Source: https://iclg.com/practice-areas/product-liability-laws-and-regulations/usa
Timestamp: 2019-04-25 04:23:14+00:00

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In the United States, there are three primary routes of liability: (1) strict liability; (2) negligence; and (3) warranty theories. All three theories are determined by state law with some variance between states. Under any of these theories, the burden is on the plaintiff to prove essential elements of their case. Defendants may be manufacturers, wholesalers, distributors, and retailers of defective products.
Warranty claims are contractual and are based upon Article 2 of the Uniform Commercial Code as adopted by each state. These claims most commonly are based upon express warranties, implied warranties, and warranties of fitness for a specific purpose.
Other theories include violations of state consumer protection statutes, and claims based on unfair and deceptive trade practices.
For most forms of personal injury caused by a product, states do not provide compensation. There are some limited federal government programs to compensate individuals injured by certain types of products and exposures.
Plaintiffs can name any entity within the distribution chain of a product as a defendant. As the entity responsible for placing the allegedly defective product into the stream of commerce, manufacturers are usually the primary target of defect claims. The extent of responsibility for fault/defect varies among states. Defences, including those known as “seller exceptions,” are sometimes afforded to non-manufacturers; exceptions vary by state and often require the non-manufacturer to show that it did not contribute to the alleged defect and had no knowledge of the alleged defect.
Regulatory authorities are not subject to liability for defective/faulty products. As noted in question 1.1, it is the manufacturers, wholesalers, distributors, and retailers of products who are subject to product liability claims.
Recalls can be voluntary or mandated by statute, regulation, or regulatory agency. Recalls are usually proactive and voluntary in response to regulatory agency requirements, internal policies, or health and safety concerns. Most states do not impose a duty to recall or retrofit a product that was not defective when sold. A manufacturer can be held liable for voluntarily conducting an ineffective recall or for failure to properly retrofit a product with a known hazard.
Criminal sanctions do not usually apply in civil suits involving defective products. However, criminal sanctions can be sought by state or federal prosecutors in cases involving conduct, such as concealing known product defects or intentionally misleading regulators regarding product defects.
Plaintiffs must prove all elements of their product liability case, including fault/defect and damages. Under strict liability, a plaintiff must prove that: (1) the defendant manufactured or sold the product; (2) the product was defective when it left the defendant’s possession; and (3) the defect in the product caused the plaintiff’s injuries. To establish that a product is unreasonably dangerous, a plaintiff must establish defective design, defectively manufactured product, or an inadequate warning. In negligence claims, a plaintiff must prove that the defendant failed to use reasonable care and breached a duty owed to the plaintiff, and that the breach caused the plaintiff’s injury.
Causation requires proof of both cause-in-fact and proximate cause. The existence of a defect and an injury are not enough. The jury determines facts, such as whether a defendant’s actions had any effect on the plaintiff’s injury. Most jurisdictions require plaintiffs to establish that the injury would not have occurred “but for” the defendant’s conduct or the defect. Many jurisdictions use the substantial factor test, requiring plaintiffs to show that the defendant’s product was a substantial factor in causing the harm. Certain jurisdictions apply both tests.
Proximate cause is shown only when the injury is caused by and connected to the defect. A plaintiff must have been using the product for its intended purpose or, at least, a purpose that was reasonably foreseeable to the defendant.
Proof of increased, but unpredictable, risk of malfunction is insufficient to establish cause-in-fact or proximate cause of personal injury. Risk of malfunction may be sufficient to assert consumer fraud, breach of contract or breach of warranty claims asserting economic damages, rather than personal injuries.
Identifying the actual party responsible for the injury is a critical element of a plaintiff’s product liability case. Market-share liability has been largely rejected.
A failure to warn of open and obvious risks can give rise to liability. Manufacturers generally have a duty to warn of dangerous propensities. The warning is considered adequate if a fact finder determines the warning would cause a reasonable person to exercise the appropriate amount of caution.
