Product Liability

Product Liability 1

Product Liability • The liability of manufacturers, sellers, and others for the injuries caused by defective products 2

Product Liability • Arguments in favor of strong product liability laws: • Traditional tort law doctrines based on fault and defenses related thereto have not always adequately served the injured person. The evolution of strict liability doctrines is a logical consequence of having this deficiency in the law. • Contract law has also failed to provide adequate assurance to the victims of product harm. Consumers traditionally have had less real bargaining power in the contacting process when it comes to attaching responsibility for harm created by a product. 2

Product Liability • Arguments in favor of strong product liability laws: • Various legislative enactments at both local and national levels designed to protect consumers tend to be reactive rather than proactive. Bans on products are enacted only after so many injuries have occurred that the products continued existence in the marketplace can no longer be tolerated. For example, do semiautomatic weapons really serve any purpose other than criminals killing police officers, innocent bystanders, and each other? • As a practical matter, the protection against defects in products is best provided by the manufacturers of those products. Compared to the consumer, they have the resources to research, develop, and test against harm. Can you as a buyer of an automobile really test the airbag before you buy the car? • Finally, the sanctions imposed by law for defective products should act as a deterrent to further introduction of faulty products into the marketplace. If sellers of goods know this, they will try harder to make products safer in the first place. 2

Product Liability • Arguments in favor of restricting the use of product liability doctrines: • The cost of the present system has simply run amok and is a model of inefficiency. For every dollar that is spent on paying for the cost of the harm done by defective products, nearly fifty percent is spent on the transfer cost without reaching the victim. • Technology never has been and cannot be expected to be one hundred percent precise. The potential harm created by products is dependent on the state of the art at the time, and to require more is to impose 20/20 retroactive hindsight. 2

Product Liability • Arguments in favor of restricting the use of product liability doctrines: • Many socially beneficial products are kept out of the U.S. marketplace because of fears raised by our product liability system in the eyes of potential importers. Conversely, the enhanced cost of U.S. products based on built-in liability insurance costs makes U.S. products less competitive overseas. This diminished participation in the worldwide marketplace hurts all of us. The rules of product liability in the U.S. compared to those of Japan illustrate this point. • Finally, there is a prevailing "lottery" mentality as a result of large damage awards from product liability costs. The harm one suffers may be minimal, but the pain and suffering losses coupled with potential punitive damages have inspired too many consumers (and their attorneys) to go down the treasure hunt path in the courts. 2

Negligence A tort related to defective products where the defendant has breached a duty of due care and caused harm to the plaintiff Misrepresentation When a seller or lessor fraudulently misrepresents the quality of a product and a buyer is injured thereby Product Liability Based on Fault 3

Strict Liability • Strict liability is imposed irrespective of fault • All parties in the chain of distribution of a defective PRODUCT are strictly liable for injuries caused by that product • Privity of contract between plaintiff and defendant is not required • The doctrine applies even if the injured party had no contractual relations with the defendant 4

Strict Liability • PRODUCT OR SERVICE? • hybrid transactions: combining the performance of services and the sale of a product, • Is the dominant element the provision of a service or the sale of a product? 4

Defects in Manufacture • Manufacturer fails to properly assemble a product • Manufacturer fails to properly test a product • Manufacturer fails to adequately check the quality of a product 5

Defects in Design • Defects that occur when a product is improperly designed 6

Crashworthiness Doctrine • Automobile manufacturers are under a duty to design automobiles so they take into account the possibility of harm from a person’s body striking something inside the automobile in the case of a car accident 7

Defect in Packaging • Occurs when a product has been placed in packaging that is insufficiently tamperproof 8

Defect in Packaging • Elsroth v. Johnson and Johnson • Facts: Diane Elsroth took tablets manufactured by the defendant and later died. Tests indicated that the product had been tampered with and contained cyanide, a poison. Another party had purchased the product. Diane’s administrator sued the defendant under the strict liability doctrine. • Issue: Was the packaging defective which allowed the tampering? 8

Defect in Packaging • Decision: Judgment for the defendant. • Reason: In determining whether a particular design is defective, the question is whether the product as designed was not reasonably safe. The defendant after previous instances of tampering had redesigned its packaging to make it extremely difficult to tamper with the product in such a way as to conceal to the average person that tampering had occurred. It is still possible to tamper with the product by very sophisticated means. It is not reasonable to expect the producer to do more. The product is reasonably safe, and the plaintiff has presented no evidence to indicate how it could be made safer. The packaging was not defective. 8

