Practice Tip: Arguing Design 'Defect' Under Strict Liability or Warranty

“Defect” in product liability law has two roots: from breach of warranty actions under contract law and from negligence under tort law. In early products liability cases, courts relied upon an implied warranty to permit recovery for personal injuries arising from defective goods. However, that cause of action required privity between the seller and the injured consumer, which could not always be satisfied. This led to the development of the strict liability doctrine in tort law, where privity was not required. Strict liability in tort remedies no longer needs to rely on a contractually based breach of implied warranty to compensate injured plaintiffs.

Under strict liability in tort, a design defect is actionable if the product is not reasonably safe. This requires an assessment by the jury of whether or not the utility of the product outweighs the risk inherent in marketing the product. This risk/utility balancing test is a negligence-inspired approach as it invites the parties to adduce proof about the manufacturer's choices “and ultimately requires the fact finder to make a judgment about the manufacturer's judgment.” See Denny v. Ford Motor Company, 87 NYS2d 248, 255, 639 NYS2d 250, 258 (1995).

The UCC's concept of a defective product requires an inquiry only into whether the product in question was fit for the ordinary purposes for which such goods are used. UCC 2-314(2)(c). This inquiry focuses on the consumer's expectations for the performance of the product when used in the customary and foreseeable manner.

Strict liability in tort actions has not completely subsumed the breach of implied warranty action in contract, nor are the two doctrines identical. Although some states have combined both into one cause of action either by judicial decision or statute (see e.g. New Jersey Product Liability Act NJS 2A:58 C-1), other states still permit recovery for strict liability in tort and breach of warranty. Lawyers should plead both in the complaint and make sure the trial court is aware of the distinction. “Defect,” in my opinion, is more easily approached by a plaintiff along the path from warranty than it is from tort; recovery under implied warranty can be had upon a showing that the product was not minimally safe for its expected purpose without proving the feasibility of alternative designs or the manufacturer's reasonableness in marketing it, proof of which is necessary under strict liability theories.

This issue arose in a recent tobacco case, Miele v. American Tobacco Company, et al. 2003 WL 23099090 (NY App Div 2d Dept., 12/29/03). The trial court, on a motion for summary judgment, dismissed the plaintiff's cause of action to recover damages for strict liability design defects after 1969. 1969 was the year in which the warning “Cigarette Smoking Is Hazardous to Your Health” was required on cigarette boxes. The court reasoned that after such a warning, how could the consumer expect a “safe” cigarette? The defense attorney successfully argued that the plaintiff had notice of the dangers to his health because of the warnings; therefore, the product satisfied the consumer's expectations as a matter of law and could not be deemed defective under that theory. The lower court held that because of the warning, cigarettes were in a condition reasonably contemplated by the consumer as a matter of law. The trial court evidently confused the two different theories and said New York applies a “consumer expectation test” to design defect actions requiring a jury to decide if the utility of the product outweighs its risk.

The appellate court reinstated the action and said that while consumer expectations may be relevant in the context of strict liability in tort, they are not controlling. The court pointed out that under Restatement (Third) of Torts: Products Liability, paragraph 2(b), while consumer expectations may play a role in the risk/utility analysis, they do not constitute an independent standard for judging defectiveness. Therefore, package warnings introduced after 1969 did not require the plaintiff's cause of action to be dismissed solely on the ground that the cigarettes were in a condition contemplated by consumers.

Consequently, in those jurisdictions permitting it, the prudent practitioner will plead both strict liability in tort as well as breach of implied warranty and bring the court's attention to the difference.

“Defect” in product liability law has two roots: from breach of warranty actions under contract law and from negligence under tort law. In early products liability cases, courts relied upon an implied warranty to permit recovery for personal injuries arising from defective goods. However, that cause of action required privity between the seller and the injured consumer, which could not always be satisfied. This led to the development of the strict liability doctrine in tort law, where privity was not required. Strict liability in tort remedies no longer needs to rely on a contractually based breach of implied warranty to compensate injured plaintiffs.

Under strict liability in tort, a design defect is actionable if the product is not reasonably safe. This requires an assessment by the jury of whether or not the utility of the product outweighs the risk inherent in marketing the product. This risk/utility balancing test is a negligence-inspired approach as it invites the parties to adduce proof about the manufacturer's choices “and ultimately requires the fact finder to make a judgment about the manufacturer's judgment.” See Denny v. Ford Motor Company , 87 NYS2d 248, 255, 639 NYS2d 250, 258 (1995).

The UCC's concept of a defective product requires an inquiry only into whether the product in question was fit for the ordinary purposes for which such goods are used. UCC 2-314(2)(c). This inquiry focuses on the consumer's expectations for the performance of the product when used in the customary and foreseeable manner.

Strict liability in tort actions has not completely subsumed the breach of implied warranty action in contract, nor are the two doctrines identical. Although some states have combined both into one cause of action either by judicial decision or statute (see e.g. New Jersey Product Liability Act NJS 2A:58 C-1), other states still permit recovery for strict liability in tort and breach of warranty. Lawyers should plead both in the complaint and make sure the trial court is aware of the distinction. “Defect,” in my opinion, is more easily approached by a plaintiff along the path from warranty than it is from tort; recovery under implied warranty can be had upon a showing that the product was not minimally safe for its expected purpose without proving the feasibility of alternative designs or the manufacturer's reasonableness in marketing it, proof of which is necessary under strict liability theories.

This issue arose in a recent tobacco case, Miele v. American Tobacco Company, et al. 2003 WL 23099090 (NY App Div 2d Dept., 12/29/03). The trial court, on a motion for summary judgment, dismissed the plaintiff's cause of action to recover damages for strict liability design defects after 1969. 1969 was the year in which the warning “Cigarette Smoking Is Hazardous to Your Health” was required on cigarette boxes. The court reasoned that after such a warning, how could the consumer expect a “safe” cigarette? The defense attorney successfully argued that the plaintiff had notice of the dangers to his health because of the warnings; therefore, the product satisfied the consumer's expectations as a matter of law and could not be deemed defective under that theory. The lower court held that because of the warning, cigarettes were in a condition reasonably contemplated by the consumer as a matter of law. The trial court evidently confused the two different theories and said New York applies a “consumer expectation test” to design defect actions requiring a jury to decide if the utility of the product outweighs its risk.

The appellate court reinstated the action and said that while consumer expectations may be relevant in the context of strict liability in tort, they are not controlling. The court pointed out that under Restatement (Third) of Torts: Products Liability, paragraph 2(b), while consumer expectations may play a role in the risk/utility analysis, they do not constitute an independent standard for judging defectiveness. Therefore, package warnings introduced after 1969 did not require the plaintiff's cause of action to be dismissed solely on the ground that the cigarettes were in a condition contemplated by consumers.

Consequently, in those jurisdictions permitting it, the prudent practitioner will plead both strict liability in tort as well as breach of implied warranty and bring the court's attention to the difference.