IENG 331 - Product Liability

1. IENG 331 - Product Liability Carter J. Kerk, PhD, PE, CSP, CPE Industrial Engineering Department South Dakota School of Mines

2. Product Liability • Read Chapter 7 in Brauer • HW7 Review Questions, p. 76-77 • Odds • Due: ?

3. Consumer Product Safety Commission • Established by the Product Safety & Liability Act of 1972 • an independent federal regulatory agency • protect the public against unreasonable risks of injuries and deaths associated with consumer products • http://www.cpsc.gov • For vehicles, tires, child safety seats, go to National Highway Traffic Safety Administration at http://www.nhtsa.dot.gov

4. Role of CPSC • Develop voluntary standards with industry • Issue & enforce mandatory standards • Ban products if necessary • Obtain recall of products • Research potential product hazards • Inform & educate consumers

5. Other Acts Affecting Product Liability • Flammable Fabrics Act • Food, Drug, and Cosmetics Act • Hazardous Substances Act • Mine Health & Safety Act • National Traffic & Motor Vehicle Safety Act • Occupational Safety & Health Act • Poison Prevention Packaging Act • Refrigerator Safety Act • Toxic Substances Act • Workers’ Compensation Act

6. Case Study - Silo Unloader • A young man working on a farm was trying to operate a silo unloader. The device was not working properly, so he climbed up into the silo to see what was wrong. He found that because part of the silage was frozen and part was not, the device had dug itself into the softer material and gotten stuck. While the machine was still running, the man tried to pull it out of the the hole. The drive wheels were powered by an exposed drive shaft which had a setscrew with a square head protruding from a collar on the shaft.

7. Silo Unloader Cont. • The only place where the man could stand to pull the machine was quite close to this setscrew. Although the shaft was turning very slowly, the setscrew caught in the man’s belt buckle and began winding his clothing around the shaft. The only control switch was located far beyond his reach and nobody was close enough to hear his calls. He was killed before the motor stalled.

8. Silo Unloader Cont. • Who was at fault for this accident? There were several contributing factors. • The man should not have entered the restrictive area in the presence of moving machinery without someone else at the control. • He should not have attempted to pull on the machine while it was running.

9. Silo Unloader Cont. • The designer/manufacturer should have recognized several problem areas and designed the machine accordingly. • It could get stuck in partly frozen silage. • Provisions should have been made for retrieving it. • Drive shaft should have been shielded. • Head screw should not have been exposed. • Result: Large sum awarded to the family by the manufacturer

10. Case Study - Escalator Escapade • An elderly woman was shopping in a store that had an escalator between the 1st and 2nd floors. While she was on the 2nd floor, the escalator stopped and required repair. Store management placed a warning sign at the bottom, but had not placed one at the top before the woman started walking down from the top. She fell and was injured and sued the store.

11. Escalator Escapade Cont. • Her lawyer approached a consulting engineer and asked if he could find some OSHA standard that the store had violated. (Of course OSHA standards protect only employees and not the general public.) The lawyer admitted privately the woman was unsteady on her feet and was looking to place the blame on the store.

12. Escalator Escapade Cont. • The consulting engineer refused to help. The case went forward. • Result: The woman was awarded $75,000

13. Consumer Product Statistics • Consumer products related deaths account for ~30% of all unintentional deaths • Unintentional Injuries • 77% in the 17 to 44 age groups • 99% in the youngest and oldest groups

14. Seeking Compensation • Workers can use Workers’ Compensation and/or Products Liability routes • Consumers can use Products Liability route

15. Product Liability • Legal action taken under tort and/or contract law in which an injured party seeks to recover damages for • personal injury or loss of property • from a • product provider, seller, designer, manufacturer, distributor, etc., alleging the injuries or loss resulted from a defective product.

16. Three Theories of Liability • Three theories of liability apply to products and establish the duties of a manufacturer or seller toward a user or consumer • 1) Warranty • 2) Negligence • 3) Strict Liability (95% of cases) • A manufacturer is not responsible for all injuries that may result from a product – that would be “absolute liability”.

17. Theories of Liability - Warranty • Warranty addresses performance of a product regarding implied or explicit claims made for it by the manufacturer or seller

18. Theories of Liability - Negligence • Negligence involves the conduct or behavior of a person or corporate body • Something they did, or • Something they failed to do.

