PL_Outline_Original_Post by yaoyufang

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									PRODUCTS LIABILITY LECTURE OUTLINE
PROFESSOR: Dr. Earl E. Hansen, CIE, CHCM
Fall Semester

I. FOUR CATEGORIES
A. Negligence
B. Tortuous Misrepresentation
C. Warranty
D. Strict Products Liability in Torts

I.1 NEGLIGENCE (foresee ability is key)
A. Elements:
1. Duty
2. Breach
3. Causal connection bet. conduct & resulting injury
a. cause-in-fact
(1) Generally:
(a) P must show D‘s conduct was the ―cause in fact‖ of P‘s injuries
(2) “But for” test:
(a) but for D‘s neglect, P would not have been injured
(b) when there is more than 1 D, use the ―substantial factor‖ test: was D‘s conduct a substantial
factor in causing P‘s injuries
(1) Concurrent Causes (substantial cause)
(a) this happens when 2 events occur to cause harm & either one wd have been sufficient to cause
substantially the same harm w /o the other. (2 fires coming together)
(2) Multiple Fault (share d fault)
(a) when P can show 2 Ds were at fault, but only 1 could have caused injury, burden shifts to each D
to show the other caused the harm. ( Summers v. Tice-hunting case—THIS IS UNUSUAL IN PL
UNLESS 2 DRUGS TAKEN TOGETHER WERE BOTH DEFECTIVE)
(3) ―Market Share‖ theory (drugs only)
(a) If P can‘t prove which M caused injury, but can show all produced defective products from same
formula, court will require each D to pay % of P‘s injuries according to market share (may be
―national‖ or ―local‖—this is problem)
a. a legal or proximate cause (it is most probable, not that it is possible)
note: it only has to be A PC, not THE PC.
(1) Generally
(a) Even if there is cause-in-fact, P must also show D was a “proximate cause” of her injuries.
Ds usually are not liable for consequences that are very unforeseeable.
(b) Cuts off liability even though there is cause-in-fact in certain cases:
(2) Foresee ability:
(a) General Rule: D is liable only for consequences of his neg., which were reasonably foreseeable at
time he acted.
(i) General Rule: D is liable only for foreseeable consequences is also usually applied to the
―unforeseeable P.‖ Palsgraph
(b) Exceptions:
(i) Once P suffers any foreseeable impact or in jury, even if relatively minor , D is liable
for any additional unforeseen physical consequences.
Egg- shell skull: D ―takes his Path as he finds them‖
 (i) If harm suffered by P is of the same general sort that made D‘s conduct neg., it is
irrelevant that the harm occurred in an unusual manner. (gun goes off when dropped
by child on foot-discharge was possible, but it was unusual to occur by dropping it on foot)
(ii) If P is a member of a class as to which there was general foresee ability of harm.




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(1) Intervening Causes
(a) A force which takes affect after D‘s neg. & which contributes to that neg. in producing
P‘s injury. Superseding Cause : Intervening causes that are sufficient to prevent D from the
beginning e.g. since they supersede or cancel D ‘s liability.
(b) IMPORTANT NOTE: INTERVENING ACT IS NOT SUPERSEDING IF:
(i) harm is the same
(ii) act does not operate independently of situation created by D ’s conduct
(a) Foresee ability
(i) TEST: If D should have foreseen the possibility that the intervening cause (or one
lie it) might occur, or if the kind of harm suffered by P was foresee able, D’s
conduct will nonetheless be the proximate cause . But if neither the intervening
causes nor the kind of harm was foreseeable, the intervening cause will be a
superseding one, relieving D of liability.
(ii) Dependent v. Independent Intervening Causes : a dependent intervening
cause is one which operates in response to or is a reaction to the stimulus of a
situation for which the actor had made himself responsible by his neg.
conduct. It is less likely to be held to be superseding than an independent
intervening cause.
Independent intervening ca use relieves D of liability
Dependent intervening cause (foreseeable) does not relieve D of
liability
(i) Superseding acts: (Independent)
Criminal acts un less they are fore seeable
Intervention which produces results not of same general nature unless
fore seeable
If 3rd person discovers harm & fails to warn
(i) Non-superseding act: (Independent)
3rd party‘s normal response to D‘s actions
intervention causing same type of harm as that which was threatened by
D‘s neg.
3rd person‘s failure to discovery & prevent harm.
1. Damage
A. Defenses:
1. Comparative negligence
a. Pure
(1) Ps can recover regardless of fault as long as their neg. is not 100%
b. Modified
(1) P can recover if % of negligence is less than Ds (49%) or does not exceed Ds (50%)
(a) P‘s negligence does not exceed 50% P<D (Okla/majority)
(b) P‗s negligence is less than D‘s negligence (49 % or less P<D
1. Sophisticated bulk/user supplier defense
2. Contributory negligence (bars all recovery/not available in intention al torts )
3. Assumption of Risk
a. Pure (traditional tort)
(1) subject knowledge
(2) voluntary encounter
IMPORTANT DISTINCTION:
Qualified (used in SPL)
(1) P actually knew of risk and appreciated danger
(2) P voluntarily encountered risk while realizing danger
(3) P‘s decision to voluntarily encounter the known risk was UNREASONABLE
The key is whether it was REASONA BLE for P to assume risk?
A. Non-defenses:
1. Disclaimer




