Products Liability
I. INTRODUCTORY ISSUES
• “Products liability’ refers broadly to the decisional and statutory law permitting money damages from manufacturers and sellers of defective products that injure persons or property.”
• There are three primary products liability doctrines: (1) manufacturing defects; (2) design defects; and (3) the failure to give adequate warnings or instructions for safe use.
• It is important to understand that any products liability case can (and typically does) involve several legal theories. For example, you can examine a plaintiff’s cause of action under three possible theories: (1) negligence; (2) warranty; and (3) strict liability.
• It is not always clear which of the three appropriate claims may be applicable: (1) manufacturing defect; (2) design defect; or (3) failure to give an adequate warning. For example, although Cronin v. J.B.E. Olson Corp. falls under the title “Design Defects” in your book, the facts of the case do not preclude a potential argument that Cronin could also be a manufacturing defect case. If the facts suggest such lack of clarity, then mention that possibly two or more claims may be applicable and argue accordingly.
II. HISTORICAL OVERVIEW
A. In 1916, MacPherson v. Buick Motor Co. - undermined the general rule -- the privity bar -- previously established in Winterbottom v. Wright. Taken together, McPherson and Winterbottom illustrate the two stages of products liability law preceding today’s modern law.
1. Initially, the privity of contract requirement constituted a no-duty rule preventing recovery by the injured product user against the manufacturer outside the contractual setting (Winterbottom). Gradually, in classic common law fashion, the courts created a set of exceptions to the harsh no-liability rule. These exceptions are discussed by Judge Cardozo in MacPherson before he proceeds to totally undermine the privity bar in the guise of expanding the exception for imminently dangerous products. Therefore, MacPherson provides the historical backdrop (the movement from no liability to fault-based liability) which is the launching pad for the move beyond fault-based liability in the 1960s.
2. MacPherson holds that there is no more privity requirement. If any products are not covered by Cardozo’s holding it is because of a lack of probability of injury, not because of a lack of privity. In other words, after MacPherson, if recovery is denied, it is because there is a lack of breach, not a lack of duty.
3. A side note: One interesting aspect of MacPherson is that it never says precisely why auto manufacturers (or for that matter, any other manufacturers), should be denied the shield of the privity bar.
4. MacPherson represents the triumph of tort over contract: the privity rule constituted a particularized approach to duty in which rights and responsibilities were determined by the contractual relationship between the parties; MacPherson establishes a generalized duty of product manufacturers to product users, based in tort, under which the absence of a contractual claim is irrelevant. Nonetheless, post-MacPherson cases continual to reflect the dual influence of tort and contract.
B. Warranty constituted its own contract-based form of strict liability, which was particularly evident in the early food cases. For a moment in the early 1960s, warranty appeared to provide a possible general foundation for a theory of strict liability (see Henningsen,). But the strict liability in tort theme, which first surfaces in Justice Traynor’s famous concurring opinion in the 1944 Escola case eventually triumphed in Traynor’s landmark opinion, two decades later, in the 1963 Greenman v. Yuba Products case (F: 561, Note 5a).
1. In Escola, Traynor contends that the court “should abandon the legal fictions of res ipsa loquitur and adopt ‘absolute liability’ [i.e., strict liability] for manufacturers placing products upon the market knowing that the product will be used without inspection, where the product ‘proves to have a defect that causes injury to human beings.’” Traynor was still ahead of his time because he suggests virtually every rationale for strict liability that would be offered a generation later, most particularly, deterrence and risk-spreading.
2. “No American court adopted Justice Traynor’s proposal in its entirety until 1963,” in Greenman v. Yuba Power Products, Inc. In Greenman, Traynor brought forth his desire “to create a remedy in tort in which plaintiff needn’t rely upon either warranty or upon a showing of defendant’s negligence. Strict liability in tort would make the manufacturer ‘strictly liable . . . when an article he places on the market, knowing that it is to be used without inspection, proves to have a defect that causes injury to a human being.’”. According to Traynor, the purpose of this liability “‘is to insure that the costs of injuries resulting from defective products are borne by the manufacturers that put such products on the market rather than by the injured persons who are powerless to protect themselves.”
C. In 1965, two years following Greenman, the American Law Institute published Restatement § 402A entitled, “Special Liability of Seller of Product for Physical Harm to User or Consumer.” “This strict liability remedy, grounded in tort and requiring no showing of seller negligence, established liability for sale of a product ‘in a defective condition unreasonably dangerous to the user or consumer or his property . . . “Restatement § 402A, or modifications upon it, “has been adopted in a majority of American jurisdictions.”
D. Regardless of these developments in strict liability, it is important to understand that issues of causation, proximate cause, and defenses can still raise difficult issues of liability. Recognize that strict liability is not “absolute” liability. What, then, do courts mean when they refer to “strict liability” for defective products: Is defendant, once identified, really liable for any injury proximately caused by its product? Your casebook explores this question in quite some detail, with a major focus on limiting the concept of “defect”.
