Product Liab., Proof of Prod. Liab., & Damages

Prod. Liab.

  1. Def.
    1. Phys. & Prop. Harm
      1. Liab. of mfgr
      2. Liab. of seller
      3. Liab. of other supplier of chattel
    2. Theories 4 Liab.
      1. Neg.
      2. Warranty
      3. SL
  2. Neg.
    1. History
      1. Old C/L said no privity of K, no duty / liab. in K / torts (Winterbottom Case)
      2. Didn't want seller of chattel 2 B liab. 2 anybody except imm. buyer
      3. Exception in old C/L 4 liab. w/o privity of K when imminently / inherently dang. obj's (Thomas v. Winchester)
    2. MacPherson v. Buick Motor Co. Stand.
      1. Even w/o privity if prod. is rsbly cert. 2 place life / limb in dang.
      2. Mfgr know will B used by people other than buying
      3. Then liab.
    3. Modern Gen. Rule: Neg. W/O Privity
      1. Not worry about thing of dang. / whether mfgr knew but only ord. neg. princ. of if mfgr acted rsbly
      2. Privity & limitation of MacPherson gone
    4. Prob. of Proof
      1. Although no privity, still need 2 prove D neg.
      2. Not ez 2 prove mfgr. was unrsbl & wholesale / retail were clearly not neg. in some cases
  3. Warranty
    1. Breach of Express Warranty (Baxter v. Ford Motor Co.)
      1. No need 4 privity btwn consumer & mfgr b/c shouldn't create demand by misrep. then deny liab. b/c of no privity
      2. Reliance
        1. Liab. when ord. consumer can't discov. fault by usual inspection / defect not readily discernible so relies on D's warranty
        2. Need reliance on use of prod. / purchase of prod.
      3. Reliance & causation
        1. If not req. reliance, then causation prob.
      4. D's S/M
        1. Not matter if D thought warranty was true b/c no fraud / misrep. needed
        2. Only matter if rep. & relied b/c not matter if rep. knowingly / innocently
      5. Rest
        1. Liab. w/o privity / neg. if seller makes express warranty 2 item's charact. & breaches
        2. Can B liab. here w/o being liab. in SL b/c can B liab. 4 good prod. if misrep. here
    2. Implied Warranty of Merchantability (Henningsen v. Bloomfield Motors Inc.)
      1. No need of privity
      2. Rely on implied warranty / fitness of gen. purpose where imposed by operation of law & not on express agmt of parties
      3. Rsbl use
        1. Mfgr's know purchase goes from dealer 2 consumer so ct. says implied warranty not dep. on law of sales but 2 ultimate purchaser
        2. Extends 2 purchasers, purchasers' family members, / those using
      4. Uniform Sales Act & 3 versions
        1. 1st req's family / house of guest
        2. 2nd req's nat. person expected 2 use
        3. 3rd only 1 that talks about prop.
      5. Law of Sales Prob.
        1. By policy, no express disclaimer allowed on implied warranties b/c look @ int's of buyers & sellers, unequal barg. pwr when stand'ed mass K, & inimical 2 pub. good
        2. For PI & cert. prop. damage, seller can't limit / excl. implied warranty
        3. UCC req. notice by buyer 2 seller in rsbl X but prob. if not notice / not see need 2 notify promptly so ct. deals by
          1. Long X still rsbl
          2. No notice reqt 4 PI (Greenman v. Yuba Pwr Prod.)
          3. Inapplicable where parties not deal w/each other
      6. Prob's of K Law in Torts So See Need 4 New Stand's
  4. SL
    1. Def.
      1. Mfgr. SL in tort when article he places in mkt proves 2 have defect causing injury 2 human
      2. SL is cost of injury born by mfgr as part of doing busi. instead of injured consumer
      3. Unlike abnormal activity, jury dec's if prod. defective
      4. Not a real SL b/c not spread risk but look 4 defect 1st
    2. Elements
      1. Busi. of selling
      2. Defect
        1. Mismfgr
        2. Misdesign
        3. Failure 2 warn
      3. Causation in Fact
      4. Prox. Cause
      5. Damages
    3. Implied Warranty v. SL
      1. SL not req. / struggle w/notice,disclaimer, & privity as implied warranty did
      2. Result not dif. but simpler & honest route by SL
      3. SL is by law so mfgr can't def. scope of defects / disclaim liab. so deal w/torts but warranty theory is a fxn
    4. Other C/A's
      1. Other C/A's still exist, esp'ly neg. which is hot
      2. But implied warranty in large sense superseded by SL
    5. Rest 402)a: Basic Approach 2 SL
      1. Sells any prod. in defective cond. unrsbly dang. 2 users so liab.
        1. If busi. of selling
        2. Expected 2 reach user/consumer w/o subst'l change in condition
      2. Sounds like neg. w/unrsbly dang.
      3. This stand. only 4 mismfgr. not misdesign / failure 2 warn
    6. Draft of Rest
      1. Req. only defective prod. @ X of sale so took out unrsbly dang. & no subst'l change
      2. Three categories of defection
        1. Mfgr
        2. Design
        3. Failure 2 Warn
    7. Mismfgr.
      1. Simpler conceptually b/c liab. if dif. from other identical prod's & not what mfgr intended
      2. Policy that cost of prod'ing bad absorbed in prod'ing & sellers can protect by indemnity & ins.
      3. Need unrsbly dang. by Rest 402)a & defect of prod.
      4. Stand's
        1. Imputed Knowledge Test (Phillips Ct)
          1. If rsbl person wouldn't put into stream of commerce if knew then unrsbly dang'ly defective
          2. Dif. from neg. b/c of imputed knowledge
            1. Neg. need cost benefit analysis of whether unrsbl 2 put into stream of commerce so need 2 know cost of prod'ing, finding out, / quality control so high cost of being aware may make it rsbl
