Chapter 07 – Business Torts and Product Liability
Supplementary Materials
I. Warnings (p. 302)
Contrast the following to Brown Forman:
William Hon died of pancreatitis at age 26. Mr. Hon drank two to three cans of Stroh beer four
nights per week for six years. Mrs. Hon sued Stroh Brewing Co. claiming it should have issued a
warning of the risk of pancreatitis from moderate, long-term consumption of beer. Stroh argued that
no medical evidence linked Mr. Hon’s death to alcohol. In 1988 a federal appeals court in
Philadelphia reversed a lower court decision and ordered a trial in the case. Previous cases had
protected brewers from product liability suits on the grounds that the risks of drinking were well
known. However, prior to trial Mrs. Hon withdrew her litigation for personal reasons. See “Product
liability Suit Against Alcohol Distiller Is Withdrawn,” The Wall Street Journal, January 17, 1991, p.
B2.
II. Comparative Negligence (p. 306)
An interesting issue that students relate well to is the issue of whether, in a case where a plaintiff
injured in a car accident was not wearing a seatbelt, that fact can be used by the defendant as
evidence of plaintiff’s comparative or contributory negligence.
First consider that over thirty states have some form of seat belt laws. According to two studies
published in the Journal of the American Medical Association, those laws are effective in reducing
serious deaths and injuries. Furthermore, those involved in crashes when not wearing seat belts incur
health costs nearly triple those of crash victims wearing seat belts. A four-year study (1983–87) of
traffic accidents in North Carolina revealed that deaths and serious injuries declined dramatically after
the enactment of seat belt legislation and the imposition of fines for violations. Similarly, a
Chicago-area study found a 65% decline in hospital admissions and a 66% drop in related costs when
accident victims taken to trauma units had been wearing seat belts.
Nevertheless, the seat belt defense, providing that plaintiff’s recovery will be reduced in an amount
equal to the increase in harm caused by the failure to wear the seat belt, is prohibited in nearly half of
the states. See “Negligence—Seat Belt Defense—Failure to Use a Seat Belt Constitutes Evidence of
Comparative Negligence, Which May Decrease Recovery for Avoidable Damages,” Harvard Law
Review 102, No. 4, February, 1989, p. 925.
With this background, consideration of the Chrysler case, a summary of which is presented in the
Supplementary Cases section below, is thought provoking. In Chrysler, all the injured parties were in
fact wearing seat belts. But under New Mexico law, that information was not allowed into evidence.
Chrysler was, however, permitted to testify to its general policy encouraging seat belt use, in response
to plaintiffs’ argument on punitive damages that Chrysler exhibited “a corporate policy of utter
disregard for the safety of its customers.” One cannot know whether from this evidence jurors drew the
inference that the passengers were not wearing seat belts when the jury returned a verdict in favor of
Chrysler.
Supplementary Cases
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Chapter 07 – Business Torts and Product Liability
I. Weirum v. Rko General, Inc., 539 P. 2d 36 (Ca. 1975) (See Negligence, p. 291)
Syllabus
An action was brought for wrongful death of the plaintiff’s decedent who was killed when his
automobile was negligently forced off a highway by a listener to defendant’s radio station,
which was conducting a contest rewarding the first contestant to locate a peripatetic disc
jockey. The trial court entered judgment for plaintiffs against radio broadcaster and it
appealed. The California Supreme Court held that evidence supported jury finding of
foreseeability of injury or death in that it was foreseeable that broadcaster’s youthful listeners,
finding the prize had eluded them at one location, would race to arrive first at the next site and
in their haste disregard demands of highway safety; the court further held the broadcaster was
not insulated from such liability on basis of deference due society‘s interest in the First
Amendment; it was further held that broadcaster could not escape liability on basis that it had
no duty to control conduct of third parties, in view of fact that broadcaster’s liability was
grounded upon an affirmative act of misfeasance creating an undue risk of harm, and not
upon mere nonfeasance.
II. Escola v. Coca Cola Bottling Co. of Fresno, 150 p. 2d 436 (ca. 1944) (See Res
Ipsa, p. 298)
Syllabus
Action by Gladys Escola against Coca Cola Bottling Company of Fresno for injuries sustained
when a bottle containing a carbonated beverage exploded. From a judgment for plaintiff, the
defendant appeals. The court applied the doctrine of res ipsa loquitur. The judgment was
affirmed.
