Product liability
Product liability is the area of law in which manufacturers, distributors, suppliers, retailers, and others who make products available to the public are held responsible for the injuries those products cause. Although the word "product" has broad connotations, product liability as an area of law is traditionally limited to products in the form of tangible personal property.
Product liability by country
The overwhelming majority of countries have strongly preferred to address product liability through legislative means. In most countries, this occurred either by enacting a separate product liability act, adding product liability rules to an existing civil code, or including strict liability within a comprehensive Consumer Protection Act. In the United States, product liability law was developed primarily through case law from state courts as well as the Restatements of the Law produced by the American Law Institute.The United States and the European Union's product liability regimes are the two leading models for how to impose strict liability for defective products, meaning that "irtually every product liability regime in the world follows one of these two models."
United States
The United States was the birthplace of modern product liability law during the 20th century, due to the 1963 Greenman decision which led to the emergence of product liability as a distinct field of private law. In 1993, it was reported that "o other country can match the United States for the number and diversity of its product liability cases, nor for the prominence of the subject in the eyes of the general public and legal practitioners." This was still true as of 2015: "In the United States, product liability continues to play a big role: litigation is much more frequent there than anywhere else in the world, awards are higher, and publicity is significant."In the United States, the majority of product liability laws are determined at the state level and vary widely from state to state. Each type of product liability claim requires proof of different elements in order to present a valid claim.
History
For a variety of complex historical reasons beyond the scope of this article, personal injury lawsuits in tort for monetary damages were virtually nonexistent before the Second Industrial Revolution of the 19th century. As a subset of personal injury cases, product liability cases were extraordinarily rare, but it appears that in the few that were brought, the general rule at early common law was probably what modern observers would call no-fault or strict liability. In other words, the plaintiff only needed to prove causation and damages.Common law courts began to shift towards a no-liability regime for products by developing the doctrine of caveat emptor in the early 1600s. As personal injury and product liability claims began to slowly increase during the early First Industrial Revolution, common law courts in both England and the United States in the 1840s erected further barriers to plaintiffs by requiring them to prove negligence on the part of the defendant, and to overcome the defense of lack of privity of contract in cases where the plaintiff had not dealt directly with the manufacturer. During the Second Industrial Revolution of the mid-to-late 19th century, consumers increasingly became several steps removed from the original manufacturers of products and the unjust effects of all these doctrines became widely evident.
State courts in the United States began to look for ways to ameliorate the harsh effects of such legal doctrines, as did the British Parliament. For example, one method was to find implied warranties implicit in the nature of certain contracts; by the end of the 19th century, enough U.S. states had adopted an implied warranty of merchantable quality that this warranty was restated in statutory form in the U.S. Uniform Sales Act of 1906, which drew inspiration from the British Sale of Goods Act 1893.
During the 1940s, 1950s, and 1960s, American law professors Fleming James Jr. and William Prosser published competing visions for the future of the nascent field of product liability. James acknowledged that traditional negligence and warranty law were inadequate solutions for the problems presented by defective products, but argued in 1955 those issues could be resolved by a modification of warranty law "tailored to meet modern needs," while Prosser argued in 1960 that strict liability in tort ought to be "declared outright" without "an illusory contract mask." James's analysis was badly weakened by the fact that he did not actually understand how insurance works. Ultimately, it was Prosser's view which prevailed.
Landmark legal cases
The first step towards modern product liability law occurred in the landmark New York case of MacPherson v. Buick Motor Co., which demolished the privity bar to recovery in negligence actions. By 1955, James was citing MacPherson to argue that "he citadel of privity has crumbled," although Maine, the last holdout, would not adopt MacPherson until 1982.The second step was the landmark New Jersey case of Henningsen v. Bloomfield Motors, Inc., which demolished the privity bar to recovery in actions for breach of implied warranty. Prosser cited Henningsen in 1960 as the "fall of the citadel of privity." The Henningsen court helped articulate the rationale for the imminent shift from breach of warranty to strict liability as the dominant theory in product liability cases, but did not actually impose strict liability for defective products.
