Opinion ID: 1983858
Heading Depth: 1
Heading Rank: 1

Heading: The Evolution of Products Liability Law.

Text: The law of products liability is of relatively recent origin. It has been noted, in fact, that a scholarly commentator could remark as late as 1955 that `[p]roducts liability does not rank as a term of art in the courts of law.' W. KEETON, D. OWEN, AND J. MONTGOMERY, PRODUCTS LIABILITY AND SAFETY, CASES AND MATERIALS 19 (1980) (hereinafter cited as PRODUCTS LIABILITY AND SAFETY) (quoting Wilson, Products Liability (pt. 1), 43 CALIF. L. REV. 614, 614 (1955)). Under Roman law at the time of Justinian, the vendor's liability turned upon whether he knew of the defect. DIG. JUST. (Book 19, 533 A.D.), reprinted in PRODUCTS LIABILITY AND SAFETY, at 21. By the thirteenth century in England, the growth of crafts in a feudal agricultural society led to concern in the law for quality good after the fashion of the day. Hamilton, The Ancient Maxim Caveat Emptor, 40 YALE L.J. 1133, 1142 (1931). The maxim caveat emptor first appeared in Moore v. Hussey, 80 Eng. Rep. 243 (K.B. 1601). For the next few centuries in this country and in England, the buyer had best beware. PRODUCTS LIABILITY AND SAFETY, at 24. Even during the early years of this century, an action generally could not lie against a remote manufacturer with whom the buyer had not directly entered into a contract (lack of privity). W. PROSSER, HANDBOOK OF THE LAW OF TORTS § 93, at 622 (4th ed. 1971). Where privity existed, negligence was the standard for recovery for personal injuries. The Industrial Revolution during the nineteenth century led to the products liability revolution in this century, which began when a Scotsman named Donald MacPherson was injured after a wheel fell off his new 1910 Buick automobile. His $5,000 verdict was appealed on the ground that, because MacPherson had bought the Buick from a dealer instead of from Buick Motor Company, he should not be allowed to sue the manufacturer, with whom he did not stand in privity. In the famous opinion by Justice Cardozo, then of the New York Court of Appeals, the manufacturer who placed the item into the stream of commerce was held to be responsible for the finished product. MacPherson v. Buick Motor Co., 217 N.Y. 382, 394, 111 N.E. 1050, 1055 (1916). In New Hampshire, we adopted the doctrine of strict liability in tort fourteen years ago in Buttrick v. Arthur Lessard & Sons, Inc., 110 N.H. 36, 39, 260 A.2d 111, 113 (1969). The reasons for the evolution of the law in the area of products liability are many. We live in an era of national advertising and of nationwide distribution which can add or remove a product from our store shelves in a matter of days. Many of those nationally sold products contain chemical compounds and synthetics the side effects of which clearly cannot be anticipated. It is believed that if today's products are capable of causing illness or physical injury, the risk of liability is best borne by the companies that profited from their sale, rather than by the unfortunate individual consumers. Buttrick v. Lessard, 110 N.H. at 39, 260 A.2d at 113; Greenman v. Yuba Power Products, Inc., 59 Cal. 2d 57, 63-64, 377 P.2d 897, 901, 27 Cal. Rptr. 697, 701 (1963). As Justice Holmes noted, the life of the law is experience, and the modern experience with consumer products has been one of ever-improving technology and rising standards of living, but also of injury and death: Americans20 million of themare injured each year in the home as a result of incidents connected with consumer products. Of the total, 110,000 are permanently disabled and 30,000 are killed. A significant number could have been spared if more attention had been paid to hazard reduction.... The exposure of consumers to unreasonable consumer product hazards is excessive by any standard of measurement. PRODUCTS LIABILITY AND SAFETY, at 2 (quoting from National Commission of Product Safety, Final Report 1 (June 1970)). Deterrence is also a valid consideration; without the stimulus of plaintiffs' products liability actions, the incentive to improve products and make them safer would not exist. See generally Cowan, Some Policy Bases of Products Liability, 17 STAN. L. REV. 1077 (1965). The recent rise in products liability claims and lawsuits has resulted in a corresponding increase in insurance rates for those making or selling products. This, in turn, led our own legislature in 1978 to enact a products liability law in the interest of protecting manufacturers who, it was believed, were being unduly burdened by rapidly rising insurance rates. See N.H.S. JOUR. 1020-29 (1977). It is significant that, during debate, a number of legislators expressed skepticism about the fairness of a State products liability law and about its effectiveness in stabilizing insurance rates for New Hampshire manufacturers. This concern about the legislation's effectiveness was based on the fact that most products manufactured in New Hampshire are sold in other States, and on the belief that the high insurance premiums paid by in-State manufacturers were attributable to the proliferation of lawsuits in larger industrialized States. See, e.g., id. at 1016-17 (remarks of Sens. Preston and Bossie); N.H.S. JOUR. 593-94 (1978) (remarks of Sen. Bossie). In fact, in conjunction with the enactment of RSA chapter 507-D (Supp. 1979), the New Hampshire Legislature authorized the creation of a fifteen-member Commission to Study Product Injury Reparations (commission) for the purpose of evaluating the legislation's effect on products liability insurance rates. Laws 1978, 31:2. The legislature directed the commission to issue a final report by January 1, 1980, on the following matters: (1) the effectiveness of RSA chapter 507-D (Supp. 1979) in improving the availability and affordability of products liability insurance; (2) other existing laws and practices which bear on the availability and affordability of such insurance; and (3) such changes as may be necessary to increase availability and affordability of such insurance, while at the same time allowing just compensation to those suffering injury from products. Laws 1978, 31:2. The commission issued its final report on December 21, 1979, finding that it was very difficult to assess the impact of RSA 507-D on the problems of availability and affordability of products liability insurance. At the time of the report, the commission found that the panic rise in manufacturers' insurance rates had ended nationwide, and not just in New Hampshire, thereby tending to show that the State legislation was not the cause of the stabilization of rates. In conclusion, the commission stated that [t]he problems of product liability insurance affordability and availability have eased, but it seems unlikely that this relaxation is attributable to the enactment of RSA 507-D. Against this background, we now turn to the specific challenges raised by these consolidated cases.