PRODUCTS LIABILITY
I. CAUSES OF ACTION
* Products Liability can be based on Strict Tort, Negligence, or Warranty.
* Legislation changed any one particular state common law. Lots of
differences depending on the state.
* Important basic things to know about
this area of torts:
1. What the various causes of the action or theories of liability are;
2. What the requirements are for each situation (b/c one product injury can have
four causes of action)?
3. Injuries caused by manufacture and distribution of products. Looking at
lenses of what cause the injuries. Product disappointment cases.
*
Cause of actions:
1) intentional tort cause of action;
2) negligence tort cause of action;
3) other torts (non-negligence/non-intentional):
(1) warranty;
(2) innocent misrepresentation;
(3) "strict" tort
A. INTENTIONAL
* intentionally fault representation of a material fact upon which the P
justifiably relies
A. NEGLIGENCE
1. NEGLIGENCE & PRIVITY
* The most significant decision is in...
Ex. WINTERBOTTOM V.
WRIGHT
Facts
* The driver of a mail coach was injured when the coach broke down due to lack
of repair.
* D has a contract with the post office to keep the coach in good condition.
Held
* The P could not recover because D only contracted with the P.O. & not the
P.
* There was no Privity so no recovery.
* Then came...
Ex.
MacPHERSON V. BUICK MOTOR CO.
Facts
* Buick (D) sold a car to a dealer who sold it to P.
* The car's wheel had defective spokes & P was injured.
Held - J. Cardozo
* No privity is necessary, the suit arises out of Tort Law not Contract Law.
* P's do not have to show that the product is "Inherently Dangerous."
* TEST is whether the product was "reasonably certain to place life &
limb in peril when negligently made."
Significance
* This established the rule that once the P shows that the product will be
unreasonably dangerous If Defective, the P may sue without Privity.
Acceptance
* Every state has accepted MacPHERSON therefore it is a rule that One who
Negligently manufactures a product is liable for any personal injuries
proximately caused by his negligence.
2. BYSTANDERS
* Casual Bystanders can recover if they are a "Foreseeable Plaintiff".
C.
WARRANTY
1. IMPLIED WARRANTIES
* The existence of a warranty as to the quality of goods can also be Implied
from the fact that the seller has offered the goods for sale.
* What triggers the operation a warranty (the source) isn't just the promise,
there has some sale before have a warranty cause of action
a. IMPLIED WARRANTY OF MERCHANTABILITY
* UCC §2-314 "...a warranty that goods shall be merchantable is implied in
a contract for their sale if the seller is a merchant with respect to goods of
that kind."
* Henningsen v. Bloomfield Motors, Inc. (C: 515)
1. DEFINITION OF
MERCHANTABLE
* UCC §2-314(1) says that merchantable means "fit for the ordinary
purposes for which such goods are used."
* Merchantable includes Packaging, in that goods must be adequately Contained,
Packaged, & Labeled.
* The good must conform to any Promises or Affirmations of Fact made on the
label.
2. REQUIREMENTS
* The seller must be a "Merchant with respect to goods of that kind"
* The seller must be a "Businessperson".
* The seller must regularly sell the kind of goods in question.
3.
APPLIES TO FOOD & DRINK
b. IMPLIED WARRANTY OF FITNESS FOR A
PARTICULAR PURPOSE (not used often)
* UCC §2-315
* This situation arises when the seller Knows that the buyer wants the goods for
a particular purpose, and the buyer Relies on the Seller's knowledgable of
Recommendation.
* A P will recover under this when "A product recommended by a
knowledgeable seller does not meet the needs of the buyer when those needs have
been communicated to the seller."
2. EXPRESS WARRANTIES
* UCC §2-313 says that an express warranty may be produced by an
"Affirmation of fact or promise" about the goods by either a
Description or a Sample or Model.
* This occurs when the seller says, "I promise that this product will
perform in a certain manner."
a. NO RELIANCE NECESSARY
* The buyer does not have to rely on the promise of the seller in order to
recover.
b. NO PRIVITY IS NECESSARY
* Exception is that some courts will not allow a P to recover if that P was not
a member of a class that the seller intended to reach with the express warranty.
c.
IS THIS STRICT LIABILITY???????
* Notice that a D's liability for breach of an Express Warranty is in reality,
Strict Liability (Liability without regard to fault).
* P only needs to show:
(1) That the Seller's representation was not true;
(2) NO RELIANCE is necessary.
