Here's another guest post, this time by Vani Singhal and Jason McVicker of McAfee Taft. It's about tort reform, Sooner style. As always, our guest correspondents get all the credit (or blame, as the case may be).
Oklahoma has enacted a new law relating to evidence in product liability cases. It is effective on November 1, 2014 (for new cases, its application to existing cases will probably be litigated). The short version is as follows:
In a formulation/labeling/design case, if a manufacturer or seller can prove compliance with federal safety standards, it triggers a rebuttable presumption the manufacturer or seller is not liable for injury arising out of the formulation/labeling/design. The presumption can be rebutted only if the plaintiff demonstrates the federal regulations were inadequate or the manufacturer withheld or misrepresented facts relevant to the federal determination.
Alternatively, if a manufacturer or seller can prove “by a preponderance of the evidence” that the product was subject to premarket licensing or approval by the federal government, that it complied with the licensing or approval process, and that it was licensed or approved, it triggers a rebuttable presumption that the manufacturer or seller is not liable for any injury to a claimant arising out of the formulation/labeling/design. The presumption can be rebutted only if the plaintiff demonstrates the standards were inadequate or that the manufacturer withheld or misrepresented facts relevant to the process if causally related to the plaintiff’s injuries.
The law does not apply to manufacturing flaws or defects, notwithstanding compliance with quality control or manufacturing practices mandated by the federal government. It also does not apply to any product that becomes the subject of a recall, or a product that is withdrawn from the market pursuant to a federal order or an agreement with a federal agency.
Sellers of a product (as opposed to manufacturers) cannot be sued unless:
- they exercised substantial control over some part of the design, testing, manufacture, packaging, or labeling in a way that caused the plaintiff harm;
- The seller altered or modified the product in a way that caused the plaintiff harm;
- In certain cases involving express warranties from the seller;
- The manufacturer cannot be identified;
- The manufacturer cannot be served in Oklahoma;
- Or the Court determines that the claimant could not enforce a judgment against the manufacturer.
Additionally, if a seller is sued in a product liability action, discovery shall be initially limited to determining if any of the above exceptions applies. Under Oklahoma law, the definition of “seller” in products liability cases is somewhat ambiguous. The legislature did not define the term here, so there will likely be litigation over which middlemen are “sellers” capable of invoking the new statute.
The legislature also specified that a product seller, other than a manufacturer, may be sued in negligence if it sold the product, did not exercise reasonable care in assembling, inspecting, maintaining, or passing on warnings related to the product, and such failure caused plaintiff’s harm. This apparently restates a truism, as this was already actionable.
This statute was modeled after Texas law, but it has some unique features (and problems). Courts will inevitably have to grapple with certain ambiguities, like burden of proof, which are addressed inconsistently throughout the statute. Nevertheless, it’s clear that the Oklahoma legislature is serious about limiting product liability suits. Oklahoma is open for business.