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All over the map.

AN EARLY MODEL CAR KNOWN AS THE "BUICK MODEL 10 RUNABOUT" BECAME THE SUBJECT OF A LIABILITY SUIT AFTER ITS WOODEN WHEEL SPOKES COLLAPSED AND SUBSEQUENTLY EJECTED AND INJURED THE DRIVER, DONALD C. MACPHERSON. THE LAWSUIT THAT MR. MACPHERSON BROUGHT AGAINST BUICK MOTOR CO. Is REGARDED AS A LANDMARK CASE BECAUSE IT CHANGED THE GENERAL RULE THAT A CONTRACTUAL RELATIONSHIP MUST EXIST WITH THE MANUFACTURER IN ORDER FOR AN INJURED PARTY TO RECOVER DAMAGES. COURTS THROUGHOUT THE COUNTRY ABANDONED CONTRACTUAL RELATIONSHIP AS A BASIS FOR LIABILITY, EXPOSING MANUFACTURERS TO A NEW CLASS OF SUITS FOR DEFECTIVE PRODUCTS.

PRODUCTS LIABILITY LAW HAS come a long way since its modern inception at the turn of the century. Across the nation, products liability reform bills sit in state legislative committees, evidence of the rising sentiment that the pure common law system has pushed products liability to an outer limit, and that statutory help is needed to halt further expansion of this effect. Meanwhile, American industry suffers from a lack of uniform standards for determining when a manufacturer or supplier should be liable for a defective product. The risk of uncertainty that this engenders often becomes too great for many small businesses and manufacturing start-ups. It also escalates the price of research and development of new product lines, injuring both consumers and suppliers because competitiveness suffers. Courts and society have an interest in encouraging product safety and compensating persons injured by unsafe products, but this must be tempered with the recognition that manufacturers and suppliers should not be guarantors of the absolute safety of all products in all circumstances.

The evolution of products liability in this country has been conducted primarily on a case-by-case basis. Lawyers term this the common law system of justice, meaning that the law exists in the cases that formulate and apply it, as opposed to statutory law, which is law made by legislatures. To understand the current state of manufacturers' liability it is necessary to examine how radically the liability of manufacturers has expanded in recent times.

After the MacPherson case, the next major evolutionary step in the expansion of manufacturers' liability was a framework of law designated the Restatement (Second) of Torts, which was propounded by a body known as the American Law Institute in the early 1960s. The most famous component of this treatise is Section 402(A), which states: "One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer."

This section, adopted by many states, provided for liability against a manufacturer without the traditional showing of negligence. A negligence standard, which had been used in products cases according to prior law, considered the defendant's conduct in the light of a reasonable person in similar circumstances. Section 402(A) expands the basis of liability for manufacturers by shifting the focus from the seller's conduct to the condition of the product itself.

An accepted rationale for a treatise work, such as the Restatement (Second) of Torts, is to distill from the many cases the "black letter" law, or the law written in its simplest, purest terms. Once it has been distilled it may be adopted by states in the hope of providing uniformity, sensibility and certainty in the law. Section 402(A) and strict liability, however, are anything but uniform, sensible or certain in courts across the United States.

Even though almost every state has adopted Section 402(A) in some form, there are vast differences in the very definition of what makes a product "defective." For example, 402(A)'s standard of a "defective product unreasonably dangerous" has been rejected through the common law in such states as Pennsylvania. Pennsylvania jurists removed "unreasonably dangerous" from the formulation, pronouncing that tests using the concept of "reasonableness" are the province of negligence actions. Judges in Pennsylvania do not consider a manufacturer's conduct in making certain design choices and instruct juries that they may find liability on the part of any manufacturer whose product is "defective."

It is easy to demonstrate the problems with a standard of liability that asks only if the product is defective. Because every case involves a plaintiff who claims to have been injured by a product, the mere existence of a case seems to imply that the product is somehow defective.

Across the Map

STATES ALSO DISAGREE about how a products liability action may be proved or defended. Some states, such as Arizona, Colorado, Kansas, Kentucky and Michigan, allow manufacturers to present evidence establishing that the design of their product was made according to the latest scientific and technological developments available at the time of its manufacture. This would demonstrate that it was not technologically or economically feasible to have incorporated any other safety features or alternative designs. Although this sort of "state-of-the-art" evidence seems logically connected to the determination of whether or not the product is in a defective condition, most other states do not permit the manufacturer to make this defense.

