The citadel reburied Restatement of the Law Third Torts: Products Liability.

• Author: Patterson, Donald

IN MAY 1995, the American Law Institute adopted Sections 1 through 8 and Section 11 of Tentative Draft No. 2 of the Restatement of the Law Third Torts: Products Liability, subject, according to ALI President Charles Alan Wright, "to editorial improvements, and to an opportunity to revisit them at a later date."(1) Of the portions of the new restatement adopted, Sections 2(a), 2(b) and 2(c), as well as Section 3, are the heart of an attempt to change products liability law, and they contain troublesome provisions. The document may now be cited with authority; indeed, a previous draft was cited as authority.(2)

Instead of two sections - 402A and 402B - as in the current Restatement (Second) of Torts, the reporters for the Third Restatement envision Sections 1 through 19 with components that have been isolated for separate treatment by appellate courts applying Sections 402A and 402B. The reporters - Professors James A. Henderson Jr. of Cornell Law School and Aaron D. Twerski of Brooklyn Law School - contend in their explanatory notes that the end result of their draftsmanship is a synthesis of the prevailing law. They are to be commended for a monumental effort of scholarship, organization and, above all else, patience and willingness to accept suggestions from diverse groups of lawyers, judges and academicians interested in the final product.

The new restatement follows the familiar form. Each section commences with a black-letter statement of substantive law, followed by a "Comment," which incorporates "Illustrations," and concludes with the "Reporters' Note," which explains each of the comments separately, with exhaustive citations of authority. Most jurisdictions have departed from the concept of defect as measured by Comments g and i of Section 402A, and these comments are not included in the new restatement.

This article will attempt to identify some of the major changes, the possible pitfalls, and the advantages of the new provisions compared to what we now understand the law to be in the various jurisdictions. But it is not possible to cover all of them.

SECTION 2(A) - MANUFACTURING

DEFECT

Section 1 simply spells out in broad terms the conditions under which a manufacturer may be held liable. The basic concept is "defect" which may take the form of a manufacturing defect, a defect in design, or inadequate instructions or warnings. Section 1 also states the limitations on those suppliers of products that are to be held strictly liable for defective products.

For purposes of determining liability under Section I, the black letter of Section 2(a) provides as follows:

For purposes of determining liability under [sections] 1: (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;...

This is little, if any, different from existing law. The two main problems encountered in its application are, first, whether a causal connection existed between the manufacturing defect and a loss,(3) and second, whether the defect that caused the loss existed at the time the product left the hands of the target seller. This appears to be no different from existing law.(4) The defect may have occurred as the result of final assembly by a downstream seller or a container may have developed a defect while it was sitting on the shelf of a retailer. Liability still requires proof that the defect existed at the time the product left the possession and control of the target defendant.

SECTION 2(B) - DESIGN DEFECT

The black letter of Section 2(b) provides:

(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, or a predecessor in the commercial chain of distribution, add the omission of the alternative design renders the product not reasonably safe;...

This represents a major departure from the consumer expectations basis of liability delineated by Comments g and i of Section 402A of the Second Restatement. At least one law review writer shows only Nebraska and Kansas as adhering to Comments g and i in defining "defective condition unreasonably dangerous."(5)

The comments, illustrations and reporters' notes that accompany Sections 2(a) and 2(b) occupy 116 pages of text. The writing is concise, direct and to the point, so a summary of the entire content of these two subsections is impossible in the compass of this article. But the touchstones are whether an alternative design is reasonable and reduces the total spectrum of risks of use by foreseeable users. Note that the black letter speaks of "foreseeable risks," so the risks are not limited to those encountered by the "ordinary" user described in Section 402A of the Second Restatement. This difference under 402A was drawn by the Seventh Circuit in Todd v. Societe BIC S.A.(6)

Here is a short list of the changes.

1. Feasibility. Interrelationship of

   Function, Safety and Cost

   1. Function. Risk/utility Replaces

   Consumer Expectations

   The reporters explain in the comments, illustrations and reporters' notes that the concept of "reasonable alternative design" requires one that is feasible. Comment e in particular lists the usual elements of feasibility in the commonly accepted terms of combinations of function, safety and cost. That portion of Comment e reads:

   The factors include, among others, the magnitude of the foreseeable risks of harm, the instructions and warnings that accompanied the product, the nature and strength of consumer expectations regarding the product, the relative advantages and disadvantages of the product as designed and as it alternatively could have been designed, and the effects of the alternative design on production costs, product longevity, maintenance and repair, esthetics, and marketability. Plaintiff is not necessarily required to introduce proof on all of these factors; their relevance, and the relevance of other factors, will vary from case to case....

   Notice that "consumer expectations" has not been entirely abandoned, but its significance has been reduced to that of a "factor" which may or may not require consideration before an alternative design is adjudged "reasonable." The reporters make it clear that the basic test of feasibility is a risk/utility analysis. Many practitioners already have used this analysis in defending a product where the function of the product is either necessary or extremely useful when compared with alternative methods that do not use the product.(7) This is particularly true in cases involving transportation, materials handling, and agricultural, industrial and household products, as well as products that are task accomplishing and frequently used to maintain a life style.

   2. Pitfalls of Risk/utility

   The application of the risk/utility analysis may become questionable, however, where the utility of a product is hedonic pleasure, such as liquor, beverages, and recreational and sports products. How successful will be the defense of a liquor manufacturer before a Bible Belt jury when risk/utility balancing is argued? The same problem may be encountered with fancy cars, such as convertibles or sports models, motorcycles, bicycles and roller blade skates. The risk/utility analysis was rejected in Kansas.(8)

   Applied to its logical extent, the doctrine could lead to an unintended result. It raises the question of whether the judicial process in applying the analysis will determine that a loss resulting from an unfortunate but informed consumer choice ultimately will lead to the reduction of many consumer choices. The judicial process does not assess the loss for a bad choice on the person who makes it but on the manufacturer who made it available. In that way the law seems to favor a reduction of choices that enhance sport, risk taking and hedonistic pleasure.

   The reporters solve that problem, however, by providing a defense when an informed buyer makes the choice of alternatives of a product and chooses a product with a risk other comparable products do not have. This is demonstrated by Illustration No. 8, the facts of which are from Dreisonstok v. Volkswagenwerk,(9) in which the Fourth Circuit held that a Volkswagen van with the engine under the driver and the driver in the extreme front of the vehicle was not defectively designed and unreasonably dangerous in a front-end collision, even though that vehicle was less safe than a Ford sedan with the engine in front of the driver. It is further shown by Illustration No. 9, the facts of which are Linegar v. Armour of America,(10) in which the armor selected protected fewer parts of the body than other models made by the same company. The product was deemed not defective, even though the other models may have covered larger areas of the human body.

   Apart from this application of consumer expectations, comments g and i of the Second Restatement have been displaced by the risk/utility analysis.

   6. Incorporating the Ultimate

   The black-letter text suggests that a design is defective if another one would involve a lesser risk of injury from foreseeable use than the design being questioned. Presumably, feasibility would permit no significant reduction in function or increase in affordable cost. This has been the result of cases under Section 402A of the Second Restatement."

   Courts may interpret this language as requiring the safest possible design consistent with function and affordable cost. The avoidance of liability may require elimination of models and further limit consumer choice. If this were the construction, this section would contradict decisions holding that the law does not require the ultimate in safety as long as the buyer makes an informed choice of function, safety in use and affordable cost of the product purchased.(12) Many of those decisions may be put in jeopardy.

   Under...