Olives, Explosions, and the Iowa Supreme Court: Practical Difficulties in Interpreting and Applying Iowa's Products Liability Statute

• Publication year: 2022

47 Creighton L. Rev. 149. OLIVES, EXPLOSIONS, AND THE IOWA SUPREME COURT: PRACTICAL DIFFICULTIES IN INTERPRETING AND APPLYING IOWA'S PRODUCTS LIABILITY STATUTE

OLIVES, EXPLOSIONS, AND THE IOWA SUPREME COURT: PRACTICAL DIFFICULTIES IN INTERPRETING AND APPLYING IOWA'S PRODUCTS LIABILITY STATUTE

John A. McWilliams

I. INTRODUCTION ................................... 150

II. BACKGROUND .................................... 151

A. THE IOWA LEGISLATURE GRANTS IMMUNITY TO NONDESIGNING, NONMANUFACTURING, NONASSEMBLING, AND SOME ASSEMBLING PARTICIPANTS IN THE STREAM OF COMMERCE IN CASES OF DESIGN, MANUFACTURING, AND POSSIBLY WARNING DEFECTS ..................... 151

B. THE IOWA SUPREME COURT IN WEYERHAEUSER CO.V. THERMOGAS CO. DEFINED ASSEMBLER LIABILITY BROADLY .............................. 153

C. THE IOWA SUPREME COURT IN KOLARIK V. CORY INTERNATIONAL CORP. REQUIRED A CAUSAL CONNECTION BETWEEN A DEFENDANT'S ASSEMBLY PROCESS AND THE DANGEROUS CONDITION IN THE PRODUCT ...................... 155

D. PERSUASIVE AUTHORITY ASSERTED IN LAWSON V. HONEYWELL INTERNATIONAL, INC.THAT THE DEFINITION OF DESIGNER IS NOT INCLUDED WITHIN THE DEFINITION OF MANUFACTURER ....... 156

E. PERSUASIVE AUTHORITY EXAMINED THE FACTS OF THE CASE IN FREEMAN V. UNITED CITIES PROPANE GAS OF GEORGIA, INC.TO DETERMINE WHETHER TWO SUPPLIERS QUALIFIED AS DESIGNERS ...................................... 158

III. ARGUMENT ....................................... 158

A. THE INCONSISTENTLY SPECIFIED CAUSES OF ACTION TO WHICH SECTION 613.18 OF THE IOWA CODE APPLIES MAKES APPLICATION OF THE STATUTE UNCLEAR ............................... 159

B. THE DEARTH OF DEFINITIONS IN SECTION 613.18 OF THE IOWA CODE, PARTICULARLY FOR THE TERMS ASSEMBLER AND DESIGNER, MAKES THE APPLICABILITY OF THE STATUTE UNCLEAR ......... 160

C. THE IOWA SUPREME COURT'S INCONSISTENT INTERPRETATION OF SECTION 613.18 OF THE IOWA CODE MAKES THE APPLICABILITY OF THE STATUTE UNCLEAR ............................... 162

IV. CONCLUSION ..................................... 165

I. INTRODUCTION

At common law, downstream participants in the stream of commerce are liable for injuries caused by upstream product defects, even if such participants did not cause the defect.(fn1) However, approximately seventeen states have enacted statutes abrogating the strict liability that is applied to nonmanufacturers at common law.(fn2) Several of these statutes limit a nonmanufacturer's liability for injuries caused by an upstream participant in the stream of commerce.(fn3) Statutes abrogating strict liability often contain language that categorizes which participant in the stream of commerce may be liable based on that participant's particular role within the stream of commerce.(fn4) However, participants in the stream of commerce cannot predict potential liability if the legislature writing the statute or the courts interpreting the statute fail to clearly define the language that categorizes such roles.(fn5)

Rather than broadly review the diverse landscape of statutes abrogating the common law liability of nonmanufacturers, this Topic Article navigates section 613.18 of the Iowa Code and its foibles.(fn6) Specifically, this Topic Article argues that section 613.18 creates uncertainty for participants in the stream of commerce who do not qualify as designers, manufacturers, and, sometimes, assemblers of products.(fn7) This Topic Article will explain how section 613.18 ostensibly applies only to design and manufacturing defects and not warning defects.(fn8) This Topic Article will also scrutinize how section 613.18 does not define the terms that pertain to specific roles of participants in the stream of commerce and how neither the Iowa Supreme Court nor persuasive authority clearly or consistently define such terms.(fn9) Finally, this Topic Article will address the Iowa Supreme Court's inconsistent application of section 613.18.(fn10)

II. BACKGROUND

A. THE IOWA LEGISLATURE GRANTS IMMUNITY TO NONDESIGNING, NONMANUFACTURING, NONASSEMBLING, AND SOME ASSEMBLING PARTICIPANTS IN THE STREAM OF COMMERCE IN CASES OF DESIGN, MANUFACTURING, AND POSSIBLY WARNING DEFECTS

