Subtle Tort Reform: New restatement injects fault issue in design defect casesAuthor(s): TERRY CARTERSource: ABA Journal, Vol. 83, No. 8 (AUGUST 1997), p. 18Published by: American Bar AssociationStable URL: http://www.jstor.org/stable/27839949 .

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NEWS

Subtle Tort Reform New restatement injects fault issue in design defect cases

The new restatement on products liability defines three categories of product defects. They are:

1. A manufacturing defect: When the design renders the product not reasonably product departs from its intended design, safe. even if all possible care was exercised. 3e lnadequate instructions or warnings: 2. A design defect: When the foreseeable When the foreseeable risks of harm posed risks of harm posed by the product could by the product couid have been reduced have been reduced or avoided by the or avoided by reasonable instructions or adoption of a reasonable alternative de- warnings, and their omission renders the sign, and the failure to use the alternative product not reasonably safe.

BY TERRY CARTER

Considering

the glacial size of the project, the drafting of the

American Law Institute's Restate ment of the Law (Third), Torts: Products Liability was done with relative swiftness, at a little under five years.

But just as a glacier's slow de veloping, slow moving mass is un remarkable until it changes a ter rain's contours over time, the new restatement adopted by the ALI on

May 20 got nary a notice in the mainstream press.

Missing Headlines "The press covers every rinky

dink mention of tort reform at the state level, and has big headlines for every products liability bill that comes up," says Victor E. Schwartz, one of 19 members of the ALI advi sory committee that worked on the project and also a tort reform lobby ist. "But at the core of products lia bility are rules set forth in this re statement. And not a whisper in The Wall Street Journal, The New York Times or Time magazine."

And that, says ALI director Geoffrey C. Hazard Jr., "is just fine with me." He wants the restate ment some refer to as revolutionary to enjoy a low-key launch. As the

new document was developed, the ethics professor took a get-tough stance to keep the deliberative process from becoming a raucous tort reform redux.

"The worst came from hip shooting plaintiffs lawyers who didn't really know about the proj ect, and from organized letter writing campaigns stirred up by corporation lawyers who obviously did not know what they were talk ing about," Hazard says. "It was re

ally unprofessional. We paid atten tion to letters that told us some

thing. We didn't with letters that yelled at us."

Roy Cohen, who chairs an ABA Torts and Insurance Practice Sec tion products liability committee, says the new restatement "puts some reason back into products lia bility law." It is unclear if the text will be as influential as its predeces sor, adopted when law in the area was not well-developed, he says.

At the heart of Restatement (Third) is a bold move away from strict liability without fault, im

posed by courts under principles of the 1964 Restatement (Second). The earlier text, cited in nearly 4,000 published opinions, established lia bility for products sold in a defective condition "unreasonably dangerous to the user or consumer."

The more nuanced Restatement (Third) lists three kinds of product defects and sets different standards of liability for each. Aaron D. Twer ski of Brooklyn Law School, who wrote the newest version along with co-reporter James A. Hender son Jr. of Cornell Law School, says the distinctions were based on 30 years of case law between the sec ond and third restatements. "It was clear there were three basic cate gories of defects and that courts treated them differently," he says.

Categorically Speaking The three categories are manu

facturing defects (as when a mouse is found in a soft drink bottle), de sign defects (the bottles are poorly designed and cut consumers' lips), and defects caused by inadequate warnings or instructions (the man ufacturer fails to warn that an arti ficial sweetener may cause cancer).

Strict liability without fault is imposed only for manufacturing de fects. Plaintiffs suing a manufac turer over a defective design must show there is a safer, reasonable, alternative design. The test re

quires courts to weigh the risks of a

product against its usefulness. That balancing prompted the

strongest debate. Critics preferred a more plaintiff-oriented test of whether a product is more danger ous than ordinary consumers would expect. The new restatement does allow courts to consider consumer

expectations, but only as one factor in weighing risk and utility.

One of the most vocal critics on this issue, and one of the 19 advis ers to the reporters on the project, is Robert L. Habush, a former pres ident of the American Trial Law yers Association. He says the risk utility analysis goes too far in

swinging the products liability pen dulum back toward manufacturers.

As a practical matter, admits Habush, plaintiffs lawyers regular ly offer reasonable alternative de signs in making their cases. "But this means it's no longer a strategic decision. ... Now it's a threshold barrier to getting to a jury."

18 ABA JOURNAL / AUGUST 1997 GRAPHIC BY BOB FERNANDEZ

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