Manufacturer Responsibility: Are Products Safer and Manufacturers More Responsible?
(With a View of the Restatement of Torts)
Washington State Trial Lawyers Association
Sunday, July 11, 1999
By: IRA H. LEESFIELD
Leesfield Leighton & Partners P.A.
2350 South Dixie Highway
Miami, Florida 33133
(305) 854-4900
"It is to the public interest to discourage the marketing of products having defects that are a menace to the public. If such products nevertheless find their way into the market it is to the public interest to place the responsibility for whatever injury they may cause upon the manufacturer, who, even if he is not negligent in the manufacture of the product, is responsible for its reaching the market."
-- Judge Traynor,
Escola v. Coca Cola, 150 P.2d 436, 441 (Cal. 1944).
It has been more than fifty years since Judge Traynor's famous opinion in Escola ushered in the modern age of product liability, but his demand on manufacturers to produce safer products in order to protect the public welfare is still heard in courtrooms throughout the country today.
Armed with the legal tools of strict liability, joint and several liability, and punitive damages, trial attorneys have forced manufacturers over the last half century to develop safer and more reliable products which has decreased the numbers of injuries and deaths in the American public. There are 6,000 fewer deaths and millions fewer injuries each year because of the product liability system.(1) Just in the field of electrical appliances, electrocutions involving consumer products have decreased 58 percent over a 16-year period.(2)
Unfortunately, unwarranted attacks on trial lawyers continues from a lack of understanding the difference we make in improving public safety. Every day across this country trial attorneys fight to bring dignity to injured clients and accountability to negligent wrongdoers. In the area of child safety, pajamas are now made with less flammable material, cribs are designed to prevent suffocation, safety caps are found on all drugs, and lead is eliminated from paint. Additionally, manufacturers have either redesigned or stopped producing their products after thousands of women died or received permanent injuries caused by IUDs, breast implants, and toxic shock. Briefly analyzing several cases across the wide spectrum of products gives one an appreciation for the difference made by the efforts of trial attorneys in the field of product liability.
I. The Cases That Made A Difference
A. Children's Safety
1. Flammable Children's Pajamas Taken Off Market
In the case of Gryc v. Dayton Hudson Corp., 297 N.W.2d 727 (Minn. 1980), cert. Denied, 101 S. Ct. 320 (1980), the Minnesota Supreme Court upheld the jury award of $750,000 for compensatory damages and $1 million for punitive damages because the manufacturer of children pajamas was "uniquely aware" that its product was highly flammable.
The fabric of its pajamas was 100 percent untreated cotton flannelette which caught fire on a 4-year-old child when she reached across an electric stove to shut off a timer. Her pajama top instantly ignited and she suffered second- and third- degree burns over her upper body. Her scars are permanent and she has required several skin grafting procedures.
The company had actual notice of the garment's flammability since several other claims had been filed against it by consumers who had been injured in fires. A company official acknowledged that flannelette was not treated with flame-retardant chemicals because of costs, even though the court noted that such treatment would have been economically feasible.
Since the lawsuit, the manufacturer stopped making the highly flammable garment. Although the manufacturer complied with the then-existing standards of the federal Flammable Fabrics Act, the court held that the company was not insulated from punitive damages since it knew the flammability test required by the Act was unreliable. Additionally, the Act has since been amended to provide for more stringent regulation of fabric in children's sleepwear.
2. Lead Eradicated From Paint
Public-health officials have determined that lead is the number one environmental threat to children, whether they live in housing or comfortable suburban homes. (3) Although manufacturers were aware of the dangers posed to children with exposure to lead, they continued to manufacture paints while committing themselves to a costly scheme of concealing the truth from the public.
In City of New York v. Lead Industries Association, Inc., 190 597 N.Y.S.2d 698 (N.Y. 1993), the court affirmed the plaintiffs' claim for joint and several liability with the concert of action theory. The manufacturing defendants knew for years, from their own privately financed studies, that lead-based interior house paint presented a health threat, especially to children. Despite their decision not to use such paint on toys and children's furniture, they nevertheless not only continued to manufacture lead-based paint for interior surfaces, but also concealed their knowledge of the hazard, suppressed its dissemination, and lobbied against governmental regulation that would have required appropriate warnings to the public.
The court upheld the requirement that the paint manufacturers pay restitution to the City of New York for inspecting and abating hazards caused by lead paint, and treating the victims of lead poisoning.
3. Lighters Made Child-Resistant
From 1987 for 1989, an estimated annual average of 8,000 fires, 180 deaths and 1,040 injuries resulted from children under the age of five playing with lighters.(4)
In Bondie v. Bic Corp., 739 F.Supp. 346 (E.D. Mich. 1990), a Michigan family brought a product liability action against a lighter manufacturer as a result of injuries sustained by the family when the family home burned. The fire was started when a three-year-old played with a brightly-colored Bic disposable cigarette lighter. Applying the risk-utility balancing test adopted in Michigan law, the court held that Bic had a duty to make its lighter child-resistant. The severity of injury is great: facial disfigurement, property loss, and death. The court held that "the societal interest in having Bic's lighters--used primarily to light cigarettes--cannot be said to outweigh the likelihood of injury to a child." Bondie, 739 F.Supp. 346, 349.
