Is there a design defect in the Restatement (Third) of Torts: Products Liability?

AuthorConk, George W.

In the Restatement (Third) of Tons: Products Liability, the American Law Institute (ALI) announced a general role to resolve the problem of the meaning of the word "defect," a problem that has haunted the law of torts since section 402A of the ALI's 1965 Restatement (Second) ushered in the era of strict liability for defective products. The new role rejects consumer expectations as a reliable measure of defect and proposes that the key question is whether there existed a feasible alternative safer design, the omission of which was unreasonable.(1) The Restatement (Third) thus heralds the end of strict liability for product sellers, grounding products-liability law's key concept--the defective product--in the law of negligence.

Courts had long grappled with the problem of defining "defect," drawing on concepts such as warranty and the consumer's reasonable expectations. But they drew most successfully on risk-utility analysis, a negligence-based approach championed by John Wade,(2) the successor to William Prosser as Reporter for the Restatement of Torts. The "alternative-safer-design" rule enshrined in section 2 of the Restatement (Third) is the vindication of Wade's view that design-defect litigation should turn on whether the product could have and should have been made safer before it was sold. Section 2 articulates a functional standard(3) that does not depend on the common-law categories that have persisted since the announcement of the Restatement (Second)'s section 402A.(4) In adopting the alternative-safer-design standard, the ALI thus resolved the doctrinal wars of the past thirty-five years over strict-liability, negligence, and warranty theories of liability.

But a design defect lurks in the heart of the Restatement (Third). In section 6(c), the ALI, virtually without debate, adopted a rule that exempts sellers of prescription drugs(5) and medical devices(6) from the alternative-safer-design standard applied to all other products.(7) Under the ALI's new rule, designers and manufacturers of drugs and medical devices will not be held liable even if their products reasonably could have been made safer. The manufacturer need persuade the factfinder only that, on balance, the product does more good than harm for at least one class of users, so that a reasonable physician would prescribe it. The alternative-safer-design standard is rejected not only for drugs, but also for vaccines and mechanical devices such as cardiac pacemakers. Blood products, although regulated as drugs by the Food and Drug Administration (FDA), are excluded entirely from the Restatement, which acquiesces in the wide legislative ban on strict or warranty liability for blood products. The Restatement (Third) thus carves out a special, protective standard for a uniquely favored industry.

The two-tiered system that section 6(c) inscribes in black letter demands less than reasonable care from manufacturers of drugs and medical devices. Its declaration that manufacturers of medical products need not make a safer product if the existing product does more good than harm reverses thirty-five years of safety-advancing products-liability law. If adopted by the courts, the rule will create a dangerous chasm in the tort law and ultimately will undermine the credibility of the ALI.

Citing the experience of hemophiliacs,(8) who became infected with hepatitis and HIV through the use of contaminated blood products, this Essay argues that drugs, vaccines, biological products, and medical devices can and should be tested for defect by the same measures as all other products. The unsafe-design problems that section 6(c) seeks to solve can be addressed effectively by the mature and reliable functional rules of section 2--the rules applicable to all other products. Applying the alternative-safer-design standard to prescription drugs, vaccines, blood products, and medical devices would accomplish a major objective of the ALI's Restatement process: culling a coherent rule from the cacophony of common-law decisions.

Part I of this Essay describes the origins of the Restatement (Second)'s section 402A as a draft rule protecting consumers from dangerous food products, cosmetics, and other "intimate" products, and its adoption as an expanded rule of strict liability for all kinds of defective products. It reviews the case law that emerged from the Restatement (Second)'s proclamation in comment k that selling an unavoidably dangerous but useful product would not give rise to liability for injuries caused by the product. This Part next explores the mass adoption of "blood shield laws" immunizing manufacturers of blood products from liability for defects. The Essay argues that the freedom from liability brought by the blood shield laws retarded the research, development, and implementation of pasteurizing techniques for blood derivatives. Part I also details the crippling effect of the blood shield statutes on product-defect litigation brought by hemophiliac plaintiffs infected with HIV and hepatitis from blood products.

