PRODUCT LIABILITY IN THE U.S.

A GUIDE FOR MANUFACTURERS AND SELLERS OF FOREIGN PRODUCTS

I. GENERAL OVERVIEW OF U.S. PRODUCT LIABILITY.

A. General Principles of U.S. Liability Law.
B. Recent Developments and Cases in U.S. Product Liability Law.

II. JURISDICTION.

A. Personal Jurisdiction -- General Principles.
B. Recent Developments.

III. WARNINGS AND INSTRUCTIONS.

A. General Objectives.
B. Case Illustration.
C. Warnings and Instructions for Foreign Products.

IV. DISCOVERY IN PRODUCT LIABILITY CASES.

A. Inspection of Product.
B. Depositions and Interrogatories.
C. Testing of Product.
D. Product Technical Information.

V. EXPERTS.

A. Experts in Pre-Litigation Design and Warning Phase.
B. Litigation Experts.

VI. RECENT PRODUCT LIABILITY LEGISLATION AND TORT REFORM.

 

I. GENERAL OVERVIEW OF U.S. PRODUCT LIABILITY.
"Product Liability" generally refers to the liability of a manufacturer and others in the supply chain for alleged defects in a product which has allegedly caused injury to an user of the product. In the U.S. , all parties in the "chain of supply" can be held responsible for any defect in the product. Most products liability cases allege that a product is defective in one of three ways:

(1) A product can be defective due to a manufacturing defect;

(2) A product can be defective because of a design defect; and/or

(3) A product can be defective because of a manufacturer's failure to provide adequate warnings concerning the properties of its product.

In the U.S. , the party bringing or commencing a lawsuit is referred to as the "Plaintiff". Any party against whom the lawsuit is commenced is, naturally, referred to as the "Defendant".
In addition to the negligence theories of negligent design, manufacture and failure to warn, most products liability actions in the U.S. will be accompanied by two additional theories of liability:

(1) Liability predicated on breach of warranties; and

(2) Liability predicated upon strict liability.

Each of these will be discussed separately.
1. Liability Predicated on Breach of Warranty.
A person who has sustained personal injury or property damage as a result of the use of a product may, in a proper case, maintain an action to recover damages against the seller or manufacturer of that product on the ground of breach of express or implied warranty. The term "warranty" has been defined in various ways by different courts. In general, an allegation of breach of warranty is essentially a claim that there has been a breach of a covenant between the seller and buyer of a product for a certain specified purpose or for a certain specified reason. A warranty is said to be a representation of a fact that induces a contract. A warranty has also been considered an agreement to be responsible for all damages that arise from the falsity of a statement or assurance of a fact, in other words a promise of indemnity against harm from defects in an article sold.¹ A warranty express or implied is contractual in nature. Whether considered part of the contract itself or a collateral promise, a warranty is an element of a contract of sale. A breach of warranty action in a products liability case is therefore independent of principles of negligence and is mainly used by Plaintiffs in products liability actions as an additional claim to their negligence claims. It secures the Plaintiff from the often difficult problems of proof which arise in negligence cases. Accordingly, it has often been a preferred position as a basis for establishing liability in products liability cases. Id.
The key disadvantage to establishing a products liability case on the basis of warranty is that the warranty approach may be available only to those who are in "privity of contract" with the Defendant. Thus, for example, an individual injured by a product may be in "privity of contract" with the retailer of that product from whom he purchased it, but may not be in privity of contract with the manufacturer who made the product and sold it through various wholesalers.
It is important to note that even if a Plaintiff chooses the breach of warranty theory, that Plaintiff must still prove that the product was defective and that the defect was the proximate cause of the injury to the Plaintiff. Essentially in the case of a breach of an express warranty, the Plaintiff would be required to prove that the product failed to live up to the representations made by its manufacturer and/or seller.
2. Strict Liability.
The concept of strict liability in the products liability arena essentially holds that a manufacturer is strictly liable in tort when an article that manufacturer has placed on the market knowing that it is to be used without inspection for defect, proves to have a defect that causes injury to the user of the product.
Under the doctrine of strict liability in tort, the liability is "strict" in the sense that it is unnecessary to prove the Defendant's negligence. Liability under the doctrine may arise by virtue of a defect in the manufacture of the product, a defect in the design of the product, or a failure to adequately warn with respect to danger in the use of the product.
Surprisingly, a number of jurisdictions in the U.S. have adopted some form of strict tort liability in their own respective jurisdictions. The doctrine of strict liability in product liability cases has been recognized in some form or another in the following jurisdictions: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, the District of Columbia, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Minnesota, Mississippi, Missouri, Montana, Nebraska Nevada, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota Tennessee, Texas, Utah, Vermont, Washington, West Virginia, and Wisconsin.
The rule of strict liability in tort cases has generally been found to be inapplicable in Delaware, Massachusetts, Michigan and North Carolina. In addition, two jurisdictions Virginia and Wyoming, have yet reported no decisions on strict liability.² Regardless, it should be emphasized that whether the theory alleged against a product manufacturer/seller is one of negligence, breach of warranty, and/or strict liability, a defect in the product must be proven and it must be shown that the defect is the proximate cause of the Plaintiffs injury.
In order for a foreign manufacturer to have a good understanding of U.S. products liability, it is necessary to gain some knowledge of general legal principles applicable to all civil cases, including products liability cases. This paper will attempt to provide the reader with some general principles of U.S. liability law.
A. GENERAL PRINCIPLES OF U.S. LIABILITY LAW.
A U.S. Plaintiff injured by a foreign product will generally commence suit against the foreign product manufacturer or seller in a manner which is most beneficial and efficient for that Plaintiff. Initially, the Plaintiff must decide whether to commence suit in state or federal court. Whether state or federal court is chosen will depend on the circumstances of each case. Because a foreign manufacturer/seller is involved, diversity jurisdiction will generally allow the Plaintiff to choose a federal forum, if the damages involved exceed $50,000.00. This is generally referred to as "diversity jurisdiction".
However, a Plaintiff may instead choose to pursue their cause of action in state court if that forum is more likely to benefit Plaintiffs case. As a general proposition, a federal forum is more favorable to the Defendant in a U.S. Products liability case. Although this is not always true, generally the federal courts will apply stricter standards and scrutiny to a claim of products liability. For instance, stricter requirements will apply to experts and other technical people participating in the trial to assure that proven scientific methods are being applied in evaluating and scrutinizing a product in federal court.
Whether suit is brought in federal or state court may at first glance seem relatively insignificant to the foreign manufacturer. However, it can truly mean the difference between winning and losing a case. Further, by recognizing some very basic principles about the commencement of a U.S. suit, a foreign manufacturer can actually arrange and plan for its marketing and distribution operations to avoid making direct contact with certain U.S. jurisdictions which are known to be more favorable to the Plaintiff's case.
1. State Courts.
In general, state courts in the U.S. are divided by political subdivisions known as "counties". Each county is assigned a circuit court seat in a designated municipality where the state court with jurisdictional authority to hear products liability cases resides. In order for a U.S. Plaintiff to begin suit in a particular county, venue laws generally require that the Defendant manufacturer or seller have some contact or connection to that particular county. Most states usually require that the Defendant:

(1) Have a place of business in the county or reside in the county;
(2) Engage in business in the county.

