PRODUCT LIABILITY ACTIONS AN OVERVIEW Allegations Defenses Due Diligence Risk Management

1. PRODUCT LIABILITY ACTIONSAN OVERVIEWAllegationsDefensesDue DiligenceRisk Management Cynthia Weiss Antonucci, Esq cantonucci@harrisbeach.com 100 Wall Street New York, New York, 10023 212 313-5410 www.harrisbeach.com

2. Typical Product Liability Allegations • Strict Product Liability • Manufacturing Defect • Design Defect • Failure to Warn • Breach of Warranty • Negligence

3. Strict Product Liability The doctrine of strict product liability imposes a duty upon manufacturers, suppliers and distributors of products not to cause injuries to others, regardless of the amount of care used by them to foresee and take steps to avoid the injuries. No matter how careful or diligent they were, if a product is defective and causes an injury, the manufacturer is liable under the doctrine of strict liability.

4. Negligence Negligence is conduct that falls below a standard established by law for the protection of others against unreasonable risk of harm. Negligent conduct may consist of either an act or a failure to act by a defendant when there is a duty to do so.

5. Breach of Warranty Warranties are statements by a manufacturer or seller concerning a product during a commercial transaction, the sale of the product. Warranty claims generally require privity, a direct relationship between the injured party and the manufacturer or seller.

6. Strict Product Liability Manufacturing Defect Design Defect Failure to Warn

7. Strict Product Liability: Manufacturing Defect The product design is not defective as it came off of the drawing board but the actual product sold did not conform to the product as designed or formulated. If the product does not match specifications, no amount of due care will excuse manufacturer or distributor from liability. Plaintiff must prove that product as sold does not match the design for the product and that plaintiff’s injury was proximately caused by the manufacturing defect.

8. Manufacturing Defect Truck Stands as Designed:

9. Manufacturing Defect Truck Stands as Sold Defective

10. Strict Product Liability: Design Defect • Design defects occur where the product design is inherently dangerous or useless no matter how carefully manufactured. • Plaintiff must prove: • Product defectively designed; • Injury was proximately caused by the design defect; • There was an alternative feasible design for the product or with the current design the product could have been made safe by a warning.

11. Strict Product Liability: Design Defect • The product as designed is flawed • Not enough guards; • Does not stop quickly enough; • No automatic shut off; • Guards are removable or not interlocked; • Opening too big; • Fabric is too flammable; • Bicycle lacked headlight; • Warning inadequate.

12. Strict Product Liability: Design Defect • Courts favor a risk‑benefit test when balancing the risk inherent in a product against its utility and costs. The factors considered include: • The utility of the product to the public and to the individual user; • The nature of the product, that is the likelihood that it will cause injury; • The availability of a safer design; • The potential for designing and manufacturing the product so that it is safer but remains functional and reasonably priced; • The ability of plaintiff to have avoided injury by careful use of the product; • The degree of awareness of the potential danger of the product which reasonably can be attributed to the plaintiff; and • The manufacturer’s ability to spread any cost related to proving the safety of the design.

13. Design Defect…Real Life Example • Plaintiff v Mixer Company • Facts: Plaintiff placed hand in cement mixer while machine moving and amputates fingers.

14. Design Defect…Real Life Example

15. Design Defect…Real Life Example DO NOT OPERATE UNLESS 8.DO NOT lift drum grid while mixer is operating or engine is running 7. Engine hood is closed after starting

16. Design Defect…Real Life Example Warning Label inside open cover Mixer kept operating with cover open Label not to operate with cover open inside the cover.

17. Design Defect…Real Life Example • Plaintiff wins • Defectively designed because mixer kept operating with cover open. • Injury, severed fingers, was proximately caused by ability to access moving parts with cover open. • Alternative feasible design would be an automatic shut off switch when the cover was lifted. • Warning if properly placed on the exterior of the cover could have prevented injury.

18. Strict Product Liability: Failure to Warn Generally considered as part of the design defect case; A product which can cause harm to the user can be rendered non-defective by the placement of an adequate warning; Is also part of a general negligence case.

