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					                             Law and Economics
                                    Economics 395
                                    Martin K. Perry
                                     Summer 2010

                          Course Packet – Tort Law

Negligence
       MacPherson v. Buick Motor (NY, 1912)            Page 2

Strict Liability (California cases)
         Escola v. Coca Cola (CA, 1944)                Page 13
         Greenman v. Yuba Power (CA, 1963)             Page 23

Negligent Design (automobiles)
       Larsen v. General Motors (MI, 1968)             Page 28
       Young v. Volkswagon (MD, 1974)                  Page 38

Duty to Warn (medical products)
        MacDonald v. Ortho Pharmaceutical (MA, 1985)   Page 51
        Vassallo v. Baxter Healthcare (MA, 1998)       Page 63

Punitive Damages
        Baker v. Exxon (US, 2008)                      Page 71




                                                                 1
                     Donald C. MacPherson, Appellant,
                                   v.
                     Buick Motor Company, Respondent
         Supreme Court of New York, Appellate Division, Third Department
                          153 A.D. 474; 138 N.Y.S. 224

                                  November 13, 1912

PRIOR HISTORY: Appeal by the plaintiff, Donald C. MacPherson, from a judgment
of the Supreme Court in favor of the defendant, entered in the office of the clerk of the
county of Saratoga on the 3d day of July, 1912, upon the dismissal of the complaint by
direction of the court at the close of plaintiff's case on a trial at the Saratoga Trial
Term.

DISPOSITION: Judgment reversed and new trial granted, with costs to appellant to
abide event.

COUNSEL: Edgar T. Brackett [Harold H. Corbin of counsel], for the appellant.
Frederick E. Wadhams [William Van Dyke of counsel], for the respondent.

JUDGES: Judge Betts, all concurred; Judge Houghton in memorandum.

OPINION BY: Judge Betts

OPINION

[1] The plaintiff was the owner of an automobile known as a model 10 runabout
purchased by him of Close Brothers who had purchased the same from the defendant,
the manufacturer thereof. While operating said automobile upon the public highway
one of the rear wheels collapsed by which plaintiff was thrown out and injured. He
brought this action against the defendant, as manufacturer, alleging that the defendant
was careless and negligent in the manufacture of said automobile and failed to use due
care in its construction and in testing the same, and the materials of which it was made,
and that it was constructed for the purpose of running at considerable speed upon
ordinary highways and for that purpose it was necessary that good and strong and
proper materials should be used in its wheels and that such materials used in the wheels
should be sufficiently inspected and tested to show that they were strong and durable
and safe, and that the defendant negligently put wheels upon said machine in question
the spokes of which were of inferior and unsuitable and unsafe timber and which
material was not sound but was brittle or brash, and that while plaintiff was carefully
running and operating said machine, the spokes of one of the wheels of said machine
gave way and broke and the machine was let down and overturned because of the
breaking of said spokes and the plaintiff was thrown out and injured.




                                                                                        2
[2] The defendant's answer does not deny but that in the year 1909 it sold and
delivered to Close Brothers an automobile known as model 10 runabout, and does not
deny but that the said automobile referred to in the complaint was constructed to run at
considerable speed on ordinary highways and that it was necessary that good and
strong material should be used in the wheels on said machine. It alleges that there is no
contractual relations between the plaintiff and the defendant and for a further defense
alleges that the said automobile was constructed by the defendant out of parts some of
which were made exclusively by the defendant and other parts used upon the wheels of
the car referred to in the complaint were not manufactured by the defendant but were
manufactured by the Imperial Wheel Company of Flint, Mich., a reputable
manufacturer and dealer, and were purchased by the defendant from the said Imperial
Wheel Company.

[3] The case came on for trial and at the close of the plaintiff's case the defendant's
motion for a nonsuit was granted by the court, from which the plaintiff appeals.

[4] It appeared upon the trial that the plaintiff, who is a resident of the village of
Galway, Saratoga county, purchased this automobile of Close Brothers (to whom the
defendant had sold it) of the city of Schenectady, that it was a model 10 Buick, 1910,
runabout with a seat for two in front with a rumble seat for one on the box behind. The
horse power was twenty-two and one-half and it was rated to go fifty miles per hour
and its weight was from 1,500 to 1,800 pounds. Plaintiff used the automobile during
the summer and fall of 1910. He next used it again in May, 1911, and used it
intermittently, caring for it himself, and never observing any breaks in the spokes until
July 25, 1911. On that day he left Galway and proceeded to the residence of a man by
the name of John E. Carr, an invalid, and took John E. Carr in the seat with him and a
relative of Carr, Charles E. Carr, in the rumble seat behind, starting to go to Saratoga
Springs to leave John E., who was ill, at a hospital. They had gone through Ballston
Spa and were near Saratoga Springs, running about fifteen miles an hour, and near the
middle of the road, near the Standard Oil Company's plant. Just outside of Saratoga
Springs and some 250 or 300 feet back of where the accident occurred, the hind wheel
either ran in a rut or in some way skidded some in the road; the plaintiff, who was
running the machine, threw off the power, and turned the machine a little to the left to
right it; then he put on the power again and pulled back towards the right-hand side of
the road, the proper side to proceed. As he was turning to the right he heard a smash
and looked back, and the rear left-hand side of the car was going down, and it did go
down six or eight inches to the ground, the axle scraping on the road. Immediately
looking forward again the automobile turned in towards a telephone pole on the right
of the road, plaintiff gave the steering wheel a turn to the left to avoid the pole, but the
end of the frame hit it and the car swung around, and, it is claimed, turned completely
around and ran on the right side of the road, facing back towards Ballston Spa, from
which they had been coming.

[5] This was all done quickly. At the time of the accident the machine was not going
as fast as fifteen miles an hour. Plaintiff was found after the fall under the hind axle of




                                                                                           3
the machine. He was released with some difficulty and had received the injuries for
which the action was brought.

[6] The left hind wheel was the one that collapsed. It was some thirty inches in
diameter and had twelve spokes, all of which were broken out.

[7] There was evidence given from which the jury might have found that these spokes
were nearly all of them of inferior hickory wood, and were brittle or brash, some of
them worse than others, and not of first quality any of them, and that there were tests
by which the inferiority of this wood could have been discovered prior to its
manufacture and being put in this wheel; that different kinds of tests were practicable
and would have disclosed the inferiority of this wood and the fact that it was not safe
for the use to which it was put. There was evidence from which the jury might have
found that the running of this automobile at an ordinary rate of speed upon an ordinary
country road, or running it at the rate for which it was rated to be run, would be
dangerous to persons riding in it and occupying it. It was occupied by three persons
only at the time, and the testimony was that it was not going at a rapid rate of speed,
and that nothing had happened to put it to an extraordinary test or put any extraordinary
strain upon it. This automobile was manufactured and sold to be used upon the public
highways or streets. It was sold to a firm in Schenectady. Schenectady is a large city,
and within a radius of a few miles, a distance likely to be reached by the owner of an
automobile, there are many other cities, large and small, so that the manufacturer sold
this car with a reasonable expectation that it would be used in and about a city district
or a district containing many cities. Galway is about seventeen miles from
Schenectady.

* * *

[8] I think this case falls within the rule established by the Court of Appeals in the
Statler case quoted from and the numerous cases quoted by that court, and I think that
the question at issue should have been under proper instructions submitted to the jury.

[9] I, therefore, favor a reversal of the judgment, with a new trial to plaintiff, costs to
abide the event.




                                                                                          4
                      Donald C. MacPherson, Respondent,

                                    v.
                      Buick Motor Company, Appellant
                            Court of Appeals of New York
                            217 N.Y. 382; 111 N.E. 1050

                               January 24, 1916, Argued
                               March 14, 1916, Decided

PRIOR HISTORY: Appeal, by permission, from a judgment of the Appellate
Division of the Supreme Court in the third judicial department, entered January 8,
1914, affirming a judgment in favor of plaintiff entered upon a verdict.

MacPherson v. Buick Motor Co., 160 App. Div. 55, affirmed.

DISPOSITION: Judgment affirmed.

COUNSEL: William Van Dyke for appellant. An automobile is not an inherently
dangerous article. (Slater v. Thresher Co., 97 Minn. 305; Danforth v. Fisher, 75 N. H.
111; Cunningham v. Castle, 127 App. Div. 580; Vincent v. Seymour, 131 App. Div.
200; Lewis v. Snorous, 59 S. E. Rep. [Ga.] 338; Huddy on Automobile, 15; Steffen v.
McNaughton, 142 Wis. 409; Jones v. Hope, 47 Wash. 633; Johnson v. Cadillac, 194
Fed. Rep. 497; 221 Fed. Rep. 801.) An automobile not being an article inherently
dangerous, defendant was not liable to a third party in simple negligence -- that is, for
negligence as contradistinguished from willful or knowing negligence, or in a
negligence action as distinguished from an action for deceit, fraud or
misrepresentation, to third parties not in contractual relations with it. (Salisbury v.
Howe, 87 N. Y. 132; Landeman v. Russell, 91 N. E. Rep. 822; Pa. Steel Co. v. Elmore
& H. Co., 175 Fed. Rep. 176; Wellington v. Downer, 104 Mass. 64; Devlin v. Smith,
89 N. Y. 470; Savings Bank v. Ward, 100 U.S. 195; Waters-Pierce Oil Co. v. Deselms,
212 U.S. 179; R. & D. Railroad v. Elliott, 149 U.S. 272; Penn. Ry. Co. v. Hummell,
167 Fed. Rep. 89.) A contention that defendant is liable because, though an automobile
is not inherently a dangerous thing, if it has a defective wheel, it is an imminently
dangerous thing, and if imminently dangerous, the same rule follows as though it were
an inherently dangerous thing, cannot be sustained. (Cadillac M. C. Co. v. Johnson,
221 Fed. Rep. 801; Titus v. R. R. Co., 136 Penn. St. 618; Statler v. Ray Mfg. Co., 125
App. Div. 71; Statler v. Ray Mfg. Co., 195 N. Y. 478; Marquardt v. Engine Co., 122
Fed. Rep. 374).

Edgar T. Brackett for respondent. An automobile, propelled by explosive gases,
certified and put out, as here conceded, to run at a speed of fifty miles an hour, to be
managed by whomsoever may purchase it, is a machine inherently dangerous. (Texas
v. Barrett, 67 Fed. Rep. 214; Statler v. Ray, 195 N. Y. 478; Torgeson v. Schultz, 192
N. Y. 156; Kahner v. Otis, 96 App. Div. 169; Favo v. Remington, 67 App. Div. 414;


                                                                                        5
Olds Motor Works v. Shaffer, 145 Ky. 616; Kuelling v. Lean Mfg. Co., 183 N. Y. 78;
Cadillac M. C. Co. v. Johnson, 221 Fed. Rep. 801; Thomas v. Winchester, 6 N. Y.
397.) The defendant was the manufacturer of the machine and subject to all the
liabilities of a manufacturer, even if it purchased and did not itself actually put together
the defective wheel which caused the plaintiff's injury. (People ex rel. v. Morgan, 48
App. Div. 395; Norris v. Com., 27 Penn. St. 494; Tidewater, etc., v. United States, 171
U.S. 210; Commonwealth v. Keystone, 156 Penn. St. 500; New Orleans v. Le Blanc,
34 La. Ann. 596; New Orleans v. Ernst, 35 La. Ann. 746; State v. Wiebert, 51 La. Ann.
122; Allen v. Smith, 173 U.S. 389; Hegeman v. W. R. R. Corp., 13 N. Y. 9; Carlson v.
Phoenix, etc., Co., 132 N. Y. 273.)

JUDGES: Judge Cardozo, Judges Hiscock, Chase and Cuddeback, concur with Judge
Cardozo, and Judge Hogan, concurs in result. Chief Judge Willard Bartlett, reads
dissenting opinion; Judge Pound, not voting.

OPINION BY: Judge Cardozo

OPINION

[1] The defendant is a manufacturer of automobiles. It sold an automobile to a retail
dealer. The retail dealer resold to the plaintiff. While the plaintiff was in the car, it
suddenly collapsed. He was thrown out and injured. One of the wheels was made of
defective wood, and its spokes crumbled into fragments. The wheel was not made by
the defendant; it was bought from another manufacturer. There is evidence, however,
that its defects could have been discovered by reasonable inspection, and that
inspection was omitted. There is no claim that the defendant knew of the defect and
willfully concealed it. The case, in other words, is not brought within the rule of
Kuelling v. Lean Mfg. Co. (183 N. Y. 78). The charge is one, not of fraud, but of
negligence. The question to be determined is whether the defendant owed a duty of
care and vigilance to any one but the immediate purchaser.

[2] The foundations of this branch of the law, at least in this state, were laid in Thomas
v. Winchester (6 N. Y. 397). A poison was falsely labeled. The sale was made to a
druggist, who in turn sold to a customer. The customer recovered damages from the
seller who affixed the label. "The defendant's negligence," it was said, "put human life
in imminent danger." A poison falsely labeled is likely to injure any one who gets it.
Because the danger is to be foreseen, there is a duty to avoid the injury. Cases were
cited by way of illustration in which manufacturers were not subject to any duty
irrespective of contract. The distinction was said to be that their conduct, though
negligent, was not likely to result in injury to any one except the purchaser. We are not
required to say whether the chance of injury was always as remote as the distinction
assumes. Some of the illustrations might be rejected to-day. The principle of the
distinction is for present purposes the important thing.

[3] Thomas v. Winchester became quickly a landmark of the law. In the application of
its principle there may at times have been uncertainty or even error. There has never in



                                                                                           6
this state been doubt or disavowal of the principle itself. The chief cases are well
known, yet to recall some of them will be helpful. Loop v. Litchfield (42 N. Y. 351) is
the earliest. It was the case of a defect in a small balance wheel used on a circular saw.
The manufacturer pointed out the defect to the buyer, who wished a cheap article and
was ready to assume the risk. The risk can hardly have been an imminent one, for the
wheel lasted five years before it broke. In the meanwhile the buyer had made a lease of
the machinery. It was held that the manufacturer was not answerable to the lessee.
Loop v. Litchfield was followed in Losee v. Clute (51 N. Y. 494), the case of the
explosion of a steam boiler. That decision has been criticised (Thompson on
Negligence, 233; Shearman & Redfield on Negligence [6th ed.], § 117); but it must be
confined to its special facts. It was put upon the ground that the risk of injury was too
remote. The buyer in that case had not only accepted the boiler, but had tested it. The
manufacturer knew that his own test was not the final one. The finality of the test has a
bearing on the measure of diligence owing to persons other than the purchaser (Beven,
Negligence [3d ed.], pp. 50, 51, 54; Wharton, Negligence [2d ed.], § 134).

[4] These early cases suggest a narrow construction of the rule. Later cases, however,
evince a more liberal spirit. First in importance is Devlin v. Smith (89 N. Y. 470,
1882). The defendant, a contractor, built a scaffold for a painter. The painter's servants
were injured. The contractor was held liable. He knew that the scaffold, if improperly
constructed, was a most dangerous trap. He knew that it was to be used by the
workmen. He was building it for that very purpose. Building it for their use, he owed
them a duty, irrespective of his contract with their master, to build it with care.

[5] From Devlin v. Smith we pass over intermediate cases and turn to the latest case in
this court in which Thomas v. Winchester was followed. That case is Statler v. Ray
Mfg. Co. (195 N. Y. 478, 480). The defendant manufactured a large coffee urn. It was
installed in a restaurant. When heated, the urn exploded and injured the plaintiff. We
held that the manufacturer was liable. We said that the urn "was of such a character
inherently that, when applied to the purposes for which it was designed, it was liable to
become a source of great danger to many people if not carefully and properly
constructed."

[6] It may be that Devlin v. Smith and Statler v. Ray Mfg. Co. have extended the rule
of Thomas v. Winchester. If so, this court is committed to the extension. The defendant
argues that things imminently dangerous to life are poisons, explosives, deadly
weapons -- things whose normal function it is to injure or destroy. But whatever the
rule in Thomas v. Winchester may once have been, it has no longer that restricted
meaning. A scaffold (Devlin v. Smith, supra) is not inherently a destructive instrument.
It becomes destructive only if imperfectly constructed. A large coffee urn (Statler v.
Ray Mfg. Co., supra) may have within itself, if negligently made, the potency of
danger, yet no one thinks of it as an implement whose normal function is destruction.
What is true of the coffee urn is equally true of bottles of aerated water (Torgeson v.
Schultz, 192 N. Y. 156). We have mentioned only cases in this court. But the rule has
received a like extension in our courts of intermediate appeal. In Burke v. Ireland (26
App. Div. 487), in an opinion by Cullen, J., it was applied to a builder who constructed



                                                                                         7
a defective building; in Kahner v. Otis Elevator Co. (96 App. Div. 169) to the
manufacturer of an elevator; in Davies v. Pelham Hod Elevating Co. (65 Hun, 573;
affirmed in this court without opinion, 146 N. Y. 363) to a contractor who furnished a
defective rope with knowledge of the purpose for which the rope was to be used. We
are not required at this time either to approve or to disapprove the application of the
rule that was made in these cases. It is enough that they help to characterize the trend
of judicial thought.

[7] Devlin v. Smith was decided in 1882. A year later a very similar case came before
the Court of Appeal in England (Heaven v. Pender, L. R. [11 Q. B. D.] 503). We find
in the opinion of Brett, M. R., afterwards Lord Esher (p. 510), the same conception of a
duty, irrespective of contract, imposed upon the manufacturer by the law itself:
"Whenever one person supplies goods, or machinery, or the like, for the purpose of
their being used by another person under such circumstances that every one of ordinary
sense would, if he thought, recognize at once that unless he used ordinary care and skill
with regard to the condition of the thing supplied or the mode of supplying it, there will
be danger of injury to the person or property of him for whose use the thing is supplied,
and who is to use it, a duty arises to use ordinary care and skill as to the condition or
manner of supplying such thing." He then points out that for a neglect of such ordinary
care or skill whereby injury happens, the appropriate remedy is an action for
negligence. The right to enforce this liability is not to be confined to the immediate
buyer. The right, he says, extends to the persons or class of persons for whose use the
thing is supplied. It is enough that the goods "would in all probability be used at once *
* * before a reasonable opportunity for discovering any defect which might exist," and
that the thing supplied is of such a nature "that a neglect of ordinary care or skill as to
its condition or the manner of supplying it would probably cause danger to the person
or property of the person for whose use it was supplied, and who was about to use it."
On the other hand, he would exclude a case "in which the goods are supplied under
circumstances in which it would be a chance by whom they would be used or whether
they would be used or not, or whether they would be used before there would probably
be means of observing any defect," or where the goods are of such a nature that "a want
of care or skill as to their condition or the manner of supplying them would not
probably produce danger of injury to person or property." What was said by Lord
Esher in that case did not command the full assent of his associates. His opinion has
been criticised "as requiring every man to take affirmative precautions to protect his
neighbors as well as to refrain from injuring them" (Bohlen, Affirmative Obligations in
the Law of Torts, 44 Am. Law Reg. [N. S.] 341). It may not be an accurate exposition
of the law of England. Perhaps it may need some qualification even in our own state.
Like most attempts at comprehensive definition, it may involve errors of inclusion and
of exclusion. But its tests and standards, at least in their underlying principles, with
whatever qualification may be called for as they are applied to varying conditions, are
the tests and standards of our law.

[8] We hold, then, that the principle of Thomas v. Winchester is not limited to poisons,
explosives, and things of like nature, to things which in their normal operation are
implements of destruction. If the nature of a thing is such that it is reasonably certain to



                                                                                           8
place life and limb in peril when negligently made, it is then a thing of danger. Its
nature gives warning of the consequences to be expected. If to the element of danger
there is added knowledge that the thing will be used by persons other than the
purchaser, and used without new tests, then, irrespective of contract, the manufacturer
of this thing of danger is under a duty to make it carefully. That is as far as we are
required to go for the decision of this case. There must be knowledge of a danger, not
merely possible, but probable. It is possible to use almost anything in a way that will
make it dangerous if defective. That is not enough to charge the manufacturer with a
duty independent of his contract. Whether a given thing is dangerous may be
sometimes a question for the court and sometimes a question for the jury. There must
also be knowledge that in the usual course of events the danger will be shared by others
than the buyer. Such knowledge may often be inferred from the nature of the
transaction. But it is possible that even knowledge of the danger and of the use will not
always be enough. The proximity or remoteness of the relation is a factor to be
considered. We are dealing now with the liability of the manufacturer of the finished
product, who puts it on the market to be used without inspection by his customers. If he
is negligent, where danger is to be foreseen, a liability will follow. We are not required
at this time to say that it is legitimate to go back of the manufacturer of the finished
product and hold the manufacturers of the component parts. To make their negligence a
cause of imminent danger, an independent cause must often intervene; the
manufacturer of the finished product must also fail in his duty of inspection. It may be
that in those circumstances the negligence of the earlier members of the series is too
remote to constitute, as to the ultimate user, an actionable wrong (Beven on Negligence
[3d ed.], 50, 51, 54; Wharton on Negligence [2d ed.], § 134; Leeds v. N. Y. Tel. Co.,
178 N. Y. 118; Sweet v. Perkins, 196 N. Y. 482; Hayes v. Hyde Park, 153 Mass. 514,
516). We leave that question open. We shall have to deal with it when it arises. The
difficulty which it suggests is not present in this case. There is here no break in the
chain of cause and effect. In such circumstances, the presence of a known danger,
attendant upon a known use, makes vigilance a duty. We have put aside the notion that
the duty to safeguard life and limb, when the consequences of negligence may be
foreseen, grows out of contract and nothing else. We have put the source of the
obligation where it ought to be. We have put its source in the law.

[9] From this survey of the decisions, there thus emerges a definition of the duty of a
manufacturer which enables us to measure this defendant's liability. Beyond all
question, the nature of an automobile gives warning of probable danger if its
construction is defective. This automobile was designed to go fifty miles an hour.
Unless its wheels were sound and strong, injury was almost certain. It was as much a
thing of danger as a defective engine for a railroad. The defendant knew the danger. It
knew also that the car would be used by persons other than the buyer. This was
apparent from its size; there were seats for three persons. It was apparent also from the
fact that the buyer was a dealer in cars, who bought to resell. The maker of this car
supplied it for the use of purchasers from the dealer just as plainly as the contractor in
Devlin v. Smith supplied the scaffold for use by the servants of the owner. The dealer
was indeed the one person of whom it might be said with some approach to certainty
that by him the car would not be used. Yet the defendant would have us say that he was



                                                                                         9
the one person whom it was under a legal duty to protect. The law does not lead us to
so inconsequent a conclusion. Precedents drawn from the days of travel by stage coach
do not fit the conditions of travel to-day. The principle that the danger must be
imminent does not change, but the things subject to the principle do change. They are
whatever the needs of life in a developing civilization require them to be.

[10] In reaching this conclusion, we do not ignore the decisions to the contrary in other
jurisdictions. It was held in Cadillac M. C. Co. v. Johnson (221 Fed. Rep. 801) that an
automobile is not within the rule of Thomas v. Winchester. There was, however, a
vigorous dissent. Opposed to that decision is one of the Court of Appeals of Kentucky
(Olds Motor Works v. Shaffer, 145 Ky. 616). The earlier cases are summarized by
Judge Sanborn in Huset v. J. I. Case Threshing Machine Co. (120 Fed. Rep. 865).
Some of them, at first sight inconsistent with our conclusion, may be reconciled upon
the ground that the negligence was too remote, and that another cause had intervened.
But even when they cannot be reconciled, the difference is rather in the application of
the principle than in the principle itself. Judge Sanborn says, for example, that the
contractor who builds a bridge, or the manufacturer who builds a car, cannot ordinarily
foresee injury to other persons than the owner as the probable result (120 Fed. Rep.
865, at p. 867). We take a different view. We think that injury to others is to be
foreseen not merely as a possible, but as an almost inevitable result. (See the trenchant
criticism in Bohlen, supra, at p. 351). Indeed, Judge Sanborn concedes that his view is
not to be reconciled with our decision in Devlin v. Smith (supra). The doctrine of that
decision has now become the settled law of this state, and we have no desire to depart
from it.

[11] In England the limits of the rule are still unsettled. Winterbottom v. Wright (10
M. & W. 109) is often cited. The defendant undertook to provide a mail coach to carry
the mail bags. The coach broke down from latent defects in its construction. The
defendant, however, was not the manufacturer. The court held that he was not liable for
injuries to a passenger. The case was decided on a demurrer to the declaration. Lord
Esher points out in Heaven v. Pender (supra, at p. 513) that the form of the declaration
was subject to criticism. It did not fairly suggest the existence of a duty aside from the
special contract which was the plaintiff's main reliance. (See the criticism of
Winterbottom v. Wright, in Bohlen, supra, at pp. 281, 283). At all events, in Heaven v.
Pender (supra) the defendant, a dock owner, who put up a staging outside a ship, was
held liable to the servants of the shipowner. In Elliott v. Hall (15 Q. B. D. 315) the
defendant sent out a defective truck laden with goods which he had sold. The buyer's
servants unloaded it, and were injured because of the defects. It was held that the
defendant was under a duty "not to be guilty of negligence with regard to the state and
condition of the truck." There seems to have been a return to the doctrine of
Winterbottom v. Wright in Earl v. Lubbock (L. R. [1905] 1 K. B. 253). In that case,
however, as in the earlier one, the defendant was not the manufacturer. He had merely
made a contract to keep the van in repair. A later case (White v. Steadman, L. R.
[1913], 3 K. B. 340, 348) emphasizes that element. A livery stable keeper who sent out
a vicious horse was held liable not merely to his customer but also to another occupant
of the carriage, and Thomas v. Winchester was cited and followed (White v. Steadman,



                                                                                        10
supra, at pp. 348, 349). It was again cited and followed in Dominion Natural Gas Co. v.
Collins (L. R. [1909] A. C. 640, 646). From these cases a consistent principle is with
difficulty extracted. The English courts, however, agree with ours in holding that one
who invites another to make use of an appliance is bound to the exercise of reasonable
care (Caledonian Ry. Co. v. Mulholland, L. R. [1898] A. C. 216, 227; Indermaur v.
Dames, L. R. [1 C. P.] 274). That at bottom is the underlying principle of Devlin v.
Smith. The contractor who builds the scaffold invites the owner's workmen to use it.
The manufacturer who sells the automobile to the retail dealer invites the dealer's
customers to use it. The invitation is addressed in the one case to determinate persons
and in the other to an indeterminate class, but in each case it is equally plain, and in
each its consequences must be the same.

[12] There is nothing anomalous in a rule which imposes upon A, who has contracted
with B, a duty to C and D and others according as he knows or does not know that the
subject-matter of the contract is intended for their use. We may find an analogy in the
law which measures the liability of landlords. If A leases to B a tumbledown house he
is not liable, in the absence of fraud, to B's guests who enter it and are injured. This is
because B is then under the duty to repair it, the lessor has the right to suppose that he
will fulfill that duty, and, if he omits to do so, his guests must look to him (Bohlen,
supra, at p. 276). But if A leases a building to be used by the lessee at once as a place
of public entertainment, the rule is different. There injury to persons other than the
lessee is to be foreseen, and foresight of the consequences involves the creation of a
duty (Junkermann v. Tilyhou R. Co., 213 N. Y. 404, and cases there cited).

[13] In this view of the defendant's liability there is nothing inconsistent with the
theory of liability on which the case was tried. It is true that the court told the jury that
"an automobile is not an inherently dangerous vehicle." The meaning, however, is
made plain by the context. The meaning is that danger is not to be expected when the
vehicle is well constructed. The court left it to the jury to say whether the defendant
ought to have foreseen that the car, if negligently constructed, would become
"imminently dangerous." Subtle distinctions are drawn by the defendant between
things inherently dangerous and things imminently dangerous, but the case does not
turn upon these verbal niceties. If danger was to be expected as reasonably certain,
there was a duty of vigilance, and this whether you call the danger inherent or
imminent. In varying forms that thought was put before the jury. We do not say that the
court would not have been justified in ruling as a matter of law that the car was a
dangerous thing. If there was any error, it was none of which the defendant can
complain.

[14] We think the defendant was not absolved from a duty of inspection because it
bought the wheels from a reputable manufacturer. It was not merely a dealer in
automobiles. It was a manufacturer of automobiles. It was responsible for the finished
product. It was not at liberty to put the finished product on the market without
subjecting the component parts to ordinary and simple tests (Richmond & Danville R.
R. Co. v. Elliott, 149 U.S. 266, 272). Under the charge of the trial judge nothing more
was required of it. The obligation to inspect must vary with the nature of the thing to be



                                                                                           11
inspected. The more probable the danger, the greater the need of caution. There is little
analogy between this case and Carlson v. Phoenix Bridge Co. (132 N. Y. 273), where
the defendant bought a tool for a servant's use. The making of tools was not the
business in which the master was engaged. Reliance on the skill of the manufacturer
was proper and almost inevitable. But that is not the defendant's situation. Both by its
relation to the work and by the nature of its business, it is charged with a stricter duty.

[15] Other rulings complained of have been considered, but no error has been found in
them.

[16] The judgment should be affirmed with costs.




                                                                                         12
                     Gladys Escola, Respondent,
                                 v.
  Coca Cola Bottling Company of Fresno (a Corporation), Appellant
                              Supreme Court of California
                              24 Cal. 2d 453; 150 P.2d 436

                                       July 5, 1944

SUBSEQUENT HISTORY: Appellant's Petition for a Rehearing was denied August
3, 1944. Judge Edmonds voted for a Rehearing.

PRIOR HISTORY: Appeal from a judgment of the Superior Court of Merced
County. Judge James D. Garibaldi.

Action for damages for personal injuries resulting from bursting of bottle of Coca Cola.

COUNSEL: H. K. Landram for Appellant. C. Ray Robinson, Willard B. Treadwell,
Dean S. Lesher, Loraine B. Rogers, Belli & Leahy and Melvin M. Belli for
Respondent.

JUDGES: In Bank. Chief Judge Gibson, Judges Shenk, Curtis, Carter, and Schauer,
concurred. Judge Traynor, concurs.

OPINION BY: Judge Gibson

OPINION

[1] Plaintiff, a waitress in a restaurant, was injured when a bottle of Coca Cola broke
in her hand. She alleged that defendant company, which had bottled and delivered the
alleged defective bottle to her employer, was negligent in selling "bottles containing
said beverage which on account of excessive pressure of gas or by reason of some
defect in the bottle was dangerous . . . and likely to explode." This appeal is from a
judgment upon a jury verdict in favor of plaintiff.

[2] Defendant's driver delivered several cases of Coca Cola to the restaurant, placing
them on the floor, one on top of the other, under and behind the counter, where they
remained at least thirty-six hours. Immediately before the accident, plaintiff picked up
the top case and set it upon a near-by ice cream cabinet in front of and about three feet
from the refrigerator. She then proceeded to take the bottles from the case with her
right hand, one at a time, and put them into the refrigerator. Plaintiff testified that after
she had placed three bottles in the refrigerator and had moved the fourth bottle about
eighteen inches from the case "it exploded in my hand." The bottle broke into two
jagged pieces and inflicted a deep five-inch cut, severing blood vessels, nerves and
muscles of the thumb and palm of the hand. Plaintiff further testified that when the
bottle exploded, "It made a sound similar to an electric light bulb that would have


                                                                                           13
dropped. It made a loud pop." Plaintiff's employer testified, "I was about twenty feet
from where it actually happened and I heard the explosion." A fellow employee, on the
opposite side of the counter, testified that plaintiff "had the bottle, I should judge, waist
high, and I know that it didn't bang either the case or the door or another bottle . . .
when it popped. It sounded just like a fruit jar would blow up. . . ." The witness further
testified that the contents of the bottle "flew all over herself and myself and the walls
and one thing and another."

[3] The top portion of the bottle, with the cap, remained in plaintiff's hand, and the
lower portion fell to the floor but did not break. The broken bottle was not produced at
the trial, the pieces having been thrown away by an employee of the restaurant shortly
after the accident. Plaintiff, however, described the broken pieces, and a diagram of the
bottle was made showing the location of the "fracture line" where the bottle broke in
two.

[4] One of defendant's drivers, called as a witness by plaintiff, testified that he had
seen other bottles of Coca Cola in the past explode and had found broken bottles in the
warehouse when he took the cases out, but that he did not know what made them blow
up.

[5] Plaintiff then rested her case, having announced to the court that being unable to
show any specific acts of negligence she relied completely on the doctrine of res ipsa
loquitur.

[6] Defendant contends that the doctrine of res ipsa loquitur does not apply in this
case, and that the evidence is insufficient to support the judgment.

