Chapter 15 Product Liability (Total Quality Management)
Post on 14-Jan-2016
Embed Size (px)
DESCRIPTIONThat is a chapter of a book about quality control. In Industrial Engineering Department. We learn about this.
1 See the CPSC's Annual Reports and the National Safety Councils annual editions of \ccidcnr Fact (these cstim.uc include injuricx from toxic suh:-.!~tnCL'."J
The marvels of technology have provided needed and useful new products. Competition among manufacturers is a significant motivating factor for providing new and modified products. However. competition sometimes forces the marketing of products before they have been adequately tested. Indeed, unproved technology creates hazards that are un- known prior to product use. Highly diverse and technically-complicated product design has also increased the severity and frequency of injuries. The number of product accidents is roughly estimated at 50 million per year, at an annual cost to the nation of S50 billion.' Thus, there is a need to reduce the risk of injuries and to compensate injured consumers.
Consumers are initiating lawsuits in record numbers as a result of injury. death, and property damage from faulty product design or faulty product workmanship. The num- ber of product liability lawsuits has skyrocketed since 1965. Jury verdicts in favor of the injured party have continued to rise in recent years. The size of the judgment or settle- ment has also increased significantly. which has caused an increase in product liability insurance. Although the larger manufacturers have been able to absorb the judgment or settlement cost and pass the cost on to the consumer. smaller manufacturers have occa- sionally been forced into bankruptcy. Although injured consumers must be compen- sated, it is also necessary to maintain viable manufacturing entities.
The reasons for product injuries fall generally into three areas-the behavior or knowledge of a product user, the environment where the product is used. and whether the factory has designed and constructed the product carefully using safety analysis and qual- ity control. Due to the varying environments and product users' capacities and habits. it is difficult to devise an adequate safety program to reduce injury. Changing human behavior and environments, although not impossible. is more difficult than changing manufacturing design and improving quality control. Reducing the risk of injury is best
Products Liability 15
~ In this chapter, the term 1it~f('c/;1e is used instead of the term nonconjormiug, because it is the legal term.
Historical records indicate that in ancient times, the producers of grain were liable for the quality of their product. This liability was based on a sample, since it was physically impossible to inspect each and every grain. If the sample was of good quality, the entire shipment was considered to be good; if the sample was of poor quality, the entire ship- ment was considered to be poor.
By the fourteenth century, sampling inspection of textiles was commonplace. Seals and official stamps were used by producers, wholesalers, and government inspectors to al lest to the quality of the goods. Sampling was used rather than I 00% inspection be- cause it was not economically feasible to inspect every yard of cloth. Economic dam- ages were awarded to plaintiffs for defective- products and, in some cases, damages were awarded for injuries sustained. However, lawsuits were infrequent, because man- ufactured products were of simple design, handcrafted. and relatively safe to use.
By the middle of the eighteenth century, two concepts had developed that affected products liability for about two centuries. Ca Feat emptor (let the buyer beware) is a con- cept that resulted from Adam Smith's "invisible hand" theory of commercial regulation. The concept that the purchaser was to take care of his or her own interests has appeal to Americans, who prize individualism and free enterprise. The other legal doctrine is priv- ily of contract. which required that the manufacturer and the injured party have a con-
accomplished by stimulating manufacturing creativity. As a result. the law has placed great responsibility upon manufacturers for injuries attributable to defective products.
There are reasons why the manufacturers liability for product injury has increased. Manufacturers are in the best position to know what are the safest designs, materials. construction methods. and modes of use. Because of the complex designs of product . consumers often lack the information to decide rationally among the risks inherent in them. Consumers expect manufacturers to design products with safety as a priority. Con- sumers can choose stereos for their cars, but they depend on the manufacturer to select the appropriate tire design and pressure so that an automobile is reasonably stable. In- deed. manufacturers promulgate the risk of product injury by placing products on the market and have the means to spread the cost of injury by appropriately pricing products to include all the costs. even the costs of injury.
