TORTS OUTLINE — SPRING – HUBBARD
Policy – Other Values
TOPIC: STRICT LIABILITY
I. Strict Liability = liability without proof of negligence
Fletcher v. Rylands
a) If you bring on land something that is not naturally there;
b) And that something is likely to do mischief if it escapes;
c) If it escapes and does mischief you are strictly liable even if not negligent
2. Exception to this Rule: If the escape is caused by the plaintiff or an act of God, then there is no strict liability.
Losee v. Buchanan
3. Rule: Despite meeting the Ryland test, the Losee court did not apply strict liability b/c they saw the benefit of having boilers (social utility)
Sullivan v. Dunham
Rule: Look to the nature of the activity to determine strict liability (the more common the activity, the less likely strict liability is to be imposed). Horse/car accident.
Indiana Harbor v. American Cynamid
Abnormally Dangerous Test: These factors make an activity abnormally dangerous…
a) Is the risk of harm great? (likelihood it would happen)
b) The harm caused would be great (extent of harm caused)
c) Inability to eliminate the risk by the exercise of reasonable care
d) Activity is not a matter of common usage
e) Activity is inappropriate to the location
f) The value to the community isn’t enough to offset the risk (balancing act as in Losee)
II. Defenses to Strict Liability:
Contributory negligence is not a defense
Assumption of risk is a defense
TOPIC: PRODUCTS LIABILITY
I. Summary Overview of Theories of Liability. (***Remember that plaintiff’s must show a legal wrong and causation) The basic theories of recovery (or causes of action) for product-caused injury are:
A. NEGLIGENCE – not much negligence on exam
a) Test: Quality Control (blueprint is fine, but did individual use due care in making the product)
(1) Encourages spending a lot of money on safety
a) Test: AC v. SC
a) Test: AC v. SC
B. STRICT LIABILITY IN TORT – RESTATEMENT SECOND FRAMEWORK
1. DEFECT (402A) (or equivalent) (p.555)
(1) Test: Did the manufacturing of the product follow the blueprint (Example: If the blueprint calls for five screws and only three go in, it doesn’t matter anything else, you are strictly liable.)
(1) Test 1: Cost: Benefit (AC:SC)
(a) Within the AC:SC analysis, jurisdictions differ in how they view “state of the art” (what’s the most scientifically doable technologically doable economically doable custom? – split) at time of trial/time of sale? – split.
(b) Burden of proof as to AC:SC and state of the art? split
(2) Test 2: Expectation of a reasonable consumer
(a) Defining “reasonable consumer”…Who is a reasonable consumer of this product?
(b) How to treat “open and obvious” risk
(i) not defective
(ii) factor in determining if defective
(iii) if defective, possible defense of AR – compare AR’s requirement of actual awareness of nature/severity of risk
(c) Are the issues too complex for a reasonable consumer (Example: car engine)?
(d) Application to injury to a third party or to an unintended but foreseeable user like a child.
(3) Also consider
(a) application to intended use/foreseeable use?
(b) role of marketing
(c) role of instructions/warnings in eval. designOH
(a) Instructions vs. Warnings = Instructions are how to use the product, and Warnings are bad things that can happen due to the product
(i) Warnings (two types): (1) The bad things that can happen if you don’t follow instructions, and (2) even if you do follow the instructions these bad things can happen.
(2) Reasons for Warnings
(a) Efficiency – reduce number and severity of accidents
(b) Autonomy – The right to make an informed choice
(3) For a warning to be defective the plaintiff must raise two issues…
(a) Necessity first, and then…
(i) Rule: A warning is required whenever a foreseeable non-de minimus risk exceeds in nature or amount that which is expected by the ordinary consumer (sufficiently large # of ordinary consumers).
(ii) If req’d, seller must give a warning unless he can reasonably rely on someone else to give the warning…
(a) Look for “learned intermediary” – exceptions: direct advertising/FDA mandate/mass immunization
(b) “bulk supplier”
(c) “sophisticated user”
(iii) Foreseeability: Is warning required even if risks not foreseeable at time of sale?
(a) Continuing duty to warn and time of trial/time of sale
(iv) Marketing can affect need for warning – Voltron toy
(i) Rule: A warning is adequate if it reasonably informs the ordinary consumer of the nature and extent of the risks involved.
(ii) Other issues to look out for:
(a) Prominence of the warning
(b) English/non-english warning
(iii) “Heeding Presumption” – adequacy wouldn’t make a different even if the warning was there.
***For the plaintiff to win the court has to find “yes” on necessity and “no” on adequacy***
NOTE: Products Restatement (p.556) (1998) is basically a negligence type approach for design and warning. Manufacturing defects are treated the same as 402A.
2. MISREPRESENTATION (402B) (p.604)
a) Remember that you must show all the elements of a cause of action.
(1) Duty/breach – misrepresentation of a material fact (not opinion or puffing) by product seller who is in the business
(2) Causation – c.i.f. and p.c.
(a) Justifiable reliance
(b) (physical harm) from misrepresentation and reliance
(3) Legally protected injury (physical harm)
NOTE: Products Restatement (p.604) is basically the same as 402B.
[NOTE: Strict liability in tort is not as “strict” as the name suggests.]
a. Three basic types of warranty
i. Express Warranty (2-313; common law)
1. Affirmation of fact or promise / not puffing (fact not an opinion)
2. Affirmation as the basis of the bargain = but for the affirmation you wouldn’t have purchased the product
a. reliance requirement eliminated b/c you have already relied (don’t need double reliance)
ii. Implied Warranty
(a) Merchantability (2-314; common law)
(i) Must be a merchant
(ii) Product must be fit for ordinary purposes for which product is used.
(b) fitness for a particular purpose (2-315; common law)
(i) Goods are suitable for particular purpose buyer is going to use them for; seller has to know of particular purpose and the buyer has to be relying on seller’s skill.
b. Duty/Breach. Is there a warranty and if so, what is it and to whom is it owed? Process for evaluating a fact situation:
i. Defenses like contributory negligence and assumption of risk become a proximate cause analysis when you are looking at it in contracts.
ii. Comparative fault may not apply
iii. Special problems of disclaimers, limits on remedy, notice, and duty to mitigate damages.
iv. Statute of limitations may be different from tort; there may be a statute of repose.
5. WHO CAN BE SUED IN STRICT LIABILITY? Who are the defendants?
a. With negligence, you have liability if you are a wrongdoer, if you did not exercise due care when you had a duty to do so.
b. With strict liability, which parties involved in some level of the sale of the defective good can be held liable?
i. The paradigm case: Sellers of products in the business are strictly liable. (§ 402A)
ii. Products (chattels)
a. new product–paradigm case
ii. “downstream” non-manufacturing seller
iii. component part – – two variations:
2. defective but only for some uses
iv. used product – – usually not SLT
v. noncommercial seller – not “in business”
2. Lessors–some courts impose on large lessors
3. Franchisers–what is role?
4. Testers, certifiers–generally no SLT
5. Auctioneers–generally no SLT
6. Contractors following specifications–split; consider negligence claim
7. Financiers–generally no liability; what is role
1. solely service–generally no claim (but consider possible common law warranty)
2. hybrid transaction — alternative “tests”
a. nature of business