[7] Many jurisdictions have applied the doctrine in cases involving exploding bottles
of carbonated beverages. (See Payne v. Rome Coca-Cola Bottling Co., 10 Ga.App. 762
[73 S.E. 1087]; Stolle v. Anheuser-Busch, 307 Mo. 520 [271 S.W. 497, 39 A.L.R.
1001]; Bradley v. Conway Springs Bottling Co., 154 Kan. 282 [118 P.2d 601]; Ortega
v. Nehi Bottling Works, 199 La. 599 [6 So.2d 677]; MacPherson v. Canada Dry Giner
Ale, Inc., 129 N.J.L. 365 [29 A.2d 868]; Macres v. Coca-Cola Bottling Co., 290 Mich.
567 [287 N.W. 922]; Benkendorfer v. Garrett (Tex. Civ. App.), 143 S.W.2d 1020.)
Other courts for varying reasons have refused to apply the doctrine in such cases. (See
Gerber v. Faber, 54 Cal.App.2d 674 [129 P.2d 485]; Loebig’s Guardian v. Coca-Cola
Bottling Co., 259 Ky. 124 [81 S.W.2d 910]; Steward v. Crystal Coca-Cola Bottling
Co., 50 Ariz. 60 [68 P.2d 952]; Glaser v. Seitz, 35 Misc. 341 [71 N.Y.S. 942]; Luciano
v. Morgan, 267 App. Div. 785 [45 N.Y.S.2d 502]; cf. Berkens v. Denver Coca-Cola
Bottling Co., 109 Colo. 140 [122 P.2d 884]; Ruffin v. Coca-Cola Bottling Co., 311
Mass. 514 [42 N.E.2d 259]; Slack v. Premier-Pabst Corporation, 40 Del. 97 [5 A.2d
516]; Wheeler v. Laurel Bottling Works, 111 Miss. 442 [71 So. 743, L.R.A. 1916E
1074]; Seven-Up Bottling Co. v. Gretes, Va. [27 S.E.2d 925]; Dail v. Tayler, 151 N.C.
284 [66 S.E. 135, 28 L.R.A.N.S. 949].) It would serve no useful purpose to discuss the
reasoning of the foregoing cases in detail, since the problem is whether under the facts




                                                                                           14
shown in the instant case the conditions warranting application of the doctrine have
been satisfied.

[8] (1) Res ipsa loquitur does not apply unless (1) defendant had exclusive control of
the thing causing the injury and (2) the accident is of such a nature that it ordinarily
would not occur in the absence of negligence by the defendant. (Honea v. City Dairy,
Inc., 22 Cal.2d 614, 616-617 [140 P.2d 369], and authorities there cited; cf. Hinds v.
Wheadon, 19 Cal.2d 458, 461 [121 P.2d 724]; Prosser on Torts [1941], 293-301.)

[9] (2) Many authorities state that the happening of the accident does not speak for
itself where it took place some time after defendant had relinquished control of the
instrumentality causing the injury. Under the more logical view, however, the doctrine
may be applied upon the theory that defendant had control at the time of the alleged
negligent act, although not at the time of the accident, provided plaintiff first proves
that the condition of the instrumentality had not been changed after it left the
defendant's possession. (See cases collected in Honea v. City Dairy, Inc., 22 Cal.2d
614, 617-618 [140 P.2d 369].)

[10] (3) As said in Dunn v. Hoffman Beverage Co., 126 N.J.L. 556 [20 A.2d 352,
354], "defendant is not charged with the duty of showing affirmatively that something
happened to the bottle after it left its control or management; . . . to get to the jury the
plaintiff must show that there was due care during that period." Plaintiff must also
prove that she handled the bottle carefully. The reason for this prerequisite is set forth
in Prosser on Torts, supra, at page 300, where the author states: "Allied to the condition
of exclusive control in the defendant is that of absence of any action on the part of the
plaintiff contributing to the accident. Its purpose, of course, is to eliminate the
possibility that it was the plaintiff who was responsible. If the boiler of a locomotive
explodes while the plaintiff engineer is operating it, the inference of his own
negligence is at least as great as that of the defendant, and res ipsa loquitur will not
apply until he has accounted for his own conduct." (See, also, Olson v. Whitthorne &
Swan, 203 Cal. 206, 208-209 [263 P. 518, 58 A.L.R. 129].)

[11] (4) It is not necessary, of course, that plaintiff eliminate every remote possibility
of injury to the bottle after defendant lost control, and the requirement is satisfied if
there is evidence permitting a reasonable inference that it was not accessible to
extraneous harmful forces and that it was carefully handled by plaintiff or any third
person who may have moved or touched it. (Cf. Prosser, supra, p. 300.) If such
evidence is presented, the question becomes one for the trier of fact (see, e.g.,
MacPherson v. Canada Dry Ginger Ale, Inc., 129 N.J.L. 365 [29 A.2d 868, 869]), and,
accordingly, the issue should be submitted to the jury under proper instructions.

[12] In the present case no instructions were requested or given on this phase of the
case, although general instructions upon res ipsa loquitur were given. Defendant,
however, has made no claim of error with reference thereto on this appeal.




                                                                                          15
[13] (5) Upon an examination of the record, the evidence appears sufficient to support
a reasonable inference that the bottle here involved was not damaged by any extraneous
force after delivery to the restaurant by defendant. It follows, therefore, that the bottle
was in some manner defective at the time defendant relinquished control, because
sound and properly prepared bottles of carbonated liquids do not ordinarily explode
when carefully handled.

[14] (6) The next question, then, is whether plaintiff may rely upon the doctrine of res
ipsa loquitur to supply an inference that defendant's negligence was responsible for the
defective condition of the bottle at the time it was delivered to the restaurant. Under the
general rules pertaining to the doctrine, as set forth above, it must appear that bottles of
carbonated liquid are not ordinarily defective without negligence by the bottling
company. In 1 Shearman and Redfield on Negligence (rev. ed. 1941), page 153, it is
stated that: "The doctrine . . . requires evidence which shows at least the probability
that a particular accident could not have occurred without legal wrong by the
defendant."

[15] An explosion such as took place here might have been caused by an excessive
internal pressure in a sound bottle, by a defect in the glass of a bottle containing a safe
pressure, or by a combination of these two possible causes. The question is whether
under the evidence there was a probability that defendant was negligent in any of these
respects. If so, the doctrine of res ipsa loquitur applies.

[16] (7) The bottle was admittedly charged with gas under pressure, and the charging
of the bottle was within the exclusive control of defendant. As it is a matter of common
knowledge that an overcharge would not ordinarily result without negligence, it
follows under the doctrine of res ipsa loquitur that if the bottle was in fact excessively
charged an inference of defendant's negligence would arise.

[17] (8) If the explosion resulted from a defective bottle containing a safe pressure, the
defendant would be liable if it negligently failed to discover such flaw. If the defect
were visible, an inference of negligence would arise from the failure of defendant to
discover it. Where defects are discoverable, it may be assumed that they will not
ordinarily escape detection if a reasonable inspection is made, and if such a defect is
overlooked an inference arises that a proper inspection was not made. A difficult
problem is presented where the defect is unknown and consequently might have been
one not discoverable by a reasonable, practicable inspection. In the Honea case we
refused to take judicial notice of the technical practices and information available to the
bottling industry for finding defects which cannot be seen. In the present case,
however, we are supplied with evidence of the standard methods used for testing
bottles.

[18] A chemical engineer for the Owens-Illinois Glass Company and its Pacific Coast
subsidiary, maker of Coca Cola bottles, explained how glass is manufactured and the
methods used in testing and inspecting bottles. He testified that his company is the
largest manufacturer of glass containers in the United States, and that it uses the



                                                                                          16
standard methods for testing bottles recommended by the glass containers association.
A pressure test is made by taking a sample from each mold every three hours --
approximately one out of every 600 bottles -- and subjecting the sample to an internal
pressure of 450 pounds per square inch, which is sustained for one minute. (The normal
pressure in Coca Cola bottles is less than 50 pounds per square inch.) The sample
bottles are also subjected to the standard thermal shock test. The witness stated that
these tests are "pretty near" infallible.

[19] (9) It thus appears that there is available to the industry a commonly-used method
of testing bottles for defects not apparent to the eye, which is almost infallible. Since
Coca Cola bottles are subjected to these tests by the manufacturer, it is not likely that
they contain defects when delivered to the bottler which are not discoverable by visual
inspection. Both new and used bottles are filled and distributed by defendant. The used
bottles are not again subjected to the tests referred to above, and it may be inferred that
defects not discoverable by visual inspection do not develop in bottles after they are
manufactured. Obviously, if such defects do occur in used bottles there is a duty upon
the bottler to make appropriate tests before they are refilled, and if such tests are not
commercially practicable the bottles should not be re-used. This would seem to be
particularly true where a charged liquid is placed in the bottle. It follows that a defect
which would make the bottle unsound could be discovered by reasonable and
practicable tests.

[20] Although it is not clear in this case whether the explosion was caused by an
excessive charge or a defect in the glass, there is a sufficient showing that neither cause
would ordinarily have been present if due care had been used. Further, defendant had
exclusive control over both the charging and inspection of the bottles. Accordingly, all
the requirements necessary to entitle plaintiff to rely on the doctrine of res ipsa loquitur
to supply an inference of negligence are present.

[21] (10) It is true that defendant presented evidence tending to show that it exercised
considerable precaution by carefully regulating and checking the pressure in the bottles
and by making visual inspections for defects in the glass at several stages during the
bottling process. It is well settled, however, that when a defendant produces evidence
to rebut the inference of negligence which arises upon application of the doctrine of res
ipsa loquitur, it is ordinarily a question of fact for the jury to determine whether the
inference has been dispelled. (Druzanich v. Criley, 19 Cal.2d 439, 444 [122 P.2d 53];
Michener v. Hutton, 203 Cal. 604, 610 [265 P. 238, 59 A.L.R. 480].)

[22] The judgment is affirmed.




                                                                                          17
CONCUR BY: Judge Traynor

CONCUR

[23] I concur in the judgment, but I believe the manufacturer's negligence should no
longer be singled out as the basis of a plaintiff's right to recover in cases like the
present one. In my opinion it should now be recognized that a manufacturer incurs an
absolute liability when an article that he has placed on the market, knowing that it is to
be used without inspection, proves to have a defect that causes injury to human beings.
McPherson v. Buick Motor Co., 217 N.Y. 382 [111 N.E. 1050], Ann.Cas. 1916C 440,
L.R.A. 1916F 696], established the principle, recognized by this court, that irrespective
of privity of contract, the manufacturer is responsible for an injury caused by such an
article to any person who comes in lawful contact with it. (Sheward v. Virtue, 20
Cal.2d 410 [126 P.2d 345]; Kalash v. Los Angeles Ladder Co., 1 Cal.2d 229 [34 P.2d
481].) In these cases the source of the manufacturer's liability was his negligence in the
manufacturing process or in the inspection of component parts supplied by others. Even
if there is no negligence, however, public policy demands that responsibility be fixed
wherever it will most effectively reduce the hazards to life and health inherent in
defective products that reach the market. It is evident that the manufacturer can
anticipate some hazards and guard against the recurrence of others, as the public
cannot. Those who suffer injury from defective products are unprepared to meet its
consequences. The cost of an injury and the loss of time or health may be an
overwhelming misfortune to the person injured, and a needless one, for the risk of
injury can be insured by the manufacturer and distributed among the public as a cost of
doing business. It is to the public interest to discourage the marketing of products
having defects that are a menace to the public. If such products nevertheless find their
way into the market it is to the public interest to place the responsibility for whatever
injury they may cause upon the manufacturer, who, even if he is not negligent in the
manufacture of the product, is responsible for its reaching the market. However
intermittently such injuries may occur and however haphazardly they may strike, the
risk of their occurrence is a constant risk and a general one. Against such a risk there
should be general and constant protection and the manufacturer is best situated to
afford such protection.

[24] The injury from a defective product does not become a matter of indifference
because the defect arises from causes other than the negligence of the manufacturer,
such as negligence of a submanufacturer of a component part whose defects could not
be revealed by inspection (see Sheward v. Virtue, 20 Cal.2d 410 [126 P.2d 345];
O’Rourke v. Day & Night Water Heater Co., Ltd., 31 Cal.App.2d 364 [88 P.2d 191];
Smith v. Peerless Glass Co., 259 N.Y. 292 [181 N.E. 576]), or unknown causes that
even by the device of res ipsa loquitur cannot be classified as negligence of the
manufacturer. The inference of negligence may be dispelled by an affirmative showing
of proper care. If the evidence against the fact inferred is "clear, positive,
uncontradicted, and of such a nature that it cannot rationally be disbelieved, the court
must instruct the jury that the nonexistence of the fact has been established as a matter
of law." (Blank v. Coffin, 20 Cal.2d 457, 461 [126 P.2d 868].) An injured person,



                                                                                        18
however, is not ordinarily in a position to refute such evidence or identify the cause of
the defect, for he can hardly be familiar with the manufacturing process as the
manufacturer himself is. In leaving it to the jury to decide whether the inference has
been dispelled, regardless of the evidence against it, the negligence rule approaches the
rule of strict liability. It is needlessly circuitous to make negligence the basis of
recovery and impose what is in reality liability without negligence. If public policy
demands that a manufacturer of goods be responsible for their quality regardless of
negligence there is no reason not to fix that responsibility openly.

[25] In the case of foodstuffs, the public policy of the state is formulated in a criminal
statute. Section 26510 of the Health and Safety Code prohibits the manufacturing,
preparing, compounding, packing, selling, offering for sale, or keeping for sale, or
advertising within the state, of any adulterated food. Section 26470 declares that food is
adulterated when "it has been produced, prepared, packed, or held under unsanitary
conditions whereby it may have been rendered diseased, unwholesome or injurious to
health." The statute imposes criminal liability not only if the food is adulterated, but if
its container, which may be a bottle (§ 26451), has any deleterious substance (§ 26470
(6)), or renders the product injurious to health. (§ 26470 (4)). The criminal liability
under the statute attaches without proof of fault, so that the manufacturer is under the
duty of ascertaining whether an article manufactured by him is safe. (People v.
Schwartz, 28 Cal.App.2d Supp. 775 [70 P.2d 1017].) Statutes of this kind result in a
strict liability of the manufacturer in tort to the member of the public injured. (See
cases cited in Prosser, Torts, p. 693, note 69.)

[26] The statute may well be applicable to a bottle whose defects cause it to explode.
In any event it is significant that the statute imposes criminal liability without fault,
reflecting the public policy of protecting the public from dangerous products placed on
the market, irrespective of negligence in their manufacture. While the Legislature
imposes criminal liability only with regard to food products and their containers, there
are many other sources of danger. It is to the public interest to prevent injury to the
public from any defective goods by the imposition of civil liability generally.

[27] The retailer, even though not equipped to test a product, is under an absolute
liability to his customer, for the implied warranties of fitness for proposed use and
merchantable quality include a warranty of safety of the product. (Goetten v. Owl Drug
Co., 6 Cal.2d 683 [59 P.2d 142]; Mix v. Ingersoll Candy Co., 6 Cal.2d 674 [59 P.2d
144]; Gindraux v. Maurice Mercantile Co., 4 Cal.2d 206 [47 P.2d 708]; Jensen v.
Berris, 31 Cal.App.2d 537 [88 P.2d 220]; Ryan v. Progressive Grocery Stores, 255
N.Y. 388 [175 N.E. 105; 74 A.L.R. 339]; Race v. Krum, 222 N.Y. 410 [118 N.E. 853,
L.R.A. 1918F 1172].) This warranty is not necessarily a contractual one (Chamberlain
Co. v. Allis-Chalmers etc. Co., 51 Cal.App.2d 520, 524 [125 P.2d 113]; see 1 Williston
on Sales, 2d ed., §§ 197-201), for public policy requires that the buyer be insured at the
seller's expense against injury. (Race v. Krum, supra; Ryan v. Progressive Grocery
Stores, supra; Chapman v. Roggenkamp, 182 Ill.App. 117, 121; Ward v. Great Atlantic
& Pacific Tea Co., 231 Mass. 90, 94 [120 N.E. 225, 5 A.L.R. 242]; see Prosser, The
Implied Warranty of Merchantable Quality, 27 Minn.L.Rev. 117, 124; Brown, The



                                                                                         19
Liability of Retail Dealers For Defective Food Products, 23 Minn.L.Rev. 585.) The
courts recognize, however, that the retailer cannot bear the burden of this warranty, and
allow him to recoup any losses by means of the warranty of safety attending the
wholesaler's or manufacturer's sale to him. (Ward v. Great Atlantic & Pacific Tea Co.,
supra; see Waite, Retail Responsibility and Judicial Law Making, 34 Mich.L.Rev. 494,
509.) Such a procedure, however, is needlessly circuitous and engenders wasteful
litigation. Much would be gained if the injured person could base his action directly on
the manufacturer's warranty.

[28] The liability of the manufacturer to an immediate buyer injured by a defective
product follows without proof of negligence from the implied warranty of safety
attending the sale. Ordinarily, however, the immediate buyer is a dealer who does not
intend to use the product himself, and if the warranty of safety is to serve the purpose
of protecting health and safety it must give rights to others than the dealer. In the words
of Judge Cardozo in the McPherson case: "The dealer was indeed the one person of
whom it might be said with some approach to certainty that by him the car would not
be used. Yet, the defendant would have us say that he was the one person whom it was
under a legal duty to protect. The law does not lead us to so inconsequent a solution."
While the defendant's negligence in the McPherson case made it unnecessary for the
court to base liability on warranty, Judge Cardozo's reasoning recognized the injured
person as the real party in interest and effectively disposed of the theory that the
liability of the manufacturer incurred by his warranty should apply only to the
immediate purchaser. It thus paves the way for a standard of liability that would make
the manufacturer guarantee the safety of his product even when there is no negligence.

[29] This court and many others have extended protection according to such a standard
to consumers of food products, taking the view that the right of a consumer injured by
unwholesome food does not depend "upon the intricacies of the law of sales" and that
the warranty of the manufacturer to the consumer in absence of privity of contract rests
on public policy. (Klein v. Duchess Sandwich Co., Ltd., 14 Cal.2d 272, 282 [93 P.2d
799]; Ketterer v. Armour & Co., 200 F. 321, 322, 323 [160 C.C.A. 111, L.R.A. 1918D
798]; Decker & Sons v. Capps, 139 Tex. 609 [164 S.W.2d 828, 142 A.L.R. 1479]; see
Perkins, Unwholesome Food As A Source of Liability, 5 Iowa L.Bull. 6, 86.) Dangers
to life and health inhere in other consumers' goods that are defective and there is no
reason to differentiate them from the dangers of defective food products. (See Bohlen,
Studies in Torts, Basis of Affirmative Obligations, American Cases Upon The Liability
of Manufacturers and Vendors of Personal Property, 109, 135; Llewellyn, On Warranty
of Quality and Society, 36 Col.L.Rev. 699, 704, note 14; Prosser, Torts, p. 692.)

[30] In the food products cases the courts have resorted to various fictions to
rationalize the extension of the manufacturer's warranty to the consumer: that a
warranty runs with the chattel; that the cause of action of the dealer is assigned to the
consumer; that the consumer is a third party beneficiary of the manufacturer's contract
with the dealer. They have also held the manufacturer liable on a mere fiction of
negligence: Practically he must know it [the product] is fit, or bear the consequences if
it proves destructive." (Parks v. C. C. Yost Pie Co., 93 Kan. 334 [144 P. 202, L.R.A.



                                                                                         20
1915C 179]; see Jeanblanc, Manufacturer's Liability to Persons Other Than Their
Immediate Vendees, 24 Va.L.Rev. 134.) Such fictions are not necessary to fix the
manufacturer's liability under a warranty if the warranty is severed from the contract of
sale between the dealer and the consumer and based on the law of torts (Decker & Sons
v. Capps, supra; Prosser, Torts, p. 689) as a strict liability. (See Green v. General
Petroleum Corp., 205 Cal. 328 [270 P. 952, 60 A.L.R. 475]; McGrath v. Basich Bros.
Const. Co., 7 Cal.App.2d 573 [46 P.2d 981]; Prosser, Nuisance Without Fault, 20
Tex.L.Rev., 399, 403; Feezer, Capacity To Bear The Loss As A Factor In The Decision
Of Certain Types of Tort Cases, 78 U. of Pa.L.Rev. 805, 79 U. of Pa.L.Rev. 742;
Carpenter, The Doctrine of Green v. General Petroleum Corp., 5 So.Cal.L.Rev. 263,
271; Pound, The End of Law As Developed In Legal Rules And Doctrines, 27
Harv.L.Rev. 195, 233.) Warranties are not necessarily rights arising under a contract.
An action on a warranty "was, in its origin, a pure action of tort," and only late in the
historical development of warranties was an action in assumpsit allowed. (Ames, The
History of Assumpsit, 2 Harv.L.Rev. 1, 8; 4 Williston on Contracts (1936) § 970.)
"And it is still generally possible where a distinction of procedure is observed between
actions of tort and of contract to frame the declaration for breach of warranty in tort."
(Williston, loc. cit.; see Prosser, Warranty On Merchantable Quality, 27 Minn.L.Rev.
117, 118.) On the basis of the tort character of an action on a warranty, recovery has
been allowed for wrongful death as it could not be in an action for breach of contract.
(Greco v. S. S. Kresge Co., 277 N.Y. 26 [12 N.E.2d 577, 115 A.L.R. 1020]; see Schlick
v. New York Dugan Bros., 175 Misc. 182 [22 N.Y.S.2d 238]; Prosser, op. cit., p. 119.)
As the court said in Greco v. S. S. Kresge Co., supra, "Though the action may be
brought solely for the breach of the implied warranty, the breach is a wrongful act, a
default, and, in its essential nature, a tort." Even a seller's express warranty can arise
from a noncontractual affirmation inducing a person to purchase the goods.
(Chamberlain Co. v. Allis-Chalmers etc. Co., 51 Cal.App.2d 520 [125 P.2d 113].) "As
an actual agreement to contract is not essential, the obligation of a seller in such a case
is one imposed by law as distinguished from one voluntarily assumed. It may be called
an obligation either on a quasi-contract or quasi-tort, because remedies appropriate to
contract and also to tort are applicable." (1 Williston on Sales, 2d ed. § 197; see
Ballantine, Classification of Obligations, 15 Ill.L.Rev. 310, 325.)

[31] As handicrafts have been replaced by mass production with its great markets and
transportation facilities, the close relationship between the producer and consumer of a
product has been altered. Manufacturing processes, frequently valuable secrets, are
ordinarily either inaccessible to or beyond the ken of the general public. The consumer
no longer has means or skill enough to investigate for himself the soundness of a
product, even when it is not contained in a sealed package, and his erstwhile vigilance
has been lulled by the steady efforts of manufacturers to build up confidence by
advertising and marketing devices such as trade-marks. (See Thomas v. Winchester, 6
N.Y. 397 [57 Am.Dec. 455]; Baxter v. Ford Motor Co., 168 Wash. 456 [12 P.2d 409,
15 P.2d 1118, 88 A.L.R. 521]; Crist v. Art Metal Works, 230 App.Div. 114 [243
N.Y.S. 496], affirmed 255 N.Y. 624 [175 N.E. 341]; see also Handler, False and
Misleading Advertising, 39 Yale L.J. 22; Rogers, Good Will, Trade-Marks and Unfair
Trading (1914) ch. VI, A Study of The Consumer, p. 65 et seq.; Williston, Liability For



                                                                                         21
Honest Misrepresentations As Deceit, Negligence Or Warranty, 42 Harv.L.Rev. 733;
18 Cornell L.Q. 445.) Consumers no longer approach products warily but accept them
on faith, relying on the reputation of the manufacturer or the trade mark. (See Max
Factor & Co. v. Kunsman, 5 Cal.2d 446, 463 [55 P.2d 177]; Old Dearborn etc. Co. v.
Seagram-Distillers Corp., 299 U.S. 183 [57 S.Ct. 139, 81 L.Ed. 109, 106 A.L.R. 1476];
Schechter, The Rational Basis of Trade Mark Protection, 40 Harv.L.Rev. 813, 818.)
Manufacturers have sought to justify that faith by increasingly high standards of
inspection and a readiness to make good on defective products by way of replacements
and refunds. (See Bogert and Fink, Business Practices Regarding Warranties In The
Sale Of Goods, 25 Ill.L.Rev. 400.) The manufacturer's obligation to the consumer must
keep pace with the changing relationship between them; it cannot be escaped because
the marketing of a product has become so complicated as to require one or more
intermediaries. Certainly there is greater reason to impose liability on the manufacturer
than on the retailer who is but a conduit of a product that he is not himself able to test.
(See Soule, Consumer Protection, 4 Encyclopedia of The Social Sciences, 282; Feezer,
Manufacturer's Liability For Injuries Caused By His Products: Defective Automobiles,
37 Mich.L.Rev. 1; Llewellyn, Cases And Materials on Sales, 340 et seq.)

[32] The manufacturer's liability should, of course, be defined in terms of the safety of
the product in normal and proper use, and should not extend to injuries that cannot be
traced to the product as it reached the market.




                                                                                         22
             William B. Greenman, Plaintiff and Appellant,
                                  v.
          Yuba Power Products, Inc., Defendant and Appellant;
               The Hayseed, Defendant and Respondent
                             Supreme Court of California
                    59 Cal. 2d 57; 377 P.2d 897; 27 Cal. Rptr. 697

                                   January 24, 1963

PRIOR HISTORY: APPEALS from a judgment of the Superior Court of San Diego
County. Robert W. Conyers, Judge.

Action by buyer's donee of a power tool for breach of express and implied warranties
and for personal injuries sustained while using the power tool.

COUNSEL: Reed, Brockway & Ruffin and William F. Reed for Plaintiff and
Appellant. Holt, Macomber, Graham & Baugh and William H. Macomber for
Defendant and Appellant. Moss, Lyon & Dunn, Gerold C. Dunn and Henry F. Walker
as Amici Curiae on behalf of Defendant and Appellant.

No appearance for Defendant and Respondent.

JUDGES: In Bank. Judge Traynor; Chief Judge Gibson and Judges Schauer,
McComb, Peters, Tobriner, and Peek, concurred.

OPINION BY: Judge Traynor

OPINION

[1] Plaintiff brought this action for damages against the retailer and the manufacturer
of a Shopsmith, a combination power tool that could be used as a saw, drill, and wood
lathe. He saw a Shopsmith demonstrated by the retailer and studied a brochure
prepared by the manufacturer. He decided he wanted a Shopsmith for his home
workshop, and his wife bought and gave him one for Christmas in 1955. In 1957 he
bought the necessary attachments to use the Shopsmith as a lathe for turning a large
piece of wood he wished to make into a chalice. After he had worked on the piece of
wood several times without difficulty, it suddenly flew out of the machine and struck
him on the forehead, inflicting serious injuries. About 10 1/2 months later, he gave the
retailer and the manufacturer written notice of claimed breaches of warranties and filed
a complaint against them alleging such breaches and negligence.

[2] After a trial before a jury, the court ruled that there was no evidence that the
retailer was negligent or had breached any express warranty and that the manufacturer
was not liable for the breach of any implied warranty. Accordingly, it submitted to the
jury only the cause of action alleging breach of implied warranties against the retailer


                                                                                       23
and the causes of action alleging negligence and breach of express warranties against
the manufacturer. The jury returned a verdict for the retailer against plaintiff and for
plaintiff against the manufacturer in the amount of $65,000. The trial court denied the
manufacturer's motion for a new trial and entered judgment on the verdict. The
manufacturer and plaintiff appeal. Plaintiff seeks a reversal of the part of the judgment
in favor of the retailer, however, only in the event that the part of the judgment against
the manufacturer is reversed.

[3] Plaintiff introduced substantial evidence that his injuries were caused by defective
design and construction of the Shopsmith. His expert witnesses testified that inadequate
set screws were used to hold parts of the machine together so that normal vibration
caused the tailstock of the lathe to move away from the piece of wood being turned
permitting it to fly out of the lathe. They also testified that there were other more
positive ways of fastening the parts of the machine together, the use of which would
have prevented the accident. The jury could therefore reasonably have concluded that
the manufacturer negligently constructed the Shopsmith. The jury could also
reasonably have concluded that statements in the manufacturer's brochure were untrue,
that they constituted express warranties,1 and that plaintiff's injuries were caused by
their breach.

[Footnote 1: In this respect the trial court limited the jury to a consideration of two
statements in the manufacturer's brochure. (1) "When Shopsmith Is in Horizonal
Position -- Rugged construction of frame provides rigid support from end to end.
Heavy centerless-ground steel tubing insures perfect alignment of components." (2)
"Shopsmith maintains its accuracy because every component has positive locks that
hold adjustments through rough or precision work."]

[4] The manufacturer contends, however, that plaintiff did not give it notice of breach
of warranty within a reasonable time and that therefore his cause of action for breach of
warranty is barred by section 1769 of the Civil Code. Since it cannot be determined
whether the verdict against it was based on the negligence or warranty cause of action
or both, the manufacturer concludes that the error in presenting the warranty cause of
action to the jury was prejudicial.

[5] Section 1769 of the Civil Code provides: "In the absence of express or implied
agreement of the parties, acceptance of the goods by the buyer shall not discharge the
seller from liability in damages or other legal remedy for breach of any promise or
warranty in the contract to sell or the sale. But, if, after acceptance of the goods, the
buyer fails to give notice to the seller of the breach of any promise or warranty within a
reasonable time after the buyer knows, or ought to know of such breach, the seller shall
not be liable therefor."

[6] (1) Like other provisions of the Uniform Sales Act (Civ. Code, §§ 1721- 1800),
section 1769 deals with the rights of the parties to a contract of sale or a sale. It does
not provide that notice must be given of the breach of a warranty that arises
independently of a contract of sale between the parties.



                                                                                        24
[7] (2) Such warranties are not imposed by the sales act, but are the product of
common-law decisions that have recognized them in a variety of situations. (See Gagne
v. Bertran, 43 Cal.2d 481, 486-487 [275 P.2d 15], and authorities cited; Peterson v.
Lamb Rubber Co., 54 Cal.2d 339, 348 [5 Cal.Rptr. 863, 353 P.2d 575]; Klein v.
Duchess Sandwich Co., Ltd., 14 Cal.2d 272, 276-283 [93 P.2d 799]; Burr v. Sherwin
Williams Co., 42 Cal.2d 682, 695-696 [268 P.2d 1041]; Souza & McCue Constr. Co.,
Inc. v. Superior Court, 57 Cal.2d 508, 510-511 [20 Cal.Rptr. 634, 370 P.2d 338].) It is
true that in many of these situations the court has invoked the sales act definitions of
warranties (Civ. Code, §§ 1732, 1735) in defining the defendant's liability, but it has
done so, not because the statutes so required, but because they provided appropriate
standards for the court to adopt under the circumstances presented. (See Clinkscales v.
Carver, 22 Cal.2d 72, 75 [136 P.2d 777]; Dana v. Sutton Motor Sales, 56 Cal.2d 284,
287 [14 Cal.Rptr. 649, 363 P.2d 881].)

[8] (3) The notice requirement of section 1769, however, is not an appropriate one for
the court to adopt in actions by injured consumers against manufacturers with whom
they have not dealt. (La Hue v. Coca-Cola Bottling, Inc., 50 Wn.2d 645 [314 P.2d 421,
422]; Chapman v. Brown, 198 F. Supp. 78, 85, affd. Brown v. Chapman, 304 F. 2d
149.)

[9] (4) "As between the immediate parties to the sale [the notice requirement] is a
sound commercial rule, designed to protect the seller against unduly delayed claims for
damages. As applied to personal injuries, and notice to a remote seller, it becomes a
booby-trap for the unwary. The injured consumer is seldom 'steeped in the business
practice which justifies the rule,' [James, Product Liability, 34 Texas L. Rev. 44, 192,
197] and at least until he has had legal advice it will not occur to him to give notice to
one with whom he has had no dealings." (Prosser, Strict Liability to the Consumer, 69
Yale L. J. 1099, 1130, footnotes omitted.) It is true that in Jones v. Burger meister
Brewing Corp., 198 Cal.App.2d 198, 202-203 [18 Cal.Rptr. 311], Perry v. Thrifty Drug
Co., 186 Cal.App.2d 410, 411 [9 Cal.Rptr. 50], Arata v. Tonegato, 152 Cal.App.2d
837, 841 [314 P.2d 130], and Maecherlein v. Sealy Mattress Co., 145 Cal.App.2d 275,
278 [302 P.2d 331], the court assumed that notice of breach of warranty must be given
in an action by a consumer against a manufacturer. Since in those cases, however, the
court did not consider the question whether a distinction exists between a warranty
based on a contract between the parties and one imposed on a manufacturer not in
privity with the consumer, the decisions are not authority for rejecting the rule of the
La Hue and Chapman cases, supra. (Peterson v. Lamb Rubber Co., 54 Cal.2d 339, 343
[5 Cal.Rptr. 863, 353 P.2d 575]; People v. Banks, 53 Cal.2d 370, 389 [1 Cal.Rptr. 669,
348 P.2d 102].)

[10] (5) We conclude, therefore, that even if plaintiff did not give timely notice of
breach of warranty to the manufacturer, his cause of action based on the representations
contained in the brochure was not barred. Moreover, to impose strict liability on the
manufacturer under the circumstances of this case, it was not necessary for plaintiff to
establish an express warranty as defined in section 1732 of the Civil Code. [Footnote 2:
"Any affirmation of fact or any promise by the seller relating to the goods is an express



                                                                                        25
warranty if the natural tendency of such affirmation or promise is to induce the buyer to
purchase the goods, and if the buyer purchases the goods relying thereon. No
affirmation of the value of the goods, nor any statement purporting to be a statement of
the seller's opinion only shall be construed as a warranty."]

