7 Things to Know About Defective Products & Product Liability Cases

Searcy Denney Scarola Barnhart & Shipley

If you have questions about a product defect or product liability in general, below are seven things to know about defective products and product liability law.

  1. What is Product Liability Law?

Product liability law addresses how injured parties may recover for damages they sustained from a defective product. Typically, the responsible party in a product liability case is anyone in the product’s chain of distribution, including but not limited to:

  • The product manufacturer
  • The manufacturer of parts of the product
  • The party that assembles the product or installs it
  • The distributor of the product
  • The retail store selling the product directly to the consumer

Product liability law is based on state law and is often brought under the following causes of action:

2. How Can a Product Be Defective?

There are various ways a product can be defective, including:

  • Manufacturing Defects: These types of defects typically occur while the product is in the manufacturer’s care.
  • Marketing Defects: These types of defects involve problems with how a product is marketed, which may include issues with the labeling of the product, a lack of warnings or instructions, etc.
  • Design Defects: These defects are caused by a flaw in the design of the product itself, such that the product is defective from the start.

3. What Are Examples of Defective Products?

There are thousands of different products that are defective, causing millions of injuries each year. That said, it would be impossible to name every type of defective product. However, below are some examples of products that have had serious defects that may be surprising:

  • Essential oils. This is a product commonly used by consumers that you would not expect to be harmful. However, in recent news, this product has been recalled in some instances after the Centers for Disease Control and Prevention determined that certain bottles of room spray contained rare and dangerous bacteria that causes melioidosis – a potentially fatal condition.
  • Off-road motorcycles. Off-road motorcycles are supposed to be fun for riders to use during their outdoor adventures. However, if the bike is defective, this activity could be dangerous. Recently, the U.S. Consumer Product Safety Commission (CPSC) recalled some of these motorcycles because the retaining clips on the front brake caliper pin were falling out. This could cause the front brakes to fail, posing a crash hazard to the bike’s rider.
  • Defective battery. Sometimes the lithium battery inside many commonly-used products such as phones, video cameras, or even remote-controlled cars can be faulty, causing severe injuries.
  • LED Projectors. When you think of a defective product, rarely would an LED projector come to mind. However, the CPSC has recently recalled some LED projectors because they can malfunction and overheat, posing a fire hazard.
  • Jogging Strollers. Your baby’s safety is a top priority. Most parents would not expect their child’s life to be in danger when taking their baby for a stroll. However, on October 7, 2021, the CPSC recalled some jogging strollers due to a product defect. The stroller’s front wheel bearing could fail or detach in some situations, posing a fall and injury hazard.
  • Wood Stools. When sitting on a stool in your kitchen, you typically would not expect to be in danger. However, some wood stools have been recalled recently due to the stool breaking during use, posing fall and injury hazards. The CPSC recalled some stools in October 2021, recommending that consumers immediately stop using the recalled items and return them to the store where they were purchased for a full refund.
  • Youth ATVs. Recently, the CPSC recalled some youth ATVs because the vehicles failed to comply with federal mandatory ATV safety standards, posing a risk of severe injury or death to children.
  • Oversized Outdoor Reclining Chairs. When you are relaxing outside in your reclining chair on a warm summer day, the last thing you expect is the chair to suddenly collapse, causing you injuries. However, the CPSC has recently recalled several reclining outdoor chairs because they could break or collapse when weight is applied, posing a fall hazard. Reports of injured parties were sent to the retailer of the chair. The CPSC recommended that consumers immediately stop using the recalled chairs and return them to the nearest retail store for a full refund.
  • Oil and Vinegar Cruets. When you are sitting down with your family enjoying a nice Italian dinner, and you go to grab the oil and vinegar cruet to add a nice flavor to your salad, you typically would not expect to be lacerated by the cruet (which is a small container). However, in September 2021, the CPSC recalled about 26,150 cruets because the glass portion can break during use, posing laceration hazards.
  • Defective power or chain saw. Be careful to inspect your power or chainsaw before use, and do your research. In December 2020, the CPSC recalled 10-inch corded chain saws with extension poles because the chainsaw can start unexpectedly without the operation of the switch when the extension cord adapter is connected upside down. This could pose serious laceration hazards. The CPSC recommended that consumers stop using the recalled chainsaw immediately and contact the manufacturer for a free repair kit.

