Summary
The Utah Supreme Court affirmed the denial of dōTERRA’s motion for partial summary judgment, holding that the distributor agreement did not clearly and unequivocally waive Kruger’s right to seek punitive damages for personal injuries caused by dōTERRA’s products. The court declined to decide whether Utah law permits preinjury waivers of punitive damages because the waiver was insufficiently clear. The court also vacated the district court’s characterization of the agreement as a contract of adhesion without expressing an opinion on that issue.
Topics
Practice areas
Questions Presented
- Whether Kruger clearly and unequivocally waived her right to seek punitive damages for personal injuries caused by dōTERRA products.
- Whether the district court erred by characterizing dōTERRA's agreement and policy manual as a contract of adhesion.
Holdings
- Assuming Utah law permits a preinjury waiver of punitive damages, such a waiver must be clear and unequivocal. The Wellness Advocate Agreement and Policy Manual did not clearly and unmistakably waive Kruger's right to seek punitive damages for personal injuries caused by dōTERRA's products.
- To the extent the district court ruled that the dōTERRA agreement was a contract of adhesion, that ruling is vacated; the Supreme Court expressed no opinion on whether the agreement satisfies Utah's legal definition of an adhesion contract.
- In concurrence, Justice Himonas concluded that the purported waiver of punitive damages was unenforceable as contrary to Utah public policy.
Key quotations
“We see no reason why a preinjury waiver of punitive damages—assuming that Utah law permits such a creature—should require anything less than the “clear and unequivocal” language required for waivers of liability.” (¶ 22)
“By signing up to be a distributor of dōTERRA’s products, Kruger did not give an “unmistakable” waiver of her right to sue dōTERRA for personal injuries caused by its products.” (¶ 32)
Factual background
Kruger became a dōTERRA Wellness Advocate and purchased ClaryCalm, which she applied to her skin before visiting a tanning salon. She suffered second- and third-degree chemical burns, and subsequent testing showed that ClaryCalm contained bergapten at a concentration capable of causing increased sun sensitivity. Although dōTERRA warned about sun sensitivity in other products and had received prior burn complaints, the ClaryCalm label stated that the product did not cause sun sensitivity.
Procedural history
Kruger sued dōTERRA for injuries allegedly caused by ClaryCalm and sought punitive damages based on dōTERRA's alleged failure to warn about the product's phototoxicity. dōTERRA moved for partial summary judgment, arguing that Kruger waived punitive damages in the Wellness Advocate Agreement and incorporated Policy Manual. The district court denied the motion, ruled that Utah law does not permit preinjury waivers of punitive damages, and referred to the agreement as a contract of adhesion. The Utah Supreme Court granted interlocutory review, affirmed the denial of partial summary judgment on the alternative ground that the waiver was not clear and unequivocal, and vacated the adhesion ruling to the extent it constituted a ruling on that issue.
Remand instructions
The denial of partial summary judgment is affirmed. The district court's contract-of-adhesion ruling is vacated to the extent it constituted a ruling on that issue, without prejudice to Kruger's ability to raise the issue on remand.