If neither requirement is met, a manufacturer or seller of a product can generally not be sued in that county, even if the cause of action arose in that county, i.e. injury to the user of the product.
There is one important exception to this general rule. If a U.S. Plaintiff commences a lawsuit against more than one Defendant in the same case and any one of these Defendants has either a place of business in that county or does business in that county, then the U.S. Plaintiff would be allowed to commence the entire case against all Defendants in the county in which the cause of action arose, even though the remaining Defendants have no place of business in the county and do no business in that particular county. Personal Jurisdiction would still have to be established as to each Defendant.
2. Federal Courts.
A Plaintiff may also commence a lawsuit against a foreign manufacturer in federal court on the basis of federal statutory law. 28 U.S. Code 5. 1332, allows a Plaintiff to commence an action in Federal District Court against citizens or subjects of a foreign state where the matter in controversy exceeds the sum or value of $50,000.00. This statutory doctrine is referred to as "Diversity Jurisdiction". From a practical point of view, a Plaintiff is only required to allege that the value of Plaintiffs case exceeds $50,000.00 in order to commence the lawsuit in federal court. Sometimes, if a true issue exists as to the value of the case, the Plaintiff may be required to offer proofs that the value of Plaintiffs case exceeds $50,000.00, in order to maintain the suit in Federal Court.
Additionally, it is significant for a foreign manufacturer/seller to be aware that federal law provides for a right of removal of a case from state court to federal court so long as there exists a basis for federal jurisdiction, i.e. diversity or cause of action arising under federal law. Under federal statute, 28 U.S. Code 5. 1441, a Defendant from a foreign state sued in state court may remove the case to federal court. Any such action shall be removed only if none of the parties in interest which are properly joined and served as Defendants are citizens of the state in which such action is brought. In order to remove, it is still necessary for the damages sought by Plaintiff to exceed $50,000.00, unless the cause of action alleged is controlled by federal law.
It is crucial for the foreign manufacturer wishing to remove to federal court to understand that federal statutes provide only a 30-day window to remove a case from state court to federal court. The 30-day period begins to run on the date of service of process, i.e. the date on which the lawsuit is served on the Defendant. Therefore, it is of utmost importance that the Defendant act quickly when served to contact counsel to effectuate the removal, or at least to evaluate the situation.
Accordingly, it is important for the foreign manufacturer to understand that U.S. federal law may provide for removal of an action from state court -- which will generally be more favorable to Plaintiff -- to federal court -- where, generally, a foreign Defendant is more likely to obtain a favorable resolution of a products liability action.
B. RECENT DEVELOPMENTS AND CASES IN U.S. PRODUCT LIABILITY LAW.
This section is admittedly designed to "shock" the foreign product manufacturer and/or seller about the real exposures in the U.S. market. In reviewing these cases, it bears mentioning that each state currently has its own approach and laws applicable to product liability. While one state may be extremely liberal in its application of common law principles to the product liability area, other states may significantly restrict such actions. This by no means is intended to represent an overview or summary of each and every state's approach, but simply as a sampling of cases which might be most significant and/or applicable to foreign manufacturers.
1. Admissibility of Scientific Evidence.
Daubert v Merrell Dow Pharmaceuticals, Inc., 113 S.Ct. 2786 (1993).
The Daubert opinion from the U.S. Supreme Court is one of the most significant recent decisions of the Supreme Court touching upon the issue of products liability. Although the opinion is not just limited to scientific evidence in product liability cases, because experts are so widely used in this area, Daubert will have significant impact in both the prosecution and defense of products liability cases in the U.S. .
In Daubert, the United States Supreme Court clarified the standards for the admission of expert scientific testimony. Under Daubert, a trial judge must determine if the proposed expert will testify (1) regarding scientific knowledge and (2) whether the testimony will aid the trier of fact to understand or determine an issue of fact. Previously, some Courts making this preliminary determination required that the proposed scientific testimony present or be based upon "generally accepted" scientific theories or techniques. The Supreme Court rejected this as a prerequisite to the admission of expert scientific testimony and instead stated that whether a particular theory or technique has been "generally accepted" will only have some bearing on the admissibility of expert testimony.
However, the Supreme Court also noted that the preliminary determination by the trial judge as to expert testimony requires an assessment of whether the theories and techniques underlying the experts' opinions are "scientifically valid" and whether those theories and techniques can be appropriately applied to the facts in issue. Factors bearing on this preliminary inquiry include but are not limited to:

(1) whether the theory/technique has been tested;
(2) whether the theory/technique has been subjected to peer review and publication;
(3) the known or potential rate of error of a technique; and
(4) acceptance of the theory/technique within the relevant scientific community.

