PRODUCTS LIABILITY

Overview

• A plaintiff can bring different types of claims for products liability:

o Negligence—plaintiff must prove duty, breach, causation, and damages

o Strict Liability for Defective Products

o Breach of Warranty Claim

Strict Products Liability

There are three types of product defects: manufacturing defects, design defects, and failure to warn.

Example 90: A motorcycle may be defective in different ways:

Manufacture: The motorcycle has plastic bolts where there are supposed to be metal bolts; the motorcycle was defectively manufactured.

Design: The motorcycle was built as designed, but it is unstable when carrying a passenger or heavy rider; the motorcycle’s design is defective.

Failure to warn: The manufacturer should have warned riders that the motorcycle cannot accommodate passengers.

Elements of a Claim—the plaintiff must show:

o The product was defective (in manufacture, design, or failure to warn);

o The defect existed when the product left the defendant’s control; and

o The defect caused the plaintiff’s injury when the product was used in a foreseeable way.

Note 16: Strict liability can apply to multiple parties in the chain of producing and selling the product. Potential defendants are discussed more below.

Establishing Defect Claims: Manufacturing defect

• The product deviated from its intended design.

• The product does not conform to the manufacturer’s own specification.

Design defect—two tests:

• Consumer expectation test—the product is defective in design if it is less safe than the ordinary consumer would expect.

• Risk-utility test—the product is defective in design if the risks outweigh its benefits; must show that there is a reasonable alternative design.

Note 17: The more technical the product is, the more likely it is that experts will be required and the risk-utility test will apply.

Failure to warn

(i) was there a foreseeable risk that was not obvious to an ordinary user, and (ii) were the steps taken to warn about that risk reasonable?

• Learned Intermediary rule (Often applies to prescription drugs):

  • Manufacturers of prescription drugs must warn the prescribing physician

  • Exception: drugs marketed directly to consumers

Inference of defect

—courts may allow proof of a defect by circumstantial evidence, especially when the defect causes the product to be destroyed.

Plaintiffs

o No privity requirement—can sue up and down the chain of production or distribution

o Anyone foreseeably injured by a defective product, including purchasers, other users, and bystanders

Defendants

o Anyone who sells the product when it is defective is potentially strictly liable.

o Must be in the chain of distribution and in theb business of selling

• Casual sellers—not strictly liable, but may be liable for negligence

Example 91: Selling something to a friend or neighbor.

o The seller may seek indemnification from another party (e.g., the manufacturer).

Damages

o Plaintiff can recover for personal injury or property damage

o Purely economic loss—generally not recoverable under a strict-liability theory

Note 18: May be brought as a breach of warranty claim (discussed below).

Defenses

8 defenses

Contributory negligence

courts hesitate to allow the plaintiff’s negligence to completely bar the plaintiff’s recovery against the defendant for a defective product.

Comparative fault

the plaintiff’s own negligence will reduce any recovery in a strict-products-liability action.

Assumption of the risk

If the risk is one that the plaintiff knew about and voluntarily chose, then the plaintiff will not be allowed to recover.

Product misuse, modification, or alteration

• The manufacturer (or seller) can be liable for a plaintiff’s foreseeable misuse, modification, or alteration of a product.

Substantial change in the product

can bar recovery.

Compliance with government standards

• Compliance with safety standards is admissible evidence that the product is not defective, but it is not conclusive evidence.

• Exception: federal preemption—when Congress has preempted regulation in a particular area (expressly by statute or impliedly by regulating the field)

“State of the art” defense

• In some jurisdictions, the relevant state of the art at the time of manufacture or warning is evidence that the product is not defective.

• In other jurisdictions, compliance with the state of the art is a complete bar to recovery.

Disclaimers, limitations, and waivers

generally does not bar recovery in strict-liability claims for defective products

Warranties

• Warranty claims may generally be brought up and down the distribution chain.

• Direct privity in contract is not required.

 Implied Warranties—Two types:

o Merchantability—the product is suitable for the ordinary purposes for which it is sold.

o Fitness for a particular purpose—the seller knows the particular purpose for which the product is being sold, and the buyer relies on the seller’s skill or judgment.

Express Warranties

an affirmation of fact or a promise by the seller that is part of the basis of the bargain

Defenses

a. Disclaimers

Note 19: Disclaimers are covered in the Contracts materials.

b. Tort Defenses

• Contributory negligence

• Comparative fault

• Assumption of the risk

• Product misuse

Three types of products liability suits:

o Negligence

o Strict liability for defective product

o Breach of implied warranty

Three ways a product may be defective:

o Manufacture

o Design

o Failure to Warn