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B. Miscellaneous:
1. no privity required
2. must be foreseeable P
3. there must be knowledge of danger, not mere possibility
I.2 TORTIOUS MISREPRESENTATION
(type of negligence claim—can fall under non-privity under warranty)
A. Fraud & Deceit (misleading stmt—Textolite case)
1. Elements:
a. representation of an existing fact
b. material false
c. speaker‘s knowledge of falsity or ignorance of truth
d. intent that it should be acted on
e. ignorance of its falsity by recipient
f. reliance
g. right to rely
h. consequential damages
A. Negligent Misrepresentation
1. Elements:
a. stmt
b. false
c. should have known false
d. lack of reasonable care
A. Strict Liability for Misrepresentation (R stmt. 2nd 402b) (shatterproof glass case)
1. Elements: ( stand by your words) (Gizmo case)
a. Seller of goods
b. Misrepresentation to public
c. Justifiable reliance
d. Physical harm
1. Public policy:
a. to stop misleading advertising
2. Miscellaneous:
a. Does not matter whether k new or not of falsity
b. product does not have to be defective, it just has to not conform to representations
c. reliance may occur after purchase

I.3 WARRANTY
A. Express (UCC 2 -313) (basis of bargain) (the “no bones” v. “deboned” case)
1. Elements:
a. affirmation of fact
D‘s reasonable belief is irrelevant
a. non-conforming product
1. no privity required
2. R2d §402(b)— see misrepresentation above
a. Seller of goods
b. must have physical harm
c. must prove you relied
d. made to the public (i.e. instruction booklet)
1. Miscellaneous:
a. if you have an express warranty connected w/product, there is no reason to use a negligent
misrepresentation b/c you have a UCC 2-313 and SL misrepresentation 402b
b. the precise time when affirmation is made is not material. It may be made after
entering K and modifies K. The sole question is whether it is fairly to be regarded as
part of the bargain
c. Reliance is not required in most jurisdictions and majority rule is P does not have to
show reliance, D has to show lack of reliance and this is difficult to prove. [2-607(3)]
-referred to as booby trap for unwary -won‘t know until gets legal advice


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A. Implied (created by law)
1. Two types:
a. Merchantability (UCC-2-314)
(1) Means: Reasonably fit for ordinary purpose
(2) Elements:
(a) merchant selling goods
(b) not merchantable
(c) Injury to P
(d) notice of seller of breach w/in reasonable time
a. Fitness for Particular Purpose (UCC 2-315)
(1) Means: fitness for particular purpose
(2) Elements:
a. Any Seller
b. S knows B wants for particular purpose
c. Reliance of buyer
1. Privity (may have problem w/horizontal-dealing w /3rd party beneficiary)
a. Vertical
no problem unless suing for pure economic reasons
a. Horizontal
(1) 3 alternative horizontal privities (UCC )
(a) extend to any natural person who is in the family or kin of the buyer, or who
is a guest (includes guest in auto) (Oklahoma adopted)
(b) extends to any natural person who may reasonably be expected to use,
consume or be affected
(c) Extends to any person who may reasonably be expected to use, consume or
be affected by the goods
1. Defenses:
a. Disclaimer
(1) Requirements:
(a) must mention merchantability
(b) must be in writing
(c) must be conspicuous
-reasonable person would notice it (common understandable language)
-TEST:
bold type
was there a heading
was there much contrast
(d) can not be unconscionable (against public policy)
(1) May disclaim all warranties if above requirements met
a. Limitation for consequential damages
b. Untimely notice
c. Assumption of risk
d. SOL
e. Inspection (obviously wrong)
(1) elements:
(a) purchaser examined goods b/f King OR
(b) purchase REFUSED to examine goods AND
(c) defect is obvious
a. No horizontal privity
1. Miscellaneous
a. Usually consumer will fair better under SPL claim instead of warranty claim,
EXCEPT in following cases:
(1) pure economic harm (loss of profits)
(2) SOL usually runs quicker in SPL than in warranty claims
A. How Warranty Cost’s affect PI cases
1. Limits consequential damages



