products liability

Products Liability: Charts Winter/Spring 2007 1-3 in MO today (but not 3rd RS) Manufacturing Defect Negligence (focusconduct) Negligent Manufacture  Failure to exercise reasonable care in manufacturing product  Actual cause  Proximate cause  Harm to Plaintiff Strict Tort Liability (focusproduct) Second Restatement §402A  Product is defective & unreasonably dangerous  Foreseeable use of product  Actual cause  Proximate cause  Harm to Plaintiff Warranties (focusbreach) Implied Warranty of Merchantability §2-314  Product not fit for ordinary purposes for which such goods are used  Actual cause  Proximate cause  Harm to Plaintiff Implied Warranty of Fitness for Particular Purpose §2-315  Product is not fit for buyer’s particular or special purposes  Seller has reason to know that buyer requires goods for particular purpose & is relying on seller’s skill or judgment in selecting suitable goods  Actual cause  Proximate cause  Harm to Plaintiff Express Warranty §2Third Restatement (focusproduct) Third Restatement §2(a)  Product departs from its intended design  Foreseeable use of product  Actual cause  Proximate cause  Harm to Plaintiff Third Restatement §2(b)  Product poses foreseeable risks of harm that could have been reduced or avoided by adoption of reasonable alternative design  Omission of alternative design renders product not reasonably safe  Foreseeable use of product  Actual cause  Proximate cause  Harm to Plaintiff Third Restatement §2(c)  Product poses foreseeable risk of harm that could have been reduced or Kuhl Design Defect Negligent Design  Failure to exercise reasonable care in designing product  Actual cause  Proximate cause  Harm to Plaintiff *focus on D’s conduct Second Restatement §402A  Product’s design is defective & unreasonably dangerous – States use various tests to determine that: o Consumer Expectations Test o Risk/Utility Test o Negligence w/ imputed knowledge  Foreseeable use of product  Actual cause  Proximate cause  Harm to Plaintiff *focus on the product (the defect) Inadequate Warning Negligent Failure to Warn  Failure to exercise reasonable care in providing warnings or instructions  Actual cause  Proximate cause Second Restatement §402A  Product is defective & unreasonably dangerous b/c it lacks adequate warnings or instructions o Under “state of the art” approach, can be liable only for failing to warn about risks that were 1 Rostron  Harm to Plaintiff     known or should have been known at time of sale o Under “imputed knowledge” approach, can be liable even for risks that could not have been known at time of sale Foreseeable use of product Actual cause Proximate cause Harm to Plaintiff 313  Affirmation of fact or promise concerning product  Made part of the basis of the bargain  Product does not conform to affirmation or promise  Actual cause  Proximate cause  Harm to Plaintiff Misrepresentation Negligent Misrepresentation  Failure to exercise reasonable care  Misrepresentation about material fact  Someone justifiably relies  Actual cause  Proximate cause  Harm to Plaintiff Second Restatement §402B  Misrepresentation about material fact  Someone justifiably relies on it  Foreseeable use of product  Actual cause  Proximate cause  Harm to Plaintiff avoided by the provision of reasonable instructions or warnings by someone in the chain of distribution  Omission of instructions or warnings renders product not reasonably safe  Foreseeable use of product  Actual cause  Proximate cause  Harm to Plaintiff Third Restatement §9  Plaintiff can sue under tort law, w/ same required elements as under Second Restatement §402B And/or Plaintiff can sue under contract law, including UCC warranties provisions Manufacturing Defect Design Defect Inadequate Warnings Misrepresentations Negligence Negligent Manufacturing Negligent Design Negligent Failure to Warn Negligent Misrepresentation Strict Tort Liability §402(A) Warranties UCC §2-314 Third Restatement §402(A)? §402(B) UCC §2-315 UCC §2-313 Manufacturing and Design Defects Negligence Proximate Cause Strict Tort Liability Proximate Cause Majority – foreseeable 2 Warranties Proximate Cause UCC 2-314 – fit for Third Restatement Proximate Cause Foreseeable use of Kuhl Rostron use of product ordinary purpose product Design Defect Claims – Obvious Danger Design Defect Claims – Effect of Warnings Negligence MO – traditional Strict Tort Liability Majority Rule – just