapy assistant left a paraplegic by a toppled 25-year-old Cybex leg extension machine, counted as very positive news for the company. On the hook after a 2010 jury verdict for a $49.5 million judgment that could have severely impaired the company, Cybex emerges from the case significantly lighter in the wallet but still in business, its stock price rising out of penny territory and its future prospects excellent.
Its officers, however, remain unsettled by the experience, which began eight years ago when the 105-pound Barnhard, an employee at Amherst Orthopedic Physical Therapy in Buffalo, N.Y. (which was found 20 percent responsible to Cybex's 75 percent and Barnhard's 5 percent), "stood on the weight-stack side of the machine, put her hands on top of it and pulled on it in order to stretch her arms and shoulder," according to the Supreme Court of the State of New York's opinion on appeal. That misuse of its leg extension machine - which the plaintiff never denied, the defendants admitted is common in gyms and the courts determined was therefore foreseeable and grounds for liability - ought to send an unmistakable message to all fitness equipment manufacturers and facility owners, says Art Hicks, Cybex's president and COO. "Tort system excess is a threat to our whole industry," he says. "Many of the players that I have spoken to recognize that that pointer was going around and around, and it probably could have stopped on anybody's business. We just got caught in the crosshairs."
In response, Cybex and the International Health, Racquet & Sportsclub Association have invited representatives of fitness equipment manufacturers and select health clubs to attend a March 14 meeting at IHRSA's International Convention in Los Angeles, at which it is hoped that "everybody can share and we can come up with some best practices," Hicks says, as well as "put together an industry initiative to support tort reform." This first step in that direction, characterized by IHRSA president and CEO Joe Moore as "a brainstorming session," could lead to a wider, more public effort in the months to come.
Hicks says the most basic lesson of Barnhard v. Cybex International Inc. is familiar but bears constant repetition: Manufacturers and facility owners must work together to avoid potential liability.
"There was a 'divide and conquer' strategy by the plaintiffs' attorney, and both the facility and Cybex allowed that to happen," Hicks says. "The fact is, we impact each other; if one side drops the ball, the other could be dealing with the fallout from it. That's why it's so critical that we both get together in a room. Manufacturers can do everything perfectly, but if the equipment isn't maintained and something goes wrong, we're in trouble. Also, fitness club owners see what goes on with equipment firsthand and can make manufacturers aware of equipment use as we go through our design cycles. We're very much in the same boat in my opinion."
Chris Clawson, president of Life Fitness, is in full agreement on that score. "I'll be attending the meeting to hear what people have to say, and I'm going there with my eyes open, because we know the situation globally is that, really, people can sue you for just about anything," Clawson says. "What's most important about this meeting is to understand that this is not a manufacturing issue, it's an industry issue. If health clubs think this is a manufacturing issue because that's the way this case came down, that's a mistake. The jury could just as easily have found the facility 75 percent responsible."
Another invitee, Paul Byrne, president of Precor, feels certain that all major manufacturers already have their bases covered with regard to printed warnings to customers about proper installation, safety signage targeting equipment users, and safety reviews of older equipment in the field and newer equipment coming off the assembly line. That's why he's hoping the meeting goes further - even as he's wary of what that could mean to the industry's other lobbying efforts.
"We all know what those safety rules are, and we all are aware of and try to design to different industry standards that have been developed," Byrne says. "I'm not sure what more you can do. Tort reform is certainly a laudable goal, and is probably worth at least talking about, but how practical it is is a whole other question. It's a massive undertaking, and I don't want this to overshadow some of the other really good stuff we can do, because I think we've got somebody in the White House who can really help us in the form of Michelle Obama, and there's headway to be made with the whole PE4Life program, for example. There are a lot of areas where we have a little bit more momentum than we've ever had, and you only have so many dollars to throw at lobbying. Let's just make sure we're judicious about where we spend it."
Hicks says he's been heartened by the sympathy shown his company by other manufacturers, and he thinks the IHRSA discussion will take all such concerns into account. "We got a lot of good notes from a lot of people saying, 'You guys are worthy competitors' - there's a mutual respect," Hicks says. "I don't think anybody thought this was a good lawsuit for anybody."
