ATRA Issues >>

Product Liability Reform

Issue:

Whether manufacturers and retailers should be liable for injuries without proof of negligence in accordance with a standard of absolute liability.

Problem:

The standard of absolute liability imposes liability on defendants who are in no sense at fault, but instead are regarded by the judge and jury as sufficiently well-financed or insured to compensate injured plaintiffs. Furthermore, the threat of product liability suits forces many U.S. manufacturers to raise prices or exit the industry altogether due to the high cost of product liability insurance.

Background:

Product liability laws are intended to protect consumers from injury due to the manufacturing and sale of unreasonably unsafe products. The standard of absolute liability aims to encourage accident prevention by holding manufacturers, who are in the best position to reduce or eliminate injuries, fully liable for injuries caused by their products.

This premise, however, unfairly holds manufacturers liable for any injury related to their activity regardless of their ability to foresee an imminent injury or the consumer’s ability to prevent it.

As the brunt of responsibility has fallen on manufacturers, product liability insurance premiums have risen twice the rate of inflation in recent years. As a result, many U.S. firms have opted to discontinue product research, cut back on introducing new product lines, and raise prices. Ultimately, the abuse of product liability laws offers consumers fewer domestic products at higher prices and compromises the competitiveness of U.S. firms in foreign and domestic markets,

Rationale:

While absolute liability places undue burdens on U.S. firms, in many cases, it also insults the good sense of responsible consumers. Only by moving to a fault based standard of liability can this issue return to the traditional principle of tort law that individuals and enterprises bear responsibility for injuries that directly result from their negligent actions.

Recommended Action:

The solution is to establish clear conditions under which a manufacturer or retailer are liable. An effective product liability reform measure will include each of the following elements:

It will govern all product liability actions, irrespective of the theory on which they are brought. Plaintiffs should not be left room to invent new theories which evade the statute.

It will permit a plaintiff to recover damages only upon proof that the product was defective and that the defect was the cause of the harm. The statute will set out clear rules for determining when a product is defective. There will be clear standards for establishing liability based on manufacturing defects, design defects, and warning defects. There will be clear rules requiring proof of causation.

PRODUCT LIABILITY STATE CHART

As of December 31, 2000

1986

Colorado

Establishes a two-year statute of limitations for product liability suits

Establishes a ten-year statute of repose for manufacturing equipment

Florida - Also see 1999

Establishes modified comparative fault for tort actions including strict product liability claims

Iowa

Estabishes a defense of conformity with the state-of-the-art at the time of the manufacture

Eliminates the liability of product sellers unless the manufacturer is not subject to the court's jurisdiction

Kansas

Prohibits submission of evidence in product liability cases concerning advances in technology or changes in manufacturing process made after the product was designed and sold

Washington

Prohibits liability if the injured person was under the influence of alcohol or illegal drugs and that condition was 50% responsible for the injury

1987

California

Provides that a manufacturer or seller is not liable if harm results from an inherent characteristic of a product that is known to the ordinary person and the product is intended for personal consumption

Delaware

Establishes a defense for product sellers when a seller did not know of the defect and did not manufacture or modify the product

Georgia

Eliminates the liability of product sellers unless the manufacturer is not subject to the court's jurisdictions

Mississippi

Makes unenforceable any attempt by a seller of consumer goods to exclude or modify any implied warranties or merchantability or fitness or to limit or modify a consumer's remedies for breach of the manufacturer's express warranties

Missouri

Recognizes state-of-the-art as a complete affirmative defense

Defines "plaintiff fault" to include product misuse, failure to take reasonable precautions, and unreasonable failure to appreciate the danger involved in the use of the product

Montana

Defines unreasonable product misuse and assumption of the risk under the comparative responsibility statute

New Jersey - Also see 1995

Provides that a manufacturer or seller of a product is liable only if claimant proves by preponderance of evidence that the product was not suitable or safe because it:

a) deviated from the design specifications or performance standards; b)failed to contain adequate warnings; c) was designed in a defective manner

