Opinion ID: 1639879
Heading Depth: 1
Heading Rank: 2

Heading: analysis of the current status of the law regarding manufacturers' liability for defective design

Text: The development of the law of tort liability for physical injury caused by products is perhaps the most striking and dramatic of all the numerous stories in the portfolio of modern tort scenarios. [7] When the societal goal of holding manufacturers accountable for the safety of their products has been threatened by the interposition of technical rules of law, it has been the rules that have gradually given way. [8] However, this has never meant that courts have been willing to impose absolute liability in this context and from their earliest application, theories of products liability have been viewed as tort doctrines which should not be confused with the imposition of absolute liability. As this Court noted in Piercefield v Remington Arms Co, Inc, 375 Mich 85, 98-99; 133 NW2d 129 (1965): Some quibbler may allege that this is liability without fault. It is not.... [A] plaintiff relying upon the rule must prove a defect attributable to the manufacturer and causal connection between that defect and the injury or damage of which he complains. When able to do that, then and only then may he recover against the manufacturer of the defective product. [9] Thus while courts have accepted the social policy rationale that those injured by defective products should be compensated for their injuries without being subject to the contractual intricacies of the law of sales, and have agreed that manufacturers can most effectively distribute the costs of injuries, [10] they have never gone so far as to make sellers insurers of their products and thus absolutely liable for any and all injuries sustained from the use of those products. [11] Like the courts in every other state, whether a suit is based upon negligence or implied warranty, we require the plaintiff to prove that the product itself is actionable  that something is wrong with it that makes it dangerous. This idea of something wrong is usually expressed by the adjective defective and the plaintiff must, in every case, in every jurisdiction, show that the product was defective. See, e.g., Piercefield, supra . As a term of art, defective gives little difficulty when something goes wrong in the manufacturing process and the product is not in its intended condition. In the case of a manufacturing defect, the product may be evaluated against the manufacturer's own production standards, as manifested by that manufacturer's other like products. [12] However, injuries caused by the condition of a product may also be actionable if the product's design, which is the result of intentional design decisions of the manufacturer, is not sufficiently safe. Conscious design defect cases provide no such simple test. The very question whether a defect in fact exists is central to a court's inquiry. It is only in design defect cases that a court is called upon to supply the standard for defectiveness. [13] Thus, the term defect in design cases is an epithet  an expression for the legal conclusion rather than a test for reaching that conclusion. See Wade, On product design defects and their actionability, 33 Van L R 551, 552 (1980). At present, questions related to design defects and the determination of when a product is defective, because of the nature of its design, appear to be the most agitated and controversial issues before the courts in the field of products liability. [14] A number of appellate courts, aware that they are engaged in the conscious task of molding the law of products liability, have become concerned that they are not differentiating with sufficient clarity between various theories of recovery in design defect cases. In response, they have sought to devise significant and well-articulated distinctions. [15] At the same time, other courts have become concerned that the differentiation is too great, and have attempted to devise means of keeping the broad scope of liability in check. [16] The result has been several cases in which the standard for liability in the design area has been very carefully examined by courts and often vigorously debated by the judges themselves. A survey of the important recent cases in neighboring jurisdictions suggests something of the creative ferment underlying what has been described as the rich tapestry of the developing common law of products liability. [17] The approaches for determination of the meaning of defect in design cases fall into four general categories. The first, usually associated with Dean Wade, employs a negligence risk-utility analysis, but focuses upon whether the manufacturer would be judged negligent if it had known of the product's dangerous condition at the time it was marketed. [18] The second, associated with Dean Keeton, compares the risk and utility of the product at the time of trial. [19] The third focuses on consumer expectations about the product. [20] The fourth combines the risk-utility and consumer-expectation tests. [21] While courts have included many other individual variations in their formulations, [22] the overwhelming consensus among courts deciding defective design cases is in the use of some form of risk-utility analysis, either as an exclusive or alternative ground of liability. [23] Risk-utility analysis in this context always involves assessment of the decisions made by manufacturers with respect to the design of their products. The law purports to stand as a watchdog to ensure that product design decisions made by manufacturers do not expose product users to unreasonable risks of injury. Thus, in a design defect case, the issue is whether the manufacturer properly weighed the alternatives and evaluated the trade-offs and thereby developed a reasonably safe product; the focus is unmistakably on the quality of the decision and whether the decision conforms to socially acceptable standards. [24] The risk-utility balancing test is merely a detailed version of Judge Learned Hand's negligence calculus. See United States v Carroll Towing Co, 159 F2d 169, 173 (CA 2, 1947). As Dean Prosser has pointed out, the liability