Failure to Warn • A defect that occurs when a manufacturer does not place a warning on the packaging of products that could cause injury if the danger is unknown • Nowak v. Faberge USA Inc. • Facts: Faberge USA manufactures Aqua Net, a hair spray that is sold in an aerosol can. Alison Nowak, a 14-year-old girl, tried to spray her hair with a newly purchased can of Aqua Net. When the valve did not work properly, she cut the can with a can opener. She was standing near a gas stove. A cloud of hair spray gushed from the can and the stove’s pilot light ignited the spray into a ball of flame. Nowak suffered severe, permanently disfiguring burns over 20 percent of her body. Nowak sued Faberge for damages under strict liability, alleging that Faberge failed to warn her of the dangers of flammability of Aqua Net. She won, and Nowak appealed. • Issue: Did Faberge adequately warn the plaintiff of the flammability of Aqua Net? 9

Other Product Defects • Failure to provide adequate instructions • Inadequate testing of products • Inadequate selection of component parts or materials • Improper certification of the safety of a product 10

Defenses to Product Liability • Supervening or intervening event • Generally known dangers • Assumption of risk • Misuse of the product • Contributory negligence • Comparative negligence 11

Defenses to Product Liability • Supervening or intervening event • Alteration of product by a party in the chain of distribution that absolves prior sellers from strict liability • Generally known dangers • Inherent danger known to general population • Correction of defect • Reasonable notice • Assumption of risk • Plaintiff knowingly and voluntarily assumed risk • Misuse of the product • Abnormal and unforeseeable misuse 11

Defenses to Product Liability • Doctrine of Contributory negligence • Plaintiff’s negligent use of the product resulted in the injury • No damages awarded • Doctrine of Comparative negligence • Damages mitigated by plaintiff’s negligence 11

Cases • Benedi v. McNeil-P.P.C., Inc. • Facts: Antonio Benedi consumed three or more glasses of wine a day. He also took Extra-Strength Tylenol. He was admitted to the hospital with liver and kidney failure. This was caused by a combination of Tylenol and too much alcohol. His Tylenol bottle did not contain a warning of the danger of the combination of Tylenol and excessive alcohol consumption. Benedi sued McNeil-P.P.C., the manufacture of Tylenol, for negligent failure to warn. Benedi won $7,850,000 in compensatory damages. McNeil appealed. • Issue: Is McNeil liable for negligent failure to warn? 11

Cases • Decision: Yes. • Reason: The court of appeals affirmed the jury’s verdict in favor of Benedi. Tylenol now contains a warning that persons who regularly consume three or more alcoholic drinks a day should consult a physician before taking Tylenol. 11

Cases • : Shoshone Coca-Cola Bottling Company v. Dolinski • Facts: Dolinski purchased a bottle of “Squirt” and began to consume it. After drinking a portion of the contents, he became ill. Upon examination, part of a decomposed mouse was discovered in the bottle. Dolinski suffered physical and mental distress and had an aversion to soft drinks. Dolinski sued Shoshone under the doctrine of strict liability. The court ruled in favor of Dolinski. Shoshone appealed. • Issue: Did a defect cause the harm? 11

Cases • Decision: Dolinski wins. • Reason: Public policy demands that someone who places a bottled beverage in a dangerous condition on the market be strictly liable for harm resulting from usage. The plaintiff still must prove that his injury was caused by a defect in the product and such defect existed when the product left the hands of the defendant. There was sufficient evidence that the plaintiff met his burden of proof. 11

Cases • Lakin v. Senco Products, Inc. • Facts: Senco manufacturers and market a variety of pneumatic nail guns. John Lakin was using a Senco SN325 nail gun to build a new home. The gun fired an unintended second nail that went through his cheekbone and into his brain. Lakin is permanently brain damaged. Lakin and his wife sued Senco for strict liability based on design defect. Lakin and his wife won. Senco appealed. • Issue: Is Senco liable to Lakin for strict liability based on a design defect in the SN325 that allowed it to double fire? • Decision: Yes. • Reason: The court of appeals held that the SN325 was defectively designed and affirmed the award of damages to Lakin and his wife. 11