a factor (including KS) Majority – Modern – just a factor (including KS) MO? Warranties Just a factor MO? Third Restatement §2, comment D Modern Rule – just a factor §2, comment D Modern Rule – just a factor Inadequate Warnings Negligence Defendant must exercise reasonable care Strict Tort Liability Warranties 1) Majority – state of the Art (liable only if knew or should have known); favors Ds (KS) 2) Minority – imputed knowledge approach (liable regardless of whether or not they knew or should have known); favors Ps 3) Burden shifting (MORSMo §537.764) Third Restatement §2(c) – negligence approach (reasonable warnings about foreseeable risks) Negligence Warnings Strict Tort Liability Warranties Rebuttable Heeding Presumption 3rd Restatement No Heeding Presumption Warning Claims Negligence Proximate Cause Strict Tort Liability Proximate Cause + Foreseeable use Warranties Proximate Cause + UCC 2-314 (not fit for a particular purpose); UCC 2-315 (seller has reason to know about particular purpose) Warranties Third Restatement Proximate Cause + Foreseeable use Negligence Warnings Strict Tort Liability Bulk Supplier Sophisticated User Post-Sale Warnings Post-Sale Warnings -18 states say yes -3 states say no -29 uncertain -No precedent in MO X X 3rd Restatement §2 Comment I; Bulk Supplier  use chain to warn Sophisticated User user already knows *§10 Not meant to be too strictly applied -1) question of law for the judge to apply, then -2) jury uses the same 4 factors Even if you drop out of the business, you are still liable for Rostron 3 Kuhl Recall No duty to recall/retrofit X X post-sale warnings, but difficult to apply (i.e. pesticide) §11 for recalls Misrepresentation Negligence 1) Misrepresentation 2) Material Fact 3) Negligence – failure to use reasonable care (strict liability – even if misrepresentation was an innocent and reasonable mistake) 4) Someone justifiably relied on it 5) Plaintiff suffered harm caused by that reliance on that misrepresentation Strict Tort Liability RS 2nd 402(b) Covers only misrepresentations made to public Covers only misrepresentations made to consumers Covers harm to property as well as people Warranties *UCC 2-313 – Express warranty (most likely used) Covers an affirmation of fact or promise The misrepresentation must be part of the basis of the bargain UCC 2-315 – Implied warranty UCC 2-314 – Implied warranty of merchantability Third Restatement §9 can be used same as §402(b) (use elements) Can use UCC too Not limited to public Not limited to consumers Covers harm to property Design Defects (general) Prescription Drugs Negligence Fault Strict Tort Liability Strict Warranties Strict Fault Adopt comment K: -Blanket Immunity (CA) --No strict liability for any prescription drug (best for defendant) -Case by Case (NE/MO) --No strict liability if defendant proves: ---(1) drug could have been made safer at time of sale, and (2) drug’s benefits justified the foreseeable risks Reject comment K (AK): -no special protection (best for Plaintiff) 3rd Restatement §2(B) – fault (reasonable alternative design) §6(C) – liable if foreseeable risks are so great, compared to benefits, that no reasonable health care provider would prescribe it for any class of patients 3rd Restatement is very favorable to defendant’s and manufacturers 3rd Restatement §6(d)(1) – learned intermediary rule §6(d)(2) – Exception: if MFR knows or should know health care providers will not be in position to reduce risks in Kuhl Warnings about prescription drugs & medical devices Negligence Strict Tort Liability Warranties Learned Intermediary Rule (everyone agrees) Exceptions recognized by some courts: (1) vaccines (mass immunization) (2) oral contraceptives & IUDs (3) products for which FDA requires warnings for patients -products advertised directly to the public Imputed knowledge? --not used for prescription drugs and medical devices Rostron 4 State of the art approach (note imputed knowledge) will apply for medical devices and prescription drugs accordance with warnings & instructions Vaccines in Comment E (but the other 3 are undecided) Applies to: prescriptions and medical devices; and health care providers 3rd Restatement §17 Comparative Fault Negligence Contributory Negligence Implied Assumption of Risk Comparative Fault (% base instead of all/nothing)  46 states (MO – uses Pure comparative fault and goes by the %; KS is modified comparative