§20.6 Limitations on Damages in Strict Tort Products Liability
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§20.6-1 Generally
Products liability claims, because they are basically personal injury, death, or property damage claims, involve all of the familiar issues related to damages. See 1 Damages ch 11 (Oregon CLE 1998 & Supp 2007). In addition, particularly because of the codification of products liability law, a few damages issues are peculiar to a product liability civil action, defined in ORS 30.900. See also §20.2-1.
NOTE: Some of the restrictions on the recovery of damages in a products liability civil action, discussed in §§20.6-2 to 20.6-6, may be obviated by proving negligence or breach of warranty. "Nothing in [the product liability statute] shall be construed to limit the rights and liabilities of sellers and lessors under principles of common law negligence or under ORS chapter 72 [UCC Article 2]." ORS 30.920(4).
§20.6-2 Damages, Damage, and Injury Defined
The terms damages, damage, and injury, although often used as if synonymous, actually refer to three different legal concepts. Damages refers to the sum of money or pecuniary compensation that may be awarded as a consequence of a tortious act; injury refers to any wrong done to another; and damage is the harm, detriment, or loss sustained by the person who is injured. See Oksenholt v. Lederle Laboratories, a Div. of American Cyanamid Corp., 294 Or 213, 223, 656 P2d 293 (1982) (damages recoverable in action for intentional misrepresentation include losses suffered through injury to reputation, lost business, and impairment of earning capacity, as well as punitive damages).
The court decided not to allow a negligence claim for medical monitoring in a cigarette-smoking context when the plaintiff "has not alleged that her exposure to defendants' products has resulted in any present physical effect, much less any present physical harm. Nor has she alleged that any future physical harm to her is certain to follow as a result of that exposure." Lowe v. Philip Morris USA, Inc., 344 Or 403, 411, 183 P3d 181 (2008). The court also ruled that the cost of reasonable and necessary medical monitoring constitutes economic loss, and, as such, is not recoverable in the absence of physical injury to the claimant's person or her property or the identification of a duty owed by the defendant to her, other than "the common-law duty to exercise reasonable care." Lowe, 344 Or at 413-414. The concurring opinion pointed out that the majority had not categorically rejected medical monitoring in negligence actions, and that "Oregon law may well permit it." Lowe, 344 Or at 415 (Walters, J., concurring). The concurring opinion agreed with the majority that "plaintiff's complaint fails to state a claim for relief because plaintiff does not allege that she has suffered present physical harm." Lowe, 344 Or at 416 (Walters, J., concurring). The concurring opinion noted that the majority had not defined the term present physical harm, nor did the majority conclude that the physical harm must have "resulted in manifest symptoms." Lowe, 344 Or at 416 (Walters, J., concurring).
§20.6-3 Restrictions on Recovering Economic Loss
§20.6-3(a) Under Restatement §402A
Certain terms in §402A of the Restatement (Second) of Torts (1965) potentially restrict the kind of damages recoverable in a strict products liability case ("liability for physical harm thereby caused to the ultimate user or consumer, or to his property") (emphasis added).
Most courts around the country have not allowed recovery under strict-liability theories for economic loss other than physical damage to the product itself caused by the defect. There has normally been no allowance for recovery of damages for loss of use of the product or for lost profits in any enterprise using the product. See, e.g., Hiigel v. General Motors Corp., 544 P2d 983, 989 (Colo 1975).
§20.6-3(b) Under Precodification Law
Before the legislative codification of §402A of the Restatement of Torts (1965) (discussed in §20.2-2), the court's most comprehensive discussion of recovery for pure economic loss in an action based on strict liability was set forth in Russell v. Ford Motor Co., 281 Or 587, 575 P2d 587 (1978). In Russell, the plaintiff had recovered a judgment for damage to a pickup truck, which was involved in a one-car collision caused by a defectively welded axle housing. The court drew a line between the disappointed user of a product (economic loss that is simply a drop in value in the product) and the endangered user of the product (physical damage to the product itself that is caused by a defect that would also physically endanger the user of the product). Russell, 281 Or at 595-596. The court stated that under §402A, a claimant may recover in strict liability for foreseeable harm to a person or foreseeable harm to property other than the product itself. Russell, 281 Or at 593-594. The court then went further, holding that when the loss in question was "a consequence of the kind of danger and occur[red] under the kind of circumstances, 'accidental' or not, that made the condition of the product a basis for strict liability" (human or other-property endangering), the loss is recoverable in strict liability. Russell, 281 Or at 595. Thus, the court allowed recovery for damages to the product itself (the pickup truck), which crashed as a result of a defect in the axle housing. The defect was clearly foreseeably human-endangering and other-property-endangering (other vehicles on the road) and the loss occurred in such circumstances. Russell, 281 Or at 594 n 5, 595.
Insofar as the premise of responsibility for the marketing of a dangerously defective product states a norm for the producer and seller, that norm either has or has not been met at the time the product is sold. Whether the seller has met this responsibility cannot depend on the fortuitous extent of the damage done when the danger created by the defect subsequently comes to pass.
Russell, 281 Or at 594. See also §20.6-3(c) regarding the codification of §402A.
§20.6-3(c) Effect of Codifying §402A
When the 1979 Legislature codified the Restatement (Second) of Torts §402A (1965), it modified the language of the Restatement pertaining to property damage. ORS 30.920(1) provides:
One who sells or leases any product in a defective condition unreasonably dangerous to the user or consumer or to the property of the user or consumer is subject to liability for physical harm or damage to property caused by that condition, if [the other requirements of ORS 30.920(1) are met]. [Emphasis added.]
Section 402A does not include the language "or damage." Since the codification of §402A, several cases have allowed strict-liability recovery for loss to other property. Thus, the owner of cattle injured or killed by a defective feeding machine has a strict-liability claim. Agristor Credit Corp. v. Schmidlin, 601 F Supp 1307, 1316-1317 (D Or 1985). So does the farmer whose existing grapevines are destroyed by a disease in purchased plants. Gladhart v. Oregon Vineyard Supply Co., 332 Or 226, 26 P3d 817 (2001).
In Russell v....
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