CHAPTER 10 Product Liability INTRODUCTION Product liability is

CHAPTER 10 Product Liability

INTRODUCTION Product liability is the legal liability of the manufacturer or seller of a product which, because of a defect, causes injury to a purchaser, user, or bystander. This chapter discusses the evolution of the strict liability doctrine. It focuses on the bases for strict liability, including manufacturing defect, design defect, and failure to warn. Defenses to product liability claims are discussed. Additionally, the law of product liability in the European Community is addressed. 2

THEORIES OF RECOVERY 1. Breach of Warranty 1. UCC Warranties. 2. Privity of Contract - a contractual relationship must exist for a Plaintiff to recover. 2. Negligence To prove negligence in a products case, the injured party must show that the defendant did not use reasonable care in designing or manufacturing its product or in providing adequate warnings. 3

THEORIES OF RECOVERY 1. Strict Liability in Tort— absolute liability for an unreasonably dangerous product. 2. To recover, Plaintiff must prove: 1. He or his property was harmed by the product; 2. The injury was caused by a defect in the product; 3. The defect existed at the time the 4 product left the defendant and did not

STRICT LIABILITY IN TORT (CONT’D) 1. Rationale 1. Law should protect consumers against unsafe products. 2. Manufacturers should not escape liability simply because they typically do not sign a formal contract with the end-user of their products. 3. Manufacturers and sellers of products are in the best position to bear the cost of injuries caused by their products. 2. Strategy and Punitive Damages 3. Employees Memos and Testimony 5

NEGLIGENCE Case 10. 1 Synopsis. Mac. Pherson v. Buick Motor Co. (N. Y. 1916). Mac. Pherson purchased a new Buick from a Buick dealer who had purchased the car directly from Buick, the manufacturer. Mac. Pherson was injured when the car ran into a ditch after a wheel collapsed due to faulty wood in the spokes of that wheel. The wheel was made by a manufacturer other than Buick. Mac. Pherson sued Buick Motor Company and won. ISSUE: Can a consumer who purchases a product from a retailer sue the manufacturer directly for negligent manufacture of the product even though there is no contract per se between the consumer and the manufacturer? HELD: Yes. The court held that Buick, as the manufacturer, owed a duty to any person who could foreseeably be injured as a result of a defect in the 6 automobile it manufactured.

DEFECTIVE PRODUCTS 1. Manufacturing Defect—a flaw in the product that occurs during manufacture. 2. Design Defect—inadequate design or poor choice of materials that make a product dangerous to users. 3. Inadequate Warnings, Labeling, or Instructions: 1. Causation Requirement—Plaintiff must show that Defendant both breached a duty to warn and that the failure to warn was the proximate cause of the Plaintiff’s injuries. 2. Bilingual Warnings. 4. Unavoidably Unsafe Product 7

BILINGUAL WARNINGS Case 10. 2 Synopsis. Ramirez v. Plough, Inc. (Cal. 1993). Jorge Ramirez, four months old, was given St. Joseph’s Aspirin for Children, for a cold or upper respiratory infection, by his mother. Jorge developed Reye’s Syndrome, resulting in severe neurological damage and retardation. Plough, the manufacturer, knew Hispanics purchased its product, but the warning on the label was only in English. ISSUE: May a manufacturer of nonprescription drugs that can lead to a deadly illness when taken as normally expected incur tort liability for distributing its products with warnings only in English despite the fact that the manufacturer knows that there are non-Englishreading users? HELD: Case dismissed because federal law only requires warning labels in English. 8

DEFINITION OF PRODUCT Case 10. 3 Synopsis. Bell v. Miller Mill Company, Inc. (Feb. 4, 2000). On August 12, 1995, Jasmine Bell and her two children, Jasmarie and Jason, were driving in their car on a highway. A van parked on a driveway near the highway rolled down a hill and struck a guy-wire attached to a telephone pole. The telephone pole broke, causing the telephone lines to sag down over the highway and strike Bell’s car. The lines lifted Bell’s car into the air. When the car landed on its back, Jasmarie was ejected; she subsequently died. Jasmine Bell filed a wrongful-death action under the Alabama Extended Manufacturer’s Liability Doctrine (AEMLD) against the manufacturer of the telephone pole, claiming that the pole had been defective and unreasonably dangerous. At the end of Bell’s case at trial, Miller filed a motion for directed verdict, which the court granted. Bell appealed. 9 CONTINUED

DEFINITION OF PRODUCT Case 10. 3 Synopsis. (Cont’d) ISSUE: Is a telephone pole installed in the ground a “product” for purposes of establishing product liability? HELD: The Supreme Court of Alabama found that a telephone pole was a “product. ” The directed verdict in favor of the defendant was reversed. 10

WHO MAY BE LIABLE § § Manufacturers Wholesalers Retailers Sellers of Used Goods and Occasional Sellers § Successor Liability § Market-Share Liability § Premises Liability 11

DEFENSES 1. Assumption of Risk – when a person voluntarily and unreasonably assumes the risk of a known danger, the manufacturer is not liable for any resulting injury. 2. Comparative Fault – damages reduced by the degree to which the plaintiff’s own negligence contributed to the injury. 3. Unforeseeable Misuse of the Product 4. Statute of Limitations and Revival Statute - a time limit, established by statute, within which a lawsuit must be brought. 12

