Source: http://olsonbrooksby.com/blog/2013/09/component-part-manufacturer-liability-in-oregon/
Timestamp: 2019-04-21 12:09:51+00:00

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Component part liability is important in products liability cases and especially in aviation cases, where the aircraft may have a long air-frame life but require service or replacements of hundreds of parts over its years of service. Although Oregon adopted the Restatement (Second) of Torts, § 402A contains a caveat (Caveat 3 (1965)) regarding whether strict liability should be extended to component part manufacturers. The Oregon Legislature, however, did not adopt this caveat as an interpretive guide for the courts. Therefore, both pre-codification and post-codification Oregon Supreme Court rulings hold that strict liability can extend to component part manufacturers for the sale of defective components. See State ex rel Hydraulic Servocontrols v. Dale, 294 Or 381 (1982); Smith v. J.C. Penney Co., 269 Or 643 (1974) (fabric manufacturer held liable because of flammable character of fabric, even though fabric was sold to the coat manufacturer before reaching consumer). If the component part is dangerously defective and it causes injury, the component part manufacturer (or seller or distributor) is subject to liability.
Oregon law also follows the Restatement (Third) of Torts: Products Liability, which takes the position that if the component part is defective and causes injury, the component part manufacturer (or seller or distributor) is subject to liability. Additionally, if the component part manufacturer “substantially participates in the integration of the component into the design of the product,” the component manufacturer is subject to liability. Restatement (Third) Of Torts: Products Liability § 5 (1998).
The manufacturer of a component part, however, is not subject to strict liability if the component was misapplied rather than defectively designed. In Hoyt v. Vitek, Inc., 134 Or App 271 (1995), after experiencing problems with her temporomandibular joint (TMJ), the joint that connects the jaw bone to the skull, the plaintiff, Hoyt, had a prosthetic device implanted in her jaw. The device gradually fragmented and released particles of Teflon, which caused a serious adverse reaction. Du Pont Company manufactured Teflon and sold it to Vitek, Inc., which used the Teflon as a component part in its TMJ device.
Vitek designed, manufactured and marketed the device. In 1977 DuPont informed Vitek that it manufactured Teflon for industrial purposes only and had sought no FDA rulings on the safety or effectiveness of surgical uses, and that Vitek would have to rely on its own medical and legal judgment. Du Pont was aware of studies that warned of abrasion and fragmentation with medical Teflon implants and passed along this information to Vitek. In 1983, Vitek received permission from the FDA to market the device pending “specific performance standards.” Hoyt, supra, 134 Or App at 277.
Hoyt sued Du Pont, contending that Teflon was unreasonably dangerous because it was defectively designed and because of Du Pont’s failure to warn the medical community. The court of appeals found that the component part was not defective. The court of appeals also relied on the “raw material supplier” doctrine in deciding not to apply strict liability. When a multiuse raw material is not unreasonably dangerous in itself, but becomes unreasonably dangerous when incorporated into certain uses, the supplier cannot be sued based on strict liability. Hoyt, supra, 134 Or App at 284-286. See Crossfield v. Quality Control Equip. Co., 1 F3d 701 (8th Cir 1993); Childress v. Gresen Mfg. Co., 888 F2d 45 (6th Cir 1989).
Plaintiffs did allege that defective replacement parts were supplied after the first sale of a helicopter in Evans v. Bell Helicopter Textron, 1998 WL 1297138 (D Or 1998), but the service bulletins proffered by plaintiffs were insufficient to establish that the defective component parts were installed in the engine after the first sale. The helicopter was manufactured in 1979, and crashed seventeen years later. Defendants’ motion for summary judgment was granted on the basis of ORS 30.905 because plaintiffs could not support their allegation that an affirmative misrepresentation occurred after the first sale of the helicopter by defendants.
In Allstate Indem. Co. v. Go Appliances LLC, 2006 WL 2045860 (D Or 2006), plaintiff alleged that a defective compressor installed on a used refrigerator caused a fire in its subrogor’s house. The opinion does not state when the refrigerator was originally first sold and does not discuss product liability time limitations. However, the court held that plaintiff could assert a products liability action against the defendant, who sold the used appliance and installed the allegedly defective new compressor.
The statute of ultimate repose in both strict product liability cases and negligence cases is beyond the scope of this article. However, one of the controlling Oregon cases relevant to a replacement component part is Erickson Air-Crane Co. v. United Technologies Corp., 303 Or 281 (1987), mod. on recons. 303 Or 452. Although Erickson discussed the application of the products liability statute of ultimate repose in the context of post-sale negligent misrepresentation, the case is relevant to a discussion regarding application of the statute of ultimate repose to a post- sale installation of a defective component part.
In Erickson, plaintiff purchased a helicopter in 1971. Defendant allegedly made misrepresentations regarding the useful safe life of a compressor disc in 1977. After the helicopter crashed in 1981 due to exhaustion of the compressor disc, plaintiff filed suit in 1983. The plaintiff’s complaint alleged that defendant was negligent in providing erroneous information, failing to warn plaintiff as to the erroneous information, and failing to warn that the helicopter was dangerous after expiration of the true safe life of the compressor disc. Erickson, 303 Or at 284-85.
The Oregon Court of Appeals found that plaintiff’s action against the manufacturer was a product liability action, and that because the action was commenced more than eight years after the first purchase of the helicopter, the statute of ultimate repose barred the action. Id. at 285-86. The Supreme Court reversed, holding that: “ORS 30.905 applies only to acts, omissions or conditions existing or occurring before or at the ‘date on which the product was first purchased for use or consumption.’ Acts or omissions occurring after that date are governed by the statute of ultimate repose contained in ORS 12.115.” Id. at 286. Because the defendant relayed the false information about the useful safe life of the compressor after the helicopter was first purchased, ORS 30.905 did not apply. Id. at 289. (“The difference between the present case and the type of case that the legislature meant to cover under ORS 30.905(1) is that, in this negligence case, the reasonableness of certain of defendant’s actions after plaintiff’s purchase are in question while, in a product liability case governed by ORS 30.905, it is the condition of the article at the date of purchase that is in question.”) (emphasis in original).
The Erickson holding, when viewed in the context of installations of new components, supports the argument that such alterations cannot “restart” the statute of ultimate repose on the original product. Erickson holds that ORS 30.905 only applies to “acts, omissions or conditions existing or occurring before or at the ‘date on which the product was first purchased for use or consumption,’” and a post-sale negligent misrepresentation leading to the installation of a new product necessarily occurs after the date the product was first purchased. A manufacturer can argue that under Erickson, the statute of ultimate repose should run on the original product from the date it entered the stream of commerce, regardless of whether component parts were installed post sale.

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