4. How to Conduct a Product Recall

When a product is defective, and a party in the product’s distribution chain, such as the manufacturer, distributor, or retailer, among other responsible parties, learns that the product is faulty, the responsible party may need to conduct a product recall. The CPSC provides guidelines on how to conduct a recall.

The CPSC recommends that one of the best ways to ensure that a product recall effectively reduces the amount of injuries or damages sustained to consumers is for a company to have a product recall plan already in place prior to an issue arising and execute it as quickly as possible.

Generally, a recall plan should begin with a company following the applicable laws and reporting the product to the CPSC. Responsible parties have a legal obligation to immediately report the following information about their products to the CPSC:

  • A defective product that could cause an unreasonable risk, injuries, or death to consumers
  • A product that fails to comply with applicable consumer product safety rules or any other rule, regulation, standard, or ban under the Consumer Product Safety Act, or any other statute enforced by the CPSC
  • An incident in which a child (regardless of age) chokes on a marble, small ball, latex balloon, or other small part contained in a toy or game and that, as a result of the incident, the child dies, suffers a severe injury, ceases breathing for any length of time, or is treated by a medical professional
  • Certain types of lawsuits applicable to manufacturers and importers and subject to the time periods detailed in Sec. 37 of the CPSA

Failure of a responsible party to properly report this information to the CPSC may lead to civil and/or criminal penalties. According to the CPSC, a responsible party should follow the following advice: “When in doubt, report.”

Sometimes defective products are reported by the consumers themselves or other sources. Once the CPSC decides that a recall may be necessary, it will expect a responsible party to respond quickly to its request for information and work closely with the CPSC’s Office of Compliance to ensure a proper recall.

5. How Do I Report an Unsafe Product or Search for Them?

If you are a consumer and would like to report an unsafe product to the CPSC, or you would like to protect your family and search the CPSC’s product recall database to see if a product you are considering is unsafe, consult the CPSC’s web page located at saferproducts.gov.

6. What Should You Do After Being Injured by a Defective Product?

If a defective product injures you, first, you should take care of your injury and seek medical attention. Your health and safety are most important. After you have addressed your medical needs, you should consider the following to help prepare your product liability case:

  • Be sure to keep the product that causes your injuries. Keep the product as-is without attempting to fix or modify it. Do not throw it away.
  • Be sure to collect your medical records documenting your injuries and take photos of the injuries caused by the defective product.
  • Be sure to follow your doctor’s advice and follow the prescribed treatment plan to ensure your injuries are treated properly.
  • Do not talk about your situation on social media. This could harm your case.
  • Seek guidance or advice on your legal rights as soon as possible after sustaining your injuries.

7. How Do I Know If I Have a Viable Product Liability Case?

If you or a loved one were injured or died because of a defective product, you may have a product liability claim. The key to winning your case is to prove that the product’s defect was the manufacturer’s fault (or another responsible party such as the seller or distributor of the product). Consumers expect, and the law requires, products to be safe and not dangerous to those using them.

Even if a product was safe when it left the manufacturer, you might still have a claim against another party if its packaging hurt you, the product was damaged at some point after leaving the manufacturer and being purchased by you, or the product did not have sufficient warnings or instructions.