The above inquiry is intended to be flexible with the focus on the scientific principles and methodologies and not on the conclusions/opinions generated by experts.³
The Daubert opinion has triggered diverse opinions among both the courts as well as legal commentators. Some believe that the decision reflects a liberalization of the standards of admissibility of scientific evidence and, therefore, view it as an opinion favorable to Plaintiffs in products liability cases. Others, however, view it as an expansion of the trial court's role in assuring the reliability of the scientific principles underlying experts' opinions in product liability cases. Regardless, without a doubt Daubert will have an impact on the admissibility of expert testimony in product liability cases. This has already been manifested in the opinions decided since Daubert was announced in 1993.
For example, following the decision of the U.S. Supreme Court in Daubert, the matter was remanded to the lower courts and the Ninth Circuit eventually affirmed an order granting summary disposition, dismissing the Plaintiffs product liability case against the Defendant, Merrell Dow Pharmaceuticals, the manufacturer of a pharmaceutical known as Bendectin. Applying the two-prong test set forth by the Supreme Court in Daubert, the Ninth Circuit determined that the Plaintiffs expert scientific testimony was not admissible to prove that Bendectin caused the minor's defects. After analyzing the factors involved by applying the Daubert standard, the Ninth Circuit noted that the application of Daubert, along with the Federal Rules of Evidence, work in tandem to insure that "junk science" is kept out of the federal courtroom.
On the other hand, the Second Circuit Court of Appeals held that the traditional standards for assessing the sufficiency of scientific evidence, as opposed to its admissibility, were not altered by the Supreme Court's opinion in Daubert. Accordingly, the Second Circuit Court of Appeals reversed a trial court's setting aside of a jury verdict, stating that the Daubert opinion was primarily about "admissibility", but it did not alter the standards for judgment as a matter of law in scientific cases. Thus, the Court concluded that the trial court had erred in ruling that the Plaintiff had failed to present sufficient scientific evidence to support the jury verdict.
2. Other Miscellaneous Pertinent Cases.
There are other miscellaneous recent decisions which bear highlighting for the foreign product manufacturer/seller.
In Gordner v Dynetics Corn., 1994 U.S. Dist. Lexis 14066 (Sept. 20, 1994 MD. PA.), a U.S. District Court applying Pennsylvania law held that a Plaintiff in a product liability action can rely on the malfunctioning theory for recovery where, through no fault of his own, the Plaintiff cannot produce the product in question for examination. The court noted that although under both Pennsylvania and Federal law, a Plaintiff who destroys evidence of the allegedly defective product in a product liability action will be subject to dismissal of the action, such sanction is not available, where there is no basis for concluding that any conduct on the part of the Plaintiff was the cause of the destruction of the allegedly defective product.
In Proctor v Davis, 1994 III. App. Lexis 995 (1994) (III. App. 1st Dist.), an Illinois Appeals Court found sufficient evidence to support punitive damages against a large pharmaceutical manufacturer, where the jury had awarded $124 Million, the largest award in Illinois history, in punitive damages. Although the punitive damages was eventually reduced to $3 Million, the Court of Appeals found that there was sufficient evidence to find that the award of punitive damages was appropriate. In order to justify punishing the manufacturer with extra compensatory damages, the cases strongly suggest two preconditions:

(1) that the manufacturer must be actually or constructively aware of a significant risk of injury, typically demonstrated by prior incidents with a product and complaints filed with the governments or prior litigation; and
(2) that a manufacturer, possessed with such knowledge, steadfastly refused to take clearly feasible remedial action that would have eliminated that substantial risk of injury.

In the Davis Pharmaceutical case, there was evidence presented that indicated that the large pharmaceutical company was aware of instances of blinding and other harm resulting from one of its pharmaceutical products long before the pharmaceutical concern chose to bring the matter to the attention of the government. Further, there was evidence presented that the pharmaceutical company actively promoted, encouraged and assisted physicians in conducting human subject studies and then disseminated the result of those studies widely.
The Tenth Circuit in the case of Richter v Limax International, Inc., 1995 U.S. App. Lexis 1571 (January 25, 1995, C.A. 10 Kan.) applying Kansas law, held that a mini trampoline manufacturer had a duty to warn buyers of reasonably foreseeable defects even if such defects were not known in the "state of the art" at the time that the product was manufactured.
The California Supreme Court held in Ramirez v Plough, Inc., 6 Cal 4th 539 (1993) that the regulatory/legislative standard of care imposes on manufacturers of nonprescription drug no legal duty within tort law to include foreign language warnings in packaging material. Thus, a product manufacturer in the U.S. , to this day, has not been required as a matter of law to warn users of the product other than in the English language for any product intended in the U.S.
II. JURISDICTION.
A. PERSONAL JURISDICTION -- GENERAL PRINCIPLES.
The legal concept of "jurisdiction" as it applies to foreign product manufacturers is crucial to any discussion of international product liability. It is significant to define the legal concept of "personal jurisdiction" as it applies here. Jurisdiction in this respect refers to the Defendant's connections or contacts with a particular forum. Simply, under U.S. law, a foreign manufacturer cannot be sued in a location where it has no connection or contacts.
Jurisdiction in the foreign product liability case depends on subject matter and personal jurisdiction, or territorial jurisdiction, and is exercised traditionally when the potential Defendant comes within the power of the jurisdiction of the forum state, so that legal process can be served upon or commenced against it. Under U.S. Law, a Defendant must have some "contact" with a particular state in order for a Plaintiff to be able to commence an action against the Defendant in that state. The crucial question for a Spanish product manufacturer is: how much of a "contact" with a state is necessary for a manufacturer to be sued in a particular jurisdiction?
Under U.S. Law, that question is answered on a case-by-case basis, but it is important for manufacturers to understand that the evolution of U.S. Law regarding personal Jurisdiction has resulted in the expansion of jurisdictional reach to include any Defendant with even "minimum" contacts to a particular state.
Under the traditional rule for assumption of "in personam" jurisdiction, the U.S. Supreme Court in 1877 held in the case of Pennover v Neff, 95 U.S. 714 (1877), that physical presence within the state of voluntary submission to the jurisdiction was required to establish jurisdiction over a Defendant. However, physical presence is no longer required under U.S. Law
Since the Supreme Court's decision in the Pennover case, numerous cased decided by the U.S. Supreme Court have expanded the concept of jurisdiction to reach any Defendant with just "minimum contacts" to the forum. Physical presence is not required. This legal principle was enunciated by the U.S. Supreme Court in the renowned case of International Shoe Corp v Washington, 326 U.S. 310 (1945). In that case, the court cited that jurisdiction may be asserted over a corporation that has no residence in the state when the corporation engages in activities that result in benefits and/or protections to the company under the laws of that state. Under this principle, a foreign manufacturer which has no presence in a particular state may still be sued in that state if it is found to have been conducting business in that particular state.
The concept of "conducting business" varies from case to case and from state to state. For example, in one case the court held that a German firearm manufacturer could be sued in the State of Kentucky after its defective pistol caused injuries to a resident of that state. The court in that case decided that the German company had sufficient "minimum contacts" with the State of Kentucky because the company had used a local distribution system in Kentucky to sell its products. (Poyner v Erma Werke Gmbh, 618 F.2d 1186 (6th Cir. 1980).
However, in another case, a New York court decided that a French insurance company did not have sufficient "minimum contacts" to classify as "doing business" in New York, where the French company had only reinsured the risks of American companies in New York. (Birmingham Fire Ins. Co. v KOA Fire & Marine Ins. Co., 572 F.Supp. 962 (S.D. NY 1983).
Where an injury has occurred to a resident of a particular state by a foreign product, the injured person and his attorney, will generally find it substantially advantageous to sue in the courts of the state of the injured person's residence. This will be usually advantageous for obvious reasons, i.e. the Plaintiffs witnesses, medical doctors, etc. will reside in the state in which he was injured. Thus, it is important for the foreign manufacturer to attempt to neutralize that advantage to the extent possible, where no direct contacts between the manufacturer and the jurisdiction have been established.
B. RECENT DEVELOPMENTS.
Again, some recent cases help to illustrate the development of personal jurisdiction specifically within the products liability area. In the case of Hall v Zambelli, 669 F.Supp. 753 (SD W.Va. 1987), the Court held that a Japanese manufacturer of fireworks had sufficient minimum contacts with the forum state where the injury occurred so as to be subject to personal jurisdiction. In that case, the Japanese manufacturer had sold the product to a customer in another state in the U.S. , but it knew that the American purchaser of its product used the product throughout the United States.