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(a) However, in goods for personal use (consumer goods), limitations are
unconscionable (unless they bargained over limitations and B knew of dangerous
propensities)
2. Horizontal privity problems in Implied Warranties
3. Can disclaim all liability under UCC
4. SPL v. K recovery
5. Unclear as to whether a SPL or K claim
I.4 STRICT PRODUCTS LIABILITY IN TORTS (SPL)
A. GR: S is liable w/o fault if product is sold
a. in a defective condition (it must malfunction)
b. that is unreasonably dangerous
dangerous to extent beyond which wd be contemplated by the ordinary consumer
who purchases it, w/the ordinary knowledge common to the community as to its characteristics. (jury question)
A M does not have to manufacture the safest design
A. Elements (402A R2nd)
1. Seller of product
Does not have to be main activity of business
1. Defective condition at time of leaving D‘s control/possession
No substantial change
1. Unreasonably dangerous
Perfection impossible, some products are reason ably dangerous (ie knife)
1. Physical harm to person/property
Anyone foreseeable
1. Defect caused injury
A. Defenses
1. misuse (not used for intended or foreseeable use)—must be UNF ORES EEABLE
no defect
product did not cause injury
manufacturer must anticipate environment in which product will be used
only necessary it‘s foreseeable that while in normal environment it may be
exposed to catalyst which can untie the chattel‘s inherent danger.
Careless use is not misuse
Customary use if FORESEEABLE
Note: in Oklahoma, misuse is a complete bar; other jurisdictions use comparative responsibility
Even in jurisdictions w/SP L w/o comparative fault, argue no causation i.e.
defect didn’t cause injury, something else caused injury i.e. P’s conduct
caused injury
P must prove the causal link between the defect and the injury, if P’s
conduct (misuse) contributed to injury, it’s relevant.
1. unfavorable unsafe products (benefits outweigh dangers)
a. prescription drugs
b. vaccines
c. blood bank if no means of testing for particular hazards
d. Kearl-Toner Approach (majority): exempts drug from Strict Product Liability if:
(1) product is properly manufactured and contains adequate warnings
(2) its benefits justify its risks
(3) the product was at the time o f manufacture and distribution incapable of being made more safe
EXAMPLE: rabies vaccine. W/o it patient will have dreadful death. However, there are high degree
of side effects
a. Brown rule (majority): there is no Strict Poduct Liabiliy for unknowable dangers
1. obviously dangerous (Vincer case-no self-latching pool door)
a. cigarettes
b. liquor
c. convertible cars
d. knives
A. Defenses not available (culpability/conduct is irrelevant)
1. Comparative negligence
2. State of the Art: M has duty to warn of UNKNOW ABLE dangers
A. Justifications for SPL
1. M is one who put product in stream of commerce



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2. Consumers reliance that product is safe
3. M is profiting/benefiting, T F must bear burden for any defects
4. Incentive to cause Ms to make safer products
5. Difficulty in consumers proving negligence e of M
6. Res ipsa is applied, TF negligence should be dispensed with
7. Reputable Ms stand behind products, so everyone should too
8. Ms are in better position to protect from harm
9. There should be shortcut to allow consumers to sue Ms direct—cuts down on litigation
(costs, time, waste)
10. Costs should be placed on party best able to determine means to prevent a cidents
A. Arguments against SPL
1. Causes price to go up
2. Over investment in safety-wipes out small business man
3. Lack of development of new pro ducts
4. Could render US not as competitive w/foreign markets
5. False claims
6. Unfair (M takes reasonable care and is still liable, then why take reasonable care?)
7. Reduce product innovation (fear of exposure)
A. Actions in which SPL does not apply:
1. When nature of transaction is a SERVICE rather than a product
2. When provider is a NON -PROF IT INS TIUT ITON that supplies a p roduct that is vita l to
PUBLIC HEALTH (i.e. medical field mainly)


II. THREE KINDS OF DEFECTIVE PRODUCTS
A. Manufacturing/product defects (it‘s the lemon, its just not the way it is suppose to be)
1. it is defective b/c it does not comply with M own specifications
2. Defenses:
a. Pure economic loss (must sue under UCC b reach of warranty)
b. See Design Defect defenses
1. Miscellaneous:
a. Pure Economic loss (i.e. bad semen) is tried as UCC breach of K claim. But if more
than pure economic loss, then sue under 402A
A. Design defects (built in at planning stage; the entire line is defective)
1. Standard:
a. if design defect we re known a t time of manufacture, a reasonable per son would
conclude that the utility of the pro duct did not outweigh the risk inherent in marketing a
product designed in that manner
2. Design will be deemed defective if:
a. There was a feasible alternative design which wd avoid injury
b. costs of alternative design are less than costs of injuries avoided
1. Defenses
a. Substantial Alteration: (intervening cause)
(1) Must show the alteration caused the injury and not the original defect (or that
there is a different harm.
(2) If M tells you how to alter the product, which makes it more dangerous, makes
the product defective when it left possession/control of M.
(3) If M is altering, then M is liable.
(4) If 3rd party is putting out altering k it, then it‘s another question as to whether it was foreseeable.
(5) Argument for:
(a) dismantling not foreseeable
(b) causation b/c of alteration
(c) not actual product of D
(d) P not an intended user
If the harm is the same, then no “substantial” change
a. Obvious defect: assumption o f risk (not absolute ba r)
awareness of defect
voluntary use
P‘s behavior was reasonable
a. Misuse (unintended and unforeseen)
If foreseeable, then SL