[11] (6) A manufacturer is strictly liable in tort when an article he places on the
market, knowing that it is to be used without inspection for defects, proves to have a
defect that causes injury to a human being. Recognized first in the case of
unwholesome food products, such liability has now been extended to a variety of other
products that create as great or greater hazards if defective. (Peterson v. Lamb Rubber
Co., 54 Cal.2d 339, 347 [5 Cal.Rptr. 863, 353 P.2d 575] [grinding wheel]; Vallis v.
Canada Dry Ginger Ale, Inc., 190 Cal.App.2d 35, 42-44 [11 Cal.Rptr. 823] [bottle];
Jones v. Burgermeister Brewing Corp., 198 Cal.App.2d 198, 204 [18 Cal.Rptr. 311]
[bottle]; Gottsdanker v. Cutter Laboratories, 182 Cal.App.2d 602, 607 [6 Cal.Rptr. 320]
[vaccine]; McQuaide v. Bridgeport Brass Co., 190 F. Supp. 252, 254 [insect spray];
Bowles v. Zimmer Manufacturing Co., 277 F. 2d 868, 875 [surgical pin]; Thompson v.
Reedman, 199 F. Supp. 120, 121 [automobile]; Chapman v. Brown, 198 F. Supp. 78,
118, 119, affd. Brown v. Chapman, 304 F. 2d 149 [skirt]; B. F. Goodrich Co. v.
Hammond, 269 F. 2d 501, 504 [automobile tire]; Markovich v. McKesson & Robbins,
Inc., 106 Ohio App. 265 [149 N.E. 2d 181, 186-188] [home permanent]; Graham v.
Bottenfield’s, Inc., 176 Kan. 68 [269 P.2d 413, 418] [hair dye]; General Motors Corp.
v. Dodson, 47 Tenn.App. 438 [338 S.W. 2d 655, 661] [automobile]; Henningsen v.
Bloomfield Motors, Inc., 32 N.J. 358 [161 A. 2d 69, 76-84, 75 A.L.R. 2d 1]
[automobile]; Hinton v. Republic Aviation Corp., 180 F. Supp. 31, 33 [airplane].)

[12] (7) Although in these cases strict liability has usually been based on the theory of
an express or implied warranty running from the manufacturer to the plaintiff, the
abandonment of the requirement of a contract between them, the recognition that the
liability is not assumed by agreement but imposed by law (see e.g., Graham v.
Bottenfield’s, Inc., 176 Kan. 68 [269 P.2d 413, 418]; Rogers v. Toni Home Permanent
Co., 167 Ohio St. 244 [147 N.E. 2d 612, 614, 75 A.L.R. 2d 103]; Decker & Sons v.
Capps, 139 Tex. 609, 617 [164 S.W. 2d 828, 142 A.L.R. 1479]), and the refusal to
permit the manufacturer to define the scope of its own responsibility for defective
products (Henningsen v. Bloomfield Motors, Inc., 32 N.J. 358 [161 A. 2d 69, 84-96, 75
A.L.R. 2d 1]; General Motors Corp. v. Dodson, 47 Tenn.App. 438 [338 S.W. 2d 655,
658-661]; State Farm Mut. Auto Ins. Co. v Anderson-Weber, Inc., 252 Iowa 1289 [110
N.W. 2d 449, 455-456]; Pabon v. Hackensack Auto Sales, Inc., 63 N.J. Super. 476 [164
A. 2d 773, 778]; Linn v. Radio Center Delicatessen, 169 Misc. 879 [6 N.Y.S. 2d 110,
112]) make clear that the liability is not one governed by the law of contract warranties
but by the law of strict liability in tort.

[13] (8) Accordingly, rules defining and governing warranties that were developed to
meet the needs of commercial transactions cannot properly be invoked to govern the
manufacturer's liability to those injured by its defective products unless those rules also
serve the purposes for which such liability is imposed. We need not recanvass the
reasons for imposing strict liability on the manufacturer. They have been fully



                                                                                         26
articulated in the cases cited above. (See also 2 Harper and James, Torts, §§ 28.15-
28.16, pp. 1569-1574; Prosser, Strict Liability to the Consumer, 69 Yale L.J. 1099;
Escola v. Coca Cola Bottling Co., 24 Cal.2d 453, 461 [150 P.2d 436], concurring
opinion.)

[14] (9) The purpose of such liability is to insure that the costs of injuries resulting
from defective products are borne by the manufacturers that put such products on the
market rather than by the injured persons who are powerless to protect themselves.
Sales warranties serve this purpose fitfully at best. (See Prosser, Strict Liability to the
Consumer, 69 Yale L.J. 1099, 1124-1134.)

[15] (10) In the present case, for example, plaintiff was able to plead and prove an
express warranty only because he read and relied on the representations of the
Shopsmith's ruggedness contained in the manufacturer's brochure. Implicit in the
machine's presence on the market, however, was a representation that it would safely
do the jobs for which it was built. Under these circumstances, it should not be
controlling whether plaintiff selected the machine because of the statements in the
brochure, or because of the machine's own appearance of excellence that belied the
defect lurking beneath the surface, or because he merely assumed that it would safely
do the jobs it was built to do. It should not be controlling whether the details of the
sales from manufacturer to retailer and from retailer to plaintiff's wife were such that
one or more of the implied warranties of the sales act arose. (Civ. Code, § 1735.) "The
remedies of injured consumers ought not to be made to depend upon the intricacies of
the law of sales." (Ketterer v. Armour & Co., 200 F. 322, 323; Klein v. Duchess
Sandwich Co., 14 Cal.2d 272, 282 [93 P.2d 799].)

[16] (11) To establish the manufacturer's liability it was sufficient that plaintiff proved
that he was injured while using the Shopsmith in a way it was intended to be used as a
result of a defect in design and manufacture of which plaintiff was not aware that made
the Shopsmith unsafe for its intended use.

[17] The manufacturer contends that the trial court erred in refusing to give three
instructions requested by it. It appears from the record, however, that the substance of
two of the requested instructions was adequately covered by the instructions given and
that the third instruction was not supported by the evidence.

[18] The judgment is affirmed.




                                                                                         27
                   Erling David Larsen, Appellant,
                                  v.
     General Motors Corporation, a Delaware Corporation, Appellee
                   United States Court of Appeals for the Eighth Circuit
                                      391 F.2d 495

                                       March 11, 1968

JUDGES: Circuit Judges Blackmun, Gibson and Heaney.

OPINION BY: Circuit Judge Floyd R. Gibson.

OPINION

[1] The driver of an automobile claims injury as a result of an alleged negligent design of
the steering assembly of the automobile. The alleged defect in design did not cause the
accident, and the manufacturer asserts the law imposes no duty of care in the design of an
automobile to make it more safe to occupy in the event of a collision. The trial court
agreed, rendering summary judgment in favor of the manufacturer, reported at 274 F.
Supp. 461 (D.C.Minn.1967). We reverse and remand.

[2] The plaintiff-appellant, Erling David Larsen, received severe bodily injuries while
driving, with the consent of the owner, a 1963 Chevrolet Corvair on February 18, 1964 in
the state of Michigan. A head-on collision, with the impact occurring on the left front
corner of the Corvair, caused a severe rearward thrust of the steering mechanism into the
plaintiff's head. The Corvair was manufactured by General Motors Corporation and
liability is asserted against General Motors on an alleged design defect in the steering
assembly and the placement or attachment of the component parts of the steering
assembly to the structure of the Corvair.2

[Footnote 2: The plaintiff alleges that the design and placement of the solid steering
shaft, which extends without interruption from a point 2.7 inches in front of the leading
surface of the front tires to a position directly in front of the driver, exposes the driver to
an unreasonable risk of injury from the rearward displacement of that shaft in the event of
a left-of-center head-on collision. So positioned it receives the initial impact of forces
generated by a left-of-center head-on collision. The unabsorbed forces of the collision in
this area are transmitted directly toward the driver's head, the shaft acting as a spear
aimed at a vital part of the driver's anatomy.]

[3] The plaintiff does not contend that the design caused the accident but that because of
the design he received injuries he would not have otherwise received or, in the
alternative, his injuries would not have been as severe. The rearward displacement of the
steering shaft on the left frontal impact was much greater on the Corvair than it would be
in other cars that were designed to protect against such a rearward displacement. The
plaintiff's complaint alleges (1) negligence in design of the steering assembly; (2)


                                                                                            28
negligent failure to warn of the alleged latent or inherently dangerous condition to the
user of the steering assembly placement; and (3) breach of express and implied
warranties of merchantability of the vehicle's intended use.

[4] General Motors contends it "has no duty whatsoever to design and manufacture a
vehicle * * * which is otherwise 'safe' or 'safer' to occupy during collision impacts," and
since there is no duty there can be no actionable negligence on its part to either design a
safe or more safe car or to warn of any inherent or latent defects in design that might
make its cars less safe than some other cars manufactured either by it or other
manufacturers.

[5] The District Court for the District of Minnesota rendered summary judgment in favor
of General Motors on the basis that there was no common law duty on the manufacturer
"to make a vehicle which would protect the plaintiff from injury in the event of a head-on
collision" and dismissed the complaint. A timely appeal was filed. This is a diversity case
in a requisite jurisdictional amount and the parties have stipulated that the law of
Michigan applies.

[6] Since a summary judgment was rendered on the pleadings and exhibits before the
court under Rule 56, Fed.R.Civ.P., we will take the well pled allegations in the complaint
at their face value and assume for purposes of discussion and decision that there was a
defect in the design of the steering assembly of the Corvair. Then if there are no issues or
any discernible theory on which the losing party could recover, a summary judgment is
proper. However, a summary judgment proceeding does not provide a very satisfactory
approach in tort cases. Williams v. Chick, 373 F.2d 330 (8 Cir. 1967).

[7] The District Court found this case to be closely related to the factual situation of
Evans v. General Motors Corporation, 359 F.2d 822 (7 Cir. 1966), cert. denied 385 U.S.
836, 87 S. Ct. 83, 17 L. Ed. 2d 70 (1966), which held in a divided decision that a
manufacturer is under no duty to make its automobile "accident-proof" or "fool-proof"
nor to render its vehicle "more" safe where the danger to be avoided is obvious to all. The
District Court discussed other cases, which will be set forth in this opinion, and
concluded as follows:

"All of these factors when considered together lead to but one conclusion: The defendant
G.M.'s duty toward the public is to design an automobile which is reasonably safe when
driven and which contains no latent or hidden defects which could cause an accident and
subsequent injury * * *. No contention is here made * * * that any design defect caused
the accident which allegedly resulted in the plaintiff's injuries. In view of this fact and
because this Court believes that any standards in this area must be left to the Legislature,
this court has no alternative but to find that the defendant was not negligent in its design
and construction of the 1963 Corvair automobile in that it was under no duty to make a
vehicle which would protect the plaintiff from injury in the event of a head-on collision."
274 F. Supp. at p. 464.




                                                                                         29
[8] The District Court also held that there was no duty to warn since the law only
requires a warning when the defects would render the product unsafe for its intended use
and that its intended purpose was transportation.

[Duty to Design Safer Automobile]

[9] Both parties agree that the question of a manufacturer's duty in the design of an
automobile or of any chattel is a question of law for the court. The decisional law is in
accord. Evans v. General Motors Corporation, supra; Schemel v. General Motors
Corporation, 261 F. Supp. 134 (S.D.Ind.1966), aff'd 384 F.2d 802 (7 Cir. 1967); Kahn v.
Chrysler Corporation, 221 F. Supp. 677 (S.D.Tex.1963).

[10] General Motors contends that it has no duty to produce a vehicle in which it is safe
to collide or which is accident-proof or incapable of injurious misuse. It views its duty as
extending only to producing a vehicle that is reasonably fit for its intended use or for the
purpose for which it was made and that is free from hidden defects; and that the intended
use of a vehicle and the purpose for which it is manufactured do not include its
participation in head-on collisions or any other type of impact, regardless of the
manufacturer's ability to foresee that such collisions may occur. General Motors cites as
supporting its contention, Evans v. General Motors Corporation, supra; Willis v. Chrysler
Corporation, 264 F. Supp. 1010 (S.D.Tex.1967); Walz v. Erie-Lackawanna Railroad
Company, CCH Prod.Liab.Rptr., para. 5722 (D.C.N.D.Ind.1967); Shumard v. General
Motors Corporation, 270 F. Supp. 311 (S.D.Ohio 1967); Schemel v. General Motors
Corporation, supra; Campo v. Scofield, 301 N.Y. 468, 95 N.E.2d 802 (1950).

[11] The plaintiff maintains that General Motors' view of its duty is too narrow and
restrictive and that an automobile manufacturer is under a duty to use reasonable care in
the design of the automobile to make it safe to the user for its foreseeable use and that its
intended use or purpose is for travel on the streets and highways, including the possibility
of impact or collision with other vehicles or stationary objects. Plaintiff's reliance is
placed on Ford Motor Company v. Zahn, 265 F.2d 729 (8 Cir. 1959); Blitzstein v. Ford
Motor Company, 288 F.2d 738 (5 Cir. 1961); Spruill v. Boyle-Midway, Inc., 308 F.2d 79
(4 Cir. 1962); Comstock v. General Motors Corporation, 358 Mich. 163, 99 N.W.2d 627,
78 A.L.R.2d 449 (Mich.1959).

[12] There is a line of cases directly supporting General Motors' contention that
negligent design of an automobile is not actionable, where the alleged defective design is
not a causative factor in the accident. The latest leading case on this point is Evans v.
General Motors Corporation, 359 F.2d 822 (7 Cir. 1966), cert. denied, 385 U.S. 836, 87
S. Ct. 83, 17 L. Ed. 2d 70 (1966). A divided court there held that General Motors in
designing an "X" body frame without perimeter support, instead of an allegedly more
safe perimeter body frame, was not liable for the death of a user allegedly caused by the
designed defect because the defendant's design could not have functioned to avoid the
collision. The Court reasoned at pp. 824 and 825 of 359 F.2d:




                                                                                          30
"A manufacturer is not under a duty to make his automobile accident-proof or fool-proof;
nor must he render the vehicle 'more' safe where the danger to be avoided is obvious to
all. Campo v. Scofield, 1950, 301 N.Y. 468, 95 N.E.2d 802, 804. Perhaps it would be
desirable to require manufacturers to construct automobiles in which it would be safe to
collide, but that would be a legislative function, not an aspect of judicial interpretation of
existing law. Campo v. Scofield, supra, 805. * * *

"The intended purpose of an automobile does not include its participation in collisions
with other objects, despite the manufacturer's ability to foresee the possibility that such
collisions may occur. * * *"

[13] In Shumard v. General Motors Corporation, the United States District Court for the
Southern District of Ohio, 270 F. Supp. 311 (1967), held there was no liability where the
alleged design defects in a 1962 Corvair automobile caused it to erupt into flames on
impact, killing the plaintiff's decedent. That Court said: "* * * No duty exists to make an
automobile fireproof, nor does a manufacturer have to make a product which is 'accident-
proof' or 'fool-proof'. Campo v. Scofield, 301 N.Y. 468, 95 N.E.2d 802 (1950) * * *" and
relied upon the Evans case for its holding that:

"* * * The duty of a manufacturer in the design of automobiles does not include
designing a 'fireproof' automobile or an automobile in which passengers are guaranteed to
be safe from fire. A manufacturer has no duty to design an automobile that will not catch
fire under any circumstances. The manufacturer's duty is to design an automobile which
will not present a fire hazard during its normal intended operation."

[14] Since General Motors concedes on the negligence count that its duty of care extends
to designing and constructing an automobile that is reasonably safe for its intended use of
being driven on the roads and highways and that contains no latent or hidden defects
which could cause an accident and subsequent injuries, it would be superfluous to review
the decisions holding manufacturers liable for negligent construction or design that were
the proximate cause of an accident and subsequent injuries. Since MacPherson v. Buick
Motor Co., 217 N.Y. 382, 111 N.E. 1050, L.R.A. 1916F, 696 (1916), the courts have
consistently held a manufacturer liable for negligent construction of an automobile.
Elliott v. General Motors Corporation, 296 F.2d 125 (7 Cir. 1961), cert. denied, 369 U.S.
860, 82 S. Ct. 949, 8 L. Ed. 2d 18 (1962); Ford Motor Company v. Zahn, 265 F.2d 729 (8
Cir. 1959); Comstock v. General Motors Corporation, 358 Mich. 163, 99 N.W.2d 627, 78
A.L.R.2d 449 (1959); Parker v. Ford Motor Company, 296 S.W.2d 35 (Mo. 1956); see 78
A.L.R.2d 473, Anno.: Products Liability -- Vehicles or Parts. And also other
manufacturers, Lovejoy v. Minneapolis-Moline Power Implement Company, 248 Minn.
319, 79 N.W.2d 688 (1956) (broken flywheel on a tractor).

[15] The Courts, however have been somewhat reluctant to impose liability upon a
manufacturer for negligent product design in the automotive field. In Gossett v. Chrysler
Corporation, 359 F.2d 84 (6 Cir. 1966) the Court reversed a judgment based on an
alleged defectively designed truck hood latch that allowed the hood to spring open while




                                                                                           31
the vehicle was in motion causing an accident, but did recognize a duty in connection
with design, stating:

"The general rule may be stated as follows: It is the duty of a manufacturer to use
reasonable care under the circumstances to so design his product as to make it not
accident or foolproof, but safe for the use for which it is intended. This duty includes a
duty to design the product so that it will fairly meet any emergency of use which can
reasonably be anticipated. The manufacturer is not an insurer that his product is, from a
design viewpoint, incapable of producing injury." (Emphasis supplied.)

[16] A case closely bearing on this precise point is Ford Motor Company v. Zahn, 265
F.2d 729 (8 Cir. 1959) where the plaintiff lost sight of one eye on being thrown against a
defectively designed ash tray having a jagged edge. The ash tray had nothing to do in a
causative way of setting up an emergency braking situation, which in turn projected the
plaintiff into the ash tray, but the Court recognized a duty to use reasonable care in
design, recognized the foreseeability of injury resulting from a defective ash tray so
placed, and also recognized the duty resting on the manufacturer to make reasonable
inspections or tests to discover defects. Judge Matthes stated the rule at p. 731:

"By force of law there is imposed upon the manufacturer of an article for sale or use the
duty to exercise reasonable care to prevent defective conditions caused by a miscarriage
in the manufacturing process. This duty requires reasonable skill and care in the process
of manufacture and for reasonable inspection or tests to discover defects."

[17] Generally, as noted in 76 A.L.R.2d 93, Anno.: Products Liability -- Duty As To
Design, the manufacturer has a duty to use reasonable care under the circumstances in the
design of a product but is not an insurer that his product is incapable of producing injury,
and this duty of design is met when the article is safe for its intended use and when it will
fairly meet any "emergency of use" which is foreseeable. Davlin v. Henry Ford & Son,
20 F.2d 317 (6 Cir. 1927). This doctrine has even been extended to cover an unintended
use where the injury resulting from that unintended use was foreseeable or should have
been anticipated. Simpson Timber Co. v. Parks (9 Cir. 1965). (The original division's
opinion, reported in CCH Prod. Liab.Rptr. para. 5498 (1965), was reversed by the Court
en Banc at 369 F.2d 324 (1966), which in turn was vacated by the Supreme Court and
remanded to pass upon issues not covered in its prior opinion, 388 U.S. 459, 87 S. Ct.
2115, 18 L. Ed. 2d 1319 (1966)).

[18] Accepting, therefore, the principle that a manufacturer's duty of design and
construction extends to producing a product that is reasonably fit for its intended use and
free of hidden defects that could render it unsafe for such use, the issue narrows on the
proper interpretation of "intended use". Automobiles are made for use on the roads and
highways in transporting persons and cargo to and from various points. This intended use
cannot be carried out without encountering in varying degrees the statistically proved
hazard of injury-producing impacts of various types. The manufacturer should not be
heard to say that it does not intend its product to be involved in any accident when it can
easily foresee and when it knows that the probability over the life of its product is high,



                                                                                          32
that it will be involved in some type of injury-producing accident. O'Connell in his article
"Taming the Automobile," 58 Nw.U.L.Rev. 299, 348 (1963) cites that between one-
fourth to two-thirds of all automobiles during their use at some time are involved in an
accident producing injury or death. Other statistics are available showing the frequency
and certainty of fatal and injury-producing accidents. See footnote 4. It should be
recognized that the environment in which a product is used must be taken into
consideration by the manufacturer. Spruill v. Boyle-Midway, Inc., 308 F.2d 79 (4 Cir.
1962).

[19] We think the "intended use" construction urged by General Motors is much too
narrow and unrealistic. Where the manufacturer's negligence in design causes an
unreasonable risk to be imposed upon the user of its products, the manufacturer should be
liable for the injury caused by its failure to exercise reasonable care in the design. These
injuries are readily foreseeable as an incident to the normal and expected use of an
automobile. While automobiles are not made for the purpose of colliding with each other,
a frequent and inevitable contingency of normal automobile use will result in collisions
and injury-producing impacts. No rational basis exists for limiting recovery to situations
where the defect in design or manufacture was the causative factor of the accident, as the
accident and the resulting injury, usually caused by the so-called "second collision" of the
passenger with the interior part of the automobile, all are foreseeable. Where the injuries
or enhanced injuries are due to the manufacturer's failure to use reasonable care to avoid
subjecting the user of its products to an unreasonable risk of injury, general negligence
principles should be applicable. The sole function of an automobile is not just to provide
a means of transportation, it is to provide a means of safe transportation or as safe as is
reasonably possible under the present state of the art.

[20] We do agree that under the present state of the art an automobile manufacturer is
under no duty to design an accident-proof or fool-proof vehicle or even one that floats on
water, but such manufacturer is under a duty to use reasonable care in the design of its
vehicle to avoid subjecting the user to an unreasonable risk of injury in the event of a
collision. Collisions with or without fault of the user are clearly foreseeable by the
manufacturer and are statistically inevitable.4

[Footnote 4: National Safety Council, Accident Facts 40 (1966 ed.) reports: In 1965
motor vehicle accidents caused 49,000 deaths, 1.8 million disabling injuries. In
automobile accidents since the advent of the horseless carriage up to the end of 1965, 1.5
million people have been killed in the United States. In 1966 the annual toll of those
killed in automobile accidents rose to 52,500 and 1.9 million suffered disabling injuries.]

[21] The intended use and purpose of an automobile is to travel on the streets and
highways, which travel more often than not is in close proximity to other vehicles and at
speeds that carry the possibility, probability, and potential of injury-producing impacts.
The realities of the intended and actual use are well known to the manufacturer and to the
public and these realities should be squarely faced by the manufacturer and the courts.
We perceive of no sound reason, either in logic or experience, nor any command in
precedent, why the manufacturer should not be held to a reasonable duty of care in the



                                                                                         33
design of its vehicle consonant with the state of the art to minimize the effect of
accidents. The manufacturers are not insurers but should be held to a standard of
reasonable care in design to provide a reasonably safe vehicle in which to travel. Ford
Motor Company v. Zahn, supra. Our streets and highways are increasingly hazardous for
the intended normal use of travel and transportation. While advances in highway
engineering and non-access, dual highways have considerably increased the safety factor
on a miles traveled ratio to accidents, the constant increasing number of vehicles gives
impetus to the need of designing and constructing a vehicle that is reasonably safe for the
purpose of such travel. At least, the unreasonable risk should be eliminated and
reasonable steps in design taken to minimize the injury-producing effect of impacts.

[22] This duty of reasonable care in design rests on common law negligence that a
manufacturer of an article should use reasonable care in the design and manufacture of
his product to eliminate any unreasonable risk of foreseeable injury. The duty of
reasonable care in design should be viewed in light of the risk. While all risks cannot be
eliminated nor can a crash-proof vehicle be designed under the present state of the art,
there are many common-sense factors in design, which are or should be well known to
the manufacturer that will minimize or lessen the injurious effects of a collision. The
standard of reasonable care is applied in many other negligence situations and should be
applied here.

[23] The courts since MacPherson v. Buick Motor Co., 217 N.Y. 382, 111 N.E. 1050,
L.R.A.1916F., 696 (1916) have held that a manufacturer of automobiles is under a duty
to construct a vehicle that is free of latent and hidden defects. We can perceive of no
significant difference in imposing a common law duty of a reasonable standard of care in
design the same as in construction. A defect in either can cause severe injury or death and
a negligent design defect should be actionable. Any design defect not causing the
accident would not subject the manufacturer to liability for the entire damage, but the
manufacturer should be liable for that portion of the damage or injury caused by the
defective design over and above the damage or injury that probably would have occurred
as a result of the impact or collision absent the defective design. The manufacturer argues
that this is difficult to assess. This is no persuasive answer and, even if difficult, there is
no reason to abandon the injured party to his dismal fate as a traffic statistic, when the
manufacturer owed, at least, a common law duty of reasonable care in the design and
construction of its product. The obstacles of apportionment are not insurmountable. It is
done with regularity in those jurisdictions applying comparative negligence statutes and
in other factual situations as condemnation cases, where in some jurisdictions the jury
must assess the value of the land before and after a taking and then assess a special
benefit accruing to the remaining property of the condemnee.

[24] General Motors in arguing against what it views as an expanded duty of a care in
design makes the statement that this duty "must be considered in its application to all
products. Automobile manufacturers cannot be made a special class." With this we quite
agree. We think the duty of the use of reasonable care in design to protect against
foreseeable injury to the user of a product and perhaps others injured as an incident of
that use should be and is equally applicable to all manufacturers with the customary



                                                                                            34
limitations now applied to protect the manufacturer in case of an unintended and
unforeseeable use. The courts have imposed this duty, perhaps more readily against other
manufacturers than against the automotive industry.

[25] We, therefore, do not think the automotive industry is being singled out for any
special adverse treatment by applying to it general negligence principles in (1) imposing
a duty on the manufacturer to use reasonable care in the design of its products to protect
against an unreasonable risk of injury or enhancement of injury to a user of the product,
and (2) holding that the intended use of an automotive product contemplates its travel on
crowded and high speed roads and highways that inevitably subject it to the foreseeable
hazards of collisions and impacts. Neither reason, logic, nor controlling precedents
compel the courts to make a distinction between negligent design and negligent
construction.

[26] The manufacturer's duty to use reasonable care in the design and manufacture of a
product to minimize injuries to its users and not to subject its users to an unreasonable
risk of injury in the event of a collision or impact should be recognized by the courts. The
manufacturers themselves have, in various public utterances in discussing automotive
safety, expressed their concern for making safer vehicles. And General Motors admits
the foreseeability of accidents which are matters of public and common knowledge over a
long period of time. Legal acceptance or imposition of this duty would go far in
protecting the user from unreasonable risks. The normal risk of driving must be accepted
by the user but there is no need to further penalize the user by subjecting him to an
unreasonable risk of injury due to negligence in design.9

[Footnote 9: The Evans case has been the subject of a number of Law Review articles or
comments and has generally received adverse comments as being a too restrictive
declaration of general negligence principles. See, 80 Harv.L.Rev. 688 (1967) "Liability
of Maker of Chattel"; 32 Iowa L.Rev. 953 (1967) "Liability for Negligent Automobile
Design"; Nadler and Page, "Automobile Design and the Judicial Process," 55
Calif.L.Rev. 645, 655 (1967).]

[Duty to Warn of Latent Design Defects]

[27] On the second count of plaintiff's petition alleging negligence in failure to warn of
an alleged dangerous condition in vehicle design the same principles would apply. We
think a cause of action is alleged and that under the law the manufacturer has a duty to
inspect and to test for designs that would cause an unreasonable risk of foreseeable
injury. Ford Motor Company v. Zahn, supra. The failure to use reasonable care in design
or knowledge of a defective design gives rise to the reasonable duty on the manufacturer
to warn of this condition.

[28] The duty of a manufacturer to test and to warn of defects in its product needs little
elaboration. The Restatement (Second), Torts, § 395, comment (f) (1965) reads:




                                                                                         35
"* * * The particulars in which reasonable care is usually necessary for protection of
those whose safety depends upon the character of chattels are * * * (4) the making of
such inspections and tests during the course of manufacture and after the article is
completed as the manufacturer should recognize as reasonably necessary to secure the
production of a safe article. * * *"

[29] Almost any chattel or commodity is capable of inflicting injury; knives cut, axes
split, dynamite explodes, food spoils, poison kills. Where the danger is obvious and
known to the user, no warning is necessary and no liability attaches for an injury
occurring from the reasonable hazards attached to the use of chattels or commodities; but
where the dangerous condition is latent it should be disclosed to the user, and non-
disclosure should subject the maker or supplier to liability for creating an unreasonable
risk.

[30] In Blitzstein v. Ford Motor Company, 288 F.2d 738, at p. 744 (5 Cir. 1961) the
court held the evidence was sufficient to present a jury issue on whether the supplier Ford
Motor was negligent in failing to exercise reasonable care to warn of a dangerous
condition caused by designing a non-ventilated motor car trunk in which an undetectable
leaky gas tank was located, stating:

"We think that a jury could reasonably have found that the American Ford Company was
negligent in marketing a product which was inherently dangerous, of which danger it
should have been aware from its long experience in the design and manufacture of
automobiles, and that American Ford failed to exercise reasonable care to inform the
buying public of this dangerous condition. * * *"

[31] If, because of the alleged undisclosed defect in design of the 1963 Corvair steering
assembly, an extra hazard is created over and above the normal hazard, General Motors
should be liable for this unreasonable hazard. Admittedly, it would not sell many cars of
this particular model if its sale's "pitch" included the cautionary statement that the user is
subjected to an extra hazard or unreasonable risk in the event of a head-on collision. But
the duty of reasonable care should command a warning of this latent defect that could
under certain circumstances accentuate the possibility of severe injury. See 2 Harper and
James, "The Law of Torts," § 28.3-28.9.

[Strict Liability]

[32] On the issue of strict liability or implied warranty of merchantability for intended
use, we make no comment as our holding of sufficiency of counts one and two are
dispositive. The doctrine of strict liability is one of policy for the various states and the
National Congress, and we do not think there has been a sufficient showing on the
Michigan law as respects this point, particularly in the automotive field. The Piercefield
case cited in footnote 5 relates to an inherently dangerous explosive, and we do not know
whether the Michigan courts would extend this doctrine to automobiles, which the courts
have at times viewed both as an inherently dangerous instrument and not an inherently
dangerous instrument. See, Comstock v. General Motors Corporation, 358 Mich. 163, 99



                                                                                           36
N.W.2d 627, 78 A.L.R.2d 449 (Mich. 1959) (an automobile with defective brakes is a
dangerous instrumentality), and Gossett v. Chrysler Corporation, 359 F.2d 84 (6 Cir.
1966) (an automobile is not a dangerous instrumentality under Ohio law.)

[National Traffic and Motor Vehicle Safety Act of 1966]

[33] General Motors contends that any safety standards in design and equipment should
be imposed as envisioned by the National Traffic and Motor Vehicle Safety Act of 1966
(Pub.L. 89-563), 80 Stat. 718, 15 U.S.C.A. § 1381 et seq. Recognizing the need to reduce
traffic accidents and deaths and injuries resulting therefrom, Congress found it necessary
to establish motor vehicle safety standards, and by this Act set up the machinery and
administrative process to establish minimum safety standards. The purpose of this Act is
manifest and the Congress recognizes in § 1391(1) that the public should be protected
against unreasonable risks of accidents occurring as a result of the design, construction or
performance of motor vehicles and also be protected against unreasonable risk of death or
injury in the event accidents do occur. Section 108(c) of the Act, 15 U.S.C. § 1397(c),
expressly negatives any intention of Congress to acquire exclusive jurisdiction in this
field and leaves the common law liability intact. Subsection (c) reads: "(c) Compliance
with any Federal motor vehicle safety standard issued under this subchapter does not
exempt any person from any liability under common law."

[34] It is apparent that the National Traffic Safety Act is intended to be supplementary of
and in addition to the common law of negligence and product liability. The common law
is not sterile or rigid and serves the best interests of society by adapting standards of
conduct and responsibility that fairly meet the emerging and developing needs of our
time. The common law standard of a duty to use reasonable care in light of all the
circumstances can at least serve the needs of our society until the legislature imposes
higher standards or the courts expand the doctrine of strict liability for tort. The Act is a
salutary step in this direction and not an exemption from common law liability.

[Conclusion]

[35] For the reasons set forth, we reverse and remand for proceedings not inconsistent
with this opinion.




                                                                                          37
                Volkswagon of America, Inc., et al.
                                v.
Young, Individual and as Adm'x of the Estate of James C. Young et al.
                             Court of Appeals of Maryland
                              272 Md. 201; 321 A.2d 737

                                  July 8, 1974, Decided

PRIOR HISTORY: Certification of question of law from the United States District
Court for the District of Columbia.

DISPOSITION: Question of law answered as herein set forth. Petitioners to pay
costs.