Part II describes and criticizes the ALI's adoption in the Restatement (Third) of the "net benefit" test for drug and medical device liability. It argues that the new Restatement's exclusion of drugs, medical devices, vaccines, and blood products from the functional standard of the alternative-safer-design test creates an undesirable fissure in the law. This Part advocates, as an alternative, a negligence-based approach that holds all manufacturers to a single standard of expertise.

Part III describes the experience of hemophiliacs in the United States in the late 1970s and early 1980s in order to illustrate the dangers of exempting medical-products manufacturers from ordinary rules of products liability. Half of the nation's hemophiliacs were infected with the AIDS virus or hepatitis before pharmaceutical companies began to market pasteurized, virus-free concentrated blood products. Without the prod of potential liability for failure to develop a safer product--a threat that was removed by the blood shield laws in forty-seven states--manufacturers did not innovate and bring safe products to market in a timely fashion. This Part criticizes the ALI's exclusion of blood products from the Restatement (Third)'s alternative-safer-design rule for failing to heed the lessons presented by the hemophiliacs' catastrophic experience.

Part IV discusses the shortcomings of the Restatement (Third)'s rationales for its special liability regime for medical products and suggests that the Restatement be revised to apply a consistent, fault-based liability rule for medical products and other products alike. This Part urges two standards of design-defect liability: the alternative-safer-design test for products capable of safer design, and a gross cost-benefit analysis for products not reasonably amenable to safer design. This return to the traditional law of negligence constitutes a more coherent approach to design-defect review and gives manufacturers of medical products the incentives necessary to prevent a medical disaster like the hemophiliacs' experience from recurring.

  1. THE BROAD UMBRELLA OF SECTION 402A

    1. The Old Regime: Comment k and Strict Liability to the Consumer

      The history of the Restatement demonstrates the power of the black-letter rule of law and the tendency of the Restatement's explanatory comments to become authoritative texts that set the terms of debate for many years. The Restatement (Second) announced in section 402A a rule that came to be called "strict liability to the consumer for defective products." Section 402A imposed liability even where the manufacturer "exercised all possible care" to avoid harm due to products in a "defective condition unreasonably dangerous to the user or consumer."(9) For thirty years, section 402A and its comment k framed the debate about how liability claims relating to prescription drugs and medical devices should be adjudicated.

      Section 402A ratified a body of product-defect case law emerging from the state courts in the 1960s. The New Jersey Supreme Court in Henningsen v. Bloomfield Motors(10) and the California Supreme Court in Greenman v. Yuba Power Products(11) inaugurated a new era in the law of products liability. In the tradition of judicial innovation represented by such jurists as Benjamin Cardozo(12) and Louis Brandeis,(13) the New Jersey and California Supreme Courts sought to use tort law as a tool for consumer protection. The ALI's adoption of section 402A imparted credibility to this effort because of the prestige of the ALI and the strong consensus among its leading voices that strict liability was the proper rule. With the issuance of the Restatement (Second), the concept of strict liability for defective products became institutionalized.(14)

      The first draft of section 402A called for strict liability but was limited to "food for human consumption."(15) A later draft embraced all "products intended for intimate bodily use."(16) The final draft adopted in 1965 extended the rule to all products.(17) Section 402A contained an internal tension: Its declaration that a manufacturer would be liable even if it "exercised all possible care in the preparation and sale of [its] product" was bounded by its application only to products that were "in a defective condition unreasonably dangerous to the user or consumer or to his property."(18) Thus, the section's strict-liability rule was tempered by a negligence-based concept of defect.(19) Limiting section 402A's strict-liability rule further was comment k.(20) Entitled "Unavoidably unsafe products," comment k exempted manufacturers from liability for products in which dangers necessarily inhered. Comment k quickly became the usual starting point for judicial and scholarly analyses of liability for drugs, cosmetics, food, cigarettes, and alcoholic beverages.(21) Prescription drugs, for example, were considered "unavoidably unsafe"...

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