Chapter 1 The Law of Manufacturing and Design Defect Liability

• Jurisdiction: New York

CHAPTER ONE THE LAW OF MANUFACTURING AND DESIGN DEFECT LIABILITY Michael Hoenig, Esq.

I. INTRODUCTION AND OVERVIEW

New York’s law of products liability is essentially a fault-based body of rules in which a claimant, who sustains personal injury or property damage in an accident, mishap or occurrence caused by a product “defect,” may recover damages against the manufacturer or commercial sellers if, at the time of the occurrence, the product was being used for the purpose and in the manner the manufacturer intended. As under most tort theories, the claimant generally must establish, via competent proof, a duty, a breach thereof, proximate cause and damages. Proof that an injury occurred during use of a product does not by itself equal proof of a defect

In general, the plaintiff must show that the product had some material flaw or deficiency in its manufacture, design, marketing or directions for use—that is, a defect that caused it to become “not reasonably safe.” Then, the claimant must show that the “defect” or “not reasonably safe” condition was a substantial factor in causing or enhancing an injury or damage to property

The claimant must also establish that the defendant’s relationship with the allegedly defective product stemmed from a “sale” of the product or some other transaction or connection the law recognizes as equivalent to a sale. This does not mean that the injured plaintiff must have been a purchaser or user of the defective product; he or she may have been an innocent bystander, who was injured when someone else used it. In order to hold a particular defendant liable under products liability theories, however, the defendant’s relationship to the product in issue must be a cognizable product liability relationship. Thus, for example, a defendant who merely supplied a service (e.g., a repair) as opposed to a “sale” of the injuring instrumentality is not a “products liability” defendant. Other tort theories, such as ordinary negligence, may be applicable to nonseller defendants who cause injury. Typically, manufacturers, wholesalers, distributors and retailers in the chain by which the defective product is placed into the stream of commerce are covered by the law of products liability. However, an “occasional” or “casual” seller as, for example, a company selling off its surplus, outdated, or not needed equipment is not the kind of seller upon whom products liability is imposed

Under New York’s fault-based scheme, a claimant’s fault or negligence must be factored in the liability equation. The applicable principle is “comparative fault.” The defendant has the burden of pleading and proving a claimant’s comparative fault. With some exceptions, a claimant’s recovery will be reduced or diminished by the proportion of comparative fault attributable to the plaintiff under the applicable rules. The higher the percentage of comparative fault, the less the recovery. Where applicable, the fault-based scheme contemplates that a jury will allocate proportional fault in its answers to interrogatories submitted by the trial court in a verdict form

In a given case, the details and nuances of the applicable products liability rules are intertwined with the separate theories of liability (e.g., strict products liability, negligence and warranty), the type of defect alleged (e.g., defects in design, manufacture or warnings), the duties imposed upon various entities connected with the product (e.g., manufacturers, sellers and others with special relationships), evidentiary rules (e.g., burdens of proof, relevant factors in gauging defectiveness, relevant time frames for determining defectiveness, admissibility of subsequent remedial measures) and rules concerning proximate causation. In general, however, “reasonableness” principles lie at the core of New York products liability. The claimant must show that the product is unreasonably dangerous (or, as New York courts state, “not reasonably safe”), and that said condition had a material causal connection to (i.e., was a “substantial factor” in bringing about) the injury. Denny v. Ford Motor Co. ¹ added a further cause of action for breach of implied warranty of merchantability, which is based on the product’s “fitness for ordinary purposes” and focuses on the user’s “expectations.”

II. LEGAL THEORIES AVAILABLE

A. Overview

Products liability claims may be based upon one or more theories: negligence, strict products liability and breach of warranty (express or implied). ² While there is a great deal of overlap between negligence and strict products liability, especially in the design and warnings contexts, ³ each theory has discrete elements of proof. Therefore, special verdicts asking the jurors to make findings as to separately alleged theories are appropriate. ⁴ Similarly, in certain cases, there is some overlap between strict products liability theory and breach of an implied warranty of merchantability. ⁵ Nevertheless, here too, there are differences, so special interrogatories to the jury upon each theory may be appropriate if each theory is properly pleaded and proof offered. ⁶ However, independent jury findings in such “overlap” situations can sometimes result in problems of inconsistent verdicts. ⁷ Thus, familiarity with the discrete elements of each theory is important.