The court held that the relationship between the parties is important, especially after it held that the plaintiffs were allowed to claim the defendant acted in a "willful and wanton" manner which entitled the plaintiffs to exemplary damages. Id. at 351. Bic had distributed to the marketplace millions of brightly-colored lighters which children are attracted to. Warnings were not attached to the lighter since it was sold in a bin.(5) Additionally, no age restrictions are placed on the purchase of lighters in order to maximize sales and profits. Bic knew or should have known that children can and will operate lighters, despite a parent's reasonable efforts to keep it from the child.
After several law suits, lighter manufacturers have begun producing child-resistant lighters which make it significantly more difficult for younger children to light, thus preventing death, injuries, and property damage.
4. Pool Drain Tragedy Leads to New Law
On June 24, 1993, Valerie Lakey was playing in a community wading pool when her friend pulled off the anti-vortex cover on the pool's drain. Valerie sat on the open drain and became trapped by suction from the pool's pump which ultimately pulled out most of her intestines. Now at the age of ten, Valerie must be hooked up to an intravenous feeding system for about 12 to 14 hours every day and will need a liver transplant.
The Lakey family sued Sta-Rite Industries, the drain cover manufacturer, arguing that Sta-Rite had failed to include a warning with the cover that suction entrapment could occur if the cover was not screwed into place.
At the end of the trial in January 1997, the North Carolina jury awarded the Lakey family substantial compensatory damages after plaintiff attorneys revealed that the manufacturer had actual notice before Valerie's injuries of at least a dozen similar incidents involving children. Although it decided that warnings were needed, the company manufactured another batch without warnings; this batch contained the cover which caused Valerie's injuries.
Since the trial, a new law in North Carolina was passed to ensure safer anti-vortex covers in pools.
5. Public Notified of Deadly Crib Defect
In 1983, a 13-month-old baby was found hanged to death on the headboard of a crib made by Bassett Furniture. The girl's head was caught in a cut-out between the top corner post and a blanket roll, lighting her feet off the mattress. Crusan v Bassett Furniture Co., Cal. Sacramento Super.Ct, June 11, 1986.
A jury awarded the girl's parents compensatory and punitive damages. Bassett had stopped producing the cribs in 1977 because of the deaths of nine children associated with that model. The company, however, did not adequately notify crib owners. It sent modification kits to stores rather than to consumers and had refused a Consumer Product Safety Commission demand for a national press release, for which it was fined.
The verdict prompted the company to speed up the recall and public notice.
B. Women's Health
American women have been disproportionately injured by dangerous and defective drugs and products, especially those related to reproduction. The anti-miscarriage drug DES, the Dalkon Shield and Copper-7 intrauterine devices, super-absorbent tampons that cause toxic shock, and silicone-gel breast implants are but a few.
Analysis of punitive damage awards in products liability cases between 1963 and 1993 revealed that nearly 70 percent of all women receiving punitive damage awards were injured by drugs or medical devices.(6)
Unfortunately, the Food and Drug Administration (FDA) sets minimum guidelines which do not necessarily create a full-proof system to protect the public from harmful products. It is often left to the process of the legal system to both compensate women for serious injuries and even death, and to deter manufacturers from further producing such products.
1. Punitive Damages Force Recall of Dalkon Shield IUD
A.H. Robins Co., the manufacturer of the infamous Dalkon Shield IUD, distributed about four million IUDs between 1971 and 1974. The IUD was blamed for thousands of spontaneous abortions, hysterectomies, painful infections, and at least eighteen deaths.(7)
Scores of lawsuits with modest punitive damages gave little incentive for the manufacturer to change the product. In Tetuan v. A.H. Robins Co., 738 P.2d 1210 (Kan. 1987), the court upheld a $10 million verdict in order to send a clear message to manufacturers of products which endanger the public welfare. Evidence established that Robins had known its IUD was associated with a high rate of pelvic disease and septic abortion, that it had misled doctors about the device's safety, and that it had dropped or concealed studies on the device when the results were unfavorable.
The Tetuan court noted the failings of modest punitive damages to affect Robins' production of the deadly product.(8) It therefore affirmed the $1.75 million in compensatory damages and $7.5 million in punitive because "the purpose of punitive damages is not merely to deter the defendant from future misconduct, but to restrain and deter others from the commission of like wrongs." Id. at 1210.
The company eventually filed for bankruptcy in 1985, and a $2.5 billion trust was created to compensate the hundreds of thousands of women who suffered diseases and injuries caused by the faulty device. Its creation set the framework for handling the many mass tort claims women have initiated since.
The fruits of the fight for victim compensation in this case is evident. In addition to the removal of the product from the market and the closer scrutiny in research and development in like products today, an estimated 99 percent of qualified claims have already been paid, and fewer than 200 cases remain.(9)
2. Toxic Shock
Playtex voluntarily removed from the market tampons linked to toxic shock syndrome (TSS) after a federal court jury awarded compensatory damages and $10 million in punitive damages to the family of Betty O'Gilvie. O'Gilvie v. International Playtex, Inc., 609 F. Supp. 817 (D. Kan. 1985), rev'd, 821 F.2d 1438 (10th Cir. 1987), cert. denied, 108 S.Ct 2014 (1988).
The Kansas woman died from TSS after using the company's product. After the verdict, Playtex strengthened its warnings on other products about the association between tampons and TSS. The company also began to alert the public about the dangers of TSS.
Playtex used the defense of complying with Food and Drug Administration (FDA) regulations concerning the product's warning labels. The jury, however, found FDA requirements only set minimum standards and mere compliance with those standards had been inadequate under the circumstances.