III. Maneely and Chambliss v. General Motors Corporation, 108 F. 3d 1176 (9th
Cir. 1997) (See Design Defects, p. 298)
Syllabus
Plaintiffs were rendered paraplegic while sleeping in the back of a moving GM pick-up in which
the driver fell asleep causing the truck to run off the road at about 23-28 mph and the plaintiffs
to be slammed into the metal sides of the truck. Plaintiffs argue that GM failed to warn them of
the danger of riding unrestrained in the back of a pick-up that the truck should have been
designed for occupants to ride in the bed of the truck and that ads showing individuals
standing or sitting in truck beds created an express warranty that riding in the truck bed was
safe. Defendant moved for summary judgment, which the trial court granted. Plaintiffs
appealed.
The circuit court held that: The dangers of riding unrestrained in the back of a moving truck
are obvious and generally known; that “no reasonable jury could find that the pickup truck’s
design—including its absence of seatbelts and other occupant packaging in the cargo bed—is
defective;” and that “no reasonable jury could find that GMC promised that riding in the back of
a moving truck was safe simply by depicting people in the beds of pickup trucks” that were
stationary and driverless. The Court found in favor of the defendant.
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Chapter 07 – Business Torts and Product Liability
IV. Cincinnati v. Beretta U.S.A. Corporation, 768 N.E. 2d 1136 (Ohio 2002) (See
Negligence, p. 291)
Syllabus
Cincinnati sued various handgun manufacturers, three trade associations and one distributor,
seeking to hold them responsible for the harm caused by the guns they manufacture, sell or
distribute under a theory of intentional and negligent conduct and failure to make guns safer.
The court held that the lower court should not have dismissed the city’s complaint. It said that
the negligence issue is whether “appellees are themselves negligent by manufacturing,
marketing, and distributing firearms in a way that creates an illegal firearms market that results
in foreseeable injury” and held that the city had stated a sufficient cause of action. It further
held that the city stated a sufficient product liability claim, both under the theory that the guns
“do not incorporate feasible safety devices that would prevent unauthorized use and
foreseeable injuries” and under the theory that defendants failed to warn about risks that were
not open and obvious (e.g., that a semi-automatic gun can hold a bullet even when the
ammunition magazine is removed). The court pointed out that its reversal did not mean the
city would prevail at trial, only that it had alleged sufficient facts to be allowed to pursue its
claims.
V. Wells v. Ortho Pharmaceutical Corp., 788 F. 2d 741 (11th Cir. 1986) (See
Warnings, p. 302)
Syllabus
An infant and her parents brought suit against a manufacturer of a spermicide which allegedly
caused the infant plaintiff to be born with birth defects. The United States District Court
awarded $5.1 million to the plaintiffs and the manufacturer appealed. The Court of Appeals
held that: (1) The finding that the plaintiffs proved to a reasonable degree of medical certainty
that manufacturer’s spermicide caused infant’s birth defects was not clearly erroneous; (2) the
finding that manufacturer had actual or constructive knowledge of potential dangers of the
product prior to July, 1980, when mother purchased the product and thus was under a duty
imposed by Georgia law to warn purchasers of the risk of birth defects was not clearly
erroneous; and (3) award of damages to infant for future lost earnings based on her full
disability was duplicative in that it conflicted with an award for future medical expenses
designed to make her employable and a further general damages award for loss of earning
capacity included in the pain and suffering award.
VI. Northwest Bank N.A. v. Chrysler Corporation and Huffines Chrysler
Plymouth, Inc., 981 P. 2d 1215 (N.M. App. Ct. 1999) (See Negligence Defenses:
Rules, p. 306)
Syllabus
This case arose from a crash of a Chrysler minivan. There were two adults wearing seat belts
in the front two seats and an additional seven people, without seatbelts, riding in the back.
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Chapter 07 – Business Torts and Product Liability
During the crash, five of the seven people in the back of the minivan were thrown out of the
vehicle; one died, and the others were more seriously injured than the riders who stayed
within the vehicle. In the process of the accident, the minivan rolled several times and the rear
cargo door opened up.