The safety and quality of products has been steadily improving. Manufacturers have met the challenge admirably: for instance, using safety glass where previously glass shards caused many severe injuries, placing safety guards around lawn mower blades to prevent lacerations and amputations. redesigning hot water vaporizers to reduce the risk of burns to children. and removing sharp edges on car dashboards to minimize second- ary collision injuries.
408 CHAPTER 1 5
I. To protect the public against unreasonable risks of injury associated with con- sumer products.
'> To assist consumers in evaluating the comparative safety of consumer products. 3. To develop uniform safety standards for consumer products and to minimize
conflicting stale and local regulations. 4. To promote research and investigation into the causes and prevention of product-
related deaths, illnesses. and injuries.
Local. state, and federal laws regulate many products. For instance. many municipali- ties have adopted building codes that require safety standards for building products. Also, states have enacted various laws to regulate such items as fireworks. toys. life pre- servers. and mattresses to enhance safety in order to protect their citizenry. Generally. these laws are in response to a local tragedy and have mild administrative sanctions or are not enforced. However. in ! 972. a significant federal consumer safety law, the Con- sumer Product Safety Act (CPSA). was passed.
The purposes of this act are:
Product Safety Law
tractual relationship. The customer, under the privily of contract doctrine. could not di- rectly sue the manufacturer for a defective product. Thus, the manufacturer was liable only to the wholesaler, the wholesaler to the retailer, and the retailer to the customer. If the retailer went out of business, the customer had no suit. If the injured party had used the product but was not the purchaser of the product, there could be no suit. For instance. if a husband was injured by a product purchased by his wife, there could be no suit be- cause the husband had not purchased the product. so he did not have privity of contract. Both the caveat emptor principle and the privily ui contract doctrine fostered the indus- trial revolution by limiting manufacturers' liability.
Initially. an exception was made to the privily of contract doctrine for inherently or imminently dangerous products such as food. drugs. and firearms. Then in 1916, the Macl'herson v. Buick Motor Company case marked the beginning of the end of the priv- ity of contract doctrine in other areas of products liability. The court held that the Buick Motor Company was negligent because it failed to inspect a defective wheel purchased from a component part manufacturer before incorporating the wheel in the finished product. The court further held that Buick owed a duty of care and vigilance to those ul-. timately expected to use the product. the consumer, and not just to the immediate pur- chaser, the retail dealer. It is now a standard practice in the automotive industry that tires are the only part of the vehicle not warranted by the vehicle manufacturer. It is interest- ing that the landmark Macl'herson 1. Buick Motor Company case has a similar fact pat- tern to the Bridgestone/Firestone tire problem that caused accidents. particularly in Ford Explorers.
PRODUCTS LIABILITY 409
Products liability law controls the private litigation of product accidents, which provides compensation to the injured party. Products liability law involves the tort law of negli- gence or strict liability and the contract law of sales or warranty. The liability may arise as a result of a defect in design or manufacturing. improper service, breach of warranty, or negligence in marketing due to improper directions, warnings, or advertising.
In all products liability suits, the plaintiff must prove causation. The plaintiff must prove that the product was substantially responsible for her injury. This can be done by proving that it is more probable than not-or 51 % likely-that the product caused the ll1JUry.
Negligence is often considered the "classic" theory of products liability. In essence, the manufacturer owes a duty of care to the consumer when constructing and designing products. In order to be compensated, the injured consumer must prove that the manu- facturer was careless or lax in its duty and thus produced a defective product that caused injury to the consumer. The negligence case focuses on the manufacturer's conduct.
The doctrine of strict liability provides that one who sells a product in a defective con- dition that is unreasonably dangerous to a consumer is liable for harm caused to the user or the user's property. The focus in a strict liability suit is whether the product is defec- tive and not whether the manufacturer's conduct was careless. Under the doctrine of strict liability, the injured party must prove that the product was defective and unrea- sonably dangerous. the defect was present at the time of manufacture, and the defect caused the injury. In addition, almost all courts require the injured party to prove that a safer alternative design was available at the time of manufacture.