The duty to warn, however, is not always directed to the consumer. For example, in pharmaceutical and medical device litigation, the duty to warn in most states is owed to the prescribing physician; physicians are in the best position to both asses the health concerns of the patient and to conduct a risk/benefit analysis of the prescription drug or device. Physicians – the “learned intermediary” – also determine which warnings should be conveyed to the patient. Some state courts have questioned the applicability of the learned intermediary defence under circumstances when the prescribing doctor prescribes a drug that is also available over-the-counter or when a manufacturer uses direct-to-consumer advertising.
Assumption of risk applies when a plaintiff knows of and appreciates the risks of a product and voluntarily chooses to use the product. This is a complete bar to recovery in certain states while others use it as part of a comparative negligence analysis.
Comparative fault reduces the damages when the jury determines that the plaintiff is responsible for a percentage of the injury. Most states set a threshold percentage which, if the plaintiff exceeds the threshold, completely bars recovery. Other states offer “pure comparative fault” that allows for recovery from a defendant for the relative proportion of fault even as little as 1%.
Idiosyncratic reaction defences apply when only a few unknown individuals in a population are at risk of plaintiff’s injury. The possibility of injury is seen as so remote that it is unforeseeable.
Pre-emption applies in cases when plaintiffs invoke state law causes of action covered by federal statute or regulation. The U.S. Constitution’s Supremacy clause provides deference to the federal law. If a product liability action creates a risk that a manufacturer may be held liable for state law claims even though it satisfied federal statutes and regulations, federal law may pre-empt the state law claim. Defendants have the burden of proving that pre-emption applies. There are three types of pre-emption: conflict, express, and implied. Conflict pre-emption occurs when a defendant literally cannot comply with both state and federal law. Express pre-emption occurs when the federal law specifically states an intent of Congress to pre-empt state law. Implied pre-emption hinges on whether the federal scheme is so pervasive that it occupies the field on that area of law.
Statute of repose limits the number of years that a consumer can use a product during its useful life before filing a lawsuit. After the statute-specified time limit, manufacturers are immune from liabilities. The repose period varies by jurisdiction.
Statute of limitations specify the length of timea plaintiff has to file a claim after an injury occurs or after the plaintiff should have “discovered” a latent injury. The statute of limitations for product liability cases varies by state, generally from two to six years.
Unavoidably unsafe products. Comment k of Section 402A of the Restatement Second of Torts covers products that are incapable of being made safe for their intended and ordinary use. If a product meets this criterion, states that accept this defence require evidence that the product was properly manufactured and contained adequate warnings of the known and unavoidably unsafe propensities of the product.
State-of-the-art design is an absolute defence in some states and, in others, can be used as evidence of non-negligence and as evidence that a feasible alternative design did not exist at the time of manufacture. Plaintiffs often rely on expert testimony to put forth an alternative design. To rebut a plaintiff’s expert and support a state-of-the-art argument, defendants may submit evidence that: (1) shows compliance with federal regulatory design standards; (2) shows the manufacture submitted relevant material to a regulatory agency before gaining government-approval; and (3) shows compliance with industry standards.
Few states recognise compliance with regulatory requirements as a defence to products liability claims.
Also see questions 3.1 (“Pre-emption”) and 3.2 above.
United States courts give full faith and credit to prior judgments in any state court. Claims brought by unrelated claimants are not subject to estoppel; every plaintiff has a right to litigate their claims. A prior plaintiff’s case against the same defendant does not preclude a subsequent plaintiff from litigating the same product liability issues. Plaintiffs are precluded from re-litigating issues if the issue has already been the subject of final judgment on the merits, related to a single transaction or injury, and involving the same parties.
