The consumer expectation test: a concept in search of meaning: is the test conceptually coherent?

• Author: Masters, William A.

Twenty men crossing a bridge Into a village

Are twenty men crossing twenty bridges, Into twenty villages, Or one man

Crossing a single bridge into a village

This is old song That will not declare itself....

--Wallace Stevens, Metaphors of a Magnifico

THE consumer expectation test ("CET") is the exclusive standard of strict products liability in some states. (1) The test has been roundly criticized as ambiguous, vague, and overbroad. As Professor Keeton noted, "the test can be utilized to explain most any result that a court or jury chooses to reach." (2) As a purported hedge against that imprecision, consumer expectations are held, for the most part, to be provable empirically. (3) If a party can not offer evidence to establish consumer expectations, the CET would be ontologically akin to the standard in negligence cases of the "reasonably prudent man." That is, it would be merely a placeholder for the discretionary judgment of the jury.

Scholars have postulated various types of information as providing adequate proof of consumer expectations: what the plaintiff says; (4) what the jury thinks; (5) evidence of risk-utility or alternate designs; (6) marketing and advertising data; (7) sales or demand data; (8) safety statutes or regulations; (9) industry safety standards; (10) industry custom; (11) surveys; (12) focus group findings; expert opinion; (13) product instructions; (14) and ex cathedra judicial declarations of what consumers expect. (15) Yet none of these types of information, upon scrutiny, is satisfactory proof of what the community of consumers expects from use of the product.

If consumer expectations are provable empirically, as is the purported case in Alaska, Arkansas, Minnesota, Nebraska, Oklahoma, Oregon, and Wisconsin, what exactly does a party need to prove? The answer to that question requires some sense of the "intension" of the concept (the defining criteria under which the predicate picks out the class of objects which it describes) in order to gather and present the proof at trial required to instantiate the "extension" of that concept (the class of objects that is described by the predicate). (16)

This article explores the "intension" of the concept of consumer expectations, its conceptual coherence, in the framework of classic choice or rational decision-making theory. (17) A conceptual analysis of the CET, at bedrock, is a matter of rational decision-making at the level of individual consumers and then at the level of groups of consumers. The CET, in the strong light of decision-making theory, is conceptually incoherent. It is a concept akin to the concept of the "four-sided triangle." At first glance, it may seem to have sense, but upon further examination, it does not.

1. Is The Consumer Expectation Test Conceptually Coherent?

   The first step in assessing the conceptual coherence of the CET is to provide an analytical definition of that standard. The unanalyzed standard, as stated in the Restatement (Second) of Torts, is:

   [A] product in a defective condition is "unreasonably dangerous" if it is "dangerous to an extent beyond that which would be contemplated by the ordinary consumer who purchases it, with the ordinary knowledge common to the community as to its characteristics." (18) In this test, four key words or phrases need to be parsed: (A) What does "dangerous" mean? (B) Who is the "ordinary consumer"? (C) What is "ordinary knowledge"? (D) What is meant by the phrase "common to the community"?

   1. What Is Dangerousness?

      "Dangerousness" is the propensity of a product, in use, to produce an outcome that a user does not prefer because the outcome is bodily harm or property damage. (19) But before that harm is actually caused, the user or purchaser has only a subjective sense of the likelihood that the use of the product will result in harm. "Dangerousness" ("D") (or its inverse "safety"), then, is a function of the "probability" ("Pr") of certain outcomes upon use of the product and the user's "preference" or utility ("U") for those outcomes. In symbolic terms: D(Pr x U).

      Dangerousness is not necessarily an assessment invariant across individuals. It is rather an assessment relative to each individual. Just as beauty is in the eye of the beholder, danger in use of a product is in the eye of the consumer or user. So defining the term "dangerousness" is a function of the individual's preferences for the outcomes of use ("U(O)") and the "subjective probability" ("SPr") (20) that such use will result in that outcome. (21) Moreover, outcomes of bodily injury would be expected to occur to varying degrees of severity. As a result, the user would need to establish his or her preference for those varying degrees of injury.

   2. Who Is An "Ordinary Consumer"?

      The phrase "ordinary consumer" is designed to signify that the consumer is not using the product in an extraordinary way. That is, the ordinary consumer is different from the extraordinary consumer who may use the product unusually. (22) For example, an ordinary consumer is one who "would be foreseeably expected to purchase the product.... " (23) A farmer is an ordinary consumer of ammonium nitrate branded as fertilizer since it is foreseeable that a farmer would purchase fertilizer. In contrast, a terrorist who buys ammonium nitrate to construct a bomb would not be deemed an ordinary consumer.

   3. What Is "Ordinary Knowledge"?

      The term "knowledge" signifies something more than mere unsupported speculation about the product in use. Knowledge signifies, at least, true belief and, at best, "justified true belief." (24) A false belief is not knowledge. For example, a Venetian in the 12th century would believe that the earth is flat. But this belief is false, and so not knowledge. Nor is a belief based on a lucky guess deemed knowledge. For example, a Minoan in the 10th century BCE would believe the earth is spherical. This belief is true but not adequately justified, and so not knowledge. Knowledge is a justified true belief. For example, an American in the 21st century believes, based on images taken from the space shuttle while in space, that the earth is spherical. The belief is true and adequately justified, and so it is knowledge. The phrase "ordinary knowledge" signifies the level of knowledge of the non-expert about the product.

   4. What Is the Meaning of "Common to the Community"?

      The phrase "common to the community" signifies that the members of the community share this ordinary knowledge about the product. (25) This criterion is designed to make the CET objective. (26)

      It is tempting to conclude that what is signified by the phrase "common to the community" is that the information about the product from which expectations can be formed is merely in the public realm. The phrase, however, is better interpreted as requiring more than that, namely that the information is not only in the public realm but also is "commonly known."

      This intuition poses the first serious problem in understanding the CET, the notion of "common knowledge." Decision theorists (and philosophers and economists) distinguish "common knowledge" from "mutual knowledge." "Common knowledge" is such that each individual knows A, knows that the other individuals know A, knows that each individual knows that each other individual knows A, and so on. (27) For example, each individual knows that he or she has a mother and everyone else knows that he or she has or had a mother, and that everyone else knows that as well, although they might not know in particular whose mother everyone has or had. (28) "Mutual knowledge," by...