D. Defenses
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D. Defenses
Although a products liability defendants may usually assert the traditional defenses for negligence causes of action, assuming the facts support those defenses (for example, comparative negligence, assumption of the risk, and intervening and superseding cause), some special rules apply to products liability defenses, particularly those available under strict liability and warranty. Also, defenses for crashworthiness claims may differ from typical tort cases.
1. Statutes of Limitation and Notice Requirements
Products liability cases do not have a specific statute of limitations. Therefore, general provisions for personal injury, wrongful death, property damage, and breach of contract actions apply.344
For tort and common law contract actions, the limitation period is three years.345
The South Carolina version of the Uniform Commercial Code provides for a six-year period,346 apparently to match the general statute of limitations applicable to consumer product liability for physical harms prior to the reduction to three years. Unlike the tort and general contract limitations provisions, this U.C.C. provision has not been shortened.347 Section 36-2-725 of the South Carolina Code further provides that "[a] cause of action accrues when the breach is or should have been discovered." This reflects a change from the traditional rule of commercial law that the limitation period runs from the passage of title from the seller to buyer, typically at the time of tender and acceptance of the product and the opportunity to inspect it. Some parties have confused the durational limitation of a warranty and the statute of limitations, which are separate and distinct issues.348
The "discovery" approach of the South Carolina version of the Code349 accords with a similar interpretation of the general statute of limitations applicable to personal injury and property damage claims in negligence and strict tort.350 This approach is now specifically set by statute for noncontractual personal injury cases.351
Statutes of limitations are different from "statutes of repose," which prescribe an action at a given time after sale of the product, completion of work, or the like.352
Although an earlier statute of repose was declared unconstitutional,353 the South Carolina General Assembly subsequently enacted a thirteen-year statute, which was narrowly restricted to building and construction cases,354 and this version was held to be constitutional.355 Under current law, actions to recover damages for defective or unsafe condition of an improvement to real property must be brought within eight years after substantial completion of the improvement.356
Unlike a statute of limitations, which is a procedural matter governed by the law of the forum, a statute of repose is a substantive matter governed by the law of the state in which the injury occurred.357
For products liability actions involving "general aviation aircraft," the federal General Aviation Revitalization Act of 1994 provides an eighteen-year statute of repose.358
Given the likelihood that the defendant in a products case is a corporate entity, note that very short limitations of time may apply to suits against corporations in the process of being dissolved.359
The Uniform Commercial Code also contains a notice360 requirement that may operate to bar a claim otherwise timely within the statute of limitations. The language of the South Carolina version, however, exempts consumer personal injury claims. Section 362-607(3) (a) provides:
(3) Where a tender has been accepted
(a) the buyer must within a reasonable time after he discovers or should have discovered any breach notify the seller of breach or be barred from any remedy; however, no notice of injury to the person in the case of consumer goods shall be required. . . .361
A contractor's right to cure a construction defect is codified in South Carolina as the South Carolina Notice and Opportunity to Cure Construction Dwelling Defects Act (Right to Cure Act).362 Under the Act, a claimant must serve written notice to the contractor of a claim for a construction defect at least ninety days prior to filing the action, which allows the contractor to remedy the defect or settle the claim.363 The Right to Cure Act also allows a contractor to stay the action if a claimant does not give notice as required in order to give the contractor an opportunity to remedy or settle.364
2. Sophisticated User and Learned Intermediary Doctrines
The South Carolina Supreme Court, Lawing v. Univar, USA, Inc.,365 defined the sophisticated user doctrine as follows:
Suppliers and manufacturers of dangerous products are generally under a duty to warn the ultimate user of the dangers associated with the use of the product. However, the sophisticated user doctrine, which arose from comment n to section 388 of the Restatement (Second) of Torts, recognizes that a supplier may rely on an intermediary to provide warnings to the ultimate user if the reliance is reasonable under the circumstances. See Restatement (Second) of Torts § 388 cmt. n. The sophisticated user doctrine is typically applied as a defense to relieve the supplier of liability for failure to warn where it is difficult or even impossible for the supplier to meet its duty to warn the end user of the dangers associated with the use of a product, and the supplier therefore relies on the intermediary or employer to warn the end user.366
In Lawing, the court stated that "that prior to the court of appeals' opinion in this case, neither this Court, nor the court of appeals, had explicitly adopted the [sophisticated user] defense,"367 despite—as the dissent noted—the court of appeals was believed to have previously adopted the defense in Bragg v. Hi-Ranger.368 However, the supreme court did not overrule Bragg or otherwise indicate that it would not formally adopt the sophisticated user defense under the right set of facts. In Lawing, however, the "sophisticated user" defense did not apply because the adequacy of the labeling on the product was the issue, and "there is a critical distinction between an intermediary's knowledge of the dangerous qualities and nature of a product, and the ability of the third[-]party user to identify and recognize that product on its face."369
Also, the South Carolina Supreme Court370 and South Carolina federal courts371 have recognized a similar defense, the "learned intermediary doctrine," which is most often applied in pharmaceutical products liability cases:
Under the doctrine, as applied to pharmaceutical products liability cases, "the manufacturer's duty to warn extends only to the prescribing physician, who then assumes responsibility for advising the individual patient of the risks associated with the drug or device." The plaintiff has the burden "to demonstrate that the additional non-disclosed risk was sufficiently high that it would have changed the treating physician's decision to prescribe the product for the plaintiff."372
3. Successor Corporation Liability
Another problem of legal responsibility is presented when a manufacturer or seller goes out of business and its place is in some way taken over by another enterprise.373 The issue of the liability of such a successor corporation arose in Simmons v. Mark Lift Industries, Inc.374 There, the federal district court certified questions to the South Carolina Supreme Court regarding successor liability under South Carolina law.375 In Simmons, the plaintiff was injured in a work-related accident at a construction site when an elevated scissor lift aerial work platform collapsed in 1999. Mark Lift, the corporation that originally manufactured, designed, and sold the platform, filed for bankruptcy in 1991. The plaintiff filed suit against Terex, which had purchased Mark Lift's assets at auction. Relying on existing South Carolina authority in Brown v. American Railway Express Co.,376 the court stated the proper test for successor liability as follows:
[I]n the absence of a statute, a successor or purchasing company is ordinarily not liable for the debts of a selling or predecessor company unless (1) there was an agreement to assume such debts, (2) the circumstances surrounding the transaction warrants the finding of a consolidation or merger of the two corporations, (3) the successor company was a mere continuation of the predecessor, or (4) the transaction was entered into fraudulently for the purpose of wrongfully defeating creditors' claims.377
The court further declined to extend the "mere continuation" exception unless there is a commonality evidenced by the fact that "the predecessor and successor corporations have substantially the same officers, directors, or shareholders."378
Revisiting Simmons, in Nationwide Mutual Insurance Co. v. Eagle Window & Door, Inc., the South Carolina Supreme Court explained that the "mere continuation test," which requires "commonality of ownership," requires "commonality of offers, directors and shareholders."379 Thus, the court of appeals erred in holding Simmons only required commonality of officers to establish a mere continuation. The court noted that Simmons rejected the "commonality of enterprise" theory of successor liability and that theory was not before the court in this case. The mere continuity test is a strict one, and intentionally high,380 but it is not completely inflexible.381 While commonality of ownership is a keystone of the analysis and almost always sufficient to establish mere continuation when paired with common directors and officers, the court stressed that control is an essential consideration as well. The court added:
Typically, ownership and control are found in tandem; however, there may be instances where directors or officers—lacking ownership—exert such control and influence over a corporation that their continued presence after a corporate acquisition is sufficient to establish successor liability. Although the mere...
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