Provides that a manufacturer or seller is not liable if at the time the product left the manufacturer's control there was not available a practical and feasible alternative design that would have prevented the harm

Provides that a product is not defective in design if harm results from an inherent characteristic of the product that is known to the ordinary person who uses or consumes it

Provides that a manufacturer or seller is not liable for a design defect if harm results from an unavoidably unsafe aspect of a product and the product was accompanied by an adequate warning

Provides that the state of the art provision does not apply if the court makes all of the following determinations:

a) that the product is egregiously unsafe; b) that the user could not be expected to have knowledge of the product's risk; c) that the product has little or no usefulness

Provides that a manufacturer or seller is not liable in a warning-defect case if an adequate warning is given (An adequate warning is one that a reasonably prudent person in the similar circumstances would have provided.)

Establishes a rebuttable presumption that a government (FDA) warning is adequate

Provides that drugs, devices, food and food additives which have received pre-market approval or are licensed or regulated by the FDA shall not be subject to punitive damages unless material information was withheld or misrepresented

New Mexico

Exempts blood, blood products, and human tissue and organs from strict productliability

North Dakota

Eliminates the liability of product sellers unless the manufacturer is not subject to the court's jurisdiction

Ohio

Codifies the consumer-expectation test for design defects

Establishes a defense for inherent characteristics of a product known to the ordinary person with knowledge common to the community

Establishes a state-of-the-art defense when no practical and technologically feasible alternative design was available unless the manufacturer acted unreasonably in introducing the product into commerce

Establishes a defense to warning claims if the risk is open and obvious or a matter of common knowledge

Establishes a defense to warning claims for drugs and medical devices if the warnings provided comply with regulations of the Food and Drug Administration

Establishes a defense to punitive damages against a drug manufacturer if the drug was approved by the Food and Drug Administration

Oregon

Prohibits punitive damages against a drug manufacturer if the drug was manufactured and labeled in accord with government approval or if it was generally recognized as safe and effective in accord with FDA procedures, unless the defendant withheld information concerning the drug from the FDA or failed to conduct a required recall

Texas

Prohibits recovery against a manufacturer, distributor or retailer of a product if the plaintiff is 60% or more responsible for the injury

1988

Louisiana

Provides that a product may be unreasonably dangerous only because of one or more of the following characteristics:

a) defective construction or composition; b) defective design; c) failure to warn or inadequate warning; d) nonconformity within express warranty

Provides that a manufacturer of a product shall not be liable for damage proximately caused by a characteristic of the product's design if the manufacturers proves that at the time the product left his control:

a) he did not know, and in light of then-existing reasonably available scientific and technological knowledge, could not have known of the design characteristic that caused the damage; b) he did not know, and in light of then-existing reasonably available scientific and technological knowledge, could not have known of the alternative design identified by the claimant; c) the alternative design identified by the claimant was not feasible, in light of then-existing reasonably available scientific and technological knowledge or then-existing economic practicality

New Hampshire

Provides affirmative defense that the risks complained of by the plaintiff were not discoverable using prevailing research and scientific techniques under the state of the art and were not discoverable using procedures required by federal or state regulatory authorities charged with supervision or licensing of the product in question

1989

Utah

Provides a statute of limitation that mandates actions shall not be brought more than six years after the date of initial purchase or ten years after the date of manufacture of a product

Provides that no dollar amount may be specified in the prayer of a complaint filed in a product liability action

Provides for an alteration or modification defense

Provides a rebuttable presumption that a product is free from any defect where the alleged defect in the plans for the product were in conformity with government standards for the industry

1993

Mississippi

Provides that product liability cases must be based on a design, manufacturing or warning defect, or breach of an express warranty, which caused the product to be unreasonably dangerous