Conversely, in the case of Singletary v B.R.X. Inc., 828 F.2d 1135 (CA 5, La., 1987), reh. den., en banc 834 F.2d 1025 (CA 5 La.), the court held that a nonresident seller was not subject to personal jurisdiction in a state in which an injury from a product occurred where the Defendant's only contacts with the forum state were a transaction which was unrelated to Plaintiffs claim. In that case the court found no personal jurisdiction even where the Defendant's advertising had occurred in the national publication, because there was no evidence as to how widely and frequently these publications were circulated or the amount of business which the Defendant gained from the advertisement and, thus, no sufficient evidence to show that the Defendant's action rose to the level of purposefully availing itself of the laws of that forum state.

In the case of Halderman v Sanderson Forklifts Co., 818 SW2d 270 (1991, Ky. App.), the court discussed what appears to be a good guide as a general test of personal jurisdiction. There, the court noted that a Defendant must avail itself to the privileges and protection of the laws of a particular state and reasonably anticipate being brought into court there before personal jurisdiction can be exercised.

Lastly, in the matter of Parry v Ernst Home Center Corp., 779 P2d 659 (Utah, 1989), the court rejected establishing personal jurisdiction against a Japanese corporation that had manufactured a tree-splitting maul to be marketed in the western United States. The court held that there was not enough sufficient minimum contacts because the Defendant had no knowledge or intent to specifically sell the product in Utah; had never advertised in or sent marketing representatives to the state of Utah; did not design the product for the Utah market; established no channels for sales or service advice to Utah customers; and maintained its principal place of business in Japan, without any place of business, without a bank account, or property in the state of Utah.
In summary, a foreign product manufacturer will be subject to personal jurisdiction in a particular state if it is apparent that the foreign manufacturer has either purposefully availed itself of the benefit of doing business in that particular state; is aware and/or intends for the product to reach a particular forum; and/or has other sufficient minimum contacts with the state, i.e. maintaining an office, agents, representatives, bank accounts advertising or distribution channels in a particular state.
III. WARNINGS AND INSTRUCTIONS.
U.S. product liability law imposes a duty on a manufacturer and seller of a product to properly and adequately inform consumers about the potential hazards associated with the use of the product, so that appropriate measures can be taken to avoid hazards and reduce the risk of injury. The area of warnings and instructions is particularly significant to the foreign manufacturer who is often shipping a product from a foreign jurisdiction where no duty to warn or instruct may exist for litigation purposes. Therefore, this section will attempt to provide the foreign manufacturer with a general overview of the area of warnings and instructions as it relates to product liability in the U.S.
A. GENERAL OBJECTIVES.
Product warnings and instructions must accomplish generally the following objectives:

1. Call attention to the warning;
2. Adequately identify all potential hazards associated with product use;
3. Adequately describe the consequences stemming from each hazard;4. Provide detailed and specific steps that the user can employ to avoid each hazard.

Unlike negligent design theories, failure to warn and instruct theories are generally simpler theories for Plaintiffs to establish factually. Practically any warning or instruction can be the subject of attack when the attacker has the benefit of looking into the past with what always turns out to be "20/20 vision". For this reason alone, it is important that the product warning and/or instruction be designed and written with great care to maximize the product user's information and minimize the risk of using the product without taking away from the integrity and aesthetic qualities of the product.
It should be understood that under U.S. Product liability law, the courts of many jurisdictions have held that a Plaintiff may recover damages for failure to warn even where the Plaintiff has never read the warning on the product!⁴ Therefore, it is absolutely imperative that any product which may present a risk with either use or misuse, incorporate warnings and instructions which are both conspicuous and efficient in informing the user.
B. CASE ILLUSTRATION.
Product Pressure Cooker
Manufacturer: South American Division of large International conglomerate.
Potential Risk/Hazard: Explosion of Pressure Cooker resulting in scalding of user.
Facts of Case: Woman using pressure cooker as a cooking pot without the cover. Cooked the contents of the pot for approximately four hours. After the food was cooked, she placed the cover on the pot to keep the food warm but did not lock the cover in place. Cover handles rotated enough to allow the cover to seal by itself and pressure to build up inside. When she lifted or forced the cover off the pot, the contents exploded, causing significant burns to Plaintiff's chest and neck area.
The manufacturer in this case incorporated three different types of warnings:

(1) a label on each of the two handles on the pressure cooker cover;
(2) warning on the pressure cooker itself;
(3) warning incorporated in the product manual.

All three of the warnings failed to adequately achieve the four objectives outlined above for several reasons.
ANALYSIS OF WARNINGS.

Label Warnings on Cover Handles.
"DON'T FORCE TO OPEN.
DON'T OPEN WHILE PRESSURIZED;
CHECK BY DISLODGING TOP VALVE.
WHILE CLOSED HANDLES MUST BE SUPERPOSED.
IMPROPER USE MAY RESULT IN SCALDING.
NO FUERCE PARA ABRIR.
NO ABRA MIENTRAS TENGA PRESION;
COMPRUEBELO MOVIENDO LA VALVULA.
MIENTRAS ESTE CERRADA.
LOS ASIDEROS DEBEN ESTAR SUPERPUESTOS.
EL USO INCORRECTO PUEDE OCASIONAR QUEMADURAS."

The above warning arguably fails to achieve the previously outlined objectives in several respects. First, there is nothing calling attention to this warning. This particular warning was actually magnified for purposes of this text. The warning was actually much smaller. It should have been designed to literally jolt the attention of any user of this product. The word "warning" or "danger" should have been included in the label.
Second, the above warning fails to adequately identify all potential hazards associated with the use of the product. Specifically, in this example the warning does not warn potential users that the pressure cooker cover can seal by itself, causing pressure to build up even though the user had not herself locked the cover in place.
Third, as to the potential consequences stemming from each hazard, this warning is poorly written and not sufficiently descriptive. While the label does indicate that: "improper use may result in scalding" it is not clear what the warning means by "improper use". For example, the user of the pressure cooker in this case, did not consider herself to be using the product "improperly", simply because she was not using the product as a pressure cooker, but instead as a cooking pot. A warning should warn not only of hazards associated with the use of a product, but also misuses of that product.
Lastly, the last factor in this analysis suggests that detailed and specific steps should be listed on the product to avoid the hazard associated with the use of this product. Although this would generally be impractical to accomplish on a warning label, it is certainly something that could and should be clearly set forth in the product manual.
C. WARNINGS AND INSTRUCTIONS FOR FOREIGN PRODUCTS.
Foreign products in particular will be subject to great scrutiny with respect to the following:

1. The nature of the warning, i.e. product labeling vs. instruction manual; size of the warning; color of the warning, etc.
2. The content of the warning, i.e. is the warning sufficient and all inclusive.
3. The language used in the warning or instruction, i.e. do not attempt to translate a warning from one language to another.