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a. Government Contractor’s Defense (immunity b/c of government approval)
applies to products sold to government (i.e. helicopter, copy machine)
There‘s a unique federal interest i.e. saving money
Feres Doctrine only applies to military personnel, not civilian which states can‘t sue government
Immunity under Discretionary Function Exception i.e. deciding which plan, etc.
GR: liability for design defects in military equipment cannot be imposed, pursuant to state laws when:
(1) the US approved reasonably precise specifications
(2) the equipment conformed to those specifications; and
(3) the supplier warned the US abt the danger in the use of the equipment
that WERE KNOW N to the supplier but not to the US.
NOTE: this only applies to DESIGN FLAWS
a. Crashworthiness test (M only has to show ―reasonably safe‖ auto)
b. Useful Life Defense (Passage of Time): no duty to M products that don‘t wear out
(1) Statute of Repose or Useful Life has run
(2) Starting Dates of SOR:
(a) date of sale
(b) date of manufacture
(1) Most common SO R time is 10 years
(2) Operates as an ABSOLU TE BAR i.e. product is presumed non-defective
(3) Advantages:
(a) might cut down on litigation
(b) might encourage incentive to Ms
(c) might help to keep costs of insurance down b/c you have a time certain that you face exposure
(1) Disadvantages:
(a) Ascertaining when useful life ends
(b) Does lifetime guarantee extend past SOR
(c) latent defects—ticking time bomb.
(d) Doesn‘t give Ms incentive to make products that last longer or to upgrade them, etc.
(e) Precludes a COA b/f you know it exists
a. State of the Art (unknowable-impossible to ascertain at time of M)
(1) elements:
(a) safer alternative not available/in use at time of M;
(b) no evidence of scientific and economic capacity to develop safer alternative
a. SOL has run
(1) Statutory time for filing has expired
Exception:
Discovery Rule: tolls SOL until P discovers or reasonably should have
discovered not only that he was injured but that his injury may have been caused
by D‘s conduct
4 pts which COA may accrue:
1. when D breaches duty
2. when P suffers harms
3. when P becomes aware of injury and discovers causal
relationship between harm and D‘s conduct
i. Pure economic loss
EXAM TIP: State of the Art Defense is a N EGLIGENCE DEFENSE not a SPL defense. In SPL,
culpability is irrelevant. In SPL the M has a DUTY TO WARN OF UNKNOWABLE DANGERS. It does not matter
that Manufacturer did not have known about danger.

1. Non-defenses:
a. Contributory negligence
2. Prescription Drugs
a. Not very m any defective design cases dealing with prescription drugs b/c o f difficulty and expense in showing
a feasible alternative. These cases w ill usually be WARNING cases.
3. Miscellaneous:
a. concentration should stay on product v. conduct
b. most design defects have a heavy negligence aspect, even though claim is based on SPL
c. requires P to show D chose design that posed an unreasonable danger
A. Warning defects (i.e. marketing flaw, defective marketing—was warning ADEQUATE?)
1. This is a failure to adequately warn or provide instructions for proper use.
Must show a warning wd have a voided the harm




