Products Liability: A Litigation Overview

Products liability is a complicated area of the law that governs who, when and how someone who has been harmed by the use of, or exposure to, a product can receive compensation. Products liability defendants include manufacturers, distributors, retailers and equipment refurbishers.

Products liability is a complicated area of the law that governs who, when and how someone who has been harmed by the use of, or exposure to, a product can receive compensation. Products liability defendants include manufacturers, distributors, retailers and equipment refurbishers.

Although the absence of federal reform of products liability law means that there probably will never be complete uniformity among the 50 states on how products liability issues are confronted, chances are that if you design, manufacture, assemble or distribute goods, as opposed to providing services, you could find yourself involved in a products liability suit.

The product involved can be almost anything man-made. Products are usually either capital goods, such as heavy machinery, airliners or farm equipment, or consumer goods such as cars, blenders or home electronics. Always be open minded when identifying the “products” your company sells.

There are three broad categories of products liability lawsuits a plaintiff can file:

  1. Strict Liability
  2. Negligence
  3. Breach of Warranty

The legal theories and defenses of each category are separate and distinct from the others, although the facts supporting them may be similar. Legal theories are made up of elements. Think of elements as pieces of a puzzle, and facts as the glue that holds the puzzle together. Plaintiffs must have a fact to support each element of their legal theory or they cannot glue that element into their puzzle.

The Three Broad Categories of Product Liability

1. Strict Liability

Strict liability is a fairly recent development in the law. As with most concepts in our legal system, the shape of strict liability is constantly changing. Strict liability essentially means that if your product was “defective” and that defect “caused” injury to the plaintiff, you must pay “damages.”

Products can be deemed defective in many ways. A product can be defectively designed (such as a hydraulic press that jams frequently due to insufficient tolerances), manufactured (such as a pressure vessel with a weak weld), or packaged (such as a meat cutter shipped without a guard and missing a warning placard). A product may also be defective due to a missing or vague warning, or what is referred to as a “failure to warn.” Often the range of defects in a product is limited only by the imagination of the plaintiff’s counsel.

Products generally are judged defective if, using language common to such cases, they “fail to meet the consumer’s reasonable expectations” or the “risk in use of the product outweighs the product’s value to society.” For instance, if an automatic garage door opener was manufactured with a bad electrical connection that caused the door to reverse direction and close on your car while you were pulling into your garage, that door opener would probably not meet your expectations as a consumer. Likewise, the utility of a door opener without a proximity safety switch might be outweighed by the risk of injury in its use. Different jurisdictions formulate their tests for product defects differently and some states do not recognize strict liability at all.

2. Negligence

It is important to remember that negligence differs from strict liability. In negligence, attention is focused on the defendant’s conduct, while in strict liability, attention is focused on the defendant’s product. The negligence of the defendant or the plaintiff is irrelevant in strict liability. Negligence is an older legal concept than strict liability, although both are “torts.” If a plaintiff sues in “tort” and wins, the plaintiff can receive damages for his injuries even though he has no contract with the defendant. In order to prevail in negligence, a plaintiff must prove each of the following elements to succeed:

  • The defendant owed the plaintiff a duty.
  • The defendant breached that duty.
  • The defendant’s breach of duty caused an injury to the plaintiff.
  • The amount of the plaintiff’s damages.

As with strict liability, a plaintiff asserting a negligence claim may allege that the defendant’s liability arises from a problem with the product’s design, manufacture or packaging, or in the defendant’s failure to warn. It is possible to be found liable in strict liability and yet be exonerated in negligence, and vice versa.

3. Breach of Warranty

Breach of warranty is conceptually different from strict liability and negligence in that breach of warranty is based in contract, not in tort. That distinction limits the number of people who can be plaintiffs. In tort, almost anyone can be a plaintiff, so long as they are injured by a product. In contract, the plaintiff must be in privity with the defendant. In its basic form, privity requires that a plaintiff must be the actual purchaser (or in his immediate family). The definition of privity varies widely from state to state.

There are generally two theories in breach of warranty:

Breach of implied warranty of merchantability.
Breach of warranty of fitness for a particular purpose.

Breach of implied warranty of merchantability is much like strict liability. Here, the plaintiff must prove that the product was “defective.” In contrast, breach of warranty of fitness for a particular purpose does not require the plaintiff to prove that the defendant’s product was defective. Instead, the plaintiff must prove that he told the defendant of his particular needs from the product (for example, size, weight, speed, endurance), that the defendant promised to meet those requirements, and that the defendant’s product failed to meet the plaintiff’s specifications.

Defending A Products Liability Suit

Defenses to the merits of civil suits are either affirmative defenses or defenses that attack one or more elements of the plaintiff’s prima facie case. One final group of defenses consists of technical defenses because they have nothing to do with the merits of the plaintiff’s claim.