The jury was required to complete a special verdict form, which asked a series of questions.
The jury found that the rear door latch was defective, but that was not a proximate cause of
plaintiffs’ injuries. Chrysler had presented evidence that the passengers were not ejected out
of the rear door, but rather out of the windows. Thus, the jury could conclude that the faulty
door latch did not impact plaintiffs’ injuries, let alone cause enhanced injuries. Thus, the fact
that the jury was instructed to assign liability using concurrent tortfeasor analysis, instead of
successive tortfeasor analysis, was a harmless error.
Under New Mexico law, information on whether passengers were wearing seat belts is not
allowed in either as a defense or as part of a showing of comparative negligence on the
plaintiff’s part. Thus, such information was not provided to the jury. However, the defendant
was allowed to testify to its general policy encouraging seat belt use. The trial judge permitted
this testimony, and the appellate court agreed, because plaintiff had argued for punitive
damages against Chrysler on the argument that Chrysler exhibited “a corporate policy of utter
disregard for the safety of its customers.”
VII. Sutowski v. Eli Lilly & Company, 696 N.E. 2d 187 (Ohio 1998) (See Strict
Liability Overview, p. 313)
Syllabus
A product liability action was filed against manufacturers and distributors of diethylstilbestrol
(DES) for injuries that the daughter allegedly sustained in utero as a result of the mother’s
injection of the drug. The federal district court submitted the question of the availability of a
market share theory of liability in Ohio to the State Supreme Court. That court indicated the
ability of a plaintiff to assert a liability claim if she named all possible tortfeasors, but held that
market share liability has not been adopted in Ohio and it would be up to the legislature to do
so.
VIII. Dunham v. Vaughan & Buschnell Mgf. CO., 247 N.E. 2d 401 (Ill. 1969) (See
Strict Liability: Coverage, p. 316)
Syllabus
Product liability action by plaintiff seeking to impose strict tort liability on distributor and
manufacturer of claw hammer for injuries plaintiff sustained when chip from the face of a
hammer struck plaintiff in the eye while plaintiff was connecting tractor to manure spreader.
The trial court entered judgment on jury verdict for plaintiff. Distributor and manufacturer
appealed. The Appellate Court affirmed and the manufacturer and distributor were granted
leave to appeal. The Supreme Court held that whether the claw hammer was defective was a
question for jury. Strict liability for defective claw hammer, when applied to manufacturer of
hammer, extended to the wholesaler even though box in which hammer was packaged
passed unopened through wholesaler’s warehouse. Affirmed.
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Chapter 07 – Business Torts and Product Liability
IX. Charlton v. Toyota Industrial Equipment, 714 A. 2d 1043 (Penn. Superior Ct.
1998) (See Strict Liability: Defenses, p. 317)
Syllabus
Charlton and his father were both employees, where the father was operating a forklift
manufactured by defendant. While neither were looking, the father backed up and ran over his
son’s foot. Plaintiff alleged that the forklift was defective because the driver’s rearward view
was obstructed, it lacked rearview mirrors and it had no backup alarm system. Plaintiff argued
the trial court erred in allowing in evidence of negligence on the part of plaintiff and his father
in the strict liability case. The court held that evidence of reckless conduct, voluntary
assumption of the risk or misuse of the product could come in as evidence, but not ordinary
negligence as was the case here. Case reversed and remanded.
X. Lamey v. Foley and Kawasaki Motors, 188 A.D. 2d 157 (N.Y. 1993) (See Strict
Liability: Defenses, p. 317)
Syllabus
Lamey, one of the top two or three national professional ATV racers at the time, was rendered
a paraplegic as a result of an ATV accident that occurred while he was performing a
promotional stunt. Defendants (other than Kawasaki Motors) were the individuals who
designed the track and were promoting the event. Defendants moved for summary judgment
before a trial on the merits, which motion was denied. This case is their appeal of that denial.