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1. Presumption of causation rule: if there had been a warning, then it is presume d that it would have been
followed. Exception: there is a rebuttable presumption by showing the absence of the warning was not a cause of
the accident.
2. Adequate Warnings must:
a. Catch attention of consumer
b. reasonably communicate severity of risk
c. physical aspects of warning must be:
(1) conspicuous
(2) prominent
(3) relative size of print
(4) adequate to alert reasonably prudent person
1. GR: the warning must adequately indicate the scope of danger, the warning must
reasonably communicate the extent or seriousness of harm that could result form the
danger; and the physical aspects of the warning—consciousness, prominence, relative
size of print, etc., --must be adequate to alert the reasonably prudent person.
2. Significance of duty to warn:
a. if it‘s a manufacturing defect, no warning can save D
b. if it‘s a design defect, no warning can save D -usually
c. even if properly designed and manufactured, D must still warn of any non-obvious risks i.e. through
instructions for proper use.
1. Special Type s of Cases:
a. Over-the-counter-drugs/No non-prescription drug s:
(1) M has duty to warn consumer
b. Prescription Drugs
(1) Learned Intermediary Rule: No duty to warn consumer, duty to warn medical provider (includes pharmacists)
(2) Even if drug is UNAVOIDABLLY UNSAFE, Manufacturer still has duty to warn.
A drug‘s benefit outweighs its risk of harm.
Its something we need even though there is a high risk
Many products, especially drugs, are incapable of being made totally safe
(1) Exceptions:
(a) Birth Control Pills
(b) Mass Immunizations
Note: M may have duty to warn consumer direct if drug is dispensed under circumstances where doctor does
not render individualized balancing of risks and benefits
(a) Policy reasons for:
 (i) substantial risks affiliated w/product‘s use
(ii) feasibility of direct warnings by M to user
(iii) the limited participation of doctor (an nual prescriptions)
(iv) possibility of insufficient oral communications between doctor &
patient
(1) Market Share Liability
(a) Each D is responsible for the proportion of the judgment rep resented b y its
share of that market: Exception: unless it proves that it could not have
made the product that caused the P‘s harm
(b) Elements:
(i) substantial share
(ii) identical formula
(iii) not P‘s fault
(1) Allergic reactions
(a) Duty to warn if M can foresee a risk of allergy in a substantial number of
persons
(b) Duty to warn of any foreseeable allergy that may be serious
(c) The more severe the risk, the fewer people required b/f warning is required
(d) Miscellaneous:
(i) an allergic person is a defective person, it doesn‘t mean product is defective
(ii) if a person knows he has allergies, he is in best position to determine if product has allergens
(1) Pharmacists::
(a) may be liable for
incorrect dosages
incompatibility between medicines
a. Sophisticated user/bulk supplier
(1) elements:



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(a) sold to knowledgeable purchaser
(b) items supplied in bulk
(c) lack of feasibility of any warning to others.
1. Defenses:
a. Prescription Drug Rule: no duty to warn consumer direct
b. Sophisticated user/bulk supplier: no duty to warn user direct
c. State of the Art (unknowable-impossible to ascertain at time of M)
(1) elements:
(a) safer alternative not available/in use at time of M;
(b) no evidence of scientific and economic capacity to develop safer alternative
a. Obvious Danger: assumption of risk : M has no duty to warn of obvious dangers
Always a jury question
a. Market Share Liability: D can bring in other D s to cut down on it‘s liability
Limited to DES cases, but argue for other drugs w/same formula made by
several Ms
1. Miscellaneous:
a. It’s not enough to convey A RISK, you must convey SEVERITY of THE RISK.
b. How marketed is the failure
c. The defect is the lack of warning
d. M has duty to warn of all necessary incidental and attendant uses
e. Problems:
(1) OVERWARNING: people get where they don‘t read the instructions
(2) OVER-PROMOTION: consumer s might be lulled into a false sense of security
(3) NAME OF PRODUCT (i.e. Safety Kleen) may lull user into false sense of security.
(4) ―Adequate‖ means ―sufficient for a specific requirement.‖ ―Warning‖ means ―caution against danger.‖
(5) Even if you give adequate instructions, that will not relieve a separate warning obligation.
A. Malfunction Theory
1. Uses circumstantial evidence to show whether or not to allow inference that product was defective
2. P must try to exclude other causes which are OVERUSE, CARELESS USE and MISUSE
A. Food Stuff
1. Elements:
a. product is unwholesome
b. product caused injuries
c. condition existed at time left possession/control of D
1. 2 Tests
(a) Foreign-Natural Food Test
(1) if substance is natural to product, no liability
(2) if substance is foreign to product, liability
(b) CET (see below)
1. Presumptions in some states
a. if consumed, object is not reasonably expected
b. if in sealed container, object in food at time of leaving M‘s control
1. Defenses:
a. opportunity for tampering
(1) people put junk there themselves
(2) 3rd part put junk there
1. Miscellaneous:
a. need to keep evidence b/c P must prove junk was really there

I. TESTS
A. Consumer Expectation Test (not usually used in DESIGN cases-b/c expert testimony is
required)
1. 2 types
a. 402A, comment G
(1) Whether the product was more dangerous than and ORDINARY consumer would expect
b. 402A, comment I
(1) Whether the product was more dangerous than an ORDINARY PERSON WHO NORMALLY USES the product
would expect.
1. Miscellaneous:
a. Normally—no expert testimony allowed
b. If danger/defect is obvious, no recovery




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A. Reasonable Seller w/full Knowledge Test
1. Assuming M knew of risk involved, was it reasonable to sell the product? (what would an
ordinary prudent Man do?)
2. Miscellaneous:
a. This test throws you into a risk-utility analysis. You assume knowledge of any risk involved and then go to
risk –utility analysis. It has a twist to it b/c you assume they knew of the risk of harm i.e. constructive notice
A. Risk/benefit Test (usually used in DESIG N cases)
1. Elements ct looks at (but can anything):
a. utility (is it something we can do w/o) (bush whacker—we can live w/o)
b. likelihood of causing injury
c. availability of substitute
d. ability to eliminate unsafe characteristic w/o destroying utility
e. ability to avoid danger
f. user‘s anticipated awareness of dangers inhere in the product
1. Always need EXPERT TESTIMONY in DESIGN cases
a. must assist trier of fact
b. must be based on scientific knowledge
1. Miscellaneous:
a. RUT best protects both the M and the consumer b/c it doesn‘t make the M an insurer, it just asks whether the
product is unreasonably dangerous even though the consumer is aware of the dangers

