Products Liability

Based on Negligence Theory

1. Duty—reasonable care owed to any foreseeable plaintiff by commercial manufacturer, distributor, retailer, or seller

2. Breach—failure to exercise reasonable care in inspection or sale of product (i.e., defect would have been discovered if defendant had not been negligent)

3. Causation—factual and proximate

4. Damages—actual injury or property damage, not pure economic loss

   1. DE Point of Law—economic loss rule does not apply in certain residential construction cases

5. Defenses—contributory or comparative negligence and A/R

Strict products liability

Elements

1. Product was defective (in manufacture, design, or failure to warn)

2. Defect existed when it left defendant’s control

3. Defect caused plaintiff’s injury when product was used in reasonably foreseeable way

   1. DE Distinction—strict products liability actions not recognized for sale of goods (UCC remedies available); strict products liability applies to nonsales transactions

Defective product (res ipsa may apply)

1. Manufacturing

2. Design Defect

3. Failure to warn defect

Manufacturing defect

product does not conform to defendant’s own specifications

• DE Point of Law—test is whether manufacturer used reasonable skill, care, and diligence of ordinarily prudent manufacturer in making product

Design defect

• Consumer expectation test—dangerous beyond expectation of ordinary consumer

• Risk-utility test—risks outweigh benefits, and reasonable alternative design (economically feasible) available; failure to use that design rendered product unreasonably unsafe

• DE Point of Law—product not reasonably fit for intended purpose and design has created risk of harm so probable that ordinarily prudent manufacturer would pursue different available design

Failure-to-warn defect

(1) Foreseeable risk of harm, (2) not obvious to ordinary user of product, and (3) risks could have been reduced or avoided with reasonable instructions or warnings

• DE Point of Law—duty to warn when manufacturer or distributor knows or should know product involves dangers to users but places it on market

Learned intermediary rule - Failure to warn

—manufacturer of prescription drug or medical device typically satisfies duty to warn by warning prescribing physician of problems with drug or device unless (1) manufacturer knows drug or device will be dispensed without personal intervention or evaluation of healthcare provider or (2) in the case of birth control pills

Under the three defective products theory

Plaintiff—not required to be in privity of contract; anyone foreseeably injured may recover

Defendants—must be in business of selling (includes manufacturer, distributor, and retail seller)

• If defendant provides both products and services, generally liable if product is consumed, not if product is only used (i.e., hospital not generally liable as distributor of defective implants)

• Casual sellers, auctioneers, plaintiff’s employer, and service providers generally not strictly liable

• Retail distributors of prescription drug or device may be liable for own negligence but only strictly liable for manufacturing defects

• DE Point of Law—asbestos manufacturers and employers have duty to warn users and employees of dangers of exposure to asbestos products

Damages for Defective product

—personal-injury or property damage; pure economic loss must be brought under warranty action

• Market share liability—for fungible defective products produced by multiple manufacturers, jury can apportion damages based on manufacturer’s market share

• DE Distinction—declined to adopt market-share liability

Defenses to Defective Product

1. Comparative fault

2. Contributory negligence

3. A/R

4. Compliance with governmental safety standards

5. State of the art standard

6. SOL

Comparative fault

—plaintiff’s negligence reduces recovery, as will A/R (majority)

Contributory negligence

—plaintiff’s negligence not a defense if plaintiff misused product in reasonably foreseeable way or negligently failed to discover defect

A/R

—complete bar to recovery in contributory-negligence jurisdictions; in most comparative-fault jurisdictions, A/R only reduces recovery

More Defenses

• Unforeseeable misuse, alteration, or modification by user precludes (most contributorynegligence states) or reduces (most comparative-fault states) recovery

• Unforeseeable intervening causes

Compliance with governmental safety standards

—not conclusive evidence that product is not defective but may be considered

State-of-the-art standard

—product conformed with level of scientific, technological, and safety knowledge existing and reasonably feasible when product was distributed; compliance with state-of-the-art standard will only bar recovery in some states; not applicable to manufacturing-defect claims

Statute of limitations (SoL)

—begins to run against plaintiff with personal injury when plaintiff discovers, or should discover with reasonable care, his injury and its connection to product

• DE Point of Law—two-year limitation period on asbestos-related claims begins to run when plaintiff chargeable with knowledge condition is asbestos-related

Warranties

(against seller, manufacturer, and distributor of product)

Implied warranties

1. Merchantability—product generally acceptable and reasonably fit for ordinary purpose

2. Fitness—product fit for particular purpose; seller must know purpose, and buyer must rely on seller’s skill or judgment in supplying product

Implied Warranties - Privity requirements

Privity requirements

• Alternative A (majority)—allows member of buyer’s family or household to recover for personal injury (not property damage or pure economic loss)

• Alternative B—anyone reasonably expected to use, consume, or be affected by product may recover for personal injury only

• Alternative C—Alternative B plus recovery for property damage and economic loss

• DE Point of Law—warranty extends to any natural person reasonably expected to use, consume, or be affected and who is injured

• Damages—personal injury; property damage; pure economic loss

Express warranties

• Affirmation of fact or promise about product; part of basis of bargain

• Seller liable for any breach of express warranty, regardless of fault

• DE Point of Law—consumer must show reliance on warranty

Defenses

1. Disclaimer

2. Comparative fault and A/R

3. Contributory negligence

4. Misuse

5. Claim generally fails if plaintiff fails to provide seller with notice of breach of warranty within statutorily required time period or reasonable period of time

   1. DE Point of Law—buyer must notify seller of breach within reasonable time after buyer discovers or should have discovered it

Disclaimers

• Consumer goods—limitation of consequential damages for personal injury is unconscionable

• Express warranties—valid only if consistent with warranty (usually not)

Comparative fault and A/R

—same as in strict-liability claims

Contributory negligence

—not a bar except when it overlaps A/R

Misuse

—prevents recovery under implied warranty of merchantability when product is warranted to be fit for ordinary purposes (majority)