3. PROBLEMS
a. PRIVITY
* Historically, the courts required that the P had contracted with the D.
* Breach of Warranty started out as a Breach of Contract action & courts
would not let P's recover without directly contracting with the D.
Ex.
HENNINGSEN V. BLOOMFIELD MOTORS, INC. (1960)
Facts
* D1 (Chrysler Corp) produced a car w/ a defective steering mechanism.
* D2 Bloomfield Motors, the dealer sold the car to Mr. Henningsen.
* Mrs. Henningsen was injured when the steering failed.
* P's cause of action: Negligence, breach of express and implied warranty. (In
any one of these product liability cases, possible for P to bring more than one
cause of action; ex: negligence, strict liability, implied warranty, etc.)
* §2-314 (2)(c): "goods to be merchantable must be at least such as are
fit for the ordinary purposes for which such goods are used"
* Court rejects privity defense in Henningsen b/c she was foreseeable.
Used to be that transactions were face to face, made sense to use it then, hence
the privity rule. Here time has change so the rule of privity no longer
should be applicable.
Held
* Mrs. Henningsen could recover under Breach of the Implied Warranty of
Merchantability, even though she did not contract directly with Chrysler Corp.
1.
VERTICAL PRIVITY
* "Who can be sued?"
* This occurs between a Manufacturer, an intermediate such as a dealer, and a
consumer.
* This used to be a barrier to Ps but is no longer a requirement to have
privity.
2. HORIZONTAL PRIVITY
* "Who can sue?"
* This occurs between a user and a member of the family or same household to
bring a cause of action for warranty. Half of states accepts alternative A,
where if you're not part of this group, can't recover.
* This used to be a barrier to Ps but it is no longer a requirement to have
privity.
* (sm: 356) who can use this to get recovery
b. DISCLAIMER
* Also from HENNINGSEN V. BLOOMFIELD MOTORS, INC. (1960)
Held
* The disclaimer was an "Adhesion Contract", & resulted from the
"gross inequality of bargaining positions" between the parties.
* The parties had no alternative.
* All the manufacturers used them.
* There was no competition among manufacturers with respect to the scope of
protection guaranteed to the buyer.
* Consumers are in position where they can't do much about the safety of the
product, so court rejecting privity is talking about placing liability on party
who can better spread the risk; control the safety of the product, etc.
* The lawmakers do not authorize manufacturers to use its position to relieve
itself from liability.
* UCC §2-316: Disclaimers are O.K. if not unreasonable or unconscionable &
they must be Conspicuous & in Writing.
* UCC §2-719: "Limitation of Consequential damages for injury to the
person in the case of Consumer Goods is prima facie unconscionable BUT
limitation of damages where the loss is commercial is not."
1.
MARKET FAILURE ARGUMENTS
* Disclaimers will not capture the real societal costs or benefits.
* The individual agreements do not capture what people really want.
* Full cost of injuries not capture, gov't usually have to step in to provide
recovery.
2. INFORMATION PROBLEMS
* Consumers do not know test crash results & therefore cannot process the
information to make an informed decision.
* Can't appreciate the magnitude of the risk associated with these products;
don't know how safe these products are.
c. NOTICE
* UCC §2-607(3) says that the buyer must "Within a reasonable time after
he discovers or should have discovered any breach", Notify the seller of
the breach.
D. STRICT TORT
* In theory, product manufacturers will behave no more safely if they are faced
with strict liability than if they are faced with negligence. Stupid chart in
book. B/c under either liability system they will only spend the amount of money
on safety, which is less than it will save in reduced accident costs because of
that safety expenditure. So, if B< P x L either liability theory would
encourage safety spending, but where b > P x L it would not encourage safety
spending. But in practice may be a difference b/c product manufacturers. May
escape liability even when acted negligently b/c not all injured person may sue
successfully.
Ex. VANDERMARK V. FORD MOTOR CO.
1.
HISTORY
Ex. GREENMAN V. YUBA POWER PRODUCTS, INC.
Facts
* P was injured by a powertool called the "Shopsmith" when he was hit
in the head by a piece of wood that it shot out.
* Ds' defend by saying that they did not receive Notice sufficiently.
Held
* Notice is not necessary because D is Strictly Liable.
* "A manufacturer is strictly liable in tort when an article he places on
the market, knowing it to be used without inspection for defects, proves to have
a defect which causes injury to a human being."
Then, Three
Years Later...