ASSUMPTION OF RISK Case 10. 4 Synopsis. Crews v. Hollenbach (Md. 2000). John Hollenbach, an employee of Honcho & Sons, Inc. , was excavating land for Honcho in its role as a sub-contractor of Excalibur Cable Communications a subcontractor of Maryland Cable Partners, L. P. During his work, Hollenbach struck a buried natural gas line owned by Washington Gas Light Company and caused a leak in the line. Gas escaped into the air and, as a result, the neighborhood where the gas line was located had to be evacuated. The fire department notified Washington Gas, which dispatched a repair crew to the scene of the leak. Lee James Crews, an employee of Washington gas for over twenty years, was the foreman of the gas line repair team dispatched to repair the leak. While he and his crew worked to repair the leak, the gas ignited an explosion occurred, seriously injuring Crews sued Hollenbach, Honcho & Sons, Excalibur Cable Communications, Maryland Cable Partners and Byers Engineering Company (which marked the utility lines), 13 claiming negligence and strict liability.

ASSUMPTION OF RISK Case 10. 4 Synopsis (Cont’d) The trial court dismissed the case on the grounds that Crews assumed the risk as part of his job. The Court of Special Appeals affirmed the judgment. Crews appealed. ISSUE: Is assumption of risk a viable defense against a suit by an employee hired to repair gas leaks who was injured during the process of repair? HELD: Affirmed. 14

DEFENSES (CONT’D) 1. Government-Contractor Defense: 1. The product was produced according to government specifications. 2. The manufacturer possessed less knowledge about specifications than did the government agency. 3. The manufacturer exercised proper skill and care in production. 4. The manufacturer did not deviate from the specifications. 2. State of the Art Defense—no safer product design is generally recognized as being possible at the time of manufacture. 3. Preemption Defense. 15

PREEMPTION DEFENSE Case 10. 5 Synopsis. Geier v. American Honda (U. S. 2000). While driving a 1987 Honda Accord, Alexis Geier crashed into a tree and was seriously injured. Although the car had manual shoulder and lap belts that Geier was using at the time of the accident, it had no airbags or other passive restraint devices. Geier and her parents sued American Honda under state law for failing to include a driver’s side airbag. The Federal Motor Vehicle Safety Standard (FMVSS) 208, promulgated pursuant to the National Traffic and Motor Vehicle Safety Act, required auto manufacturers to equip 10 percent of their national fleet of cars with passive restraints, but did not require airbags. The district court dismissed plaintiff’s claim on the grounds that it was preempted by federal law. The U. S. Court of Appeals affirmed, and the Geiers 16 appealed. CONTINUED

PREEMPTION DEFENSE 1. Case 10. 5 Synopsis. (Cont’d) 2. ISSUE: Does the Safety Act preempt state tort claims based upon a manufacturer’s failure to equip a vehicle with air bags? HELD: The Supreme Court held that the state product liability claims asserted by Geier conflicted with the objectives of FMVSS 208 and were preempted by the Act. The claims were dismissed. 17

LEGISLATIVE DEVELOPMENTS 1. Statutes of Repose—cut off the right to assert a cause of action after a specified period of time from delivery of the product or completion of the work. 2. Limitations on Punitive Damages. 3. Codification of Defenses. 1. Plaintiff’s Negligence. 2. Assumption of Risk. 3. Misuse of Product. 18

LEGISLATIVE DEVELOPMENTS (CONT’D) 1. Limitations on Non. Manufacturer’s Liability - Plaintiff must show: 1. Defendant had some control over the design or manufacture of the product or warned the manufacturer of the alleged defect. 2. Defendant actually knew of the defect. 3. Defendant created the defect. 2. Limitations on Joint Liability 3. Penalties for Frivolous Suits 19

PRODUCT LIABILITY Case 10. 6 Synopsis. Potter v. Chicago Pneumatic Tool Co. (Conn. 1997). Plaintiffs, grinders in a shipyard, were injured in the course of working for General Dynamics Corporation. The injuries occurred from using pneumatic tools (to chip, grind, and smooth metal surfaces) manufactured by Defendant. Plaintiffs suffered permanent vascular and neurological impairment of their hands which causes, inter alia, numbness, pain, and an intolerance to cold and were no longer able to work at their former jobs. Plaintiffs sued Defendants for defective tool design (excessive vibrations) and inadequate warnings by Defendant. The trial jury found for Plaintiffs. Defendants appealed. ISSUE: Did the plaintiffs have to show a reasonable alternative design to win in a defective design case? HELD: No. The Connecticut Supreme Court said they did not. However, the jury verdict was vacated and a new trial ordered because the Court found that the Plaintiff’s employer had modified the tools 20 prior to use by Plaintiffs.

PRODUCT LIABILITY IN THE EUROPEAN UNION § Comparison with U. S. Strict Liability - similar in both situations. § Implementation: EU Member States can choose to: § Allow the development-risks defense. § Impose a cap on damages of not less than 55 million pounds. § Exclude all agricultural products. 21

REVIEW 1. Should pharmaceutical companies that distribute drugs with known side effects be liable when those side effects occur in a small percentage of users? 2. If a product is targeted at a typically non. English speaking market, should warning labels be in languages other than English too? 3. Should the state-of-the-art defense be 100% successful? 22