COUNSEL: Laidler B. Mackall, with whom were Richard O. Cunningham, John M.
Edsall, Scott R. Schoenfeld and Steptoe & Johnson, Herbert Rubin, Michael Hoenig
and Herzfeld & Rubin, Hal C. B. Clagett and Sasscer, Clagett, Channing & Bucher on
the brief, for petitioners. John C. Joyce and F. Robert Troll, Jr., with whom were
Donald L. Hoage and Duckett, Orem, Christie & Beckett on the brief, for respondents.

JUDGES: Chief Judge Murphy and Judge Singley, Smith, Digges, Levine and
Eldridge; Judge Eldridge delivered the opinion of the Court.

OPINION BY: Judge Eldridge

OPINION

[1] This matter reaches us via the Uniform Certification of Questions of Law Act,
Maryland Code (1974), § 12-601 et seq., of the Courts and Judicial Proceedings
Article. [Footnote 1: That Act provides in pertinent part: "§ 12-601. Jurisdiction
granted to Court of Appeals: The Court of Appeals may answer questions of law
certified to it by the Supreme Court of the United States, a Court of Appeals of the
United States, a United States District Court, or the highest appellate court or the
intermediate appellate court of any other state when requested by the certifying court if
there is involved in any proceeding before the certifying court a question of law of this
state which may be determinative of the cause then pending in the certifying court and
as to which it appears to the certifying court there is no controlling precedent in the
Court of Appeals of this state." With regard to our jurisdiction under the Act, see
Smith v. Gray Concrete Pipe Co., 267 Md. 149, 154-155, 297 A. 2d 721 (1972).] The
case is a wrongful death action, filed in the United States District Court for the District
of Columbia by the mother and the widow of James C. Young who was killed in a
1971 automobile accident in Prince George's County, Maryland. After the filing of the
complaint and before any further proceedings took place, the defendants moved to
certify a question of law to this Court; the plaintiffs consented; and the court issued an
"Order For Certification."


                                                                                         38
[2] The question certified by the Order of the United States District Court is:

"Whether or not, under Maryland law, the definition of the 'intended use' of a motor
vehicle includes the vehicle's involvement in a collision and thus in turn, whether a
cause of action is stated against the manufacturer or importer of said vehicle in breach
of warranty or negligence or absolute liability or misrepresentation by allegations that
the design and manufacture of the vehicle unreasonably increased the risk of injury to
occupants following a collision not caused by any defect of the vehicle."

[3] Compare Evans v. General Motors Corporation, 359 F. 2d 822 (7th Cir. 1966),
cert. den. 385 U.S. 836, 87 S. Ct. 83, 17 L.Ed.2d 70 (1966), with Larsen v. General
Motors Corporation, 391 F. 2d 495 (8th Cir. 1968).

[4] The statement of "Facts Relevant to Question Certified" contained in the Order of
the United States District Court is as follows:

This is an action brought by plaintiffs against an automobile manufacturer who
manufactures Volkswagen automobiles in Germany (VWAG) and against an importer
of Volkswagen automobiles (VWOA), in which plaintiffs allege the wrongful death of
plaintiffs' decedent, survival of decedent's claim and loss of consortium of decedent's
widow based on breach of warranty, negligence, absolute liability and
misrepresentation.

The action allegedly grows out of a Maryland automobile accident in which plaintiffs'
decedent, operating a Volkswagen in a northerly direction, stopped at a stop light and
thereafter the Volkswagen was struck in the rear by another vehicle negligently driven
in the same direction.

The complaint alleges that immediately upon collision the Volkswagen was propelled
forward and the seat assembly failed, resulting in plaintiffs' decedent being thrown into
the rear portion of the Volkswagen where he allegedly suffered injuries which resulted
in his death. The complaint alleges that the injuries were caused by the design and
manufacture of the seat assembly and the design and manufacture of the passenger
compartment structures, surfaces and protrusions.

Plaintiffs do not allege that any defect in the Volkswagen caused or contributed to the
collision, but all causes of action alleged are based upon the so-called 'crashworthy
doctrine' -- that the 'intended use' of a motor vehicle includes the vehicle's involvement
in collisions and thus in turn, that there is a duty to design and manufacture the vehicle
so as not to unreasonably increase the risk of injury to occupants following a collision
not caused by a defect in the vehicle.

[5] The Order of the United States District Court further specified that the phrasing of
the certified question was not intended to restrict our consideration of the problems
involved and the issues as we perceive them in light of the complaint in the case.



                                                                                        39
The complaint in the case was attached to the "Order For Certification," and it reveals
certain additional detail concerning the factual allegations. The Volkswagen which
James C. Young was operating at the time of the accident was a 1968 "Type I Beetle
Sedan." It was purchased on March 30, 1968 by the deceased in the state of Alabama.
It was alleged that "[d]uring the course of said purchase, plaintiffs' decedent relied on
advertisements by the defendants that he had seen, heard, and read in the
communications media stating or implying that said Volkswagen was sound and fit for
its intended and foreseeable purposes to be used as a passenger automobile on the
streets and highways of the United States of America." It was further alleged that the
vehicle was "defectively designed, manufactured, and marketed with defects which
rendered it structurally hazardous, not merchantable, and not fit for the purpose
intended" because the seat assembly was "unreasonably vulnerable to separation from
the floor upon collision" and "[t]he rear passenger compartment structures, surfaces and
protrusions . . . allowed an unreasonable risk of injury upon collision . . . ." The nature
of the claimed defective design of the car was more specifically set forth in the
allegations concerning the injury:

". . . [T]he vehicle of plaintiffs' decedent was struck in the rear portion thereof by a
1967 Ford negligently driven in the same direction by one William Benjamin Benson.
Immediately upon collision the car driven by plaintiffs' decedent was propelled forward
and the seat assembly unit, seat frame, seat bracing pieces, seat adjustment mechanism,
seat reinforcements and metal tracks to which the seat itself was fastened, hereinafter
collectively referred to as the 'seat assembly,' failed to withstand the impact against the
rear of the vehicle with the direct and proximate result that the driver's seat separated
from the floor of the car causing it and James C. Young, deceased, to be thrown
violently into the rear portion of said car where his head, body and torso impacted into
and was impacted by various inadequate and defectively designed passenger
compartment structures, surfaces and protrusions."

[6] The plaintiffs went on to allege that James Young's death directly resulted from the
asserted design defects. Finally, it was alleged that the defendants had "actual notice
and knowledge" of the defective seat assembly and rear compartment defects because
of surveys and reports given to them and studies made by various testing institutions;
that, notwithstanding these reports, defendants gave no warning to Volkswagen owners
and operators generally or to James Young in particular; and that the defects were
"latent and hidden." Several studies from named testing organizations were listed in
the complaint.

[7] In light of the factual allegations of the instant complaint, and with the
qualifications hereinafter set forth, we answer the "Question Certified" in the
affirmative. The "intended use" or "intended purpose" of an automobile, in our view, is
not merely to provide transportation. It is to provide reasonably safe transportation. The
complaint in this case was sufficient, we believe, to set forth a cause of action in
negligence under Maryland law.




                                                                                         40
[8] This is the first case to reach this Court concerning the extent of an automobile
manufacturer's liability for a design defect resulting in enhanced injuries in a motor
vehicle accident, where the defect did not cause the initial impact or movement of the
injured person. Such cases are often called "second collision" cases or "automobile
crashworthiness" cases. They differ from other products liability cases involving
defective automobiles by the combination of two factors. First, the alleged defect is in
the design of the automobile rather than a negligent deviation during the construction
or assembly process from the manner in which the vehicle was supposed to be made.
The latter is usually called a "construction defect." [Footnote 2: The author of one
article has described the distinction as follows (Automobile Design Liability: Larsen v.
General Motors And Its Aftermath, 118 Univ. of Penn. L. Rev. 299, n. 4 (1969)):
"Design defects are, by definition, common to all vehicles of a particular model.
Construction defects are generally limited to an extremely small portion of a given
model."] Second, the defect is not the cause of the initial impact. Typically, the actions
of the driver of the car in which the plaintiff is riding, or the actions of the driver of
another vehicle, or the actions of some third person, cause an initial disruption or
impact which in turn results in the plaintiff's colliding with the interior (or occasionally
the exterior) of the car. The plaintiff's collision with the car is the so-called "second
collision." The issue of whether the automobile manufacturer has a duty to take
reasonable steps to design its vehicles so as to minimize the injuries caused by "second
collisions" has engendered much controversy and comment throughout the nation.

[9] The principal case holding that an automobile manufacturer has no duty to design
its cars so as to minimize the injuries suffered in automobile accidents is Evans v.
General Motors Corporation, 359 F. 2d 822 (7th Cir. 1966), cert. denied 385 U.S. 836,
87 S. Ct. 83, 17 L.Ed.2d 70 (1966). The plaintiff in Evans was killed when his 1961
Chevrolet station wagon was struck broadside by another car. He claimed that General
Motors was negligent in designing the frame of his car, inasmuch as an "X" type frame
rather than a box or perimeter type frame was used, contrary to the construction of
some other cars. The claim was that an "X" type frame without side rails would not
adequately protect occupants during a side impact collision, and that the defendant
manufacturer had created an unreasonable risk of serious injury. The trial court,
applying Indiana law, dismissed the complaint for failure to state a claim on which
relief could be granted, and the dismissal was affirmed by the United States Court of
Appeals for the Seventh Circuit. The Court of Appeals held that the critical question
was the nature of the manufacturer's duty. It went on to conclude that a manufacturer
has a duty only to design a car reasonably fit for its intended purpose, and that

"[t]he intended purpose of an automobile does not include its participation in collisions
with other objects, despite the manufacturer's ability to foresee the possibility that such
collisions may occur. As defendant argues, the defendant also knows that its
automobiles may be driven into bodies of water, but it is not suggested that defendant
has a duty to equip them with pontoons." (359 F. 2d at 825.)

[10] The Court of Appeals for the Seventh Circuit also stated as grounds for its
decision that a "manufacturer is not under a duty to make his automobile accident-



                                                                                          41
proof or fool-proof" (id. at 824) and that requiring "manufacturers to construct
automobiles in which it would be safe to collide . . . [is] a legislative function . . . ."
(Ibid.)

[11] Some of the cases applying the Evans holding that an automobile manufacturer
has no duty to design the vehicle so as not to increase unreasonably the risk of injury
following a collision are McClung v. Ford Motor Company, 333 F. Supp. 17 (S.D. W.
Va. 1971), aff'd per curiam 472 F. 2d 240 (4th Cir. 1973); Shumard v. General Motors
Corporation, 270 F. Supp. 311 (S.D. Ohio 1967); Willis v. Chrysler Corporation, 264
F. Supp. 1010 (S.D. Tex. 1967); General Motors Corporation v. Howard, 244 So. 2d
726 (Miss. 1971); Ford Motor Co. v. Simpson, 233 So. 2d 797 (Miss. 1970); Walton v.
Chrysler Motor Corp.. 229 So. 2d 568 (Miss. 1969); Biavaschi v. Frost, CCH Prod.
Liab. Rep. § 6547 (N. J. Super. Ct. 1970); Enders v. Volkswagenwerk, A. G., CCH
Prod. Liab. Rep. § 5930 (Wis. Cir. Ct. 1968). See also Frericks v. General Motors
Corp., 20 Md. App. 518, 317 A. 2d 494 (1974), cert. granted July 5, 1974 (No. 88,
September Term, 1974).

[12] The seminal case on the other side of the issue is Larsen v. General Motors
Corporation, 391 F. 2d 495 (8th Cir. 1968). The plaintiff in Larsen suffered severe
bodily injuries while driving a 1963 Corvair which collided head-on with another car.
The impact caused the steering mechanism to thrust forward into the plaintiff's head.
The suit against General Motors charged negligence in the design of the steering
assembly and the placement of the component parts of the steering assembly into the
structure of the car. It was alleged that General Motors was also negligent in not
warning the user of this latent condition. The specific defect relied upon by the plaintiff
was that the solid steering shaft was so designed as to extend "without interruption
from a point 2.7 inches in front of the leading surface of the front tires to a position
directly in front of the driver," exposing him "to an unreasonable risk of injury from the
rearward displacement of that shaft in the event of a left-of-center head-on collision. So
positioned it receives the initial impact of forces generated by a left-of-center head-on
collision. The unabsorbed forces of the collision in this area are transmitted directly
toward the driver's head, the shaft acting as a spear aimed at a vital part of the driver's
anatomy." 391 F. 2d 497, n. 2. The plaintiff also pointed out that other cars were
designed so as to protect against such rearward displacement, in that the steering
column did not protrude beyond the forward surface of the front tires. The lower court
in Larsen granted General Motors' motion for summary judgment on the theory that the
manufacturer had no duty to design a vehicle which would protect the plaintiff from
injury in a collision. On appeal, the United States Court of Appeals for the Eighth
Circuit reversed, holding that the plaintiff had made out a sufficient case for
consideration by the jury.

[13] The Court of Appeals in Larsen first reviewed the many cases throughout the
country holding manufacturers liable in tort for hidden defects in automobiles, whether
of design or construction, which made the vehicles unsuitable for their intended use,
causing collisions and resulting injuries. 391 F. 2d at 501. The court then stated that the




                                                                                         42
issue was whether an injury resulting from the so-called "second collision" was
encompassed within the "intended use" of an automobile (id. at 501-502):

"Accepting, therefore, the principle that a manufacturer's duty of design and
construction extends to producing a product that is reasonably fit for its intended use
and free of hidden defects that could render it unsafe for such use, the issue narrows on
the proper interpretation of 'intended use.' Automobiles are made for use on the roads
and highways in transporting persons and cargo to and from various points. This
intended use cannot be carried out without encountering in varying degrees the
statistically proved hazard of injury-producing impacts of various types. The
manufacturer should not be heard to say that it does not intend its product to be
involved in any accident when it can easily foresee and when it knows that the
probability over the life of its product is high, that it will be involved in some type of
injury-producing accident."

[14] And later the court emphasized (id. at 502):

“The sole function of an automobile is not just to provide a means of transportation, it
is to provide a means of safe transportation or as safe as is reasonably possible under
the present state of the art."

[15] The Court of Appeals concluded that an automobile manufacturer "is under a duty
to use reasonable care in the design of its vehicle to avoid subjecting the user to an
unreasonable risk of injury in the event of a collision." (Ibid.)

[16] The Larsen court then emphasized the limitations of its holding; that it was not
making automobile manufacturers "insurers"; that it was merely applying common law
principles of negligence; that the standard for manufacturers was "reasonable care";
and that an automobile did not have to be absolutely crash-proof but only designed to
provide "a reasonably safe vehicle in which to travel." 391 F. 2d at 503. The court went
on to reiterate these limitations, stating (ibid.):

"This duty of reasonable care in design rests on common law negligence that a
manufacturer of an article should use reasonable care in the design and manufacture of
his product to eliminate any unreasonable risk of foreseeable injury. The duty of
reasonable care in design should be viewed in light of the risk. While all risks cannot
be eliminated nor can a crash-proof vehicle be designed under the present state of the
art, there are many common-sense factors in design, which are or should be well
known to the manufacturer that will minimize or lessen the injurious effects of a
collision. The standard of reasonable care is applied in many other negligence
situations and should be applied here."

[17] The court also stated that the "failure to use reasonable care in design or
knowledge of a defective design gives rise to the reasonable duty on the manufacturer
to warn of this condition." (Id. at 505.) The court continued (ibid.):




                                                                                        43
"Where the danger is obvious and known to the user, no warning is necessary and no
liability attaches for an injury occurring from the reasonable hazards attached to the use
of chattels or commodities; but where the dangerous condition is latent it should be
disclosed to the user, and non-disclosure should subject the maker or supplier to
liability for creating an unreasonable risk."

[18] A growing number of jurisdictions have followed the principles set forth in
Larsen in so-called "second collision" cases. Just last year the Court of Appeals of New
York adopted the Larsen view with respect to an alleged design defect in a motorcycle,
which enhanced the motorcycle operator's injuries following an initial collision with an
automobile. The New York court in Bolm v. Triumph Corporation, 33 N.Y.2d 151, 305
N.E.2d 769, 772 (1973), held that the trier of facts should determine if there was a
latent design defect which the manufacturer could have reasonably foreseen would
cause injury, saying:

"As was stated in Campo [v. Scofield, 301 N.Y. 468, 95 N.E.2d 802 (1950)], a
manufacturer is under no duty to design a product which is accident-proof. There is no
liability on the part of a manufacturer for injuries resulting from dangers which are
patent or obvious. Thus, the operator of a motor vehicle assumes the dangers which
inhere in its operation, including the probability of many 'second collision' injuries. The
extent of that assumption, however, should be no greater than those 'second collision'
injuries which would result from an impact in a reasonably designed and constructed
vehicle. While a vehicle need not be made 'crash-worthy,' the manufacturer should not
be permitted to argue that a user of its product assumes dangers from unknown or latent
defects, either in construction or design, which the manufacturer can reasonably foresee
will cause injury on impact. The standards for imposing liability for such unreasonably
dangerous design defects are, thus, general negligence principles (see Larsen v.
General Motors Corp., supra . . . ."

[19] Even more recently, the United States Court of Appeals for the Fourth Circuit,
applying Virginia law and assuming that Virginia would follow Larsen, applied the
principles of Larsen to reverse a verdict in favor of the plaintiff and to hold that the
manufacturer was not liable under the facts of that case. In Dreisonstok v.
Volkswagenwerk, A.G., 489 F. 2d 1066 (4th Cir. 1974), the plaintiff was seated in the
center of the seat of a Volkswagen "microbus" next to the driver. Upon impact with a
telephone pole the vehicle crumpled, causing the plaintiff's leg to fasten between the
seat and the dashboard of the van and throwing her forward. The plaintiff claimed, inter
alia, that the vehicle was defectively designed because the manufacturer failed to
provide "'sufficient energy-absorbing materials or devices or "crush space" . . . so that
at 40 miles an hour the integrity of the passenger compartment would not be violated. .
. .'" (Id. at 1068-1069.) The crux of the plaintiff's case was that the "'Volkswagen
station wagon did not provide the protection for the front seat passengers as did the
"normal" or standard passenger car,'" with the passengers in the middle, the motor in
the front, and a "long hood" in front of the passenger compartment (id. at 1074).




                                                                                         44
[20] The United States Court of Appeals for the Fourth Circuit in Dreisonstok, quoting
extensively from Larsen, emphasized that the manufacturer's duty is to design a vehicle
so that there is no "'unreasonable risk of injury in the event of a collision'" and that
liability "'is imposed only when an unreasonable danger is created.'" (489 F. 2d at
1071.) The court went on to hold that in determining whether the design of a vehicle
gives rise to an unreasonable risk of danger in a second collision, the court must
consider the "attractiveness of the style of the car" as an element "by which buyers are
influenced"; the "purpose of the particular type of vehicle"; the price of the vehicle; and
the circumstances of the accident, for example whether it is a "head-on" collision,
whether the vehicle is traveling at a high speed, etc. (Id. at 1072-1073.) The court then
stated (id. at 1073):

"In summary, every case such as this involves a delicate balancing of many factors in
order to determine whether the manufacturer has used ordinary care in designing a car,
which, giving consideration to the market purposes and utility of the vehicle, did not
involve unreasonable risk of injury to occupants within the range of its 'intended use.'"
The court applied these principles to hold that the manufacturer's design had not been
negligent, as the vehicle was of a "special type and particular design . . . uniquely
developed in order to provide the owner with the maximum amount of either cargo or
passenger space in a vehicle inexpensively priced and of such dimensions as to make
possible easy maneuverability." (Id. at 1073-1074.) In addition to holding that the
design was not unreasonable in light of the pertinent factors that must be considered,
the court also relied on the fact that the nature of the design and any danger inherent in
not having any substantial part of the vehicle in front of the passenger compartment
"was readily discernible to any one using the vehicle; in fact, it was . . . the unique
feature of the vehicle." (Id. at 1074.)

[21] Other cases adopting and applying the Larsen principles to design defects in
automobiles causing "second collisions" are: Passwaters v. General Motors
Corporation, 454 F. 2d 1270 (8th Cir. 1972); Bremier v. Volkswagen of America, Inc.,
340 F. Supp. 949 (D.D.C. 1972); Grundmanis v. British Motor Corporation, , 308 F.
Supp. 303 (E.D. Wis. 1970); Dyson v. General Motors Corporation, 298 F. Supp. 1064
(E.D. Pa. 1969); Badorek v. General Motors Corporation, 11 Cal. App. 3d 902, 90 Cal.
Rptr. 305 (1970); Culpepper v. Volkswagen of American, 33 Cal. App. 3d 510, 109
Cal. Rptr. 110 (1973); Brandenburger v. Toyota Motor Sales, U.S.A., Inc., 513 P. 2d
268 (Mont. 1973); May v. Portland Jeep, Inc., 509 P. 2d 24 (Or. 1973); Mickle v.
Blackmon, 252 S. C. 202, 166 S.E.2d 173 (1969).3

[Footnote 3: The question of a motor vehicle manufacturer's liability for a design
defect which enhances injuries in a "second collision" has also been the subject of
much legal literature. See, e.g., Sklaw, "Second Collision" Liability: The Need For
Uniformity, 4 Seton Hall L. Rev. 499 (1973); Hoenig and Werber, Automobile
"Crashworthiness": An Untenable Doctrine, 20 Clev. St. L. Rev. 578 (1971); Note, 24
Vanderbilt L. Rev. 862 (1971); Automobile Design Liability: Larsen v. General Motors
And Its Aftermath, 118 U. Penn. L. Rev. 299 (1969); Note, "Intended Use" And The
Unsafe Automobile: Manufacturers' Liability For Negligent Design, 28 Md. L. Rev.



                                                                                         45
386 (1968); Nader and Page, Automobile Design and the Judicial Process, 55 Cal. L.
Rev. 645 (1967); Note, Liability for Negligent Automobile Design, 52 Iowa L. Rev.
953 (1967); Katz, Liability Of Automobile Manufacturers For Unsafe Design of
Passenger Cars, 69 Harv. L. Rev. 863 (1956).]

[22] In our view, Larsen v. General Motors Corporation, supra, and the cases
following it, are more in accord with traditional negligence principles than Evans v.
General Motors Corporation, supra. Since the time of MacPherson v. Buick Motor
Co., 217 N. Y. 382, 111 N. E. 1050 (1916), it has been generally held that an
automobile manufacturer or supplier, like the manufacturer or supplier of other
products, is liable in negligence to an ultimate user of the vehicle for a construction
defect of which he was or reasonably should have been aware, which was not obvious
to the user, and which causes a collision and resulting injuries. See Woolley v.
Uebelhor, 239 Md. 318, 325, 211 A. 2d 302 (1965).

[23] The principle is no different where the defect is in the design of a product rather
than its construction. We have imposed liability upon manufacturers for injuries caused
by the unsafe designs of their products, Babylon v. Scruton, 215 Md. 299, 138 A. 2d
375 (1958). See also Restatement 2d, Torts, § 398. The recent cases in Maryland which
have held manufacturers and suppliers not liable for allegedly unsafe designs of their
products, have not been on the theory that a design defect does not give rise to a cause
of action in negligence; instead, the denial of liability in each case was based on the
fact that the danger in the design was patent or obvious to the user. Patten v. Logemann
Bros. Co., 263 Md. 364, 283 A. 2d 567 (1971); Blankenship v. Morrison Mach. Co.,
255 Md. 241, 257 A. 2d 430 (1969); Myers v. Montgomery Ward & Co., 253 Md. 282,
252 A. 2d 855 (1969). Where the unsafe design was not obvious to the user, the
manufacturer was held responsible, Babylon v. Scruton, supra.

[24] That the design defect does not cause the initial collision should make no
difference if it is a cause of the ultimate injury. Where the injuries to an occupant of a
motor vehicle resulted from both the negligence of a driver as well as a negligent
condition created by some other entity, this Court has held that both negligent actors
may be liable, Howard County v. Leaf, 177 Md. 82, 95, 8 A. 2d 756 (1939). We have
also stated that the "aggravation of the results of a collision" may give rise to tort
liability, Warner v. Markoe, 171 Md. 351, 358, 189 A. 260 (1937). As stated by the
Court of Appeals of New York in Bolm v. Triumph Corporation, supra, 305 N. E. at
773-774:

"Neither sound policy nor reason can be found to justify a distinction between the
liability of the manufacturer whose defective item causes the initial accident and that of
the manufacturer whose defective product aggravates or enhances the injuries after an
intervening impact. Assuming that in each case the defect is 'a substantial factor in
bringing about [the] injury or damages,' what possible justification is there for
disallowing a claim against the manufacturer whose defective product results in injury
after a foreseeable intervening cause? It is well settled that foreseeable intervening
cause will not relieve a wrongdoer of liability in other situations (41 N.Y.Jur.,



                                                                                        46
Negligence, § 38; 2 Harper and James, Law of Torts, § 20-5). We can perceive no
reason why a manufacturer of motor vehicles should be held to a lesser degree of
liability. Accordingly, we reject the 'second collision rule' in favor of traditional rules
of negligence and warranty."

[25] In sum, "traditional rules of negligence" lead to the conclusion that an automobile
manufacturer is liable for a defect in design which the manufacturer could have
reasonably foreseen would cause or enhance injuries on impact, which is not patent or
obvious to the user, and which in fact leads to or enhances the injuries in an automobile
collision.

[26] The arguments advanced by Volkswagen in the instant case for creating an
exception to the application of traditional negligence principles in "second collision"
cases are not persuasive. They are essentially the same reasons set forth by the United
States Court of Appeals for the Seventh Circuit in Evans and the other cases following
Evans. Volkswagen's principal arguments are: (1) that the intended purpose of an
automobile is transportation and does not include its participation in collisions; (2) that
"a manufacturer is not required to produce accident-proof or injury-proof cars"; (3) that
manufacturers are not insurers; and (4) that "[d]esign requirements are a legislative, not
a judicial function . . . ."

[27] While the intended purpose of an automobile may not be to participate in
collisions, the intended purpose includes providing a reasonable measure of safety
when, inevitably, collisions do occur. For many years automobiles have been equipped
with safety glass, bumpers, windshield wipers, etc. More recently, and largely as a
result of governmental action, automobiles are equipped with additional safety devices
such as seat belts, shoulder harnesses, padded dashboards, padded visors, non-
protruding knobs, etc. Frequent collisions are foreseeable, and the intended purpose of
all of these parts of the vehicle is to afford reasonable safety when those collisions
occur.

[28] The arguments that there is no duty to design "accident-proof" or "injury-proof"
vehicles, and that automobile manufacturers are not insurers, are "straw men." No case
has ever held that an automobile manufacturer must design an "accident-proof" or
"injury-proof" vehicle or that the manufacturer is an insurer. Concerning two of the
examples most often used by the advocates of non-liability for design defects, no one
has suggested that an automobile must be designed to withstand a high speed head-on
collision with a truck or to float if it leaves the road and goes into a body of water. As
the court stated in Larsen, supra, 391 F. 2d at 502:

"We do agree that under the present state of the art an automobile manufacturer is
under no duty to design an accident-proof or fool-proof vehicle or even one that floats
on water, but such manufacturer is under a duty to use reasonable care in the design of
its vehicle to avoid subjecting the user to an unreasonable risk of injury in the event of
a collision."




                                                                                         47
[29] The standard to be applied is the traditional one of reasonableness.

[30] The contention that the design of automobiles involves a legislative function and
not a judicial function, similarly furnishes no sound reason for exempting automobile
"second collision" cases from the normal principles of tort liability. Legislative or
administrative requirements that persons or businesses conduct their operations in a
particular manner, and adhere to specified standards, have never been viewed as
supplanting tort liability. On the contrary, such statutory or regulatory requirements are
deemed to furnish standards by which courts or juries determine, along with other
circumstances, whether or not conduct is negligent. Failure to adhere to those standards
is evidence of negligence for the court or jury to consider. McLhinney v. Lansdell
Corp. of Md., 254 Md. 7, 14-15, 254 A. 2d 177 (1969); Paramount Development v.
Hunter, 249 Md. 188, 193, 238 A. 2d 869 (1968); Aravanis v. Eisenberg, 237 Md. 242,
259, 260, 206 A. 2d 148 (1965); Liberto v. Holfeldt, 221 Md. 62, 65, 155 A. 2d 698
(1959); Austin v. Buettner, 211 Md. 61, 70, 124 A. 2d 793 (1956), and cases therein
cited. Moreover, the most significant legislation dealing with motor vehicle safety
standards makes it clear that Congress did not view the question of safe motor vehicle
design as solely a legislative problem. The National Traffic and Motor Vehicle Safety
Act of 1966 specifically provides that "Compliance with any Federal motor vehicle
safety standard issued under this subchapter does not exempt any person from any
liability under common law." 15 U.S.C. 1397 (c). The committee reports and debates
specify that the purpose of this provision was to insure that "state common law
standards of care" and the principles of "product liability at common law" would
continue to be viable, and that the legislative safety standards were not "to affect the
rights of parties under common law . . . ." S. Rep. No. 1301, Committee on Commerce,
89 Cong., 2d Sess. 1966, p. 12; H.R. Rep. No. 1776, Committee on Interstate and
Foreign Commerce, 89 Cong., 2d Sess. 1966, p. 24; 112 Cong. Rec. 14230 (1966).

[31] While we hold that the federal court complaint in the present case is sufficient to
set forth a cause of action in negligence under Maryland law, the limitations upon this
type of liability should be reiterated. As emphasized in Larsen and the cases following
it, the automobile manufacturer does not have to design a crash-proof car. Instead, the
manufacturer must use only reasonable care in the design of a vehicle in order to avoid
subjecting a user to an unreasonable risk of injury in a collision.

[32] Moreover, in determining "reasonableness," many factors must be considered.
There must be "a balancing of the likelihood of harm, and the gravity of harm if it
happens against the burden of the precautions which would be effective to avoid the
harm." Larsen, supra, 391 F. 2d at 502, n. 3. The style and type of vehicle, and its
particular purpose, must be taken into consideration. A "convertible could not be made
'as safe in roll-over accidents as a standard four-door sedan with center posts and full-
door frames.'" Dreisonstok v. Volkswagenwerk, A.G., supra, 489 F. 2d at 1072,
quoting from Dyson v. General Motors Corporation, supra, 298 F. Supp. at 1073. Price
must be a pertinent factor, as the cost of a particular design change may in some
instances be so great, while adding little to safety, that the vehicle will be taken "out of
the price range of the market to which it was intended to appeal." Dreisonstok, supra,



                                                                                          48
489 F. 2d at 1073. And the price of the vehicle itself should be considered, for "a
Cadillac may be expected to include more in the way of . . . 'crashworthiness' than the
economy car." Id. at 1073. The nature of the accident is to be taken into account, as "'it
could not reasonably be argued that a car manufacturer should be held liable because
its vehicle collapsed when involved in a head-on collision with a large truck, at high
speed.'" Id. at 1073; Dyson, supra, 298 F. Supp. at 1073. There are perhaps many other
factors that will be pertinent in particular cases. In order to impose liability, the trier of
the facts must be able to conclude that the design was unreasonable in light of all of the
relevant considerations.

[33] In addition, there can be no recovery if the danger inherent in the particular design
was obvious or patent to the user of the vehicle. Larsen, supra, 391 F. 2d at 505. See
also Patten v. Logemann Bros. Co., supra, 263 Md. at 368-370; Blankenship v.
Morrison Mach. Co., supra, 255 Md. at 245-246; Myers v. Montgomery Ward & Co.,
supra, 253 Md. at 292-295.

[34] The plaintiffs-respondents also argued before us that their complaint was
sufficient to state a cause of action under theories of breach of warranty and strict
liability. As to a cause of action for breach of warranty, this would depend upon
Alabama law and not Maryland law. The general rule, to which we adhere, is that "the
law of the place of the sale determines the extent and effect of the warranties which
attend the sale." Schultz v. Tecumseh Products, 310 F. 2d 426, 428 (6th Cir. 1962). See
also, e.g., Modern Farm Service, Inc. v. Ben Pearson, Inc., 308 F. 2d 18, 22-23 (5th
Cir. 1962); Texas Motorcoaches v. A.C.F. Motors Co., 154 F. 2d 91, 93 (3rd Cir.
1946); Pipe Welding Supply Co. v. Gas Atmospheres, Inc., 201 F. Supp. 191, 196-197
(N.D. Ohio 1961); Grummons v. Zollinger, 189 F. Supp. 64, 66 (N.D. Ind. 1960); Hunt
Truck Sales and Service, Inc. v. Omaha Standard, 187 F. Supp. 796, 798-799 (S.D.
Iowa 1960); Hermanson v. Hermanson, 19 Conn. Sup. 479, 117 A. 2d 840, 842 (1954);
McCrossin v. Hicks Chevrolet, Inc., 248 A. 2d 917, 921 (D.C. 1969); Amos v. Walter
N. Kelley Co., 240 Mich. 257, 215 N. W. 397 (1927); Somerville Container Sales v.
General Metal Corp., 39 N. J. Super. 348, 120 A. 2d 866, 871 (1956); but cf. Uppgren
v. Executive Aviation Services, Inc., 326 F. Supp. 709 (D. Md. 1971). Since the
Volkswagen was purchased in Alabama, the law of that state determines whether a
cause of action for breach of warranty was alleged.

