Products Liability Outline
Question for Sanders: What portions of PL law are truly strict liability and why if limited did the casebook repeatedly refer to strict liability even when it was not?
1. Chapter 1
a. Introduction
i. Section A: History
1. Products Liability refers to civil liability for injuries caused by defective products. It covers several different theories of liability—including negligence, breach of warranty so-called strict liability, and misrepresentation
2. Negligence, warranty, and misrep were developed primarily outside of the context of products liability litigation
a. Negligence applies to PL pretty much in the same was as in other personal injury litigation
b. Warranty law was developed primarily in the context of commercial dealings, and its roots are in contract law
c. Misrepresentation also developed primarily in commercial dealings context, but its roots are in tort law.
d. Unlike previous three, so-called strict tort liability was developed as a special theory to deal with injuries caused by defective products. In this book this theory is referred to as products liability
i. The main historic advantage of PL is that the plaintiff can recover without a showing of fault. However, the plaintiff must still prove that the product was defective at time it left manufacturer’s hands, that the product was used in a foreseeable manner, and that the defect was both the cause in fact and the proximate cause of the injury.
ii. Limitations of PL:
1. can only be used against certain classes of potential defendants, e.g. those in the business of selling or leasing products
2. Recovery is generally limited to cases involving personal injury or property damage. i.e. most courts do not allow recovery in cases involving pure economic loss
a. Some courts do not permit recovery for damage to the product itself
3. **After the new Restatement, differences between PL and negligence are not as important as they once were
3. Comparing breach of warranty to PL:
a. Similar both in terms of what a plaintiff has to prove and the type of conduct that is recognized as a defense
b. BUT, warranty law imposes three additional obstacles to recovery that arise from the contractual nature of the remedy:
i. Privity of K is sometimes required
ii. Plaintiff must give a reasonably prompt notice of breach of warranty
iii. Disclaimers are permitted
c. Another difference: four year warranty statute of limitations begins to toll at time of sale while tort statutes of limitations generally begin to run at time of injury
d. Warranty theories are important primarily in cases where PL does not apply, such as those involving pure economic loss
4. Modern PL law is divided into three eras:
a. Before MacPherson, product manufacturers were given special protection. P could only recover for injuries caused by negligently manufactured products ONLY IF PRIVITY EXISTED. Privity is important in Ks, but foreseeability usually governs d’s liability in negligence
i. Even before MacPherson, there existed an exception to the privity requirement: NEGLIGENT MANUFACTURERS OF INHERENTLY DANGEROUS PRODUCTS COULD BE LIABLE TO REMOTE PLAINTIFFS WITH WHOM THEY WERE NOT IN PRIVITY OF K.
1. Justice Cardozo applied this exception in MacPherson to an automobile with a defective wheel, holding that the privity rule is not applicable to any product that is dangerous when defective…
2. …MacPherson effectively sounded the death knell of the privity rule because most products are dangerous when defective.
b. After MacPherson privity no longer a hurdle. During this second phase, product cases treated like other negligence cases. i.e. P still required to prove that the D failed to use reasonable care
i. Ps burden of proving negligence was difficult because the negligence occurred before plaintiff’s connection to product or manufacturer
c. Greenman v. Yuba Power Products ushered in the third stage of modern PL law by adopting PL for sellers of defective products
i. PL requires neither privity of K nor proof of negligence, and it is not subject to disclaimers that are applicable to warranties under UCC.
ii. In 1964, the ALI adopted section 402A of the Restatement (second) of Torts, which followed Greenman and embodied its theory of PL for sellers of defective products
ii. Section B. Negligence
1. actionable negligence requires unreasonable conduct that is both a cause in fact and a proximate, or legal cause of damages
2. P must prove that a reasonable person in the position of the D, before the alleged negligent act, would have recognized that the act would create a risk of harm to others, and that this foreseeable risk is unreasonable, that is, is not justified by the benefit gained by taking it.
3. NOTE: foreseeability and reasonableness of risks are evaluated from perspective of reasonable person, not from perspective of individual D
a. EXCEPTION: a defendant’s superior skill and knowledge are taken into account
i. This is important in cases invol
of selling chattels who makes a public misrep of a material fact (can’t be private misrep) through advertisements or labels is subject to liability for physical harm to a consumer of the chattel caused by justifiable reliance upon the misrepresentation even though (a) it is not made fraudulently or negligently, and (b) the consumer has not bought the chattel from or entered into any contractual relation with the seller
c. Innocent misrep embodied in section 9 was not cut from whole cloth. It is an outgrowth of law of intentional misrep (fraud) and negligent misrep, which are important in products cases for a few reasons:
i. ***A plaintiff can rely directly on the law of fraud and negligent misrep in a products case. A product seller who fraudulently or negligently misreps a product may be liable for any resulting damages, including purely economic damages
1. Thus, a plaintiff who can prove fraud or negligent misrep has this advantage over a p who can prove only products liability or ordinary negligence (under which pure economic damages are not allowed), though not over a P who can prove breach of warranty (warranty breaches can provide for pure economic losses)
2. CL action for fraud: P must prove:
a. The D made a false rep of a material fact
b. That the defendant knew the statement was false, knew that he had no knowledge of its truth or falsity, or knew that he did not have as strong a basis for his statement as he implied
c. That the defendant intended P to rely on the statement
d. P justifiably relied on the statement
e. P suffered damage
3. An action for fraud or negligent misrep differs from breach of K because absence of a K (due to lack of consideration, for example) does not defeat recovery
4. IN addition to the different requirements concerning the defendant’s state of mind, most courts also distinguish between fraud and negligent misrep in terms of defendant’s scope of liability:
a. Most courts have held that a defendant’s liability for fraud extends to any person who the defendant had “reason to know” would rely
i. Broader scope as more culpable tort
b. On other hand, D’s liability for negligent misrep. extends only to individuals within the class of persons that the defendant actually knew would rely
Narrower scope as the less culpa
