Opinion ID: 3135254
Heading Depth: 2
Heading Rank: 1

Heading: Whether the Risk-Utility Test Applies

Text: To resolve the above-mentioned issues, we begin our analysis with a discussion of the differences and similarities between a products liability case based on a negligence theory and a strict products liability case with its two subsets: manufacturing defects and design defects. Historically, the focus of products liability law was initially on manufacturing defects. Restatement (Third) of Torts: Products Liability §1, Comment a , at 6 (1998). A manufacturing defect differs from a design defect in that the former occurs in only a small percentage of units in a product line, whereas the latter arises when the specific unit conforms to the intended design but the intended design itself, or its sale without adequate instructions or warnings, renders the product not reasonably safe. Restatement (Third) of Torts: Products Liability §1, Comment a , at 6 (1998). In the 1960s, courts began to recognize that a commercial seller of a defective product should be liable in tort for harm caused by a defect in the product regardless of the plaintiff’s ability to maintain a traditional negligence or warranty action. See, e.g. , Suvada v. White Motor Co. , 32 Ill. 2d 612 (1965); see also Restatement (Third) of Torts: Products Liability §1, Comment a , at 6 (1998). Courts began imposing liability on the manufacturer and seller even if the quality control in producing the defective product was reasonable. Restatement (Third) of Torts: Products Liability §1, Comment a , at 6 (1998). The American Law Institute set forth this principle in section 402A of the Second Restatement of Torts, which provides as follows: “(1) One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if (a) the seller is engaged in the business of selling such a product, and (b) it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold. (2) The rule stated in subsection (1) applies although (a) the seller has exercised all possible care in the preparation and sale of his product, and (b) the user or consumer has not bought the product from or entered into any contractual relation with the seller.” Restatement (Second) of Torts §402A, at 347-48 (1965). Section 402A was adopted by this court in Suvada v. White Motor Co. , 32 Ill. 2d 612, 621 (1965), a manufacturing defect case. The test set forth in section 402A came to be known as the consumer-expectation test ( Hansen v. Baxter Healthcare Corp. , 198 Ill. 2d 420, 433 (2002)), or consumer-contemplation test ( Todd v. Societe Bic, S.A. , 21 F.3d 1402, 1406 (7th Cir. 1994)), and has been articulated by Illinois courts as follows: “A product is ‘unreasonably dangerous’ when it is ‘dangerous to an extent beyond that which would be contemplated by the ordinary consumer who purchases it, with the ordinary knowledge common to the community as to its characteristics.’ ” Lamkin , 138 Ill. 2d at 528, quoting Palmer v. Avco Distributing Corp. , 82 Ill. 2d 211, 216 (1980), quoting Restatement (Second) Torts §402A, Comment i , at 352 (1965); see also Hunt v. Blasius , 74 Ill. 2d 203, 211-12 (1978). In Hunt , this court applied the consumer-expectation test to prevent liability in a design defect case, noting that injuries are “not compensable in products liability if they derive merely from those inherent properties of a product which are obvious to all who come into contact with the product.” Hunt , 74 Ill. 2d at 211. By the early 1970s, some courts sought to impose liability without fault for design defects and defects due to inadequate instructions and warnings under the principles enunciated in section 402A. Restatement (Third) of Torts: Products Liability §1, Comment a , at 6 (1998); see, e.g. , Anderson v. Hyster Co. , 74 Ill. 2d 364 (1979). It became apparent, however, that section 402A, created to address manufacturing defects, did not adequately cover design defects or defects based on inadequate warnings. Restatement (Third) of Torts: Products Liability §1, Comment a , at 6-7 (1998). This court understood the problem and recognized a second, alternative test for proving a strict products liability cause of action involving a defective design. The second test eventually became known as the risk-utility or risk-benefit test. Hansen v. Baxter Healthcare Corp. , 198 Ill. 2d 420 (2002). The California Supreme Court is generally credited with creating the risk-utility test in Barker v. Lull Engineering Co. , 20 Cal. 3d 413, 573 P.2d 443, 143 Cal. Rptr. 225 (1978), to address the restrictions of the consumer-contemplation test. Todd , 21 F.3d at 1409. It was first broached by an Illinois court in Anderson v. Hyster Co. , 74 Ill. 2d 364 (1979), which affirmed a jury verdict for the plaintiff, finding that the evidence presented was sufficient to prove that the defendant manufacturer defectively designed a forklift that caused the plaintiff’s injuries. In so doing, Anderson noted the following: “A manufacturer is held to the degree of knowledge and skill of experts [citation] and is under a nondelegable duty to make a product which is reasonably safe [citation]. That a product was not reasonably safe by reason of defective design may be proved, inter alia , by evidence of the availability and feasability of alternative designs at the time of its manufacture, or that the design used did not conform with the design standards