of the manufacturer rests upon a departure from proper standards of care, so that the tort is essentially a matter of negligence. [25] Although many courts have insisted that the risk-utility tests they are applying are not negligence tests because their focus is on the product rather than the manufacturer's conduct, see, e.g., Barker v Lull Engineering Co, Inc, 20 Cal 3d 413, 418; 143 Cal Rptr 225; 573 P2d 443 (1978), the distinction on closer examination appears to be nothing more than semantic. As a common-sense matter, the jury weighs competing factors presented in evidence and reaches a conclusion about the judgment or decision (i.e., conduct) of the manufacturer. The underlying negligence calculus is inescapable. As noted by Professor Birnbaum: When a jury decides that the risk of harm outweighs the utility of a particular design (that the product is not as safe as it should be) it is saying that in choosing the particular design and cost trade-offs, the manufacturer exposed the consumer to greater risk of danger than he should have. Conceptually and analytically, this approach bespeaks negligence. Birnbaum, Unmasking the test for design defect: From negligence [to warranty] to strict liability to negligence, 33 Van L R 593, 610 (1980) (quoting Barker v Lull Engineering, supra, p 432) (emphasis added). The competing factors to be weighed under a risk-utility balancing test invite the trier of fact to consider the alternatives and risks faced by the manufacturer and to determine whether in light of these the manufacturer exercised reasonable care in making the design choices it made. Instructing a jury that weighing factors concerning conduct and judgment must yield a conclusion that does not describe conduct is confusing at best. The Model Uniform Product Liability Act was published in 1979 by the Department of Commerce for voluntary use by the states. [26] The act adopts a negligence or fault system with respect to design defects. [27] It is important to examine the rationale underlying the UPLA's adoption of negligence as the criteria for liability in design defect cases. The drafters rejected, as a reason for application of strict liability to design defect cases, the theory of risk distribution wherein the product seller distributes the costs of all product-related risks through liability insurance. They believe that a firmer liability foundation than strict liability is needed in a design defect case because the whole product line is at risk. Furthermore, the drafters believed that a fault system would provide greater incentives for loss prevention. [28] The approach of the UPLA has been approved by several commentators, whose analysis is also instructive. [29] First, unlike manufacturing defects, design defects result from deliberate and documentable decisions on the part of manufacturers, and plaintiffs should be able to learn the facts surrounding these decisions through liberalized modern discovery rules. Access to expert witnesses and technical data are available to aid plaintiffs in proving the manufacturer's design decision was ill considered. Second, to the extent that a primary purpose of products liability law is to encourage the design of safer products and thereby reduce the incidence of injuries, a negligence standard that would reward the careful manufacturer and penalize the careless is more likely to achieve that purpose. A greater incentive to design safer products will result from a fault system where resources devoted to careful and safe design will pay dividends in the form of fewer claims and lower insurance premiums for the manufacturer with a good design safety record. The incentive will result from the knowledge that a distinction is made between those who are careful and those who are not. Third, a verdict for the plaintiff in a design defect case is the equivalent of a determination that an entire product line is defective. It usually will involve a significant portion of the manufacturer's assets and the public may be deprived of a product. Thus, the plaintiff should be required to pass the higher threshold of a fault test in order to threaten an entire product line. The traditional tort law of negligence better serves this purpose. Fourth, a fault system incorporates greater intrinsic fairness in that the careful safety-oriented manufacturer will not bear the burden of paying for losses caused by the negligent product seller. It will also follow that the customers of the careful manufacturer will not through its prices pay for the negligence of the careless. As a final bonus, the careful manufacturer with fewer claims and lower insurance premiums may, through lower prices as well as safer products, attract the customers of less careful competitors. We find the formula adopted by the UPLA on the question of defective design to have the merit of being clear and understandable. We recognize that in products liability cases against manufacturers based upon alleged defects in the design of a product, the courts of this state have attempted to avoid both the notion of fault implicit in negligence and the harshness of no-fault implicit in absolute liability. Thus, on the basis of the heritage of contract and sales law underlying concepts of implied warranty, we have in the past approved instructions that attempted to focus a jury's attention on the condition of a product rather than on the reasonableness of the manufacturer's conduct or decision. We are persuaded that in so doing in the context of cases against the manufacturers of products based upon allegations of defective design, we have engaged in a process that may have served to confuse, rather than enlighten, jurors, who must ultimately apply understandable guidelines if they are to justly adjudicate the rights and duties of all parties. Imposing a negligence standard for design defect litigation is only to define in a coherent fashion what our litigants in this case are in fact arguing and what our jurors are in essence analyzing. Thus we adopt, forthrightly, a pure negligence, risk-utility test in products liability actions against manufacturers of products, where liability is predicated upon defective design.