Defenses to Plaintiff’s Prima Facie Case

Earlier in this article, we looked at how a plaintiff must prove facts to support each element of his legal theory in order to complete his puzzle and win. In contrast, the defendant only has to successfully defeat one element to invalidate the plaintiff’s cause of action. Put another way, if the defendant can take away one piece of the plaintiff’s puzzle, the plaintiff cannot finish his puzzle and must lose.

If the defendant can stop the plaintiff from proving his prima facie case by attacking the plaintiff’s proof directly, the defendant will win. For instance, if the defendant can prove that it owed no duty to the plaintiff, the defendant wins. Or, let’s assume the defendant is a seller and the plaintiff’s theory is a failure to inspect. If the seller proves it had no duty to inspect, then the  seller wins. Likewise, if the defendant is a manufacturer and can prove the plaintiff was burned at home instead of at the plant on the defendant’s machine as claimed, the defendant wins. The defendant has defeated the plaintiff’s proof of causation.

Affirmative Defenses

The affirmative defenses to products liability suits are specifically tailored to each different legal theory, although they, like the legal theories, may share many of the same facts. Affirmative defenses allow the defendant to win even if the plaintiff provides evidence to support each element of his prima facie case. With affirmative defenses, it does not matter if the plaintiff finishes his puzzle or not; the plaintiff still loses. The following are usually thought of as affirmative defenses. However, some affirmative defenses also attack the facts underlying the plaintiff’s prima facie case.

Affirmative Defenses to Strict Liability

Modification and Misuse

Affirmative defenses to strict liability break down into two categories: those based on the product, and those based on the plaintiff’s behavior. The defenses that focus on the product are modification and misuse.

Modification is a potential defense when the defendant’s product has been changed since it left the defendant’s hands. To prevail in strict liability, the plaintiff must show that the product was defective when it left the defendant’s control. If the defendant can show the product it made is not, so to speak, the product that injured the plaintiff, then the defendant is not liable.

To prove modification, the defendant must prove the original design, how the product has been changed (for example, removal of guards, installation of nonstandard  parts), and that the change caused the plaintiff’s injuries. Product misuse is either foreseeable or unforeseeable. Product misuse that is foreseeable (such as driving a car too fast) may not provide a manufacturer any defense, but unforeseeable misuse (such as using a loaded pistol for a hammer) may exonerate the manufacturer from liability.

Assumption of the Risk

The primary strict liability defense that focuses on the plaintiff’s behavior is assumption of the risk. To prove assumption of the risk, the defendant must prove that the plaintiff knew of the hazard that ultimately injured him and confronted the hazard knowingly. For example, a butcher knows that a meat slicer can injure him if he comes into contact with the moving blade. If the butcher removes the blade guard to clean the slicer while it is running, and then loses a finger, he has assumed the risk of his injury.

Affirmative Defenses to Negligence

Contributory and Comparative Negligence

The primary defense to a negligence suit is to prove that the plaintiff was negligent, too. This defense has two types. The first and oldest negligence defense is contributory negligence. Under this doctrine, a plaintiff cannot recover at all if he was the least bit at fault in his injury. If the defendant was 99 percent negligent, and the plaintiff was one percent negligent, the plaintiff loses. The obvious unfairness of this doctrine led to the creation of the doctrine of comparative negligence. Under this doctrine, if the defendant was 90 percent negligent and the plaintiff was 10 percent negligent and the plaintiff’s damages are $100, the plaintiff collects $90. If the plaintiff was 70 percent negligent, he collects $30, and so on. Although comparative negligence, or some variation of it, is the majority rule today, it may not apply in every state.  

Contributory/comparative negligence is not the same as assumption of the risk. Contributory/comparative negligence is similar to assumption of the risk, but remember that a negligence defense is not applicable in strict liability. This is because, as discussed previously, the negligence of either party is irrelevant in strict liability, which looks at the product, not conduct.

Affirmative Defenses to Breach of Warranty

There are several defenses to counter a claim of breach of warranty.

Lack of Privity

As discussed above, privity requires that the plaintiff and the defendant be parties to the contract for the purchase of the product at issue. If there is no privity, the plaintiff cannot win, even if the defendant’s product was defective – that is, not “merchantable” or not “fit for plaintiff’s particular purpose.”

Modification

The modification defense to a breach of warranty claim is essentially the same as the modification defense to strict liability. This similarity exists because, in both breach of implied warranty o merchantability and strict liability, the plaintiff must prove that defendant’s product was not “merchantable” – that is, that the defendant’s product was defective. To prove modification, the defendant must prove the original design, how the product has been changed, and that the change was the cause of the plaintiff’s injuries.

