Outline - Torts - IX - Products Liability

Torts (2005 Fall)

IX. PRODUCTS LIABILITY

1. Three Theories
   1. Warranty (breach of implied warranty of fitness and merchantability) - contract theory
      1. Strict liability on retailer [McCabe]
      2. Modern rule in UCC offers three alternatives
         1. Family or household member of buyer
         2. Reasonable consumer
         3. Bystander
   2. Negligence - tort theory [McPherson - Duty owned to foreseeable persons; privity rules modified]
   3. Products Liability under Second restatement § 402A
2. Second Restatement § 402A
   1. Defendant is in the
      1. Business of selling,
      2. Products for use or consumption, and
      3. The product is expected to and does reach consumer without substantial change
   2. The product is in a defective condition. There are three alternative types of defects. Plaintiff must prove one of the following:
      1. Manufacturing
      2. Design
      3. Inadequate warning
   3. The product is unreasonably dangerous to the user/consumer or to her property. (No longer have to prove this.)
   4. The defect results in
      1. Physical harm to the
      2. User or consumer, and bystanders
3. Product Defects - Plaintiff must prove at least one of the following:
   1. Manufacturing
      1. Strict liability
      2. Seller is responsible even if the defect was introduced somewhere up the supply chain. [Welge v. Planters]
   2. Design - Use one of two tests

      1. Consumer expectation test [Soule]

         A product is defective if it“fails to perform as safely as an ordinary consumer would expect when used in an intended or reasonably foreseeable manner.”

         1. The manufacturer’s product failed to perform as safely as an ordinary consumer would expect.
         2. The defect existed when the product left the manufacturer’s possession.
         3. The defect was a “legal cause” of plaintiff’s “enhanced injury”.
         4. The product was used in a reasonably foreseeable manner.

         OR

      2. Risk utility test [Barker]

         A design is defective “if through hindsight the jury determines that the product’s design embodies ‘excessive preventable danger,’” or, if the jury finds that the risk of danger inherent in the challenged design “outweighs the benefits of such design.”

         Factors to consider:

         1. Gravity of danger posed by the challenged design
         2. The likelihood that such danger would occur
         3. The mechanical feasibility of a safer alternative design (also known as a reasonable alternative design, or RAD) [Camacho, leg guards on motorcycle]
         4. The financial cost of an improved design
         5. The adverse consequences to the product and to the consumer that would result from an alternative design
      3. Barker - Plaintiffs offered two tests
      4. Soule - Limit consumer expectation test to obvious violations of minimum safety, apply risk utility test to crashworthiness cases.
      5. Pruitt - Defective air bag deployment not a common experience, so use risk utility test.
      6. Camacho - Crashworthiness doctrine applies “where a manufacturing or design defect, though not the cause of the accident, caused or enhanced the injuries”

   3. Inadequate Warning

      These come under a negligence regime. The following factors need to be considered:

      1. When must a manufacturer give a warning?

         A manufacturer must give a warning when it knows or should have known of a risk of harm to a substantial number of the population that is likely to encounter the product. (Majority of jurisdictions use hindsight rule; MA adopts “state of the art” rule in Vassallo.)

         Exception: Learned Intermediary Doctrine (e.g., pharmaceuticals) shields manufacturer except (i) in cases of mass immunization, (ii) where the FDA mandates direct warnings and (iii) where there is marketing directed at consumers.

         BUT: “The Pill” treated differently than other pharmaceuticals.

      2. To whom must a warning be given?

         Purchasers, users, and “persons who foreseeably will be injured or endangered by use or exposure to the product”

      3. Is the content of the warning adequate?

         Manufacturer must provide a written warning conveying reasonable notice of the (i) nature, (ii) gravity, and (iii) likelihood of known or knowable side effects.

         Hood – Plaintiff removed safety guards from saw blade and was injured.

      4. Did the lack of warning cause plaintiff's injuries?
4. Defenses
   1. Comparative Fault [GM v. Sanchez – mis-shifted gear]
   2. Royer v. Catholic Medical Center – Where seller is primarily engaged in health services, no retailer liability. The service itself may be amenable to negligence.
5. Contract vs. Tort Damages
   1. Breach of Contract
      1. Expectation damages (loss of the bargain)
      2. Generally, lost profits from loss of a product not recoverable
      3. Generally, no punitive damages
   2. Tort
      1. Compensatory damages (restores victim to position prior to tort)
      2. Compensatory damages may include lost future wages or profits
      3. Possibility of punitive damages (under a higher standard)

   	Personal injuries	Property damage (other than to product itself)	Damage to the product itself	Lost profits or benefits
   402A	Yes	Yes	No	No
   Disclaimable?	No	No	X	X
   Warranty	Yes	Yes	Yes	Must Bargain
   Disclaimable	No	Yes/No	Yes	Yes