Unit 4
A MANUFACTURER'S GUIDE TO PRODUCT LIABILITY LAW IN THE UNITED STATES
Preface to Third Edition
The product liability landscape has significantly evolved since this book's initial publication in 1991.
Constant changes in laws and litigation practices necessitated this third edition.
Key developments since the second edition (1999) include:
Evolving tactics and strategies of plaintiffs’ counsel.
The advent of electronic discovery.
The introduction of caps on punitive damages, which were previously a distant hope for manufacturers.
Few federal preemption victories.
Anticipation of future developments, hinting at a potential fourth edition within the next decade.
Foreword
The authors are lawyers specializing in defending manufacturers in product liability lawsuits.
They emphasize a crucial lesson: manufacturers face substantial challenges in litigation partly because key personnel lack understanding of product liability law.
Consequences of ignorance lead to errors that adversely affect lawsuit outcomes and increase damages awarded.
Purpose of the guide is to provide fundamental information about product liability law and litigation, especially for nonlegal personnel in manufacturing.
Discusses product liability exposure reduction measures and suggests the guide's use in corporate training programs.
Importance of education for managers and decision-makers who influence design, literature, and product improvements, and may testify in court.
Introduction
Notable increase in lawsuits related to defective products and significant damages awarded to plaintiffs.
Common observation: manufacturers often settle claims even if a product is not defective due to high costs and burden of litigation.
Disturbing cases illustrate unjust outcomes where manufacturers are held liable despite consumer misuse of products.
The case example:
Involves a man injured while misusing a cotton-picking machine against clear safety guidelines.
Court sided with the plaintiff despite manufacturer’s argument against liability.
Emphasizes the need for manufacturers to anticipate misuse and design for safety accordingly.
Importance of manufacturer employee education to limit harmful actions during litigation.
Overview of contents:
Chapter 1: Basic concepts of product liability law.
Chapter 2: Structure of product liability lawsuits.
Chapter 3: Measures to reduce liability exposure.
Appendix includes sample jury instructions, document freeze memorandum, requests for production, and glossary.
Chapter 1: Product Liability Law
No uniform 'United States product liability law': Each state has differing laws shaped by courts and legislatures.
Liability: Defined by the circumstances and laws governing the injury caused by a product.
Plaintiff: who initiates the lawsuit.
Defendant: who the lawsuit is against.
Legal Theories of Liability
Negligence: Manufacturers are responsible for injuries due to negligence by themselves or their employees.
Example: An electrical appliance manufacturer liable for injury due to negligence in safety during production.
Breach of Warranty: Manufacturers are liable if a product fails to meet promised standards causing injury.
Can arise from express written warranties or implied warranties from the suitability for use.
Claimants traditionally preferred breach of warranty claims as they were easier to prove.
Strict Liability: Most states employ strict liability for defective products, establishing manufacturer accountability.
Section 402A of the American Law Institute states:
Seller liable for a product that is defective and unreasonably dangerous to consumers.
Liability exists even if due care was exercised or if there was no contractual relationship with the consumer.
Plaintiff must prove defectiveness existed at the time of product delivery and caused injury.
Types of Defects
Manufacturing Defect: Product not built per specifications, leading to safety issues.
Design Defect: A lack of clear standards makes this complex; risk-benefit analysis often applies.
Consumer expectations test determining if a product is more dangerous than expected.
Warning/Instruction Defect: Inadequate warnings leading to misuse or failure to provide safe usage instructions.
Various regulations exist for drug warnings only directed to prescribing professionals (learned intermediary rule).
The Third Restatement
Highlights significant changes, moving away from consumer expectations for design defects.
Calls for objective evaluations proving alternative designs could lessen foreseeable risks.
Not considered law until embraced by states' courts.
Proof of Defect
Normal Requirements for Plaintiffs: Must prove defectiveness, existence at the time of delivery, and causation.
Evidence categories may include expert opinions, injuries from similar products, and manufacturing standards violations.
Government/Industry Standards: Evidence of a product failing to meet standards could establish liability.
Who Is Liable for a Product Defect?
Liability typically extends through the product distribution chain, from manufacturer to retailer.
Exception: Occasional sellers are only liable for their own negligence.
Liability for generic products can lead to collective responsibility based on market share in some jurisdictions.
Defenses to Liability
Plaintiff's Carelessness or Misuse: Varies between states as a bar or partial defense.
Alteration or Misuse by Others: Liability could remain if alteration was foreseeable or preventable.
Passage of Time: Statutes of limitations restrict the time frame to file claims, and defenses vary significantly.
Contract Provisions: May limit liability but must adhere to state laws, especially in government contracts.
Damages
Compensatory Damages: Intended to compensate loss incurred for injuries.
Classification:
Economic Losses: Include lost earnings and medical expenses.
Noneconomic Losses: Pertains to pain, suffering, or loss of relationship.
Survival and Wrongful Death Actions: Distinguish between claims of the deceased's estate and the surviving family members, allowing recovery for various economic and noneconomic damages.
Sample Verdicts
Includes various case examples where plaintiffs won claims against manufacturers with detailed monetary variations.
Joint and Several Liability
Underpins that each liable party can be responsible for the entire damages awarded.
Problems arise when one party bears significant financial distress relative to others.
Conflicting State Laws
Challenges in multi-state operations requiring courts to determine applicable laws navigating varying regulations.
The Product Liability Lawsuit
Filing Process: Emergency filing of a complaint and summons to initiate a lawsuit.
Defense Strategies: Involves personal jurisdiction, venue considerations, and timely responses.
Discovery Phase
Mechanisms established for information sharing, including interrogatories and deposits.
Electronic discovery highlights the burdens and costs involved, especially regarding the technology used.
Spoliation: Acknowledge duties to preserve relevant documentation potentially damaging to defense.
Reducing Product Liability Exposure
Strategies must be woven throughout the design, manufacturing, and post-accident responses to mitigate risks.
Product Liability Prevention Manager: Their role focuses primarily on coordinating education programs addressing product liability implications.
Documentation and Written Records: Emphasis on maintaining comprehensive records while being wary of the content's legal implications.
Design and Marketing: Includes diligence in crafting product descriptions, warnings, and adhering to regulations.
Insurance Considerations: Regular review of coverage adequacy against potential product liabilities.
Conclusion
Emphasis that understanding these principles can guard against unduly severe outcomes due to wrongful assessments or misunderstandings within the processes.