Unformatted text preview: Strict Liability
re: Dangerous Activities re: Products
Fault is not necessary, but one must always show causation and harm Competing View on Strict Liability
Serves as a necessary restraint on business Everyone Agrees: Products Should Be Made as Safe as Is Practical
But how to do so? Test for Strict Liability for Activities
Strict Liability if these three questions are answered: 1. Is there a high level of danger from the activity? 2. Can the risk in the activity be reduced by reasonable measures? 3. Is the activity unusual in that locale? YES, NO, YES means strict liability Product Liability
A matter of public policy, with three main decision makers Our J, P, B Hatted Volunteers! Jury/Judicial System
Case-by-case basis Not as efficient as a comprehensive legislative or regulatory approach Legislatures
Can hold hearings and enact systematic approaches Lawmakers are representative (elected), but often are influenced by lobbyists Bureaucrats
Conduct investigations Bring in experts Put in time to hold hearings Can promulgate rules, but - compared to juries and legislature - these administrative agencies are least representative of the populace In Product Liability, one can sue based on negligence, strict liability, and/or warranties Plaintiffs/Defendants Product Liability (PL) cases receive far more attention from business & government than is proportionate to PL's share of all tort cases (only 4%) But the impact of PL cases on industries, individual businesses, employees, and consumers is often far greater than those low numbers might indicate LOTS of WORRY about LAWSUITS Who is liable for a defective product?
Each party in the chain of distribution may be liable: 1. Manufacturers 2. Wholesalers 3. Retailers. So, there is a broad class of potential plaintiffs and defendants. But the sellers of used goods rarely are liable unless: (a) the seller itself was negligent in poorly making, replacing, or repairing a product or part; or (b) the seller provided a warranty (and, to give some protection in one industry, some states require short-term guarantees for used-car sales) Successor corporations
Tend to be liable for the acquired company's debts, including product liability judgments or claims stemming from the acquired business' actions before it was acquired Experts
Use of Experts is quite frequent Experts assist the fact finder, especially concerning duties, breaches, defects, and damages Expert testimony frequently is the focal point of a product liability case Paying the Expert - No contingency fee for experts, who are supposed to NOT be financially motivated to "win" Why Impose Strict Liability on a Manufacturer or Other Seller?
1. 2. 3. 4. 5. Make it the insurer of its product It has control over product quality It can distribute costs It can bear burdens better than others (e.g., the consumer) can Morality - it has special responsibilities Strict Liability
DEUNCH: Defective Product Engaged in business of making/selling product Unreasonably dangerous to user No substantial change to the product after leaving defendant's control Causation Harm Four States (Delaware, Michigan, North Carolina, and Virginia) do not apply strict liability to products cases What is a defect?
Something that leaves a product unreasonably dangerous Defects may exist when products are/were: poorly made; badly designed; or with insufficient or nonexistent warnings Lack of "crashworthiness" can be a defect Legal Tests for Product Defect
There are 2 tests for determining whether a product is defective under strict liability: 1. Consumer Expectations 2. Risk-benefits analysis Some states have replaced the Consumer Expectations test with a "reasonable alternative design" standard What is a material change to a product?
Ordinarily, a merely decorative alteration would not be a material change An alteration of a product's working components would be a material change Privity Product Liability Proposals:
1. 2. 3. Make product liability laws uniform Establish a national statute of limitations Allow federal courts to hear most class-action suits the Class Action Fairness Act of 2005 (CAFA) probably has accomplished that 4. Bar suits involving long-standing products statutes of repose (as is found in Florida) 5. Permit defenses that the victim's alcohol/drug abuse helped to cause his/her injuries 6. Provide more scrutiny of lawyers who reach settlements offering their clients "coupons" for goods or services, instead of cash again, CAFA has done that, by limiting attorney fees in class actions to be based on the money value of coupons actually redeemed, not just issued 7. Permit an immediate appeal when a court certifies a case as a class action - perhaps less need for that due to enactment of CAFA 8. Protect companies from the discovery process when they have dismissal motions pending so few defense costs unless the judge permits the case to go forward. 9. Require plaintiffs to more clearly specify the relief they seek 10. Require arbitration or another alternate dispute resolution early in the process 11. Abolish joint and several liability 12. SEE Barron's text, pp. 430 & 438 for other reforms, such as (a) barring punitive damages for a defect in a product that a government agency approved; and (b) capping punitive damages. Many state legislatures have done that, but some courts have overturned the provisions as unconstitutional infringements on the right to a jury trial or other protections. An anti"reform" concern
Constraints on liability findings and caps on damages awards raise due process concerns Fighting the Cases
In reaction to the seeming ease in which strict product liability cases have proceeded, some courts have adopted rules that better enable defendants to fight such suits DEFENSES Among the defenses which may bar or reduce a product liability plaintiff's recovery in a number of states are: 1. Product misuse 2. Assumption of risk 3. Sophisticated purchaser 4. Preemption 5. State-of-the- art We are not responsible for anything that may go wrong with any item sold at this store. Sorry, you're out of luck. Disclaimers of Warranties So to avoid liability, WARN, WARN, WARN!
Let there be no doubt that any even semi-attentive observer would have noticed these warnings. Some Favorites Found on a butane lighter Warning: Flame may cause Fire Found on a child's stroller Warning: Remove child before folding Found on Frito-Lay's Max Potato Chips Warning: This product contains Olestra. Olestra may cause abdominal cramping and loose stools. Olestra inhibits the absorption of some vitamins and other nutrients. Vitamins A, D, E and K have been added. ...
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- Spring '08
- representative, Product liability, Olestra, CAFA