Product Liability Law: Liability for Manufacturing Defects That Cause Injuries




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Product Liability for Manufacturing Defect Claims

 

Product liability is the area of law that governs the liability of entities responsible for placing products into the stream of commerce and who are liable for injuries caused by defective products.

 

Product liability law is mainly derived from tort law. Torts are acts or omissions that give rise to injury or harm to another and amount to civil wrongs for which courts can impose liability. In the context of torts, "injury" describes the invasion of any legal right, whereas "damages" describes loss or detriment that victims suffer.[1] There are three levels of intent relevant to tort law:

 

•Intentional: where the defendant knew or should have known that harm would result from his or her actions

 

•Negligent: where the defendant's actions were unreasonably unsafe and in which the defendant either intentionally engaged in risky behavior or failed to reasonably perceive a risk in his behavior; and

 

•Strict Liability: cases in which liability attaches even though the defendant was not at fault.

 

In most cases, intentional or negligent action is required for liability to attach. However, in some cases (including certain product liability actions), liability can attach even though the defendant did not engage in negligent or intentionally harmful behavior.

 

Product liability refers to the liability of any or all parties along the chain of commerce of any product for damage caused by that product. When a defective product causes injury, the manufacturer of the product, the distributor, the wholesaler and the retailer who sold the product may all be liable under product liability rules.

 

The law of product liability is mainly found in case law, the Uniform Commercial Code and in many state statutes that deal with product liability. Also, the United States Department of Commerce has implemented a Model Uniform Product Liability Act (MUPLA) for voluntary use by the states.[2]

 

There are four possible bases for product liability:

 

1.    Defects in design. This occurs when the design of the product makes the product unreasonably dangerous. To establish defective design, it must be shown that the product is more dangerous that it would otherwise be but for the design defect. It is understood that certain products are inherently dangerous and this does not necessarily constitute defective design. For example, a gun manufacturer would not be liable for defective design just because a gun was used to kill someone, but may be liable if the gun’s safety mechanism failed.

 

2.    Manufacturing defects. A manufacturing defect occurs when something goes wrong with the construction or production of an individual unit.[3] A mistake made on the assembly line causing an automobile to malfunction is a classic example of a manufacturing defect.

 

3.    Failure to warn. This occurs when the product is not unreasonably unsafe, but contains certain dangers that the customer should have been made aware of. These include improper instructions and failures to warn consumers of latent dangers in products. This basis for liability is common in prescription drug liability cases.

 

4.    Breach of warranty. Liability will arise even when a product is not unreasonably unsafe if the product failed to live up to a safety standard expressly or impliedly promised by the manufacturer or seller. Express warranties mean warranties stated or published outright, while the law adds “implied” warranties that products will perform as would reasonably be expected (the “implied warranty of merchantability”)[4] and where the seller knew that a consumer needed a product for a specific purpose (“implied fitness for a particular purpose”).[5]

 

In the cases of defective design or failure to warn, some level of negligence or fault must be shown for liability to accrue. Lawsuits based on these defects are negligence lawsuits and are decided based on applicable negligence rules and standards.

 

However, in the case of a manufacturing defects, the manufacturer is strictly liable for damages that result from a defect.  It is irrelevant whether the manufacturer exercised great care; if there is a defect in the product that causes harm, he or she will be held liable for it.[6] The same is true in a breach of warranty case. Where the product does not live up to the express or implied warranties of the manufacturer or seller, the manufacturer or seller will be strictly liable for damages caused by these defects.[7]

 

However, in the case of a manufacturing defect, many courts have held that strict liability does not apply to defects “that the manufacturer could not have guarded against,” although the manufacturer “may be held liable once those dangers or defects are discovered.”[8] So, although there is liability even when the manufacturer is not at fault for the defect, there will not be liability when there was nothing the manufacturer could have done to prevent the defect.

 

            As an example of fault-based occurred in a 2016 case, In re DePuy Orthopaedics Inc. Pinnacle Hip Implant Product Liability Litigation, five plaintiffs were awarded damages based on defective hip implants.[9] The lawsuit against DePuy was based on a defective metal-on-metal hip prosthesis that was found to “cause serious health problems, including inflammation of surrounding tissues, bone erosion and metallosis, a toxic condition allegedly caused when the device’s components grind against each other and shed metal debris into the bloodstream.” The jury found that the hip implants were designed defectively and that the company failed to appropriately warn patients of the risks associated with the devices. This illustrates a case in which multiple theories of product liability were applied.[10] Because defective design and failure to warn were the two bases for the cause of action, negligence was required (and was shown) for liability.

 

Ji Chang Son, et al. v. Tesla, Inc., a proposed class action lawsuit filed in March, 2017 against automaker Tesla, is an example that helps distinguish between a design defect (which is governed by the rules for ordinary negligence) and a manufacturing defect (which applies a strict liability standard). That lawsuit alleged that a software defect in some of Tesla’s models can cause unintended acceleration, which has resulted in numerous crashes.[11] The lawsuit also alleges “that even if every incident was caused by human error, Tesla has a legal responsibility to create a ‘fail-safe’ that would stop the acceleration.” The lawsuit alleged defective design and breach warranty.

 

In April 2017, Tesla filed a motion in which it argued that the incidents of unintended acceleration were caused by human error and “that automakers have no duty to design a fail-safe into their vehicles.” Tesla argues that the courts have clearly differentiated between design defects and manufacturing defects and that its defect is one of design, and therefore not subject to strict liability. Regarding the breach of warranty, Tesla also argues that its warranty only covers manufacturing defects, not design defects.

 

Ultimately, if the defect is due to a design flaw and not a manufacturing flaw, the court will apply the rules of ordinary negligence. However, if the court finds that the cause of the unintended acceleration is a result of a manufacturing defect, then the strict liability standard will most likely apply and Tesla’s claim that automakers “have no duty to design a fail-safe into their vehicles” will be irrelevant.

 

Product liability is a complex area of law. While there are many standards and tests used to determine fault, the main thrust of product liability law indicates that manufacturers and sellers of products in the stream of commerce are liable for most cases in which their defective products cause injuries.



Footnotes:

[1] 2 Restatement (Second) of Torts § 7

[3] Cornell Law School: Legal Information Institute, “Product Reliability Law: An Overview”

[4] See U.C.C. § 2-314

[5] See U.C.C. § 2-315

[6] See Greenman v. Yuba Power Products, Inc., 59 Cal. 2d 57 (Cal. 1963)

[7]  See U.C.C. § 2-314

[8] Welge v. Planters Lifesavers Co., 17 F.3d 209 (7th Cir. 1994).

[9] In re DePuy Orthopaedics Inc. Pinnacle Hip Implant Product Liability Litigation, case number 3:11-md-02244, in the U.S. District Court for the Northern District of Texas (2017).

[10] Densfor, Fink “Jury levels $1B verdict against J&J’s DePuy Ortho in Pinnacle hipbellwether” (2016). 

[11] Field, Emily. “The Top Product Liability Cases Of 2016: Midyear Report” (2017).