Products Liability Law
A five-member commission, appointed by the President with the advice and consent of the Senate, administers this act and other similar acts. such as the Refrigerator Safety Act and the Flammable Fabrics Act. The commission is authorized to establish product safety standards relating to performance, composition. design. construction. finishing. labeling, or packaging of products. All consumer products used in and around a house- hold or school or for recreation are covered by the CPSA, except for products adminis- tered bv other agencies. Exempted products covered by other agencies include cars. \:>oats, ~\I"!)\anes, food, drng,s, cosmetics, tobacco. and poisons.
The commission is required to maintain an injury information clearinghouse to col- lect, investigate, analyze, and disseminate injury data. It may conduct research and in- vestigations on the safety of consumer products. The commission is relying principally on the development of voluntary safety standards; however, conditions may warrant civil or criminal penalties. The act does not provide for any compensation to the injured consumer. Compliance with a consumer product safety rule does not relieve any manu- facturer from liability under common law or state legislative law. However. compliance with an applicable federal standard can sometimes be useful evidence that the manufac- turer was not negligent in its duties.
410 CHAPTER 1 5
II:. A substantial portion of the trial is spent determining the cause of the accident. The de- fendant makes every effort to prove that the product was not responsible for the injury. The defendant wili attempt 10 prove that the plaintiff's had judgment, the plaintiff's fail- ure to maintain the product properly. or the plaintiff's improper use of the product are the causes of the injury. It is also possible that the accident was caused by an alteration or change in the product after it left the manufacturer. The legal theories that can be used to defend a products l iabi lity suit are comparative negligence, assumption of risk, mis- use. and Statures of Repose.
Comparative negligence is gaining acceptance even in the strict liability cause of ac- tion. Comparative negligence apportions fault and thus a corresponding amount of damages to the injured consumer who hax been negligent in the use of a product. For
Generally. the agreement between parries to a contract concerning the quality or the safely of a product takes the form of warranties, which are controlled by the Uniform Commercial Cude or the law of sales. There are two types of warranties-an express warranty and an implied warranty. An express warranty is a material statement made voluntarily hy a manufacturer or merchant in sales brochures or sales talk to induce sales. A consumer who relies upon a false material statement that results in injury can bring an express warranty suit because the product is not what it was expressly stated to be. An implied warranty provides that the product is reasonably fit for the general pur- pose for which the product was designed. The duty to provide a reasonably fit product is implied by law: thus it is automatically a part of every sales contract made by a mer- chant and cannot be waived by a private contract agreement.
I. The utility of the product. 1 The feasibility and approximate cost of safety improvements. 3. The pubiic s common knowledge or the products inherent clanger. .:J.. The frequency and severity of injuries that result from the product. 5. The adequacy or instructions and warnings. 6. The environment where the product was used. 7. The consumer's reasonable care in using the product. 8. The age and the condition of the product.
Whether the product is considered "defective" is one of the central issues in any prod- ucts liability case. A manufacturing defect can easily be proved merely hy comparing a defective product Lo a nondefective one by the same manufacturer. However. proving a design defect can be difficult. Some of the factors used by the jury to assess whether; product design is defective and unreasonably dangerous are:
PRODUCTS LIABILITY 411
Proof that the product was defective at the time of manufacture is frequently difficult, because the product may be entirely or partly destroyed by the accident. Expert testi- mony may be needed to ascertain when the defect occurred. This testimony will usually follow the line of reasoning that a microscopic flaw, which was present during the man- ufacturing operation, caused the product to fail at a future date-for instance, the use o "dirty steel" in the manufacturing process.
Expert witnesses are engaged by both sides of the litigation to prove their arguments. The defendant uses the services of expert technical witnes...