of the industry, design guidelines provided by an authoritative voluntary association, or design criteria set by legislation or governmental regulation. Anderson , 74 Ill. 2d at 368. The rationale of Anderson , which appears to partially set forth the risk-utility test, was followed up with decisions in Kerns v. Engelke , 76 Ill. 2d 154 (1979), Lamkin v. Towner , 138 Ill. 2d 510 (1990), and Hansen v. Baxter Healthcare Corp. , 198 Ill. 2d 420 (2002), all of which involved defective product designs. Hansen and Lamkin made clear that the risk-utility test represented an additional way a plaintiff could prove a strict liability claim for defective design, stating the two alternative tests as follows: “ ‘A plaintiff may demonstrate that a product is defective in design, so as to subject a retailer and a manufacturer to strict liability for resulting injuries, in one of two ways: (1) by introducing evidence that the product failed to perform as safely as an ordinary consumer would expect when used in an intended or reasonably foreseeable manner or (2) by introducing evidence that the product’s design proximately caused his injury and the defendant fails to prove that on balance the benefits of the challenged design outweigh the risk of danger inherent in such designs.’ ” Hansen , 198 Ill. 2d at 433, quoting Lamkin , 138 Ill. 2d at 529. Hansen also stated that a plaintiff may demonstrate that a product is unreasonably dangerous because of a design defect by presenting evidence of an alternative design that would have prevented the injury and was feasible in terms of cost, practicality and technology. Hansen , 198 Ill. 2d at 436. The American Law Institute has now recognized the inadequacy of section 402A to address claims of defective design and defects based on inadequate instructions and warnings. Accordingly, it adopted new rules reflecting the developments in products liability law as expressed in cases such as Lamkin . Section 2 of the Third Restatement of Torts: Products Liability provides: “A product is defective when, at the time of sale or distribution, it contains a manufacturing defect, is defective in design, or is defective because of inadequate instructions or warnings. A product: (a) contains a manufacturing defect when the product departs from its intended design even though all possible care was exercised in the preparation and marketing of the product; (b) is defective in design when the foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative design by the seller or other distributor, or a predecessor in the commercial chain of distribution, and the omission of the alternative design renders the product not reasonably safe; (c) is defective because of inadequate instructions or warnings when the foreseeable risks of harm posed by the product could have been reduced or avoided by the provision of reasonable instructions or warnings by the seller or other distributor, or a predecessor in the commercial chain of distribution, and the omission of the instructions or warnings renders the product not reasonably safe.” Restatement (Third) of Torts: Products Liability §2, at 14 (1998). Comment a of section 1 of the Third Restatement discusses the relationship of the above standards with the concepts of negligence and strict liability. According to that comment, “Sections 2(b) and 2(c) rely on a reasonableness test traditionally used in determining whether an actor has been negligent. See Restatement, Second, Torts §§291-293. Nevertheless, many courts insist on speaking of liability based on the standards described in §§2(b) and 2(c) as being ‘strict.’ ” Restatement (Third) of Torts: Products Liability §1, Comment a , at 7 (1998). Among the reasons offered for this preference is that “some courts are concerned that a negligence standard might be too forgiving of a small manufacturer who might be excused for its ignorance of risk or for failing to take adequate precautions to avoid risk. Negligence, which focuses on the conduct of the defendant-manufacturer, might allow a finding that a defendant with meager resources was not negligent because it was too burdensome for such a defendant to discover risks or to design or warn against them. The concept of strict liability, which focuses on the product rather than the conduct of the manufacturer, may help make the point that a defendant is held to the expert standard of knowledge available to the relevant manufacturing community at the time the product was manufactured.” Restatement (Third) of Torts: Products Liability §1, Comment a , at 7 (1998). The Institute distinguished between design defects and manufacturing defects, noting that the same rationale for imposing strict liability in manufacturing defect cases does not apply to design defects. Rather, section 2(b) and (c) achieve the same general objectives as does liability predicated on negligence. Restatement (Third) of Torts: Products Liability §2, Comment a , at 16 (1998). The Institute mentions the reasonableness test traditionally used in ordinary negligence cases (see Restatement (Second) of Torts §§291 through 293 (1965)) and maintains that sections 2(b) and (c) are founded upon it. Section 291 of the Second Restatement provides as follows: “Where an act is one which a reasonable man would recognize as involving a risk of harm to another, the risk is unreasonable and the act is negligent if the