Pennsylvania Court Finds that Two Possible Causes Can Prove a Product Malfunction Theory of Liability

Gus Sara | The Subrogation Strategist

In Allstate Ins. Co. v. LG Elecs. USA, Inc., No. 19-3529, 2021 U.S. Dist. LEXIS 127014, the United States District Court for the Eastern District of Pennsylvania considered whether plaintiff’s expert engineer’s opinion that there were two possible causes of a fire—both related to alleged product defects within a refrigerator manufactured by the defendant—was sufficient to support the malfunction theory of products liability. The court found that because both potential causes imposed liability on the product manufacturer and the expert ruled out misuse of the product, as well as all external causes of the fire, it was not necessary for the engineer to identify a specific cause under the malfunction theory. The court also found that the expert’s investigation and opinions met the criteria set forth in Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579 (1993) and the Federal Rules of Evidence and, thus, were admissible.

LG Electronics arose from a fire at the home of Thomas and Lisa Ellis. The public sector fire investigator identified the area of fire origin as the top of a refrigerator manufactured by LG Electronics USA, Inc. (LG). The Ellises filed a claim with their homeowner’s insurance carrier, Allstate Insurance Company (Insurer). Insurer retained a fire investigator and an electrical engineer to investigate the origin and cause of the fire. The fire investigator agreed with the public sector investigator that the fire originated at the top of the refrigerator. The engineer conducted a forensic inspection of the scene and ruled out all potential external ignition sources. He then examined the internal components of the refrigerator. He found arcing activity on a wire at the front top of the refrigerator. He opined that there were two possible causes of the fire: either the heater circuit insulation failed over time due to mechanical damage, or the heat from the internal light fixture ignited combustible components of the refrigerator. Since the engineer ruled out improper use of the refrigerator, he opined that the damage was caused by a manufacturing defect.

Insurer filed a subrogation action against LG to recover the amount it paid the Ellises for the loss. LG filed a Daubert motion to exclude the opinion of Insurer’s engineer. LG argued that the engineer’s opinions were not relevant, were not reached to a reasonable degree of scientific certainty and did not have a proper factual scientific basis. The root of LG’s arguments was that the engineer did not identify the specific cause of the fire, but instead presented two possible causes. LG also filed a summary judgment motion, arguing that without the engineer’s testimony, there was no issue of material fact and Insurer could not meet its burden of proof.

As a necessary basis for its ruling, the court acknowledged that Pennsylvania recognizes the malfunction theory of products liability. Success under this theory requires evidence of an occurrence of a malfunction, evidence eliminating abnormal use and evidence eliminating reasonable secondary causes. The malfunction theory is offered as an alternative method of proving a product liability case and relieves the plaintiff of the need to pinpoint a specific defect. The court held that the malfunction theory was available to Insurer in this case, even though the evidence was available for inspection. The court cited to other Pennsylvania cases where courts found that even though the evidence was able to be inspected, the plaintiff was still allowed to rely on circumstantial evidence to prove a product defect.

The court acknowledged that under Rule 702 of the Federal Rules of Evidence and Daubert, the factors to consider for the admissibility of expert testimony are: 1) whether the expert is qualified; 2) whether the testimony is based on sufficient facts and data; 3) whether the opinions are the product of reliable principles and methods; and 4) were the principles and methods reliably applied to the facts of the case. Since LG did not challenge the expert’s qualifications, the court had to decide if the expert’s opinions were based on sufficient facts and data, were based on reliable principles and methods and whether the expert reliably applied his methodology to the facts. In determining reliability, the court considered whether the method employed consisted of a testable hypothesis, was subject to peer review and was based on generally accepted standards.

The court found that in the engineer’s opinion that there were two possible causes which were relevant and helpful in proving the elements of the malfunction theory. The court held that the plaintiff need not show which of the two potential causes occurred because either one would impose liability on LG. The court also found that the engineer appropriately applied the principles and methods set forth in National Fire Protection Association 921 – A Guide for Fire and Explosion Investigations (NFPA 921), which is the generally accepted standard for fire origin and cause investigations. The court found that the engineer’s process of conducting a scene inspection and destructive examinations of the evidence were sufficient methods. Contrary to LG’s assertions, the court noted that NFPA 921 did not require any specific testing or physical experimentation. Finding that the engineer utilized reliable principles and methods to reach his conclusions, the court denied LG’s Daubert and summary judgment motions.

