Avoiding Product Liability Claims: How Much Testing Is Enough?

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DISSENTING more than 40 years ago, Justice Robert Jackson wrote that in a "day of synthetic living," when people are dependent on manufacturers, their products "must not be tried out on the public."(1) Modern consumers probably share this view, but at the same time recognize that they are at the mercy of large manufacturers for the safety of everyday products.

How much testing is enough before a product may be marketed by a manufacturer without fear of future liability? An example of unfortunate events is Hopkins v. Dow Corning Corp.,(2) in which a silicon breast implant recipient received awards of $840,000 compensatory and $6.5 million punitive damages. In affirming, the Ninth Circuit stated that the evidence indicated that the manufacturer "rushed development of the silicone gel implants, failed to adequately test the implants, and ignored knowledge of adverse health consequences associated with the implants."

Is there a relationship of trust between manufacturer and consumer with respect to testing? Courts have consistently struggled with determining what is an adequate testing program. Analysis of specific cases often leads to confusing and irreconcilable results because the cases frequently turn on their particular facts. Only by following all of the case law on a broader level can manufacturers begin to understand the common law approach to this question, as well as the cutting edge defenses available to them.

COMMON LAW "SLIDING SCALE" APPROACH

In Nicklaus v. Hughes Tool Co.(3) the Eighth Circuit reviewed prior case law and gleaned what has come to be the prevailing common law doctrine regarding the adequacy of a manufacturer's testing. The rule enunciated in Nicklaus, citing MacPherson v. Buick Motor Co.,(4) states: "A manufacturer has a duty to exercise reasonable skill and care in the design and manufacture of its product, commensurate with the risk of harm flowing from normal use of that product." Under this rubric, the level of testing required is directly proportional to the danger involved with the use of the product--thus, the "sliding scale" approach.

The Nicklaus court applied its rule to a case in which a helicopter crash was caused by a loss of engine power shortly after takeoff. The court weighed the dangers of helicopter flight against the fact that several "thorough and meticulous inspections and tests" had been performed by the manufacturer to find that the helicopter's componentry had not been negligently manufactured or tested.

The problem inherent in the Nicklaus approach is that although in some cases the product's potential for harm will be apparent, in many cases that potential will not be discovered or discoverable until the harm has occurred, and the manufacturer already faces liability. This uncertainty is the root of the problem facing corporate executives responsible for making decisions regarding the level of testing to be performed. In the fact of such uncertainty, it is easy for the decision maker to focus on the only knowns in the equation--the costs of further testing. This cost-centered analysis invariably leads to the conclusion that the company has tested its product adequately and that further testing is not cost effective.

The uncertainty in the Nicklaus calculation can be minimized by following two leads the court provided. These leads derive from the court's balancing of the product's dangers against the test program that was employed in order to determine whether the manufacturer should be held liable. This means that manufacturers should make conscious efforts to evaluate the dangers involved with the use of their products and the adequacy of their own testing programs.

A. Dangers Involved

The Nicklaus court consciously evaluated particular potential helicopter malfunctions, instead of summarily concluding that helicopter flight is dangerous. This approach suggests that manufacturers should realistically evaluate the dangers of their particular product. The inquiry may require test procedures designed simply to expose possible dangers, without any concern, at least for the moment, of trying to remedy them.

Once this is done, manufacturers should inventory the potential risks that their particular product poses. Under this approach, manufacturers will have at least identified those risks that a court is likely to deem "foreseeable" and will have a better idea of how to remedy these dangers through a test program.

B. Testing Programs

The dispositive fact in Nicklaus was what the court termed the "thorough testing and inspection procedures" employed by the manufacturer. This reasoning provides a second critical lead to manufacturers: although additional product testing may marginally reduce the company's bottom line profit margin, the added investment is worth the price because it significantly reduces the company's future product liabilities. The Nicklaus rule encompasses a policy determination that a manufacturer is not under a "duty to produce a fail-safe product, so long as the product poses no unreasonable dangers for consumer use."(5)

Note, however, that the manufacturer must act reasonably.(6) Courts will scrutinize testing programs for possible deficiencies. At trial, plaintiffs will point the court's attention to tests that are typically--or even could be--performed by the industry and which this defendant failed to perform.(7) Therefore, a manufacturer's goals in designing a test program include preventing the plaintiff from being able to suggest tests that the manufacturer could have performed, as well as bolstering its own claim that it acted reasonably.

What constitutes reasonableness in any given …