Failure to Give Timely Notice

Because breach of warranty is based on a contract between the parties, the defendant can require the plaintiff to do certain things to obtain a remedy. Often a plaintiff is required to make the claim within a specific time after the injury or damage and give notice of such claim in writing. If the plaintiff fails to comply, the plaintiff cannot win against the defendant.

Limitation of Remedies

Warranties often limit plaintiffs’ remedies for repair and/or replacement of a product. Limitations are valid if properly made, except that no manufacturer can exclude or limit liability for personal injuries.

Misuse

Like modification, the misuse defense to breach of warranty follows the same form as the misuse defense to strict liability. Product misuse that is foreseeable may not provide a manufacturer with a defense. Unforeseeable misuse, however, is a defense.

Technical Defenses

When a defendant has won a case because of some factor that has nothing to do with the merit of his case, the defendant has won based on a “technicality.” Outlined below are some of the technicalities that can aid you in the defense of your company and your product. These defenses can be invoked regardless of whether your company’s actions had anything to do with the plaintiff’s injury.

Statute of Limitations

A statute of limitations sets a date after which the plaintiff cannot bring suit against the defendant based on the date of the plaintiff’s injury. For example, if the statute of limitations for personal injuries is two years, and plaintiff is injured on January 31, 2006, the plaintiff must file suit on or before January 30, 2008.

Statute of Repose

A statute of repose sets a date after which the plaintiff cannot bring suit against the defendant based on the date of the first sale of the product in question. The date of the plaintiff’s injury is irrelevant. For example, if the statute of repose for consumer goods is eight years, and the plaintiff purchased a consumer good on January 31, 2000, the plaintiff must file suit on or before January 30, 2008. If plaintiff is injured after that date, he has no recourse against the defendant, even if he files a lawsuit within the statute of limitations.

Jurisdiction

Jurisdiction is the legal term for the court’s power over a case and the parties to it. In order to enter a valid judgment against a defendant, a court must have both jurisdiction over the type of case brought by the plaintiff, also called subject matter jurisdiction, and jurisdiction over the defendant, referred to as in personam jurisdiction. If either is lacking, no valid action can be brought against the defendant in that court.

Service of Process

In order to obtain in personam jurisdiction over a defendant, a plaintiff must serve the defendant with the appropriate legal documents that commence the plaintiff’s lawsuit. Unless the defendant receives the documents that commence the lawsuit, a defendant has no idea that he has been sued or what for, and, therefore, cannot defend himself.

One final note on these technical defenses. Like all affirmative defenses, they must be used to best advantage. This may even mean not actively pursuing an affirmative defense if it might give your opponent an argument that could impair the strength of another of your defenses.

Conclusion

Products liability is a complicated area of the law. Competent, knowledgeable counsel well versed in both the theory and application of products liability law is necessary for success. This is particularly true if your potential exposure is nationwide.

The subject of digital estate planning first gained widespread exposure in 2005 when Yahoo! refused to provide the family of a deceased U.S. Marine, Justin Ellsworth, access to his e-mails. The Ellsworth family ultimately secured a court order forcing Yahoo! to hand over the contents of the son’s e-mail account to his father. Despite the ruling, however, Yahoo! refused to reverse its policy, citing privacy concerns. The company also stated that the family of a deceased user would have to petition a court to verify the family member’s identity as well as their relationship to the deceased user.

As we go deeper into the digital age, a general perception remains that digital assets primarily concern the younger generation and active users of social networking and other Internet services. However, the issues surrounding digital assets can affect all persons — young and old. With the innovation of various online forms of communication, networking, investing, storing and filing, the current property, contract and probate laws do not adequately address the category of property known as “digital assets.”

WHAT ARE DIGITAL ASSETS?

Digital assets are broadly defined and include any online account and any file stored on a person’s computer or a server. Online accounts include e-mail accounts, financial or brokerage accounts like E*Trade and Scottrade, online bank and bill pay accounts, social networking sites such as Facebook, Twitter and LinkedIn, photo-sharing sites like Picasa, Kodak Gallery, Snapfish and Flickr, and blogs. This class of digital assets also includes online resources like eBay, Yelp, PayPal, domain names and URLs from sites like GoDaddy.com, or avatars on video games and virtual worlds such as World of Warcraft or Second Life. In short, any online account that is protected by a username and password, and contains a user’s economically or sentimentally valuable content can be classified as a “digital asset.”

A second class of digital assets is comprised of files stored on a personal computer, tablet or smartphone, or on a server through an online backup service. Such digital files can include business
documents, address books, family photos, journals, family recipes and many other types of information that individuals might want their heirs to inherit or access. In addition, professionals such as computer programmers, graphic or Web designers, photographers, writers, musicians and artists may have created “digital data” that is stored on a computer or a server and may have substantial intellectual property and monetary value. For example, when Leonard Bernstein died in 1990, he left only an electronic, password-protected draft of his memoir, Blue Ink. In fact, the manuscript was so well protected that no one has yet been able to break the password.1

DO YOU HAVE DIGITAL ASSETS?

