UNIVERSITY OF PUGET SOUND LAW REVIEWVolume 2, No.2SPRING 1979
CASE NOTES
Shepard v. Superior Court - Recovery For Mental Distress In A Products Liability Action
G. Scott Greenburg
In Shepard v. Superior Court,(fn1) the California Court of Appeals held that a party directly witnessing injury to a close relative(fn2) could recover damages for resulting mental distress in a strict products liability action.(fn3) By recognizing a duty to avoid infliction of emotional distress in a products liability case,(fn4)Shepard elevated a manufacturer's duty in strict liability to the level recently recognized in a negligence action.(fn5) The court correctly reasoned that a cause of action for mental distress in products liability was consistent with economic realities of modern society(fn6) and the purposes behind products liability.(fn7)
The plaintiffs in Shepard were the parents and brother of a child killed because of an allegedly defective door latch in the family's Ford Pinto wagon.(fn8) Based on strict liability and warranty, the plaintiffs brought suit against Ford Motor Company for emotional shock and resulting physical injuries caused by observing the child's death. Accepting Ford's contention, however, that the California Supreme Court's holding in Dillon v. Legg(fn9) prohibited plaintiffs from recovering for emotional injury in other than a negligence action, the trial court sustained Ford's demurrer without leave to amend.(fn10) Plaintiffs sought a writ of mandate compelling the trial court to vacate its order.(fn11) Despite Justice Kane's lengthy dissent, a California Court of Appeals(fn12) granted the writ, reasoning that Dillon did not involve a products liability issue and therefore was not dispositive of the plaintiffs' complaint.(fn13) The majority in Shepard, however, did not find Dillon totally inapposite. Rather, the court relied heavily on Dillon's reasoning in allowing witnesses to recover damages in strict liability for mentally induced physical injury.
Prior to Dillon,(fn14) courts allowed damages for emotional harm in negligence only upon proof of actual or threatened physical impact.(fn15) Dillon abrogated the qualifications on the rule and allowed recovery even though the witness was not physically threatened by the tortfeasor's negligence. The Dillon court, although noting the difficulty in fixing limits on this recovery,(fn16) indicated that this difficulty did not justify the denial of recovery in all cases, and defined guidelines to govern the extent of future liability. The Dillon guidelines are factors for courts to consider on a case-by-case basis in ascertaining whether a defendant reasonably should foresee injury to the plaintiff, and whether the defendant owes plaintiff a duty of due care.(fn17) Accordingly, the Dillon guidelines intertwine foreseeability and duty by requiring: (1) close proximity of the plaintiff to the accident; (2) emotional impact of direct observation; and (3) a close relationship between the plaintiff and victim.(fn18) Dillon also imposed a requirement of physical harm as a prerequisite to the action: a plaintiff could maintain an action only when the emotional shock resulted in physical injury.(fn19) These guidelines and the physical harm requirement thus limit the defendant's "otherwise potentially infinite liability."(fn20)
One significant issue in Shepard was whether Dillon, including its guidelines and restrictions, should apply in a products liability action where fault is not an element of proof.(fn21) Fundamental to this issue is whether the policy reasons underlying strict products liability should apply equally for physical harm caused by mental distress and for physical harm caused by direct force. To answer this question the Shepard court ascertained the existing limitations on the type of injury compensable in products liability as defined in Restatement (Second) of Torts, Section 402A.(fn22) A strict reading of the Restatement, however, does not conclusively establish the limits of compensable injury. Thus, to clarify the scope of the Restatements language,(fn23) the majority reviewed past California products liability cases(fn24) and determined that precedent allowed extensions beyond the Restatement's literal language when shown to be consistent with the policies and purposes underlying strict products liability.(fn25)
The majority implied that extending recovery for mentally induced physical injury accorded with the policies and purposes for imposing strict products liability-policies and purposes articulated as early as 1944 by California's Justice Traynor.(fn26) Justice Traynor recognized that persons suffering injury from defective products may not be prepared to meet the costs of injury and the resulting loss of time and health.(fn27) He viewed these burdens as needless misfortunes because manufacturers could insure against the risk of injury and distribute the loss among the public as a cost of doing business.(fn28) Justice Traynor realized that in balancing the responsibility of injury and the policy of preventing injurious accidents, "the manufacturer is best situated to afford such protection."(fn29)
Accordingly, the Shepard majority equated the defendant's duty to avoid infliction of mental distress to the plaintiff in strict products liability to the defendant's duty to the plaintiff that Dillon applied in negligence.(fn30) The majority indicated the plaintiffs' allegations, if true, established plaintiffs' right to recover under a negligence theory.(fn31) Because the duty owed to a plaintiff in strict liability is the same as the duty owed in negligence, these allegations also should establish a prima facie case in products liability.(fn32)
The majority also, indicated that although Dillon did not preclude extending products liability for mental distress, the Dillon restrictions were applicable.(fn33) In so holding, the majority rejected the dissent's contention that Dillon limits recovery to negligence cases where fault is the foundation for the duty imposed.(fn34) The majority held that the injuries complained of in Shepard were equally foreseeable consequences of defective design or manufacture, or of negligent driving,(fn35) and that the manufacturer of the defective product should be liable for those consequences. Accordingly, to permit recovery against the manufacturer responsible for the injury is consistent with both Dillon and Justice Traynor's policy reasons for imposing strict products liability.(fn36)
Although the Shepard majority implied that foreseeability is a question for the trier of fact, Justice Kane in his dissent argued that foreseeability is a question of law.(fn37) Arguing against acknowledging the plaintiffs' cause of action, Justice Kane viewed the crucial policy question as whether the manufacturer's limited duty should include liability for mental, as opposed to physical trauma.(fn38) Justice Kane proposed several factors useful in evaluating a manufacturer's liability and duty of care to third persons. Those factors are:[T]he extent to which the transaction was intended to affect the plaintiff; the foreseeability of harm to him; the degree of certainty that the plaintiff suffered injury; the closeness of the connection between the defendant's conduct and the injury suffered; the moral blame attached to the defendant's conduct; the extent of the burden to the defendant and the consequences to the community of imposing a duty with resulting liability for breach; and the availability, cost and prevalence of insurance for the risk involved . . . .(fn39)
Justice Kane analyzed these factors as individual policy arguments to defeat arguments in favor of finding a manufacturer's duty to prevent infliction of mental distress, and thus to deny recovery, in strict liability, for injuries caused by mental trauma. Justice Kane first attempted to show that, from a policy standpoint, no intent to protect witnesses existed within the transaction.(fn40) Courts, however, long have eliminated privity as a criterion for imposing strict liability; the policy reasons behind eliminating privity requirements(fn41) should not be discounted merely because the plaintiffs were physically injured by witnessing an accident rather than by direct force. Further, the factors concerning certainty of injury and causation, contrary to Justice Kane's contention, are questions of fact for a jury. Because Dillon's guidelines adequately provide a vehicle for jury determination of causation and certainty of injury, a court's only difficulties in allowing the fact-finder to decide these factors are administrative.(fn42) Justice Kane presented no compelling policy argument against the Dillon view that "administrative difficulties do not justify the denial of relief for serious invasions of mental and emotional tranquility. . . . "(fn43)
The dissent also incorrectly interjected fault into its choice of applicable factors. Inquiry into moral blame proves inappropriate and ineffective in a products liability case because judicial policy favors spreading the losses of injury regardless of blameworthiness, fault, or intent.(fn44) Because Justice Kane believed this should not be a products liability case, he would have applied this fault related argument to deny the cause of action. His moral blame argument suggested that physical injuries caused by emotional trauma are more speculative and conjectural than those caused by...
