Opinion ID: 1605449
Heading Depth: 2
Heading Rank: 2

Heading: Eradication of a Social Evil

Text: In this regard, it is not enough for the legislature to merely characterize the problem as a social evil and then recite in the enacting clause that the legislation is directed to that evil. There must be a substantial relationship between the act and the eradication of the evil. The trial judge applied a somewhat more lenient test in upholding the statute. The social evil, as perceived by the legislature and as set out in § 6-5-500, is: ... that product liability actions and litigation have increased substantially, and the cost of such litigation has risen in recent years. The legislature further finds that these increases are having an impact upon consumer prices, and upon the availability, cost and use of product liability insurance, thus, affecting the availability of compensation for injured consumers. Therefore, it is the intent of the legislature to provide a comprehensive time framework for the commencement and maintenance of all product liability actions brought in this state. As we have previously stated, it is not our place to review the legislature's decision as to what is a social evil; rather our review is directed to the question whether a substantial relationship exists between the evil and the legislature's attempt to eradicate the evil. It is in this regard that we find § 6-5-502(c) violative of § 13. To say that barring claims involving products that have been used for more than 10 years will eradicate and ease the cost increases in consumer prices and product liability insurance is unreasonable in our opinion. At the outset of our analysis, we wish to acknowledge that Professor Francis McGovern's article, The Variety, Policy and Constitutionality of Product Liability Statutes of Repose, 30 Am.U.L.Rev. 579 (1981), has been quite helpful and informative in our deliberation. Although a statute of repose certainly would reduce recoveries by persons injured by products, there may not be a corresponding reduction in insurance premium rates. An eight-to-ten year statute of repose, for example, would be too long to improve the predictability of insurance claims. McGovern, supra, page 595, citing the Final Report of the Federal Interagency Task Force on Product Liability. The Federal Interagency Task Force was established by the Economic Policy Board of the White House after claims by manufacturers that a products liability crisis had developed that rendered products liability insurance unaffordable or even unavailable. The Task Force undertook a study during 1976 and 1977. It sponsored symposiums, sought information from numerous insurance and manufacturing organizations, analyzed data collected from congressional hearings, and commissioned studies by independent contractors. The final report was published on November 1, 1977. On January 12, 1979, the Commerce Department published a draft of a Model Uniform Product Liability Act. A final version of the Act was published on October 31, 1979. 44 Fed.Reg. 62,714 (1979). [The above information on the Task Force was taken from Note, Alabama's Products Liability Statute of Repose, 11 Cum.L.Rev. 163 (1980)]. Even though the Task Force and others have alluded to the long-tail claims problem, as far as this Court can ascertain the problem has not been documented. See Massery, Date-of-Sale Statutes of LimitationA New Immunity for Product Suppliers, 1977 Ins.L.J. 535, 546. Indeed, the appellees point us to no manifestation of an insurance crisis. Even if there was evidence of a national crisis, that still would not provide the necessary relationship to uphold the statute. The effect of the crisis on this State would still have to be shown. As was noted in Note, The Utah Product Liability Limitation of Action: An Unfair Resolution of Competing Concerns, 1979 Utah L.Rev. 149, a survey by the Utah Manufacturers' Association suggested that insurance rate increases are not the result of the number of product liability claims in Utah. The author concluded that the Utah tort-litigation system had not contributed to the increase in insurance costs. Although assuring the availability of reasonably priced products liability insurance is an admirable goal, it will not be accomplished or even furthered by limiting access to courts in this State where such access is seldom sought. 1979 Utah L.Rev. 149, 151. In § 101 of the Model Uniform Product Liability Act proposed by the U. S. Department of Commerce, it is stated that: Product liability insurance rates are set on the basis of countrywide, rather than individual state, experience. Insurers utilize countrywide experience because a product manufactured in one state can readily cause injury in any one of the other states, the District of Columbia, or the Commonwealth of Puerto Rico. One ramification of this practice is that there is little an individual state can do to solve the problems caused by product liability. 