Academic journal article St. John's Law Review

Product Recalls: Why Is Tort Law Deferring to Agency Inaction?

Academic journal article St. John's Law Review

Product Recalls: Why Is Tort Law Deferring to Agency Inaction?

Article excerpt

INTRODUCTION

In 2014, General Motors recalled some models of its cars due to a defective ignition switch.1 Product recalls are common and usually not too noteworthy. But this recall became noteworthy when it was revealed that GM knew of the potential problem with the ignition switch as early as 2001.2 Yet, it waited thirteen years to actually recall the cars.3

The thirteen-year delay was likely unreasonable. The ignition switch posed a risk of death both to drivers of the defective cars and to other motorists. In fact, GM has agreed to pay compensation for 124 deaths, 18 catastrophic injuries, and 257 other injuries related to the ignition switch.4 Given this grave risk, if the costs of a product recall were manageable, a reasonable manufacturer likely would have recalled the product.

But GM will not face tort liability related to its thirteen-year delay in recalling the vehicles.5 Why not? Because the National Highway Traffic Safety Administration never ordered nor encouraged GM to recall its affected vehicles within that thirteen-year period. Essentially, tort liability cannot exist because no agency ordered a product recall.

This effectively complete deference to agency determinations contrasts starkly with courts' treatment of other agency actions. For example, courts give little deference to agency safety standards. A manufacturer can easily be liable for compensatory and punitive damages despite complying with an agency's safety standards, like a required product warning. Similarly, the post-sale duty to warn that many courts have recently adopted pays no attention to whether the agency ordered a manufacturer to issue a post-sale warning. Again, a manufacturer can easily be liable for compensatory and punitive damages even though no agency ever required it to issue a post-sale warning.

Courts see product recalls differently, however. Courts believe they are ill equipped to evaluate the reasonableness of a product recall and thus defer to agencies. Tort law defers to agency determinations of whether the benefits of the recall justify the costs; in other words, whether a reasonable manufacturer would have recalled the product. If an agency determines that a recall would be reasonable and orders one, then a manufacturer can be liable in tort if it acts unreasonably within that recall. But if not, then tort liability cannot exist; after all, a reasonable manufacturer would not have recalled the product.

Thus, agency action is a prerequisite for tort liability. If a government agency never orders nor otherwise encourages a manufacturer to recall a product, the manufacturer is unlikely to ever face tort liability related to a recall. A glaring problem exists with this complete deference. An agency's not ordering a recall is not the same thing as deciding that no recall was appropriate; instead, it is inaction. Deference to agency inaction is nonsensical. It is also inconsistent with negligence per se principles. There is nothing special about product recalls to merit this unique legal treatment. Yet, courts allow agency inaction to preclude the possibility of tort liability for what seems likely unreasonable conduct.

Part I of this Article explores tort law's treatment of agency standards and regulations regarding determinations of product defectiveness, the propriety of post-sale warnings, and whether to punish the manufacturer with punitive damages. Part II then explains how tort law treats agency determinations-and lack thereof-on product recalls. This Part explains how tort law's narrow standards for liability defer to agency orders to determine the reasonableness of a product recall and how that deference is illogical and inconsistent with negligence per se principles. Part II also concludes that product recalls are not so special so as to deserve special treatment within tort law.

I. A DEFAULT OF NO DEFERENCE

"Products liability is a mixture of state tort law and federal regulation. …

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