Products Liability - Strict Products Liability

Strict Products Liability - General Rule

The defendant who sells a defective product unreasonably dangerous to the user or consumer or to his property is liable if he:

(1) Is engaged in the business of selling the product,

(2) it is expected to and does reach the plaintiff without substantial change in the condition in which it was sold

Such rule applies even if:

(1) The defendant has exercised all possible care, and

(2) there is no privity between the plaintiff and the defendant.

SPL - Elements

1. Defect: product must have been in a defective condition unreasonably dangerous to the consumer or his property

2. Control: must have been defective when it left the D’s control (D liable even if he didn’t cause defect

3. Business: D must be in the business of selling the product

4. Causation: DAS must result from defect

   1. D liable for physical damage

   2. Where only economic loss, like repairs or lost profits, SL is usually dnied

5. Privity not required

Manufacturing Defect - Definition and PP

A product contains a manufacturing defect when the product departs from its intended design even though all possible care was exercised in the preparation and marketing of the product.

PP: consumers should be protected bc they’re powerless to protect themselves

Manufacturing Defect - Elements/Approach

1. Defendant manufactured and sold product

2. At the time product was sold, it was defective and unreasonably dangerous to user/consumer

   1. For analysis: identify defect

3. Product was expected to and did reach the consumer

4. Product’s condition was substantially unchanged at the time it was sold

5. The defective condition caused plaintiff’s injury

   1. For analysis:

      1. Prove defect caused harm—show whether it was defective, that it was unreasonably dangerous, and why it was.

      2. Trace existence of defect from time of sale of the product by defendant

      3. Negate other sources of the flaw such as maintenance or misuse.

Can defendant be held liable for services?

No.

Definition of seller (Amazon case)

A seller is a person or entity that distributes a product or its component parts into the stream of commerce for use

Occasional sellers - SPL?

No

Auctioneers - SPL?

No

Used products - SPL?

majority does not impose SPL on sellers of used oroducts

Retailers, wholesalers, distributors, other sellers - SPL?

Most jurisdictions apply SPL to all sellers under vertical chain

Makers of component parts - SPL?

Likely yes.

Successor liability/corporate acquisitions - SPL?

Generally only SPL for defective products if it:

1. agreed to assume liability

2. transfer was fraudulent

3. two corps merged

4. successor is a continuation of company, or

5. if it acquired all the assets and continued the product line

Manufacturing Defect - PP

Consumers must be protected, bc they are powerless to protect themselves.

Design Defects - Rule

The product has a design defect when it contains a foreseeable risk of harm that the seller or other predecessor in the chain of distribution could have reduced or avoided by choosing a reasonable alternative design, and the omission of such makes the product not reasonably safe.

Design Defect: 7+1 Test

Risk utility test: Whether a reasonable alternative design would, at reasonable cost, have reduced the foreseeable risks of harm posed by the product and, if so, whether the omission of the alternative design by the seller or a predecessor in the distributive chain rendered the product not reasonably safe

• P must prove such a reasonable alternative was, or reasonably could have been, available at time of sale or distribution

Design Defect: 7+1 Test factors

1. Usefulness and desirability of product

2. safety aspect of product

3. Availability of substitute product

4. Manufacturer’s ability to eliminate unsafe condition

5. Consumer’s ability to avoid danger

6. Consumer’s anticipated awareness of inherent dangers

7. Feasability of mfx spreading loss

8. Consumer expectation test:

   1. looks at whether a reasonable consumer would find the product defective when using it reasonably

   2. if a reasonable person would not find the product to be defective even when using it in a reasonable manner, then the defendant is not liable, even if product’s design caused injury

Model Uniform Product Liability Act

• adopts negligence or fault based system for design defects because entire product line is at risk

• PP: introducing fault makes manufacturers make safer products. Design defects are the result of deliberate decisions

Crashworthiness — DD

Mfx under no duty to design an accident-proof or crash-proof car because a car’s intended purpose is not to crash

Product liability for whiskey, tobacco, butter

Products who inherent characteristics make them dangerous are not unreasonably dangerous.

Industry custom

May be introduced on the question of defect, but not determinative to attach SL

Obvious Danger

Most jurisdictions reject obviousness of danger as a bar to recovery and consider it as one of the factors in the risk utility test.

Prescription drugs and medical devices

No strict liability on design of medical devices or Rx drugs

Applicability to food

Foreign natural: SL only applicable if injury causing substance is a piece of glass wire, or other foreign substance in the food. If substance is natural, like bone fragments or pits, SL not applicable.

Allergic reaction

No recovery for allergic reaction. This is a failure to warn issue.

Abnormal and unintended use

*applies to warranties as well

Mfx not liable for injuries resulting from abnormal and unintended use unless it’s reasonably foreseeable

Product' user’s negligence in failing to discover defect - SPL?

not a defense.

Sales-service distinction - SPL?

No SPL.

1. In a service transaction, there is no mass production and distribution, and no ability to spread risk of loss to consumers

2. Service transactions do not involve a group of consumers needing protection from a remote/unknown mfx.

Pharmacists - SPL?

