Court Opinion

ID: 9557579
Source: CourtListenerOpinion
Date Created: 2023-08-21 16:52:50.60941+00
Date Added: 2024-06-11T09:06:01.396977
License: Public Domain

O’CONNELL, C. J.,
specially concurring.
The majority opinion is written on the assumption that even though the remedy for injuries resulting from a defective product is available under the Uniform Commercial Code, the court is free to provide relief under a separate theory of strict liability as defined in § 402A of the Eestatement (Second) of Torts (1965). We have made this assumption in previous cases. It is my opinion that we should no longer indulge in that assumption.
A careful reading of the Uniform Commercial *274Code reveals that it prescribes a legal framework for the recovery of damages for personal injuries resulting from defective products. Recovery for personal injuries resulting from the negligent conduct of the seller is left for the courts to develop.① But it is apparent that aside from the negligence cases the Code provides an integrated and comprehensive scheme under which recovery for personal injuries may be sought both by privity and non-privity plaintiffs.
This subject matter is treated under the rubric “warranty,” thus drawing to it the previously developed case law including the law of implied warranty of merchantability. Many courts, including our own, came to perceive that the basis for recovery for breach of an implied warranty of merchantability was in substance recovery for strict liability in tort.② This fact was emphasized by the authors of § 402A,③ and was utilized by courts in developing a common law of strict products liability based upon tort principles and free from the strictures of Code provisions relating to disclaimers, limitation of remedy, privity and notice requirements. But development of this case law has *275posed the question of legislative pre-emption,④ and that question is not resolved by the determination that breach of warranty is more tort than breach of contract. If pre-emption obtains, then of course the court is not free to adopt § 402A.
After careful study of the question I have reluctantly concluded that the Code is controlling in this area of the law. I say “reluctantly” not only because that conclusion would require us to repudiate cases predicated on § 402A, but also because the requirements of the Code relating to notice and disclaimer do not make much sense in the field of personal injury cases. But the fact that these requirements are ill-fitting does not give us license to purge them from the statute.
The Uniform Commercial Code, as enacted in Oregon, focuses on dealings between businessmen. But a fair reading of the Code and its official comments indicates its attention to the question of sales to consumers as a part of the general subject matter of commercial transactions. Moreover, personal injury problems are dealt with explicitly. In QBS 72.7150, injury to person or property resulting from breach of warranty is specified as an aspect of consequential damages sanctioned by the Code. Limitation of such *276damages in the ease of consumer goods is declared prima facie unconscionable in OES 72.7190 (3). It. is evident that persons other than the buyer of products may recover damages for personal injuries under OES 72.3180 and the comments to that section. And the comments to OES 72.6070 include a discussion of the variability of notice requirements when applied to retail consumers and section 72.3180 beneficiaries.
Very probably the disposition of the cases which we have decided under § 402A would be no differérit hnder the Uniform Commercial Code. But while § 402A rejects disclaimer and notice impediments to recovery in all cases,⑤ the Code envisions at least some circumstances in which recovery may be conditioned by satisfaction of those requirements. Nor can it be said that § 402A and the Code were intended to deal with different buyer-seller relationships; by its terms the former covers immediate as well as remote parties to a sale, and a careful reading of the official comment to OES 72.3180 indicates that similar coverage is permitted by the Code. It is true that the general inter 7 pretation section of the Code permits the Code to be supplemented by case law development.⑥ But I do not *277think that this can be regarded as giving the court the license to create a separate body of common law which covers substantially the same field and displaces the Code’s explicit provisions.
As I have said, notice and disclaimer provisions of the Code do not make much sense in the context of personal injury eases. Strict products liability resting on tort principles and free of such requirements seem most responsive to contemporary notions of who should bear the burden of compensating members of the public for personal injuries resulting from defective products. But the legislature has spoken in unambiguous terms on this precise problem, and it is for the legislature to decide whether public policy as expressed in the Code is well or ill-conceived.
• ’ As first stated, I believe that the disposition of .the instant case would be the same under § 402A and the Uniform Commercial Code. With regard to my conclusion that the Code is controlling in this area of the law, I would hold that the statute should govern all future products liability cases wherein discovery of an alleged breach of warranty occurs after the date of this, decision.
The position taken by the majority injects into our law of products liability complexities which are iikely to haunt us in future cases. An example of the confusion which is invited by our present holding is the suggestion in Justice McAllister’s specially concurring opinion that there are two parallel causes of *278action, one under the Code and one under § 402A, each of which must be pleaded differently. Apparently the magic word “warranty” in the complaint will signal a Code cause of action. I can see no reason for recognizing a cause of action as arising under the Code once this court has taken the step of designing its own theory of products liability outside of the Code. The practical effect of our holding is that § 402A is the exclusive test of liability. I read the majority opinion to mean that if a plaintiff elects to bring his action on the theory of § 402A, defendant could not set up a defense of disclaimer or lack of notice even though those defenses were given to sellers under the Code. Adopting the majority’s position, so far as the defendants in the products cases are concerned, § 402A provides the exclusive body of law governing their liability. And practically speaking, § 402A can be regarded as the exclusive remedy of the plaintiffs in products cases simply because there would be no reason for a plaintiff to seek a remedy under the Code since it would always be to his disadvantage. The only explanation a plaintiff could give for filing a complaint under the Code would be inadvertence or mistake—it certainly cannot benefit him in any way. Thus it can be said that the Code has no utility and can be disregarded because plaintiffs do not need it and defendants cannot have it. If we permit a plaintiff to bring his action either under the Code or under § 402A, we put ourselves in the strange position of holding that plaintiff can elect to use the Code as the basis for his action, but defendant does not have the privilege of utilizing Code defenses if the plaintiff decides that he does not want them interposed.
