Opinion ID: 1767833
Heading Depth: 3
Heading Rank: 2

Heading: Prudent Manufacturer Test v. Risk-Utility Test

Text: Having concluded that our statute incorporates a test other than the consumer expectation test for proving the unreasonable dangerousness of a product, we turn now to the issue of the relationship, if any, between that test and the risk-utility test urged by plaintiff. Our research has revealed that, in reality, what plaintiff refers to as the risk-utility test is more correctly an analysis which involves the balancing of numerous factors. Under the approach, the court balances the usefulness of the product against the magnitude of risk or danger likely to be caused by the product. Prosser & Keeton on Torts 699 (P. Keeton ed 5th ed. 1984). In order to determine whether the second test in our statute, which we have called the prudent manufacturer test, anticipates a risk-utility analysis, we turn to the most commonly used description of both. Generally stated, the prudent manufacturer test imposes liability in circumstances in which a reasonably prudent manufacturer with knowledge of a product's dangerousness would not place the product in the stream of commerce. As expanded by Dean Wade, the test has evolved into a consideration of various factors which must be weighed to determine whether the manufacturer was reasonably prudent. The factors include the usefulness and desirability of the product, the safety aspects of the product, the availability of a substitute product which would meet the same need, the manufacturer's ability to eliminate the unsafe character, the user's ability to avoid danger, the user's awareness of the danger, and the feasibility of spreading the loss. Wade, On the Nature of Strict Tort Liability for Products, 44 Miss.L.J. 825, 837-38 (1973). Thus, Dean Wade summarizes the test as follows: A [product] is not duly safe if it is so likely to be harmful to person [or property] that a reasonable prudent manufacturer, who had actual knowledge of its harmful character, would not place it on the market. Id. at 839-40. [7] In effect, the prudent manufacturer test, by definition, requires a risk-utility analysis. The determination of whether a product is unreasonably dangerous turns on whether, balancing all the relevant factors, a prudent manufacturer would market the product despite its dangerous condition. Naturally, a prudent manufacturer would consider usefulness, costs, seriousness and likelihood of potential harm, and the myriad of other factors often lumped into what plaintiff called a risk-utility test, see Banks v. ICI Americas, Inc., 264 Ga. 732, 450 S.E.2d 671, 673 (1994)(citing Preliminary Draft No. 1 (April 20, 1995) Restatement (Third) of Torts: Products Liability, § 101, Reporter's Notes to comment g). These factors mirror those designated by Deans Wade and Keeton as appropriate for consideration under the prudent manufacturer test. Defendant's argument that the Tennessee General Assembly could not have intended to include the risk-utility test, (or what we have determined to be a risk-utility analysis), in the 1978 enactment of the Products Liability Act since the test originated that same year [8] is not persuasive. We must interpret the plain language of the legislation, Mercy v. Olsen, 672 S.W.2d 196 (Tenn. 1984), and we must give effect to every word, phrase, clause and sentence... . Tidwell v. Collins, 522 S.W.2d 674, 677 (Tenn. 1975). Clearly, the legislation includes a second test to determine whether a product is unreasonably dangerous. Whether that test  whatever name it is ultimately given  is the same as an approach originating elsewhere is of no consequence. In an aberrant move, California adopted a hybrid consumer expectation risk-utility test that shifts the burden of proof to defendant to establish that on balance the benefits of the challenged design outweigh the risk of danger inherent in such design. Barker v. Lull Engineering Co., Inc., 143 Cal. Rptr. 225, 573 P.2d at 452. Setting aside this aberration, it is obvious that the prudent manufacturer test set out in our statute and the analysis which plaintiff refers to as the risk-utility test are substantially the same. [9] Stated more precisely, we hold that the prudent manufacturer test set forth in the Tennessee Products Liability Act requires a risk-utility balancing of factors, including those factors identified as part of the Wade-Keeton prudent manufacturer test. [10] The test under our statute does not include a shifting of the burden of proof to defendant. Rather, the burden remains on plaintiff in a products liability action to establish injury as a result of an unreasonably dangerous product. Plaintiff may meet this burden either by establishing that the product was dangerous beyond that contemplated by an ordinary consumer (consumer expectation test) or by establishing that a reasonably prudent manufacturer, assumed to know the product's dangerous condition, would not have marketed the product (prudent manufacturer test employing risk-benefit analysis). Our statute does not limit the application of either test to only certain types of actions. Nonetheless, the consumer expectation test will be inapplicable, by definition, to certain products about which an ordinary consumer can have no expectation. Despite the potentially overlapping nature of the tests, plaintiff here relied only on the second test, which we have defined as requiring consideration of numerous factors. Our statute clearly authorizes plaintiff to attempt to establish the unreasonable dangerousness of a product by employing a prudent manufacturer test which includes a risk-utility balancing approach. The Clerk will transmit this opinion in accordance with Rule 23, Section 8 of the Rules of the Supreme Court. The costs in this Court will be taxed equally between plaintiff and defendant. BIRCH, C.J., and DROWOTA, ANDERSON and REID, JJ., concur.