It is absolutely crucial that the foreign manufacturer not simply incorporate or transfer its domestic product warning for use in the U.S. Market Such an approach may save time and money in the short run, but is likely to result in a great deal of expense of both time and money as well as energy defending U.S. Product liability cases in the U.S. in the long run.
Instead, all warnings and instructions should preferably be designed and written originally in English by those with a good understanding of warning and instruction standards as well as U.S. Product liability concepts.
The illustration case adopted above is an excellent example of this approach. It is clear to anyone with the ability to read both English and Spanish that the English version of this warning is in effect a poor translation from the Spanish version. The language on the label employed on the cover handles indicates:
"While closed handles must be superposed".
First, this language fails to adequately communicate its intended message, namely, that the pressure cooker should be sealed properly with the cover before use.
Additionally, the choice of language employed to communicate this warning is ambiguous at best and confusing at worst. The word "superposed" is not only curious in this context, but it is also not likely to convey the intended message that the pressure cooker must be properly sealed prior to use.
In summary, the subject of warning and instructions are crucially important to any product manufacturer in the U.S. Warnings and instructions become particularly significant to the foreign manufacturer looking to export to the U.S. Market It is unlikely that any foreign exporter will face similar scrutiny and analysis of warnings and instructions in their own country. Therefore, it is important that the foreign manufacturer not simply rely upon a translation of its own labeling, but, instead, employ an individual or firm who can prepare the original version of the warning in English, incorporating all standards and guidelines for product warning in the U.S.
IV. DISCOVERY IN PRODUCT LIABILITY CASES.
The concept of "discovery" in civil cases is new to most foreign product manufacturers and sellers. Few countries, even taking other common law countries into consideration, provide for the type of liberal discovery allowed for by both federal and state law in the U.S. .

It is crucial for the foreign manufacturer and seller to become familiar with the discovery process in the U.S. because it is often the discovery process which makes the difference between winning and losing a case.

A. INSPECTION OF PRODUCT
Each party to civil litigation involving a product will be entitled to reasonable inspection of that product so long as destruction or harm to the product does not result. Since the injured Plaintiff will usually have control of the product, that party will have a marked advantage in determining and controlling the inspection of the product allegedly causing injury. In fact, upon retention of the services of an attorney, the first act on the attorney's part is often taking possession of the subject product. Indeed, it is not uncommon in cases in which the injured party does not have possession or control of the product for Plaintiff's attorney to purchase the product in order to control it during the litigation. However, simply because the Plaintiff or his attorney controls the product does not mean that the manufacturer or seller defending a product liability action will not be entitled to inspect it. To the contrary, the rules of discovery in every state generally follow in one form or another the Federal Rules of Civil Procedure which provide specifically for such inspection.
Pursuant to the provisions of Federal Rules of Civil Procedure 26 and 34, a party to a civil action may serve on any other party a Request to Produce and permit the party making the request to inspect, test or sample any tangible things which constitute or contain matters within the scope of discovery which are in the possession or control of the party upon whom the request is serve. The responding party must produce the item for inspection within (thirty) 30 days of the request.
The inspection of the product in question often presents a practical problem for the foreign manufacturer and seller. Unless the foreign manufacturer or seller has the appropriate agent or representative to inspect the product in the U.S. , inspection will usually require shipping of the product overseas for inspection. In some cases, depending on the product involved, this will be practically impossible.
Nevertheless, if the case warrants it, it is important for the foreign manufacturer and seller to have the appropriate individuals inspect the subject product in any significant product liability action. First, such an inspection will often provide for the best input as to design and manufacturing issues involved in the case. Second, those most familiar with the product as it originated from the manufacturing or first selling point, will often be best equipped to identify and analyze any alterations and/or damage to the product. Lastly, an inspection of the product in its damaged state following an injury will provide information and education to the designer and manufacturer of the product not only for the case at hand, but also for future cases that might arise.
In summary, the foreign manufacturer should take every reasonable step possible to assure that those individuals with the most knowledge about the design and manufacture of the product inspect the product following injury to the Plaintiff. Whenever possible, the foreign manufacturer and/or seller should not exclusively rely upon the attorney and/or technical expert defending the product on behalf of the manufacturer/seller. Instead, those individuals with the most knowledge about the design, testing, manufacturing and assembly of the product should be consulted in connection with the inspection of a product involved in a product liability action.
B. DEPOSITIONS AND INTERROGATORIES.
The use of depositions and interrogatories are equally foreign to most foreign manufacturers and sellers of products. A deposition is a statement taken under oath in the presence of all attorneys representing parties in a product liability action. Generally, the individuals to be deposed in a product liability case include the parties, i.e. Plaintiff and representatives of the Defendant manufacturer or seller, etc.; depositions of all witnesses to the accident; and depositions of expert witnesses.
Pursuant to Federal Rule of Civil Procedure 30, a party may take the testimony of any person, including another party, by deposition upon oral examination without leave of the court. During the deposition the party giving oral testimony will be under oath and will be subject to cross examination by any other counsel present representing interests other than the interests of the attorney for the deponent. A court reporter/stenographer will be present to take down all testimony and questions and a transcript is generally made of the testimony for use in the case.
Interrogatories are written questions from one party to another or to witnesses, which must be answered by the party to whom the interrogatories are directed under oath. The key substantive difference between answering questions upon deposition and Interrogatories is that Interrogatories are generally answered by a party with the assistance of their attorney. During a deposition, the witness cannot be assisted in answering questions by their counsel, but must rely upon their own knowledge and memory to provide answers to all questions.
Pursuant to Federal Rule of Civil Procedure 33, any party may serve upon any other party written Interrogatories not exceeding 25 questions to be answered by the party served or their designated representative. Upon receipt of the Interrogatories, a party shall have thirty (30) days after service of the Interrogatories to provide answers and, if any, objections to the Interrogatories.
It is common for the Interrogatories (written questions) to be combined with requests for production of documents which requires a party to copy and provide the other side with all non-privileged written communications and documentation requested, including, any product information requested. For this reason, it is important that the foreign manufacturer and seller use discretion in the preparation and compilation of documentation relating to the design and manufacture of the product. At the very least, the manufacturer/seller should be aware of the fact that such documentation will be subject to discovery by the attorney representing any party injured by the product in civil litigation. Although information such as trade secrets and formulas can be guarded from disclosure to the public through a 'protective order', it will still be subject to disclosure in most civil cases to the suing party only.
It is also important for the foreign manufacturer/seller to recognize that the federal and state discovery rules are very broad. For instance, the federal discovery rule, which also happens to be the model for most state discovery rules, is Rule 26 of the Federal Rules of Civil Procedure. It provides in pertinent part as follows:

"(b) SCOPE OF DISCOVERY. Unless otherwise limited by order of the court in accordance with these rules, the scope of discovery is as follows:
(1) In General. Parties may obtain discovery regarding any matter not privileged, which is relevant to the subject matter involved in the pending action. It is not ground for objection that the information sought will be inadmissible at trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence."

