Sources of law
Product liability statutesIs there a statute that governs product liability litigation?
There is no uniform theory of product liability, by statute or common law, that applies across all 50 states. Rather, each state defines product liability claims and defences under its own principles; though, as a general matter, product liability claims arise in the form of strict product liability theory, tort (negligence or fraud) theory or warranty theory.
In addition, the Restatement of Torts is a treatise developed by the American Law Institute, which summarises general principles of common law on US tort law. The Restatement serves as the model for most strict product liability law. Many states have adopted statutory versions of the Restatement, and it provides a degree of uniformity in basic elements of product liability law across jurisdictions.
Traditional theories of liabilityWhat other theories of liability are available to product liability claimants?
Strict liabilityIn most states, product liability claimants may also pursue claims under a form of ‘strict product liability’. Pursuant to this theory, a manufacturer or seller will be subject to liability for injuries caused by a defective product. If the prerequisites are satisfied, the producer, seller or manufacturer may be liable, irrespective of whether he or she was negligent. Most states recognise manufacturing defects, design defects and warning defects.
Negligence
A claim sounding in negligence may be appropriate where the defendant failed to use ordinary care or to act as would a reasonable person acting under similar circumstances. Negligence claims are the most commonly asserted in the product liability context. The duty for purposes of negligence generally refers to a manufacturer’s obligation to make and sell a reasonably safe product. Design defect claims may generally also be pursued under a negligence theory.
Fraud
Unlike negligence and strict product liability, fraud requires a showing of a defendant’s specific intent to deceive. Fraud claims generally are asserted in the form of fraudulent misrepresentation, fraudulent omission or fraudulent concealment. For purposes of product liability actions, the courts have held that manufacturers are obliged to warn or inform users of certain non-obvious dangers associated with both use and foreseeable misuse of the product.
Contract
Breach of contract often arises in product liability suits in the form of breach of warranty. Breach of warranty claims may include breach of express warranty, breach of implied warranty of fitness for a particular purpose and breach of implied warranty of merchantability.
Consumer legislationIs there a consumer protection statute that provides remedies, imposes duties or otherwise affects product liability litigants?
Most jurisdictions have deceptive trade practices acts or consumer protection statutes. In addition, the Federal Trade Commission also governs deceptive trade practices at the federal level, which generally prohibits ‘unfair or deceptive acts or practices in or affecting commerce’. These statutes prohibit certain unlawful, unconscionable or deceptive sales and marketing practices. Cases often rely upon guidance from the Food & Drug Administration (FDA) and Environmental Protection Agency as well, where those agencies have publicly stated what they believe to be misleading or deceptive product marketing or advertising.
The Consumer Product Safety Act also requires the reporting of certain product safety issues and regulatory violations to the US Consumer Product Safety Commission. A recall that results from such a report can affect product liability litigation.
Criminal lawCan criminal sanctions be imposed for the sale or distribution of defective products?
Generally, criminal liability does not attach to claims in product liability, although this may be possible in certain especially egregious circumstances. Additionally, it is a criminal violation under the Consumer Product Safety Act (CPSA) punishable for up to five years’ imprisonment or a fine, or both, for a knowing and wilful violation of the prohibited acts section of the CPSA (15 U.S.C. § 2068), which is enforced by the US Consumer Product Safety Commission (CPSC). This includes knowingly and wilfully failing to report to the CPSC a product defect that could cause a substantial product hazard, selling or distributing a recalled consumer product, selling or distributing a consumer product that does not conform with regulatory requirements enforced by the CPSC, and various other product safety-related prohibited acts listed in the statute.
Novel theoriesAre any novel theories available or emerging for product liability claimants?
While many courts recognise the theory of medical monitoring, there is a split of opinion as to whether this theory is an independent cause of action or just a form of damages. Conceptually, medical monitoring is different from increased risk or fear of disease in which the compensation is for the incremental risk and the fear itself respectively. Instead, plaintiffs seek to recover the actual cost for the medical test, which has been previously recognised. However, what makes medical monitoring controversial is the award in the absence of physical injury and its use in class actions.