III. MANUFACTURING DEFECTS: MODERN DEVELOPMENTS
A. Restatement § 402A and its successor, Restatement (Third) Products Liability address the “defect” concept. Note that in positing liability even when the seller had exercised “all possible care in the preparation and sale of his product” (§ 402A: (2)(a)), Restatement § 402A fails to distinguish among various categories of product cases (manufacturing, design, and warning cases) that came to be generally recognized as the case law developed.
B. In contrast to Restatement § 402A, Restatement (Third) § 1 is organized around the various categories of product cases.
1. Note that § 1 fails to mention explicitly strict liability, which suggests that we can start over in thinking about the modern standard of liability in future products cases. With § 1, we can start from scratch even though the courts have for thirty years generally accepted Restatement § 402A, which has been commonly thought to impose strict liability.
2. Note also that only § 1(a), dealing with manufacturing defects, follows § 402A in recognizing liability even though “all possible care” has been taken. This statement spells out the tort law approach to manufacturing defect, where “true” strict liability seems to be generally accepted.
C. How is strict liability to be applied to manufacturing defect cases?
1. From the outset, the language of § 402A(1) posed difficulties with its reference to a defective condition “unreasonably dangerous” to the user or consumer. Was the new standard of strict liability, even in manufacturing defect cases, really any different from negligence? Doesn’t the “unreasonably dangerous” modifier take us right back to a negligence standard?
2. Cronin v. J.B.E. Olsen Corp. was in fact concerned that the “unreasonably dangerous” modifier might take us right back to a negligence standard. For this reason, Cronin rejected the unreasonably dangerous language for the purposes of California products liability law. In essence, the Cronin “court thought the phrase ‘burdened the injured plaintiff with proof of an element which rings of negligence.’” The facts of Cronin also highlighted the need to distinguish between manufacturing defects and design defects, because the rejection of the modifying “unreasonably dangerous” language is generally not problematic for manufacturing defects.
D. What is the difference between manufacturing defects and design defects?
1. Manufacturing defect: A manufacturing defect is a malfunctioning or aberrant unit of the standardized product. The fact that a particular unit of the product malfunctions in a way that injures the plaintiff is usually sufficient for purposes of liability without any further inquiry into whether it was unreasonably dangerous or not. The unit failed to function in the way standard units of the product function and that is the end of the matter. The application of “true” strict liability in these cases hasn’t caused a great deal of difficulty.
a. Note however: Problems with these cases do arise as a result of the effect of passage of time on a product.
b. As an example of the passage of time effect, consider the following: If the defendant drives her car for 100,000 miles without ever checking the brakes, and the plaintiff is injured because of the defendant’s brake failure, a defect claim against the manufacturer is going to be problematic on the grounds of improper maintenance -- at some point the normal wear and tear on a wide variety of product shifts responsibility from the manufacturer to the user, consumer or second hand seller of the product.
2. Design defect: A design defect is an inherent flaw in the standard design of the product that potentially makes all units dangerous.
a. Note: The distinction between design defects and manufacturing defects is not always so clear. For example, in Cronin, it’s not entirely clear whether the flawed safety hasp was a manufacturing or a design defect.
b. In a somewhat strained sense, virtually every manufacturing defect could be regarded as a design problem -- if the design process were different so a stronger alloy was used, or twice as many assembly line safety tests were performed, then the one unit in a thousand that malfunctioned would have been avoided. But this is a very strained conception of a design defect and usually the distinction between an inherent structural problem and a chance mishap is clear enough.
IV. DESIGN DEFECTS: MODERN DEVELOPMENTS AND “TESTS”
A. Restatement § 402A. Note that the following tests draw upon, reject, or modify, various portions of the Restatement.
B. Cronin rejects the “unreasonably dangerous” language in § 402A. Question: Was Cronin too quick to reject this language in § 402A? Is the concept of “defective condition” self-defining in design defect cases? Although a “large number of states have followed Cronin in dropping the ‘unreasonably dangerous’ phrase from the definition of defect,” ,the Cronin test is apparently not the most popular of the possible tests of design defects and other courts have offered alternatives.
C. Barker v. Lull Engineering Co. (1978). A few years after Cronin, the California Supreme Court recognized the need for additional guidance on the framework to be applied in cases involving defects in design and handed down its landmark opinion in Barker v. Lull. Barker offered a two prong test:
1. Does the product fail to meet consumer expectations? Or, if the consumer would not know what to expect,
2. Does the product create “excessive preventable dangers” (EPD). More specifically, do the risks inherent in the design outweigh its benefits, prompting a “risk/utility” analysis?
3. In Barker, the court “synthesized the most workable features of the consumer expectation test and the risk/utility test into a hybrid test that, its adherents argue, preserves the attributes of both [tests].”
4. “[T]he first prong of the Barker analysis derives from the implied warranty of merchantability and comments “g” and “i” to Restatement § 402A. . . . Under Barker, the plaintiff would only be required to show that he or she used the product in the way intended or in another reasonably foreseeable way, and that the product failed to perform safely.”
