Products Liability

Question 1

what is verticle privity?

Answer 1

think about vertical privity going down the chain of distribution, who is a proper defendant

Question 2

What is horizontal privity?

Answer 2

we think about who is a proper plaintiff.

Question 3

Difference in Damages

Answer 3

contract actions and torts actions formulate the concept of damages a little differently. Economic loss is not available in tort actions. If all you suffer is just economic loss and is not tied to property damage or physical injury, than you cannot bring a tort action.

Question 4

Is breach of express warranty fault based?

Answer 4

Breach of express warranty is not fault based . It is strict liability in contract. We are just saying, unlike negligence that you made some sort of representation about the product and it turned out not to be true.

Question 5

Warranties

Answer 5

they reside in the UCC

Question 6

Warranties

Answer 6

The warranty series are NOT tort series and they are defined in the UCC, which is sort of a shock when you think about it because you are studying contracts based theories in a torts class. Now having said there are all these different theories. There is strict liability and tort as expressed in the second restatement. Than there is the third restatement as well. For number 3,4, it is not listed under there but strict liability and tort expressed in the second restatement and the third restatement actually falls into three different categories. There are strict liability theories that deal with manufacturing defects. There are cases involving design defects where the entire design of the product is held substandard, and there are cases involving defects in warnings and instructions. So three different type of cases under section 402, A of the second restatement of torts or articulated as part of the third restatement of products liability. THIS IS AN AREA WHERE OUTLINE WILL NEED A LOT OF ORGANIZATION. Bison suggests to cover each products theory as a separate cause of action. Have a separate section in outline under products for each theory: negligence, warranty actions, strict liability and tort from the second and third restatements.

Question 7

Strict Liability in Tort (Restatement Second of Torts) 402A Defective Design

Answer 7

Plaintiff is required to prove that D was a commercial seller who sold a product with a defective condition that renders the product unreasonably dangerous,, where the product reaches the user or consumer w/o substantial change and is the actual and proximate cause of physical injury or property damage

Question 8

Product Liability Theories

Answer 8

Negligence; Warranties: Express Warranty, Implied Warranty of Merchantability; Strict Liability in Tort (402A); Restatement Third - Products Liability

Question 9

Does the theory apply to any and all sellers only OR commercial sellers (AKA merchants)?

Question 10

Does the theory have privity restrictions? Horizontal privity - who is a proper P? Verticle Privity: Who is a proper defendant?

Answer 10

Vertical privity concerns the relationship between parties at different levels of the distribution chain, such as manufacturers, wholesalers, and retailers. Regarding who is a proper defendant in a product liability case, Section 402A primarily focuses on manufacturers. However, the scope of liability can extend to other parties in the distribution chain, like wholesalers and retailers, under certain circumstances. This broader approach acknowledges that defects can arise at various stages of a product’s journey from production to consumer.

Question 11

What damages are available?

Question 12

Negligence Elements and defenses

Answer 12

Duty (owed to all sellers to forseeable Ps)
Breach (look for carelessness in design, manufacture, warning, packaging, shillpin, inspecting, testing, etc.)
Causation (actual and proximate)
Damages (physical injury and property damages NOT pure economic loss)

Question 13

What can the manufacturer do in negligence?

is there privity?

Answer 13

The manufacturer can negligently create an unsafe condition (e.g. unnecessarily dangerous design, negligent manufacturing, or omitting a part of a step) – subsequent sellers or furnishers can also be negligent in failing to discover or failing to warn of unsafe condition.

There is no privity

Question 14

Duty

Answer 14

Owed by ALL sellers to  foreseeable Ps (which can be bystanders, victims, or if McPherson lends his car to his friend. This is forseeable. So when we think of the purchaser in negligence, we are always going to say the purchaser is almost always the forseeable plaintiff. Plus a friend could be in zone of danger, as it is forseeable that you could loan product to a friend and they could be injured. There is a huge bar.

Question 15

Negligence: Breach

Answer 15

b. Breach : Look for carelessness in: Negligence: Assessing Breach - B < P X L
1. Careless design
2. Manufacture:
3. Warning
4. Packaging
5. Shipping
6. Inspecting
7. Testing, etc
Breach can be based on many different kinds of acts, conduct and it could be failure to properly design the product. There could be something wrong in the manufacturing process so that one or more units of the product are defective careless manufacture. Warn is adequate instructions on how to use the product. Usually the final manufacturer is resp for the warning. Also failure to package the package, ship the product and to inspect or test. In deciding whether there is a breach, UT talks about on page 282, using Hand formula to access breach in negligence, and if only costs 200 in Pinto, than we may say there is a breach. There were discussions during the design process to use stronger material or change the location of the gas tank. When jury found out it only costs 200 per car, they found breach and the jury went nuts, so it comes down to you analyze this negligence in breach. Can we say that the burden of changing the defendants behavior is less than the probability of the injury times the likely severity of the injury? That is how you analyze it.