The trial court, commentating on the jury's decision to assess punitive damages, said the "jurors were actually saying, 'Take the damnable product off the market.'" Id. at 818. At a post trial hearing, the judge told the president of Beatrice Company, the president of Playtex, that if no changes in the product were contemplated, the jury's award was probably "only the beginning. There surely will be others." The court also told the plaintiffs' counsel that their efforts had "literally changed an industry." Id. at 820.
3. Breast Implants
An estimated one million to two million American women have had silicone breast implants since their introduction into the stream of commerce more than 30 years ago. Thousands of women have sued the makers of the implants, primarily Dow Corning, because of the severe injuries and immune system disorders caused by the implants. Since their use, more than 250,000 women have experienced connective tissue diseases and autoimmune diseases like systemic lupus and rheumatoid arthritis.(10)
Manufacturers told women that implants would last a lifetime and that ruptures occurred less than 1 percent of the time. But studies published in the American Journal of Radiology in 1992 and the Annals of Plastic Surgery in 1995 reveal a rupture rate of 5 to 51 percent. A third study, published in Plastic and Reconstructive Surgery in 1993, ties rupture to the age of the implant. Of implants aged one to nine years, 35.7 percent had ruptured. Of those aged 10 to 17 years, 95.7 percent had ruptured.
A federal judge in 1994 approved what was then the world's largest product-liability settlement when Dow Corning, after losing a number of product-liability cases, and other manufacturers agreed to pay $4.2 billion in compensation to women with illnesses attributed to silicone breast implants. Soon after the 1994 settlement, it became apparent that the amount of money agreed upon was insufficient, and in 1995 Dow Corning filed for bankruptcy protection.(11)
In August Dow Chemical, the parent company of Dow Corning, was found by a Louisiana jury responsible for the illnesses of scores of breast-implanted women since it "had knowingly deceived women by hiding information about the health risks of silicone used in breast implant."
Despite the manufacturers' incessant claims that silicone implants are safe, thousands of women have received compensation for their crippling illnesses due to the relentless efforts of trial attorneys. Their efforts acted as the catalyst to finally pull silicone-gel implants off the market in 1992.
C. Asbestos
Asbestos products, carcinogenic in nature, pose a danger millions of Americans, but especially to lower-income workers whose occupation of construction and insulation exposed them directly to the cancer-causing fibers.
In the landmark decision of Borel v. Fiberboard Paper Products Co, 493 F.2d 1076 (5th Cir. 1974), cert. denied, 419 U.S. 869 (1974), the Fifth Circuit Court of Appeals ruled that an asbestos manufacturer could be held strictly liable for failing to adequately warn a worker that asbestos could cause terminal illnesses.
In Borel, the worker inhaled asbestos dust during more than 30 years as an insulation worker. As a result of his exposures, he contracted asbestosis, which caused a form of lung cancer known as mesothelimoa. The worker died of the disease before trial.
With the future of the public welfare in mind, the court claimed the manufacturers were responsible for compensation since they had known about the dangers of inhaling asbestos as early as the 1930's and had failed to test asbestos to determine its effects on workers, even though they had the duty to do so. Although the hazards posed by asbestos were clearly foreseeable, the manufacturers remained silent.
The manufacturer's silence (internal company documents more accurately depict a conscious "cover-up" of the product's hazards) put at risk about 20 million Americans who have been occupationally exposed to asbestos. Experts predict that by the end of the century as many as 200,000 American deaths will have been caused by asbestos-related diseases, and the number is expected to rise to 265,000 by the year 2015.(12)
In the wake of Borel, other workers exposed to asbestos have won jury verdicts for compensatory and punitive damages against asbestos manufacturers. Most importantly, workers today are protected by stricter standards and asbestos insulation is no longer sprayed in buildings and schools.
D. Automobiles
The higher level of safety in automobiles produced today is in large part attributable to the efforts of trial attorneys seeking both compensation for thousands of clients, and manufacturers' desire to avoid future liability.
1. Exploding Gas Tanks
In the most infamous case of malice and reprehensible conduct by an automobile manufacturer which used a systematic effort to hide safety dangers in its faulty gas tank design, the court in Grimshaw v. Ford Motor Company, 174 Cal.Rptr. 348 (Cal. 4th DCA 1981), upheld an instruction on malice and an award of $125 million in punitive damages.
The case involved a rear-end collision with a Ford Pinto, in which a thirteen-year-old passenger suffered devastating burns when the Pinto's gas tank ruptured and the leaking gasoline caught fire. The location of the gas tank, its construction, and the strength of the rear structure of the Pinto were alleged to constitute design defect that resulted in the fire. The question of a risk-benefit analysis of the gas tank and rear structure design played a central role in the case.
Ford conducted a cost-benefit analysis and determined that it would be economically advantageous for the company to face litigation rather than recall the defective automobiles. The cost of human life was not a factor to Ford.
The court in Grimshaw, however, believed that such 'analysis' by the Ford management "was reprehensible to the extreme. It exhibited a conscious and callous disregard of public safety in order to maximize corporate profits." Id. at 388.
The ceaseless efforts by the trial attorneys which led to the $125 million punitive verdict finally forced Ford to redesign the car.
2. "Illusory Park" Defect
Exploding fuel tanks were not the only defect found in Ford automobiles in the 1970's. The Ford Motor Company manufactured automobiles with a defectively designed transmission between 1970 and 1979. This defect produced an "illusory park" position, giving the operator the impression that car was secured when it was not. Vibration of slamming of a car door could cause the automobile to move in reverse. About 90 injuries were reported as a result of this defect.