In addition, a new strain of product liability claims has emerged in which an e-commerce seller is being sued and held liable for defective products sold by third parties on their marketplace. The details of the e-commerce seller’s liability are still being determined, but it marks a shift from traditional definitions of ‘manufacturer’ and ‘seller’ in the product space.
Product defectWhat breaches of duties or other theories can be used to establish product defect?
Generally, the United States will assess a product defect under the consumer expectation test or the risk utility test. The consumer expectation test asks whether a product is unreasonably dangerous compared to the expectation of a reasonable consumer using the product in a foreseeable manner. The risk utility test – which is becoming more common in the United States – balances the risk posed by the product with the product’s utility. In the latter case, if a design is state of the art, the product will likely not be found defective.
Defect standard and burden of proofBy what standards may a product be deemed defective and who bears the burden of proof? May that burden be shifted to the opposing party? What is the standard of proof?
Typically, the plaintiff must prove, by a preponderance of the evidence, any of the defects described below. Only in rare cases does the burden shift to the defendant.
Manufacturing defect
A manufacturing defect occurs when a safely designed product is unsafe owing to a problem that occurs during the manufacturing process. In a manufacturing defect case, it is common for most products to be defect-free and only a small subset to be defective.
Design defect
A design defect occurs when the product is defective despite conforming to the design specifications of the product. In design defect cases either all or none of the products that were manufactured to the allegedly-defective specifications are defective.
Warning defect
A warning defect involves a failure to warn or to adequately warn of a reasonably foreseeable danger of the product. This type of case typically involves inadequate warnings, either because the necessary warnings are not provided or because the provided warnings are ambiguous or incomplete.
Possible respondentsWho may be found liable for injuries and damages caused by defective products? Is it possible for respondents to limit or exclude their liability?
The entire chain of distribution can be found liable in a product liability case. The law permits a plaintiff to sue anyone in this chain of distribution, and the various defendants can sort out liability among themselves. In practice, the manufacturer and the distributor are the most obvious defendants. Defendants can limit liability contractually and also by showing that someone further down the distribution chain altered the product. Additionally, the law is evolving in some states to hold e-commerce sellers and marketplaces liable for defective products sold by third parties on their websites.
CausationWhat is the standard by which causation between defect and injury or damages must be established? Who bears the burden and may it be shifted to the opposing party?
Typically, the plaintiff bears the burden of showing by a preponderance of the evidence that the product caused its damage. In certain circumstances, the burden can shift to the defendant, especially if there are multiple defendants and the plaintiff cannot determine which plaintiff caused the injury (eg, the market share theory).
When assessing whether causation has occurred, the plaintiff typically must show that the product was the ‘but for’ cause of its injury, or in other contexts, that it was a ‘substantial factor’ in causing the injury. Both standards require the plaintiff to demonstrate a nexus between the product and the alleged harm, though the ‘substantial factor’ test requires a less direct nexus.
Post-sale dutiesWhat post-sale duties may be imposed on potentially responsible parties and how might liability be imposed upon their breach?
Generally, manufacturers do not have a legal duty to recall products, though manufacturers often engage in a ‘voluntary’ recall to avoid liability arising from harm caused by the known unsafe attribute of the product. Where products are strictly regulated and are in violation of mandatory standards (eg, limits for lead in children's products), manufacturers do have a legal duty to recall products, which will be overseen by the CPSC. Additionally, while most recalls are voluntarily undertaken by manufacturers, the FDA, CPSC and National Highway Traffic Safety Administration all provide guidance on recall procedures and require manufacturers to submit reports to them if a firm learns of a product defect or safety concern. Regardless of whether the product is recalled, the manufacturer retains the duty to warn consumers of product safety issues arising from reasonably foreseeable uses of the product, even if the safety issue is discovered after the product has entered the stream of commerce.
