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C H A P T E R 1 0
PRODUCT LIABILITY
INTRODUCTION
Product liability is the legal liability manufacturers and suppliers have for defective products that
injure a purchaser, user, bystander, or property. Liability extends to anyone in the chain of
distribution: manufacturers, distributors, wholesalers, and retailers. The general trend is towards
I. THEORIES OF RECOVERY. The primary theories on which a product liability claim can
be brought are breach of warranty, negligence, and strict liability.
A. Breach of Warranty.
1. Common Law Warranties and Privity of Contract is a breach-of-warranty
2. UCC Warranties may be express or implied, for merchantability or
particular purchase.
B. Negligence. To prove negligence for product liability, plaintiff must show that
CASE 10.1 MacPherson v. Buick Motor Co., 111 N.E.2d 1050 (N.Y. 1916).
MacPherson purchased a new car from a Buick dealer, who had
purchased the car directly from the manufacturer. MacPherson
C. Strict Liability in Tort. A person injured by an unreasonably dangerous product
can recover damages from the manufacturer or seller of the product.
1. Rationale.
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2. Elements of Strict Liability Claim. Plaintiff must prove that the plaintiff
II. LITIGATION STRATEGY AND PUNITIVE DAMAGES. Negligence and warranty actions
are generally secondary to strict liability. Strict liability is easier to prove for the plaintiff
need not prove negligence or privity of contract.
III. WHAT IS A PRODUCT? What a court qualifies as a product is unclear at times.
A. Products versus Services or Information. Courts generally hold that for a product
B. Software. Varying results, there is no bright line.
C. Fixtures and Structural Improvements. Some courts hold that fixtures are not
personal property and therefore cannot be a ‘product’ in the technical sense.
IV. WHAT MAKES A PRODUCT DEFECTIVE? Plaintiffs must prove that the product was
defective when it left the manufacturer or seller, and the defect made the product
unreasonably dangerous.
A. Manufacturing Defect is a flaw in the product that occurs during production, such
as a failure to meet the design specifications.
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CASE 10.2 Ramirez v. Plough, Inc., 863 P.2d 167 (Cal. 1993). Jorge
Ramirez, four months old, was given St. Joseph’s Aspirin
for Children, for a cold or upper respiratory infection, by
2. Causation Requirement. Plaintiff must show that defendant breached a
duty to warn and that the defendant’s failure to warn was the proximate
cause of plaintiff’s injuries.
D. Unavoidably Unsafe Products. Nearly every state follows the Restatement
V. WHO MAY BE STRICTLY LIABLE FOR PRODUCT DEFECTS? Each party in the chain of
distribution may be liable: manufacturers, distributors, wholesalers, and retailers.
A. Manufacturers of Products and Component Parts. So long as the manufacturer
sells the product (even just a component part), it is strictly liable for defects.
VI. SUCCESSOR, MARKET SHARE, AND PREMISES LIABILITY.
A. Successor Liability. A successor corporation is liable for its debts (and defective
products) of the original corporation.
B. Market-Share Liability. If multiple manufacturers produce identical products, the
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C. Premises Liability. Applies to manager for failure to warn about asbestos
dangers.
VII. PRODUCT LIABILITY CLASS ACTIONS. Product liability cases are frequently resolved
through class action litigation, e.g., tobacco, breast implants, and harmful diet drugs.
VIII. COMMON LAW DEFENSES. Defenses to product liability include the following:
Traditional tort defenses: assumption of risk; comparative negligence (fault). Other
defenses: obvious risk; unforeseeable use; statute of limitations; government-contractor;
and state-of-the-art.
A. Assumption of Risk. When a person voluntarily and unreasonably assumes the
risk of a known danger, the manufacturer is not liable for any resulting injury.
CASE 10.3 James v. Meow Media Inc., 300 F.3d 683 (6th Cir. 2002). In 2002,
a teenager shot and killed eight people in his school in Paducah,
Kentucky. The families of the victims sued the video game maker.
HELD: Dismissed. The child’s criminal acts were not a
E. Government-Contractor Defense. A manufacturer can avoid product liability if
the product was manufactured according to government specifications.
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G. Preemption Defense can be used to preclude state product liability law when
manufacturer complies with federal laws. The defense depends largely on the
language and context of the federal statute at issue.
1. Tobacco.
CASE 10.4 Pliva v. Mensing, 131 S.Ct. 2567 (2011). Consumers sued
IX. OTHER LEGISLATIVE LIMITS ON LIABILITY. Since the 1980s a number of state
legislatures have enacted a number of laws to reduce or limit product liability.
A. Limitations on Non-Manufacturers’ Liability. Some states absolve non-
manufacturer/sellers in the chain of distribution from strict liability claims.
E. Statute of Limitations. When the date of injury is uncertain (e.g. from asbestos)
the statute of limitations does not begin to run until the person discovers their
injury.
1. Discovery of Injury Statutes. When dealing with some products, e.g.,
asbestos, the statute of limitations clock does not start ticking until the
injury is discovered.
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F. Statutes of Repose cuts off the right to assert a cause of action after a specified
period of time from the delivery of the product or completion of work.
1. Useful Life Statutes differ from statutes of limitation and repose in that
they differ in how they define the time in which a product should safely
provide utility to the user.
X. TOBACCO, GUNS, AND BIG FOOD. Dramatic applications of product liability law have
been applied against tobacco and gun companies. Litigation by private individuals
against gun companies has had mixed results.
A. Tobacco. Forty-six states and the federal government brought lawsuits and
reached settlements with the tobacco industry. Litigation has occurred outside the
XI. PROBLEMS WITH THE PRODUCT LIABILITY SYSTEM AND THE RESTATEMENT
(THIRD) APPROACH TO DESIGN DEFECTS. Current product liability scheme has been
criticized which leads to higher manufacturing costs, ultimately taking its toll on industry
efficiency and competitiveness.
A. Design Defects and the Reasonable-Alternative-Design Requirement. The new
Restatement avoids the term “strict liability” proposing instead that any claim of
design defect be supported by a showing of a reasonable alternative design.
CASE 10.5 Branham v. Ford Motor Co., 701 S.E.2d 5 (S.C. 2010).
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THE RESPONSIBLE MANAGER: TEACHING SUGGESTIONS.
1. Discuss what steps managers should take to minimize their company’s exposure to
liability in the design, manufacture, assembly, and sale of its products.
2. Should pharmaceutical companies that distribute drugs with known side effects be liable
when those side effects occur in a small, but certain percentage of users?