The company, however, refused to correct the defect until two verdicts forced the manufacturer to recall the car or face more litigation with punitive damages. In Ford Motor Co. v. Bartholomew, 297 S.E.2d 675 (Va. 1982), the court upheld a jury verdict. In 1976, a woman put her 1973 Lincoln in the park position and left the vehicle to load groceries. The car suddenly moved backwards, knocking the plaintiff down and running over her legs.
In Ford Motor Co. v. Nowak, 638 S.W.2d 582 (Tex. App. 1982), a driver who walked to the rear of her car while it was in the park position was killed when the automobile reversed unexpectedly. In 1979, a jury found the transmission design was defective and that Ford had failed to properly warn consumers of the problem. The jury awarded compensatory damages and assessed $4million in punitive damages.
Only through the persistence of trial attorneys to uncover the corporate veil and seek compensation for their clients Ford decided, several months after the verdicts, to eliminate the "illusory park" position hazard.
3. Defective Door Latch
At least 37 passengers have been killed in accidents when they were ejected from rear lift gates opened on Chrysler Town and Country, Dodge Caravan or Plymouth Voyager minivans sold from 1984 through 1995, according to the National Highway Traffic Safety Administration. At least 134 backseat passengers have been ejected.
Chrysler knew the rear gate latch design it choose was defective. It was the type of latch which had not been used since the 1960's, and its documents and crash test results related to the hatch had been destroyed.
A federal court jury in Charleston, South Carolina, assessed $250 million in punitive damages against Chrysler on October 8, 1997, after finding that a 6-year-old boy died as the result of the defective latch. The jury also ordered Chrysler to pay the parents of Sergio Jimenez $12.5 million in actual damages.
The boy was seated on the rear seat of the minivan, which was only traveling 25 mph when it was stuck by another car traveling 5 mph. The latch failed on impact causing the boy to fly out backwards; the boy suffered a skull fracture and died at the scene.
As a result of extensive litigation to force the companies to produce safer products, Chrysler has discontinued the use of this latch and incorporated a newly-designed latch to its newer automobiles.
4. Motorcycles
Twenty-seven year old Todd Eimers was rendered a high level quadriplegic after suffering a C6 spinal cord injury when his motorcycle spun out of control due to a design defect in the kickstand. Eimers v. Honda Motor Company, Ltd, 1993 WL 333027 (No. 112123). From the time of the accident through verdict Todd barely survived on social security benefits. He was wheelchair bound, receiving only minimum life care.
The jury held that Honda was negligent in its design of the kickstand and failed to provide adequate warnings, and awarded Todd a $19.8 million verdict. Since the trial, similar injuries have been eliminated by Honda and no similar accidents have been reported since the re-design of the kickstand.
E. Medical Products
IUDs and silicone implants are just a few of the numerous products whose defects cause millions of Americans injuries or deaths. Other products whose defective designs or improper warning labels range from surgical ventilators to prescription drugs.
1. Faulty Surgical Ventilators
Airco, Inc., the world's largest manufacturer of anesthesia equipment, marketed an artificial breathing machine that assisted patient breathing during surgery. The machine included a flexible bag and ventilator that were used to help the lungs expand and contract. During surgery, it was necessary to switch between the bag and ventilator. This could be done either manually by connecting a hose or by turning an optional selector valve on the ventilator.
In 1980, Georgia Huchingson of Little Rock suffered brain and lung damage caused by lack of oxygen during surgery. A Benton, Arkansas, jury found that the design of the machine's optional selector valve was defective because it was conducive to inadvertent misuse by it operators, resulting in oxygen deprivation to the patient. Airco, Inc. v. Simmons First National Bank, 638 S.W.2d 660 (Ark. 1982).
The Arkansas Supreme Court upheld the $3 million in punitive damages since the "manufacturer knew from the outset, by its own testing, that an unnecessary component of the product was so deadly that it should never have been made available to the public. Id. at 663.
After the trial had compensated the victim and his family, the manufacturer voluntarily issued a medical device alert under auspices of the FDA. Further, the defendant doctors testified at trial that they would never use the ventilator in the same way.
2. Jaw Implants
Between 1983 and 1988, more than 25,000 patients received synthetic jaw implants manufactured by Vitek Inc. These health care consumers suffered from temporo-mandibular joint syndrome (TMJ), a disorder that causes arthritis, jaw and facial pain, headaches, earaches and restricted jaw movements.
In 1983, Vitek began marketing its jaw implant, which essentially was two layers of plastic (Teflon FEP and Proplast) laminated together, after convincing the FDA that the device was "substantially equivalent" to a product already on the market before enactment of a 1976 law regulating medical devices. The jaw implant was never tested in animals before being marketed. Nor did Vitek perform any human trials.
The jaw implants safety was questioned only after animal testing and implants in humans showed the device could not withstand the wear and tear of lower sliding on its plastic surface. Products liability suits against the company and medical negligence claims against surgeons who implanted the device began mounting in 1987.(13)
These claims, in turn, caused liability-insurance problems for Vitek, which eventually withdrew the jaw implant from the market in 1988. The FDA forced the company after the manufacturer was proven negligent in court to issue a safety alert in 1990.
3. Warning Labels
In Benedi v. McNeil, P.P.C., Inc., 1994 WL 729052 (E.D. Va. 1994), the jury awarded a 39-year-old former Presidential aide nearly $8 million in damages including $1 million in punitive damages due to the toxic reaction caused by the manufacturer's drug.