Question 16

Negligence Causation

Answer 16

Causation: (1) ACTUAL (“but for”) – AND – (2) PROXIMATE It would be unlikely to have a negligence claim and not have foreseeability.

Question 17

Negligence: Damages

Can you obtain pure economic damages loss only?

Answer 17

NOT pure economic loss ONLY. If you also had physical or property damage you can get economic loss parasitically; otherwise you need to bring a warranty suit.
1. Physical Injury
2. Property Damage

Question 18

Defenses for Negligence

Answer 18

contributory negligence, comparative fault, assumption of risk

Question 19

EXPRESS WARRANTY
ELEMENTS AND PRIVITY ISSUES

Answer 19

EXPRESS OR IMPLIED

Question 20

Proper D for Express Warranty

Answer 20

Merchants (commercial sellers) Important for Exam: UCC refers to professional sellers as merchants as that is contract language. That is NOT how we discuss professional sellers in the torts context. In the restatements they are called commercial sellers, not merchants. So when you are dealing with a tort claim, if you have to say that you have a professional seller, you will call them a commercial seller. When you are dealing with a UCC warranty claim, don’t use the term commercial seller, call them merchants.

Question 21

Proper Plaintiff. There are 3 alternatives under the UCC to who can be the proper P.

Answer 21

In a jdx following alternative B, any natural person who is physically injured is a proper plaintiff.

Purchaser is always a proper plaintiff BUT, UCC provides (3) alternatives to who can be the proper P. This is pursuant to UCC 2-318.

1. Alternative A: Purchaser plus any P, who only suffers physical injury from BOW, if person is (1) family or the household of the buyer or (2) guests of the purchaser. This is referred to as natural persons. (human being, not corporation). Note, the buyer can recover for all, including just economic loss. This is the most narrow.
   a. If you are a bystander You CANNOT sue under this alternative
2. Alternative B: Any P that ONLY suffers physical injury (Bystanders OK). (some they may be members of the buyers family, but do not have to be)
   a. HYPO: P driving, the windshield shatters + hits bystander. Bystander can bring the claim
3. Alternative C: Expands to all persons but covers more than physical injury. You can cover everything (physical, property, economic loss) and removes the natural person, so we are including companies, corporations. Bystander is NOT physically injured, but has dog on a leash, and the glass injures the dog.

Question 22

What is an Express Warranty Elements # 1 - Assertion of Fact

These are not tort series and are defined in the UCC

Answer 22

An assertion of fact (a material representation about products composition, durability, performance, safety) that is the basis of the bargain (statements must precede or accompany the sale) —UCC presumes buyers reliance

Composition: This refers to the makeup or ingredients of a product. In an express warranty, the seller might guarantee the specific materials or components used in the product. For example, an express warranty might state that a product is made from 100% organic cotton, implying a certain quality and absence of synthetic materials.

Durability: Durability refers to the ability of a product to withstand wear, pressure, or damage. An express warranty on durability might promise that the product will last for a specific period under normal use conditions. For example, a warranty might claim that a kitchen appliance will function effectively for at least five years.

Performance: This relates to how well a product does its intended job. An express warranty on performance might guarantee that the product will perform to a certain standard or efficiency level. For example, a car battery might come with a warranty that it will maintain a certain level of performance over a specified number of charging cycles.

Safety: Safety in the context of product warranties refers to the product being free from hazards or defects that could cause injury or harm. An express warranty on safety might assure that the product has been tested and meets specific safety standards. For instance, a children’s toy might come with a warranty that it is free from harmful chemicals and safe for use by children of a certain age group.

Make it clear before start to analyze that it cannot be opinion or puffing, as you cannot sue for this as it is subjective opinion. i.e. this bread is delicious.

Burden is placed on the manufacturer or retailer.

mnemonics: Can Dogs Perform safely?

Question 23

Express Warranty Element 2 - Breach

Answer 23

Breach product lacks the promised quality.

Question 24

Express Warranty Element 3 - Causation

Answer 24

Causation (lack of the quality is causally linked to a foreseeable harm)

Question 25

Damages for Express Warranty

Important issue for pure economic loss that you cannot obtain in tort actions

Answer 25

personal injury; property damage; pure economic loss

Pure Economic Loss: Under warranty action, you can sue for pure economic loss alone where you do not have physical or property damage. Where negligence will fail you, express warranty will not. This is not available in a tort action. A complaint can also assert multiple causes of actions.