fault; P >=D, then can’t) Strict Tort Liability Implied Assumption of Risk Comparative Fault (%base instead of all/nothing) Warranties Implied Assumption of Risk Comparative Fault (%base instead of all/nothing) Economic Loss Rule Negligence Strict Tort Liability Can’t use these rules unless you suffered personal injury OR harm to property other than the product itself (MO) Warranties 3rd Restatement §21 (3rd RS does not take a position as to property) §18 – not allowed to waive or disclaim for harm to person from new product (3rd RS does not take a position as to old products or not new products) Waivers & Disclaimers Generally disfavored (but is still possible) Never Allowed Generally Allowed Notice UCC §2-607 (3) *Buyer – only need to warn your immediate seller 3rd Restatement Contract Specifications Rostron Negligence KS – Yes Strict Tort Liability KS – NO Warranties KS – NO 5 Kuhl Defense (nondesigning MFR is liable only if design defect should have been obvious to it) Government Contractor Defense – 1) US Gov’t approved reasonably precise specifications; 2) The equipment conformed to the specifications; and 3) the supplier warned the U.S. about dangers known to the supplier, but not to the U.S. MO – Yes GA – does not have it MO – Yes MO – Yes Yes Yes Yes States can create their own too (KS has) Compliance with statutes and regulations  generally just a factor to consider (3rd RS 4(B)); UNLESS you can show federal preemption or special state law (like KSA 60-3301); (presumption of non-defectiveness if comply w/ federal standard) Violation of statute or regulation – negligence per se (form of strict liability) – 3rd RS f(a) – P has to be the kind of person and suffer the kind of injury the statute was designed to protect 3rd Restatement §1 & §9 – engaged in business of selling the product Non-business Sellers Negligence Check (allowed) Strict Tort Liability Engaged in business of selling the product (§402(A) & (B)) Services Used Products Check (allowed) Check (allowed) X Courts Split Warranties 2-314 Merchants 2-315 Sellers w/ special skill or judgment 2-313 any seller X Check Free Products Check (allowed) Rented or Borrowed Pre-Purchase Injuries Check (allowed) Applies if circumstances justify treating it as a sale Applies if circumstances justify treating it as a sale Courts split Article 2A covers leases ? (there hasn’t been a sale) Check (allowed) X §8 – liable if: 1) seller is negligent 2) defective under §2(a) or 3 and marketed in a way that makes reasonable person expect it to be as safe as new product 3) remanufactured 4) violates statute or regulation §20 – “other distribution” covers free things §20 – “other distribution” covers rentals, loans, etc… ? Rostron 6 Kuhl Franchisor Trade Association Someone who influences design choice Non-Manufacturing designer Negligence Check If voluntarily assumed duty X Strict Tort Liability Courts split X X Warranties Courts split X X 3rd Restatements Check X X Evidence of Subsequent remedial measures Evidence that product was recalled Circumstantial Evidence Negligence Excluded Strict Tort Liability Warranties Allowed – CA, MO (1/2 states) Exclude – KS (1/2 states); FRE 407 Check (allowed) Malfunction Doctrine (or indeterminate defect or general defect) 3rd Restatement Check (allowed) Res Ipsa Loquitur §3 Negligence Covers Anything Strict Tort Liability §402(A) – Product §402(B) – Chattel Warranties “Goods” – all movable things (includes crops) Real Property Check (allowed) Electricity Live Animals Check (allowed) Check (allowed) Generally does not cover real property (MO) Some courts make exceptions: 1) mass produced buildings (i.e. NJ homes after WWII) 2) Pre-fabricated housing/buildings 3) Equipment attached to real property Courts split Courts split Article 2 does not cover real property (but implied warranties exist under common law) 3rd Restatement §19 products – tangible personal property distributed commercially for use or consumption §19 leaves it up in the air, but general rule is that it does not cover real property Courts split Check (allowed); UCC applies Will not apply Blood or other human tissue Check (allowed) Will not apply §19 - generally, we don’t know Check (allowed); nothing that excludes live animals Not a product; Will not apply 3rd Restatement §19 Information Negligence Incitement? Endorsement? Strict Tort Liability Warranties Some courts – charts and maps Rostron 7 Kuhl