A. Barker Test (used in DESIGN cases ONLY)
1. Elements:
a. CET; OR
b. Risk-utility test but burden shifts to D to show benefits outweigh the risk.
1. Modified Barker test: some jurisdiction do not shift burden to D

A. Rstmt 3rd Approach (Defect specific)
1. 3 Tests
a. Manufacturing Defect Test (aka Deviation from the Norm)
(1) Elements:
a. D manufactured product
b. Defective when put to reasonably anticipated use
c. Product put to that use
d. Caused P‘s injuries
(2) a product deviates from other products of the same line
e. Design Defect Test
(1) foreseeable risk of harm
(2) reduction or avoidance by feasible alternative design
a. Warning Test
(1) Foreseeable risks could have been reduced or avoided by providing additional instructions/warnings

A. Foreign-Natural Food Test (see above)
(1) if substance is natural to product, no liability
(2) if substance is foreign to product, liability
A. Component part test (10th Circuit garbage truck case)
1. Elements
a. Trade Custom: at what stage is device generally installed
b. Relative expertise: which party is best acquainted w/the design problems and safety techniques in question
c. Practicality: at what stage is installation of device most feasible
1. Question: at what point does product become dangerous? Before or after conversion between being a component part
and the final product by the component part assembler.


A. Reasonable alternative Test (used in all Design ca ses)
1. Universal: P must show feasible alternative
a. Evidence of practical feasible alternative
(1) Expert testimony (a must)
(a) Requirements-Daubert
Must assist trier of fact
Based on scientific knowledge
(1) Factors in evaluating expert testimony:



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(a) whether concept has been tested
(b) whether concept has been subject to peer review
(c) what known rate of error is, and
(d) whether community generally accepts concept
b. Evidence allowed to show feasibility:
(1) Remedial repairs if they show feasible alternative
a. Evidence allowed (or which may be introduced), but not p roof of feasibility:
(1) compliance with government regulations
(2) past accidents (involving same product)
(3) Custom
(4) Unsupported or speculative evidence i.e. junk science
a. Inadmissible evidence:
(1) remedial repairs to show culpable conduct (b ut may be shown to show feasib le
alternative)
A. Crashworthiness Test:
1. Ms are only required to pro ve a ―reasonably safe‖ automobile in the event of a collision
b/c it‘s foreseeable. (Fort Pinto)
2. The first collision (when care actually wrecks) and 2 nd collision when occupants com e in
contacts with stuff inside the vehicle.
3. Problems:
How safe is safe
If collision is bad enough, wd an alternate design make a difference
1. P must prove:
a. Safer feasible design
b. What injuries wd have resulted if safer design had been used
c. Extent of enhanced injuries
Note some jurisdictions put burden o f all of the abov e on the P, so me shift it to
the D after P shows a safer feasible design
1. Seat belt defense—who the hell knows right now.
A. Essence of the Transaction Test (Services v. non-services)
B. Product Safety Tests
1. 2 tests:
a. utility > risk test?
b. Has risk been reduced as much as possible w/o hindering utility


I. DAMAGES
A. Emotional Distress:
1. All jurisdictions allow when there is PHYSICAL injury
a. there does not have to be a huge amt. of physical damage. It does not have to be
severe
2. Elements (same as for intentional infliction of emo tional distress
a. negligence
b. emotional distress
c. causation
d. physical harm manifested by objective symptomatology; and
e. reasonable person wd have suffered emotional distress under the circumstances
1. Jurisdictions are split on whether allowed when NO PHY SICAL injury
2. 2 classifications of emotional distress
a. users
b. 3rd parties
1. Cases are saying if you are the ACTUAL USER of the product when it hurts another
person THEN YOU SHOULD B E ABLE TO SUE FOR E MOTIONAL DISTRESS.
2. Courts draw lines w/:
a. Impact Rule
Directly impacted, sustained physical injury
a. Zone of D anger Rule
A person who had potential of being hurt
a. Bystander Rule (witness recovery)
A person who witnesses the event
(1) 3 factor test in determining whether bystander is foreseeable (usually between parent
and child)




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(a) located near scene
(b) shock resulted from observing accident
(c) close relation ship
1. Miscellaneous
a. there must be a MALFUNCTION of the pro duct. It can‘t be based on a FEAR of a malfunction. (heart valve case)
note: fraud COA wd survive b/c it is concerned with D’s conduct, not whether there was a
malfunction
.