If you own or use a computer, have an e-mail account, a smartphone or a digital camera, buy books2 and music3 online, or own a small business, the answer, most likely, is “yes.” Even if you don’t have any digital assets of financial value, you will most likely have e-mails saved in folders and digital photos uploaded and stored on servers such as Snapfish (Hewlett-Packard), Kodak Gallery, Shutterfly or Flickr (Yahoo!). If your family members are unable to access these digital assets, there is a risk that a lifetime of memories will be lost to the Internet abyss. Would you know how to access these pictures if something were to happen to your loved one?

KEY REASONS FOR DIGITAL ESTATE AND SUCCESSION PLANNING

Fiduciaries and family members traditionally have administered an estate by reading the deceased’s mail and sorting through records at the deceased’s residence. However, with online accounts and paperless billing, these traditional approaches may not be available today. The information required to locate and access tangible and digital assets often resides in the digital world itself. For example, e-mail accounts often serve as the primary access point and conduit to all other online assets. Online statements, notifications, messages, paperless bills, etc., will all come through to the decedent’s e-mail account. Moreover, the decedent’s address book and calendar can often be tied to or stored within
the e-mail account.

Consider the following scenario for the Facebook profile of someone close to you. If that someone dies without leaving instructions about what to do with their Facebook page, immediate family members might argue about what steps to take. Some might want to keep the page as a remembrance
or living memorial where friends could post condolences and memories. Other family members might find it upsetting to have their loved one’s profile show up as a recommended friend to other people, especially when they are not alive to accept those requests. Others may also find it hard to move on if the decedent’s photos and wall posts constantly appear on their Facebook page. On top of that, if no one has the correct login information, the family must contact Facebook to have the decedent’s profile either removed or memorialized. This process can be slow, frustrating and upsetting for the family.

UNCERTAINTY AND ABSENCE OF LAWS

Given the breadth of digital assets, starting the process of digital estate and succession planning can be difficult and often overwhelming. Further complicating these matters is the uncertainty of existing ownership and transferability laws and the risk of online identity theft.4

To date, only five states have enacted laws that relate to digital assets with regard to estate planning.
Although the earliest laws, from Rhode Island and Connecticut, are limited in scope to e-mail accounts, statutes enacted in Indiana, Oklahoma and Idaho are broader and include all electronically stored documents of the deceased. Thus, rights of executors, agents, guardians and beneficiaries with regard to accessing digital assets are muddy at best. In addition, there is no real consensus regarding ownership and transferability of digital assets or the category of property in which digital assets belong. Some say they are intellectual property, while others say they are intangible property. In reality, some of the digital assets may not be “assets” at all; rather, they are mere licenses to use a Web site’s services. Licenses are generally not transferable and expire upon death.

Despite statutory legal authority to “access” there is a risk that a lifetime of memories will be lost to the Internet abyss. Would you know how to access these pictures if something were to happen to your loved one?

CONCLUSION

Although laws governing the handling of digital assets are now emerging, lawmakers and the courts lag behind technology, creating confusion and unnecessary expense for those trying to sort things out. In the meantime, digital-savvy individuals should take some basic steps to prepare an inventory of their digital accounts and assets, assemble a list of passwords and give their executors the proper information, instructions and authority so that the estate administrator will know just what the user has, where it is located, and how he/she wants to dispose of it.

Footnotes


  1. Helen W. Gunnarsson, Plan for Administering Your Digital Estate, 99 Ill. B.J. 71 (2011). 

  2. In May 2011, Amazon announced that its Kindle books were outselling all print books, hardcover and paperback. Amazon Now Selling More Kindle Books Than Print Books, Stat Spotting (May 20, 2011), [http://statspotting.com/2011/05/amazon-now-selling-more-kindle-books-than-print books](http://statspotting.com/2011/05/amazon-now-selling-more-kindle-books-than-print books)+.
    Statistics source: Amazon. 

  3. On February 25, 2010, Apple announced that iTunes sold its 10 billionth song. iTunes Store Tops 10 Billion Songs Sold, Apple — Press Info (February 25, 2010), http://apple.com/pr/library/2010/02/25iTunes-Store-Tops-10-Billion-Songs-Sold.html

  4. According to the Federal Trade Commission, up to nine million people per year are victims of identity theft. When an individual is unable to continue to monitor his or her online accounts because of incapacity or death, criminals have an enhanced opportunity to hack these accounts and open new credit cards, apply for jobs and even procure state identification cards in the accountholder’s
    name.