LG Electronics highlights that, in Pennsylvania, the malfunction theory is available to a plaintiff in a products case even if a specific product defect cannot be identified, provided that the plaintiff can rule out secondary causes and abnormal misuse. The malfunction theory is a particularly helpful alternative in property subrogation cases, where the evidence is often severely damaged to the point where the specific failure mode cannot be ascertained. A subrogating plaintiff in Pennsylvania should be aware that the malfunction theory is an available option if there is sufficient circumstantial evidence to satisfy the elements of this alternative theory. LG Electronics also provides an insightful analysis of Daubert in the context of cause and origin investigations, with which subrogation professionals are typically involved.

Industry Standard and Sole Negligence Defenses Can’t Fix a Defect

Lian Skaf | The Subrogation Strategist

Strict products liability cases have been the subject of much fluctuation in the Pennsylvania courts over the last few years. Utilizing hope created by the courts in recent strict liability cases, defendants have tried to revive defenses based on meeting industry standards and the plaintiff’s contributory negligence. Recently, the Superior Court of Pennsylvania tempered that hope with limitations of how far strict liability defenses can extend.

In Sullivan v. Werner Co., No. 3086 EDA 2019, 2021 Pa. Super. LEXIS 210, an appellate panel of the Superior Court reviewed the lower court’s decision to exclude evidence of industry standards and of the plaintiff’s negligence in a trial that resulted in a $2.5 million verdict for the plaintiff. Upholding the decision of the lower court, the court found that the proffered evidence was within the discretion of the court to exclude.

In Sullivan, Michael Sullivan (Sullivan) was working as a union carpenter at a renovation project for a local school. He and his apprentice were installing exterior sheathing to the outdoor walls. In order to install the sheathing, Sullivan had to use a scaffold. He put together a new SRS-72 scaffold manufactured by Werner Company (Werner) that his foreman bought at Lowe’s Companies, Inc. (Lowe’s) and used the scaffold during the course of his work. While on the scaffold, Sullivan fell through and crashed to the ground. He suffered permanent injuries as a result of the incident.

Sullivan and his wife, Melissa Sullivan, brought a strict products liability action against Werner and Lowe’s (herein after referred to collectively as Manufacturer). Determining that a design defect caused the accident, the jury awarded Sullivan $2.5 million in damages. Manufacturer appealed, alleging, among other things, that the lower court improperly disallowed evidence that it met industry standards in its design and that Sullivan’s negligent actions could constitute the sole cause of the loss.

In support of its industry standard argument, Manufacturer claimed that it should be allowed to have its expert testify that the “inverted L-shaped design of the deck pins” was the most common design in the industry. The court did not find Manufacturer’s argument persuasive, holding that the much discussed Tincher decision (see Tincher vs. Omega Flex, Inc., 104 A.3d 328 (Pa. 2014)), a case that loosened some restrictions in product liability cases, did not overturn the prohibition against industry and government standards being introduced as evidence in strict liability cases. Thus, the exclusion of such evidence by the trial judge was not improper.

The court also did not find persuasive Manufacturer’s argument that evidence of Sullivan’s potential negligence should have been allowed. Although the court conceded that there are “limited exceptions” addressing when a plaintiff’s conduct may be allowed as evidence of the plaintiff’s sole negligence, including voluntary assumption of the risk, product misuse and highly reckless conduct, Sullivan’s actions in this case did not fall into those exceptions. Here, Manufacturer claimed that Sullivan improperly assembled the product at issue. However, since such evidence is not allowed when the alleged negligence involves the product itself, the trial court properly excluded it.