In Benedi, the plaintiff suffered a liver failure which resulted in a coma and liver transplant after he took extra-strength Tylenol for several days to combat the flu. The plaintiff developed a toxic reaction between the acetaminophen in the Tylenol and the alcohol.
The manufacturer was aware or should have been aware of potential toxic reactions caused by the mixture, and furthermore should have placed warning labels on the Tylenol to alert customers of potential risks. In fact, pharmacologists have known about the link between Tylenol, alcohol and liver damage since the late 1970's.
Since the verdict, the FDA has forced all manufacturers of acetaminophen to place warning labels on containers.
II. Product Liability Statistics
Manufacturer and corporate lobbyists argue that product liability litigation in the United States is clogging the court system, reducing American competitiveness, and stifling innovation by causing companies to declare bankruptcy. Such broad sweeping generalizations, not only distort the truth about our legal system, but also contradict facts.
Tort claims do not clog our courts. In fact, such claims accounted for only about 5 percent of all civil claims filed in state courts in 1992.(14) Of 19.7 million civil cases filed in 1992, about one million were tort cases. Furthermore, tort filings in state courts have essentially remained constant over the past decade and actually declined in 6 percent between 1991 and 1993, according to the same study. This is particularly significant because over 95 percent of all tort cases are filed in state courts.
A. Product Liability
Since Judge Traynor's opinion in Escola demanded manufacturers be responsible for their products which pose a harm to the public welfare, courts have used the theory of product liability in order to ensure manufacturers do not escape liability. The policy reasons for imposing product liability include:
(1) Because manufacturers have control over the expertise, data, and facts concerning their product, plaintiffs are offered an evidentiary shortcut to presenting their case.
(2) It provides an incentive to the manufacturer to improve product safety and invest in research and development of safer products.
(3) It spreads the burden of loss, a tremendous weight for one individual, among all users of the product through pricing and insurance.
(4) Consumers have a right to expect that the manufacturer thought about safety when designing and testing the product.
Although opponents of product liability claim such litigation clogs up American courts, product liability cases account for only 4 percent of all tort cases in state courts, according the NCSC.
Its impact on safety can not be disputed. "Where product liability has had a notable impact where it has most significantly affected management decision making has been in the quality of the products themselves. Managers say products have become safer, manufacturing procedures have been improved, and labels and use instructions have become more explicit."(15)
B. Punitive Damages
Punitive damages is the one greatest legal weapon plaintiffs have in forcing manufacturers to produce safer products due to its deterrent effect.
Punitive damages are awarded in less than 5 percent of civil jury verdicts.(16) Between 1965 and 1990, there were only 355 such awards in product liability cases.(17) More than half of those awards were reduced or overturned on appeal. It is not necessarily its implementation which is important, rather it is the threat of its use which deters manufacturers from cutting safety corners. Those who do choose to "test the waters" such as Ford's Pinto fuel tanks and A.H. Robins' Dalkon Shield are further deterred from future wrong doings when punitive damages are awarded.
190 of 252 non-asbestos defendants who were subject to punitive damages awards between 1969 and 1990 "have taken some safety step in the wake of punitive damages litigation. In 80 percent of these cases, there were steps such as fortified warnings, product withdrawals, and safety features added to products which followed shortly after the litigation."(18)
C. Competitiveness
Finally, the role of product liability litigation not only compensates victims and improves safety, but also improves the quality of American products.
"Our products, because of their superior reputation for safety, due in part to the effects of product liability over the last 20 years, have a superior reputation in the international marketplace . . . [We] cannot compete at this time with the low labor costs of newly industrializing countries, but we can compete very effectively . . . in safety, and it would be a great risk to out international competitiveness to toy with the tort system that helps bring about that competitive advantage."(19)
III. Conclusions
Since the mid to late 1960's, product liability cases using the legal tools of strict liability, joint and several liability, and punitive damages, have clearly improved the safety and quality of products produced by American manufacturers. In addition to saving 6,000 lives every year, product liability cases serve Americans and our clients and their families by receiving compensation which allows them to continue functioning in society after severe injuries or death. It also does well for our law firms.
We should not take for granted the tremendous hard work, courage, and innovative theories of law necessary to prove victorious in product liability cases. From children's sleepwear to medical implants, product liability cases have forced manufacturers to produce safer products.
In May of 1997, the American Law Institute adopted the Restatement of the Law Third, Torts: Products Liability. This Restatement represents an attempt to "organize, clarify and restate thirty years of case law decided under a single provision, section 402A of the Restatement (Second) of Torts.(20)
The ALI's new Restatement and its comments, feature three significant departures from the traditional analysis of product defectiveness. First, the new Restatement rejects the "one size fits all" definition of defect found in section 402A of the Restatement (Second) of Torts and establishes three distinct categories of defect: (1) manufacturing defect; (2) defect in design; and (3) a defect based on inadequate warnings."(21) Historically, most courts and commentators have routinely differentiated between these categories of product defects, however, in an attempt to clarify product liability law the new Restatement now affirmatively recognizes these functional categories.(22)
The second change, and by far the most significant and controversial, is section 2(b)'s elimination of the consumer expectation test and its adoption of a risk-utility test based on the "foreseeable risks of harm" and proof of "a reasonable alternative design." While various jurisdictions have used a risk-utility test in the past, the new Restatement's version is notably different in that it requires proof of a "feasible" reasonable alternative design as its main component.(23)
The third change proposed by the new Restatement adopts a negligence standard for design defects and warning defect cases.(24) The new standard is based largely on criticism of 402A's strict liability standard which arguably holds a seller liable despite the lack of a reasonable alternative design. A majority of courts already apply a negligence based theory under the misnomer of strict liability in these types of cases.