Although discovery is not unlimited in the U.S. , particularly when the requests are "open ended", the generally liberal discovery rules are particularly advantageous to the Plaintiff who is seeking information about the existence or absence of prior or subsequent complaints involving a Defendant's product. Evidence of prior complaints or incidents involving a Defendant's product is generally discoverable if it is relevant to the issues of existence of a danger or a defect in a product, feasibility of an alternative design, whether the defect was the cause of Plaintiffs injury or whether the Plaintiff had an unusual susceptibility to the product. Essentially, in a product liability action, the existence or absence of prior or subsequent complaints or incidents related to the use of a Defendant's product is generally a proper subject for pretrial discovery. Such information is discoverable regardless of the theory of recovery, as long as it involves the same or a substantially similar product.
Any manufacturer or seller who is asked to provide representatives for depositions should immediately familiarize himself or herself with not only the case at hand, but also with the deposition procedure. Specifically, unless the party proposed for deposition is significantly experienced in giving depositions, he or she should spend as much time as reasonably possible preparing for the deposition. Such preparation should include the review of other testimony previously taken; the review of depositions in general; meeting with the attorney who will be representing the deponent at the deposition well in advance to prepare for both the subject matter as well as the form of the depositions. Often, what is disclosed by oral testimony in a deposition will be decisive in a product liability action. No representative of a manufacturer or seller should provide testimony without full and adequate preparation.
C. TESTING OF PRODUCT.
Evidence of the results of scientific analysis or tests of a product is obviously of great importance in determining its character and whether or not the product is dangerous or defective. In fact, some court have held that the failure of a Plaintiff to introduce evidence of any analysis and testing of the product may be indicative of the absence of a defect in the product. Conversely, evidence offered by the product manufacturer and/or seller that the product was thoroughly tested following its manufacture can be used to show that the product was not defective. If a product is tested by a foreign manufacturer/seller, it is important to note that such tests may be the subject of discovery by another party in a product liability action. Accordingly, any testing which indicates the potential for defects or dangers to the extent documented and/or recorded, will be discoverable by the injured party and their attorney in a product liability suit. The manufacturer and/or seller will not be allowed to hide detrimental and/or bad test results under the cloak of trade secrets or proprietary information. While such defenses may bar the disclosure of the confidential proprietary information to the general public, it will generally not preclude a Plaintiff in a product liability suit to obtain this information. The best the Defendant can hope for in such a situation is for a protective order from the court precluding dissemination to the general public.
The testing which has been addressed so far in this discussion relates to testing of a product occurring in the normal course of the research and development and/or manufacturing process, before a product liability suit. In addition, however, pursuant to Federal Rule of Civil Procedure 34, any party to a product liability case may serve a request upon the other party to perform nondestructive testing or sampling of a product in the possession of the party to who the request is served. As addressed above, since the injured party and/or his attorney will generally have possession and/or control of the subject product, it is often necessary for the Defendant to obtain the product for testing and/or sampling purposes. It is important for the foreign manufacturer/seller to recognize that such testing is allowed and provided for under both federal as well as state procedure in product liability cases and, where appropriate, to perform such post injury testing on the product.
However, if any such post injury testing does occur, it will be necessary to take all reasonable and necessary precautions to assure that the product is in no way altered, changed, affected, or destroyed during the testing process. Otherwise, the tester of the product may be subject to a default judgment or separate cause of action for spoilation, depending on the circumstances involved.
In summary, testing of a product involved in an alleged injury to the user of a product is an important discovery tool which, in conjunction with the inspection of the product, is allowed for under both federal and state law. Where appropriate, such testing should be undertaken by the most appropriate individuals available, including design, research and development and/or manufacturing technical people or an expert hired by the Defendant in the product liability action.
D. PRODUCT TECHNICAL INFORMATION.
There are generally two categories of technical product information which will be most relevant to a product liability case in the U.S. Such reliable technical information will include:

1. Technical literature in the field; and 2. Engineering or technical quality standards.

Technical literature is often a reliable source of information about products because of the generally scrupulous standards of reporting in such publications. This literature will include anything from books, treatises, articles, journals, periodicals, and/or other journals dealing with specific product information.
In addition, technical product information which is specific to the product causing injury will often be relied upon to both prosecute as well as defend a civil liability action alleging product defect. Examples of these include:

(1) Patents and related patent information, i.e. application for patent together with supporting information;
(2) Product drawings and specifications; and
(3) Research and development data.

It is important for the foreign manufacturer/seller to compile and safeguard this data for as long as feasibly possible to secure its availability in the defense of a product action in the U.S. .

However, the foreign manufacturer/seller should be aware that this information, like all of the other information discussed above pertinent to the product, will be discoverable by an opponent in a product Liability action pending in the U.S. .

Engineering and Design Standards

There are two sources of engineering and design standards generally applicable to product liability cases in the U.S. They are: (1) government standards; and (2) industry standards.
Government standards are generally codified in statutes adopted by local state government or the federal government. Often, the government standard will be similar, if not identical, to the industry standard.
An example of such government standard would include the: "Department of Labor General Industry Commission Safety Standards" for mechanical power presses. This standard was adopted by the State of Michigan as a guide to the design and manufacture of mechanical power presses manufactured and/or sold in the State of Michigan.
In addition to government standards, industry standards are prevalent and will be used whenever possible against a foreign product manufacturer and/or seller. Industry standards are usually standards which have either been adopted or drafted by a product industry or independent engineering association.
Some of the more widely referenced industry standards applicable to product liability cases include the following:

1. The American National Standards promulgated by the American National Standards Institute ("ANSI");
2. The National Institute of Standards and Technology;
3. American Council of Independent Laboratories;
4. Underwriters Laboratories Inc.