A. Punitive Damages:
1. Majority of jurisdictions allow if P shows gross disregard for public welfare.
a. Factors which may be considered:
(1) existence and magnitude of danger to public
(2) cost or feasibility of reducing danger
(3) M‘s awareness of danger, magnitude of danger, and availability of feasible
alternative
(4) Nature, duration and reasons for M‘s failure to act appropriately in discovering
or reducing danger
(5) Extent M purposefully created danger
(6) Extent to which D is subject to fed. Regs
(7) Probability compensatory damages might be awarded against D in other cases; and
(8) Amount of time, which has passed since the actions sought to be deterred.
1. Common thread of all punitive damage cases is:
KNOWLEDGE & M’s CONCEALMENT
2. Probably few courts would allow punitive damages if M has complied w/fed. Re gs.
3. Statutory Reform: ways to limit punitive damages:
a. raising standard of proof to ―clear and convincing evidence‖
b. capping punitive awards
c. payment of portion of award to public treasury
d. bifurcating trials
e. shifting determination of amt from jury to judge
f. barring punitive damages where D complied w/government regulations
g. allowing punitive damages to be pleaded only upon proper showing and amendment to complaint.
1. Ratio rule
A. Personal Injury & Death
B. Economic Loss
1. most courts say if you only have economic loss, then one must sue under UCC
2. usually need vertical Privity.
3.There are 3 approaches for determining if tort action can be brought for damage to product itself:
a. Majority: precludes liability if the defective products damages only itself.
Note you leave your jacket in the car, the car blows up , suddenly you have additional property
damage other than product itself and you and sue in tort
Note, many jurisdictions don‘t allow component part arguments when dealing with real estate.
a. Minority: permits tort actions if defective product damages only itself regardless of
whether the defect created an unreasonable risk of harm
b. Qualitative: differentiates between disappointed and endangered users and permits
only ENDANGERED user s to sue in tort.
A. Property Damages
B. Miscellaneous

I. PLAINTIFFS
A. Purchasers/Users
1. Negligence
a. user must show he was ―reasonably foreseeable‖
b.
1. SPL
2. Warranty
A. Bystanders



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1. Negligence
2. Strict Product Liability
a. presence was ―reasonably foreseeable‖
3. Warranty
a. Courts are splits. Will depend on UCC

I. DEFENDANTS
A. ANY SELLER OF A PRODUCT
1. Retailers, Wholesalers and Distributors
2. Component Part Manufacturers and Assemblers
a. Component M is liable if component is defective.
b. It‘s simply tracing the defective condition back to the component
c. If component only becomes defective b/c of the product it is used in, then there is no liability on
Component M.
Example: Garbage Truck conversion. Truck was not defective until a component was put on
finished product.
1. Federal Government
2. Government Contractor
3. Lessors
4. Used Product Sellers/Lessors
Probably does not include garage sales and swap meet persons who are occasional sellers
A. Mere fact a seller never had possession is irrelevant. They still are a seller
B. Miscellaneous:
1. A retailer (etc) may be liable in SPL and warranty but not necessarily liable in NEG. COA.
If a store sells product in sealed container, it is difficult to say the store was negligent



I. SERVICES
A. SPL does not apply to services.
B. Test: Essence of the Transaction Test.
C. Policy reasons for SPL not to apply
1. medical personnel are already subject to liability
2. they are held Strictly Liable for any products sold in gift shop, cafeteria , etc which are not related
to rendition of medical services.
A. Specific cases
1. Beauticians are treated like retailers of the permanent wave solution used on a customer and liable
for Strict Product Liability.
2. Physicians render services and are not Strict Liability
3. Drug company is Strictly Liable b/c they are selling a product, not a service
4. Pharmacist are probably Strictly Liable b/c they are more in the area of selling than providing a
service, especially the mail-order places.




I. USED PRODUCTS
A. Garage sales or swap meets have occasional sellers are no SL
B. Look at:
1. the product
2. realistic expectation
3. was it reasonable under those circumstances
A. Majority rule is REFUSING to extend SPL to used dealers

PRODUCTS LIABILITY Short form for easy memorization


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I. FOUR CATEGORIES
A. Negligence
B. Tortious Misrepresentation
C. Warranty
D. Strict Products Liability in Torts
I. NEGLIGENCE (for see consequences is the key)
A. Elements:
1. Duty
2. Breach
3. Causal connection b et. conduct & resulting injury
4. Damage
A. Defenses:
1. Comparative negligence
2. Sophisticated bulk/user
supplier defense
3. Contributory negligence
4. Assumption of Risk
A. Non-defenses:
1. Disclaimer

I. TORTIOUS MISREPRESENTATION
A. Fraud & Deceit (misleading statement)
B. Negligent Misrepresentation
C. S t r i c t L i a b i l i t y f o r Misrepresentation (Rstmt. 2 nd 402b)