44 Fed.Reg. 62,714, 62,716 (1979). The findings listed after § 101 of the Model Act indicate that studies done by the states of Maine and Georgia emphasize that individual state tort reforms can do little to affect the product liability problem and will not stabilize product liability insurance rates. 44 Fed.Reg. 62,714, 62,716 (1979). The limited available data show that insurers' apprehension about older products may be exaggerated. See ISO Closed Claims Survey at 105-08 (indicating that over 97 percent of product-related accidents occur within six years of the time the product was purchased and, in the capital goods area, 83.5 percent of all bodily injury accidents occur within ten years of manufacture). Nevertheless, as the Task Force Report indicated, the underwriters' concern about potential losses associated with older products may be an important factor in the recent increase in liability insurance premiums for manufacturers of durable goods. See Task Force Report at VII-21. [The word `potential' was emphasized in the original; other emphasis added.] Analysis to § 110 of the Model Act, 44 Fed.Reg. 62,714, 62,733. The Insurance Services Office (ISO), Closed Claim Survey, cited above, indicated that only 2.7 percent of the products involved in products liability actions were purchased more than six years prior to the injury-causing event. The results of this study cannot be over-emphasized. Initiated by the insurance industry and conducted by the Insurance Services Office, the ratemaking arm of the industry, the study encompassed 7,800 claims closed between July 1 and November 1, 1976 by 23 of the largest property and casualty insurance companies in the country. Massery, supra, at 542. The Task Force also determined that [p]roduct insurance usually provides coverage on what is called `occurrence' basis, whereby coverage is provided for all product-related damages that occur during the policy period. Neither the time of manufacture of the product nor the time at which the claim is made determines whether the policy provides coverage. Task Force Final Report, supra, at V-5. The appellees also make note of the fact that the machine in question operated without incident for 15 years and that this fact alone must be seen as proof that at the time of sale it was in fact a safe design. We do not think that fact establishes or could establish the necessary relationship between the statute and the perceived social evil. It is interesting to note that according to the 1974 Census of U. S. Civil Aircraft, the average age of a Boeing 707 then in use was 10 years. Massery, supra, at 543. Massery also cites the case of Adams v. General Dynamics Corp., 405 F.Supp. 1020 (N.D.Cal.1975), as an example of the harshness of a products liability statute of repose. In that case, 12 Air Force personnel were killed in a crash of a 20-year-old Convair T-29. Discovery in the case revealed that the manufacturer had long been aware of the incidence of defective frame castings in this model aircraft, which resulted in the crash, yet failed to warn of the danger. If an absolute statute of repose had been in force, the plaintiffs would have been barred from suit, despite the fact that the manufacturer may have hidden the defect from the aircraft's users. Manufacturers are right in asserting that they should not be held liable for injuries that occur simply because a product wears out. But no uniform wearing-out time should be enacted for all products alike by means of a statute of limitations. The lives of different products vary widely, as do the lives of similar products depending on the extent of their use and maintenance. Phillips, An Analysis of Proposed Reform of Products Liability Statutes of Limitations, 56 N.C.L.Rev. 663 (1978). One study revealed that 50 percent of all tractors surveyed had a life-span of more than 10 years. Doss & Tfister, Nature and Extent of Farm Machinery Use in Relation to Frequency of Accidents in Michigan and Ohio, 1972 (Agricultural Engineering Department, Michigan State University). The Task Force Report found the existence of insurance problems, but not problems amounting to an insurance crisis. The Task Force identified three causes of the problems: (1) insurance rate-making procedures; (2) uncertainties in tort law; and (3) unsafe manufacturing practices. Task Force Report at 1-21. So even though the Task Force identified insurance problems, it did not indicate that a statute of repose was a solution to any of the problems encountered. We conclude that there is not a sufficient relationship between the statute and the perceived social evil to sustain the statute.