risk is of such magnitude as to outweigh what the law regards as the utility of the act or of the particular manner in which it is done.” Restatement (Second) of Torts §291, at 54 (1965). This test is very similar to the risk-utility test and both are in turn similar to the factors an Illinois court must consider in determining whether a duty exists in a given case: (1) the reasonable foreseeability of injury; (2) the reasonable likelihood of injury; (3) the magnitude of the burden that guarding against the injury places on the defendant; and (4) the consequences of placing that burden on the defendant (see e.g. , Bucheleres v. Chicago Park District , 171 Ill. 2d 435, 450 (1996)). Accordingly, it has been observed that the kind of hindsight analysis inherent in the risk-utility test, which requires juries to weigh the risk inherent in the product’s design, has all the earmarks of determining negligence. Todd , 21 F.3d at 1409 n.6. Illinois cases considering a cause of action for defective products liability sounding in negligence rather than strict liability are rare, probably because it appears to plaintiffs that it is easier to prove the strict liability count. When speaking of a manufacturing defect, this is certainly true, as liability for such defects can no doubt be considered strict. A manufacturer is liable for such defects no matter how adequate and careful its quality control may have been. However, a design defect suit is more akin to a negligence claim. Any difference between the two would lie in the fault concept. See Todd , 21 F.3d at 1412; Phillips v. United States Waco Corp. , 163 Ill. App. 3d 410, 417 (1987). In a negligence defective design case, the focus is on the conduct of the defendant, but in a strict liability defective design case, the focus is on the product. See Coney v. J.L.G. Industries, Inc. , 97 Ill. 2d 104, 117-18 (1983); Baltus v. Weaver Division of Kidde & Co. , 199 Ill. App. 3d 821, 829 (1990); Carrizales v. Rheem Manufacturing Co. , 226 Ill. App. 3d 20, 36-37 (1991). (footnote: 1) That there is a distinction between the two kinds of claims is borne out by the few appellate court decisions that have considered products liability claims sounding in negligence. Those courts have held that a plaintiff raising a negligence claim must do more than simply allege a better design for the product; he must plead and prove evidence of a standard of care by which to measure a defendant’s design and establish a deviation from that standard. Carrizales , 226 Ill. App. 3d at 37; Baltus , 199 Ill. App. 3d at 831; see also Ferentchak v. Village of Frankfort , 105 Ill. 2d 474, 480 (1985). Thus, to establish a negligence claim for a defective design of a product, a plaintiff must prove that either (1) the defendant deviated from the standard of care that other manufacturers in the industry followed at the time the product was designed, or (2) that the defendant knew or should have known, in the exercise of ordinary care, that the product was unreasonably dangerous and defendant failed to warn of its dangerous propensity. Carrizales , 226 Ill. App. 3d at 36; Baltus , 199 Ill. App. 3d at 830. This is consistent with section 398 of the Second Restatement of Torts, which provides that “[a] manufacturer of a chattel made under a plan or design which makes it dangerous for the uses for which it is manufactured is subject to liability  [for] failure to exercise reasonable care in the adoption of a safe plan or design.” Restatement (Second) of Torts §398, at 336 (1965). We believe that Carrizales and Baltus correctly state the appropriate standard for negligence cases involving defective products and that the risk-utility test does not apply to such cases. The negligence analysis set forth in Carrizales and Baltus correctly focuses on the conduct of the defendant and correctly makes a differentiation in the fault concept between negligence and strict liability. Again, we note that the standard expressed in these cases is similar, but not identical to, the standard to be applied in strict products liability actions involving defective design. In contrast to negligence’s focus on the standard of care established by other manufacturers in the industry, strict liability focuses on the product and only requires proof that the benefits of the challenged design do not outweigh the risk of danger inherent in such designs, that the alternative design would have prevented the injury, and that the alternative design was feasible in terms of cost, practicality and technology. See Hansen , 198 Ill. 2d at 436. In a strict liability setting, if plaintiff introduces evidence that a reasonable alternative design could have been practically adopted, a trier of fact may conclude that the product was defective notwithstanding that the proposed design was not adopted by any manufacturer, or even considered, at the time of sale. Restatement (Third) of Torts: Products Liability §2, Comment d , at 19 (1998). Of course, a plaintiff can also prove his strict liability claim by presenting proof that the defendant deviated from the industry standard ( Anderson , 74 Ill. 2d at 368), and in that case it would subsume the risk-utility standard. Having determined the appropriate criteria to assess plaintiff’s negligence claim, and in particular that the risk-utility test is not applicable, we now turn to other issues raised by the parties.