Contribution claims are generally apportioned among the tortfeasors relative to culpability in terms of the percentage of fault for the plaintiff’s injury. Indemnity generally shifts liability completely to one party, most often up the distribution chain toward the manufacturer. Indemnification can originate from a contractual agreement or negligence on the part of a third-party. In certain jurisdictions, multiple defendants in a case are considered joint and severally liable for a plaintiff’s injury, which makes each defendant liable for the entire judgment. In those cases, defendants who pay more than their apportioned share generally have a right to contribution against other defendants.
Several jurisdictions account for such contribution by reducing the damages awarded by the percentage of fault attributed to the plaintiff’s own actions in causing the accident. In addition, a plaintiff’s contributory negligence can be used as evidence that the defendant’s product was not the proximate cause of an accident.
Every trial has a judge and a fact finder. A judge always rules on legal issues. The fact finder can be either the judge or a jury. Federal and state rules of procedure allow any party to demand a jury trial on any issue triable. Parties can waive this right and proceed with a bench trial, meaning the judge rules on both legal and fact issues.
Federal Rule of Civil Procedure (“FRCP”) 53 allows a judge to appoint a special master to hold trial proceedings and, in some instances, make findings of fact on exceptional conditions. Special masters may address pre- and post-trial matters that cannot be timely addressed by the judge.
See question 4.8 below for a discussion of Federal Rule of Evidence 706.
FRCP 23 sets forth the following prerequisites for class certification: (1) the class is so numerous that joinder of all members of the class is impractical; (2) there are questions of law or fact common to the class; (3) the claims or defences of the class representative parties are typical of the claims or defences of the class; and (4) the representative parties will fairly and adequately protect the interest of the class. Most states have class action procedures similar to the federal rules.
A plaintiff may seek certification of a class for product liability claims that a defendant manufactured an unreasonably dangerous product. Each plaintiff must have a valid cause of action. In the case of personal injury claims, plaintiffs often have difficulty certifying the class because the extent of alleged injuries among plaintiffs can vary widely, meaning individuals of the proposed class are not representative of others in the class. The individual assessment of each plaintiff’s damages and injuries reduces the frequency with which class actions are seen for products liability litigation.
In the case of products liability class actions, plaintiffs opt-out or they are bound by the outcome.
Parties can also file motions before the Judicial Panel on Multidistrict Litigation which determines whether civil actions pending in different federal districts involve one or more common questions of fact such that they should be transferred to one district for coordinated proceedings.
Generally, no one other than the injured party can bring a claim against a manufacturer. This includes representative bodies as they have no standing to file claims for injuries sustained by members. Rarely, claims can be brought “in the public interest” by an individual.
The time from filing a claim to trial varies depending upon both the case and the jurisdiction. In complex product litigation, the pre-trial process can take one to two years and sometimes longer depending on whether it is a single plaintiff with a single set of issues or a consolidation of hundreds of cases from multiple jurisdictional districts.
State courts’ trial calendars also vary significantly by jurisdiction.
Under FRCP 42, when there are common questions of law or fact, courts can order separate trials on one or more separate factual issues, claims, crossclaims, counterclaims, or third-party claims. Deciding a preliminary issue related to several actions can assist the court in avoiding prejudice or expediting and economising consolidated hearings.
Prior to trial, defendants can move for summary judgment to dispose of specific claims or the entire case where there is no genuine issue of material fact and judgment may be entered as a matter of law. During trial, a court can grant a directed verdict or judgment as a matter of law after the plaintiff‘s case is presented if the court finds that a reasonable jury would not have a legally sufficient evidentiary basis to find for the plaintiff.
Final judgments can be appealed to a higher court, usually within 30 days after entry of judgment or order appealed from. Fed. R. App. P. 4. Appellate courts apply different standards, depending on the type of issue being appealed. Factual determinations at the trial level are rarely overturned. Questions of law are reviewed de novo. The appellate court will not overturn the decision unless the trial court’s error was likely to have impacted the outcome. A successful appeal can result in reversal, a new trial, or remand for further proceedings in the trial court.