To avoid the confusion invited by Justice Mc-Allister’s opinion, we should declare that our action *279in recognizing § 402A as a separate principle upon which to rest the personal injury cases in the products field has the effect of excluding recovery under the Code.
I also disagree with Justice McAllister’s conclusion that our previous adoption of § 402A of the Restatement (Second) of Torts constituted an adopttion of the so-called enterprise liability rationale found in the comment to § 402A which, of course, would constitute a repudiation of our pronouncement in Wights v. Staff Jennings, 241 Or 301, 405 P2d 624 (1965), rejecting enterprise liability as the sole basis for imposing strict liability in products cases.
The fallacy in Justice McAllister’s reasoning is in confusing the rule laid down in § 402A with the commentator’s explanation for the adoption of the rule. The rule is found in the blackletter statement which is to the effect that a commercial seller of goods who sells a product in a defective condition unreasonably dangerous to the user or consumer or his property is subject to liability for physical harm caused by the product. There is nothing to compel the conclusion that this rule is necessarily based upon the reasoning that the seller can best bear or shift the cost of injury, although this happens to be the explanation used in the comment. Proof that this is not the only explanation for strict liability is found in the comment to § 402A in its original form, which limited strict liability to sellers of food. In that comment the reporter explains:
“* * =» In the beginning these decisions displayed considerable ingenuity in evolving more or less fictitious .theories of liability to fit the case. The various devices included'an agency of the intermediate dealer or another to purchase for the *280consumer, ór to sell for the seller; a theoretical assignment of the seller’s warranty to the intermediate dealer; a third party beneficiary contract; and an implied representation that the food was fit for consumption because it was placed on the market. In later years the courts have become more or less agreed that the theory of a ‘warranty’ -from the seller to the consumer, either ‘running with the goods’ by analogy to. a covenant running with the land, or made directly to the consumen Other decisions have indicated that the basis is merely one of strict liability in tort, which is not dependent upon either contract or negligence.” Restatement (Second) of Torts, Tentative Draft No. 6, p. 34 (Apr. 7,1961). .
At the time § 402A' was first drafted Greenman v. Tuba Power Products, Inc., 59 Cal2d 57, 377 P2d 897, 27 Cal Rptr 697 (1963), which originated the enterprise liability theory to support recovery for personal injury in the products cases, was not yet decided and the cases relied upon as a basis for the rule stated in § 402A used one or more of the various theories listed in the comment quoted above.
It is demonstrable then that the rule expressed in § 402A need not be based upon the enterprise liability theory as the concurring opinion seems to assume.
This being so, it seems exceedingly strange to pick out for endorsement the one basis for liability which this court had previously rejected in Wights v. Staff Jennings, supra. In that case we held that the seller could be held strictly liable for selling a product which creates an ultrahazardous condition, but we refused to accept the view advanced in Greenman v. Tuba Power Products, supra, on the ground that if we adopted such a theory we would be forced to *281extend strict liability, across the board to situations, not. involving products. ...
In Heaton v. Ford Motor Co., 248 Or 467, 435 P2d 806 (1967) we relied upon, the rule stated in § 402A in holding, that the seller could be held liable for personal injuries resulting from the use of an unreasonably dangerous vehicle.. It is apparent from that, opinion, that the court did not regard its holding as inconsistent with the. position which it had previously taken in Wights. And it is to be noted that no mention was made of enterprise liability in Heaton as the basis for the decision. The reasoning in Heaton centered upon the. question of. whether the product failed to meet the reasonable expectations of the user. The court held that “If the product faded under conditions concerning which an average consumer of that product could have fairly definite expectations, then the jury would have a basis for making an informed judgment upon the existence of a defect.” 248 Or at 472. This is essentially the same approach one finds in cases using a warranty theory to impose liability. And when the warranty approach is taken, the courts have not deemed it necessary to find support for imposition of liability in the loss shifting rationale of enterprise liability. Heaton followed the same pattern of reasoning.
The concurring opinion does not explain why the enterprise liability rationale would not be equally applicable to cases in which the plaintiff was injured by a “defect” not involving products. If we took the course suggested, it would be difficult to explain why strict liability should not be imposed upon non-negligent store owners for injuries caused by defective premises. And, the same conclusion would have to be *282reached-with respect to any defendant who could shift the cost of injuries under the enterprise liability rationale.
The majority opinion correctly concludes that the product cases can rest upon a theory of liability which has application only where there is a sale of goods. Under that theory the seller is deemed to impliedly represent to all purchasers that the goods marketed by him meet a certain standard. That standard is determined by the reasonable expectation of purchasers. This is in essence the test employed in § 402A. That test does not have any necessary connection with the theory of enterprise liability, although it is not likely that this court, or any other court, would impose liability upon a seller unless he theoretically, at least, could spread the loss through the pricing of his product.