* Restatement §402A (1964)
* Applies to all products
* 1997: ALI came out of RS (3d) of Product Liability
* Only one product liability cause of action to stop all confusing causes of
product liability.
* Will the courts, with 33 years of product liability common law developed,
follow the new RS (3d)?
STRICT LIABILITY OF SELLER OF PRODUCT FOR PHYSICAL
HARM TO USER OR CONSUMER
1. Steps to take:
1) Identify particular aspect of product that is deemed to be defective.
* What's wrong with this product
* What is it that the P claim is wrong?
2) Determine the kind of defect:
a) Manufacturer (defect is different from most similar product, different from
the ordinary like product),
b) Design, or
c) Marketing defect?
* Problem 27 (536):
* Glass broke and injured P; manufacturing defect; this glass is not like other
like glasses
* D argues: we did not make this glass
* P argues:
* RS (3d) (p. 524); and
* liability is impose on those in business of selling and providing products
* Newmark v. Gimbel's Inc. says...
* Those who sell and distribute a defective product is strictly liable
* A clear minority: at least where Manufacturer is avail, should not have strict
liability against seller, better to force P to goes directly against the
manufacturer (RS do not take this approach)
* In strict product liability,
we don't focus on the conduct of D, just the D's product.
Rationale: Why
strict liability
1. Non-instrumental/Moral/Fairness:
a. Breach of consumer expectation (530)
b. Taking - manufacturer knows that some people
2. Instrumental/Social
Utility:
a. Encourage investment in safety
b. Discourage consumption of hazardous products
* Higher cost due to liability paid out to injuries after using such hazardous
products will discourage consumers from using these.
c. Reduce transaction costs
* Easier to prove case, so cheaper to go through case
* Clearer on who will win (the uncertainty aspect will be settle faster)
d. Promote loss spreading
* Surprise element, P hurt by product (surprised by injury) hard for them to
insure against the injury ahead of time.
a. ACCEPTANCE
* Virtually every jurisdiction in this country has recognized the rule of
privity-free products liability in some form or another.
b.
NON-MANUFACTURERS
* Notice that §402A also applies to Retailers, & any other person in the
distributive chain.
2. WHAT KIND OF CLAIMS?
a. MANUFACTURING
* This occurs when the product deviates from the Manufacturer's Specifications.
* The court asks "Is this product defective?" & do not look at the
reasonableness of the D's behavior.
b. DESIGN
* This occurs when all of the similar products manufactured by the D are the
same, and they all bear a feature whose design is itself defective, &
unreasonably dangerous.
Though
* The requirement of "Unreasonably Dangerous" as well as defective has
been rejected by many courts
1. CONSCIOUS DESIGN DEFECT
* Design was meant to have that dangerous characteristic
* Manufacturer was aware of the design defect.
Ex. TROJA V.
BLACK & DECKER MANUFACTURING CO.
* removable guide fence
* Car manufacturer case, car made without airbag (D knew)
2.
UNCONSCIOUS DESIGN DEFECT
* Product meant to be made the way it was, but company didn't know it was
dangerous
* Manufacturer was unaware of the design defect.
* Courts will impute the knowledge of the danger to the manufacturer.
Ex.
TROJA V. BLACK & DECKER MANUFACTURING CO.
Heaton v. (549)
*
In design defect cases: need to ask...
1. What are the standards?
2. What are the tests courts used to test those standards?
c. MARKETING
* Directions or warnings about product are missing or innaccurate
* Problems with inaccuracy of warning or direction missing.
* Pop-tart story: before not have warning about not leaving about unattended.
1.
THREE ISSUES
* Must a warranty have been given?
* What must the warranty say?
* Did the D's wrong cause the P's injury?
2. R §402A (Comment J,
Directions or Warning.) - applies to anyone so long as seller is engaged in the
business of selling that product.
3. PATENT DANGER
* If the danger is Known & Recognized there is no duty to warn.
* What Standard should be used to decide if it is a patent danger?
* You have to warn if the product would be defective without the warning, but
then we are back to what is defective into a Risk v. Benefits analysis.
4. STANDARD
* "It must be reasonably clear & conspicuous with reasonable
notice"
OR
* "Of an intensity sufficient to turn on the light for the
reasonable ordinary user".
Ex. BARNES V. LITTON INDUSTRIES PRODUCTS,
INC.
Ex. MacDONALD V. ORHTO PHARMACEUTICAL CORP.
3.
WHY STRICT LIABILITY
* Reasons
(1) Encourages investment in product safety.
