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Product Liability Law

“The U.S. tort system creates an enclave of idiotic whimsy in the heart of the most open society in the world”.

The above statement by Sebastian Mallaby, taken from a recent article in the San Jose Mercury News, shows one side of the tort reform argument. As today’s economy becomes more global, and technology and scientific advancement create intensified competition in the marketplace, the issues of product liability and tort reform become more important.

This paper is intended to outline some of the major product liability issues affecting the marketplace today. To achieve that goal, we will first outline a definition of product liability, and then briefly outline two landmark product liability cases, Borel v. Fibreboard and Hymowitz v. Eli Lilly. After the case summaries, we will touch on the debate over tort reform measures to limit the liability manufacturers face when bringing products to the marketplace. We will conclude by outlining our recommendations for managers of manufacturing companies to help them avoid suits brought on regarding product liability.

Defining Product Liability

Product Liability refers to the liability incurred by manufacturers, distributors and sellers of products when product defects cause injury or property damage to consumers, users, or bystanders whether through negligence (breach of the duty of care) or strict liability (no fault), and breach of warranty (promise that something sold is as factually stated or legally implied by the seller). Negligence and strict liability types of product liability authorize actions under tort law while breach of warranty relief is pursued under contract law.

Product liability exists by reason of the buyer-seller relationship and asserts that manufacturers and sellers of products have a higher responsibility by operation of law to ensure their products will not harm others, if used as intended. Through statutory and common law, the courts protect society's interest in the personal physical safety of the people, authorizing product liability suits against manufacturers and sellers.

While most tort actions involving product liability assert both negligence and strict liability, it is important to recognize the difference between the two. Negligence occurs when a manufacturer fails to exercise due care through all stages of manufacturing a product, resulting in a defect. It is often difficult for plaintiffs to prove a violation of due care because the plaintiff is in a poor position related to discovery of the manufacturer’s processes. Under the doctrine of strict liability, a manufacturer may be held liable for the results of their actions regardless of their intentions and whether or not they exercised due care.

Types of defects addressed in product liability under the tort system include design defects, manufacturing defects, and failure to warn. Design defects include any design flaw that makes a product unsafe when used by the consumer for the intended purpose, manufacturing defects occur when a product becomes unsafe due to variation from its design, and failure to warn exists when a product does not warn about non-apparent risks and foreseeable misuses.

Case Study #1: Borel v. Fibreboard – Failure to Warn

Clarence Borel worked as an insulation installer from 1936 to 1969. During Clarence’s 33 years in the industry, most major brands of insulation contained asbestos, and Clarence had worked with them all. It was a day-to-day occurrence for Clarence to come into contact with asbestos dust to such an extent that by the end of the day he was covered from head to toe by the powder.