5. “The second prong of the Barker test comes into play where the product performance is apparently commensurate with ordinary consumer expectations of safety, but the product still exposes persons to ‘excessive preventable danger.’ Under the Barker test, in such circumstances plaintiff may undertake to prove that the product’s design proximately caused plaintiff’s injury or loss. Under such proof, the burden of proof shifts to the defendant to show that ‘on balance the benefits of the challenged design outweighed the risk of danger inherent in such design.’”.
6. Note that Barker is not nearly as categorical as Cronin. Barker adopts a “negligence type” standard (EPD), with two major exceptions from a “true” negligence standard: (1) EPD is ex poste rather than ex ante; and (2) EPD burdens the defendant rather than the plaintiff.
D. Soule v. General Motors Corp. (1994) (F: 571). The Soule test is a modification of the Barker test.
1. In Soule, the California Supreme Court “reinterpreted the alternative tests of Barker, i.e., the consumer expectations test and the risk/utility test. In an automobile crashworthiness test involving complex engineering issues, the California court concluded that juries should only be permitted to place exclusive reliance upon the consumer expectations standard where “everyday experience of the product’s users permits a conclusion that the product’s design violated minimum safety assumptions.’ Where complex technical or design issues ‘g[o] beyond the common experience of the product’s users,’ the court continued, ‘the jury must engage in the balancing of risks and benefits’ under Barker’s second prong.”
2. Reworded, the facts of Soule can be viewed in terms of a two-prong process. In Soule, the plaintiff argued consumer expectations (prong one), but the court said it was inapplicable because the alleged defect constituted too complex a situation for the plaintiff to have any safety expectations; hence, risk/utility applied (prong two). What is the test for which prong applies, i.e., when is the plaintiff entitled to rely on consumer expectations? The court articles its test as follows: whether “the product’s design performed below the legitimate, commonly accepted minimum safety assumptions of its ordinary consumers.”
3. In the abstract, it might be advantageous to the plaintiff to convince the court to adopt a consumer expectations test rather than risk/utility in cases like Soule. That way, the plaintiff would not have to establish that the risks of the product were in excess of the product’s benefits. But question if that is what seems fair. Suppose it would be very expensive to design around the possibility of arm fractures, but consumers think (expect) that air bags are entirely safe. Question whether there should be liability in such a case.
4. More generally, is it desirable to avoid some version of a risk utility test in design defect cases? Arguably not, if you consider the crashworthiness cases like Driesonstock. If there is liability because the design feature caused injury, without more, then cost pressure would lead to autos designed like tanks -- with the poor priced out of the market and consumer options seriously reduced. Aware of such considerations, the two-pronged test adopted in Barker, as modified in Soule, is not the only possible approach that courts have adopted. [For example, consider next the Restatement Third, § 1 (b), which omits a consumer expectation test and Camacho.].
E. Restatement Third, § 1 (b) (F: 567). The Restatement Third omits a consumer expectation test. It also adopts a reasonable alternative design (RAD) requirement (F: 579, note
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F. Camacho rejects the first prong of Barker - the consumer expectations test. The Camacho court seems to think that adopting a consumer expectations test, as expressed in comment i, would create a defense whenever the risks of the product are “open and obvious,”
Cepeda v. Cumberland Eng'g Co Guy loses finger in pelletizing machine without safety shield. Manufacturers cannot escape liability on grounds of 'misuse'/abnormal use if the actual use proximate to injury was objectively foreseeable. No contributory negligence in strict products liability, but can have assumption of risk. Judge Wade's conception of design defect includes hindsight: "so likely to be harmful to persons or property that a reasonable prudent manufacturer who had acutal knowledge of its harmful character would not place it on the market."
o Wade-Keeton balancing test (used in Cepeda v. Cumberland NJ):
• Usefulness and desirability of the product to user / public as a whole
• Likelihood it will cause injury / seriousness
• Availability of substitute product
• Ability to make safe without reducing utility or making it too expensive
• User’s ability to avoid danger by using product carefully
• General public knowledge of dangers inherent in product / warnings-instructions
• Feasibility of manf. spreading loss by price or liability insurance There are special exemptions for design defect. i.e. prescription drugs.
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Gower v. Savage Arms PA 2001
Hunger shoots himself in foot, alleges design defect in safety.
• Not a design defect just because it didn’t have a “user friendly” safety.
• Manufacturing defect seems possible because of metal ridge.
a manufacturing defect (Escola; lemon): defective when product left factory i Gower v. Savage Arms, Inc. (E.D. Pa. 2001, p. 876) All types of defects alleged, only two are feasible claims (existed when product left
factory), must exist at time that product leaves factory to be feasible claim.
Gower was out shooting when he shot himself in the foot. Four defects claimed: Unloading defect: The rifle could not be unloaded when the safety was on. Court rejects the unloading defect because it wasn't causally
related to the injury. Gower wasn't trying to unload the rifle at the time that he shot himself. Court grants D SJ on this. Insufficient Warnings: The rifle didn't come with sufficient warnings. Court rejects the insufficient warnings on two grounds, first, that Gower
was admits he was aware of the danger of the rifle, and second, that rifles were shipped from the factory with manuals, even if Gower himself did not receive one. Court grants D SJ on this. Detent defect: The rifle didn't have a detent system which would have made it stay in the safety position.