Cases • Strict Liability • 6.1. Yes, the doctrine of strict liability applies to this case. The doctrine of strict liability applies to products but not the provision of services. Jeppesen, the defendant, argued that the landing charts it produced for pilots to use were not a product, and therefore the doctrine of strict liability did not apply. The court held that the landing charts were a product, subjecting Jeppesen to the doctrine of strict liability. • The court held Jeppesen strictly liable for the deaths caused when the airplane crashed into the mountain, which was not included in Jeppesen’s landing chart for the aircraft at Cold Bay, Alaska. Jeppesen argued that it should not be liable because it is without fault in this case, i.e., the error stemmed from the incorrect data supplied by the Federal Aviation Administration. The court rejected this argument, holding that the concept of fault has been purged from the doctrine of strict liability, and that all parties in the chain of distribution of a defective product are liable to the injured party without regard to fault. The court stated: 11

Cases • The justification for strict liability has been said to be that the seller, by marketing his product for use and consumption, has undertaken and assumes a special responsibility toward any member of the consuming public who may be injured by it; that the public has the right to and does expect, in the case of products which it needs and for which it is forced to rely upon the seller, that reputable sellers will stand behind their goods; that public policy demands that the burden of accidental injuries caused by the products intended for consumption be placed upon those who market them, and be treated as a cost of production against which liability insurance can be obtained; and that the consumer of such products is entitled to the maximum of protection at the hands of someone, and the proper person to afford it are those who market the product. • The court held Jeppesen strictly liable for damages for the deaths of people killed in the airplane crash. Brocklesby v. Jeppesen and Company, 767 F.2d 1288 (9th Cir. 1985). 11

Cases • Product or Service • 6.2. No, the pharmacist is not strictly liable for selling defective prescription drugs. The court held that although a pharmacist is engaged in a “hybrid enterprise” combining the performance of services and the sale of prescription drugs, the dominant element is the provision of a service and not the sale of product. The court reasoned that a pharmacist is considered a professional, and must be licensed by the state as such. Further, the court reasoned that a pharmacist is involved in providing a “health service.” The court drew the analogy that since hospitals are not strictly liable for providing blood products, then pharmacists should not be strictly liable for selling prescription drugs. The court held that the pharmacist was not liable to the plaintiff. Murphy v. E.R. Squibb & Sons, Inc., 40 C.3d 672, 221 Cal.Rptr. 447 (Cal. 1985). 11

Cases • Defect • 6.3. Yes, Remington is strictly liable for Lovitz’s injuries. In order to recover for strict liability a plaintiff must show that the product that caused the injury was somehow defective. The Restatement (second) of Torts Section 402A requires that the product be in a defective condition that is unreasonably dangerous to the consumer. One type of defect is a defect in manufacture. A defect in manufacture occurs when a manufacturer fails to either (1) properly assemble a product, (2) properly test a product, or (3) has inadequate quality control measures that do not discover product defects. The court held that the inclusions in the shotgun barrels were defects in the product. The testing procedures that Remington used to check the shotguns were inadequate, because not only did they fail to discover defects, the testing itself may have started the development of the problem. Because Remington assembled a shotgun that was in a defective condition unreasonably dangerous to consumers, and had failed to adequately test the product, they were found liable for Lovitz’s injuries. The court awarded $75,000 in compensation and $1,600,000 in punitive damages. Lovitz v. Remington Arms Co., Inc., 532 N.E.2d 1091 (Ill.App. 1988). 11

Cases • Crashworthiness Doctrine • 6.4. Yes, the Chevrolet station wagon was a defective product. A defect in the design of a product will support an action for strict liability. The court held that there was a defect in the design of the Chevrolet station wagon in which Christine was seated. The defect in design consisted of placing the fuel tank in a vulnerable location in the back of the station wagon and outside of the crossbars of the frame of the vehicle. This location left the fuel tank exposed to the dangers of a collision from another vehicle. In evaluating the adequacy of a product’s design, the courts consider the gravity of the danger posed by the design, the likelihood that injury will occur, the availability and cost of producing a safer alternative design, and social utility of the product. In this case, the court held that General Motors could have produced a safer alternative design merely by placing the fuel tank underneath the station wagon between the crossbars of the frame. • General Motors contended that defective design was not properly at issue in the case because a design is defective only if it results in a product that is unsafe for its intended use. Here, General Motors asserts, no evidence was produced to show the station wagon was unsafe for its intended use—operation on the highway. The court rejected this assertion, stating that this theory had been repudiated in Cronin v. J. B. E. Olson Corp., 8 C. 3d 121, 104 Cal. Rptr. 433 (Cal. 1972), where the Court stated: 11

