Chapter 13: Product Liability

1. Chapter 13:Product Liability

2. 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).

3. §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.

4. 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.

5. 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.

6. §2: Product LiabilityBased 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.

7. §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).

8. 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.

9. “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.

10. 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.

11. 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.

12. 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).

13. §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.

14. 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.”

15. 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).

16. 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).

17. 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.

18. §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.

19. 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