Product Liability Reform Proposals in Washington-a Public Policy Analysis

• Citation: Vol. 4 No. 01
• Publication year: 1980

UNIVERSITY OF PUGET SOUND LAW REVIEWVolume 4, No.1FALL 1980

Product Liability Reform Proposals In Washington-A Public Policy Analysis

Howard E. Bundy

I. Introduction

The current interest in statutory reform of product liability law(fn1) presents a unique opportunity for the Washington Legislature to make some principled decisions in furtherance of the policies behind product liability law.(fn2) Uncertainty as to the law, unpredictability of the outcome of litigation, and perceptions of inequities in the balancing process(fn3) have increased the costs of insurance, litigation, and products, creating a crisis atmosphere,(fn4) pitting manufacturers against consumers in a polarized confrontation.(fn5) Manufacturers seek to minimize their exposure to liability, reduce the size of judgments, and generally restrict claimants' ability to prevail.(fn6) On the other hand, plaintiffs' representatives seek to continue the present system which they perceive as favoring claimants.(fn7) The legislature, in deciding the future direction of product liability law in Washington, must look beyond these polarized interests to policy considerations for guidance. The policies underlying product liability law support legislation defining a single, clear cause of action, applying comparative fault principles, and adopting the contribution doctrine; however, those same policies require retaining the doctrine of joint and several liability, and rejecting proposals for a statute of repose.(fn8)

This comment examines the major reform proposals in light of product liability policies, the common law, and fundamental standards of fairness. It compares the alternatives of continuation under the present system, the model Uniform Product Liability Act (U.P.L.A.),(fn9) and state legislative proposals. Finally, this comment offers specific recommendations regarding product liability legislation for Washington State.

II. Historical Development

A brief overview of the historical development of product liability law helps to focus the issues involved in modern legislative reform proposals. The common law first addressed modern product liability issues in 1842 in Winterbottom v. Wright,(fn10) denying recovery to a passenger in a defective carriage because he lacked privity of contract with the manufacturer.(fn11) Judicially created exceptions slowly eroded the Winterbottom privity rule(fn12) until 1916 when Judge Cardozo broke the privity barrier in MacPherson v. Buick Motor Co.,(fn13) holding a manufacturer liable to the ultimate purchaser on a negligence theory.(fn14) The next major development came in 1960 when in Henningsen v. Bloomfield Motors,(fn15) under an implied warranty theory, the court held a manufacturer and intermediate sellers liable to the ultimate user, who was not even a purchaser.(fn16) Because the negligence and warranty theories inadequately address the inherent problems of such cases,(fn17) the California Supreme Court in Greenman v. Yuba Power Products,(fn18) in 1963, applied the doctrine of strict liability to a product liability case.(fn19) In 1965, the American Law Institute published section 402A of the Restatement (Second) of Torts,(fn20) leading to adoption of strict product liability by a majority of United States jurisdictions.(fn21) Washington joined the majority in 1969 with Ulmer v. Ford Motor Co.(fn22) Contemporary reform proposals result in large part from frustration with judicial efforts to interpret and apply strict product liability in light of the policies that led the Washington Supreme Court to adopt it eleven years ago.

III. Underlying Policies

The major policies underlying strict product liability are: risk distribution, consumer protection, and safety incentive.(fn23) The basis of the risk distribution rationale is that the manufacturer is in the best position to control and minimize risks and should, therefore, bear the burden of the inevitable costs associated with those risks. Manufacturers have a greater ability-compared with product users-to pay the costs of product-related injuries and to spread those costs among all consumers through price adjustments. As a matter of public policy, courts allocate liability to manufacturers without regard to issues of duty, privity, or even fault.(fn24)

Similarly, the premise supporting the consumer protection rationale is that consumers, who often lack the skills and knowledge to avoid or prevent product-related injuries, should receive full compensation for those injuries. Because few consumers have the financial ability to absorb the costs of unanticipated product-related injuries, public policy places the financial burden on the party who placed the defective product on the market, again without regard to duty, privity, or fault in the negligence sense.(fn25)

The closely related safety incentive rationale seeks to place the burden of paying for harm on the party in the best position to prevent injury. It presumes that if defective construction, design, or warning caused an injury, the manufacturer can and should market safer products. Therefore, to encourage development of safer products by making safety improvements the more economic alternative, public policy places liability for such product-related injuries on the manufacturer.(fn26) On the other hand, this rationale also supports the proposition that the amount of the manufacturer's liability should be proportionately less where the plaintiffs or a third party's actions are a cause of the injury.(fn27) These policies of risk distribution, consumer protection, and safety incentive form the basis of strict product liability law and provide a standard for evaluating the various proposals for legislative reform.(fn28)

IV. Defining the Cause of Action

The first major area of proposed legislative reform of product liability law is the definition of the cause of action. Eleven years after the Washington Supreme Court adopted strict product liability,(fn29) the court still intermingles elements of negligence and strict liability doctrines in many product liability cases.(fn30) The problem results from the court's failure to recognize that product liability cases involve two levels of analysis: first, whether the product is defective, and second, if the product is defective whether the manufacturer is liable for harm caused by the product. The Washington court adopted strict product liability in Ulmer v. Ford Motor Co.,(fn31) a construction defect case, and because of the unique character of construction defects, the court did not have to address the standard of responsibility applicable to determining whether a defect existed.

The existence of a defect was not at issue in the Ulmer appeal.(fn32) The only issue was whether the plaintiff had to show negligence before the defendant manufacturer was liable.(fn33) Having accepted the trial court's factual finding that a defect existed, the Washington Supreme Court held the manufacturer strictly liable because "(1) . . . there was a defect, (2) which existed at the time the product left the hands of the manufacturer, (3) which was not contemplated by the user, (4) which render[ed] the product unreasonably dangerous, and (5) [which] was the proximate cause of plaintiffs injury."(fn34) The Ulmer court's holding, therefore, was that, given the existence of a defect, the manufacturer is strictly liable if the plaintiff proves the above five elements.

It was in the context of Seattle-First National Bank v. Tabert (fn35) a design defect case, that the Washington Supreme Court first said it was applying strict liability to the question of whether the design constituted a defect.(fn36) The court proceeded, however, to say: "[W]e are dealing with a relative, not an absolute concept. . . . [A] number of factors must be considered. The relative cost of the product, the gravity of the potential harm . . . and the cost and feasibility of eliminating or minimizing the risk . . . ."(fn37) Those factors are remarkably similar to the traditional negligence factors, namely: the burden of exercising sufficient care, the probability of harm, and the gravity of the potential harm.(fn38) The court did not distinguish between the two necessary levels of analysis in Tabert-defect determination and liability determination-instead treating it as a single-step analysis. Liability determination was not before the Tabert court, although the court's language seems to lead to a contrary conclusion.(fn39) The court should have recognized that it was only considering the standard for determining the existence of a defect in design, and that the standard it prescribed was ordinary negligence on the part of the designer or manufacturer. Having found a defect on such grounds, the court then could have applied the Ulmer test(fn40) to find the manufacturer strictly liable. By intermingling the strict liability and negligence doctrines and the two levels of analysis that it should have treated separately, the Washington court injected unnecessary confusion into product liability law governing design defect cases.

The Washington Supreme Court arrived at the same confusing result in Little v. PPG Industries, Inc.,(fn41) a warning defect case. The Little court used the language of strict liability(fn42) but applied the same balancing test as in the Tabert design case.(fn43) As in Tabert, the issue of liability determination was not before the Little court.(fn44)...