Chapter 13: Product Liability

Introduction Product Liability refers to liability of manufacturers and sellers of defective products that cause injury to consumers, users and bystanders. Liability can be based on: Negligence; Misrepresentation; Strict Liability; or Warranty Theory (Chapter 11).

§1: Product Liability based on Negligence Negligence-based product liability is based on a manufacturer’s breach of the reasonable standard of care and failing to make a product safe. No privity of contract required.

Product Liability (Negligence) [2] Manufacturer must exercise “due care” in: Designing products; Manufacturing and Assembling Products; Inspecting and Testing Products; and Placing adequate warning labels.

Product Liability (Negligence) [3] Manufacturers who violates state or federal law in the manufacture or labeling of a product, may be negligent per se. Liability extends to any person’s injuries caused by a negligently made (defective) product.

§2: Product Liability Based on Misrepresentation. Occurs when fraud is committed against consumer or user of product. Fraud must have been made knowingly or with reckless disregard for safety. Plaintiff does not have to show product was defective.

§3: Strict Product Liability Manufacturers liable without regard to fault based on public policy: Consumers must be protected from unsafe products; Manufacturers should be liable to any user of the product; Manufacturers, sellers and distributors can bear the costs of injuries. Case 13.1: Greenman v.Yuba Power Products (1962).

Requirements Requirements for strict liability: Product is unreasonably dangerous when sold; Defendant normally sells the product; Plaintiff injured by use or consumption of product ; Defective condition is the proximate cause of injury; and Product has not substantially changed.

“Unreasonably Dangerous” Product Plaintiff must show product was so “defective” it was “unreasonably dangerous”. Court could consider whether: Product was dangerous beyond ordinary consumer expectations; OR A less dangerous alternative was economically feasible but rejected.

Market Share Liability Theory of liability when multiple Defendants contributed to manufacture of defective product. Liability of each Defendant is proportionate to the share of the market held by each respective Defendant.

Suppliers’ Liability Suppliers of Component Parts. Liable if component is defective at the time of sale or distribution; or Liable if supplier “substantially participates” in the design and integration of defective product.

Bystander Liability Manufacturers, distributors, suppliers, sellers liable to an injured bystander who did not purchase, use or consumer the product. Injuries to bystanders from defective products are reasonably foreseeable. Case 13.2: Embs v. Pepsi-Cola (1975).

§4: Strict Liability—Restatement (3rd) of Torts The terms “unreasonably dangerous” and “defective” are used interchangeably and subject to differing definitions by different courts. Restatement defines three different types of defects: manufacturing, design and warning defects.

Strict Liability: Manufacturing Defects Occurs when a product “departs from its intended design even though all possible care was exercised in the preparation and marketing of the product.”

Strict Liability: Design Defects Occurs when the “foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative . . . and the omission of the alternative design renders the product not reasonably safe.” Case 13.3: Rogers v. Ingersoll-Rand Co. (1998).

Strict Liability: Warning Defects A product may be defective because of inadequate warnings or instructions. Liability based on foreseeability that proper instructions/labels would have made the product safe to use. Case 13.4: Liriano v. Hobart Co. (1999).

Warning Defects [2] There is no duty to warn about obvious or commonly known risks. Seller must also warn about injury due to product misuse. Key is whether misuse was foreseeable.

§5: Defenses to Product Liability Assumption of Risk. Product Misuse (Plaintiff does not know the product is dangerous for a particular use). Contributory/Comparative Negligence. Commonly known dangers. Statutes of Limitation.

Law on the Web American Law Institute. Horitz and Levy Law Firm. Tobacco Company Litigation at USATODAY. Law Journal Extra! On Product Liability. Legal Research Exercises on the Web