19. Strict Product Liability: Failure to Warn • Failure to Warn Defenses: • No Warning Necessary • There is no danger or the danger is so open and obvious that the plaintiff should have known. • Some Warning • Is it adequate? • Great Warning • Exactly what happened.

20. Strict Product Liability: Failure to Warn Failure to Warn: Risk is Open and Obvious

21. Strict Product Liability: Failure to Warn Failure to Warn: Risk is Open and Obvious

22. Failure to Warn: Risk is Open and Obvious

23. Strict Product Liability: Failure to Warn • Adequacy of the Warning • In evaluating the adequacy of warnings look to standards such as: • Whether the warning adequately indicates the scope of the danger; • Whether the warning reasonably communicates the extent or seriousness of the harm that could result from misuse of the product; • Whether the physical aspects of the warning are adequate to alert a reasonably prudent person to the danger; (Size, Shape, Color or Location) • Whether a simple directive warning indicates the consequences that might result from failure to follow it; and • Whether the means to convey the warning is adequate.

24. Strict Product Liability: Failure to Warn Warning does not communicate the type or seriousness of the injury Warning does not contain color highlights or pictograms Warning is improperly placed. The warning is inside the hood. Adequacy of the Warning

25. Failure to Warn: Real Life Example Plaintiff operates boom lift under electrical wires, comes in contact with wires and is electrocuted. • Plaintiff v Boom Lift

26. Failure to Warn: Real Life Example Red Color DANGER in large bolded lettering Pictogram showing hazard Electrocution Hazard Specifically warns of injury and death if warning not followed • Specifically tells how to avoid injury • Keep equipment more then 10 feet away from electrical lines. • Allowance must be made for user error, boom deflection and electrical lines swaying.

27. PRODUCT LIABILITY: RISK ASSESSMENTPre-Market Due Diligence Conduct an overview of the current U.S. climate for product liability litigation; Evaluate company documents including public documents, published scientific materials and competitor materials; Analyze product labels, warnings, user manuals, and directions/instructions for use to ensure clear warnings and communications with consumers; Review marketing materials, product brochures, sales training programs to ensure they are consistent with product labeling and are in compliance with applicable laws; Review contract manufacturer, supplier and vendor agreements and determine that litigation risks are addressed by indemnity and additional insured requirements; Identify key personnel who can best serve as company witnesses;

28. PRODUCT LIABILITY: RISK ASSESSMENTPre-Market Due Diligence Conduct verdict and settlement research to identify potential exposures, insurance needs and likely outcomes in the event of litigation; Outline legal, factual and technical defenses available under case law applicable to products to counter allegations of defect and how to bolster those defenses; Develop a positive body of evidence that will assist in the defense and a plan to cure the impact of “red-herring/bad document/smoking gun” materials that may exist; Arrange for insurance coverage for product liability and recall situations; Plan a strategy for the first few lawsuits, consumer complaint and claims handling before they escalate into costly complex litigation; Establish litigation hold procedures and retention policies for handling electronically stored information and documents to avoid sanctions for failure to preserve evidence.

29. PRODUCT LIABILITY: Defending the Case Defense themes for Negligence Case and Products Case are the same. Start early. If there is an accident start your investigation and collection of evidence before there is a lawsuit. Involve your counsel at the beginning so that the attorney client privilege, work product and privilege of material prepared for litigation control. Have outside counsel retain the experts and conduct the witness interviews. Preserve evidence. Do not automatically dispose of or change condition (repair) from time of accident

30. Conclusion The defense of the case is only as good as the evidence your lawyer has to present to the jury. While the plaintiff has the burden of proof the reality is the juries want explanations and want to know how an accident happened if you are saying it didn’t occur the way the plaintiff said it happened. By being prepared for trial the majority of your cases won’t be tried either because the plaintiff will know that you will win the case, or because you will know that you can’t.

31. Conclusion Questions?