In rare cases, an interlocutory appeal may be made before final judgment. 28 U.S.C. §1292. State appellate procedures vary by jurisdiction but are generally similar to the federal rules.
Federal Rule of Evidence 706 allows a court to “appoint any expert that the parties agree on and any of its own choosing”.
State evidentiary rules and Federal Rule of Evidence 702 allow parties to present an expert’s testimony. Rule 702 sets forth four requirements that must be met for a witness who is qualified as an expert by knowledge, skill, experience, training or education to provide expert opinion testimony: “(a) the expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue; (b) the testimony is based on sufficient facts or data; (c) the testimony is the product of reliable principles and methods; and (d) the expert has reliably applied principles and methods to facts of the case”.
In Daubert v. Merrell Dow Pharmaceuticals, Inc., 50 U.S. 579 (1993), the Court charged trial judges to act as gatekeepers in assessing the reliability of scientific expert testimony. Several factors can be used to determine whether an expert’s testimony is reliable, including: (1) whether the expert’s theory can be tested; (2) whether the expert’s theory has been subjected to peer review and publication; (3) the known or potential rate of error of the particular scientific technique; and (4) whether there has been “general acceptance” of the expert’s theory or technique.
There are often pre-trial hearings to determine the admissibility of expert evidence.
FRCP 26 requires parties to disclose the names and addresses of individuals likely to have discoverable information that the disclosing party may use to support its claims or defences, unless the use would be solely for impeachment purposes, as well as the identity of any witness who may be used at trial to present expert opinion evidence. Disclosure of expert witnesses, unless otherwise stipulated or ordered by the court, must be accompanied by the expert’s written report.
State rules vary on the requirements of fact and expert depositions and expert report disclosure.
FRCP 26 requires parties to provide, as part of initial disclosures, a copy or description by category and location of all documents, electronically stored information, and tangible things that the disclosing party has in its possession, custody or control that may be used to support its claims or defences. Rule 26 also requires a party, as part of its pre-trial disclosures, to identify each document or exhibit that the party expects to offer or may offer at trial.
Parties may also serve interrogatories and requests for production of documents. Rule 33(b)(3) requires that a party provide answers and/or objections with specificity to each interrogatory, separately and fully in writing under oath. Requests for production must also be responded to either by objections, specifying the reasons for such objection, or state that copy and inspection will be permitted as requested.
If parties fail to disclose such documents as required by Rule 26(a) or respond to discovery requests pursuant to Rule 33 or Rule 34, numerous sanctions are available under Rule 37.
In the In re: Actos (Pioglitazone) Products Liability Litigation, a jury returned a $9 billion punitive damages award against defendant manufacturers after the jury heard evidence of the defendant’s alleged destruction, or spoliation, of evidence. This verdict was later reduced to $37 million and then voluntarily dismissed pursuant to a $2.4 billion global settlement.
Alternative dispute resolution is available in state and federal courts. The types of arbitration available include arbitration, mediation, and negotiation. The programmes for alternative dispute resolution vary by state. Rule 26(f) of the Federal Rules of Civil Procedure requires parties to discuss settlement as part of their initial conference and judges often encourage parties to consider settlement discussions and mediation at various stages in the pre-trial discovery process. Additionally, courts in certain jurisdictions are authorised by local rules to mandate mediation between parties.
Persons or corporations not domiciled in the United States can be subject to suits here if personal jurisdiction exists. To establish personal jurisdiction, due process requires that a defendant has “certain minimum contacts” with the forum “such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice’”. International Shoe Co. v. Washington. Personal jurisdiction can be established through specific or general jurisdiction.
In 2014, the Supreme Court rejected the “agency theory” that would “subject foreign corporations to general jurisdiction whenever they have an in-state subsidiary or affiliate”, in Daimler AG v. Bauman. The Court overturned the Ninth Circuit’s ruling and held that Daimler cannot be subject to suit in California based on claims brought by foreign plaintiffs having nothing to do with events that occurred or had their principal impact in California. The California Supreme Court subsequently expanded a theory of specific jurisdiction allowing plaintiffs from anywhere in the country, to sue companies in California as long as one Californian sued over the same conduct.
