1. Product Liability Law Product Liability – Negligence duty of care WSJ 2008 – Mazda Cars Trashed 4,703 New Mazda’s – Less than 10 miles Weeks bobbing at 60º angle Cars safely strapped down Schools wanted them for shop Hollywood for stunts You are CEO of Mazda, what would you do and why? 4,700 Mazda CX7s and 3s on board Weird Al – I’m Gonna Sue You Ape Attack

2. Requirements of Strict Product Liability—Summarized The defendant must sell the product in a defective condition. The defendant must normally be engaged in the business of selling that product. The product must be unreasonably dangerous to the user or consumer because of its defective condition (in most states). A court may consider a product so defective as to be unreasonably dangerous if either (a) the product was dangerous beyond the expectation of the ordinary consumer or (b) a less dangerous alternative was economically feasible for the manufacturer, but the manufacturer failed to produce it. The plaintiff must incur physical harm to self or property by use or consumption of the product. The defective condition must be the proximate cause of the injury or damage. The goods must not have been substantially changed from the time the product was sold to the time the injury was sustained.

3. Product Liability Overview. – Liability of manufacturers, sellers, and lessors of goods – to consumers, users, and bystanders – for injuries or damages that are caused by the goods. Product liability claims are most often based on: – Warranty Law – Misrepresentation – Negligence – Strict Liability CASE 10.3 Jimenez v. Superior Court of San Diego County (2002). Is the manufacturer of a non-defective seat component that is integrated into the seat, liable for injuries suffered? CASE 10.4 James v. Meow Media, Inc. (2003). Is the creator of a violent video game liable if the child acts out?

4. Greenman v. Yuba Power Products, Inc. When Greenman was injured by a defect in the design of a “Shopsmith” woodworking tool, he sued claiming breach of warranty and negligence. The court instead held the manufacturer strictly liable. Liability w/o fault – applies to: – Abnormally dangerous activities – Food, drink, intimate body usage products – Any product that is “defective.”

5. Strict Liability Why shift standards? Product Focus. Focus on product itself rather than duties Chain of Liability. Claim against anyone in the chain of distribution; including the – immediate seller, – the wholesaler, – the manufacturer, and – the manufacturer of component parts Elements – One who sells any product in a defective condition unreasonably dangerous to the user or the consumer… Must be engaged in the business of selling the product No substantial change in the product – The rule applies even though Seller exercised all possible care in the preparation and sale of the product, and The user or consumer has not bought the product from or entered into any contract with the seller. Liability of Co. for Adding Safety Devise to Machine Gebo’s hand crushed by embossing machine Gebo sued Filtration Sciences who originally purchased machine and modified its design Filtration systems added a guard system Filtration systems sold its mill and all machinery to Gebo

6. Interesting Successful Lawsuits – Negligence and Strict Liability Broken Ankle Tripping over Toddler Loose in Store - $780,000. Ms Robertson tripped when a toddler ran in front of her in store. Toddler was her son. Restaurant Patron Tripped Over Cola Can on Floor - $113,500. Amber Carson slipped on a cola can and broker her tailbone. She had thrown the can seconds earlier at her boyfriend in a fight. Hand Ran Over - $74,000. Mr. Truman’s hand was ran over while trying to steal the hubcaps off the car and the owner failed to see him. Locked in Garage - $500,000. Mr. Dickson spent a week locked in a garage because the garage door malfunctioned and the door to the house locked when he closed it. He subsisted on a case of Pepsi and a large bag of dried dog food. He was robbing the house at the time. Dog Bite - $14,500. Jerry Williams was bitten on buttocks by neighbor's beagle. The beagle was on a chain in the owner’s fenced yard and Williams, who climbed the fence, was repeatedly shooting it with a pellet gun. Fell in Bathroom Window -$2,000. Kara Walton fell into a bathroom window and broke her two front teeth. This occurred while she was sneaking into a bar to avoid paying a cover charge. Winnebago with Cruise Control - $1,750,000. Set the Winnebago to cruise control at 70 mph and calmly left the driver’s seat to make himself a cup of coffee. Vehicle left highway and was demolished. First Place Winner Per Article Source: Financial Services Advisor, May/June 2004

7. Yamaha Rhino Not a car/not an ATV Not regulated Test rider started tipping – put leg out to stop from tipping over and 1,100 pound machine snapped leg. Warnings to wear seat belts, helmet and to drive straight up or down hills to avoid tipping. Drivers suing Should Yamaha be liable?

