Chapter 7
STRICT LIABILITY
AND PRODUCT LIABILITY
Who is responsible for injury from a defective product?
- Overview
When an individual is hurt because of a defective product, the first thought is usually to compensation and its source. Traditionally the theories of liability have centered around either contract law or tort law. In contract warranties provide a mechanism for potential litigation based on either express or implied promises unless disclaimed. Tort law typically has involved the application of negligence theory to the situation.
Traditional negligence doctrines have failed to adequately protect consumers hurt by defective products. Courts led the way to newer avenues of recourse by way of the doctrine of strict liability. A sampling of arguments from the two sides of the public policy debate surrounding this doctrine is set out below. The actual mechanics of the doctrine are found in the Restatement (Second) of Torts at Section 402A.
On the side of product users, the following points are worth considering:
1.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.
2.Contract law, both common and UCC, has also failed to provide adequate assurance to the victims of product harm. Consumers traditionally have had less real bargaining power in contracting when it comes to attaching responsibility for harm created by a product.
3.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 product’s continued existence in the marketplace can no longer be tolerated. For example, consider how long it took to get three-wheel all-terrain vehicles and lawn darts off the market. Or do semiautomatic "street sweepers" really serve any legitimate societal purpose?
4.As a practical matter, protections against defects in products are 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?
- The sanctions imposed by law for defective products should act as a deterrent to further introduction of faulty products into the marketplace. If the sellers of goods know this, they will try harder to make products safer in the first place.
- Manufacturers and other members of the chain of distribution have traditionally had the "deep pockets" to fight off the "little guy" by using so-called "hard ball" tactics in fighting all claims regardless of the equities of the individual claims.
7.There is an extreme inconsistency among the states regarding the rules of evidence and the like that make, or otherwise legitimate, a "crap shoot" when going after nationally based business organizations who can seek out the more "business friendly" forum.
As persuasive as some of these arguments may be, the other side of the coin has its own convincing points. Some key arguments for the seller against the current products liability laws are as follows:
1.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.
2.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.
3.The present day procedural rules have allowed a deep pocket mentality to set in. Rules like joint and several liability of cotortfeasors allow an entity with only a small percentage of responsibility to be liable out of proportion to that level of responsibility based only on its financial resources.
4.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 costs 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.
5.There is a prevailing lottery mentality as a result of large damage awards from product liability cases. The harm done may be minimal, but the pain and suffering losses coupled with potential punitive damages have inspired too many consumers (and their attorneys) to go on a treasure hunt in the courts.
6.Some products, by definition, are involved in high risk and must be assured of some legal protections in order to be financially viable in the marketplace. Consider, for example, such hi-tech medicinal devices such as heart pacemakers. Recent testimony before Congress by the manufactures of such devices indicated the distinct possibility that lawsuits may eventually drive such products off the market entirely. This creates a "lose-lose" scenario for all concerned.
The steps used in attaching liability for harm done by products are set out in the key question checklist. One unfortunate aspect of having all these protections has been the creation of a false comfort. That mind-set says: "If there is harm, the blame falls on everyone but me!" The law is there to be used by the innocent, good faith victim of harm. If, however, a person harmed suffers from legal myopia, a tendency to see only what he wants to see, he should not be surprised if the law does not protect him in all events. Just as it was wrong to expect the buyer to find his own way in caveat emptor, it is also wrong to expect the UCC, the government, and its courts to cover buyers in all instances. Buyer beware may be outdated in the legal sense, but it makes just as much sense as ever in reality that all product liability claims can somehow be expected to be a sure bet. Yet when you consider real cases like the one used in the hypothetical multi-issue essay question, you can see why the law must act to restrain reckless and callous design, manufacture, and sale of truly harmful products.