Both rulings in this case are important because they help calm the choppy waters of strict liability for plaintiffs in Pennsylvania. As the court notes, “a product could be defective yet still widespread in an industry.” Thus, allowing a jury to consider evidence of industry standards as a defense to a design defect would be counterintuitive to the essence of strict products liability. Likewise, although a plaintiff’s sole negligence can still be used as a defense, because such evidence is not admissible when it involves the product itself, manufacturers cannot avoid the ramifications of a defective design simply because the plaintiff misused it. Considering these two defense prohibitions is important when evaluating the strength of a strict liability case in Pennsylvania and the potential defenses that can be raised in litigation.

California Court of Appeal Addresses Right to Repair Statute

Blake Robinson | Davis Wright Tremaine

The California Court of Appeal recently issued a decision analyzing the application of the Right to Repair Act1 as applied to a company that provided an allegedly defective product in a residential construction project. In State Farm General Insurance Co. v. Oetiker, Inc., 58 Cal.App.5th 940 (2020), the court concluded that the Act’s statute of repose barred the plaintiff’s negligence claim but not its strict liability and breach of implied warranty claims because those claims were not subject to the Act.

Summary of the Act

The Act, which was enacted in 2002, “codifies a comprehensive reform to construction defect litigation applicable to residential dwellings in California.”2 The Act establishes certain standards a dwelling’s components must satisfy, requires pre-litigation notices of defect with an opportunity to cure, allows for homeowners to file lawsuits even absent property damage or personal injury, and establishes a 10-year statute of repose for latent construction defect claims.

The Facts

The plaintiff sued the manufacturer of a plumbing product used in a new home’s construction. The plaintiff claimed the product caused a leak that damaged the home.

The plaintiff filed claims for negligence, strict liability, and breach of implied warranty. The trial court granted the manufacturer’s motion for summary judgment as to all claims on the ground that they were barred by the Act’s statute of repose.

The Court of Appeal’s Decision

The Court of Appeal agreed that the negligence claim was barred but disagreed as to the strict liability and implied warranty claims because those claims were not subject to the Act. To determine whether a claim is subject to the Act, the court stated it must first look to see whether the alleged defect would violate the building standards in Section 896 of the Act. The court readily concluded that it did, as the alleged defect was to a component of the plumbing system.

Next, the court addressed the plaintiff’s argument that the “manufactured product” exception in Section 896(g)(3)(E) applied and excluded its claims from the Act. That section excludes “any action seeking recovery solely for a defect in a manufactured product located within or adjacent to a structure.” The court rejected the plaintiff’s argument, concluding that the exception only applies if a plaintiff’s claim alleges that a product is defective but that the defect does not violate a Section 896 standard. Because the plaintiff alleged a Section 896 violation, the Act applied.

Finally, the court analyzed to which claims the Act applied. The court held that the Act applies to product manufacturers only to the extent the plaintiff alleges the manufacturer’s negligence or breach of contract caused a violation of the Section 896 standards. Thus, the Act applied to the plaintiff’s negligence claim, and it was barred by the 10-year statute of repose. The Act did not apply to the strict liability and breach of implied warranty claims, however, so they were not barred by the statute of repose.

Takeaways

The Right to Repair Act is very broad and provides exclusive remedies for many actions relating to residential new construction, so anyone involved in residential construction should familiarize themselves with the Act.

However, at least as to claims against product manufacturers (whether by the homeowner or by the contractor that used the part in the construction), the Act covers only negligence and breach of contract claims and does not cover strict liability and implied warranty claims. This can be significant where, like in Oetiker, the latent defects were not discovered until after the 10-year statute of repose in the Act had already passed.


FOOTNOTES

1  Cal. Civ. Code, § 895, et seq.
2  Id. at 944.

Florida’s Products Liability Economic Loss Rule Bars Claims Where Only Damage Sustained is to the Building Itself

Catherine Delorey | Forum on Constrution Law

Can a products liability claim survive the economic loss rule (“ELR”) where the only claimed damage to “other property” is to the finished building itself? If your state takes an “integrated” approach to the ELR, the answer to this question should be “no.”