Provides that a product which contains an inherently dangerous characteristic is not defective unless the dangerous characteristic cannot be eliminated without substantially reducing the product's usefulness or desirability and the inherent characteristic is recognized by the ordinary person with ordinary knowledge common to the community

Provides that a manufacturer or seller cannot be held liable for failure to warn of a product's dangerous condition if it was unknowable at the time the product left the manufacturer's or seller's control

Completely bars from recovery a plaintiff who knowingly and voluntarily exposes himself or herself to a dangerous product condition if her or she is injured as a result of that condition

Relieves a manufacturer or seller from the duty to warn of a product that poses an open and obvious risk

Provides that a properly functioning product is not defective unless there was a practical and economically feasible design alternative available at the time of manufacture

Provides for indemnification of innocent retailers and wholesalers

New Hampshire

Establishes New Hampshire manufacturers' right of indemnification from the original purchasers of a product for damages caused by the product if it is significantly altered after it leaves the New Hampshire manufacturer's control

North Dakota

Provides for a move from pure comparative fault to modified comparative fault in product liability actions and allows a manufacturer's and seller's defense where injury was due to a product's alternation or modification

Texas

Requires proof of an economically and technologically safer alternative design available at the time of manufacture in product liability actions for defective design

Provides immunity for manufacturers and sellers of inherently unsafe products

Establishes a 15 year statute of repose for product liability actions against manufacturers or sellers of manufacturing equipment

Provides for a seller's defense

1995

Indiana

Abolishes joint liability in product liability actions; Indiana does not apply joint and several liability in other civil actions

Provides a rebuttable presumption that the product was not defective if:

a) the manufacturer of the product was in conformity with recognized "state of the art" safety guidelines; or b) the manufacturer of the product complied with government standards approved by the Federal Drug Administration, Federal Aviation Administration, etc.

Prohibits strict liability actions against the seller unless seller is a manufacturer of the product

Michigan

Provides a rebuttable presumption that manufacturer or seller is not liable if product complied with federal or state standards

Provides an FDA defense; sellers' defense; a defense for misuse or alteration; and an assumption of the risk defense

Provides an absolute defense if claimant was 50% or more at fault due to intoxication or a controlled substance

Limits non-economic damages awarded in product liability actions to $280,000 unless the action involves death or loss of vital bodily function which raises the limit to $500,000

Abolished joint liability in product liability actions. Pure comparative fault applies to all product manufacturers except those named in medical malpractice cases.

New Jersey

Limits strict liability for product sellers in product liability actions

North Carolina

Expressly provides that there shall be no strict liability in tort product liability actions; and

Provides statutory defenses for manufacturer or sellers including an assumption of the risk defense.

North Dakota

Establishes 10 year statute of repose in product liability actions; and

Provides for a government standards defense

South Dakota

Provides a state of the art defense in product liability actions

1996

Maine

Provides that "subsequent remedial measures" or steps taken after an accident to repair or improve the site of injury are not admissible as evidence of negligence.

1997

Iowa

Establishes a 15 year statute of repose in product liability actions with exceptions for fraud, concealment, latent disease caused by harmful materials, and specified products.

1998

Massachusetts

The Massachusetts Supreme Court adopted the state of the art defense in product liability cases in the case of Vassallo v. Baxter Healthcare Corporation

1999

Florida

Establishes a 12-year statute of repose for products with a useful life of 10 years or less, unless the product is specifically warranted a useful life longer than 12 years. Provides for a 20-year statute of repose for airplanes or vessels in commercial activity, unless the manufacturer specifically warranted a useful life longer than 20 years. Exceptions include: improvements to real property including elevators and escalators; latent injury cases; and when the manufacturer, acting though its officers, directors or managing agents, took affirmative steps to conceal a known defect in the product.

Provides a state of the art defense

Prohibits “subsequent remedial measures”-evidence taken after an injury for the purpose of proving negligence or a product defect

Provides a government rules defense

For specific model legislation, contact ATRA at 202-682-1163.

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