19. Theories of Liability – Strict Liability • Strict liability deals with characteristics of products that are unreasonably dangerous • ~95% of cases • In certain situations, a defendant is liable for plaintiff’s damages without any requirement that the plaintiff prove the defendant was negligent

20. Historical Roots – Caveat Emptor • In late 1800s as the industrial revolution placed new products on the market, companies were protected by the concept of “caveat emptor” or “let the buyer beware”. • Complaints about a product were ignored. • The buyer was held negligent for not examining a product for defects at the time of purchase.

21. Historical Roots – Privity of Contract • A manufacturer was further protected by “privity of contract”. • It limits the parties involved in a negligence case to those directly involved in a transaction – the buyer and seller. • As long as the manufacturer was not part of the direct selling of its product, there was no concern over suits from buyers.

22. Negligent Manufacture • The maker of a product can be held liable for its performance from a S&H perspective • MacPherson v. Buick Motor Company (1916) • While driving a Buick, MacPherson lost control and was injured. The cause was a defective wheel. The courts ruled in MacPherson’s favor. • This opened the door for changes in product liability law.

23. Breach of Warranty • Manufacturer’s liability broadened to include people without contractual agreements with the manufacturer, and limited the protection manufacturers could derive from disclaimers

24. Breach of Warranty, Cont. • Henningson v. Bloomfield Motors (1960) • Mr. Henningson purchased a new car for his wife who was injured in an accident • Car had a defective steering system • Court ruled • Implied warranty exists for the performance of the car • It extended to persons other than the actual buyer

25. Products Liability Evidence • The plantiff must bring evidence in support of their claim, except in express warranty cases, the plantiff must prove: • The product was defective • The defect existed at the time it left the defendant’s hands • The defect caused injury or harm and was proximate to the injury • In negligence cases, must also show the defendant was negligent in some duty toward the plantiff. • In warranty cases, must merely show a product failed to meet implied or expressed warranty.

26. Negligent Design • Beyond Negligent Manufacture, a company can be held liable for Negligent Design

27. Strict Liability in Tort Law • One who sells any product in a defective condition unreasonably dangerous to the user is subject to liability for physical harm or property damage • The imposition of liability on a party without finding of fault • The plaintiff needs to prove only that the tort happened and the defendant was responsible • Neither good faith nor the fact the defendant took all possible precautions are valid defenses • http://www.west.net/~smith/strict.htm

28. Duty to Warn • Three criteria to determine whether a Duty to Warn exists: • Potential for an accident when the product is used without a warning, provided use is reasonably predictable • Probable seriousness of injuries if an accident does occur • Potential positive effectiveness and feasibility of a warning

29. Prevention / Defense of PL Claims • Manufacture a reasonably safe and reliable product, and where necessary, • provide instructions for its proper use. • BUILD IN PRODUCT SAFETY! • Develop a Product Safety Management Program

30. Developing a PSM Program • The purpose of a Product Safety Management (PSM) Program is to limit as much as possible a company’s exposure to product liability litigation and related problems. • More information is available, see links • Nelson PSM • http://www.hazardcontrol.com/product.html • Bill Kitzes PSM Website • http://www.productsafety.com/

31. Total Quality Mgt & Product Safety • It is widely accepted that the best way to limit liability exposure is to produce a quality product. • A quality product is one that meets or exceeds customer standards and expectations. • An inherent expectation is that the product, if used properly, will cause no health or safety problems. • Tie in with ISO 9000

32. ISO 9000 2000 • Quality Management Standards • Requirements: ISO 9001 • Guidelines: ISO 9000 and ISO 9004 • ISO: International Organization for Standardization • www.iso.org • Purpose: facilitate international trade by providing a single set of standards that people everywhere would recognize and respect in all kinds of organizations

33. How Does ISO 9000 Work? • You decide that you need to develop a quality management system that meets the Quality Standard, because: • the need to control or improve the quality of your products and services • to reduce the costs associated with poor quality • to become more competitive • your customers expect you to do so • a governmental body has made it mandatory

34. How do you develop aQuality Management System? • Perform a Gap Analysis • Tells you exactly what you are missing • Follow a detailed System Development Plan • Grassroots approach • Once your program has been developed and implemented you can be • Voluntarily Compliant • Certified (this will mean more to customers)

35. Product Liability • Read Chapter 7 in Brauer • HW7 Review Questions, p. 76-77 • Odds • Due: ?