[35] With respect to the contention that the complaint sets forth a cause of action under
the "strict liability" theory of Restatement 2d, Torts, § 402A, this Court has not
endorsed the theory of that section. Bona v. Graefe, 264 Md. 69, 77, 285 A. 2d 607
(1972); Myers v. Montgomery Ward & Co., supra, 253 Md. at 296-297; Telak v.
Maszczenski, 248 Md. 476, 487-489, 237 A. 2d 434 (1968). Regardless of whether the
theory of § 402A of the Restatement should be accepted in other contexts, we are
convinced that it has no proper application to liability for design defects in
motor vehicles. The thrust of § 402A is that a seller of "any product in a defective
condition" is liable to a user for harm caused by that defective condition even though
"the seller has exercised all possible care in the preparation and sale of his product."
This principle obviously changes the standard of care with regard to a construction



                                                                                            49
defect. But as to a defect in design, it has no special meaning. Since the existence of a
defective design depends upon the reasonableness of the manufacturer's action, and
depends upon the degree of care which he has exercised, it is wholly illogical to speak
of a defective design even though the manufacturer has "exercised all possible care" in
the preparation of his product. While a few cases applying Larsen principles have used
language of "strict liability" with respect to design defects, it has been recognized that
this results in "no practical difference" from the application of negligence principles.
Note, 24 Vanderbilt L. Rev. 862, 866-867 (1971); Sklaw, "Second Collision" Liability:
The Need For Uniformity, 4 Seton Hall L. Rev. 499, 507, 522-523 (1973).
Consequently, the tort liability under Maryland law of a manufacturer or supplier of a
motor vehicle, for a defective design which enhances injuries in a collision, depends
upon traditional principles of negligence.

[36] Question of law answered as herein set forth.

[37] Petitioners to pay costs.




                                                                                        50
                      Carole D. MacDonald & another
                                    v.
                     Ortho Pharmaceutical Corporation
                       Supreme Judicial Court of Massachusetts
                            394 Mass. 131; 475 N.E.2d 65

                                May 8, 1984, Argued
                             February 28, 1985, Decided

PRIOR HISTORY: Worcester. Civil action commenced in the Superior Court on
February 15, 1978. The case was tried before Judge William C. O'Neil, Jr. The
Supreme Judicial Court on its own initiative transferred the case from the Appeals
Court.

DISPOSITION: So ordered.

COUNSEL: John F. Keenan for the plaintiffs. Robert W. Sparks of New Jersey
(Edward P. Leibensperger with him) for the defendant.

JUDGES: Chief Judge Hennessey, Judges Liacos, Abrams, Nolan, and O'Connor.
Judge O'Connor, dissenting.

OPINION BY: Judge Abrams

OPINION
[1]    This products liability action raises the question of the extent of a
drug manufacturer's duty to warn consumers of dangers inherent in the use of oral
contraceptives. The plaintiffs brought suit against the defendant, Ortho Pharmaceutical
Corporation (Ortho), for injuries allegedly caused by Ortho's birth control pills, and
obtained a jury verdict in their favor. The defendant moved for a judgment
notwithstanding the verdict. The judge concluded that the defendant did not owe a duty
to warn the plaintiffs, and entered judgment for Ortho. The plaintiffs appealed. We
transferred the case to this court on our own motion and reinstate the jury verdict.
[Footnote 2: The only issues before us are issues of the drug manufacturer's liability.]
[2] We summarize the facts. In September, 1973, the plaintiff Carole D. MacDonald
(MacDonald), who was twenty-six years old at the time, obtained from her
gynecologist a prescription for Ortho-Novum contraceptive pills, manufactured by
Ortho. As required by the then effective regulations promulgated by the United States
Food and Drug Administration (FDA), the pill dispenser she received was labeled with
a warning that "oral contraceptives are powerful and effective drugs which can cause
side effects in some users and should not be used at all by some women," and that
"[t]he most serious known side effect is abnormal blood clotting which can be fatal."3
The warning also referred MacDonald to a booklet which she obtained from her
gynecologist, and which was distributed by Ortho pursuant to FDA requirements. The
booklet contained detailed information about the contraceptive pill, including the


                                                                                      51
increased risk to pill users that vital organs such as the brain may be damaged by
abnormal blood clotting.4 The word "stroke" did not appear on the dispenser warning
or in the booklet.

[Footnote 3: FDA regulations in effect during the time period relevant to this litigation
required that the following warning be included in or with the pill dispenser:

Do Not Take This Drug Without Your Doctor's Continued Supervision. The oral
contraceptives are powerful and effective drugs which can cause side effects in some
users and should not be used at all by some women. The most serious known side effect
is abnormal blood clotting which can be fatal. Safe use of this drug requires a careful
discussion with your doctor. To assist him in providing you with the necessary
information, ___(Firm name) has prepared a booklet (or other form) written in a style
understandable to you as the drug user. This provides information on the effectiveness
and known hazards of the drug including warnings, side effects and who should not use
it. Your doctor will give you this booklet (or other form) if you ask for it and he can
answer any questions you may have about the use of this drug. Notify your doctor if
you notice any unusual physical disturbance or discomfort.

21 C.F.R. § 130.45(d)(1), 35 Fed. Reg. 9002-9003 (1970), recodified at 21 C.F.R. §
310.501(a)(4), 39 Fed. Reg. 11680 (1974), 40 Fed. Reg. 5354 (1975).]

[Footnote 4:     Applicable FDA regulations required that the booklet contain
"information in lay language, concerning effectiveness, contraindications, warnings,
precautions, and adverse reactions," including a warning "regarding the serious side
effects with special attention to thromboembolic disorders and stating the estimated
morbidity and mortality in users vs. nonusers." 21 C.F.R. § 130.45(e) & (e)(3), 35 Fed.
Reg. 9002, 9003 (1970), recodified at 21 C.F.R. § 310.501(a)(6) & (a)(6)(iii), 39 Fed.
Reg. 11680 (1974), 40 Fed. Reg. 5353 (1975). Ortho's booklet contained the following
information:

About blood clots
Blood clots occasionally form in the blood vessels of the legs and the pelvis of
apparently healthy people and may threaten life if the clots break loose and then lodge
in the lung or if they form in other vital organs, such as the brain. It has been estimated
that about one woman in 2,000 on the pill each year suffers a blood clotting disorder
severe enough to require hospitalization. The estimated death rate from abnormal
blood clotting in healthy women under 35 not taking the pill is 1 in 500,000; whereas
for the same group taking the pill it is 1 in 66,000. For healthy women over 35 not
taking the pill, the rate is 1 in 200,000 compared to 1 in 25,000 for pill users. Blood
clots are about three times more likely to develop in women over the age of 34. For
these reasons it is important that women who have had blood clots in the legs, lungs or
brain not use oral contraceptives. Anyone using the pill who has severe leg or chest
pains, coughs up blood, has difficulty breathing, sudden severe headache or vomiting,
dizziness or fainting, disturbances of vision or speech, weakness or numbness of an
arm or leg, should call her doctor immediately and stop taking the pill.]



                                                                                         52
[3] MacDonald's prescription for Ortho-Novum pills was renewed at subsequent
annual visits to her gynecologist. The prescription was filled annually. On July 24,
1976, after approximately three years of using the pills, MacDonald suffered an
occlusion of a cerebral artery by a blood clot, an injury commonly referred to as a
stroke. [Footnote 5: MacDonald's hospital records refer to her injury as a "cerebral
vascular accident," terminology likewise descriptive of brain damage attributable to
blood clotting.] The injury caused the death of approximately twenty per cent of
MacDonald's brain tissue, and left her permanently disabled. She and her husband
initiated an action in the Superior Court against Ortho, seeking recovery for her
personal injuries and his consequential damages and loss of consortium.
[4] MacDonald testified that, during the time she used the pills, she was unaware that
the risk of abnormal blood clotting encompassed the risk of stroke, and that she would
not have used the pills had she been warned that stroke is an associated risk.6 The case
was submitted to a jury on the plaintiffs' theories that Ortho was negligent in failing to
warn adequately of the dangers associated with the pills and that Ortho breached its
warranty of merchantability. These two theories were treated, in effect, as a single
claim of failure to warn. The jury returned a special verdict, finding no negligence or
breach of warranty in the manufacture of the pills. The jury also found that Ortho
adequately advised the gynecologist of the risks inherent in the pills;7 the jury found,
however, that Ortho was negligent and in breach of warranty because it failed to give
MacDonald sufficient warning of such dangers. The jury further found that
MacDonald's injury was caused by Ortho's pills, that the inadequacy of the warnings to
MacDonald was the proximate cause of her injury, and that Ortho was liable to
MacDonald and her husband. [Footnote 8: The only issue before us concerns the
scope of Ortho's duty to the plaintiffs. The defendant does not contest the damages but
relies solely on its claim that it owes no duty to warn the plaintiffs directly.]

[Footnote 6: Subsequent to the events in this case, the FDA regulation was amended
by 43 Fed. Reg. 4221 (1978), which replaced the regulation requirement of a specified
warning on the pill dispenser, see note 3, supra, with a requirement that the dispenser
contain a warning "of the serious side effects of oral contraceptives, such as
thrombophlebitis, pulmonary embolism, myocardial infarction, retinal artery
thrombosis, stroke, benign hepatic adenomas, induction of fetal abnormalities, and
gallbladder disease" (emphasis added). See 21 C.F.R. § 310.501(a) (2)(iv) (1984).]

[Footnote 7: MacDonald stated at trial that her gynecologist had informed her only that
oral contraceptives might cause bloating, and had not advised her of the increased risk
of stroke associated with consumption of birth control pills. The physician was not
joined as a defendant in this action, and no questions relating to any potential liability
on his part are before us. MacDonald further testified at trial that she had read both the
warning on the Dialpak tablet dispenser as well as the booklet which she received from
her gynecologist. See notes 3 and 4, supra.]

[5] After the jury verdict, the judge granted Ortho's motion for judgment
notwithstanding the verdict, concluding that, because oral contraceptives are
prescription drugs, a manufacturer's duty to warn the consumer is satisfied if the



                                                                                        53
manufacturer gives adequate warnings to the prescribing physician, and that the
manufacturer has no duty to warn the consumer directly.

[6] The narrow issue, on appeal, is whether, as the plaintiffs contend, a manufacturer
of birth control pills owes a direct duty to the consumer to warn her of the dangers
inherent in the use of the pill. We conclude that such a duty exists under the law of this
Commonwealth.

[7] 1. Extent of duty to warn. Ordinarily, "a manufacturer of a product, which the
manufacturer knows or should know is dangerous by nature or is in a dangerous
condition," is under a duty to give warning of those dangers to "persons who it is
foreseeable will come in contact with, and consequently be endangered by, that
product." H.P. Hood & Sons v. Ford Motor Co., 370 Mass. 69, 75 (1976). The element
of privity being long discarded, a manufacturer's warning to the immediate purchaser
will not, as a general matter, discharge this duty. However, "there are limits to that
principle." Carter v. Yardley & Co., 319 Mass. 92, 98 (1946). Thus, "a manufacturer
may be absolved from blame because of a justified reliance upon . . . a middleman." Id.
at 99. This exception is applicable only in the limited instances in which the
manufacturer's reliance on an intermediary is reasonable. See Restatement (Second) of
Torts § 388 comment n (1965). In such narrowly defined circumstances, the
manufacturer's immunity from liability if the consumer does not receive the warning is
explicable on the grounds that the intermediary's failure to warn is a superseding cause
of the consumer's injury, or, alternatively, that, because it is unreasonable in such
circumstances to expect the manufacturer to communicate with the consumer, the
manufacturer has no duty directly to warn the consumer.9 See generally 1A L. Frumer
& M. Friedman, Products Liability §§ 8.01, 8.03 [3] (1983 & Supp. 1984); Restatement
(Second) of Torts, supra at § 452 comment f.

[Footnote 9: Ortho points out that a number of courts have reached this result in oral
contraceptive cases. See, e.g., Brochu v. Ortho Pharmaceutical Corp., 642 F.2d 652,
656 (1st Cir. 1981) (applying New Hampshire law); Lindsay v. Ortho Pharmaceutical
Corp., 637 F.2d 87, 91 (2d Cir. 1980) (applying New York law); Skill v. Martinez, 91
F.R.D. 498, 507 (D. N.J. 1981), aff'd, 677 F.2d 368 (3d Cir. 1982); Goodson v. Searle
Laboratories, 471 F. Supp. 546, 549 (D. Conn. 1978); Dunkin v. Syntex Laboratories,
Inc., 443 F. Supp. 121, 123 (W.D. Tenn. 1977); Chambers v. G.D. Searle & Co., 441 F.
Supp. 377, 381 (D. Md. 1975), aff'd per curiam, 567 F.2d 269 (4th Cir. 1977);
Carmichael v. Reitz, 17 Cal. App. 3d 958, 989 (1971); Hamilton v. Hardy, 37 Colo.
App. 375, 387 (1976); Mahr v. G.D. Searle & Co., 72 Ill. App. 3d 540, 561 (1979);
Ortho Pharmaceutical Corp. v. Chapman, 180 Ind. App. 33, 43 (1979); Seley v. G.D.
Searle & Co., 67 Ohio St. 2d 192, 198 (1981); McEwen v. Ortho Pharmaceutical Corp.,
270 Or. 375, 385 (1974); Leibowitz v. Ortho Pharmaceutical Corp., 224 Pa. Super. 418,
431 (1973). See also Terhune v. A.H. Robins Co., 90 Wash. 2d 9, 14 (1978)
(intrauterine contraceptive device).]

[8] The rule in jurisdictions that have addressed the question of the extent of a
manufacturer's duty to warn in cases involving prescription drugs is that the prescribing



                                                                                        54
physician acts as a "learned intermediary" between the manufacturer and the patient,
and "the duty of the ethical drug manufacturer is to warn the doctor, rather than the
patient, [although] the manufacturer is directly liable to the patient for a breach of such
duty." McEwen v. Ortho Pharmaceutical Corp., 270 Or. 375, 386-387 (1974). Oral
contraceptives, however, bear peculiar characteristics which warrant the imposition of
a common law duty on the manufacturer to warn users directly of associated risks.
Whereas a patient's involvement in decision making concerning use of a prescription
drug necessary to treat a malady is typically minimal or nonexistent, the healthy, young
consumer of oral contraceptives is usually actively involved in the decision to use "the
pill," as opposed to other available birth control products, and the prescribing physician
is relegated to a relatively passive role. [Footnote 10: According to the American
Medical Association, "the medical profession regards the pill, in most cases, as a
convenience rather than a traditional medication." Statement of American Medical
Association, published in Science News, March 14, 1970, quoted in Comment,
Liability of Birth Control Pill Manufacturers, 23 Hastings L.J. 1526, 1532 (1972).
These distinguishing features have been recognized by legal commentators as well as
by the medical profession. See Merrill, Compensation for Prescription Drug Injuries,
59 Va. L. Rev. 1, 91, 93 (1973); Comment, Liability of Birth Control Pill
Manufacturers, 23 Hastings L.J. 1526, 1538-1543 (1972).]

[9] Furthermore, the physician prescribing "the pill," as a matter of course, examines
the patient once before prescribing an oral contraceptive and only annually thereafter.
J. Willson, E. Carrington, & W. Ledger, Obstetrics and Gynecology 184 (7th ed. 1983).
D. Danforth, Obstetrics and Gynecology 267 (4th ed. 1982). T. Green, Gynecology:
Essentials of Clinical Practice 593 (3d ed. 1977). At her annual checkup, the patient
receives a renewal prescription for a full year's supply of the pill. [Footnote 11:
MacDonald saw her gynecologist once in the summer of 1973, once in the summer of
1974, and once in August of 1975. At each appointment, she received a prescription for
birth control pills. Thus, eleven months had elapsed between her last gynecological
checkup and her stroke in July, 1976.] Thus, the patient may only seldom have the
opportunity to explore her questions and concerns about the medication with the
prescribing physician. Even if the physician, on those occasions, were scrupulously to
remind the patient of the risks attendant on continuation of the oral contraceptive, "the
patient cannot be expected to remember all of the details for a protracted period of
time." 35 Fed. Reg. 9002 (1970).

[10] Last, the birth control pill is specifically subject to extensive Federal regulation.
The FDA has promulgated regulations designed to ensure that the choice of "the pill"
as a contraceptive method is informed by comprehensible warnings of potential side
effects. [Footnote 12: See 21 C.F.R. § 130.45(a), 35 Fed. Reg. 9002 (1970) (oral
contraceptives "are used for long periods of time by large numbers of women who, for
the most part, are healthy and take them as a matter of choice for prophylaxis against
pregnancy, in full knowledge of other means of contraception"); 43 Fed. Reg. 4215
(1978).] See notes 3 and 4, supra. These regulations, and subsequent amendments,
have their basis in the FDA commissioner's finding, after hearings, that "[b]ecause oral
contraceptives are ordinarily taken electively by healthy women who have available to



                                                                                         55
them alternative methods of treatment, and because of the relatively high incidence of
serious illnesses associated with their use, . . . users of these drugs should, without
exception, be furnished with written information telling them of the drug's benefits and
risks." 43 Fed. Reg. 4215 (1978). The FDA also found that the facts necessary to
informed decisions by women as to use of oral contraceptives are "too complex to
expect the patient to remember everything told her by the physician," and that, in the
absence of direct written warnings, many potential users of "the pill" do not receive the
needed information "in an organized, comprehensive, understandable, and handy-for-
future-reference form." 35 Fed. Reg. 9002 (1970).

[11] The oral contraceptive thus stands apart from other prescription drugs in light of
the heightened participation of patients in decisions relating to use of "the pill"; the
substantial risks affiliated with the product's use; the feasibility of direct warnings by
the manufacturer to the user; the limited participation of the physician (annual
prescriptions); and the possibility that oral communications between physicians and
consumers may be insufficient or too scanty standing alone fully to apprise consumers
of the product's dangers at the time the initial selection of a contraceptive method is
made as well as at subsequent points when alternative methods may be considered. We
conclude that the manufacturer of oral contraceptives is not justified in relying on
warnings to the medical profession to satisfy its common law duty to warn, and that the
manufacturer's obligation encompasses a duty to warn the ultimate user. Thus, the
manufacturer's duty is to provide to the consumer written warnings conveying
reasonable notice of the nature, gravity, and likelihood of known or knowable side
effects, and advising the consumer to seek fuller explanation from the prescribing
physician or other doctor of any such information of concern to the consumer.
[Footnote 13: This opinion does not diminish the prescribing physician's duty to
"disclose in a reasonable manner all significant medical information that the physician
possesses or reasonably should possess that is material to an intelligent decision by the
patient whether to" take "the pill." Harnish v. Children’s Hosp. Medical Center, 387
Mass. 152, 155 (1982).]

[12] 2. Adequacy of the warning. Because we reject the judge's conclusion that Ortho
had no duty to warn MacDonald, we turn to Ortho's separate argument, not reached by
the judge, that the evidence was insufficient to warrant the jury's finding that Ortho's
warnings to MacDonald were inadequate. Ortho contends initially that its warnings
complied with FDA labeling requirements, and that those requirements preempt or
define the bounds of the common law duty to warn. We disagree. The regulatory
history of the FDA requirements belies any objective to cloak them with preemptive
effect. In response to concerns raised by drug manufacturers that warnings required and
drafted by the FDA might be deemed inadequate by juries, the FDA commissioner
specifically noted that the boundaries of civil tort liability for failure to warn are
controlled by applicable State law. 43 Fed. Reg. 4214 (1978). Although the common
law duty we today recognize is to a large degree coextensive with the regulatory duties
imposed by the FDA, we are persuaded that, in instances where a trier of fact could
reasonably conclude that a manufacturer's compliance with FDA labeling requirements
or guidelines did not adequately apprise oral contraceptive users of inherent risks, the



                                                                                        56
manufacturer should not be shielded from liability by such compliance. See Brochu v.
Ortho Pharmaceutical Corp., 642 F.2d 652, 658 (1st Cir. 1981); Skill v. Martinez, 91
F.R.D. 498, 508 (D.N.J. 1981); Stevens v. Parke, Davis & Co., 9 Cal. 3d 51, 65 (1973);
McEwen v. Ortho Pharmaceutical Corp., 270 Or. 375, 397-398 (1974). Cf. Hubbard-
Hall Chem. Co. v. Silverman, 340 F.2d 402, 405 (1st Cir. 1965); Ferebee v. Chevron
Chem. Co., 552 F. Supp. 1293, 1304 (D.D.C. 1982). See generally 1A L. Frumer & M.
Friedman, Products Liability § 8.07[1] (1983). Thus, compliance with FDA
requirements, though admissible to demonstrate lack of negligence, is not conclusive
on this issue, just as violation of FDA requirements is evidence, but not conclusive
evidence, of negligence. See Deignan v. Lubarsky, 318 Mass. 661, 664 (1945). See
also Lukaszewicz v. Ortho Pharmaceutical Corp., 510 F. Supp. 961, 965 (E.D. Wis.
1981). We therefore concur with the plaintiffs' argument that even if the conclusion
that Ortho complied with FDA requirements were inescapable, an issue we need not
decide, the jury nonetheless could have found that the lack of a reference to "stroke"
breached Ortho's common law duty to warn.

[13] The common law duty to warn, like the analogous FDA "lay language"
requirement, necessitates a warning "comprehensible to the average user and . . .
convey[ing] a fair indication of the nature and extent of the danger to the mind of a
reasonably prudent person." Ortho Pharmaceutical Corp. v. Chapman, 180 Ind. App.
33, 49 (1979), quoting Spruill v. Boyle-Midway, Inc., 308 F.2d 79, 85 (4th Cir. 1962).
Whether a particular warning measures up to this standard is almost always an issue to
be resolved by a jury; few questions are "more appropriately left to a common sense
lay judgment than that of whether a written warning gets its message across to an
average person." Ferebee v. Chevron Chem. Co., 552 F. Supp. 1293, 1304 (D.D.C.
1982). See Hayes v. Ariens Co., 391 Mass. 407, 409-410 (1984). A court may, as a
matter of law, determine "whether the defendant has conformed to that standard, in any
case in which the jury may not reasonably come to a different conclusion," Restatement
(Second) of Torts § 328B (d) and comment g (1965), but judicial intrusion into jury
decision making in negligence cases is exceedingly rare. See Croley v. Matson
Navigation Co., 434 F.2d 73, 75 (5th Cir. 1970). Further, we must view the evidence in
the light most favorable to the plaintiffs. Uloth v. City Tank Corp., 376 Mass. 874, 876
(1978). The test is whether "anywhere in the evidence, from whatever source derived,
any combination of circumstances could be found from which a reasonable inference
could be drawn in favor of the plaintiff." Poirier v. Plymouth, 374 Mass. 206, 212
(1978), quoting Raunela v. Hertz Corp., 361 Mass. 341, 343 (1972). Accord Michnik-
Zilberman v. Gordon’s Liquor, Inc., 390 Mass. 6, 7 n.1 (1983).

[14] Ortho argues that reasonable minds could not differ as to whether MacDonald
was adequately informed of the risk of the injury she sustained by Ortho's warning that
the oral contraceptives could cause "abnormal blood clotting which can be fatal" and
further warning of the incremental likelihood of hospitalization or death due to blood
clotting in "vital organs, such as the brain." We disagree. "The fact finder may find a
warning to be unreasonable, hence inadequate, in its factual content, its expression of
the facts, or the method or form in which it is conveyed. . . . The adequacy of such
warnings is measured not only by what is stated, but also by the manner in which it is



                                                                                      57
stated. A reasonable warning not only conveys a fair indication of the nature of the
dangers involved, but also warns with the degree of intensity demanded by the nature
of the risk. A warning may be found to be unreasonable in that it was unduly delayed,
reluctant in tone or lacking in a sense of urgency." Seley v. G.D. Searle Co., 67 Ohio
St. 2d 192, 198 (1981). We cannot say that this jury's decision that the warning was
inadequate is so unreasonable as to require the opposite conclusion as a matter of law.
[Footnote 14: See Weinberger, Collateral Estoppel and the Mass Produced Product: A
Proposal, 15 New Eng. L. Rev. 1, 36-38 (1980).] The jury may well have concluded, in
light of their common experience and MacDonald's testimony, that the absence of a
reference to "stroke" in the warning unduly minimized the warning's impact or failed to
make the nature of the risk reasonably comprehensible to the average consumer.
Similarly, the jury may have concluded that there are fates worse than death, such as
the permanent disablement suffered by MacDonald, and that the mention of the risk of
death did not, therefore, suffice to apprise an average consumer of the material risks of
oral contraceptive use. Cf. Hubbard-Hall Chem. Co. v Silverman, 340 F.2d 402, 405
(1st Cir. 1965).

[15] Ortho's argument that, as a matter of law, there was insufficient evidence that
MacDonald's injury was proximately caused by a deficiency in the warnings is
substantially similar to its argument on the issue of the adequacy of the warnings, and
is likewise unavailing. Relying on Harnish v. Children’s Hosp. Medical Center, 387
Mass. 152 (1982), for the proposition that MacDonald had the burden of proving
causation by showing that "had the proper information been provided neither [s]he nor
a reasonable person in similar circumstances" would have accepted Ortho's pills as a
contraceptive method, id. at 158, Ortho argues that "[t]here was no evidence that a
reasonable person, having been informed of the risk of death by abnormal blood
clotting and having chosen to assume the risk, would have acted differently if informed
of the risk of 'stroke.'" The jury were free, however, to credit MacDonald's testimony
that she would not have used the pills had she been advised of the danger of "stroke,"
and to infer that an explicit reference to the risk of stroke might tip the balance in a
reasonable person's choice of a contraceptive method. Ortho also asserts that evidence
that MacDonald did not ask her gynecologist for an explanation of the meaning of
"abnormal blood clotting" or inform him of two episodes of numbness in her hand
subsequent to her initiation of oral contraceptive use indicates that MacDonald was not
disposed to heed Ortho's warnings, and, consequently, that the evidence did not permit
an inference that a different warning by Ortho would have affected MacDonald's
decision to use Ortho's pills. These arguments raise the issue of the plaintiff Carole
MacDonald's comparative negligence. That issue was not raised below and thus is not
before us. Kagan v. Levenson, 334 Mass. 100, 106 (1956).
[16] We reverse the judgment, which the judge ordered notwithstanding the verdict,
and remand the case to the Superior Court for the entry of judgment for the plaintiffs.
So ordered.




                                                                                       58
DISSENT BY: Judge O'Conner

DISSENT

[17] The court reverses the judgment below and holds Ortho Pharmaceutical
Corporation (Ortho) liable to Carole and Bruce MacDonald even though the jury found
that Ortho adequately informed Carole MacDonald's physician of the risks associated
with the use of its contraceptive pills, and regardless of whether Ortho complied with
the applicable Federal Food and Drug Administration (FDA) regulations governing the
provision of printed information to users of oral contraceptives. I would hold that, as a
matter of law, by adequately informing physicians of the risks associated with its
product and by complying with applicable FDA regulations, a contraceptive pill
manufacturer fulfils the duty to warn that it owes consumers. Therefore, because the
jury found that Ortho adequately warned Carole MacDonald's physician of the risks
associated with its contraceptive pills and because the MacDonalds presented no
evidence that Ortho failed to comply with FDA regulations, I would affirm the
judgment for Ortho.

[18] In order to fulfil its duty to warn consumers of risks associated with its product, a
manufacturer of a nonprescription ("over-the-counter") drug must place on the drug's
package printed warnings. That duty "derives from the basic marketing predicate of the
over-the-counter drug industry, namely, that nonprescription drugs are purchased by
consumers for the purpose of self-medication typically without any intended or actual
intervention by a physician." Torsiello v. Whitehall Laboratories, 165 N.J. Super. 311,
322 (1979) (emphasis added). In contradistinction, a manufacturer of a prescription
drug fulfils its duty to warn a consumer by adequately informing the consumer's
physician -- a "learned intermediary between the purchaser and the manufacturer" -- of
the drug's associated risks. Sterling Drug, Inc. v. Cornish, 370 F.2d 82, 85 (8th Cir.
1966). That rule results from the fact that, by definition, before a consumer uses a
prescription drug, that consumer must have some interaction with a doctor. See 21
U.S.C. § 353(b)(1) (1982).1 In cases involving manufacturers of contraceptive pills,
every court but one has adhered to the "prescription drug" rule. See Hamilton v. Hardy,
37 Colo. App. 375, 387 (1976); Mahr v. G.D. Searle & Co., 72 Ill. App. 3d 540, 561
(1979); Ortho Pharmaceutical Corp. v. Chapman, 180 Ind. App. 33, 43 (1979); Cobb v.
Syntex Laboratories, Inc., 444 So.2d 203, 205 (La. App. 1983); Seley v. G.D. Searle &
Co., 67 Ohio St. 2d 192, 202-203 (1981); McEwen v. Ortho Pharmaceutical Corp., 270
Or. 375, 385 (1974); Leibowitz v. Ortho Pharmaceutical Corp., 224 Pa. Super. 418, 431
(1973); Brochu v. Ortho Pharmaceutical Corp., 642 F.2d 652, 656 (1st Cir. 1981);
Lindsey v. Ortho Pharmaceutical Corp., 637 F.2d 87, 91 (2d Cir. 1980); Goodson v.
Searle Laboratories, 471 F. Supp. 546, 548 (D. Conn. 1978); Dunkin v. Syntex
Laboratories, Inc., 443 F. Supp. 121, 123 (D. Tenn. 1977); Chambers v. G.D. Searle &
Co., 441 F. Supp. 377, 381 (D. Md. 1975); Skill v. Martinez, 91 F.R.D. 498, 507
(D.N.J. 1981). See also Carmichael v. Reitz, 17 Cal. App. 3d 958, 989 (1971) (oral
contraceptive pills used to treat woman for endometriosis and to aid her to become
pregnant); Terhune v. A.H. Robins Co., 90 Wash. 2d 9, 13 (1978) (intrauterine
contraceptive device). But see Lukaszewicz v. Ortho Pharmaceutical Corp., 510 F.



                                                                                        59
Supp. 961, 963, amended by order, 532 F. Supp. 211 (D. Wis. 1981). The one court
that went beyond the prescription drug rule, see Lukaszewicz v. Ortho Pharmaceutical
Corp., supra, imposed on Ortho the duty to adequately inform physicians of the
contraceptive pill's risks and to comply with applicable FDA regulations. 532 F. Supp.
at 213. To my knowledge, no other court has embraced the rule laid down today by the
court.

[Footnote 1: Section 353(b)(1) provides: "A drug intended for use by man which -- (A)
is a habit-forming drug to which section 352(d) of this title applies; or (B) because of
its toxicity or other potentiality for harmful effect, or the method of its use, or the
collateral measures necessary to its use, is not safe for use except under the supervision
of a practitioner licensed by law to administer such drug; or (C) is limited by an
approved application under section 355 of this title to use under the professional
supervision of a practitioner licensed by law to administer such drug; shall be
dispensed only (i) upon a written prescription of a practitioner licensed by law to
administer such drug, or (ii) upon an oral prescription of such practitioner which is
reduced promptly to writing and filed by the pharmacist, or (iii) by refilling any such
written or oral prescription if such refilling is authorized by the prescriber either in the
original prescription or by oral order which is reduced promptly to writing and filed by
the pharmacist. The act of dispensing a drug contrary to the provisions of this
paragraph shall be deemed to be an act which results in the drug being misbranded
while held for sale."]

[19] Before prescribing any drug, whether on the doctor's initiative or at the patient's
request, the doctor must exercise professional judgment as to the medical propriety of
that patient's taking that drug and, in exercising that judgment, the doctor must conform
to the standards of good medical practice laid down in Brune v. Belinkoff, 354 Mass.
102, 109 (1968). Furthermore, this court has held that a doctor must "disclose in a
reasonable manner all significant medical information that the physician possesses or
reasonably should possess that is material to an intelligent decision by the patient
whether to undergo a proposed procedure." Harnish v. Children’s Hosp. Medical
Center, 387 Mass. 152, 155 (1982). That rule applies when a physician prescribes a
drug just as it does when a physician performs any other medical procedure.
"Materiality may be said to be the significance a reasonable person, in what the
physician knows or should know is his patient's position, would attach to the disclosed
risk or risks in deciding whether to [use the drug]." Id. at 156, quoting from Wilkinson
v. Vesey, 110 R.I. 606, 627 (1972). "Appropriate information may include the nature . .
. and probability of risks involved, the benefits to be reasonably expected, the inability
of the physician to predict results, . . . , and the available alternatives, including their
risks and benefits." Harnish, supra at 156.

[20] Unless doctors have current, accurate, and complete information about a drug's
risks, they cannot properly perform their vital role. Therefore, courts have imposed on
drug manufacturers the duty to provide doctors with that information. See, e.g., Brochu
v. Ortho Pharmaceutical Corp., supra at 657-659. A drug manufacturer who fails




                                                                                          60
properly to fulfil that duty must respond in damages to a patient who suffers an injury
as a result. See, e.g., McEwen v. Ortho Pharmaceutical Corp., supra at 386-387.

