On lost cats and crypto: a lawsuit on the move raises questions about valuation and liability

Quick Take

  • Powers v Am. Crocodile Int’l Grp., Inc. is a federal court lawsuit that was filed in the fall of 2019 in Michigan.
  • Plaintiffs allege that a defective massage chair caused a fire that destroyed $300k in unspecified crypto and killed prize cats.
  • The cases raises some potentially novel legal questions about valuation and liability for lost crypto, and insurance coverage for the same as well.
  • The Court agreed to transfer the case to federal court in the Central District of California, where it is now pending.

What does a defective electric massage chair have to do with lost cryptocurrency and cats?

A federal court lawsuit filed in the Eastern District of Michigan (and now transferred to federal court in Los Angeles) alleges a connection.

In Powers v. Am. Crocodile Int'l Grp., the plaintiffs allege that the Defendant made and sold an electric massage chair. They further say that because of product defects, said chair caused a fire in their home that caused a lot of loss.

Per the Court in an Order dated January 27, "[t]he resulting fire allegedly consumed the entirety of Plaintiffs' home. Plaintiffs also claim to have lost $300,000 of 'cryptocurrency,' and three cats. One of the cats was supposed to have been 'the world's tallest domestic cat,' while another sported 'the world's longest tail on a domestic cat.'"

The Complaint itself says that a non-party bought the chair in 2009. The non-party gave the chair to one of the Plaintiffs in 2017 and it caught on fire.  The Complaint says that "[a]mong other things, the fire destroyed approximately $300,000 in cryptocurrency, which cannot be recovered."

It's a two-count suit, alleging strict products liability, negligence and breach of an implied warranty. Pretty standard stuff for this sort of loss. I'm going to oversimplify here, but part of the gist is that a products liability claim imposes liability upon manufactures and sellers regardless of their state of mind if the product was in a defective and unreasonably dangerous condition was sold. Negligence requires a duty of care.

Now, we don't know what kind of crypto the plaintiffs lost from the Complaint (and it sounds like the loss of the cats and was much more traumatic). But (and with no disrespect to the human and feline tragedy alleged) there are some interesting legal issues here.

THE SCOOP

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