Part I of this presentation will focus on Section 2(b) and the changes it holds for product liability practitioners. Part II discusses recent case law adopting the new Restatement's position that an adequate warning will not necessarily vitiate liability when a safer reasonable design is available. Part III briefly describes some of the other key provisions in the new Restatement.
I. Section 2(b): Foreseeable Risks & Reasonable Alternative Design
Section 402A purported to establish a strict liability cause of action for product defects. In product liability cases this meant that a seller could be held liable for a product defect "simply upon proof that a product was defective and the defect caused the plaintiff's injury. Proof that some fault of the seller created the defect would not be necessary."(25) This theory of strict liability proved useful in manufacturing defect cases, but critics argued that it was inadequate to the determination of defectiveness in design and warning defect cases.(26) These criticisms, in large part, led to the adoption of a negligence based theory of fault for design defect and warning defect cases in the new Restatement.
A. Risk-Utility over Consumer Expectations
The traditional basis for establishing liability in design defect cases was rooted in a consumer expectations test derived from the comments to section 402A. Comment g of that section defined a "defective condition" as "a condition not contemplated by the ultimate consumer, which will be unreasonably dangerous to him."(27) Comment i defined "unreasonably dangerous" as "dangerous to an extent beyond that which would be contemplated by the ordinary consumer who purchases it, with the ordinary knowledge common to the community as to its characteristics."(28) Under this consumer expectations test the defectiveness of a product is measured by the "risks of use not contemplated by the "ordinary user."(29) In other words, when a product functions in a manner not contemplated by the user, and that function injures the user, the manufacturer may be held liable under strict liability.
Manufacturers argued that the consumer expectations test was too subjective to be applied in defective design cases. They claimed that where the product was "generally made as intended" and where an alternative design did not exist, that it was unfair to subject the seller to strict liability based on risks not contemplated by the consumer.(30) It appears that the reporters for the new Restatement liked this argument well enough to replace the traditional consumer expectations test with a risk-utility test.(31) While various jurisdictions currently recognize and favor the risk-utility test over the consumer expectations test, the new Restatement's version is notably different. The existence of a safer alternative design is no longer just one of many factors to consider in determining defectiveness, it is now the determinative factor. It appears that if a plaintiff cannot prove the availability of a safer reasonable alternative design, the case will be dismissed.(32) In addition, plaintiffs must prove that an alternative design is "reasonable" rather than just feasible.(33) Whereas feasibility only required proof that it was possible to construct a reasonable alternative design, the reasonable requirement of the new Restatement places the burden on the plaintiff to prove, in light of risk and utility, cost and benefit, that the alternative design was reasonable.(34)
While plaintiffs in design defect cases often attempt to provide evidence of an alternative design, sometimes proof of an alternative design is not possible or simply too costly. The controversy over the new risk-utility test lies with the absolute nature of the alternative-design requirement.(35) It appears that if a plaintiff cannot prove that a reasonable alternative design existed then the plaintiff's case may be dismissed.(36) As such, if the courts choose to adopt section 2(b)'s requirement of a reasonable alternative design, many injured consumers will be denied compensation. For instance, if plaintiffs had "been required to develop a 'better' Dalkon Shield, a 'better' breast implant, 'better' asbestos, and so on, many of their claims would have been eliminated..."(37)
There is, however, a noteworthy exception to the absolute requirement of proving the existence of a reasonable alternative. Section 2, Comment e of the new Restatement, the "Habush Amendment,"(38) provides that "the designs of some products are so manifestly unreasonable, in that they have low social utility and high degree of danger, that liability should attach even absent proof of a reasonable alternative design."(39)
In addition to the required proof of a reasonable alternative design, § 2(b) also provides that defectiveness of design "is going to be measured by the 'foreseeable risks of harm posed by the product,' rather than by the risks of use not contemplated by the 'ordinary user.'"(40) Under 402A, courts employing the risk-utility test generally imputed knowledge of the risk to the seller when a product injured the user.(41) Under the new Restatement, the risks must now be those that are foreseeable by the seller at the time of sale. It should be noted, however, that in various instances Section 2(b)'s "foreseeable risks" provision may help plaintiffs. For instance, in Todd v. Societe BIC S.A., 991 F. 2d 1334 (7th Cir. 1993), "in which the risk of a cigarette lighter used by a child might be deemed foreseeable but not within the scope of section 402A, since a child was not an 'ordinary user.'"(42) courts often would not grant recovery where the person injured was not an "ordinary user."
II. Warnings are not Acceptable Alternative to Safe Design
Under comment j of Section 402A, an adequate warning was generally held to insulate a manufacturer from liability regardless of the feasibility or reasonableness of a safer alternative design.