In 2711 Hollywood Beach Condominium Association, Inc. v. TRG Holliday, Ltd., Florida’s Third District Court of Appeal provided clarity on the issue of whether the ELR bars a products liability claim where the only damages sought are repairs and replacement to a building system in which the product is a component part. 307 So.3d 869 (Fla. 3d DCA 2020). 2711 Hollywood was decided against the backdrop of the Florida Supreme Court’s decision in Tiara Condo. Ass’n, Inc. v. Marsh & McLennan Companies, Inc., where the Court limited the ELR to products liability cases. 110 So. 3d 399, 400 (Fla. 2013). The Tiara court reviewed and seemingly cited with approval its prior 1993 decision in Casa Clara Condominium Ass’n., Inc. v. Charley Toppino and Sons, Inc., 620 So.2d 1244 (Fla. 1993) in reaching this decision. Id., 401, 405-406. There, the Court held that the ELR barred a homeowner’s claims against a supplier of allegedly defective concrete, where the only alleged damages were rusting and spalling to the structure of the completed condominium units. Casa Clara Condominium Ass’n., Inc., 620 So.2d at 1245. Despite Tiara’s apparent reliance on Casa Clara, Westlaw’s “KeyCite” system continues to apply a “red flag” warning to the Casa Clara decision.

The 2711 Hollywood decision makes clear that Casa Clara’s holding still applies to product manufacturers and suppliers in Florida. In 2711 Hollywood, the condominium association sued the maker of the component fittings of the condominium’s fire suppression system (“FSS”), claiming that these fittings caused the fire suppression system to leak. 307 So.3d at 870. The association sought damages for future repairs and replacement of the FSS under negligent and strict products liability theories against the fittings maker. Id.

On appeal, the Court affirmed summary judgment entered in favor of the manufacturer based upon Casa Clara. Id. In doing so, it recognized that when a products liability claim arises in the context of real estate, courts are to apply the “object of the bargain” rule. Id. The focus of this rule is on “the product purchased by plaintiff,” rather than “the product sold by the defendant.” Id. Where a product is an “integral part of the finished product,” (i.e., the building), and the only alleged damages are to the building itself, such damage is not considered injury to “other property.” Id. The FSS fittings were an integral part of the FSS, and the completed building. As such, the ELR applied to bar the Association’s products liability claims, because the only alleged damages were the cost to replace the FSS and resulting repair damages to the building. Id.

The 2711 Hollywood decision also reinforces the applicability of the ELR in circumstances where a purchaser or installer attempts to bring a tort-based products liability claim against a downstream manufacturer or supplier. In 1995, the United States Court of Appeals for the Eleventh Circuit applied the ELR to a homebuilder’s claim against the manufacturer of chemicals applied by the homebuilder to its roof sheathing, which allegedly caused the roofs to deteriorate. Pulte Home Corp. v. Osmose Wood Preserving, Inc., 60 F.3d 734, 736 (11th Cir. 1995). It reasoned that while the homebuilder was required to remove roof components (shingles and untreated plywood) due to defective treated plywood, these components were not “damaged,” but rather, removed “as a consequence of replacing” damaged, treated plywood. Id. at 742 (citing Casa Clara Condominium Ass’n., Inc., 620 So.2d at 1246).

2711 Hollywood provides needed clarification on the scope of cognizable tort-based products liability claims against building products manufacturers and suppliers in the Florida. Absent a showing of personal injury, or damage to property wholly unconnected with the completed building, such claims should be barred. The 2711 Hollywood decision ensures that products liability claims involving only “economic losses” will be dealt with in the manner which best suits them: “[c]ontract law, and the law of warranty in particular.” See Tiara Condo. Ass’n, Inc., 110 So. 3d at 404.