Ch. 8: Liability for Defective Products A. Introduction

Ch. 8: Liability for Defective Products A. Introduction A person is injured by a product and sues the manufacturer, or the retailer who sold the product. What legal theories are available to support recovery?

Ch. 8: Liability for Defective Products A. Introduction • A person is injured by a product and sues the manufacturer, or the person who sold the product. • What legal theories are available to support recover? • negligence theories • contract theories: breach of warranty • other tort theories: fraud, or misrepresentation • strict product liability

Negligence – based theories MacPherson v. Buick Motor Co. Wheel maker sells wheel to Buick, who sells car to Retailer, who sells car to Plaintiff, who is injured when wheel collapses P’s theory: rsble inspection by Buick would have revealed defect. sues

Negligence – based theories MacPherson v. Buick Motor Co. • Buick: • No duty: no privity! • No duty to inspect: bought from reputable manufacturer.

Negligence – based theories MacPherson v. Buick Motor Co. “if the nature of a thing is such that it is reasonably certain to place life and limb in peril when negligently made, it is a thing of danger. . . . If to the element of danger, there is added knowledge that the thing will be used by persons other than the purchaser, and used without new tests, then irrespective of contract, the manufacturer of this thing of danger is under a duty to make it carefully.”

Negligence – based theories • Applying MacPherson to our problem, what are the legal issues? • As to duty: • Would there be a duty on the tire manufacturer, as opposed to Ford? • Is the danger “not merely possible, but probable”? • Was there knowledge that the product would be used by persons other than the purchaser? • Was there knowledge that the product would be used without new tests?

Negligence – based theories • Applying MacPherson to our problem, what are the legal issues? • As to breach? What are the “untaken precautions”? • Mismanufactured? • Failure to inspect and discover flaw? • Poor design? • Failure to warn?

If the plaintiff’s theory is that the tires that had tread separation were mismanufactured, what are the issues for a negligence cause of action: • Was there a flaw in the tires? Can you use res ipsa? • Would a reasonable inspection would have revealed the flaw? • Would a reasonable manufacturing process have avoided the flaw? • Does Ford’s ability to inspect or test mean Firestone had no duty? Is it an intervening cause that absolves Firestone? • Does the arguable misuse of the product by consumers give Firestone a complete defense? Does it constitute comparative fault? • What is the relevance of arguments that the design of the vehicles contributed to the harm?

Contract theories: breach of warranty Note 7, p. 545. Note 4. P. 550: § 2-314. Implied Warranty: Merchantability; Usage of Trade. (1) Unless excluded or modified . . . a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant . . . (2) Goods to be merchantable must be at least such as. . .(c) are fit for the ordinary purposes for which such goods are used

Ch. 8: Liability for Defective Products Escola v. Coca Cola Bottling Co., Traynor, J. concurring: “ It should now be recognized that a manufacturer incurs an absolute liability when an article that he has placed on the market, knowing that it is to be used without inspection, proves to have a defect that causes injury to a human being.”

What are the arguments for strict liability in such a case? Traynor, in Escola, p. 547: 1) placing liability “where it will most effectively reduce the hazards … inherent in defective products that reach the market.” 2) shifting the loss to the party who can best insure and spread the loss among users of the product 3) providing “general and constant protection” against a “general and constant risk” 4) liability is in effect strict anyway; res ipsa gets the plaintiff to the jury, and the jury will almost always find for the plaintiff 5) under modern marketing methods, the consumer no longer has the means to investigate a product’s soundness, and has been led to be confident in manufacturers’ ability to produce a safe product.

Chapter VIII: Liability for Defective Products A. Introduction The questions: 1) What does it mean to say a manufacturer is “strictly liable”? How does it differ from fault based liability? 2) How do you decide, doctrinally, that strict liability will be imposed? When is a product “defective”? 3) Why, as a matter of policy, are we imposing strict liability on manufacturers?

Ch. 8: Liability for Defective Products A. Introduction Greenman v. Yuba Power Products (note 5, p.551) “a manufacturer is strictly liable in tort when an article he places on the market, knowing that it is to be used without inspection for defects, proves to have a defect that causes injury to a human being.” : liability of course should be defined in terms of the safety of the product in normal and proper use (Escola, p. 550) : and should not extend to injuries that cannot be traced to the product (ditto)

Ch. 8: Liability for Defective Products A. Introduction Vandermark: retailers are strictly liable on the same terms as manufacturers. Elmore: strict liability extends to bystanders.