In 2017, the Supreme Court significantly limited the ability of plaintiffs to bring defendants into whatever jurisdiction or court these plaintiffs choose. In Bristol-Myers-Squibb v. Superior Court, the Courtrejected the aforementioned California expansion of specific personal jurisdiction as violative of the Due Process Clause of the US Constitution. The court concluded that for specific personal jurisdiction to be exercised by a state, there must be a connection between the forum state and the specific claims being brought in the matter. Per this opinion, the Court clarified that a corporation that markets and sells products throughout the US is not subject to litigation in any jurisdiction purely for those reasons. The Bristol-Myers-Squibb decision is having an immediate impact on deterring the plaintiffs’ bar’s practice of filing lawsuits in plaintiff-friendly jurisdictions.
There are statutes of limitations periods applicable to products liability actions that vary by jurisdiction. See question 3.1 above.
The statute of limitations periods for products liability actions vary by jurisdiction. Most jurisdictions toll the statute of limitations period for claims brought by minors, incompetents and those in active military duty.
Generally, discovery rules permit the tolling of the statute of limitations period until the plaintiff discovers or through diligence should have reasonably discovered the cause(s) of his or her injuries. If the plaintiff is prevented from discovering the cause of his or her injury because of the defendant’s fraudulent conduct, courts will toll the statute of limitations period.
Absent a statute or common law doctrine permitting for the tolling of statute of limitations periods, courts do not have discretion to waive statute of limitations requirements.
If a defendant fraudulently conceals information which prevents a plaintiff from learning of the cause of his or her injury, the statute of limitations will usually be tolled until the plaintiff discovers or should have discovered the cause of his or her injury.
Monetary compensation is the usual remedy sought in products liability actions. Some plaintiffs also seek and some courts may permit declaratory or injunctive relief.
Economic damages related to personal injuries caused by a product defect that are recoverable in products liability actions include property damage, past and future medical expenses, loss of actual earnings, and lost earning capacity. While some courts permit recovery for damage to the product itself, the majority of courts do not permit recovery when the only damage suffered is damage to the product itself.
Non-economic damages are recoverable and include damages for pain and suffering, quality of life, increased risk and/or fear of future illness, emotional or mental harm, and loss of consortium. Some states have caps on non-economic damages.
Punitive damages may also be recoverable. See question 6.4.
Some state and federal courts have recognised claims for medical monitoring; however, the law regarding medical monitoring claims is not uniform. Of the states that do permit the recovery of medical monitoring expenses, some require proof of a present physical injury to allow a plaintiff to recover medical monitoring damages, while others recognise such claims without proof of a physical injury.
Punitive damages are recoverable in products liability actions, but laws vary by jurisdiction. Most states have punitive damages caps, which also vary by statute.
The standard for the burden of proof also varies by jurisdiction. Some states require punitive damages to be proven by the higher standard of “clear and convincing evidence” rather than the lesser burden of a “preponderance of the evidence” applicable to other tort claims.
There is no maximum limit on the damages recoverable from one manufacturer arising from one incident or accident.
FRCP 23(e) states that “claims, issues, or defences of a certified class may be settled, voluntarily dismissed, or compromised only with the court’s approval”. Court approval is also usually required for claims involving minors, incompetents, and wrongful death cases.
The government can claim benefits to damages awarded or settlements paid to individuals covered by its Medicare or Medicaid programmes. Medicare is the federal health insurance programme for individuals who are 65 or older, certain younger individuals with disabilities, and people with End State Renal Disease. Medicaid is a joint federal and state programme that assists low income individuals with medical costs and expenses.