(2) There will be less consumption of dangerous products
(3) Loss spreading.
(4) Reduce transaction costs.
(5) Fairness - The P is paying for the goods & should get what he reasonably
expected.
(6) Easing the evidentiary burden on P's to prove seller's negligence.
(7) Deterring the marketing of defective products.
(8) Forcing sellers to make good on implied representations of safety.
a. IS IT?
4. STANDARD/TESTS
a. MANUFACTURING DEFECTS
* Wine glass example.
b. MARKETING/DESIGNS DEFECTS
(i)
CONSUMER EXPECTATIONS
* A product is defective if it fails to perform as safely as an ordinary
reasonable consumer would expect. (would a reasonable
* Dissent: what ordinary consumer should expect.
* The product can be deemed defective if either used in the
"Intended" way or in a "Reasonably Foreseeable" way.
Ex.
HEATON V. FORD MOTOR CO.
* Liability is attached when it fails to perform as safely as an ordinary
consumer would expect, when used in the "intended" or "reasonably
foreseeable" way.
1. PROBLEM
* The problem with this test is that consumers do not have formulated opinions
or expectations on every subject.
* The jury didn't have the knowledge of what the ordinary consumer would have
under this situation. No sense of what to expect the ordinary consumer
would have in regards to how safe a product should be.
* Majority of Potter says gotta have same as Heaton court says.
* If no knowledge at all, will not be expected to know what could happen.
(ii)RISK
UTILITY BALANCING TEST
* The key issue is the reasonableness of the manufacturer's conduct in putting
the product on the market.
* FACTORS
(1) The Relative Need of the product (is it a luxury or an essential?);
(2) The Likelihood that the product will cause an injury, as well as the
Probable Severity of such injury;
(3) The availability of an Alternative Design.
* The court in TROJA V.
BLACK & DECKER MANUFACTURING CO. used this test. Potter talks about
these factors also.
(a) HOW APPLY?
* These tests are both found in BARKER V. LULL ENGINEERING CO.
* In BARKER, once the P proved that the product caused the injury the burden
shifts to the D to prove that the product is not defective?
* This case is
a strict minority in shifting the Burden of persuasion to the D
Utility
Risk
50 mil $ 100 deaths in a car designed defectively
15 mil fuel economy
65 mil
* Is a 100 deaths worth more than 65 mil (does the risk outweigh
the utility)
* We're valuing each life at more than 65 mil $
Assume...
Utility Risk
50 mil 100 deaths
50 mil fuel economy
100 mil
* In this situation, does the utility of the conducts outweighs
the risk? Who got the burden of persuasion?
* Majority view:
The P has the burden of persuasion. P has to prove "more likely than
not" that the risk outweighs the utility.
* Minority
view: Unless the court takes the view of Barker, which shifted the burden of
persuasion on the D on the theory that the Ds are ones in the best position to
proffer evidence about what the utility of conduct versus the risks are (D have
to prove that the utility of conduct outweighs the risk), but Barker is a very
small minority that follow this.
* Look at RS 179-180 c: analysis in strict tort liability is essentially the
same as negligence balancing test. Strict tort liability court will argue
that here, we're looking at that the defectiveness of the product.
However, can argue that the Ds are the ones who made the product, so essentially
it is their conduct that defective product is made, thus, conduct is negligent.
*
Five area of differences b/w Strict Tort v. Neg.:
1. Manufacturing defects (glass breaking), this product is different from other
products, so D liable. On the other hand, since someone messed up it's
also really negligent.
* If products don't turn out differently even with someone's negligent conduct,
than the product is defective, thus it's strict tort.
2. Retailers and manufacturer (those who are in the distribution chain.
3. In two states (California, p. 606), shift burden to D to persuade (minority
view only)
4.Limited defenses: less availability to D in Strict Tort than Negligence.
5. In conscious design defect, harder to distinguish b/w Strict Tort v.
Negligence. However, with unconscious design defect, the D is not aware
that this product is as dangerous as it was. The law will impute knowledge
of danger to the manufacture (you're unreasonable for not knowing/you should
have known).
* What knowledge gets imputed?
a. Knowledge readily available or knowledge that existed everywhere; or
c. Knowledge as of when (existed and readily avail as of time product was
manufacture or the time the case being tried?)
5. SPECIAL ISSUES
a.