Question 27

Express Warranty PRIVITY ISSUES

Answer 27

Protected Ps - (horizontal privity issues) UCC 2-318 provides 3 alternatives indicating who can sue on the warranty and what kind of damages s/he can get

Defendants liable (verticle privity issue) UCC limits liability to merchants (commercial sellers) but many jurisdictions expand liability to all sellers

Question 28

Express Warranty - Defenses

Answer 28

1. Lack of reasonable notification
   Within a rsbl time of discovering breach, P must notify seller or suit barred
2. Limitations of liability by D – must be rsbl, consistent with the warranty, not unconscionable (D may not disclaim an express warranty)
3. Comparative negligence
4. Assumption of the risk

Question 29

Implied Warranty of Merchantability (4 elements)

Answer 29

Merchant (commercial seller);

Sells a good not fit for ordinary purposes [breach];

Failure of implied warranty causes

Damages (pers injury; ppty damage; pure econ loss)

Question 30

Why is it cheaper to bring an express warranty suit compared with negligence?

But there are exceptions

Answer 30

You do not need an expert, just pick up a brochure, product lacked a particular bargain, like shattered glass. As a lawyer you can look at brochure or advertisement and know so this proves express warranty claim as it lacked a particular quality that was promised. Than here is a medical report that shows the injuries to the client.
b. However if arguing carelessness in the manufacturing process, you will need a product engineering person who can carefully access what the manufacturing process was.
c. If you are claiming negligence in the way warnings, or instructions were designed, you might need an expert to talk about how careful warnings are constructed, how to get the users attention, how to use plain language of what the problem is.

Question 31

Strict Liability in Tort (restatement 2d, Torts 402A)

Answer 31

1. Commercial seller (merchant) who sells a product
2. Defective condition that is unrsbly dangerous
   a.) Manufacturing defects
   b.) Design defects
   c.) Warning and instruction defects
3. Causation – actual and proximate
4. Physical injury and property damage to user/consumer

Question 32

Element 1 Commercial Seller

Answer 32

Commercial Seller that sells product (do not call them “merchants” under this theory)
1. A Defendant in the business or regularly dealing w/ the product that injured the P
a. Example: Retailer, manufacturer, component part maker, etc.
b. NOTE: Does not apply to amateur sellers (e.g. grandma that sells jam)
b. Proper Plaintiff: The user or consumer. (that is more limited). (this could also be a client who is injured by a hairdresser while blowing their hair, or passenger in a vehicle)

Question 33

Products Liability in Tort (restatement 3d Section 2) A product

Answer 33

a.) contains a manufacturing defect when the product departs from its intended design even though all possible care was exercised….
b.) is defective in design when the foreseeable risks of harm…could have been reduced or avoided by the adoption of a reasonable alternative design…and the omission…renders the product not reasonably safe
c.) is defective because of inadequate warnings or instructions when the foreseeable risks of harm… could have been reduced or avoided by the provision of reasonable warnings or instructions….

Question 34

Element Number 2 for defective condition that is unreasonably dangerous

Answer 34

a. To assess a manufacturing defect, one compares the product’s design against the allegedly non-conforming unit of the product, which injured the plaintiff.

Question 35

Product Liability in Tort (Restatement 2d, Torts, 402A - from second element 4 rules

Answer 35

Second element: Defective condition that is unreasonably dangerous

Design defects – 4 Rules

1. Hindsight risk/utility
2. Ordinary risk/utility
3. Consumer expectations
4. Hybrid approach (California approach)

Four Rules to Prove Design Defects
* Mnemonic: “HRU, ORU, CE, HA” (Hindsight Risk/Utility, Ordinary Risk/Utility, Consumer Expectations, Hybrid Approach)
* Explanation: This covers the four rules: Hindsight Risk/Utility, Ordinary Risk/Utility, Consumer Expectations, and the Hybrid Approach.
i. Hindsight Risk/Utility (Dean Keaton)
* Mnemonic: “Not Followed JD”
* Explanation: Reminds you that this approach is not really followed by any jurisdiction.
ii. Ordinary Risk/Utility (Dean Wade)
* Mnemonic for 7 Factors: “Use Safe Subs, Improve, Avoid, Aware, Spread”
* Explanation: This mnemonic helps remember the seven factors: Usefulness, Safety, Substitute, Improvement, Avoidance, Awareness, and Spreading the cost.
b. Consumer Expectations (GASP Test)
* Mnemonic: “ConExp GASP”
* Explanation: Stands for Consumer Expectations and the GASP test, which is less frequently tested.
c. Hybrid Approach
* Mnemonic: “HybApp Rare”
* Explanation: Indicates that the Hybrid Approach is rarely tested.

Question 36

Hindsight risk/Utility (Dean Keaton) - Not really followed by any jdx.

Answer 36

Impute knowledge of risks = useful aspects of product to D using knowledge available at time of trial

Question 37

Ordinary risks

Answer 37

Ordinary risks/utility (Dean Wade) P must prove that the hazards associated with the product outweigh the individual + societal benefits of the product as designed. - knowledge base is at the time the product is marketed.