The court found their motion properly denied (i.e., the issue should go to trial). One issue for
decision is whether plaintiff had assumed the risk of his injury. “As a general rule, participants
[in sports or entertainment events] properly may be held to have consented, by their
participation, to those injury-causing events which are known, apparent or reasonably
foreseeable consequences of the participation.” However, plaintiff presented evidence that his
injury was caused instead by an “unassumed, concealed or unreasonably increased risk,”
specifically, the risk of an unpadded fence post. Another issue for a trier-of-fact was whether
plaintiff’s own actions constituted a superseding cause of the injury, prohibiting recovery from
defendant, specifically, whether plaintiff’s voluntary participation in the stunt race at the
request of the camera crew (a substantially more dangerous ride) was such a superseding
cause.
Plaintiff also argued that defendant is strictly liable for his injury as a consequence of a
defectively designed product, which defect made it unreasonably dangerous for its intended
use.
Defendant argued that plaintiff’s assumption of the risk is a complete bar to a claim of strict
liability and, therefore, the defendant’s motion for summary judgment in the defendant’s favor
should be granted. The court held that “the defense of primary assumption or risk is not
available to eliminate or reduce a manufacturer’s duty to produce a nondefective product even
where the product’s dangerous qualities are obvious to and appreciated by the user.”
The court also found that there existed a question of fact concerning whether plaintiff’s injuries
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Chapter 07 – Business Torts and Product Liability
were actually the result of his own recklessness and his modifications to the ATV.
Thus, neither of defendant’s asserted grounds for summary judgment were accepted by the
court and the case was remanded for a trial on the merits.
Selected Bibliography
Associated Press, “GM Hit with $150 Million Award,” Waterloo-Cedar Falls Courier, June 4, 1996, p.
B6.
“Case Against GM: A Judicial Travesty,” The Wall Street Journal, October 26, 1999, p. A27.
Editorial, “Dumping Ground for Guns,” Washington Post, July 2, 1999, p. A26.
Edward Felsenthal, “Punitive-Damage Awards Found to Be Generally Modest and Rare,” The Wall
Street Journal, June 17, 1996, p. B7.
Mike France, “Class Actions: Fine-Tune the Law, Don’t Trash It,” Business Week, July 12, 1999, p. 45.
Milo Geyelin and Laurie McGinley, “Panel Concludes There Is No Connection between Implants and
Major Diseases,” The Wall Street Journal, June 22, 1999, p. B15.
John Grisham, “The Runaway Jury” (published by Doubleday 1996).
Los Angeles Times, “Ford Bronco II Dodges Bullet that Hit the Suzuki Samurai,” Waterloo Courier,
April 24, 1989, p. B5.
Paul Marcotte, “DES Legacy,” ABA Journal 76, June 1990, p. 14.
Amy Dockser Marcus, “Few Large Jury Awards Survive Appeal,” The Wall Street Journal, January 28,
1991, p. B6.
Amy Dockser Marcus, “Grandchild May Widen Liability with DES Suit,” The Wall Street Journal,
January 7, 1991, p. B1.
Andrew Pollack, “Paper Trail Haunts G. M. After It Loses Injury Suit,” New York Times, July 12, 1999,
p. A12.
“Safety Belts Could Have Saved 10,000 in 1988,” Des Moines Register, June 14, 1989, p. 1T.
Mark Schlinkmann, “St. Louis Files Lawsuit against 27 Defendants in Gun Industry,” St. Louis
Post-Dispatch, May 1, 1999, p. 8.
Peter Schuck, Agent Orange on Trial: Mass Toxic Disasters in the Court (Cambridge: Belknap Press of
Harvard University Press 1987).
Tim Smart, “The Liability Battle: Business Becomes a Road Warrior,” Business Week, April 9, 1990, p.
25.
Bradley A. Stertz, “Suzuki Takes Extraordinary Measures to Halt Sales Plunge of Samurai Model,” The
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any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 07 – Business Torts and Product Liability
Wall Street Journal, July 15, 1988, p. 16.
Joan C. Szabo, “The Maze of Product Liability,” Nation’s Business, June 1990, p. 62.
Neal Templin, “Ford Settles Big Lap-Belt Injury Suit,” The Wall Street Journal, April 5, 1990, p. B1.
“Tobacco’s First Loss,” Time, June 27, 1988, p. 48.
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