II.Hypothetical Multi-Issue Essay Question:
ClintWayne and his fiancée, MollyOakley, of Boulder, were as infatuated with their guns as they were with each other. They collected all sorts of new and antique weaponry and were NRA certified expert marksmen. One of Clint's prized possessions is his 1953 Big Bang Long Barrel (a.k.a. the tumescent tool that won the West!). This model was a deliberate copy of the 1873 Colt Peacemaker. The Long Barrel was manufactured by the Big Bang Company from 1953 to 1973, when it was replaced by its current snub-nosed model, the Saturday Night Bobbitt. Current gross sales are better than ever at over $90 million per year with a net profit of $22 million. The owner of the Big Bang Company is Mr.I.M.A.Big-BangIV.
One of the reasons for the replacement of the original Long Barrel model in 1973 was a pesky little problem of the gun going off when it was accidentally bumped. When the gun was fully loaded and uncocked, the hammer rested against the end of the firing pin, which in turn was in contact with the bullet. Thus, even a slight contact with the hammer could set off a chain reaction that fired the gun. To avoid this possibility, the Big Bang Company instruction manual specifically advised owners to keep the chamber under the hammer empty by loading only five bullets. The company has refused, however, to formally recall the gun and could not be forced to do so under current gun control laws.
On a fateful day last month, Clint was picking up Molly to go to the shooting range. He had his Big Bang Long Barrel on the front seat of his pickup truck and pushed it aside to clear the seat for Molly. The gun fell to the floor, discharged, and killed Molly instantly.
Assume your court has jurisdiction over all the parties and issues presented in this controversy. What are consequences of this accident to Clint, Molly's estate, the Big Bang Company, and Mr.I.M.A.Big-BangIV?
III.Outline
Products Liability
The liability of manufacturers, sellers, and others for the injuries caused by defective products
PRODUCT LIABILITYWarranty / Negligence / Strict Liability
↓ / ↓ / ↓
Express/Implied / Duty Breach, Injury, Causation / Danger, No Fault
WARRANTY SUMMARY
Warranty / When Relevant / Manner of Disclaimer
Express: / anytime given / N/A
-description
-statement
-model
Implied:
-merchantability / sale by a merchant / mention merchant-fitness for a particular purpose / sale by anyone if:
-seller knows of purpose
-buyer relies on seller to select goods / -if in writing, conspicuous
-'as-is' with all faults
-examination
-course of dealing
-in writing and conspicuous
Tort Liability Based on Fault
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
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
Damages Recoverable – usually personal injuries, property damage (often not economic loss) and punitive (punishment) damage with either intent or reckless disregard for safety.
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
Defects in Design
Defects that occur when a product is improperly designed
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
Defect in Packaging
Occurs when a product has been placed in packaging that is insufficiently tamperproof
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
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
Defenses to Product Liability
Supervening or intervening event—not foreseeable
Generally known dangers—known to the general population
Government contractor defense—government control
Assumption of risk—knowledge and voluntary
Misuse of the product—unforeseeable misuse
Statutes of limitation and statutes of repose—from time of injury or from date of sale
Contributory negligence—no recovery if partially at fault
Comparative negligence—apportionment of damages
Manufacturer of defective product must notify purchasers and correct the defect.
IV.Objective Questions:
Terms:
1.A statute that limits the sellers' liability to a certain number of years from the date when the products was first sold is a statute of ______.
2.A defect that occurs when a manufacturer does not place a warning on the packaging of products that could cause injury if unknown is called a ______defect.
3.The defense to a product liability action in which the defendant must prove that (1) the plaintiff knew and appreciated the risk, (2) the plaintiff voluntarily assumed the risk, and (3) the plaintiff's undertaking of the risk was unreasonable is known as the ______defense.
4.The liability defense that says the plaintiff abused the product that in ordinary amounts would not be dangerous is called ______.
5.The ______arises automatically upon the sale of a product by a merchant stating that the product is fit for normal use.
6.The doctrine of ______applies to sellers and lessors of products who are engaged in the business of selling and leasing products.
7.When a manufacturer fails to properly assemble, test, or check the quality of its product, this is mostly to be defined as a ______.