[21] I believe that the "prescription drug" rule, combined with the Harnish rule, most
fairly and efficiently allocates among drug manufacturers, physicians, and drug users,
the risks and responsibilities involved with the use of prescription drugs. Furthermore, I
believe that those rules best ensure that a prescription drug user will receive in the most
effective manner the information that she needs to make an informed decision as to
whether to use the drug. The rules place on drug manufacturers the duty to gather,
compile, and provide to doctors data regarding the use of their drugs, tasks for which
the manufacturers are best suited, and the rules place on doctors the burden of
conveying those data to their patients in a useful and understandable manner, a task for
which doctors are best suited. Doctors, unlike printed warnings, can tailor to the needs
and abilities of an individual patient the information that that patient needs in order to
make an informed decision whether to use a particular drug. Manufacturers are not in
position to give adequate advice directly to those consumers whose medical histories
and physical conditions, perhaps unknown to the consumers, make them peculiarly
susceptible to risk. Prescription drugs -- including oral contraceptives -- differ from
other products because their dangers vary widely depending on characteristics of
individual consumers. Exposing a prescription drug manufacturer to liability based on a
jury's determination that, despite adequately informing physicians of the drug's risks
and complying with FDA regulations, the manufacturer failed reasonably to warn a
particular plaintiff-consumer of individualized risks is not essential to reasonable
consumer protection and places an unfair burden on prescription drug manufacturers.

[22] Even though the court recognizes the universal application of the "prescription
drug" rule, it states that "[o]ral contraceptives . . . bear peculiar characteristics which
warrant the imposition of a common law duty on the manufacturer to warn users
directly of associated risks." Ante at 136-137. The court attempts to distinguish
contraceptive pills from other prescription drugs by comparing the relative involvement
of doctor and patient in the prescribing process. "Whereas a patient's involvement in
decision making concerning use of a prescription drug necessary to treat a malady is
typically minimal or nonexistent," the court asserts, "the healthy, young consumer of
oral contraceptives is usually actively involved in the decision to use 'the pill,' as
opposed to other available birth control products, and the prescribing physician is
relegated to a relatively passive role." Ante at 137. In making that statement, the court
not only assumes facts not established on the record but also disregards the mandate of
Harnish v. Children’s Hosp. Medical Center, supra.

[23] While I would choose the "prescription drug" rule over the rule announced today
by the court, I recognize that the FDA has promulgated regulations governing the
provision of printed information to users of oral contraceptives. I would not consider
the imposition of tort liability for failure to comply with those regulations, designed to
further consumer protection, unfair nor unduly burdensome to contraceptive pill
manufacturers. However, in my view, the evidence in this case would not support a
finding that Ortho failed to comply with those regulations. The FDA required Ortho to



                                                                                         61
place on every oral contraceptive pill dispenser a warning stating that the "most serious
known side effect [of the oral contraceptive pill] is abnormal blood clotting which can
be fatal." 21 C.F.R. § 130.45(d)(1), 35 Fed. Reg. 9002-9003 (1970). Ortho complied in
every way with that requirement. The FDA also required that Ortho make available to
physicians for patients who requested it "information in lay language, concerning
effectiveness, contraindications, warnings, precautions, and adverse reactions." 21
C.F.R. § 130.45(e), 35 Fed. Reg. 9003 (1970). Ortho provided Carole MacDonald's
physician with a booklet that stated: "Blood clots occasionally form in the blood
vessels of the legs and pelvis of apparently healthy people and may threaten life if the
clots break loose and then lodge in the lung or if they form in other vital organs, such
as the brain." MacDonald's physician gave Ortho's booklet to MacDonald. The court
finds it unnecessary to decide whether Ortho complied with FDA's "lay language"
requirement, ante at 140-141, but I do not believe that any rational trier of fact could
have concluded that Ortho failed to comply with the regulation.

[24] Furthermore, even if there be a common law duty necessitating a direct warning
to the consumer with respect to the "nature and extent of the danger" of contraceptive
pills, as the court declares, the MacDonalds presented no evidence that Ortho failed to
fulfil that duty. The court states only that the jury "could have found that the lack of
reference to 'stroke' breached Ortho's common law duty to warn." Ante at 140. Surely,
the statement in Ortho's booklet that the contraceptive pill could cause life threatening
blood clots to form in the brain, even though it did not contain the word "stroke,"
satisfied the court's requirement that Ortho provide "written warnings conveying
reasonable notice of the nature, gravity, and likelihood of known or knowable side
effects." Ante at 139. I would affirm the judgment for Ortho.




                                                                                       62
                    Florence and Vincent Vassallo
                                 v.
      Baxter Healthcare Corporation & Baxter International, Inc.
                       Supreme Judicial Court of Massachusetts
                            428 Mass. 1; 696 N.E.2d 909

                                 May 5, 1998, Argued
                                July 16, 1998, Decided

PRIOR HISTORY: Middlesex. Civil action commenced in the Superior Court
Department on October 1, 1993. The case was tried before Margot Botsford, J. The
Supreme Judicial Court granted an application for direct appellate review.

DISPOSITION: Affirmed.

COUNSEL: David R. Venderbush, of California (Harry T. Daniels with him) for the
defendants. Fredric L. Ellis (Edward D. Rapacki with him) for the plaintiffs.

Hugh F. Young, Jr., of Virginia, & David R. Geiger, for Associated Industries of
Massachusetts & others, amici curiae, submitted a brief.

JUDGES: Chief Judge Wilkins, and Justices Abrams, Lynch, Greaney, and Marshall.

OPINION BY: Judge Greaney

OPINION

[1] In this products liability case, the plaintiff Florence Vassallo claimed that the
defendants, Baxter Healthcare Corporation and Baxter International, Inc., were liable to
her for damages because silicone breast implants, manufactured by a predecessor
company to the defendants (Heyer-Schulte Corporation), which had been implanted in
her, were negligently designed, accompanied by negligent product warnings, and
breached the implied warranty of merchantability, with the consequence that she was
injured. The plaintiff Vincent Vassallo claimed a loss of consortium. The plaintiffs also
asserted a claim for violation of G. L. c. 93A, §§ 2 (a) and 9.

[2] A jury in the Superior Court heard the negligence and breach of warranty claims,
returned verdicts (in response to special questions) on those claims in favor of the
plaintiffs, and assessed damages. The judge entered a separate memorandum of
decision on the G. L. c. 93A claim in which she found the defendants liable for a
violation of that statute. The judge concluded that the defendants' conduct was not
knowing or wilful, determined that an assessment of additional compensatory damages
would duplicate the damages determined by the jury, and awarded the plaintiffs their
reasonable attorney's fees and costs. The defendants appealed from the judgment, and
we allowed their application for direct appellate review.


                                                                                       63
[3] We conclude that the determinations of liability as to the negligence and G. L. c.
93A claims are correct, and the judgment can be affirmed on this basis. As a result, we
need not consider the defendants' arguments concerning the warranty findings.

[4] We conclude, however, that we should change our products liability law to
conform to the clear majority rule regarding what has to be shown to recover in a
breach of warranty claim for failure to warn of risks associated with a product, and we
do so in Part 3 of this opinion.

[5] The jury could have based their verdicts on the following evidence. In February,
1977, at the age of forty-eight, Mrs. Vassallo underwent breast implantation surgery.
The silicone gel breast implants that Mrs. Vassallo received were manufactured by
Heyer-Schulte Corporation in October, 1976. Through a series of corporate
transactions, the defendants assumed responsibility for breast implant products
manufactured by Heyer-Schulte.

[6] In 1992, Mrs. Vassallo underwent a mammogram after complaining of chest pains
that extended up under her left armpit. The mammogram revealed that her breast
implants might have ruptured. The silicone gel implants were subsequently removed in
April, 1993, and were replaced with saline implants. During the course of the explant
surgery, the surgeon noted severe, permanent scarring of Mrs. Vassallo's pectoral
muscles which she attributed to the silicone gel. The implants themselves were
encapsulated in scar tissue with multiple nodules of silicone granulomas. Dissection of
the scar tissue capsules revealed that the left implant had ruptured, releasing free
silicone gel, while the right implant was intact, but had several pinholes through which
silicone gel could escape.

[7] The plaintiff's pathology expert, Dr. Douglas Shanklin, indicated that, based on the
cellular responses shown in the pathology slides of Mrs. Vassallo's breast tissue taken
at the time of explant, the rupture had been longstanding, perhaps for several years.
According to Dr. Shanklin, Mrs. Vassallo's pathology slides showed silicone
granulomas, giant cells, lymphocytes, and macrophages, all of which indicated a
chronic immunological and inflammatory reaction to the silicone implants. Dr.
Shanklin also identified deposits of silica and lymphocytic vasculitis, which, he
testified, were evidence that Mrs. Vassallo suffered from an autoimmune disease
caused by the silicone gel.

[8] Doctor Christopher Batich, professor of materials science and engineering at the
University of Florida, testified for the plaintiffs on the effects of silicone in the body.
He discussed animal studies that demonstrated migration of silicone to various organs
both from ruptured gel implants and after intramuscular injection of "radio-labeled"
liquid silicone. Doctor Batich also discussed the mechanism by which silicone can
degrade to low molecular weight materials in the body,3 and explained that the use of
silicone gel in breast implants was unreasonably dangerous "because the material can
get out of the implant, it can break up into small particles, it can travel through the



                                                                                         64
body, and it can undergo chemical transformation into things that have biochemical
effects."

[Footnote 3: Doctor Batich discussed a Dow Corning study that showed that silicone is
metabolized in the human body by the process of demetholation (removal of methyl
groups) to form silica. Doctor Batich also discussed his own research and Dow Corning
animal studies in which exposure of silica to water resulted in the formation of silenol,
which was found to be extremely toxic in rats, with damage to the central nervous
system, liver, and blood vessels.]

[9] Doctor Bruce Freundlich, chief of rheumatology at Graduate Hospital in
Philadelphia and an associate professor of medicine at the University of Pennsylvania,
indicated that silicone gel breast implants can cause atypical connective tissue disease
with a variety of symptoms that can include joint pain, dry eyes and mouth, difficulty
sleeping leading to chronic fatigue, breast pain, fever, reduced sensation in the hands
and feet, hair loss, itching, problems swallowing, and heartburn. Doctor Freundlich
also offered his opinion that Mrs. Vassallo was suffering from atypical autoimmune
disease, based on a review of her medical records and a physical examination that
revealed the following symptoms: "tobacco pouch mouth," or a tightening of the face
around the mouth which has been associated with scleroderma or mixed connective
tissue disease; puffy fingers; an ulceration on one finger; thickening of the skin on her
face and neck; telangiectasia, or small red blood vessels, of the nose; hyperreflexia;
nocturnal myophonic jerking; dry eyes; elevated levels of antinuclear antibodies and
IGA immunoglobin antibodies; [Footnote 4: An antibody is an "immune or protective
protein . . . evoked in man or other animals by an antigen." Stedman's Medical
Dictionary 94 (25th ed. 1990).] numbness and tingling in her hands; chronic fatigue;
hair loss; difficulty swallowing; and problems with memory loss. According to Dr.
Freundlich, Mrs. Vassallo's problems were related to her exposure to silicone gel, and
her future was "guarded."

[10] Doctor Eric Gershwin, chief of the division of rheumatology, immunology and
allergy at the University of California at Davis School of Medicine, discussed his own
clinical research, and internal Dow Corning studies, to support his conclusion that
silicone gel acts as an adjuvant to stimulate the body's immune system. [Footnote 5:
An adjuvant is defined in immunology as "a vehicle used to enhance antigenicity."
Stedman's Medical Dictionary 28 (25th ed. 1990).] Based on his research and treatment
of more than 700 women with silicone gel breast implants, Dr. Gershwin stated that
there is a unique constellation of symptoms seen in approximately five per cent of
women with silicone breast implants, and that these symptoms, taken together,
constitute an atypical autoimmune disease. Doctor Gershwin also reviewed Mrs.
Vassallo's medical records and concluded that her symptoms were consistent with this
atypical autoimmune disease and were caused by her ruptured silicone gel breast
implant.

[11] There was also extensive testimony as to knowledge, attributable to the
defendants, of the risks of silicone gel breast implants up to the time of Mrs. Vassallo's



                                                                                        65
implant surgery in 1977. According to Heyer-Schulte's own internal correspondence,
the company was aware of a "Talk Paper," issued by the United States Food and Drug
Administration in 1976, that documented migration to the brain, lungs, and heart, and
death following injections of liquid silicone into the human body. In 1976, Heyer-
Schulte received a report of an animal study, partially funded by Heyer-Schulte and
conducted using miniature silicone gel implants supplied by Heyer-Schulte, that
documented migration of gel from ruptured implants to the surrounding connective
tissues and local inflammatory responses with fibroblastic activity and giant cell
formation. The authors of the study stated: "The present tendency by manufacturers of
breast implants towards ever thinner envelopes and a filler that is getting further away
from gel and closer to silicone liquid must be looked at in the light of these
experimental findings, and the question must be asked whether the possible advantages
of these changes outweigh the disadvantages." Heyer-Schulte was also aware that some
of their implants were rupturing, having received 129 complaints of ruptured gel
implants in 1976. In fact, the president of Heyer-Schulte had written in 1975 that
"presently, mammary implants have been designed to be increasingly fragile in
response to plastic surgeons' demand for softness, realistic feel and mobility." As a
result, Heyer-Schulte knew that its implants were "not consistent as far as durability or
destructibility is concerned." The encapsulation of the implant, and the viscous nature
of the silicone gel, made it difficult to detect that a rupture had occurred, allowing the
silicone to leak into the body for long periods before explantation. By 1975, Heyer-
Schulte also knew that, even without a rupture of the implant shell, the silicone gel
could leak (known as "gel bleed") through to the exterior surface of the implant and
possibly produce "detrimental effect[s]" in the body.

[12] Despite this knowledge of the possible adverse long-term consequences of
leaking silicone in the body, Heyer-Schulte conducted few animal, and no clinical,
studies to document the safety and efficacy of its silicone gel implants. When Heyer-
Schulte began using silicone gel manufactured by Dow Corning in 1976, they relied
primarily on the animal testing conducted by Dow Corning, despite the observations of
a Heyer-Schulte scientist that "the data . . . [did] not answer questions concerning
migration," and "was lacking in quality and left many questions unanswered." Heyer-
Schulte did conduct toxicity testing on the Dow Corning gel; the gel passed the seven-
day and thirty-day toxicity tests, but failed the ninety-day toxicity test based on the
microscopic tissue evaluation that showed considerably greater fibrous tissue reaction
and inflammation to the silicone gel than to the control material. There is no indication
in the record that Heyer-Schulte ever repeated this ninety-day toxicity test, and the
company continued to use the Dow Corning gel in the manufacture of their silicone gel
breast implants.

[13] Heyer-Schulte did furnish warnings to physicians concerning their silicone gel
implants in a product insert data sheet (PIDS). The 1976 version of the PIDS that
accompanied Mrs. Vassallo's implants included warnings that the implant shell could
be easily cut or ruptured by excessive stresses, and that Heyer-Schulte could not
guarantee gel containment in the case of a rupture. The warnings did not address the
issue of gel bleed, the fact that a rupture could result from normal stresses and could



                                                                                        66
persist undetected for a significant time period, or the consequences of gel migration in
the body. The PIDS also contained a list of potential complications associated with
breast implants, but this list did not address the risks of chronic inflammation,
permanent tissue scarring, or possible effects on the immune system. Proposed
revisions to the PIDS, which would have included "a warning to the effect that
uncontained silicone gel may have untoward consequences," and complications of
"migration of the silicone, with mild to severe consequences, including reduction of
breast size and absorption of the silicone by the blood and lymph systems, resulting in
damage to the liver and kidneys," were rejected by Heyer-Schulte's president in March,
1976. The president did issue a letter to doctors dated August 23, 1976, which stated
that "if a shell is torn with time and normal stresses the gel will migrate," and that
"mild inflammation and polynuclear giant cell response characterized as mild foreign
body reaction" had been associated with the silicone gel implants. Once again, this
letter did not completely address the potential effects of silicone migration on the
body's immune system. Mrs. Vassallo stated that, if she had known that the implants
could cause permanent scarring, chronic inflammation, and problems with her immune
system, she would not have gone ahead with the implantation procedure. We now turn
to the issues appropriate for discussion.
* * *

[14] 3. The evidence warrants the jury's findings (and their verdicts) on the negligence
claims, and the defendants' arguments seeking judgment in their favor or a new trial on
the negligence claims have been considered and rejected. No issue is raised as to the
amount of damages awarded.

[15] Because the plaintiffs' recoveries can be upheld on the jury's findings of
negligence, we need not address the defendants' claims of error concerning the breach
of warranty count. We take this opportunity, however, to consider the defendants'
argument that we should change our products liability law concerning the implied
warranty of merchantability from what is stated in Hayes v. Ariens Co., 391 Mass. 407,
413, 462 N.E.2d 273 (1984), and that the law should be reformulated to adopt a "state
of the art" standard that conditions a manufacturer's liability on actual or constructive
knowledge of the risks.

[16] Our current law, regarding the duty to warn under the implied warranty of
merchantability, presumes that a manufacturer was fully informed of all risks
associated with the product at issue, regardless of the state of the art at the time of the
sale, and amounts to strict liability for failure to warn of these risks. See Simmons v.
Monarch Mach. Tool Co., 413 Mass. 205, 207-208 n.3, 596 N.E.2d 318 (1992); Hayes,
supra. This rule has been justified by the public policy that a defective product,
"unreasonably dangerous due to lack of adequate warning[s], [is] not fit for the
ordinary purposes for which [it is] used regardless of the absence of fault on [a
defendant's] part." Id.

[17] At trial, the defendants requested a jury instruction that a manufacturer need only
warn of risks "known or reasonably knowable in light of the generally accepted



                                                                                         67
scientific knowledge available at the time of the manufacture and distribution of the
device." The judge declined this request, and instead gave an instruction using
language taken almost verbatim from that in Hayes, supra. While the judge's instruction
was a correct statement of our law, we recognize that we are among a distinct minority
of States that applies a hindsight analysis to the duty to warn. [Footnote 17: The
Reporters' Note to the Restatement (Third) of Torts: Products Liability § 2 (c) comment
m, at 106 (1998), lists four States taking the position that a manufacturer is charged
with a duty to warn of risks without regard to whether the manufacturer knew or
reasonably should have known of the risks, including Massachusetts; Hawaii, see In re
Haw. Fed. Asbestos Cases, 960 F.2d 806 (9th Cir. 1992) (applying Hawaii law);
Pennsylvania, see Dambacher v. Mallis, 336 Pa. Super. 22, 485 A.2d 408 (1984);
Washington, see Ayers v. Johnson & Johnson Baby Prods. Co., 117 Wash. 2d 747, 818
P.2d 1337 (1991).]

[18] The majority of States, either by case law or by statute, follow the principle
expressed in Restatement (Second) of Torts § 402A comment j (1965), which states
that "the seller is required to give warning against [a danger], if he has knowledge, or
by the application of reasonable, developed human skill and foresight should have
knowledge, of the . . . danger." See, e.g., M.F. Daller, Product Liability Desk Reference
-- a Fifty-State Compendium (1996 ed.); Annot., Strict Products Liability: Liability for
Failure to Warn as Dependent on Defendant's Knowledge of Danger, 33 A.L.R.4th
368, 377 (1984 & 1997 Supp.); Restatement (Third) of Torts: Products Liability,
Reporters' Note to comment m, at 104 (1998) ("An overwhelming majority of
jurisdictions supports the proposition that a manufacturer has a duty to warn only of
risks that were known or should have been known to a reasonable person"). At least
three jurisdictions that previously applied strict liability to the duty to warn in a
products liability claim have reversed themselves, either by statute or by decision, and
now require knowledge, or reasonable knowability as a component of such a claim. See
Fibreboard Corp. v. Fenton, 845 P.2d 1168, 1172-1173 (Colo. 1993); Feldman v.
Lederle Labs., 97 N.J. 429, 455, 479 A.2d 374 (1984); La. Rev. Stat. Ann. §
9:2800.59(B) (West 1997). The change in the law of New Jersey is particularly
relevant, because we relied in part on New Jersey law in formulating the strict liability
standard expressed in the Hayes decision. See Hayes, supra, 391 Mass. at 413, citing
Beshada v. Johns-Manville Prods. Corp., 90 N.J. 191, 202-207, 447 A.2d 539 (1982).

[19] The thin judicial support for a hindsight approach to the duty to warn is easily
explained. The goal of the law is to induce conduct that is capable of being performed.
This goal is not advanced by imposing liability for failure to warn of risks that were not
capable of being known. See Henderson, Doctrinal Collapse in Products Liability: The
Empty Shell of Failure to Warn, 65 N.Y.U. L. Rev. 265, 274 & n.32 (1990).

[20] The Restatement (Third) of Torts: Products Liability § 2 (c) (1998), recently
approved by the American Law Institute, reaffirms the principle expressed in
Restatement (Second) of Torts, supra at § 402A comment j, by stating that a product "is
defective because of inadequate instructions or warnings when the foreseeable risks of
harm posed by the product could have been reduced or avoided by the provision of



                                                                                        68
reasonable instructions or warnings . . . and the omission of the instructions or
warnings renders the product not reasonably safe." The rationale behind the principle is
explained by stating that "unforeseeable risks arising from foreseeable product use . . .
by definition cannot specifically be warned against." Restatement (Third) of Torts:
Products Liability, supra at § 2 comment m, at 34. However, comment m also clarifies
the manufacturer's duty "to perform reasonable testing prior to marketing a product and
to discover risks and risk-avoidance measures that such testing would reveal. A seller is
charged with knowledge of what reasonable testing would reveal." Id. [Footnote 18:
Several respected legal scholars, many of whom were advisors to the Restatement
(Second) of Torts, Reporters to the Restatement (Third) of Torts formulation of the
principles of product liability, or both, have concluded that liability for a failure to
warn should not be imposed without a showing that a defendant knew or should have
known of the alleged risk at the time the product was sold. See, e.g., Owen,
Defectiveness Restated: Exploding the "Strict" Products Liability Myth, 1996 U. Ill. L.
Rev. 743, 782-784; Henderson, Doctrinal Collapse in Products Liability: The Empty
Shell of Failure to Warn, 65 N.Y.U. L. Rev. 265, 273-280 (1990); Wade, Symposium:
The Passage of Time: The Implications for Product Liability: On the Effect in Product
Liability of Knowledge Unavailable Prior to Marketing, 58 N.Y.U. L. Rev. 734, 760
(1983).]

[21] We have stated that liability under the implied warranty of merchantability in
Massachusetts is "congruent in nearly all respects with the principles expressed in
Restatement (Second) of Torts § 402A." Commonwealth v. Johnson Insulation, 425
Mass. 650, 653-654, 682 N.E.2d 1323 (1997), quoting Back v. Wickes Corp., 375
Mass. 633, 640, 378 N.E.2d 964 (1978). The main difference has been our application
of a hindsight approach to the duty to warn of (and to provide adequate instructions
regarding) risks associated with a product. We recognize that this approach has
received substantial criticism in the literature, see note 18, supra, and, in fact, has not
been uniformly applied by Massachusetts State and Federal courts. See, e.g., Boston v.
United States Gypsum Co., 37 Mass. App. Ct. 253, 261-262, 638 N.E.2d 1387 (1994)
(noting, but not addressing, jury instruction that for a breach of warranty claim, the
"duty to warn extends only to such dangers or defects about which the manufacturer
either actually knew . . . [or] which it reasonably should have known"); Welch v.
Keene Corp., 31 Mass. App. Ct. 157, 163 & n. 2, 575 N.E.2d 766 (1991) (noting that,
for a breach of warranty claim, "a manufacturer has a duty to warn only as to those
dangers about which the manufacturer actually knew or about which it reasonably
should have known"); Kotler v. American Tobacco Co., 926 F.2d 1217, 1231-1232 (1st
Cir. 1990), vacated on other grounds, 505 U.S. 1215, 112 S. Ct. 3019, 120 L. Ed. 2d
891 (1992) (same); Anderson v. Owens-Illinois, Inc., 799 F.2d 1, 4 (1st Cir. 1986)
(same); Wasylow v. Glock, Inc., 975 F. Supp. 370, 378 (D. Mass. 1996) (same).

[22] In recognition of the clear judicial trend regarding the duty to warn in products
liability cases, and the principles stated in Restatement (Third) of Torts: Products
Liability, supra at § 2 (c) and comment m, we hereby revise our law to state that a
defendant will not be held liable under an implied warranty of merchantability for
failure to warn or provide instructions about risks that were not reasonably foreseeable



                                                                                         69
at the time of sale or could not have been discovered by way of reasonable testing prior
to marketing the product. A manufacturer will be held to the standard of knowledge of
an expert in the appropriate field, and will remain subject to a continuing duty to warn
(at least purchasers) of risks discovered following the sale of the product at issue. In
accordance with the usual rule governing retroactivity in this type of action, the
standard just expressed will apply to all claims on which a final judgment has not been
entered, or as to which an appeal is pending or the appeal period has not expired, and to
all claims on which an action is commenced after the release of this opinion. See
McCarthy v. Litton Indus., Inc., 410 Mass. 15, 25-26, 570 N.E.2d 1008 (1991); Payton
v. Abbott Labs, 386 Mass. 540, 568-570, 437 N.E.2d 171 (1982). [Footnote 19: As
previously stated, the jury's verdict on the negligence count precludes the defendants
from benefiting from this change in the warranty law. See Hayes v. Ariens Co., 391
Mass. 407, 410, 462 N.E.2d 273 (1984) (defendant cannot be found negligent without
also breaching implied warranty of merchantability). Moreover, the jury appear to have
found that the defendants did have actual or constructive knowledge of risks associated
with the silicone breast implants that were not contained in any warnings issued with
the product.]

[23] 4. The judge made detailed findings of fact to support her rulings that G. L. c.
93A had been violated. The judge's findings are not clearly erroneous, her legal
conclusions are sound, and, having found no error in the trial, we reject the defendants'
argument that the G. L. c. 93A decision cannot stand. The judge could properly decline
to assess additional compensatory damages on the G. L. c. 93A claim because such an
assessment would duplicate the jury's award of damages. See Calimlim v. Foreign Car
Ctr., Inc., 392 Mass. 228, 235, 467 N.E.2d 443 (1984). The fact that Mr. Vassallo was
not included in the demand letter sent under G. L. c. 93A, § 9, caused the defendants no
prejudice because the award of attorney's fees and costs would, in any event, be
attributable in its entirety to Mrs. Vassallo's G. L. c. 93A claim.
[24] 5. The judgments are affirmed. The plaintiffs may apply to a single justice of this
court for an award of appellate attorney's fees and costs pursuant to G. L. c. 93A, § 9
(4), and Yorke Mgt. v. Castro, 406 Mass. 17, 19-20, 546 N.E.2d 342 (1989).
[25] So ordered.




                                                                                       70
                 Exxon Shipping Company, et al., Petitioners,
                                    v.
                             Grant Baker et al.
                            (Edited by Martin K. Perry, 2009)

                           Supreme Court of the United States
                                   128 S.Ct. 2605

                                 Argued Feb. 27, 2008.
                                 Decided June 25, 2008.

Background: After third remand for reconsideration of punitive damages in a suit arising
from the 1989 grounding of an oil supertanker in Alaska, the United States District Court
for the District of Alaska, H. Russel Holland, Chief Judge, 296 F.Supp.2d 1071, entered a
$4.5 billion award of punitive damages against oil company, and parties filed cross-
appeals. The United States Court of Appeals for the Ninth Circuit, 490 F.3d 1066,
vacated and remanded for reduction of the punitive damages award to $2.5 billion, and
certiorari was granted.

Disposition: 472 F.3d 600 and 490 F.3d 1066, vacated and remanded.

Counsel: Walter Dellinger, Washington, DC, for petitioners. E. Edward Bruce,
Covington & Burling LLP, Washington, D.C., Walter Dellinger, Counsel of Record, John
F. Daum, Charles C. Lifland, Jonathan D. Hacker, O'Melveny & Myers LLP,
Washington, D.C., for Petitioner Exxon Mobil Corporation.

Jeffrey L. Fisher, for Respondents. James vanR. Springer, Dickstein Shapiro LLP,
Washington, DC, Brian B. O'Neill, Faegre & Benson LLP, Minneapolis, MN, David W.
Oesting, Counsel of Record, Stephen M. Rummage, David C. Tarshes, Jeffrey L. Fisher,
Davis Wright Tremaine LLP, Anchorage, AK, for Respondents.

Justice Souter delivered the opinion of the Court, in which Chief Justice Roberts and
Justices Scalia, Kennedy, and Thomas joined, and in which Justices Stevens, Ginsburg,
and Breyer joined as to Parts I, II, and III. Justice Scalia filed a concurring opinion, in
which Justice Thomas joined. Justices Stevens, Ginsburg, and Breyer filed opinions
concurring in part and dissenting in part. Justice Alito took no part in the consideration
or decision of the case.

Opinion: Justice Souter delivered the opinion of the Court.

[1] There are three questions of maritime law before us: whether a shipowner may be
liable for punitive damages without acquiescence in the actions causing harm, whether
punitive damages have been barred implicitly by federal statutory law making no
provision for them, and whether the award of $2.5 billion in this case is greater than
maritime law should allow in the circumstances. We are equally divided on the owner's


                                                                                        71
derivative liability, and hold that the federal statutory law does not bar a punitive award
on top of damages for economic loss, but that the award here should be limited to an
amount equal to compensatory damages.

I [Facts and Legal Background]

[2] On March 24, 1989, the supertanker Exxon Valdez grounded on Bligh Reef off the
Alaskan coast, fracturing its hull and spilling millions of gallons of crude oil into Prince
William Sound. The owner, petitioner Exxon Shipping Co. (now SeaRiver Maritime,
Inc.), and its owner, petitioner Exxon Mobil Corp. (collectively, Exxon), have settled
state and federal claims for environmental damage, with payments exceeding $1 billion,
and this action by respondent Baker and others, including commercial fishermen and
native Alaskans, was brought for economic losses to individuals dependent on Prince
William Sound for their livelihoods.

A [Facts]

[3] The tanker was over 900 feet long and was used by Exxon to carry crude oil from the
end of the Trans-Alaska Pipeline in Valdez, Alaska, to the lower 48 States. On the night
of the spill it was carrying 53 million gallons of crude oil, or over a million barrels. Its
captain was one Joseph Hazelwood, who had completed a 28-day alcohol treatment
program while employed by Exxon, as his superiors knew, but dropped out of a
prescribed follow-up program and stopped going to Alcoholics Anonymous meetings.
According to the District Court, “[t]here was evidence presented to the jury that after
Hazelwood was released from [residential treatment], he drank in bars, parking lots,
apartments, airports, airplanes, restaurants, hotels, at various ports, and aboard Exxon
tankers.” In re Exxon Valdez, No. A89-0095-CV, Order No. 265 (D.Alaska, Jan. 27,
1995), p. 5, App. F to Pet. for Cert. 255a-256a (hereinafter Order 265). The jury also
heard contested testimony that Hazelwood drank with Exxon officials and that members
of the Exxon management knew of his relapse. See ibid. Although Exxon had a clear
policy prohibiting employees from serving onboard within four hours of consuming
alcohol, see In re Exxon Valdez, 270 F.3d 1215, 1238 (C.A.9 2001), Exxon presented no
evidence that it monitored Hazelwood after his return to duty or considered giving him a
shoreside assignment, see Order 265, p. 5, supra, at 256a. Witnesses testified that before
the Valdez left port on the night of the disaster, Hazelwood downed at least five double
vodkas in the waterfront bars of Valdez, an intake of about 15 ounces of 80-proof
alcohol, enough “that a non-alcoholic would have passed out.” 270 F.3d, at 1236.

[4] The ship sailed at 9:12 p.m. on March 23, 1989, guided by a state-licensed pilot for
the first leg out, through the Valdez Narrows. At 11:20 p.m., Hazelwood took active
control and, owing to poor conditions in the outbound shipping lane, radioed the Coast
Guard for permission to move east across the inbound lane to a less icy path. Under the
conditions, this was a standard move, which the last outbound tanker had also taken, and
the Coast Guard cleared the Valdez to cross the inbound lane. The tanker accordingly
steered east toward clearer waters, but the move put it in the path of an underwater reef




                                                                                         72
off Bligh Island, thus requiring a turn back west into the shipping lane around Busby
Light, north of the reef.

[5] Two minutes before the required turn, however, Hazelwood left the bridge and went
down to his cabin in order, he said, to do paperwork. This decision was inexplicable.
There was expert testimony that, even if their presence is not strictly necessary, captains
simply do not quit the bridge during maneuvers like this, and no paperwork could have
justified it. And in fact the evidence was that Hazelwood's presence was required, both
because there should have been two officers on the bridge at all times and his departure
left only one, and because he was the only person on the entire ship licensed to navigate
this part of Prince William Sound. To make matters worse, before going below
Hazelwood put the tanker on autopilot, speeding it up, making the turn trickier, and any
mistake harder to correct.

