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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.
[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).