Section 111 of the Medicare, Medicaid and SCHIP Extension Act of 2007 (MMSEA) sets forth mandatory reporting requirements for Medicare beneficiaries who receive settlements or judgment awards or other types of payment from liability insurance. These reporting requirements extend to plaintiffs and defendants.
Some statutes and court rules permit the recovery of attorneys’ fees and costs. However, while attorneys’ fees have been awarded, it has also been argued that such fees are inappropriate in products liability actions because this award conflicts with the general policy of products liability litigation of encouraging manufacturers to make safer products.
Generally, there is no 5th Amendment right to counsel in civil cases as exists in the United States in criminal cases. There are various state bar associations and legal aid foundations that provide legal aid to civil litigants. Generally, to qualify for pro bono assistance, individuals are screened initially based on income eligibility, as there are income restrictions required for various types of pro bono aid.
Funding is allowed through contingency fee agreements. Such agreements are governed by the state bar associations. Most ethics rules, including the Model Rules of Professional Conduct, require that contingent fee agreements be in writing. There are also percentage restrictions on contingency fee agreements, which typically range from 25 to 40 percent.
Third party funding of claims is permitted by some states that either allow third party funding by statute or ethics opinion from the state attorney general or similar governing entity. States that allow third party funding do so with particular caveats to follow the Rules of Professional Responsibility, as certain state attorney ethics rules prohibit a lawyer from accepting payment by anyone other than a client when doing so would interfere in the lawyer’s exercise of independent professional judgment or with the client-lawyer relationship.
Third Party Litigation is becoming increasingly common and is often used by plaintiffs in pursuing complex litigation claims.
FRCP 1 states that the Rules should be construed to “secure the just, speedy, and inexpensive determination of every action and proceeding”. A practical manner for controlling costs is court oversight to ensure that cases proceed expeditiously. However, not all courts focus on strict oversight as a cost control measure.
Additionally, courts are empowered to examine the proportionality of costs in considering the merits of discovery requests. Pursuant to amended FRCP 26(b)(1), information is discoverable if it is relevant to the party’s claim or defence and is “proportional to the needs of the case”. Proportionality factors to be considered include: the amount in controversy; parties’ relative access to relevant information; parties’ resources; importance of the discovery in resolving issues; and whether the burden or expense of the proposed discovery outweighs the likely benefit. Courts may deny discovery requests where the burden and cost of compliance is deemed too high; alternatively, while rare, courts may impose cost sharing to compensate for the expense of compliance.
In June 2017, the US Supreme Court limited the ability of plaintiffs to bring manufacturers into whatever jurisdiction they choose. In Bristol-Myers-Squibb v. Superior Court, the Court rejected California’s expansion of specific personal jurisdiction to cover claims by nonresident plaintiffs against a nonresident defendant for injuries that did not occur in California. The Court held that for specific personal jurisdiction to be exercised by a state, there must be a connection between the forum state and the specific claims being brought in the matter. Per this opinion, the Court clarified that a corporation that markets and sells products throughout the US is not subject to litigation in any jurisdiction purely for those reasons. This opinion has already impacted the practice of “forum shopping" with subsequent dismissals of cases brought in states by nonresident plaintiffs with no personal jurisdiction over defendants for their claims.
Also, there remains uncertainty regarding the impact of the Trump presidency on product liability litigation. The general expectation is legislative reform efforts to reduce the volume and cost of litigation. That said, the private practices of President Trump signal a potential deviation from this position. As a private businessman, Mr. Trump was an active litigant and as president he has not made litigation reform an issue.
There are indicators that the Trump administration will maintain continuity with expected tort reform positions. For example, litigation reform legislation generally falls in line with President Trump’s emphasis on de-regulation, less federal oversight and diminished directives for federal agencies to utilize enforcement powers. The president has appointed and nominated judges largely supportive of de-regulation and federal preemption of certain types of tort claims.
Overall, it would be surprising if President Trump breaks with the prevailing sentiment of the business community and the Republican Party, which favours litigation reform.

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