Lastly, it is important to point out that in addition to design and manufacturing standards, there are comprehensive statutory and common law requirements concerning safety warnings, as well as rules concerning warnings adopted by various state and federal agencies through enabling legislation. Consultation of all of these sources are crucial for the specific purpose of designing and drafting appropriate warnings and instructions relating to product use.
V. EXPERTS.
The use of expert witnesses to address product liability issues is novel to most foreign manufacturers and sellers. While many foreign manufacturers and sellers employ technical support during all phases of product development and manufacture, most of these "experts" are specifically entrusted with technical tasks relating to the design, testing, manufacture, assembly, packaging and marketing of the product. Few foreign manufacturers are familiar with the concept of employing expert technical support in both the pre-litigation as well as litigation phase.
A. EXPERTS IN PRE-LITIGATION DESIGN AND WARNING PHASE.
Most foreign manufacturers/sellers of products are unfamiliar with the use of technical experts in litigation itself. Accordingly, it is not expected that most would be familiar with the use of such technical experts prior to litigation.
However, many product manufacturers and sellers employ such technical experts before bringing a product to the market in the U.S. These technical experts can be relied upon to provide important tasks relative to the safety aspects of a product. Namely, if the appropriate expert is chosen, that individual or firm can provide important assistance with the following tasks:

-- Technical assistance with respect to design of safety features;
-- Technical support with respect to the design and drafting of warnings and labels;
-- Technical support for the preparation of product manuals and instructions;
-- Testing of the product in the market through focus group studies;
-- Review of all applicable government and industry standards to assure compliance;
-- Testing of design and manufacturing features.

The above list includes only some of the tasks which can be performed by the technical expert prior to bringing a foreign product to the marketplace. Admittedly, not every foreign manufacturer will be able to afford the luxury of these technical services simply for the benefit of lawsuit prevention. However, the use of such technical experts and/or product consultants will generally serve the manufacturer and seller in the long run in preventing or decreasing product liability suits. At the very least, it will provide for significant ammunition to defend the product manufacturer/seller should litigation occur anyway.
B. LITIGATION EXPERTS.
The use of experts in product liability cases has become so prevalent an industry of litigation experts has actually been created to specifically service parties and their attorneys in litigation. It is almost certain that regardless of the technical integrity and quality of a product, if it results in a sufficiently serious injury, some expert will offer his or her services for a fee to support an alleged defect in the product.
The proliferation of the use of expert witnesses in product liability litigation has become so prevalent that some have even suggested that courts conduct preliminary screening hearings of expert witnesses offered in product liability cases.⁵
Accordingly, a foreign manufacturer should be well aware of the role of the expert witness in product liability cases. The Federal Rules of Evidence permit a party to offer an "expert" witness to help the trier of fact, i.e. jury, to determine whether a product is defective. Often, the answer to this question will turn on the evaluation and analysis of very technical and sophisticated information. Thus, the theory is that an expert witness can be offered to assist the jury or judge to understand technical and/or scientific information about the product to help them decide whether or not the product worked or failed. Specifically, Federal Rule of Evidence 702 provides in pertinent part as follows:

"If scientific, technical or other specialized knowledge will assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education, may testify thereto in the form of an opinion or otherwise."

The reality about the use of expert witnesses in U.S. litigation is that much too often the expert will step beyond the role of assisting the trier of fact to understand technical and sophisticated information. Unfortunately, much too often, the expert in U.S. civil litigation has become an "advocate" for the party which has retained him.
The foreign product manufacturer should expect that any product liability case in the U.S. Will be accompanied by an "expert" whose sole task will be to attack the design, manufacturing, and/or warning integrity of its product.
Likewise, the foreign manufacturer and/or seller, through their representative, or otherwise, should be prepared to retain the services of the most qualified and knowledgeable expert in the field for purposes of defending the integrity of the product. The most logical expert would be the individual who may have been involved in providing technical pre-litigation support for the product. If no such technical support was provided, the foreign manufacturer should employ the services of an attorney and/or other appropriate consultant to identify and retain an expert who is knowledgeable with the product itself. Much too often, parties in product liability cases employ the use of technical experts who are otherwise extremely qualified but have absolutely no knowledge of the industry or product in question. Such expert, otherwise qualified, is likely to be the subject of significant attack at the time of trial and, may fail to qualify as an expert under the Daubert two-prong test discussed above.
In summary, the use of experts in the pre-litigation as well as post litigation phase is crucial to securing as well as defending the technical integrity of the design and manufacture of a product, as well as the warnings and instructions accompanying the product. It is recommended that the foreign manufacturer employ the services of such a consultant in the U.S. Market both before and subsequent to litigation.
VI. RECENT PRODUCT LIABILITY LEGISLATION AND TORT REFORM.
In some respects, the discussion addressed above will be tempered by the adoption of a comprehensive federal products liability law recently passed by both Houses of Congress in the United States. Although the bill has not yet been signed into law by President Clinton, there is little doubt that it will soon become the law of the land.
Once the U.S. Product liability law is signed into law, it will pre-empt the law of all states, to the extent that the bill addresses issues covered by the bill.
The U.S. House of Representatives and the U.S. Senate propose separate legislative efforts toward long anticipated federal action on tort reform. On March 15, 1995, the Senate introduced the "Product Liability Fairness Act of 1995" (5. 565). The House recently approved the "Common Sense Product Liability and Legal Reform Act of 1995" (HR 956) on March 10th of 1995. After a series of amendments was first adopted and then dropped in order to gain sufficient support, the Senate approved a modified version of S. 565 as a substitute for HR 956 which was passed in the House of Representatives. Although HR 956 has thus now been approved by both Houses of Congress, differences between the Senate and House versions must still be reconciled. Among other differences, the Senate bill would apply only to product liability actions, while many provisions of the House measure would apply more broadly.
The principal new feature of the Legislation passed by the Senate is a softening of the proposed cap on punitive damages. The bill would generally limit punitive damages to the greater of (1) $250,000.00, or (2) two times the sum of economic and noneconomic damages. Awards against individuals with a net worth not over $500,000.00 or against businesses with fewer than 25 employees would be limited to the lesser of those two alternative amounts. However, the bill would permit the court to award a greater sum if the court found doing so to be necessary to punish or deter egregious conduct of the Defendant. A Defendant subject to such an increased award would be entitled to a new trial on punitive damages if the Defendant did not accept the court's determination. Punitive awards would require support by clear and convincing evidence of a conscious flagrant indifference to the safety of others.

By contrast, the House passed measure on punitive damages caps awards at the greater of $250,000.00 or three times economic damages.

The Senate bill would set special rules for product sellers who are not manufacturers, limiting their liability to liability founded on negligence, express warranty, or intentional wrongdoing. An exception would be created in cases of product manufacturers not subject to service of process or unable to pay a judgment.

