May 5th Notes

Complex Litigation
May 5, 2010

NEWS
Remaining Classes:
Tonight: Product Liability
5/12:    Freedom of Religion
5/19:    Freedom of Religion
    Bankruptcy
5/26:    Bankruptcy
    Review
6/2:    Final
    -1st Amendment (speech and religion)
    -Bankruptcy
    -Product Liability
---------------------------------------------

Product Liability
-products that cause damage and harm
-newer area of law, used to be "caveat emptor" (buyer beware)
-used to be no liability, with the exception of inherently dangerous products

Thomas v. Winchester 1852
"caveat emptor" (let the buyer beware)
except for "inherently dangerous" products
    -explosives, poisons, guns, etc.
-druggist case sold many dangerous chemicals
    -there is liability to selling poisons, but not across the board

McPherson v. Buick 1916
"caveat venditor" (let the seller beware)
-injured when a wooden car wheel broke and caused injury
    -automobile is not inherently dangerous, not a utility dangerous purpose
    -but anything can cause a danger if made improperly

In product questions, think of 3:
    1. type of injury or loss
    2. then pick a theory
    3. then pick a defense

Losses
1. Personal Injury
    -injured, death to person
2. Property Damage
    -damage to machine or surroundings
3. Economic
    -malfunctioning can cause business issues

Recovery
-some are better than others, depends on state and use

1. Contract (Warranty): promised usage
    1. Express: most common
        1. Fact of promise about product
        2. Description of product
        3. Sample, model, display, demonstration
            -means it should work the way you show
        Exception: thin line between fraud and puffing
            -puffing is okay (looks great on you)

    2. Implied Warranty of Fitness for Particular Purpose
        1. Seller knows purpose
            -ask the seller for advice
        2. Seller knows buyer is relying
        3. Actual reliance: just like fraud
            -goods must do the job for which they were purchased

    3. Implied Warranty of Merchantability
        -good are fit for reasonable consumer expectations
        -implied for all goods

2. Tort
    1. Manufacture
        -something happened at the assembly line to make it different
    2. Design
        -made from an inherently flawed template
        1. Structure
        2. Safety
            -prevention of injury, engineered to cause less harm
        3. Foreseeable misuse
            -manufacture must think of ways people will use it wrong
    3. Failure to warn/instruct

3. Strict Liability (Restatement of Torts § 402A 1965)
    -from no liability to strict liability now
    -not all products, 2 requirements
    1. defective condition leaving manufacturer's control
    2. causing an unreasonable danger from that defect
        -but not unavoidably unsafe (ie rat poison)

Trends
1. Market share liability
    -products that have caused a lot of damage
    -sharing the judgment on damages
    -imposed on manufacturer once it is defective
    -hold them liability for % of the market

2. Expansion beyond the manufacturer to everyone in the retail chain
    -wholesale, retail, potential product liability
    - have to prove breech, the retailer doesn't have a duty to take the defective device apart
    -so it becomes strict liability

3. Any reasonably foreseeable plaintiff
    -anyone that ends up with the product
    -or could be effected with the product
   
Defenses
1. Statute of Limitations
    -4 years warranty
    -3 years negligence or strict liability
2. Useful Safe Life
    -12 years
3. Comparative Negligence
    -usually using the product in a dangerous way
4. Assumption of Risk
    -must know of the risk to assume it
5. Disclaimer (warranty only)
    -"as is"
    -"with all faults"
    -"as it stands"
6. Product misuse
    -unforeseeable
7. State of Art
    -technology changes consistently
8. Unavoidably unsafe

RCW 7.72   Product Act