See ORS 71.1020 (3), ORS 71.1030, and Comment 2 to ORS 72.3180, published in 1962 by the Legislative Counsel Committee.

 See, e.g., McGrath v. White Motor Corp., 258 Or 583, 484 P2d 838 (1971); Heaton v. Ford Motor Co., 248 Or 467, 470, 435 P2d 806 (1967); Wights v. Staff Jennings, 241 Or 301, 305, 405 P2d 624 (1965); Greeno v. Clark Equipment Company, 237 F Supp 427 (N D Ind 1965); Vandermark v. Ford Motor Co., 61 Cal2d 256, 37 Cal Rptr 896, 391 P2d 168 (1964); Greenman v. Yuba Power Products, Inc., 59 Cal2d 57, 27 Cal Rptr 697, 377 P2d 897 (1961); Goldberg v. Kollsman Instrument Corp., 12 NY2d 432, 240 NYS2d 592, 191 NE2d 81 (1963). See also, Prosser, The Assault Upon the Citadel, 69 Yale L J 1099, 1126-27 (1960) and Prosser, The Fall of the Citadel, 50 Minn L Rev 791, 800-02 (1966).

 Restatement (Second) of Torts 355-56, § 402A, comment m (1965).

 See generally, Rapson, Products Liability Under Parallel Doctrines: Contrasts Between the Uniform Commercial Code and Strict Liability in Tort, 19 Rutgers L Rev 692 (1965); Titus, Restatement (Second) of Torts Section 402A and the Uniform Commercial Code, 22 Stan L Rev 713 (1970); Franklin, When Worlds Collide: Liability Theories and Disclaimers in Defective Products Cases, 18 Stan L Rev 974 (1966); Dickerson, The ABC’s of Products Liability—With a Close Look at Section 402A and the Code, 36 Tenn L Rev 439 (1969); Shanker, Strict Tort Theory of Products Liability and the Uniform Commercial Code: A commentary on Jurisprudential Eclipses, Pigeonholes and Communication Barriers, 17 Wes Res L Rev 5 (1965).

 Supra n. 3.

 “Unless displaced by the particular provisions of the Uniform Commercial Code, the principles of law and equity, including the law merchant * * * shall supplement its provisions.” ORS 71.1030.
This is not to say that courts may not go beyond the Code’s explicit coverage in certain circumstances.
“The official comments to the Uniform Commercial Code clearly contemplate case law development concerning both privity [ORS 72.31801, Comment 3] and the extension of warranties to non-sale transactions [ORS 72.3130, Comment 2], However, the comments hopefully express an ‘intention that the policies of this Act may offer useful guidance in dealing with *277further eases as they arise.’ The matters of * * * notice, and disclaimer are specifically covered by the Code, and should be regarded as an expression of legislative policy.” Rapson, supra ri. 4 at 712-713.