The third step was the landmark California case of Greenman v. Yuba Power Products, Inc., in which the Supreme Court of California openly articulated and adopted the doctrine of strict liability in tort for defective products. Greenman heralded a fundamental shift in how Americans thought about product liability towards a theory of enterprise liability—instead of basing liability on the defendant's "fault" or "warranty", the defendant's liability should be predicated, as a matter of public policy, on the simple question of whether it was part of a business enterprise responsible for inflicting injuries on human beings. The theoretical foundation for enterprise liability had been laid by James as well as another law professor, Leon Green. As noted above, it was Greenman which led to the actual emergence of product liability as a distinct field of private law in its own right. Before this point, products had appeared in case law and scholarly literature only in connection with the application of existing doctrines in contract and tort.
The Greenman majority opinion was authored by then-Associate Justice Roger J. Traynor, who cited to his own earlier concurring opinion in Escola v. Coca-Cola Bottling Co.. In Escola, now also widely recognized as a landmark case, Justice Traynor laid the foundation for Greenman with these words:
Even if there is no negligence, however, public policy demands that responsibility be fixed wherever it will most effectively reduce the hazards to life and health inherent in defective products that reach the market. It is evident that the manufacturer can anticipate some hazards and guard against the recurrence of others, as the public cannot. Those who suffer injury from defective products are unprepared to meet its consequences. The cost of an injury and the loss of time or health may be an overwhelming misfortune to the person injured, and a needless one, for the risk of injury can be insured by the manufacturer and distributed among the public as a cost of doing business. It is to the public interest to discourage the marketing of products having defects that are a menace to the public. If such products nevertheless find their way into the market it is to the public interest to place the responsibility for whatever injury they may cause upon the manufacturer, who, even if he is not negligent in the manufacture of the product, is responsible for its reaching the market. However intermittently such injuries may occur and however haphazardly they may strike, the risk of their occurrence is a constant risk and a general one. Against such a risk there should be general and constant protection and the manufacturer is best situated to afford such protection.
Traynor's argument for imposing strict liability in Escola "has had an enormous impact on the way legal scholars have understood products liability and tort law more generally". The year after Greenman, the Supreme Court of California proceeded to extend strict liability to all parties involved in the manufacturing, distribution, and sale of defective products. In 1969, the court then held that such defendants were liable not only to direct customers and users, but also to any innocent bystanders randomly injured by defective products.
Nationwide adoption of product liability
In turn, Prosser was able to propagate the Greenman holding to a nationwide audience because the American Law Institute had appointed him as the official reporter of the Restatement of Torts, Second. The Institute approved the Restatement's final draft in 1964 and published it in 1965; the Restatement codified the Greenman doctrine in Section 402A. Greenman and Section 402A "spread like wildfire across America". The highest courts of nearly all U.S. states and territories embraced this "bold new doctrine" during the late 1960s and 1970s. By 1971, the doctrine had been adopted in 28 states; by 1976, it had been adopted in 41 states. As of 2018, the five exceptions who have rejected strict liability are Delaware, Massachusetts, Michigan, North Carolina, and Virginia. In four of those states, warranty law has been so broadly construed in favor of plaintiffs that only North Carolina truly lacks anything resembling strict liability in tort for defective products. North Carolina's judiciary never attempted to adopt the doctrine, and the state legislature enacted a statute expressly banning strict liability for defective products in 1995.Before the product liability revolution, it was unheard of in American case law, for example, for a consumer to sue a ladder manufacturer after falling off a ladder or to sue a diving board manufacturer for diving injuries. After the 1960s, these kinds of lawsuits became very common.
In a landmark 1986 decision, East River S. S. Corp. v. Transamerica Delaval Inc., the U.S. Supreme Court also embraced strict liability for defective products by adopting it as part of federal admiralty law, holding that admiralty law "incorporates principles of product liability, including strict liability".