Question 38

7 factors to balance the ordinary risk test

Answer 38

pp. 286 UT):
1. Usefulness + desirability of the product
2. Safety aspects of the product (likelihood & severity of injury) Probability and Magnitude of the potential injury associated with the product as designed
3. Availability of safer substitute product.
i. Some JDs treat this factor as a stand alone element that P must prove in her PF case
4. Ability to improve product’s safety w/o impairing its usefulness or making it too expensive
5. User’s ability to avoid injury through careful use
6. Awareness of danger due to knowledge/warnings/instructions
7. Feasibility of D spreading cost of liability of product or improving safety of design
i. If D can get liability insurance to ensure against the lawsuits of the kind – Ps favor
ii. If D could take the costs of accidenta and spread that costly by increasing the price of the product – does the D have the ability to spread the cost? – Ps favor
iii. Usually hard for D because you have a merchant that is usually in this deadling and has insurance as a policy.
iv. Spreading the loss – almost a given that they will be able to.
v. Able to tweak price to save someone + the loss of accidenta is not only on the company
vi. Almost always in favor of the P.

Question 39

Consumer Expectations

Answer 39

Whether the dangerous aspect of the product violates the reasonable expectation of an ordinary adult consumer - GASP test.

Question 40

Product Liability in Tort (restatment 2d, Torts) The 7 Risk Utility Factors, Rules 1 and 2

Answer 40

The 7 Risk-Utility Factors – rules 1 and 2
1. Usefulness & desireability of the product
2. Safety aspects of the product (likelihood & severity of injury)
3. Availability of safer substitute product
4. Ability to improve product’s safety without impairing its usefulness or making it too expensive
5. User’s ability to avoid risk by being careful when using product
6. Awareness of danger due to general knowledge or warnings
7. Feasibility of D spreading loss, getting insurance

Question 41

Product Liability in Tort (Restatement 2d, Torts, 402A) Second element: Defective condition that is unreasonably dangerous

Answer 41

Design defect – rule 3

Consumer expectations – Does the product violate the expectations of an ordinary consumer – is it more dangerous than an ordinary consumer would expect?

Question 42

Product Liability in Tort (Restatement 2d, Torts, 402A) Second element: Defective condition that is unreasonably dangerous
Design defect – rule 4 – California rule (will not be tested)

Answer 42

Hybrid approach- Product has design defect if:

P shows product failed to perform as safely as an ordinary consumer would expect; or

2. P shows product’s design proximately caused injury and D fails to prove benefits outweigh risk

Question 43

Element 2: Product Liability in Tort (Restatement 2d, Torts, 402A) Second element: Defective condition that is unreasonably dangerous
Warning defects

Answer 43

Rule: P must show that manufacturer knew or should have known of the risks associated with product.

Rule for other Ds: P must show that retailer knew or had reason to know of the risks. Considered a lesser standard.

Question 44

Product Liability in Tort (Restatement 2d, Torts, 402A) Second element: Defective condition that is unreasonably dangerous

Answer 44

Warning defects – some sub-rules

State of the art relevant to “knowability”
Obvious hazards – no need to warn
Sophisticated users – no need to warn
Learned Intermediary rule
Post-sale duty to warn

Question 45

Causation

Answer 45

Actual (but for) AND w/o substantial change

Assuming the _____ was defectively designed, did the product reach the user or consumer without substantial change, and was the defect the actual and proximate cause of the plaintiffs harm?

Ask if a misuse will defeat proximate causation. If misuse is forseeable then causation will not be defeated.

Question 46

Products Liability in Tort (Restatement 2d, Torts, 402A Third element: Causation

Answer 46

The defect identified in the second element must be the actual & proximate cause of P’s injury

The defect must have existed when the product left the D’s control (We saw this with respect to manufacturing defects in the Rix case)

Question 47

Product Liability in Tort (Restatement 2d, Torts, 402A) Defenses to 402A claims

Answer 47

Comparative fault is a defense in most jurisdictions (reduces recovery)

Assumption of the risk may bar suit

Unforeseeable misuse may bar suit

Question 48

Assumption of Risk

Answer 48

To succeed in establishing a implied assumption of risk defense, the defendant would need to demonstrate that the plaintiff voluntarily assumed a known risk. (case by case analysis)

Question 49

Comparative Negligence

Answer 49

A plaintiffs negligence may be used to reduce damages in a strict products liability in tort action

Question 50

Product Misuse

Answer 50

Misuse of a product is only a defense if the misuse is foreseeable.

Question 51

Product Liability in Tort (Restatement 2d, Torts, 402A) Fourth element: Damages

Answer 51

Physical injury and property damage to user/consumer

Pure economic loss not available
Physical injury damages available
Property damages available (harm to product itself not always considered property damage)
Economic loss that flows from physical injury or property damages is available