UNAVOIDABLY SAFE Reasonable person - look at foreseeability
* A manufacturer of an unavoidably unsafe drug will not be held strictly liable
if properly prepared & packaged with proper warnings.
Ex.
BROWN V. SUPERIOR CT.
Facts
* P's were DES children.
Issue
* Can a manufacturer of prescription drugs be held strictly liable?
Held
* Yes if it fails the Comment K test R¤402A
* The test is that the maker of an unavoidably unsafe product is not liable if
properly prepared, & accompanied by proper directions & warnings.
* The Public interest in the availability of drugs at an affordable price is
more important because drugs cans save lives & reduce pain &
suffering.
b.GOVERNMENT STANDARDS
* Fed/State regulations set a minimum - doesn't mean that is reasonable.
c.PATENT/OBVIOUS
DANGER
Ex. MACDONALD V. ORTHO PHARMECEUTICLS
Facts
* P used Birth control pills made by D.
* P suffered a stroke.
* Warning said, "abnormal brain clotting which can be fatal," no
mention of stroke as a result of the blood clotting.
Held
* The warning was lacking.
* The warning should have included "stroke".
* A manufacturer of birth control pills owes a direct duty to the consumer to
warn of the dangers.
BROWN V. SUPERIOR CT.
* Says that there is no other way to make the drugs (DES).
* The Public Interest in the availability of drugs at an affordable price is
more important than holding a drug manufacturer liable because drugs save lives
& reduce pain & suffering.
d. STATE OF THE ART (Generally courts accept)
Ex.
BESHADA V. JOHNS-MANVILLE PRODUCTS CORP.
Facts
* Ps were exposed to Asbestos & were injured.
* D said that they did no know or could not have known that their products
caused such ailments at the time
Held
* The court decided for the P's because of
*Loss spreading.
*Those who profit should pay
Contrary Authority is...
Ex. WOODILL V. PARKE
DAVIS & CO. (369 sm)
Facts
* D was a producer of Pitocin.
* Used by pregnant women when the fetus is in high station.
Held
* D should not be held liable for defects unknown at the time of manufacturing.
* RS §402A Comment J "Directions or Warning": "A manufacturer is
required to have knowledge or reason to know of the danger before it can be held
liable for failure to warn."
Ex. Anderson v. Owens-Corning Fiberglass
Corp.
Facts:
* Asbestos case: P got lung cancer through exposure from D's product, while
working as an electrician.
* Alleged that Ds failed to warn users of the risk of danger.
Held:
* State of the art evidence is not admissible since it focuses one the
reasonableness of the D's conduct.
* Majority view (Ca.): knowledge, actual or constructive, is a requisite for
strict liability
1. STANDARD
* The standard outlined by the RS §402A Comment J `Directions or Warning' is:
"knowledge of reasonable developed human skill & foresight".
2. ARGUMENTS AGAINST STRICT TORT LIABILITY
* How could D's use contributory fault defense if it is assumed that they are
100% wrong.
* D's would become virtual insurers.
* A Manufacturer should only be held liable at the point of distribution.
I.
OTHER ELEMENTS OF THE PRIMA FACIE CASE
II. DEFENSES
* There are some defenses, Contributory Negligence, which can be used by a D in
a strict liability products liability case.
1. PLAINTIFF'S NEGLIGENCE
a.
FAILING TO INSPECT
* If the P's contributory negligence lies in Failing to inspect the product,
mosts courts do not accept this as a defense.
BUT
* If the P learns of the risk, & nonetheless voluntarily submits to it, this
will be a defense to strict liability.
2. ASSUMPTION OF THE RISK
* P's use must be both voluntary & unreasonable as set out
in R §402A.
3. MISUSE OF THE
PRODUCT
* If the P's negligence consists of her Abnormal use or Misuse of the product,
this may be a defense to strict liability depending on the degree of
foreseeability.
* If the misuse or abnormal use is done by someone other than the P, the D
cannot claim that this constitutes contributory neg. or Assumption of Risk,
since only the P's conduct can give rise to these defenses.
Ex. MURRAY V. FAIRBANKS MORSE
Facts
* P was installing equip when a bracket broke & it fell on him.
Issue
* Is comparative fault available to reduce a damage award on strict liability?
Held
* Yes, but burden is on D to prove the neg.
4 Defenses to Products
Liability:
1) P Fault (comparitive fault)
2) Assumption of the Risk
3) Misuse (Forseeable misuse not always defense)
4) Preemption (325-327sm) DO NOT NEED TO KNOW
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