[6] As Hazelwood left, he instructed the remaining officer, third mate Joseph Cousins, to
move the tanker back into the shipping lane once it came abeam of Busby Light. Cousins,
unlicensed to navigate in those waters, was left alone with helmsman Robert Kagan, a
nonofficer. For reasons that remain a mystery, they failed to make the turn at Busby
Light, and a later emergency maneuver attempted by Cousins came too late. The tanker
ran aground on Bligh Reef, tearing the hull open and spilling 11 million gallons of crude
oil into Prince William Sound.

[7] After Hazelwood returned to the bridge and reported the grounding to the Coast
Guard, he tried but failed to rock the Valdez off the reef, a maneuver which could have
spilled more oil and caused the ship to founder.1 The Coast Guard's nearly immediate
response included a blood test of Hazelwood (the validity of which Exxon disputes)
showing a blood-alcohol level of .061 eleven hours after the spill. Supp.App. 307sa.
Experts testified that to have this much alcohol in his bloodstream so long after the
accident, Hazelwood at the time of the spill must have had a blood-alcohol level of
around .241, Order 265, p. 5, supra, at 256a, three times the legal limit for driving in most
States.

[Footnote 1: As it turned out, the tanker survived the accident and remained in Exxon's
fleet, which it subsequently transferred to a wholly owned subsidiary, SeaRiver Maritime,
Inc. The Valdez “was renamed several times, finally to the SeaRiver Mediterranean,
[and] carried oil between the Persian Gulf and Japan, Singapore, and Australia for 12
years. ... In 2002, the ship was pulled from service and ‘laid up’ off a foreign port (just
where the owners won't say) and prepared for retirement, although, according to some
reports, the vessel continues in service under a foreign flag.” Exxon Valdez Spill
Anniversary Marked, 30 Oil Spill Intelligence Report 2 (Mar. 29, 2007).]

[8] In the aftermath of the disaster, Exxon spent around $2.1 billion in cleanup efforts.
The United States charged the company with criminal violations of the Clean Water Act,
33 U.S.C. §§ 1311(a) and 1319(c)(1); the Refuse Act of 1899, 33 U.S.C. §§ 407 and 411;
the Migratory Bird Treaty Act, 16 U.S.C. §§ 703 and 707(a); the Ports and Waterways
Safety Act, 33 U.S.C. § 1232(b)(1); and the Dangerous Cargo Act, 46 U.S.C. § 3718(b).



                                                                                          73
Exxon pleaded guilty to violations of the Clean Water Act, the Refuse Act, and the
Migratory Bird Treaty Act and agreed to pay a $150 million fine, later reduced to $25
million plus restitution of $100 million. A civil action by the United States and the State
of Alaska for environmental harms ended with a consent decree for Exxon to pay at least
$900 million toward restoring natural resources, and it paid another $303 million in
voluntary settlements with fishermen, property owners, and other private parties.

B [Legal Background]

[9] The remaining civil cases were consolidated into this one against Exxon, Hazelwood,
and others. The District Court for the District of Alaska divided the plaintiffs seeking
compensatory damages into three classes: commercial fishermen, Native Alaskans, and
landowners. At Exxon's behest, the court also certified a mandatory class of all plaintiffs
seeking punitive damages, whose number topped 32,000. Respondents here, to whom we
will refer as Baker for convenience, are members of that class.

[10] For the purposes of the case, Exxon stipulated to its negligence in the Valdez
disaster and its ensuing liability for compensatory damages. The court designed the trial
accordingly: Phase I considered Exxon and Hazelwood's recklessness and thus their
potential for punitive liability; Phase II set compensatory damages for commercial
fishermen and Native Alaskans; and Phase III determined the amount of punitive
damages for which Hazelwood and Exxon were each liable. (A contemplated Phase IV,
setting compensation for still other plaintiffs, was obviated by settlement.)

[11] In Phase I, the jury heard extensive testimony about Hazelwood's alcoholism and
his conduct on the night of the spill, as well as conflicting testimony about Exxon
officials' knowledge of Hazelwood's backslide. At the close of Phase I, the Court
instructed the jury in part that

“[a] corporation is responsible for the reckless acts of those employees who are employed
in a managerial capacity while acting in the scope of their employment. The reckless act
or omission of a managerial officer or employee of a corporation, in the course and scope
of the performance of his duties, is held in law to be the reckless act or omission of the
corporation.” App. K to Pet. for Cert. 301a.

[12] The Court went on that “[a]n employee of a corporation is employed in a
managerial capacity if the employee supervises other employees and has responsibility
for, and authority over, a particular aspect of the corporation's business.” Ibid. Exxon did
not dispute that Hazelwood was a managerial employee under this definition, see App. G,
id., at 264a, n. 8, and the jury found both Hazelwood and Exxon reckless and thus
potentially liable for punitive damages, App. L, id., at 303a.2

[Footnote 2: The jury was not asked to consider the possibility of any degree of fault
beyond the range of reckless conduct. The record sent up to us shows that some thought
was given to a trial plan that would have authorized jury findings as to greater degrees of




                                                                                         74
culpability, see App. 164, but that plan was not adopted, whatever the reason; Baker does
not argue this was error.]

[13] In Phase II the jury awarded $287 million in compensatory damages to the
commercial fishermen. After the Court deducted released claims, settlements, and other
payments, the balance outstanding was $19,590,257. Meanwhile, most of the Native
Alaskan class had settled their compensatory claims for $20 million, and those who opted
out of that settlement ultimately settled for a total of around $2.6 million.

[14] In Phase III, the jury heard about Exxon's management's acts and omissions
arguably relevant to the spill. See App. 1291-1320, 1353-1367. At the close of evidence,
the court instructed the jurors on the purposes of punitive damages, emphasizing that they
were designed not to provide compensatory relief but to punish and deter the defendants.
See App. to Brief in Opposition 12a-14a. The court charged the jury to consider the
reprehensibility of the defendants' conduct, their financial condition, the magnitude of the
harm, and any mitigating facts. Id., at 15a. The jury awarded $5,000 in punitive damages
against Hazelwood and $5 billion against Exxon.

[15] On appeal, the Court of Appeals for the Ninth Circuit upheld the Phase I jury
instruction on corporate liability for acts of managerial agents under Circuit precedent.
See In re Exxon Valdez, 270 F.3d, at 1236 (citing Protectus Alpha Nav. Co. v. North
Pacific Grain Growers, Inc., 767 F.2d 1379 (C.A.9 1985)). With respect to the size of the
punitive damages award, however, the Circuit remanded twice for adjustments in light of
this Court's due process cases before ultimately itself remitting the award to $2.5 billion.
See 270 F.3d, at 1246-1247, 472 F.3d 600, 601, 625 (2006) (per curiam), and 490 F.3d
1066, 1068 (2007).

[16] We granted certiorari to consider whether maritime law allows corporate liability
for punitive damages on the basis of the acts of managerial agents, whether the Clean
Water Act (CWA), 86 Stat. 816, 33 U.S.C. § 1251 et seq. (2000 ed. and Supp. V),
forecloses the award of punitive damages in maritime spill cases, and whether the
punitive damages awarded against Exxon in this case were excessive as a matter of
maritime common law. 552 U.S. ----, 128 S.Ct. 492, 169 L.Ed.2d 337 (2007). We now
vacate and remand.

II [Corporate Responsibility for Reckless Acts of Employees]

DELETED

III [Clean Water Act Preempts Maritime Punitive Damages]

DELETED

IV [Excessive Punitive Damages]




                                                                                         75
[17] Finally, Exxon raises an issue of first impression about punitive damages in
maritime law, which falls within a federal court's jurisdiction to decide in the manner of a
common law court, subject to the authority of Congress to legislate otherwise if it
disagrees with the judicial result. See U.S. Const., Art. III, § 2, cl. 1; see, e.g., Edmonds
v. Compagnie Generale Transatlantique, 443 U.S. 256, 259, 99 S.Ct. 2753, 61 L.Ed.2d
521 (1979) (“Admiralty law is judge-made law to a great extent”); Romero v.
International Terminal Operating Co., 358 U.S. 354, 360-361, 79 S.Ct. 468, 3 L.Ed.2d
368 (1959) (constitutional grant “empowered the federal courts ... to continue the
development of [maritime] law”). In addition to its resistance to derivative liability for
punitive damages and its preemption claim already disposed of, Exxon challenges the
size of the remaining $2.5 billion punitive damages award. Other than its preemption
argument, it does not offer a legal ground for concluding that maritime law should never
award punitive damages, or that none should be awarded in this case, but it does argue
that this award exceeds the bounds justified by the punitive damages goal of deterring
reckless (or worse) behavior and the consequently heightened threat of harm. The claim
goes to our understanding of the place of punishment in modern civil law and reasonable
standards of process in administering punitive law, subjects that call for starting with a
brief account of the history behind today's punitive damages.

A [Early History of Punitive Damages]

[18] The modern Anglo-American doctrine of punitive damages dates back at least to
1763, when a pair of decisions by the Court of Common Pleas recognized the availability
of damages “for more than the injury received.” Wilkes v. Wood, Lofft 1, 18, 98 Eng.
Rep. 489, 498 (1763) (Lord Chief Justice Pratt). In Wilkes v. Wood, one of the
foundations of the Fourth Amendment, exemplary damages awarded against the
Secretary of State, responsible for an unlawful search of John Wilkes's papers, were a
spectacular £4,000. See generally Boyd v. United States, 116 U.S. 616, 626, 6 S.Ct. 524,
29 L.Ed. 746 (1886). And in Huckle v. Money, 2 Wils. 205, 206-207, 95 Eng. Rep. 768,
768-769 (K.B.1763), the same judge who is recorded in Wilkes gave an opinion
upholding a jury's award of £300 (against a government officer again) although “if the
jury had been confined by their oath to consider the mere personal injury only, perhaps
[£20] damages would have been thought damages sufficient.”

[19] Awarding damages beyond the compensatory was not, however, a wholly novel
idea even then, legal codes from ancient times through the Middle Ages having called for
multiple damages for certain especially harmful acts. See, e.g., Code of Hammurabi § 8
(R. Harper ed.1904) (tenfold penalty for stealing the goat of a freed man); Statute of
Gloucester, 1278, 6 Edw. I, ch. 5, 1 Stat. at Large 66 (treble damages for waste). But
punitive damages were a common law innovation untethered to strict numerical
multipliers, and the doctrine promptly crossed the Atlantic, see, e.g., Genay v. Norris, 1
S.C.L. 6, 7 (1784); Coryell v. Colbaugh, 1 N.J.L. 77 (1791), to become widely accepted
in American courts by the middle of the 19th century, see, e.g., Day v. Woodworth, 13
How. 363, 371, 14 L.Ed. 181 (1852).




                                                                                          76
B [Common Law Rationales for Punitive Damages]

[20] Early common law cases offered various rationales for punitive-damages awards,
which were then generally dubbed “exemplary,” implying that these verdicts were
justified as punishment for extraordinary wrongdoing, as in Wilkes's case. Sometimes,
though, the extraordinary element emphasized was the damages award itself, the
punishment being “for example's sake,” Tullidge v. Wade, 3 Wils. 18, 19, 95 Eng. Rep.
909 (K.B.1769) (Lord Chief Justice Wilmot), “to deter from any such proceeding for the
future,” Wilkes, supra, at 19, 98 Eng. Rep., at 498-499. See also Coryell, supra, at 77
(instructing the jury “to give damages for example's sake, to prevent such offences in
[the] future”).

[21] A third historical justification, which showed up in some of the early cases, has
been noted by recent commentators, and that was the need “to compensate for intangible
injuries, compensation which was not otherwise available under the narrow conception of
compensatory damages prevalent at the time.” 8 Cooper Industries, Inc. v. Leatherman
Tool Group, Inc., 532 U.S. 424, 437-438, n. 11, 121 S.Ct. 1678, 149 L.Ed.2d 674 (2001)
(citing, inter alia, Note, Exemplary Damages in the Law of Torts, 70 Harv. L.Rev. 517
(1957)). But see Sebok, What Did Punitive Damages Do? 78 Chi.-Kent L.Rev. 163, 204
(2003) (arguing that “punitive damages have never served the compensatory function
attributed to them by the Court in Cooper ”). As the century progressed, and “the types of
compensatory damages available to plaintiffs ... broadened,” Cooper Industries, supra, at
437, n. 11, 121 S.Ct. 1678, the consequence was that American courts tended to speak of
punitive damages as separate and distinct from compensatory damages, see, e.g., Day,
supra, at 371 (punitive damages “hav[e] in view the enormity of [the] offence rather than
the measure of compensation to the plaintiff”). See generally 1 L. Schlueter, Punitive
Damages §§ 1.3(C)-(D), 1.4(A) (5th ed.2005) (hereinafter Schlueter) (describing the
“almost total eclipse of the compensatory function” in the decades following the 1830s).

[Footnote 8: Indeed, at least one 19th-century treatise writer asserted that there was “no
doctrine of authentically ‘punitive’ damages” and that “judgments that ostensibly
included punitive damages [were] in reality no more than full compensation.” Pacific
Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 25, 111 S.Ct. 1032, 113 L.Ed.2d 1 (1991)
(SCALIA, J., concurring in judgment) (citing 2 S. Greenleaf, Law of Evidence 235, n. 2
(13th ed. 1876)). “This view,” however, “was not widely shared.” Haslip, supra, at 25,
111 S.Ct. 1032 (SCALIA, J., concurring in judgment) (citing other prominent 19th-
century treatises). Whatever the actual importance of the subterfuge for compensation
may have been, it declined.]

[22] Regardless of the alternative rationales over the years, the consensus today is that
punitives are aimed not at compensation but principally at retribution and deterring
harmful conduct.9 This consensus informs the doctrine in most modern American
jurisdictions, where juries are customarily instructed on twin goals of punitive awards.
See, e.g., Cal. Jury Instr., Civil, No. 14.72.2 (2008) (“You must now determine whether
you should award punitive damages against defendant[s] ... for the sake of example and
by way of punishment”); N.Y. Pattern Jury Instr., Civil, No. 2:278 (2007) (“The purpose



                                                                                       77
of punitive damages is not to compensate the plaintiff but to punish the defendant ... and
thereby to discourage the defendant ... from acting in a similar way in the future”). The
prevailing rule in American courts also limits punitive damages to cases of what the
Court in Day, supra, at 371, spoke of as “enormity,” where a defendant's conduct is
“outrageous,” 4 Restatement § 908(2), owing to “gross negligence,” “willful, wanton, and
reckless indifference for the rights of others,” or behavior even more deplorable, 1
Schlueter § 9.3(A).10

[Footnote 9: See, e.g., Moskovitz v. Mount Sinai Medical Center, 69 Ohio St.3d 638,
651, 635 N.E.2d 331, 343 (1994) (“The purpose of punitive damages is not to
compensate a plaintiff, but to punish and deter certain conduct”); Hamilton Development
Co. v. Broad Rock Club, Inc., 248 Va. 40, 45, 445 S.E.2d 140, 143 (1994) (same); Loitz
v. Remington Arms Co., 138 Ill.2d 404, 414, 150 Ill.Dec. 510, 563 N.E.2d 397, 401
(1990) (same); Green Oil Co. v. Hornsby, 539 So.2d 218, 222 (Ala.1989) (same); Masaki
v. General Motors Corp., 71 Haw. 1, 6, 780 P.2d 566, 570 (1989) (same); see also Cooper
Industries, Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424, 432, 121 S.Ct. 1678, 149
L.Ed.2d 674 (2001) (punitive damages are “intended to punish the defendant and to deter
future wrongdoing”); State Farm Mut. Automobile Ins. Co. v. Campbell, 538 U.S. 408,
416, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003) (“[P]unitive damages ... are aimed at
deterrence and retribution”); 4 Restatement § 908, Comment a.]

[Footnote 10: These standards are from the torts context; different standards apply to
other causes of action.]

[23] Under the umbrellas of punishment and its aim of deterrence, degrees of relative
blameworthiness are apparent. Reckless conduct is not intentional or malicious, nor is it
necessarily callous toward the risk of harming others, as opposed to unheedful of it. See,
e.g., 2 Restatement § 500, Comment a, pp. 587-588 (1964) (“Recklessness may consist of
either of two different types of conduct. In one the actor knows, or has reason to know ...
of facts which create a high degree of risk of ... harm to another, and deliberately
proceeds to act, or to fail to act, in conscious disregard of, or indifference to, that risk. In
the other the actor has such knowledge, or reason to know, of the facts, but does not
realize or appreciate the high degree of risk involved, although a reasonable man in his
position would do so”). Action taken or omitted in order to augment profit represents an
enhanced degree of punishable culpability, as of course does willful or malicious action,
taken with a purpose to injure. See 4 id., § 908, Comment e, p. 466 (1979) (“In
determining the amount of punitive damages, ... the trier of fact can properly consider not
merely the act itself but all the circumstances including the motives of the wrongdoer
...”); cf. Alaska Stat. § 09.17.020(g) (2006) (higher statutory limit applies where conduct
was motivated by financial gain and its adverse consequences were known to the
defendant); Ark.Code Ann. § 16-55-208(b) (2005) (statutory limit does not apply where
the defendant intentionally pursued a course of conduct for the purpose of causing injury
or damage).

[24] Regardless of culpability, however, heavier punitive awards have been thought to be
justifiable when wrongdoing is hard to detect (increasing chances of getting away with



                                                                                             78
it), see, e.g., BMW of North America, Inc. v. Gore, 517 U.S. 559, 582, 116 S.Ct. 1589,
134 L.Ed.2d 809 (1996) (“A higher ratio may also be justified in cases in which the
injury is hard to detect”), or when the value of injury and the corresponding
compensatory award are small (providing low incentives to sue), see, e.g., ibid. (“[L]ow
awards of compensatory damages may properly support a higher ratio ... if, for example,
a particularly egregious act has resulted in only a small amount of economic damages”);
4 Restatement § 908, Comment c, p. 465 (“Thus an award of nominal damages ... is
enough to support a further award of punitive damages, when a tort, ... is committed for
an outrageous purpose, but no significant harm has resulted”). And, with a broadly
analogous object, some regulatory schemes provide by statute for multiple recovery in
order to induce private litigation to supplement official enforcement that might fall short
if unaided. See, e.g., Reiter v. Sonotone Corp., 442 U.S. 330, 344, 99 S.Ct. 2326, 60
L.Ed.2d 931 (1979) (discussing antitrust treble damages).

C [State Regulation of Punitive Damages]

[25] State regulation of punitive damages varies. A few States award them rarely, or not
at all. Nebraska bars punitive damages entirely, on state constitutional grounds. See, e.g.,
Distinctive Printing and Packaging Co. v. Cox, 232 Neb. 846, 857, 443 N.W.2d 566, 574
(1989) (per curiam). Four others permit punitive damages only when authorized by
statute: Louisiana, Massachusetts, and Washington as a matter of common law, and New
Hampshire by statute codifying common law tradition. See Ross v. Conoco, 2002-0299,
p. 14 (La.10/15/02), 828 So.2d 546, 555; Flesner v. Technical Communications Corp.,
410 Mass. 805, 813, 575 N.E.2d 1107, 1112 (1991); Fisher Properties v. Arden-Mayfair,
Inc., 106 Wash.2d 826, 852, 726 P.2d 8, 23 (1986); N.H.Rev.Stat. Ann. § 507:16 (1997);
see also Fay v. Parker, 53 N.H. 342, 382 (1872). Michigan courts recognize only
exemplary damages supportable as compensatory, rather than truly punitive, see Peisner
v. Detroit Free Press, Inc., 104 Mich.App. 59, 68, 304 N.W.2d 814, 817 (1981), while
Connecticut courts have limited what they call punitive recovery to the “expenses of
bringing the legal action, including attorney's fees, less taxable costs,” Larsen Chelsey
Realty Co. v. Larsen, 232 Conn. 480, 517, n. 38, 656 A.2d 1009, 1029, n. 38 (1995).

[26] As for procedure, in most American jurisdictions the amount of the punitive award
is generally determined by a jury in the first instance, and that “determination is then
reviewed by trial and appellate courts to ensure that it is reasonable.” Pacific Mut. Life
Ins. Co. v. Haslip, 499 U.S. 1, 15, 111 S.Ct. 1032, 113 L.Ed.2d 1 (1991); see also Honda
Motor Co. v. Oberg, 512 U.S. 415, 421-426, 114 S.Ct. 2331, 129 L.Ed.2d 336 (1994).11
Many States have gone further by imposing statutory limits on punitive awards, in the
form of absolute monetary caps, see, e.g., Va.Code Ann. § 8.01-38.1 (Lexis 2007)
($350,000 cap), a maximum ratio of punitive to compensatory damages, see, e.g., Ohio
Rev.Code Ann. § 2315.21(D)(2)(a) (Lexis 2001) (2:1 ratio in most tort cases), or,
frequently, some combination of the two, see, e.g., Alaska Stat. § 09.17.020(f) (2006)
(greater of 3:1 ratio or $500,000 in most actions). The States that rely on a multiplier
have adopted a variety of ratios, ranging from 5:1 to 1:1.12

[Footnote 11: A like procedure was followed in this case, without objection.]



                                                                                         79
[Footnote 12: See, e.g., Mo.Rev.Stat. Ann. § 510.265(1) (Vernon Supp.2008) (greater of
5:1 or $500,000 in most cases); Ala.Code §§ 6-11-21(a), (d) (2005) (greater of 3:1 or
$1.5 million in most personal injury suits, and 3:1 or $500,000 in most other actions);
N.D. Cent.Code Ann. § 32-03.2-11(4) (Supp.2007) (greater of 2:1 or $250,000);
Colo.Rev.Stat. Ann. § 13-21-102(1)(a) (2007) (1:1).]

[27] Oklahoma has a graduated scheme, with the limit on the punitive award turning on
the nature of the defendant's conduct. See Okla. Stat., Tit. 23, § 9.1(B) (West 2001)
(greater of 1:1 or $100,000 in cases involving “reckless disregard”); § 9.1(C) (greater of
2:1, $500,000, or the financial benefit derived by the defendant, in cases of intentional
and malicious conduct); § 9.1(D) (no limit where the conduct is intentional, malicious,
and life threatening).

[28] Despite these limitations, punitive damages overall are higher and more frequent in
the United States than they are anywhere else. See, e.g., Gotanda, Punitive Damages: A
Comparative Analysis, 42 Colum. J. Transnat'l L. 391, 421 (2004); 2 Schlueter § 22.0. In
England and Wales, punitive, or exemplary, damages are available only for oppressive,
arbitrary, or unconstitutional action by government servants; injuries designed by the
defendant to yield a larger profit than the likely cost of compensatory damages; and
conduct for which punitive damages are expressly authorized by statute. Rookes v.
Barnard, [1964] 1 All E.R. 367, 410-411 (H.L.). Even in the circumstances where
punitive damages are allowed, they are subject to strict, judicially imposed guidelines.
The Court of Appeal in Thompson v. Commissioner of Police of Metropolis, [1998] Q.B.
498, 518, said that a ratio of more than three times the amount of compensatory damages
will rarely be appropriate; awards of less than £5,000 are likely unnecessary; awards of £
25,000 should be exceptional; and £50,000 should be considered the top.

[29] For further contrast with American practice, Canada and Australia allow exemplary
damages for outrageous conduct, but awards are considered extraordinary and rarely
issue. See 2 Schlueter §§ 22.1(B), (D). Noncompensatory damages are not part of the
civil-code tradition and thus unavailable in such countries as France, Germany, Austria,
and Switzerland. See id., §§ 22.2(A)-(C), (E). And some legal systems not only decline to
recognize punitive damages themselves but refuse to enforce foreign punitive judgments
as contrary to public policy. See, e.g., Gotanda, Charting Developments Concerning
Punitive Damages: Is the Tide Changing? 45 Colum. J. Transnat'l L. 507, 514, 518, 528
(2007) (noting refusals to enforce judgments by Japanese, Italian, and German courts,
positing that such refusals may be on the decline, but concluding, “American parties
should not anticipate smooth sailing when seeking to have a domestic punitive damages
award recognized and enforced in other countries”).

D [Criticisms of Punitive Damages]

[30] American punitive damages have been the target of audible criticism in recent
decades, see, e.g., Note, Developments, The Paths of Civil Litigation, 113 Harv. L.Rev.
1783, 1784-1788 (2000) (surveying criticism), but the most recent studies tend to



                                                                                       80
undercut much of it, see id., at 1787-1788. A survey of the literature reveals that
discretion to award punitive damages has not mass-produced runaway awards, and
although some studies show the dollar amounts of punitive-damages awards growing
over time, even in real terms,13 by most accounts the median ratio of punitive to
compensatory awards has remained less than 1:1.14 Nor do the data substantiate a marked
increase in the percentage of cases with punitive awards over the past several decades. 15
The figures thus show an overall restraint and suggest that in many instances a high ratio
of punitive to compensatory damages is substantially greater than necessary to punish or
deter.

[Footnote 13: See, e.g., RAND Institute for Civil Justice, D. Hensler & E. Moller, Trends
in Punitive Damages, table 2 (Mar.1995) (finding an increase in median awards between
the early 1980s and the early 1990s in San Francisco and Cook Counties); Moller, Pace,
& Carroll, Punitive Damages in Financial Injury Jury Verdicts, 28 J. Legal Studies 283,
307 (1999) (hereinafter Financial Injury Jury Verdicts) (studying jury verdicts in
“Financial Injury” cases in six States and Cook County, Illinois, and finding a marked
increase in the median award between the late 1980s and the early 1990s); M. Peterson,
S. Sarma, & M. Shanley, Punitive Damages: Empirical Findings 15 (RAND Institute for
Civil Justice 1987) (hereinafter Punitive Damages: Empirical Findings) (finding that the
median punitive award increased nearly 4 times in San Francisco County between the
early 1960s and the early 1980s, and 43 times in Cook County over the same period). But
see T. Eisenberg et al., Juries, Judges, and Punitive Damages: Empirical Analyses Using
the Civil Justice Survey of State Courts 1992, 1996, and 2001 Data, 3 J. of Empirical
Legal Studies 263, 278 (2006) (hereinafter Juries, Judges, and Punitive Damages)
(analyzing Bureau of Justice Statistics data from 1992, 1996, and 2001, and concluding
that “[n]o statistically significant variation exists in the inflation-adjusted punitive award
level over the three time periods”); Dept. of Justice, Bureau of Justice Statistics, T.
Cohen, Punitive Damage Awards in Large Counties, 2001, p. 8 (Mar.2005) (hereinafter
Cohen) (compiling data from the Nation's 75 most populous counties and finding that the
median punitive damage award in civil jury trials decreased between 1992 and 2001).]

[Footnote 14: See, e.g., Juries, Judges, and Punitive Damages 269 (reporting median
ratios of 0.62:1 in jury trials and 0.66:1 in bench trials using the Bureau of Justice
Statistics data from 1992, 1996, and 2001); Vidmar & Rose, Punitive Damages by Juries
in Florida, 38 Harv. J. Legis. 487, 492 (2001) (studying civil cases in Florida state courts
between 1989 and 1998 and finding a median ratio of 0.67:1). But see Financial Injury
Jury Verdicts 307 (finding a median ratio of 1.4:1 in “financial injury” cases in the late
1980s and early 1990s).]

[Footnote 15: See, e.g., Cohen 8 (compiling data from the Nation's 75 most populous
counties, and finding that in jury trials where the plaintiff prevailed, the percentage of
cases involving punitive awards was 6.1% in 1992 and 5.6% in 2001); Financial Injury
Jury Verdicts 307 (finding a statistically significant decrease in the percentage of verdicts
in “financial injury” cases that include a punitive damage award, from 15.8% in the early
1980s to 12.7% in the early 1990s). But see Punitive Damages: Empirical Findings 9




                                                                                           81
(finding an increase in the percentage of civil trials resulting in punitive damage awards
in San Francisco and Cook Counties between 1960 and 1984).

[31] One might posit that ill effects of punitive damages are clearest not in actual awards
but in the shadow that the punitive regime casts on settlement negotiations and other
litigation decisions. See, e.g., Financial Injury Jury Verdicts 287; Polinsky, Are Punitive
Damages Really Insignificant, Predictable, and Rational? 26 J. Legal Studies 663, 664-
671 (1997). But here again the data have not established a clear correlation. See, e.g.,
Eaton, Mustard, & Talarico, The Effects of Seeking Punitive Damages on the Processing
of Tort Claims, 34 J. Legal Studies 343, 357, 353-354, 365 (2005) (studying data from
six Georgia counties and concluding that “the decision to seek punitive damages has no
statistically significant impact” on “whether a case that was disposed was done so by trial
or by some other procedure, including settlement,” or “whether a case that was disposed
by means other than a trial was more likely to have been settled”); Kritzer & Zemans,
The Shadow of Punitives, 1998 Wis. L.Rev. 157, 160 (1998) (noting the theory that
punitive damages cast a large shadow over settlement negotiations, but finding that “with
perhaps one exception, what little systematic evidence we could find does not support the
notion” (emphasis deleted)).]

[32] The real problem, it seems, is the stark unpredictability of punitive awards. Courts
of law are concerned with fairness as consistency, and evidence that the median ratio of
punitive to compensatory awards falls within a reasonable zone, or that punitive awards
are infrequent, fails to tell us whether the spread between high and low individual awards
is acceptable. The available data suggest it is not. A recent comprehensive study of
punitive damages awarded by juries in state civil trials found a median ratio of punitive to
compensatory awards of just 0.62:1, but a mean ratio of 2.90:1 and a standard deviation
of 13.81. Juries, Judges, and Punitive Damages 269.16 Even to those of us
unsophisticated in statistics, the thrust of these figures is clear: the spread is great, and the
outlier cases subject defendants to punitive damages that dwarf the corresponding
compensatories. The distribution of awards is narrower, but still remarkable, among
punitive damages assessed by judges: the median ratio is 0.66:1, the mean ratio is 1.60:1,
and the standard deviation is 4.54. Ibid. Other studies of some of the same data show that
fully 14% of punitive awards in 2001 were greater than four times the compensatory
damages, see Cohen 5, with 18% of punitives in the 1990s more than trebling the
compensatory damages, see Ostrom, Rottman, & Goerdt, A Step Above Anecdote: A
Profile of the Civil Jury in the 1990s, 79 Judicature 233, 240 (1996). And a study of
“financial injury” cases using a different data set found that 34% of the punitive awards
were greater than three times the corresponding compensatory damages. Financial Injury
Jury Verdicts 333.

[Footnote 16: This study examined “the most representative sample of state court trials
in the United States,” involving “tort, contract, and property cases disposed of by trial in
fiscal year 1991-1992 and then calendar years 1996 and 2001. The three separate data
sets cover state courts of general jurisdiction in a random sample of 46 of the 75 most
populous counties in the United States.” Juries, Judges, and Punitive Damages 267. The




                                                                                              82
information was “gathered directly” from state-court clerks' offices and the study did “not
rely on litigants or third parties to report.” Ibid.]

[33] Starting with the premise of a punitive-damages regime, these ranges of variation
might be acceptable or even desirable if they resulted from judges' and juries' refining
their judgments to reach a generally accepted optimal level of penalty and deterrence in
cases involving a wide range of circumstances, while producing fairly consistent results
in cases with similar facts. Cf. TXO Production Corp. v. Alliance Resources Corp., 509
U.S. 443, 457-458, 113 S.Ct. 2711, 125 L.Ed.2d 366 (1993) (plurality opinion). But
anecdotal evidence suggests that nothing of that sort is going on. One of our own leading
cases on punitive damages, with a $4 million verdict by an Alabama jury, noted that a
second Alabama case with strikingly similar facts produced “a comparable amount of
compensatory damages” but “no punitive damages at all.” See Gore, 517 U.S., at 565, n.
8, 116 S.Ct. 1589. As the Supreme Court of Alabama candidly explained, “the disparity
between the two jury verdicts ... [w]as a reflection of the inherent uncertainty of the trial
process.” BMW of North America, Inc. v. Gore, 646 So.2d 619, 626 (1994) (per curiam).
We are aware of no scholarly work pointing to consistency across punitive awards in
cases involving similar claims and circumstances.17

[Footnote 17: The Court is aware of a body of literature running parallel to anecdotal
reports, examining the predictability of punitive awards by conducting numerous “mock
juries,” where different “jurors” are confronted with the same hypothetical case. See, e.g.,
C. Sunstein, R. Hastie, J. Payne, D. Schkade, W. Viscusi, Punitive Damages: How Juries
Decide (2002); Schkade, Sunstein, & Kahneman, Deliberating About Dollars: The
Severity Shift, 100 Colum. L.Rev. 1139 (2000); Hastie, Schkade, & Payne, Juror
Judgments in Civil Cases: Effects of Plaintiff's Requests and Plaintiff's Identity on
Punitive Damage Awards, 23 Law & Hum. Behav. 445 (1999); Sunstein, Kahneman, &
Schkade, Assessing Punitive Damages (with Notes on Cognition and Valuation in Law),
107 Yale L.J. 2071 (1998). Because this research was funded in part by Exxon, we
decline to rely on it.