            2. SL impute knowledge of flaw so cost of discov'ing defect not in cost benefit analysis
        2. Consumer Expectation Test (Rest)
          1. More dang. than ord. consumer expects
          2. Gen'ly ans. is yes so P wins
        3. CA Jury Instruction 9.00.3
          1. Mfgr. defect when differes from mfgr's intended result / prod. differs from identical prod. from same mfgr. so if dif, P wins
      5. Gen'ly same result using any stand's
      6. Prob. of proof
        1. X of accident must B defective
        2. X of sale must B defective
    8. Misdesign
      1. Liab. if defect in basic oncept & came out the way mfgr intended but bad
      2. Conceptual prob's b/c harder 2 det. defect w/o comparison
      3. Can't say misdesign if cause injury b/c cert. things (knives) can't B used as benefit w/o getting injured
      4. Rest 402)a inapplicable b/c that only deals w/mismfgr
      5. SL & neg. really close in misdesign cases
        1. Neg. on if mfgr behav. rsbly & SL on existence of defect
      6. Stand's
        1. Cost Benefit w/Imputed Knowledge Test (Phillips)
          1. Cost benefit analysis w/imputed knowledge of harm the prod. is capable of causing
            1. Rsbl mfgr can put into commerce things that can harm consumers b/c utility may B great & change of design may impair utility, prod. / price
            2. Imputed knowledge may make dif. if missing info rsbly but gen'ly probably aware
        2. Consumer Expectation Test
          1. More dang. than ord. consumer expects when use prod. in rsbly foreseeable manner
          2. Prob. when consumer not know, then can't expect something (car w/no air bag)
        3. CA: Created Dif. Btwn Neg. & SL By Either of 2 Tests
          1. If benefit outweighed by risk inherent in that design (neg. heritage) OR
          2. Prod. fails as consumer expects when used in manner rsbly foreseeable by D (warranty heritage)
          3. Shift burden of proof 2 D when cost benefit w/imputed knowledge
        4. Prentis: Neg. Test W/O Any SL
        5. Jxn's All Differ
      7. Cost Benefit Analysis = Benef. of Prod. v. Likelihood & Extent of Harm
      8. Relevance of State of the Art
        1. Level of tech. expertise @ X of design
        2. Relev. 4 cost benefit analysis 4 feasibility of substitute / design alt.
        3. Unless better alt., can't win in misdesign gen'ly in most jxn
        4. Even if best design, may lose anyway b/c no prod. may B better if risk outweighs utility
      9. Rest 3rd Draft
        1. Misdesign when foreseeable risk of harm could've been lwred by adoption of rsbl alt. design by seller / predecessor
          1. Dif. b/c no cost benefit analysis w/imputed knowledge b/c risk foreseeable
          2. No lang. of SL / neg. but focus on prod.
      10. Mfgr v. Sellers
        1. Little distinction of SL & neg. 4 mfgr
        2. Gen'ly 4 sellers, wholesalers, & retailers, SL but not neg.
      11. Custom
        1. Custom not = 2 state of the art but may lag behind
        2. Even if custom not use alt, may have 2 use the best alt. possible
      12. Prescription Drug Mfgr Exception (Brown v. Superior Ct)
        1. Rest 402)a, comment k
          1. Exception of SL 4 misdesign of unavoidably unsafe prod.
          2. Unavoidably unsafe if will hurt somebody & impossible 2 make it safer so gen'ly apply 2 drugs & blood
        2. Purpose & Policy of Comment k
          1. Prescription drugs alleviate pain & sustain life & harm 2 some users inevitable
          2. Encourage mfgr 2 research & distrib. w/o fear of liab.
          3. Broad pub. int. 2 make drugs available, quickly
        3. Still Neg.
          1. Bright line rule that not SL b/c not want fear in drug ind. but neg. o.k.
          2. Quest'able if SL v. neg. distinction imp. b/c drugs still expensive w/neg. & neg. & SL close
        4. Drugs v. Abnormally Hazardous Activity SL Distinctions
          1. In drugs, no SL b/c can't B made safe but abnormally hazardous, apply SL b/c can't B made safe
          2. Person injured by drugs also benefitted but not in abnormally hazardous
          3. Drugs have spec. sense of value & benefit
          4. P vol'ly took drugs, not invol'ly injured
        5. Mfgr not SL so long as properly prepared & warnings of dang. propensities of known / rsbly scientifically knowable @ the X of distrib.
      13. Inherent Charact. Rule Exception 2 SL (Comment I)
        1. If prod. inherently unsafe
        2. Known 2 B unsafe by ord. consumer
        3. Common prod. 4 human consumption like sugar & tobacco
        4. Historically tolerated & concerns about A/R when risk known
    9. Failure 2 Warn (Anderson v. Owens-Corning Fiberglas Corp)
      1. Det'ing When D Liab. 4 Failure 2 Warn Dang's
        1. Not warn all dang's b/c impossible
      2. Knowability
        1. No imputed knowledge b/c can't make mfgr abs. insurer & can't warn unknowns
        2. Only liab. 4 not warn dang. that was known / knowable risk
      3. Jxn's
        1. Most sugg. neg. & others keep SL b/c have it 4 other kinds of prod. liab.
      4. Failure 2 Warn v. Misdesign
        1. Failure 2 warn has no imputed knowledge but misdesign does
        2. Failure 2 warn may B good prod. w/risk but misdesign may B bad
        3. Failure 2 warn has inherent risk so no limit but misdesign has limit b/c shouldn't B on mkt / better alt.
      5. Draft of 3rd Rest.
        1. Foreseeable risk of known / knowable risk: jxn's not uniform on what warning
        2. Kind of warning & suff.: no maj. but some say best possible warning 2 sep. from neg.