The Senate bill would also create a complete defense if the claimant's use of alcohol or drugs was more than 50% responsible for the harm at issue, as well as establishing a product misuse or alteration defense under which a Defendant's liability would be reduced by the percentage of responsibility attributable to product misuse or alteration by any person except those immune from liability under State Worker's Compensation Law, i.e. the employer.
Significantly, the Senate version of the bill would also abolish joint and several liability for noneconomic loss, making such liability proportional to the Defendant's percentage of responsibility. Currently, in those jurisdictions in which joint and several liability still exists, a Defendant product manufacturer who is found to be only 1% responsible for the Plaintiffs injuries can be made to pay all of the Plaintiffs damages, if the Plaintiff is unable to collect those damages from any other Defendant.
Under the Senate version, the liability of biomaterial suppliers would also be limited under the Senate measure. Significantly, the Senate passed bill would also establish a two year Statute of Limitations beginning when the claimant discovered or should have discovered the harm and its cause. Exceptions to the two year period would be recognized as to persons with a legal disability and as to actions which are stayed or enjoined.
Most significantly, the Senate bill would create a 20 year Statute of Repose for durable goods subject to exceptions for toxic harm; for motor vehicles; vessels, aircraft or trains used primarily for the transport of passengers for hire; for express warranties established by the General Aviation Revitalization Act of 1994. The House version of the bill contains a 15 year Statute of Repose.
This change in the current status of the law in most jurisdictions with respect to statutes of repose represents a significant reduction in the exposure of product manufacturers. Currently, most states do not impose limits of this type in products liability cases. Thus, an injured Plaintiff can bring a cause of action within the statutory period of limitations, regardless of when the product was first designed, manufactured and assembled.
Some of the more pertinent provisions of the Product Liability Fairness Act of 1995 include the following:

Section 104. Imposes seller liability if the seller failed to exercise reasonable care, made an express warranty, or engaged in intentional wrongdoing. Declares that a failure to inspect is not a failure of reasonable care if there was no reasonable opportunity to inspect. Makes a seller liable as a manufacturer if the manufacturer is not subject to service or if the claimant would be unable to enforce a judgment. Makes certain persons engaged in the business of renting or leasing a product liable as a seller, but prohibits liability for the tortuous act of another solely by reason of ownership.
Section 105. Makes it a complete defense if the claimant was under the influence of alcohol or a drug and was more than 50% responsible.
Section 106. Reduces damages by the percentage of harm attributable to misuse or alteration except for actions involving an employer or co-employee if the employer or CO-employee is, under State law, immune from claimant's action.
Section 107. Allows punitive damages as permitted by State law if a claimant shows by clear and convincing evidence that the harm resulted from the Defendant's conscious, flagrant safety indifference.
Section 109. Limits the time within which a product liability action must be started with a separate limit for durable goods other than motor vehicles, vessels, aircraft or trains used primarily to transport passengers for hire.
Section 110. Permits several and prohibits joint liability for noneconomic loss.
Section 111. Grants an insurer a right of subrogation whether or not the insurer is a party. Prohibits an employee from making settlements or accepting payments without the consent of the employer. Requires, if the manufacturer or seller alleges the harm was the fault of the claimant's employer or CO-employee, that the issue be submitted to the trier of fact. Reduces damages if it is found by clear and convincing evidence that the harm was so caused, but requires the manufacturer or seller to reimburse the insurer for attorney fees and costs if it is not so found.
Section 112. Declares that U.S. District Court shall not have jurisdiction under this Act based on provisions of the U.S. Code relating to Federal questions, commerce and antitrust and amounts in controversy.

It is likely that some compromise form of the House version and Senate version will be signed into law soon, in light of the upcoming election year in 1996!

NEW RESTATEMENT THIRD OF TORTS ON PRODUCTS LIABILITY
While Congress has visibly and controversially been considering enacting federal products liability law, a much less publicized effort, more than three years in the making, is nearing completion that could yield a far greater impact on product liability law. The American Law Institute, which for 60 years has published the Restatements of Law, began work in 1992 on a new Restatement of Product Liability to replace the current Section 402A which, since its adoption in 1964, has been followed by courts in nearly 40 states.
At the annual meeting of the All in May of 1995, nearly half of the provisions of the proposed Restatement 3rd of Torts on Products Liability were approved. The sections which were approved are the most significant portions of the Restatement and represent significant changes in the law of Section 402A.
Section 1, the Basic Liability Section, provides:

"One engaged in the business of selling or otherwise distributing products who sells or distributes a defective product is subject to liability for harm to persons or property caused by the product defect."

This section 1(a) does nothing more than capture all of the essential elements of the product's cause of action: (1) a Defendant must be in the business of selling products, (2) who sells or distributes a defective product, (3) which defect caused, (4) personal injury or property damage. Section 1(b) provides:

"A product is defective if, at the time of sale or distribution, it contains a manufacturing defect, is defective in design, or is defective because of inadequate instructions or warnings."

Unlike the current Section 402(A) which contains a generic definition of product defectiveness (defective condition that is unreasonably dangerous), this new section creates a functional approach to product defects that is incorporated into Section 2 that explicitly sets forth how each functional category of defect must be established.
Section 2, entitled "Categories of Product Defect", provides that for purposes of determining liability:

a. A product contains a manufacturing defect when the product departs from its intended design even though all possible care was exercised in the preparation and marketing of the product;

b. A product is defective in design when the foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative design by the seller or other distributor ... and the omission of the alternative design renders the product not reasonably safe;
c. A product is defective because of inadequate instructions or warnings when the foreseeable risks of harm posed by the product could have been reduced or avoided by the provision of reasonable instructions or warnings by the seller or other distributor ... and the omission of the instructions or warnings render the product not reasonably safe.

In conclusion, the new Restatement of Torts on Product Liability provides a more definitive application of long standing common law in the U.S. with respect to product liability. Until Federal Legislation pre-empting some of these areas is passed, it will in all likelihood be the majority view on product liability in the U.S.

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¹ 63 Am Jur 2d, Section 450, page 608.
² 63 Am Jur 2d Products Liability, Section 537, pages 737-749.
³ Daubert v Merrell Dow Pharmaceuticals, Inc. 113 S. Ct. 2786 (1993).
⁴ DRI, for the Defense, October, 1993 issue, "The Consumers' Failure to Read Product Warnings: What They Don't Know Can Hurt You," pages 12-18.
⁵ Journal of Products and Toxic Liability, "Should Courts Conduct Preliminary Screening Hearings of Expert Witnesses Proffered in Products Liability Litigation?" A debate edited by Honorable Warren Eginton, Volume 16, Number 1, page 33-54 (1994).