8.A defense to a product liability action that says that some necessary products are unavoidably dangerous but serve a valuable social function is called the ______defense.
9. Warranties may be either ______or ______.
10. If a consumer is injured because of a foreign dangerous substance found in a bottle of soda , there is obviously a defect in ______.
True/False:
1.____Compliance with federal or state safety standards for product design automatically absolves a defendant from product liability.
2.____In the case of a supervening event, only the party who caused the defendant harm and all sellers after him are liable, but prior sellers are absolved from strict liability.
3.____Manufacturers are liable for damages caused by both foreseeable and unforeseeable misuse of products.
4.____Generally, to receive punitive damages, the plaintiff must prove the defendant intentionally injured him or acted with reckless disregard.
5.____Strict liability, like negligence, requires the injured person to prove the defendant breached a duty of care.
6.____Only persons who are injured because they relied on a misrepresentation may recover against a seller for the tort of intentional misrepresentation.
7.____Negligence per se automatically establishes that (1) the defendant breached his duty of care, (2) there was an injury to the plaintiff, and (3) there was causation.
8.____The doctrine of strict liability applies only to sellers who are engaged in the business of selling products.
9.____Express warranties automatically arise if a model is referred to and is a basis for the bargain.
10.____All parties in the chain of distribution of a defective product are strictly liable for injuries caused by that product even though they did not personally cause the defect.
Multiple Choice:
1.Pharmaceutical Company of America (PCA) produces and packages aspirin for sale to stores including Smith's Corner Store. PatsyPrepared buys a bottle of PCA aspirin at Smith's. Two weeks later Patsy's friend, SarahSickly takes two aspirin for a headache while she is at Patsy's house. Within minutes, Sarah is deathly ill and is rushed to the hospital. Sarah suffered extensive injuries from a toxic substance in the aspirin. Which of the following is correct?
A.Sarah cannot sue PCA or Smith's because she did not buy the aspirin and is therefore not in privity with PCA.
B.Sarah cannot sue PCA or Smith's because they are protected by the defense of unavoidably dangerous products.
C.Sarah cannot sue PCA or Smith's because she assumed the risk of taking the aspirin.
D.Sarah can sue PCA or Smith's even though she did not buy the aspirin and is not in privity. .
2.Neighbor Nel sells her lawn mower to Homebody Homer because she is moving away. Homer is injured by a defective part in the lawn mower. Which of the following is correct?
A.Nel is strictly liable for the defect in the mower since she was in the chain of distribution.
B.Nel is strictly liable for failing to provide adequate instructions.
C.Nel is strictly liable because she is not a merchant and this was a casual sale.
D.Nel is not strictly liable because only manufacturers can be held liable.
3.Pedestrian Pat is injured while standing on the corner of an intersection when Biker Becky's new motorcycle speeds out of control because of a defective part. Which of the following is correct?
A.In most jurisdictions, Pat can sue the motorcycle manufacturer even though he was only a bystander.
B.In most jurisdictions, Pat cannot sue the motorcycle manufacturer since he was only a bystander.
C.Biker Becky is strictly liable for the defect.
D.None of the above.
4.Wilfred takes a medication for his heart condition. Seven different pharmaceutical companies produce the medication. Unfortunately, Wilfred experiences seriously damaging side effects about which he was not warned by any of the pharmaceutical companies. Wilfred wants to sue the medication manufacturer. However, the medication is fungible, and Wilfred cannot identify the pharmaceutical company responsible for the drug he took. Assume Wilfred is in a state that allows suits based on market share liability. Which of the following is correct?
A.Each of the seven defendant pharmaceutical companies must prove they did not make the medication Wilfred took.
B.Wilfred must sue each company based on the number of units of the medication they produce.
C.Wilfred cannot sue unless he identifies the pharmaceutical company most likely to have made the medication he took.
D.None of the above.
5.Which of the following is correct? To recover for strict liability, the injured party must show:
A.That the product was defective.
B.That the product was the cause of the injury.