Proof of Prod. Liab.

  1. SL: Mismfgr (Friedman v. Gen. Motors Corp)
    1. Defect when accident
      1. Evid. must show more likely than not defective @ the X of accident
      2. Could have all circ'al evid.
        1. Expert testimony
        2. Wouldn't occur normally
        3. Negate the existence of probable causes not attributable 2 the maker
        4. Could infer from phys. cond.
    2. Defect When Left D's Hands
      1. X per. not dispositive but 1 of factors
    3. Gen'al proof prob's b/c accidents ord'ly destroy defects

Damages of Prod. Liab.

  1. Kinds of Damages (2 Rivers Co. v. Curtiss Breeding Serv.)
    1. Pers. Injury 2 User / Consumer or 2 Prop. Other Than Defective Prod.
      1. Recov'able in SL
      2. Safety accident ins. policy
    2. Econ. Loss
      1. Loss of benefit of the barg. so can't recov. by SL but can go 2 UCC b/c warranty & sales law designed 2 deal w/sit's where econ. rel. btwn buyer & seller on barg.
      2. Reputation is econ. harm
    3. Harm 2 Defective Prod. Itself
      1. Most difficult category
      2. Can't recov. in SL & must go 2 UCC & sales
    4. Line Drawing @ Defective Prod. Damage
      1. Hybrid: Prod. Itself & Some Other Prop.
        1. Can recov. 4 both (2 Rivers Case)
        2. Balance policies of safety accident ins. v. econ. loss of benefit of barg.
      2. Mormon Mfgr. Nat. Co. Case Stand.
        1. If calamatous accidental loss of phys. damage, then can recov. b/c more like safe ins. accident stuff
        2. Deterioration is econ. loss so can't recov.
      3. Jxn's All Differ 4 Prod. Harm
    5. Defective Material Used in Process
      1. If defective material used in process, prod. ruined, & damage 2 prop. then recov. allowed


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