Another matter that receives varying treatment among the states is how long a manufacturer must guarantee its product's safeness to consumers. Statutes of limitation that cut off liability at a certain point after the date of injury or discovery of injury vary from state to state. In a similar manner, some state statutes terminate liability for manufacturers a certain number of years after their product has entered the marketplace. Since no product has an infinite life span, it is logical that a manufacturer should be responsible to consumers only for a finite period of time after the product is sold to its first consumer. Despite the appeal of this position, legislatures in only a handful of states have enacted these statutes.

Lawsuits against manufacturers of alcoholic beverages, cigarettes, handguns and other products widely regarded by the general public as inherently dangerous illustrate another problem with our strict liability system. Liability may be imposed without there being anything "wrong" with the product other than its widely known intrinsic danger. Jurisdictions permitting these suits - despite common knowledge of the product's "defect"- threaten to expose more and more classes of manufacturers to liability.

Another example of unequal treatment of manufacturers in many states is the dichotomy maintained between products actions and ordinary negligence actions. Negligence cases in most jurisdictions permit a balancing of the plaintiffs conduct and the defendant's conduct in analyzing who was at fault and who should bear any losses incurred. Thus, the plaintiff's damages are reduced according to the degree of fault.

Strict products liability, in most jurisdictions, does not permit proper analysis of the plaintiffs conduct. Even consumers who are aware of the risk that a product presents, or who misuse or alter the product, may collect against the manufacturer because the focus of the law is solely upon the product and whether it is defective and/or unreasonably dangerous. Plaintiffs who were under the influence of alcohol at the time of injury or those who have removed safety features from a product are the most blatant offenders on this point.

Costly Confusion

THE VERY EXISTENCE of 50 different versions of products liability law creates costly confusion regarding what is expected of manufacturers and difficulty in designing a legally "safe" product. In states such as Pennsylvania, all liability is determined by judges on a case-by-case basis. In other states, such as Michigan, legislatures have enacted statutes to decide many of the important policy considerations involved in products liability law. The determination of whether a product is defective thus depends upon which state the product is in.

The lack of uniformity and uncertainty among states has led to increased litigation costs. Because the likelihood of a successful claim or defense cannot be predicted with accuracy, litigants are encouraged to engage in protracted research and discovery, ultimately causing more cases to be tried rather than settled. Inability to predict the future number of successful claims against manufacturers also results in the unwillingness of insurance companies to provide coverage. Thus, coverage becomes more expensive and less available.

When legislatures explore the policy considerations inherent in this field of law, they are generally better able to provide a truly representative view that results in more certainty and the "big picture" approach often lacking in the case-by-case treatment found in pure common law systems. In addition, legislatures provide an overall framework, instead of merely considering one case at a time.

Legislatures are an appropriate forum for the determination of the social policy considerations inherent in products liability law. Electorally responsible representatives can create a framework of products laws according to the best interests of both consumers and suppliers. A proper statutory framework would provide realistic and obtainable standards for determining the safety of products and move the law in the direction of sensibility and predictability in this important area.

Certainly, any reform should treat manufacturers and injured parties equally. This plea for reform does not come merely from a special interest but represents a growing acknowledgment that reform in products law will benefit both suppliers and consumers.

All factions should be involved in developing the framework of products law, including the business community, trial lawyers associations and environmental and consumer interest groups. As such, this democratic process may prove a better method of answering the unique social policy questions presented by products law than the piecemeal policy construction that is inherent in a purely common law approach.

What Manufacturers

Should Know

Questions to determine manufacturers' exposure regarding products liability:

* What is the definition of a defective product in the jurisdiction?

* Can evidence of a product's being "state-of-the-art" at the time of manufacture be admitted?

* Will the plaintiff's conduct be taken into account and considered to reduce damages?

* What is the standard for punitive damage claims?

* Will compliance with applicable government standards be admissible?

* Will compliance with prevailing industry standards be admissible?

* Will post-manufacture modifications be a consideration?

* Are there caps on the amount of pain and suffering or punitive damage awards?

* Do statutes limit the number of years for which a manufacturer may be held liable after the product has entered the marketplace?

* May reasonable attorney's fees be awarded to the prevailing party if the claim or defense is adjudged frivolous?

Robert S. Grigsby, a former judge, is a director in the Pittsburgh law firm of Cohen & Grigsby. Kevin C. Harkins and Thomas J. Madigan are associates in litigation with Cohen & Grigsby.
COPYRIGHT 1992 Risk Management Society Publishing, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Products Liability
Author:Grigsby, Robert; Harkins, Kevin; Madigan, Thomas
Publication:Risk Management
Date:Jul 1, 1992
Words:1741
Previous Article:Aviation and risk management.
Next Article:The case for products liability reform.
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