Under the new Restatement it appears that warnings, whether adequate or not, will not longer vitiate liability where a safer design was available to the manufacturer. Two high-level courts have recently adopted the new Restatement's comment L to section 2 which provides that an adequate warning is not a substitute for a safe design that would eliminate the hazard from the product."(43)
In Uniroyal Goodrich Tire Co. v. Martinez, 977 S.W. 2d 328 (Tex. 1998), a mechanic was injured when he was struck in the face by a 16-inch tire that exploded as he tried to mount it on a 16 ½-inch rim. Attached to the tire was a prominent warning label depicting yellow and red highlights as well as a pictograph of a worker being thrown into the air by an exploding tire.(44) Martinez alleged that the Goodrich tire was defective in that it failed to incorporate a safer alternative design that would have reduced the risk of explosion or prevented the accident. Goodrich argued that Comment j of the Restatement (Second) of Torts should be applied and as such, the tire should be found to be neither defective in condition nor unreasonably dangerous where adequate warning is given. The court agreed with Martinez and held that adequate warnings are not an acceptable alternative to a safe design. In reaching this conclusion the found that Comment l of the new Restatement § 2 specifically rejects Comment j of the Restatement (Second) of Torts.(45) The court also noted that "the fact that a danger is open and obvious (and thus need not be warned against) does not preclude a finding of product defect when a safer, reasonable alternative design exists."(46)
In Rogers v. Ingersoll-Rand Co., 144 F.3d 841 (D..C. Cir. 1998), the court adopted Comment l of Section 2 and held that despite adequate warnings "a manufacturer may have a heightened responsibility to incorporate additional safety features to guard against foreseeable harm."(47) In Rogers, a road-crew worker was severely injured when a 50,000 pound milling machine rolled over her foot and leg. When the accident occurred the worker was standing with her back to the machine and the machine's alarm-designed to sound when the unit backs up-failed to sound. The defendant presented its operation and maintenance manual which warned and instructed users to "(1) stay ten feet away form the rear of the machine when it is operating; (2) verify that the back-up alarm works; and (3) 'check area for people or obstructions in your line of travel.'"(48) Based on these warnings the defendant proposed jury instructions that directed the jury to "'find for the defendant' if it found 'that the milling machine was accompanied by adequate warnings which made the milling machine safe for use if the warnings are followed.'"(49) The court refused to apply this instruction stating that the "instruction assumes that an adequate warning by itself would immunize a manufacturer from any liability caused by its defectively designed product. This is not a correct statement of applicable law."(50) In adopting comment l of Section 2, the court clarified that the adequacy of a warning is not the "sole consideration in the risk-utility analysis," and a warning cannot take the place of a reasonably safe design.(51)
III. Other Key Provisions
§ 3. Circumstantial Evidence Supporting Inference of Product Defect
Contrary to some jurisdictions, § 3 states that the plaintiff need not identify a specific defect when the plaintiff is harmed, rather that defect can be inferred by circumstantial evidence. However, under this section, the plaintiff still bears the burden of proving that a defect existed at the time the product left the defendant's possession.
§ 4. Non-Compliance and Compliance with Safety Statutes or Regulations
A. Non-Compliance
Essentially, a product will be deemed defective per se, where it fails to comply with an applicable governmental safety regulation or statute.
B. Compliance
On the other hand, compliance with an applicable regulation or statute does not vitiate liability, rather it is but one factor to consider when determining whether a product is defective.
§ 10. Liability of Commercial Product Seller or Distributor for Harm Caused by Post-sale Failure to Warn
The Restatement (Second) of Torts did not address this topic. However, under the new Restatement "a product seller under appropriate circumstances may be subject to liability for failure to warn of newly discovered dangers in the use of a product about which the seller obtains actual or constructive knowledge after the time of the sale of the product."(52) Note, some jurisdictions already impose such a duty.
1. BNA Product Liability Daily, "Senate Panel Hears Testimony on Reform Bill," April 6, 1990, at 4.
2. BNA Product Liability Daily, "Electrocutions Involving Consumer Products Reduced 58 Percent Over 16-Year Period," November 22, 1993, at 1.
3. Newsweek, "Lead and Your Kids," July 15, 1991, at 42. After scores of litigation, the federal government banned the use of lead-based paints in 1978.
4. Unpublished memorandum on the Cigarette Lighter Project from Linda E. Smith, EPHA, through Dr. Robert D. Verhalen, Associate Executive Director, Directorate for Epidemiology and Robert E. Frye, Director, EPHA, to Barbara J. Jacobson, Manager, at 3 (Feb. 6, 1992).
5. A warning, however, is insufficient to eliminate risks of foreseeable injury to children as a matter of law in most states, including Michigan. See also Redman v. Bic Corp., No. CV-86-1196 (Maine Super.Ct. Jan. 8, 1990).
6. These findings are a product of the extensive research conducted by Professor Michael Rustad of the Suffolk University School of Law and Professor Thomas Koenig of Northeastern University.
7. Jane Bowling, "Maryland Woman Wins $1 Million Dalkon Shield Case," Daily Record, March 24, 1997, at 1A.
8. The first Dalkon Shield case to proceed to trial occurred in Kansas in Deemer v. A.H. Robins Co., No. C-26420, March 1, 1975. The jury awarded the plaintiff a modest $75,000 against Robins; this did not cause a recall of the product, nor did it warn users and physicians of the dangers.
9. Bowling, supra. note 7, at 1A.
10. Jon Schmid, "Implant Suit Focus on Law vs. Science," Chicago Sun-Times, August 24, 1997, at 33.
11. See In re Dow Corning Corp., 1997 WL 751706 (Bankr. E.D. Mich. Nov 20, 1997) (No. 95-20512); In re Temporomandibular Joint (TMJ) Implants Products Liability Litigation, 113 F.3d 1484 (8th Cir. 1997); In re Coordinated Breast Implant Litigation, 1995 WL 705154 (N.D. Cal. Nov 21, 1995); In Re Silicone Gel Breast Implants Products Liability Litigation, 887 F. Supp. 1455 (N.D. Ala. 1995).