No. Pharmacists do not sell drugs; they provide a service

Transactions that have both a sale and service involved

No SPL if transaction predominantly a service.

Blood, blood products, human tissue

Most jrsdx exempt providers of blood and blood products and tissue from SL by statute. This extends to doctor or provider and commercial supplier because we want to encourage people to continue to donate blood and administer it.

Selling animals - SPL?

No. animals are not products.

Charts and Maps - SPL?

No SPL for incorrectly drawn up charts and maps.

Books and games - SPL?

No SPL for books and games that fail to warn and games that injure people.

Computer Apps - SPL

No. Computer not product

AI - SPL

No; AI is not product.

Electricity - SPL?

Only when it passes through the meter to the user’s house at which it becomes a product. Otherwise, when passing through transmission lines; it’s a service.

Naval warship - SPL?

No SPL. it’s tangible personal property.

Endorsers, lincesors, and franchisors - SPL?

SL may apply to a trademark licensor or franchisor if the licensor retains the right to control the quality of the product on which the trademark is used.

Organizations that set standards - SL?

Design Defect - PP

Consumers powerless to protect themselves

Warnings Defect - Rule

A product may be defective because of inadequate instructions or warnings when it poses a foreseeable risk of harm that:

(1) Could have been reduced or avoided by providing reasonable instructions or warnings by the seller, distributor, or other predecessor in the commercial chain of distribution, and

(2) The omission of the instructions or warnings makes the product not reasonably safe.

Warnings Defect - Elements

1. D was in business of selling the product

2. Product contained a foreseeable risk of harm dangerous to user or consumer

3. D knew or should have known of the hazard

4. D failed to provide adequate warnings or instructions to the user or consumer about the unreasonable risk of harm

5. Because of lack of warning or instruction, P was harmed.

Warnings requirements

1. should get someone’s attention

2. explain hazard

3. tell user to avoid hazard

Warnigs Balancing Test

The rules of strict liability require a plaintiff to prove only that:

1. the defendant did not adequately warn of a particular risk that was known or knowable in light of the generally recognized and prevailing best scientific and medical knowledge available at the time of manufacture and distribution.

the manufacturer is liable if it failed to give warning of dangers that were known to the scientific community at the time it manufactured or distributed the product. the user of the product must be given the option either to refrain from using the product at all or to use it in such a way as to minimize the degree of danger.

Balance:

1. the risk of death or serious disability with

2. the end goal sought to be achieved by the product which can only be knowable by examining the best scientific and medical kowledge available at the time of manufacture and distribution pf product.

The fact that a manufacturer acted reasonably prudent in deciding not to warn, while perhaps absolving him of liability under the negligence theory, will not bar strict liability if the judge concludes that, based on the information scientifically available to the manufacturer, the manufacturer’s failure to warn rendered the product unsafe to its users.

Mfx should provide evidence that the particular risk was neither known nor knowable by the application of scientific knowledge available at the time of manufacture and/or distribution.

When is a seller not liable for failure to warn?

When the warnings regard risks or risk-avoidance measures that should be obvious to, or generally known by foreseeable product users

Obvious Dangers

No SPL for warnings for obvious dangerous generally known

Why not always require warning?

Reduces efficacy of warnings

Allergic reactions - Failure to Warn

Duty to warn if ingredient is one which many are allergic to

Learned Intermediary

In cases involving pharmacy, almost all states find that warnings and instructions should be given to the doctor who is a learned intermediary between the drug company and the patient

Exceptions:

1. Where mfx is aware there will be no medical provider to provide learned advice or where the patient is expected to take active role in product selection

FDA Regulations

Floor, not ceiling. Does not preempt state product liability claims

Innovator liability

Most courts reject this

Generic drug mfx - failure to warn

If it does not update a warning to match brand name’s amended warning, COA in state products liability law is not preempted.

FDA non-adoption

If mfx can show the FDA would not have adopted the P’s proposed change in the drug’s label, then P’s claim is preempted under impossibility preemption. Determination of law is made by judge.

Defenses - SPL

• Comparative negligence

  • P’s recovery reduced to the extent his own lack of reasonable care contributed to the injury

  • most states will bar P’s recovery if his fault exceeds the manufacturer’s

  • Examined case-by case

• Assumption of risk

  • Total bar to P’s recovery

  • Defendant must plead and prove:

    • User knew of a defect

    • user voluntarily and unreasonably used the product

    • usage was unforeseeable and outrageous

• Product misuse

  • results from abnormal and unintended use

• Express preemption

  • Mfx complied with federal statute and regulations under it

• Implied preemption

  • Federal law that preempts state law makes mfx not liable

• Government Contract defense

  • Contractor could be immune for defective product if they can show that

    • US approved specifications

    • equipment conformed to them

    • contractor warned the US about the dangers in the use of equipment

• State of the Art

  • the product design conforms to the industry custom, reflects the most advanced tech developed at the time, and what the scientific community knows

SPL - DAS

• Compensatory

  • Loss resulting from PI - lost wages and med expenses recoverable

  • Economic loss without PI — for economic loss only, not recoverable

    • Exception: pure economic loss recoverable when alleged defect creates unreasonable risk or injury to people

  • Property damage — applies.