E [Prior Supreme Court Cases on Punitive Damages]

[34] The Court's response to outlier punitive damages awards has thus far been confined
by claims at the constitutional level, and our cases have announced due process standards
that every award must pass. See, e.g., State Farm Mut. Automobile Ins. Co. v. Campbell,
538 U.S. 408, 425, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003); Gore, 517 U.S., at 574-575,
116 S.Ct. 1589. Although “we have consistently rejected the notion that the constitutional
line is marked by a simple mathematical formula,” id., at 582, 116 S.Ct. 1589, we have
determined that “few awards exceeding a single-digit ratio between punitive and
compensatory damages, to a significant degree, will satisfy due process,” State Farm, 538
U.S., at 425, 123 S.Ct. 1513; “[w]hen compensatory damages are substantial, then a
lesser ratio, perhaps only equal to compensatory damages, can reach the outermost limit
of the due process guarantee,” ibid.




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[35] Today's enquiry differs from due process review because the case arises under
federal maritime jurisdiction, and we are reviewing a jury award for conformity with
maritime law, rather than the outer limit allowed by due process; we are examining the
verdict in the exercise of federal maritime common law authority, which precedes and
should obviate any application of the constitutional standard. Our due process cases, on
the contrary, have all involved awards subject in the first instance to state law. See, e.g.,
id., at 414, 123 S.Ct. 1513 (fraud and intentional infliction of emotional distress under
Utah law); Gore, supra, at 563, and n. 3, 116 S.Ct. 1589 (fraud under Alabama law);
TXO, supra, at 452, 113 S.Ct. 2711 (plurality opinion) (slander of title under West
Virginia law); Haslip, 499 U.S., at 7, 111 S.Ct. 1032 (fraud under Alabama law). These,
as state-law cases, could provide no occasion to consider a “common-law standard of
excessiveness,” Browning-Ferris Industries, 492 U.S., at 279, 109 S.Ct. 2909, and the
only matter of federal law within our appellate authority was the constitutional due
process issue.

[36] Our review of punitive damages today, then, considers not their intersection with
the Constitution, but the desirability of regulating them as a common law remedy for
which responsibility lies with this Court as a source of judge-made law in the absence of
statute. Whatever may be the constitutional significance of the unpredictability of high
punitive awards, this feature of happenstance is in tension with the function of the awards
as punitive, just because of the implication of unfairness that an eccentrically high
punitive verdict carries in a system whose commonly held notion of law rests on a sense
of fairness in dealing with one another. Thus, a penalty should be reasonably predictable
in its severity, so that even Justice Holmes's “bad man” can look ahead with some ability
to know what the stakes are in choosing one course of action or another. See The Path of
the Law, 10 Harv. L.Rev. 457, 459 (1897). And when the bad man's counterparts turn up
from time to time, the penalty scheme they face ought to threaten them with a fair
probability of suffering in like degree when they wreak like damage. Cf. Koon v. United
States, 518 U.S. 81, 113, 116 S.Ct. 2035, 135 L.Ed.2d 392 (1996) (noting the need “to
reduce unjustified disparities” in criminal sentencing “and so reach toward the
evenhandedness and neutrality that are the distinguishing marks of any principled system
of justice”). The common sense of justice would surely bar penalties that reasonable
people would think excessive for the harm caused in the circumstances.

F [Jury Instructions]

1

[37] With that aim ourselves, we have three basic approaches to consider, one verbal and
two quantitative. As mentioned before, a number of state courts have settled on criteria
for judicial review of punitive-damages awards that go well beyond traditional “shock the
conscience” or “passion and prejudice” tests. Maryland, for example, has set forth a
nonexclusive list of nine review factors under state common law that include “degree of
heinousness,” “the deterrence value of [the award],” and “[w]hether [the punitive award]
bears a reasonable relationship to the compensatory damages awarded.” Bowden v.
Caldor, Inc., 350 Md. 4, 25-39, 710 A.2d 267, 277-284 (1998). Alabama has seven



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general criteria, such as “actual or likely harm [from the defendant's conduct],” “degree
of reprehensibility,” and “[i]f the wrongful conduct was profitable to the defendant.”
Green Oil Co. v. Hornsby, 539 So.2d 218, 223-224 (1989) (internal quotation marks
omitted). But see McClain v. Metabolife Int'l, Inc., 259 F.Supp.2d 1225, 1236
(N.D.Ala.2003) (noting but not deciding claim that post-trial review under Green Oil “is
unconstitutionally vague and inadequate”).

[38] These judicial review criteria are brought to bear after juries render verdicts under
instructions offering, at best, guidance no more specific for reaching an appropriate
penalty. In Maryland, for example, which allows punitive damages for intentional torts
and conduct characterized by “actual malice,” U.S. Gypsum Co. v. Mayor and City
Council of Baltimore, 336 Md. 145, 185, 647 A.2d 405, 424-425 (1994), juries may be
instructed that

“An award for punitive damages should be: (1) In an amount that will deter the
defendant and others from similar conduct, (2) Proportionate to the wrongfulness of the
defendant's conduct and the defendant's ability to pay, (3) But not designed to bankrupt or
financially destroy a defendant.” Md. Pattern Jury Instr., Civil, No. 10:13 (4th ed.2007).

[39] In Alabama, juries are instructed to fix an amount after considering “the character
and degree of the wrong as shown by the evidence in the case, and the necessity of
preventing similar wrongs.” 1 Ala. Pattern Jury Instr., Civil, No. § 23.21 (Supp.2007).

[40] These examples leave us skeptical that verbal formulations, superimposed on
general jury instructions, are the best insurance against unpredictable outliers.
Instructions can go just so far in promoting systemic consistency when awards are not
tied to specifically proven items of damage (the cost of medical treatment, say), and
although judges in the States that take this approach may well produce just results by dint
of valiant effort, our experience with attempts to produce consistency in the analogous
business of criminal sentencing leaves us doubtful that anything but a quantified
approach will work. A glance at the experience there will explain our skepticism.

[41] The points of similarity are obvious. “[P]unitive damages advance the interests of
punishment and deterrence, which are also among the interests advanced by the criminal
law.” Browning-Ferris Industries, 492 U.S., at 275, 109 S.Ct. 2909.18 See also 1977
Restatement § 908, Comment a, at 464 (purposes of punitive damages are “the same” as
“that of a fine imposed after a conviction of a crime”); 18 U.S.C. § 3553(a)(2) (requiring
sentencing courts to consider, inter alia, “the need for the sentence imposed ... to provide
just punishment for the offense” and “to afford adequate deterrence to criminal
conduct”); United States Sentencing Commission, Guidelines Manual § 1A1.1, comment.
(Nov.2007).

[Footnote 18: This observation is not at odds with the holding in Browning-Ferris, that
the Excessive Fines Clause of the Eighth Amendment does not apply to punitive
damages. See Browning-Ferris, 492 U.S., at 275, 109 S.Ct. 2909. That conclusion did not
reject the punitive nature of the damages, see ibid., but rested entirely upon our



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conviction that “the concerns that animate the Eighth Amendment” were about “plac[ing]
limits on the steps a government may take against an individual,” ibid. Thus the Clause
“does not constrain an award of money damages in a civil suit when the government
neither has prosecuted the action nor has any right to receive a share of the damages
awarded.” Id., at 264, 109 S.Ct. 2909. We noted the similarities of purpose between
criminal penalties and punitive damages and distinguished the two on the basis of their
differing levels of state involvement. See id., at 275, 109 S.Ct. 2909.]

[42] It is instructive, then, that in the last quarter century federal sentencing rejected an
“indeterminate” system, with relatively unguided discretion to sentence within a wide
range, under which “similarly situated offenders were sentenced [to], and did actually
serve, widely disparate sentences.”19 Instead it became a system of detailed guidelines
tied to exactly quantified sentencing results, under the authority of the Sentencing
Reform Act of 1984, 18 U.S.C. § 3551 et seq. (2000 ed. and Supp. V).

[Footnote 19: Nagel, Structuring Sentencing Discretion: The New Federal Sentencing
Guidelines, 80 J.Crim. L. & C. 883, 895-899 (1990) (citing studies and congressional
hearings).]

[43] The importance of this for us is that in the old federal sentencing system of general
standards the cohort of even the most seasoned judicial penalty-givers defied consistency.
Judges and defendants alike were “[l]eft at large, wandering in deserts of uncharted
discretion,” M. Frankel, Criminal Sentences: Law Without Order 7-8 (1973), which is
very much the position of those imposing punitive damages today, be they judges or
juries, except that they lack even a statutory maximum; their only restraint beyond a core
sense of fairness is the due process limit. This federal criminal law development, with its
many state parallels, strongly suggests that as long “as there are no punitive-damages
guidelines, corresponding to the federal and state sentencing guidelines, it is inevitable
that the specific amount of punitive damages awarded whether by a judge or by a jury
will be arbitrary.” Mathias v. Accor Economy Lodging, Inc., 347 F.3d 672, 678 (C.A.7
2003).

2

[44] This is why our better judgment is that eliminating unpredictable outlying punitive
awards by more rigorous standards than the constitutional limit will probably have to take
the form adopted in those States that have looked to the criminal-law pattern of quantified
limits. One option would be to follow the States that set a hard dollar cap on punitive
damages, see supra, at 2623, a course that arguably would come closest to the criminal
law, rather like setting a maximum term of years. The trouble is, though, that there is no
“standard” tort or contract injury, making it difficult to settle upon a particular dollar
figure as appropriate across the board. And of course a judicial selection of a dollar cap
would carry a serious drawback; a legislature can pick a figure, index it for inflation, and
revisit its provision whenever there seems to be a need for further tinkering, but a court
cannot say when an issue will show up on the docket again. See, e.g., Jones & Laughlin
Steel Corp. v. Pfeifer, 462 U.S. 523, 546-547, 103 S.Ct. 2541, 76 L.Ed.2d 768 (1983)



                                                                                          86
(declining to adopt a fixed formula to account for inflation in discounting future wages to
present value, in light of the unpredictability of inflation rates and variation among lost-
earnings cases).

[45] The more promising alternative is to leave the effects of inflation to the jury or
judge who assesses the value of actual loss, by pegging punitive to compensatory
damages using a ratio or maximum multiple. See, e.g., 2 ALI Enterprise Responsibility
for Personal Injury: Reporters' Study 258 (1991) (hereinafter ALI Reporters' Study)
(“[T]he compensatory award in a successful case should be the starting point in
calculating the punitive award”); ABA, Report of Special Comm. on Punitive Damages,
Section of Litigation, Punitive Damages: A Constructive Examination 64-66 (1986)
(recommending a presumptive punitive-to-compensatory damages ratio). As the earlier
canvass of state experience showed, this is the model many States have adopted, see
supra, at 2623, and n. 12, and Congress has passed analogous legislation from time to
time, as for example in providing treble damages in antitrust, racketeering, patent, and
trademark actions, see 15 U.S.C. §§ 15, 1117 (2000 ed. and Supp. V); 18 U.S.C. §
1964(c); 35 U.S.C. § 284.20 And of course the potential relevance of the ratio between
compensatory and punitive damages is indisputable, being a central feature in our due
process analysis. See, e.g., State Farm, 538 U.S., at 425, 123 S.Ct. 1513; Gore, 517 U.S.,
at 580, 116 S.Ct. 1589.

[Footnote 20: There are State counterparts of these federal statutes. See, e.g., Conn.
Gen.Stat. § 52-560 (2007) (cutting or destroying a tree intended for use as a Christmas
tree punishable by a payment to the injured party of five times the tree's value); Mass.
Gen. Laws, ch. 91, § 59A (West 2006) (discharging crude oil into a lake, river, tidal
water, or flats subjects a defendant to double damages in tort).]

[46] Still, some will murmur that this smacks too much of policy and too little of
principle. Cf. Moviecolor Ltd. v. Eastman Kodak Co., 288 F.2d 80, 83 (C.A.2 1961). But
the answer rests on the fact that we are acting here in the position of a common law court
of last review, faced with a perceived defect in a common law remedy. Traditionally,
courts have accepted primary responsibility for reviewing punitive damages and thus for
their evolution, and if, in the absence of legislation, judicially derived standards leave the
door open to outlier punitive-damages awards, it is hard to see how the judiciary can
wash its hands of a problem it created, simply by calling quantified standards legislative.
See State Farm, supra, at 438, 123 S.Ct. 1513 (Justice Ginsburg, dissenting) (“In a
legislative scheme or a state high court's design to cap punitive damages, the handiwork
in setting single-digit and 1-to-1 benchmarks could hardly be questioned”); 2 ALI
Reporters' Study 257 (recommending adoption of ratio, “probably legislatively, although
possibly judicially”).

[47] History certainly is no support for the notion that judges cannot use numbers. The
21-year period in the rule against perpetuities was a judicial innovation, see, e.g., Cadell
v. Palmer, 1 Clark & Finnelly 372, 6 Eng. Rep. 956, 963 (H.L.1833), and so were exact
limitations periods for civil actions, sometimes borrowing from statutes, see C. Preston &
G. Newsom, Limitation of Actions 241-242 (2d ed.1943), but often without any statutory



                                                                                           87
account to draw on, see, e.g., 1 H. Wood, Limitations of Actions § 1, p. 4 (4th ed.1916).
For more examples, see 1 W. Blackstone, Commentaries on the Laws of England 451
(1765) (listing other common law age cut-offs with no apparent statutory basis). And of
course, adopting an admiralty-law ratio is no less judicial than picking one as an outer
limit of constitutionality for punitive awards. See State Farm, supra, at 425, 123 S.Ct.
1513.21

[Footnote 21: To the extent that Justice Stevens suggests that the very subject of
remedies should be treated as congressional in light of the number of statutes dealing
with remedies, see post, at 2634 - 2636 (opinion concurring in part and dissenting in
part), we think modern-day maritime cases are to the contrary and support judicial action
to modify a common law landscape largely of our own making. The character of
maritime law as a mixture of statutes and judicial standards, “an amalgam of traditional
common-law rules, modifications of those rules, and newly created rules,” East River
S.S. Corp. v. Transamerica Delaval Inc., 476 U.S. 858, 865, 106 S.Ct. 2295, 90 L.Ed.2d
865 (1986), accounts for the large part we have taken in working out the governing
maritime tort principles. See, e.g., ibid. (“recognizing products liability ... as part of the
general maritime law”); American Export Lines, Inc. v. Alvez, 446 U.S. 274, 100 S.Ct.
1673, 64 L.Ed.2d 284 (1980) (recognizing cause of action for loss of consortium);
Moragne v. States Marine Lines, Inc., 398 U.S. 375, 90 S.Ct. 1772, 26 L.Ed.2d 339
(1970) (recognizing cause of action for wrongful death). And for the very reason that our
exercise of maritime jurisdiction has reached to creating new causes of action on more
than one occasion, it follows that we have a free hand in dealing with an issue that is
“entirely a remedial matter.” Id., at 382, 90 S.Ct. 1772. The general observation we made
in United States v. Reliable Transfer Co., 421 U.S. 397, 409, 95 S.Ct. 1708, 44 L.Ed.2d
251 (1975), when we abrogated the admiralty rule of divided damages in favor of
proportional liability, is to the point here. It is urged “that the creation of a new rule of
damages in maritime collision cases is a task for Congress and not for this Court. But the
Judiciary has traditionally taken the lead in formulating flexible and fair remedies in the
law maritime, and Congress has largely left to this Court the responsibility for fashioning
the controlling rules of admiralty law” (internal quotation marks and footnote omitted).
See also Exxon Co., U.S.A. v. Sofec, Inc., 517 U.S. 830, 116 S.Ct. 1813, 135 L.Ed.2d
113 (1996) (holding that proportional-liability rule applies only to defendants
proximately causing an injury); McDermott, Inc. v. AmClyde, 511 U.S. 202, 114 S.Ct.
1461, 128 L.Ed.2d 148 (1994) (adopting proportionate-fault rule for calculation of
nonsettling maritime tort defendants' compensatory liability).]

[48] Indeed, the compensatory remedy sought in this case is itself entirely a judicial
creation. The common law traditionally did not compensate purely economic harms,
unaccompanied by injury to person or property. See K. Abraham, Forms and Functions of
Tort Law 247-248 (3d ed.2007); see, e.g., Robins Dry Dock & Repair Co. v. Dahl, 266
U.S. 449, 45 S.Ct. 157, 69 L.Ed. 372 (1925) (imposing rule in maritime context). But
“[t]he courts have ... occasionally created exceptions to the rule. Perhaps the most
noteworthy involve cases in which there has been natural-resource damage for which no
party seems to have a cause of action.” Abraham, supra, at 249 (discussing Union Oil Co.
v. Oppen, 501 F.2d 558 (C.A.9 1974) (recognizing exception for commercial



                                                                                           88
fishermen)). We raise the point not to express agreement or disagreement with the Ninth
Circuit rule but to illustrate the entirely judge-made nature of the landscape we are
surveying.

[49] To be sure, “Congress retains superior authority in these matters,” and “[i]n this era,
an admiralty court should look primarily to these legislative enactments for policy
guidance.” Miles v. Apex Marine Corp., 498 U.S. 19, 27, 111 S.Ct. 317, 112 L.Ed.2d 275
(1990). But we may not slough off our responsibilities for common law remedies because
Congress has not made a first move, and the absence of federal legislation constraining
punitive damages does not imply a congressional decision that there should be no
quantified rule, cf. Rapanos v. United States, 547 U.S. 715, 749, 126 S.Ct. 2208, 165
L.Ed.2d 159 (2006) (plurality opinion) (noting the Court's “oft-expressed skepticism
towards reading the tea leaves of congressional inaction”). Where there is a need for a
new remedial maritime rule, past precedent argues for our setting a judicially derived
standard, subject of course to congressional revision. See, e.g., Reliable Transfer, supra,
at 409, 95 S.Ct. 1708.

[50] Although the legal landscape is well populated with examples of ratios and
multipliers expressing policies of retribution and deterrence, most of them suffer from
features that stand in the way of borrowing them as paradigms of reasonable limitations
suited for application to this case. While a slim majority of the States with a ratio have
adopted 3:1, others see fit to apply a lower one, see, e.g., Colo.Rev.Stat. Ann. § 13-21-
102(1)(a) (2007) (1:1); Ohio Rev.Code Ann. § 2315.21(D)(2)(a) (Lexis 2005) (2:1), and a
few have gone higher, see, e.g., Mo. Ann. Stat. § 510.265(1) (Supp.2008) (5:1).
Judgments may differ about the weight to be given to the slight majority of 3:1 States, but
one feature of the 3:1 schemes dissuades us from selecting it here. With a few statutory
exceptions, generally for intentional infliction of physical injury or other harm, see, e.g.,
Ala.Code § 6-11-21(j) (2005); Ark.Code Ann. § 16-55-208(b) (2005), the States with 3:1
ratios apply them across the board (as do other States using different fixed multipliers).
That is, the upper limit is not directed to cases like this one, where the tortious action was
worse than negligent but less than malicious,22 exposing the tortfeasor to certain
regulatory sanctions and inevitable damage actions;23 the 3:1 ratio in these States also
applies to awards in quite different cases involving some of the most egregious conduct,
including malicious behavior and dangerous activity carried on for the purpose of
increasing a tortfeasor's financial gain.24 We confront, instead, a case of reckless action,
profitless to the tortfeasor, resulting in substantial recovery for substantial injury. Thus, a
legislative judgment that 3:1 is a reasonable limit overall is not a judgment that 3:1 is a
reasonable limit in this particular type of case.

[Footnote 22: Although the jury heard evidence that Exxon may have felt constrained not
to give Hazelwood a shoreside assignment because of a concern that such a course might
open it to liabilities in personnel litigation the employee might initiate, see, e.g., App. F
to Pet. for Cert. 256a, such a consideration, if indeed it existed, hardly constitutes action
taken with a specific purpose to cause harm at the expense of an established duty.]




                                                                                            89
[Footnote 23: We thus treat this case categorically as one of recklessness, for that was
the jury's finding. But by making a point of its contrast with cases falling within
categories of even greater fault we do not mean to suggest that Exxon's and Hazelwood's
failings were less than reprehensible.]

[Footnote 24: Two of the States with 3:1 ratios do provide for slightly larger awards in
actions involving this type of strategic financial wrongdoing, but the exceptions seem to
apply to only a subset of those cases. See Alaska Stat. § 09.17.020(g) (2006) (where the
defendant's conduct was motivated by financial gain and the adverse consequences of the
conduct were actually known by the defendant or the person responsible for making
policy decisions on behalf of the defendant, the normal limit is replaced by the greater of
four times the compensatory damages, four times the aggregate financial gain the
defendant received as a result of its misconduct, or $7 million); Fla. Stat. §§ 768.73(1)(b),
(c) (2007) (normal limit replaced by greater of 4:1 or $2 million where defendant's
wrongful conduct was motivated solely by unreasonable financial gain and the
unreasonably dangerous nature of the conduct, together with the high likelihood of injury,
was actually known by the managing agent, director, officer, or other person responsible
for making policy decisions on behalf of the defendant).]

[51] For somewhat different reasons, the pertinence of the 2:1 ratio adopted by treble-
damages statutes (offering compensatory damages plus a bounty of double that amount)
is open to question. Federal treble-damages statutes govern areas far afield from maritime
concerns (not to mention each other);25 the relevance of the governing rules in patent or
trademark cases, say, is doubtful at best. And in some instances, we know that the
considerations that went into making a rule have no application here. We know, for
example, that Congress devised the treble damages remedy for private antitrust actions
with an eye to supplementing official enforcement by inducing private litigation, which
might otherwise have been too rare if nothing but compensatory damages were available
at the end of the day. See, e.g., Reiter, 442 U.S., at 344, 99 S.Ct. 2326. That concern has
no traction here, in this case of staggering damage inevitably provoking governmental
enforcers to indict and any number of private parties to sue. To take another example,
although 18 U.S.C. § 3571(d) provides for a criminal penalty of up to twice a crime
victim's loss, this penalty is an alternative to other specific fine amounts which courts
may impose at their option, see §§ 3571(a)- (c), a fact that makes us wary of reading too
much into Congress's choice of ratio in one provision. State environmental treble-
damages schemes offer little more support: for one thing, insofar as some appear to
punish even negligence, see, e.g., Mass. Gen. Laws, ch. 130, § 27, while others target
only willful conduct, see, e.g., Del.Code Ann., Tit. 25, § 1401 (1989), some undershoot
and others may overshoot the target here. For another, while some States have chosen
treble damages, others punish environmental harms at other multiples. See, e.g.,
N.H.Rev.Stat. Ann. § 146-A:10 (2005) (damages of one-and-a-half times the harm
caused to private property by oil discharge); Minn.Stat. Ann. § 115A.99 (2005) (civil
penalty of 2 to 5 times the costs of removing unlawful solid waste). All in all, the
legislative signposts do not point the way clearly to 2:1 as a sound indication of a
reasonable limit.




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[Footnote 25: See, e.g., 15 U.S.C. § 15 (antitrust); 18 U.S.C. § 1964 (racketeering); 35
U.S.C. § 284 (patent); 15 U.S.C. § 1117 (trademark) (2000 ed. and Supp. V); 7 U.S.C. §
2564 (plant variety protections); 12 U.S.C. § 2607 (real estate settlement antikickback
provision); 15 U.S.C. § 1693f (consumer credit protection).]

3

[52] There is better evidence of an accepted limit of reasonable civil penalty, however, in
several studies mentioned before, showing the median ratio of punitive to compensatory
verdicts, reflecting what juries and judges have considered reasonable across many
hundreds of punitive awards. See supra, at 2624 - 2625, and n. 14. We think it is fair to
assume that the greater share of the verdicts studied in these comprehensive collections
reflect reasonable judgments about the economic penalties appropriate in their particular
cases.

[53] These studies cover cases of the most as well as the least blameworthy conduct
triggering punitive liability, from malice and avarice, down to recklessness, and even
gross negligence in some jurisdictions. The data put the median ratio for the entire gamut
of circumstances at less than 1:1, see supra, at 2624 - 2625, and n. 14, meaning that the
compensatory award exceeds the punitive award in most cases. In a well-functioning
system, we would expect that awards at the median or lower would roughly express
jurors' sense of reasonable penalties in cases with no earmarks of exceptional
blameworthiness within the punishable spectrum (cases like this one, without intentional
or malicious conduct, and without behavior driven primarily by desire for gain, for
example) and cases (again like this one) without the modest economic harm or odds of
detection that have opened the door to higher awards. It also seems fair to suppose that
most of the unpredictable outlier cases that call the fairness of the system into question
are above the median; in theory a factfinder's deliberation could go awry to produce a
very low ratio, but we have no basis to assume that such a case would be more than a
sport, and the cases with serious constitutional issues coming to us have naturally been on
the high side, see, e.g., State Farm, 538 U.S., at 425, 123 S.Ct. 1513 (ratio of 145:1);
Gore, 517 U.S., at 582, 116 S.Ct. 1589 (ratio of 500:1). On these assumptions, a median
ratio of punitive to compensatory damages of about 0.65:126 probably marks the line near
which cases like this one largely should be grouped. Accordingly, given the need to
protect against the possibility (and the disruptive cost to the legal system) of awards that
are unpredictable and unnecessary, either for deterrence or for measured retribution, we
consider that a 1:1 ratio, which is above the median award, is a fair upper limit in such
maritime cases.27

[Footnote 26: See supra, at 2624, n. 14, for the spread among studies.]

[Footnote 27: The reasons for this conclusion answer Justice Steven's suggestion, post, at
2638, that there is an adequate restraint in appellate abuse-of-discretion review of a trial
judge's own review of a punitive jury award (or of a judge's own award in nonjury cases).
We cannot see much promise of a practical solution to the outlier problem in this
possibility. Justice STEVENS would find no abuse of discretion in allowing the $2.5



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billion balance of the jury's punitive verdict here, and yet that is about five times the size
of the award that jury practice and our judgment would signal as reasonable in a case of
this sort.]

[54] The dissent also suggests that maritime tort law needs a quantified limit on punitive
awards less than tort law generally because punitives may mitigate maritime law's less
generous scheme of compensatory damages. Post, at 2636 - 2637. But the instructions in
this case did not allow the jury to set punitives on the basis of any such consideration, see
Jury Instruction No. 21, App. to Brief in Opposition 12a (“The purposes for which
punitive damages are awarded are: (1) to punish a wrongdoer for extraordinary
misconduct; and (2) to warn defendants and others and deter them from doing the same”),
and the size of the underlying compensatory damages does not bespeak economic
inadequacy; the case, then, does not support an argument that maritime compensatory
awards need supplementing.

[55] And this Court has long held that “[p]unitive damages by definition are not intended
to compensate the injured party, but rather to punish the tortfeasor ... and to deter him and
others from similar extreme conduct.” Newport v. Fact Concerts, Inc., 453 U.S. 247, 266-
267, 101 S.Ct. 2748, 69 L.Ed.2d 616 (1981); see supra, at 2620 - 2621. Indeed, any
argument for more generous punitive damages in maritime cases would call into question
the maritime applicability of the constitutional limit on punitive damages as now
understood, for we have tied that limit to a conception of punitive damages awarded
entirely for a punitive, not quasi-compensatory, purpose. See, e.g., Philip Morris USA v.
Williams, 549 U.S. 346, 352, 127 S.Ct. 1057, 166 L.Ed.2d 940 (2007) (“This Court has
long made clear that ‘[p]unitive damages may properly be imposed to further a State's
legitimate interests in punishing unlawful conduct and deterring its repetition’ ” (quoting
Gore, 517 U.S., at 568, 116 S.Ct. 1589)); State Farm, 538 U.S., at 416, 123 S.Ct. 1513
(“[P]unitive damages ... are aimed at deterrence and retribution”); Cooper Industries, 532
U.S., at 432, 121 S.Ct. 1678 (“[C]ompensatory damages and punitive damages ... serve
distinct purposes. The former are intended to redress the concrete loss that the plaintiff
has suffered .... The latter ... operate as ‘private fines' intended to punish the defendant
and to deter future wrongdoing”).

[56] The provision of the CWA respecting daily fines confirms our judgment that
anything greater would be excessive here and in cases of this type. Congress set criminal
penalties of up to $25,000 per day for negligent violations of pollution restrictions, and
up to $50,000 per day for knowing ones. 33 U.S.C. §§ 1319(c)(1), (2). Discretion to
double the penalty for knowing action compares to discretion to double the civil liability
on conduct going beyond negligence and meriting punitive treatment. And our
explanation of the constitutional upper limit confirms that the 1:1 ratio is not too low. In
State Farm, we said that a single-digit maximum is appropriate in all but the most
exceptional of cases, and “[w]hen compensatory damages are substantial, then a lesser
ratio, perhaps only equal to compensatory damages, can reach the outermost limit of the
due process guarantee.” 538 U.S., at 425, 123 S.Ct. 1513.28




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[Footnote 28: The criterion of “substantial” takes into account the role of punitive
damages to induce legal action when pure compensation may not be enough to encourage
suit, a concern addressed by the opportunity for a class action when large numbers of
potential plaintiffs are involved: in such cases, individual awards are not the touchstone,
for it is the class option that facilitates suit, and a class recovery of $500 million is
substantial. In this case, then, the constitutional outer limit may well be 1:1.]

V [Decision]

[57] Applying this standard to the present case, we take for granted the District Court's
calculation of the total relevant compensatory damages at $507.5 million. See In re
Exxon Valdez, 236 F.Supp.2d 1043, 1063 (D.Alaska 2002). A punitive-to-compensatory
ratio of 1:1 thus yields maximum punitive damages in that amount.

[58] We therefore vacate the judgment and remand the case for the Court of Appeals to
remit the punitive damages award accordingly.

It is so ordered.



Justice Ginsburg, concurring in part and dissenting in part.

I join Parts I, II, and III of the Court's opinion, and dissent from Parts IV and V.

[59] This case is unlike the Court's recent forays into the domain of state tort law under
the banner of substantive due process. See State Farm Mut. Automobile Ins. Co. v.
Campbell, 538 U.S. 408, 418-428, 123 S.Ct. 1513, 155 L.Ed.2d 585 (2003) (reining in
state-court awards of punitive damages); BMW of North America, Inc. v. Gore, 517 U.S.
559, 574-585, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996) (same). The controversy here
presented “arises under federal maritime jurisdiction,” ante, at 2626 (opinion of the
Court), and, beyond question, “the Court possesses the power to craft the rule it
announces today,” ante, at 2638 (Justice Stevens, concurring in part and dissenting in
part). The issue, therefore, is whether the Court, though competent to act, should
nevertheless leave the matter to Congress. The Court has explained, in its well stated and
comprehensive opinion, why it has taken the lead. While recognizing that the question is
close, I share Justice Stevens' view that Congress is the better equipped decisionmaker.

[60] First, I question whether there is an urgent need in maritime law to break away from
the “traditional common-law approach” under which punitive damages are determined by
a properly instructed jury, followed by trial-court, and then appellate-court review, to
ensure that [the award] is reasonable.” Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1,
15, 111 S.Ct. 1032, 113 L.Ed.2d 1 (1991). The Court acknowledges that the traditional
approach “has not mass-produced runaway awards,” ante, at 2624, or endangered
settlement negotiations, ante, at 2624 - 2625, n. 15. Nor has the Court asserted that outlier




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awards, insufficiently checked by abuse-of-discretion review, occur more often or are
more problematic in maritime cases than in other areas governed by federal law.

[61] Second, assuming a problem in need of solution, the Court's lawmaking prompts
many questions. The 1:1 ratio is good for this case, the Court believes, because Exxon's
conduct ranked on the low end of the blameworthiness scale: Exxon was not seeking “to
augment profit,” nor did it act “with a purpose to injure,” ante, at 2622. What ratio will
the Court set for defendants who acted maliciously or in pursuit of financial gain? See
ante, at 2631 - 2632. Should the magnitude of the risk increase the ratio and, if so, by
how much? Horrendous as the spill from the Valdez was, millions of gallons more might
have spilled as a result of Captain Hazelwood's attempt to rock the boat off the reef. See
ante, at 2613 (opinion of the Court); cf. TXO Production Corp. v. Alliance Resources
Corp., 509 U.S. 443, 460-462, 113 S.Ct. 2711, 125 L.Ed.2d 366 (1993) (plurality
opinion) (using potential loss to plaintiff as a guide in determining whether jury verdict
was excessive). In the end, is the Court holding only that 1:1 is the maritime-law ceiling,
or is it also signaling that any ratio higher than 1:1 will be held to exceed “the
constitutional outer limit”? See ante, at 2634, n. 28. On next opportunity, will the Court
rule, definitively, that 1:1 is the ceiling due process requires in all of the States, and for
all federal claims?

[62] Heightening my reservations about the 1:1 solution is Justice Stevens' comment on
the venturesome character of the Court's decision. In the States, he observes, fixed ratios
and caps have been adopted by legislatures; this Court has not identified “[any] state
court that has imposed a precise ratio” in lieu of looking to the legislature as the
appropriate source of a numerical damage limitation. Ante, at 2637.

[63] For the reasons stated, I agree with Justice Stevens that the new law made by the
Court should have been left to Congress. I would therefore affirm the judgment of the
Court of Appeals.




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