I. WARRANTY
A. Express (UCC 2-313)
B. Implied (created by law)
1. Defenses:
a. Disclaimer
b. L i m i t a t i o n f o r consequential damages
c. Untimely notice
d. Assumption of risk
e. SOL
f. Inspection (obviously wrong)
g. No horizontal privity


II. STRICT PRODUCTS LIABILITY IN TORTS (SPL)
A. Elements (402A R2nd)
1. Seller of product
2. Defective condition at time of leaving D‘s control/possession
3. Unreasonably dangerous
4. P h y s i c a l h a r m to person/property
5. Defect caused injury
A. Defenses
1. Misuse
2. unavoidably unsafe products
(benefits outweigh dangers)
3. obviously dangerous (-no self-latching pool door)
A. Defenses not available (culpability/conduct is irrelevant)
1. Comparative negligence
2. State of the Art: M has duty to warn of UNKNOWABLE dangers
A. Justifications for SPL
1. M is one who put product in stream of commerce
2. Consumers reliance that product is safe


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3. M is profiting/benefiting, TF must bear burden for any defects
4. Incentive to cause Ms to make safer products
5. Difficulty in consumers proving negligence of M
6. Resipsa is applied, TF negligence should be dispensed with
7. Reputable Ms stand behind products, so everyone should too
8. Ms are in better position to protect from harm
9. There should be shortcut to allow c o n s u m e r s to sue M‘s direct— cuts down on litigation
(costs, time, waste)
10. Costs should be placed on party best able to determine means to prevent accidents
A. Arguments against SPL
1. Causes price to go up
2. Over investment in safety wipes out small business man
3. Lack of development of new products
4. Could render us not as competitive w/foreign markets
5. False claims
6. Unfair (M takes reasonable care and is still liable, then why take reasonable care?)
7. Reduce product innovation (fear of exposure)
A. Actions in which Strict Product Liability does not apply:
1. When nature o f transaction is a SERVICE rather than a product
2. When provider is a NONPROFITINST IUTITON that supplies a product that is vital
to PUBLIC HEALTH (i.e. medical field mainly)

I. THREE KINDS OF
DEFECTIVE PRODUCTS
A. Manufacturing/product defects
B. Design defects
1. Defenses
a. S u b s t a n t i a l / Alteration
b. O b v i o u s de f e c t : assumption of risk
c. Misuse
d. G o v e r n m e n t Contractor’s Defense
e. Crashworthiness
f. Useful Life Defense (Passage of Time):
g. State of the Art
h. SOL has run
1. Non-defenses:
a. Contributory negligence
2. Prescription Drugs
a. hard to prove, expensive
A. Warning defects (i.e. marketing
flaw, defective marketing—was warning ADEQUATE?)
1. Presumption of causation rule
2. Adequate Warnings must:
a. C a t c h attention of consumer
b. reasonably communicate severity of risk
c. physical aspects of warning must be:
(1) conspicuous
(2) prominent
(3) relative size of print
(4) adequate to alert reasonably prudent person
1. Special Type s of Cases:
a. O v e r - t h e - c o u n t e r - drugs/Non-Prescription drugs:
b. Prescription Drugs
(1) L e a r n e d Intermediary Rule
(2) UNAVOIDABLLY UNSAFE



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(3) Exceptions:
(a) Birth Control Pills
(b) Mass Immunizations
(1) M a r k e t S h a r e Liability
(2) Allergic reactions
(3) Pharmacists:
a. Sophisticated user/bulk supplier
1. Defenses:
a. Prescription Drug Rule
b. Sophisticitated user/bulk
c. State of the Art
d. O b v i o u s D a n g e r: assumption of risk
e. Market Share Liability
A. Malfunction Theory
B. Food Stuff

I. TESTS
A. Consumer Expectation Test
B. Reasonable Seller w/full
Know ledge Test
C. Risk/benefit Test
D. Barker Test
E. Re-statement 3rd Approach
F. Foreign-Natural Food Test
G. Component part test

I. DAMAGES
A. Emotional Distress:
B. Punitive Damages:
C. Personal Injury & Death
D. Economic Loss
E. Property Damages

I. PLAINTIFFS
A. Purchasers/Users
B. Bystanders

I. DEFENDANTS
A. ANY SELLER OF A PRODUCT
1. Retailers, Wholesalers and Distributors
2. C o m p o n e n t s Parts M a n u f a c t u r e r s a n d Assemblers
3. Federal Government
4. Government Contractor
5. Lessees
6. U s e d P r o d u c t
Sellers/Lessees
I. SERVICES
A. Strict Product Liability does no t apply to services.
I. USED PRODUCTS
A. Majority rule is REFUSING to extend Strict Product Liability to used dealers




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