Ch. 8: Liability for Defective ProductsThe Third Restatement: Products Liability Section 1: One engaged in the business of selling . . . products who sells . . . a defective product is subject to liability for harm to persons or property caused by the defect.

Ch. 8: Liability for Defective ProductsThe Third Restatement Section 2: there are three types of defects: Manufacturing defect: “A product contains a manufacturing defect when the product departs from its intended design even though all possible care was exercised in the preparation and marketing of the product.” Design defect: the foreseeable risk of harm could have been reduced by adopting a reasonable alternative design. Warning defect: the foreseeable risk of harm posed by the product could have been reduced or avoided by reasonable instructions or warnings.

Manufacturing defects To establish strict liability, the plaintiff must show 1) that the product was defective: 2) and that as a result of the defect, the product was : Restatement 402a: was in a “defective condition unreasonably dangerous to the user or consumer or to his property.” California: “failed to perform as safely as an ordinary consumer would expect when used in an intended or reasonably foreseeable manner.”

Manufacturing defects Restatement (Third) Product Liability: “A product contains a manufacturing defect when the product departs from its intended design even though all possible care was exercised in the preparation and marketing of the product.” How is this different from imposing liability on a negligence theory?

Defective Designs:The Barker v. Lull test A product may be found defective in design: a) if the plaintiff demonstrates that the product failed to perform as safely as an ordinary consumer would expect when used in an intended or reasonably foreseeable manner OR b) if through hindsight, the jury determines that the product’s design embodies “excessive preventable danger”, or in other words, if the jury finds that the risk of danger inherent in the challenged design outweighs the benefits of such design.

Defective Designs Under the Barker test, the risk utility test in strict liability differs from the negligence test because: 1) consumer expectation is a floor. 2) the risk - utility calculus is applied in hindsight. 3) the burden of showing that the benefits of the design used outweigh its dangers is on the defendant. 4) the focus is on the product, not on the manufacturer’s conduct.

Defective Designs A two step approach: 1) Under Soule, the product must be one as to which ordinary consumers have an expectation of safety; 2) If it is such a product, then the question is “whether the article is dangerous to an extent beyond which would be contemplated by the ordinary consumer who purchases it with the ordinary knowledge common to the community as to its characteristics (574, Restatement 402A comment i) 3) If it is not such a product, the plaintiff must show that the design embodies “excessive preventable danger”: the risks of the design are not outweighed by its benefits.

Defective Designs In determining whether the design is defective, look to: 1) usefulness of product 2) safety aspects of the product 3) availability of a substitute product 4) ability to eliminate the unsafe character without harming its utility 5) user’s ability to avoid danger by exercise of due care 6) user’s anticipated awareness of the dangers inherent in the product 7) feasibility of spreading the loss by setting the price or carrying insurance

Defective Designs Restatement of Product Liability, §2: A product: b) is defective in design when the foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative design by the seller or other distributor, or a predecessor in the commercial chain of distribution, and the omission of the alternative design renders the product not reasonably safe;

Defective Designs Restatement of Product Liability, §2 comment f (p. 567-568, note 8): Factors to be considered in evaluating a RAD: 1) magnitude and probability of risk 2) instructions and warnings accompanying the product 3) nature and strength of consumer expectations, including expectations based on marketing 4) relative advantages and disadvantages of the product and its alternatives, including product longevity, repair, range or consumer choice among products, etc.

Ch. 8: Liability for Defective Products Failure to Warn Restatement of Product Liability, §2 A product: c) is defective because of inadequate instructions or warnings when the foreseeable risks of harm posed by the product could have been reduced or avoided by the provision of reasonable instructions or warnings by the seller or other distributor, or a predecessor in the commercial chain of distribution, and the omission of the instructions or warning renders the product not reasonably safe.

Ch. 8: Liability for Defective Products Failure to Warn Evaluating “failure to warn” defects: 1) Need for a warning? 2) Whom do you warn? 3) Was the warning adequate? -- content? -- appearance?