8. Strict Liability – Product Defect and Other Issues Product Defect. Material defect in design or failure to warn. – No Duty of Care Breached. Contains a manufacturing defect when the product departs from its intended design even though all possible care was exercised in the preparation and marking of the product – Economically Feasible Safer Design. Is defective in design when the foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative design by the seller or other distributor, or by a predecessor in the commercial chain of distribution, and the omission of the alternative design renders the product not reasonably safe – Defective Due to Inadequate Warnings. Is defective because of inadequate instructions or warnings when the foreseeable risks of harm posed by the product could have been reduced or avoided by the provision of reasonable instructions or warnings… Black Talon Bullet. Olin corp sells the Black Talon Bullet designed as a hollowpoint. On impact it bends into six razor-sharp petals or “talons” that increase the wounding power. Colin Ferguson opened fire on a commuter train using the bullets and killed six. Plaintiffs sued Olin based on design defect.. Black Talon Bullet Hollister v. Dayton-Hudson Corp Facts. Hollister burned when t-shirt she was wearing caught fire when it touched a hot stove. Issue. Sued for strict product liability, is there an economically feasible alternative Holding. No. She failed to show there was a reasonable alternative design available what would have reduced the risk.

9. Subsequent Product Re-Design. K2 Snowboards. K2 sold snow board without pre-drilled holes to allow for placment of any brand binding Hyjek purchased this model and was injured when binding came loose and struck him on the inside of his ankle K2 developed a new system involving “through-core inserts” to improve installation of binding to the board Hyjek sought to introduce this design change in support of his claim for design defect of the original model. Our society does not want to discourage product improvement.

10. Warnings for dangers Winners of Michigan Lawsuit Abuse Watch Award for Wackiest Consumer Warning Label “Do not put any person in this washer” for a washing machine. “Harmful if swallowed” – three pronged fishing lure “Do not use for personal hygiene” Disposable Toilet Bowl Cleaner “Never use hair dryer while sleeping” “Not intended for highway use” Bilingual Warnings. CASE 10.2 Ramirez v. Plough, Inc. (1993). Under federal law must manufacturers distribute products with non-English labels when they are commonly used by non-English consumers,? No.

11. Market Share Liability and Latent Defects Market Share Liability – DES drug linked to rare cerverical cancer in daughters (among other things) – Lawsuits not until 20 or more years after taking the drug – Prescribed to reduce miscarriages – Unable to prove which of the 300 manufacturers made the precise pills – Identical formulas used – Lead Paint example – lead paint used in houses – how can you know who produced the lead paint? – Alternate liability: two hunters shoot in same direction. One bullet hits plaintiff in eye and lip. Summers v. Tice. Latent Defects – Farsian v. Pfizer for heart valve – Valve failed in 4.2% of cases killing 2/3 of those where the valve failed – Plaintiff where valve did not fail claimed lower value of valve and emotional distress – Court dismissed case because no-injury suffered. Ad Promoting DES to Physicians

12. Defenses to Product Liabi lity There are several defenses that manufacturers, sellers, or lessors can raise to avoid liability for harms caused by their products. Assumption of Risk Comparative Negligence Other Defenses Commonly Known Dangers Product Misuse Government liability limited by law to $1 million for all claims Claims against contractors limited to 6 year statute of limitations

13. Product Misuse Nissan Altima into Tree Roy Mercuiro drove his Nissan Altima into a tree at 30-40 mph. He had a blood alcohol content of at least.18% Spouse sued because car not crash worthy Product Misuse. Risk of a 30-40 mph collision is foreseeable – regardless of circumstances why (drinking in this case). Voluntarily Assumed Risk. Assumed risk of an accident, but not risk that car un-crash worthy – therefore, evidence of alcohol use not admissible. Similar to Assumption of Risk Defense Product misuse pogo backflip atv backflip

14. A Manager’s Dilemma, p. 328