12. Stephan Latan, "Judges' Panel Seeing Court Crisis Combines 26,000 Asbestos Cases," The New York Times, July 30, 1991, at 1.
13. See Blaschka-Mansfeldt v. Vitek, Inc., 1989 WL 131525 (Minn. App. Nov. 7, 1989) (No. C2-89-1114); Forest v. Vitek, Inc., 884 F. Supp. 378 (D. Nev. 1993); Hoyt v. Vitek, Inc., 894 P.2d 1225 (Or. App. 1995).
14. A recent study conducted by the nonpartisan National Center for State Courts.
15. The Conference Board Report, "Product Liability: The Corporate Response," No. 893 (1987), at 2.
16. According to a 1990 American Bar Foundation study of 25,000 jury verdicts in 11 states over a four-year period.
17. Rustad, supra note 6.
18. Rustad, supra. note 6, at 28.
19. Testimony of Professor Mark Hager, Assistant Professor of Law, Washington College of Law, American University, at Consumer Subcommittee Hearing on S. 1400, April 5, 1990, transcript at 126.
20. William E. Westerbeke, " The Sources of Controversy in the New Restement of Products Liability: Strict Liability Versus Products Liability." 8-Fall Kan. J.L. & Pub. Pol'y1, at 1 (1998).
21. RESTATEMENT OF THE LAW THIRD, TORTS: PRODUCTS LIABILITY. See Comment a, §1 and the reporter's notes following. See also § 2(b), and comments.
22. Westerbeke,at 9.
23. James A. Henderson, Jr., "Restatement Third, Torts: Products Liability: What Hath the ALI Wrought?" 64 Def. Couns. J. 501 at 507. (Oct. 1997).
24. Westerbeke, at 9. See generally § 2 and comments.
25. Westerbeke at 6.
26. See generally, James A. Henderson, Jr., "Restatement Third, Torts: Products Liability: What Hath the ALI Wrought?" 64 Def. Couns. J. 501. (Oct. 1997).
27. Westerbeke, at 9. citing, RESTATEMENT (SECOND) OF TORTS § 402A, cmt. g.
28. Westerbeke, at 9. citing, RESTATEMENT (SECOND) OF TORTS § 402A, cmt. i.
29. Henderson at 507.
30. Larry S. Stewart, " A New Frontier: Design Defect Cases and the New Restatement." 34-Nov Trial 20, 21 (1998).
31. Henderson at 507-508. (Comment g and i of Section 402A have been eliminated from the new Restatement). See Comment d ("Whereas a manufacturing defect consists of a product unit's failure to meet the manufacturer's design specifications, a product asserted to have a defective design meets the manufacturer's design specifications but raises the question whether the specifications themselves create unreasonable risks. Answering that question requires reference to a standard outside the specifications. Subsection (b) adopts a reasonableness ("risk-utility" balancing) test as the standard for judging the defectiveness of product designs."
32. Note, however, that proof of an alternative reasonable design does not necessarily require a prototype, rather expert testimony may suffice.
33. Henderson at 507.
34. See Comment f.
35. Larry S. Stewart, " A New Frontier: Design Defect Cases and the New Restatement." 34-Nov Trial 20, 21 (1998).
36. Id.
37. Id. at 21.
38. Named for its sponsor, Robert Habush, a former American Trial Lawyers Association (ATLA) president.
39. See RESTATEMENT OF THE LAW, THIRD, TORTS: PRODUCTS LIABILITY, Section 2, cmt. e. (comment e gives a specific illustration involving a toy gun that shoots hard rubber pellets with enough velocity to significantly injure children. Comment e states that while toy guns that don't shoot hard pellets may be a reasonable alternative, where the consumer purchases the hard-pellet gun for the realism of the hard pellets, then no reasonable alternative may be found and cmt. e may provide an "escape hatch" for the reasonable alternative design requirement.).
40. Henderson, at 507.
41. Westerbeke, at 10.
42. Henderson, at 507.
43. Rogers v. Ingersoll-Rand Co., 144 F.3d 841 (D..C. Cir. 198); Uniroyal Goodrich Tire Co. v. Martinez, 977 S.W. 2d 328 (Tex. 1998).
44. Uniroyal Goodrich Tire Co. v. Martinez, 977 S.W. 2d 328, 332 (Tex. 1998)(The label stated: DANGER: NEVER MOUNT A 16" SIZE DIAMETER TIRE ON A 16.5" RIM. Mounting a 16" tire on a 16.5" rim can cause severe injury or death. While it is possible to pass a 16" diameter tire over the lip r flange of a 16.5" size diameter rim, it cannot position itself against the rim flange. If an attempt is made to seat the bead by inflating the tire, the tire bead will break with explosive force.).
45. Id. at 336. See Reporter's Notes in the New Restatement referring to Comment J as "unfortunate language" that "had elicited heavy criticism form a host of commentators."
46. Id.
47. Rogers v. Ingersoll-Rand Co., 144 F.3d 841, 845 (D..C. Cir. 1998), citing RESTATEMENT (THIRD) OF TORTS: PRODUCTS LIABILITY § 2 CMT. L (1997) ("[W]arnings are not ... a substitute for the provision of a reasonably safe design.... Just as warnings may be ignored, so may obvious or generally known risks be ignored, leaving a residuum of risk great enough to require adopting a safer design.").
48. Id. at 843.
49. Id.
50. Id. at 843.
51. Id. at 844.
52. Henderson, at 522.