Ch. 8: Liability for Defective Products Failure to Warn • Ways in which a warning can reduce the foreseeable risks of harm: • Reducing risk by instructing the user in the product’s proper use; • 2) Reducing risk by alerting the user to dangers presented by possible misuse of the product; • 3) Alerting consumers to inherent dangers of the product that cannot be reduced or avoided (side effects).

Ch. 8: Liability for Defective Products Failure to Warn • Is there a need for a warning? • “foreseeable risks of harm posed by the product that could have been reduced or avoided” where “omission of the instructions or warning renders the product not reasonably safe” • risks that are common knowledge? • risks that were unknown at the time your product was designed?

Ch. 8: Liability for Defective Products Failure to warn What if the hazards of the product were not known? -- the Restatement position -- the Beshada position (note 2, p. 600) -- the California position (note 3 p. 601)

Ch. 8: Liability for Defective Products Failure to warn Carlin v. Superior Court (p. 602, n.3) The rules of strict liability require a plaintiff to prove only that the defendant did not adequately warn of a particular risk that was known or knowable in light of the generally recognized and prevailing best scientific and medical knowledge available at the time of manufacture and distribution.

“Thus, in strict liability, as opposed to negligence, the reasonableness of the defendant's failure to warn is immaterial. Stated another way, a reasonably prudent manufacturer might reasonably decide that the risk of harm was such as not to require a warning as, for example, if the manufacturer's own testing showed a result contrary to that of others in the scientific community. Such a manufacturer might escape liability under negligence principles. In contrast, under strict liability principles the manufacturer has no such leeway; the manufacturer is liable if it failed to give warning of dangers that were known to the scientific community at the time it manufactured or distributed the product. Similarly, a manufacturer could not escape liability under strict liability principles merely because its failure to warn of a known or reasonably scientifically knowable risk conformed to an industry-wide practice of failing to provide warnings that constituted the standard of reasonable care.”

Ch. 8: Liability for Defective Products Failure to Warn Evaluating the adequacy of a warning: 1) Appearance 2) Content

Chapter EightLiability for Defective Products: Defenses • How victim behavior is relevant in a product liability case: • consumer expectation -- not defective • open and obvious danger (or there is a warning) -- not defective • unforeseeable misuse -- not defective • product modification -- not defective / superseding cause • comparative fault

Chapter Eight: Liability for Defective Products Can a product be defective if, although it performs as safely as an ordinary consumer would expect, an alternative design would make it even safer? If there is no alternative design?

Chapter Eight: Liability for Defective Products Knives that cut people? Hamburgers that cause obesity? Tobacco that causes cancer? Camacho: motorcycle without leg guards Luque: lawn mower designed with a hole in the top (note 2, p. 579; note 7, p. 589 Uniroyal: the exploding tire case (p. 591, n. 9) The cigarette lighter cases (note 8, p. 580) O’Brien: above ground swimming pool (p. 570, n.12)

Ch. 8: Liability for Defective Products Failure to Warn Restatement of Product Liability, §2 comment e: “[a court could] conclude that liability should attach without proof of a reasonable alternative design. . . [if] the extremely high degree of danger posed by its use or consumption so substantially outweighs it negligible social utility that no rational, reasonable person, fully aware of the relevant facts, would choose to use, or to allow children to use, the product.”

Ch. 8: Liability for Defective Products Failure to warn: Problem I. Manufacturing, Design, Warning? II. Manufacturing A. Prove a flaw that existed when left control 1. Manufacturer’s intent B. Creates danger 1. Consumer expectation test 2. Inherent / intrinsic characteristics of product C. Causation D. Defenses

Ch. 8: Liability for Defective Products Failure to warn: Problem III. Design defect A. Consumer expectation test 1. Remember failure to warn B. Risk utility test 1. Reasonable Alternative Design 2. State of the art 3. “Open and Obvious” 4. “Ultrahazardous products??” C. Causation D. Defenses

Ch. 8: Liability for Defective Products Failure to warn: Problem IV. Failure to Warn A. Does the lack of a warning make the product defective. 1. Need for a warning? 2. Who do you warn? 3. Was the warning adequate: a. content b. appearance. B. Causation C. Defenses

Ch. 8: Liability for Defective Products A. Introduction