The problem of inconsistent verdicts arose in Lundgren v. McColgin. ⁸ The plaintiff was injured in an aircraft accident and sued the manufacturer, charging negligent design and strict products liability for an allegedly unsafe emergency override lever. The court submitted written interrogatories to the jury. One read as follows: “Was the defendant . . . negligent in the design of the override lever and, if so, was such negligence a proximate cause of the crash and plaintiff’s injury?” ⁹ The jury answered this question, “Yes.” ¹⁰ The other liability question was posed as follows: “Was the override lever, at the time of its sale by . . . [the manufacturer], defective, that is, not reasonably safe for its intended use?” ¹¹ The jury answered this question, “No.” ¹² The trial judge entered judgment on the negligence liability theory and the defendant appealed. Were the answers inconsistent?

The Appellate Division held the answers irreconcilable. The jury, said the court, “could not have concluded that . . . [the manufacturer] negligently designed the override system and at the same time conclude that it was reasonably safe for its intended use.” ¹³ Although the plaintiff claimed that the jury’s “yes” answer on negligence could have meant breach of a duty to warn, this argument was unavailing, because the failure-to-warn issue was omitted from the trial judge’s charge and, therefore, was not before the jury. Since the defense had raised the inconsistency issue prior to discharge of the jury, the matter was a proper predicate for reversal. Further, since the verdict had apportioned liability among the defendants, a new trial against all was required in the interests of justice. ¹⁴

Lundgren involved an inconsistency between jury findings in negligence and strict liability—legal theories that are quite similar. As a result of the Denny decision, a defendant may be held liable in warranty even though a jury rejects design liability under a strict products tort theory. As the Court in Denny noted, although the distinction between these defect concepts “may have little or no effect in most cases,” the nature of the proof and the way the issues are litigated may result in diverging causes of action. ¹⁵

B. Negligence

Negligence focuses upon a defendant’s failure to act reasonably and prudently under the circumstances with respect to some aspect of preparation, manufacture or marketing of a product, which makes the product unreasonably dangerous or “not reasonably safe.” It is a conduct-oriented cause of action. Thus, a manufacturer’s departure from standards of reasonable care with regard to design, testing, manufacture, sale, inspection or marketing, which renders the product unreasonably dangerous, may incur negligence liability ¹⁶

In negligent design cases, plaintiffs have to prove that “it was feasible to design the product in a safer manner.” This means that plaintiffs must show “the potential for designing . . . the product so that it is safer but remains functional.” In Adamo v. Brown & Williamson Tobacco Corp., ¹⁷ plaintiffs claimed that the defendant tobacco companies were negligent in designing their regular cigarettes with high levels of tar and nicotine. They claimed that “light” cigarettes had the same “utility” but were less dangerous. A jury finding of negligent design was reversed, however, because plaintiffs did not show that cigarettes from which much of the tar and nicotine has been removed remain “functional,” that is, that “light” cigarettes are as satisfying to smokers as regular cigarettes. Indeed, it is virtually uncontested that they are not.

The negligence cause of action involves the following themes: (1) a duty to use reasonable care so that the product will be reasonably safe for its normal uses—“reasonable care” meaning the degree of care a reasonably prudent manufacturer would use in designing, making, inspecting and testing a product; (2) a breach of that duty (by act or omission) so that the product is rendered reasonably certain to be dangerous (i.e., “defective”); and (3) the applicable time frame. The time frame for gauging defectiveness, which is based on when the product was put on the market, ¹⁸ is an important element because the “reasonableness” of the manufacturer’s conduct may be related to a specific point in time. In other words, an act or omission that may have been reasonable at a particular time might be deemed unreasonable at some later date when science, technology, state of the art or knowledge might dictate a different behavior as “reasonable.” ¹⁹

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