Cases • The argument that the van was built only for “normal” driving is unavailing. We agree that strict liability should not be imposed upon a manufacturer when injury results from a use of its product that is not reasonably foreseeable. Although a condition may not be the “normal” or intended use of a motor vehicle, vehicle manufacturers must take accidents into consideration as reasonably foreseeable occurrences involving their products. The design and manufacture of products should not be carried out in an industrial vacuum but with recognition of the realities of their everyday use. • The court held that a motor vehicle manufacturer is required to foresee that, as an incident of normal operation in the environment in which his product will be used, accidents will occur, including high‑speed collisions between vehicles. Because of this possibility, the manufacturer is required to design its vehicle to minimize unreasonable risks of injury and death. From this duty it follows that a motor vehicle manufacturer must take into account the possibility of a high‑speed collision when it selects a location for the fuel tank in the vehicle. The manufacturer must evaluate the crashworthiness of its product and take such steps as may be reasonable and practicable to forestall particular crash injuries and mitigate the seriousness of other problems. The court ordered a new trial in this case. Self v. General Motors Corporation, 42 C.A.3d 1, 116 Cal.Rptr. 575 (Cal.App. 1974). 11

Cases • Misuse • 6.8. Defendant Wilcox‑Crittendon Company wins. The law of strict liability provides that the abnormal or unforeseeable misuse of a product by a plaintiff relieves the manufacturer from any liability for any injuries caused by that misuse. A manufacturer or seller of a product is entitled to assume that the product will be put to its intended use, and is not liable in strict liability for an unforeseeable, unintended, unexpected, or abnormal misuse of the product. The hook in this case was intended to be used to tie animals to fences, posts, etc. and was not intended to be used to lift a 1,700-pound counterweight into the air. The use of the hook in this manner by Dosier was an unforeseeable and abnormal misuse of the product that relieved Wilcox‑Crittendon from strict liability for any injuries suffered by Dosier when the hook broke and crushed his arm. Dosier v. Wilcox‑Crittendon Company, 45 Cal.App.3d 74, 119 Cal.Rptr. 135 (Cal.App. 1975). 11

Cases • Dangerous Product • 6.9. No, Lederle Laboratories (Lederle) is not strictly liable to Elizabeth Kearl for the injuries she suffered when she took the polio. Vaccine liability provides that manufacturers of unavoidably dangerous products which serve an important social function are not liable for injuries or side effects caused by such product if such dangers are reasonably warned against. A product is unavoidably unsafe if, at the time of its distribution, there existed no alternative design that would have as effectively accomplished the same purpose or result with less risk. This rule is based on the public policy that society is benefited by the production and distribution of many unavoidably dangerous products, such as the oral polio vaccine in this case. To hold the manufacturer of this vaccine strictly liable would place an onerous burden on the manufacturers that may cause them not to introduce the product. • The court held that the vaccine administered to Elizabeth Kearl was an unavoidably unsafe product and that there was no alternative vaccine that could be legally marketed which would have immunized children against whopping cough just as effectively but with less risk. The court held that Lederle provided a proper and extensive warning of the possible side effects of taking the otherwise unavoidably dangerous oral polio vaccine. The court held that a manufacturer of an unavoidably dangerous product can only be found liable under the doctrine of negligence. The court granted judgment to Lederle on the strict liability claim. Kearl v. Lederle Laboratories, 172 C.A.3d 812, 218 Cal.Rptr. 453 (Cal.App. 1985). 11

Cases • Defense • 6.11. No, Honda Motor Co., Ltd. (Honda) is not strictly liable to Camacho for the injuries suffered in the motorcycle accident. The court held that certain products are inherently dangerous and are known to the general population to be so. Sellers are not strictly liable for failing to warn buyers of these generally known dangers. In this case, the court found that motorcycles are built to serve a certain purpose, and the Honda Hawk on which Camacho was injured was designed perfectly for this purpose. The court held that the harm or danger was fully apparent and commonly known to persons of ordinary perceptions and sensibilities. Therefore, Honda did not owe a duty to warn Camacho of the dangers of riding a motorcycle. Camacho v. Honda Motor Co., Ltd., 701 P.2d 628 (Colo.App. 1985). 11

Product Liability