The Iowa Legislature enacted section 613.18 of the Iowa Code in 1986.(fn11) Section 613.18 has remained unchanged since its passage in 1986.(fn12) Under section 613.18, a person who is not the designer, manufacturer, or assembler of a product who also wholesales, retails, distributes, or sells a product is both immune from suits based on strict liability or breach of implied warranty, and not liable for damages based on strict liability or breach of implied warranty.(fn13) However, an assembler who is also a retailer is not liable for damages so long as the assembly has no causal connection to the injury and the original manufacturer is subject to the jurisdiction of Iowa courts and has not been declared insolvent.(fn14) The Iowa Supreme Court in Weyerhaeuser Co. v. Thermogas Co.(fn15) and Kolarik v. Cory International Corp.(fn16) has highlighted the lack of clarity within section 613.18, particularly regarding the definitions of terms and resulting liability within section 613.18.(fn17) The Mississippi Supreme Court in Lawson v. Honeywell International, Inc.(fn18) and the United States District Court for the Middle District of Georgia in Freeman v. United Cities Propane Gas of Georgia, Inc.(fn19) illustrated how non-Iowa courts manage undefined terms, particularly designer, vis-?-vis non-Iowa statutes abrogating liability for some participants in the stream of commerce.(fn20)

The Iowa Supreme Court has explained through dicta that section 613.18(1)(b) applies to strict liability claims arising from warning defects.(fn21) In Bingham v. Marshall & Huschart Machinery Co.,(fn22) the plaintiff brought strict-liability and breach-of-implied-warranty claims under theories of design and manufacturing defects against a product seller.(fn23) The trial court granted the seller's motion to dismiss the plaintiff's strict-liability and breach-of-implied-warranty claims, and the Iowa Supreme Court affirmed the trial court's dismissal.(fn24) In dicta, the Iowa Supreme Court explained that section 613.18(1)(b) of the Iowa Code(fn25) applies to strict-liability claims arising from warningdefects.(fn26)

B. THE IOWA SUPREME COURT IN WEYERHAEUSER CO.V. THERMOGAS CO. DEFINED ASSEMBLER LIABILITY BROADLY

In Weyerhaeuser Co. v. Thermogas Co.,(fn27) the Iowa Supreme Court asserted that the Iowa legislature, when enacting the immunity provisions of section 613.18(1)(a) of the Iowa Code,(fn28) intended to except assemblers from immunity from liability when an assembler's finished product incorporates a defective component part.(fn29) In Weyerhaeuser, the plaintiff, the owner of a cardboard box manufacturing plant, used tanks filled with liquid propane supplied by the defendant, Thermogas Co. ("Thermogas"), to power forklifts in the plant.(fn30) Thermogas would pick up about fifteen empty tanks each day and replace them with fifteen filled tanks.(fn31) One of the plaintiff's forklifts caught fire, and the plaintiff alleged that the liquid propane tank exploded prematurely during the resulting fire, which ultimately destroyed half of the plant.(fn32) The district court granted Thermogas's motion for directed verdict on the plaintiff's strict liability and breach of implied warranty claims, finding that the defendant's act of filling the tank with its product did not constitute assembly.(fn33) The plaintiff appealed to the Iowa Supreme Court, claiming that the district court erred in directing a verdict for Thermogas on the strict-liability and breach-ofimplied-warranty claims.(fn34)

The Iowa Supreme Court concluded that Thermogas was an assembler and held that the immunity provisions of section 613.18 did not apply to the defendant.(fn35) The Weyerhaeuser court first explored the definition of assembler, noting that the Iowa legislature did not define the term assembler.(fn36) The Weyerhaeuser court explained that, under the theory of assembler's liability, a party that places a finished product incorporating a defective component in the stream of commerce is liable for the injuries resulting from the defect in the component part.(fn37) Even if an assembler does not manufacture a defective component part, an assembler is nonetheless liable under the theory of assembler's liability.(fn38) The Weyerhaeuser court next suggested justifications for holding the assembler liable and posited that the assembler (1) should hold the burden for accidental injuries for marketing a defective component; (2) could exert pressure on the manufacturer to make the product safer; (3) derives an economic benefit from the final product that incorporates the defective product; (4) could test or inspect the component part; and (5) represents to the consumer that the final product is safe.(fn39)

The Weyerhaeuser court pointed out that the container or packaging of a product should not be distinguished from the product itself.(fn40) The tank involved in the fire was manufactured fifteen years prior to the fire.(fn41) Additionally, federal regulations require that tanks used for liquid propane be tested or recertified at mandatory periods, although tanks are to be tested earlier if they show signs of damage, such as dents or corrosion.(fn42) The court cited two specific problems with the testing of the tank involved in the fire: first, the tank...