The Peculiar Problem of Product Liability
Neely, Richard, National Forum
In 1976 John Newlin, a Pennsylvania farm manager, ordered an International Harvester Front End Skid Loader. That model came equipped with a roll bar, but Mr. Newlin requested that the roll bar be removed so that the tractor could go through his low barn door. Jim Hammond, a farm employee, operated the skid loader for several months, but then one day in a freak accident turned the machine over and killed himself. Jim's widow sued International Harvester and won on the grounds that the skid loader was defective by not having a roll bar. But the roll bar had been removed at the direction of the purchaser! This type of lawsuit is known as a product-liability case.
Product liability is that part of tort law which involves suits against manufacturers and distributors for defective and unsafe products. Until about 1960 a plaintiff had to show that the manufacturer was negligent, but now such a showing is no longer required. Today it is necessary only to demonstrate that the product had either a design or manufacturing defect which caused injury when the product was being used for a forseeable purpose. Furthermore, juries are given such broad discretion that the user of the product can be entirely at fault yet recover. Consequently, the more novel, complicated, or susceptible to misuse the product, the greater the manufacturer's exposure to lawsuits.
Numerous areas of tort law combine to create what has come to be called "the liability crisis," but it is a mistake to lump product liability with such other tort problems as medical malpractice, liability for defective premises (slip-and-fall cases), municipal liability, or unfair firing cases. Product liability is a unique problem that emerges more from the structure of American courts than from anything resembling juridical science.
American lawyers are fond of pointing out that the United States is a "common law" country. By that they usually mean that American law, like early English law, relies more on judge-made rules than it does on legislative codes. But to use the term "common law" simply to refer to a malleable, court-dominated legal system misses what was perhaps the most important feature of the original common law - namely, its uniformity. In the context of English law, use of the word "common" did not mean "ordinary" or "vulgar," but rather "uniform."
America, however, has turned the common law on its head. When we refer to ourselves as a "common law" country, we have slipped behind the looking glass, because the United States has very little uniform, national law. Unlike England, with its centralized court system staffed by a cadre of similarly trained judges, the United States today has fifty three separate court systems. First, there are freestanding court systems in the fifty states, the District of Columbia, and Puerto Rico. In addition, however, there is the federal system, which is divided into thirteen separate circuits that are loosely held together by the Supreme Court of the United States.
America's diversity of court systems leads to a diversity of law systems because American judges, like their English predecessors, have extensive lawmaking powers. And because each court system is administratively independent of the others, each can generate eccentric judge-made law at odds with the statutory and judge-made law of the other jurisdictions. Whole fields of American law, such as contracts and torts, are creatures of court decisions rather than legislative enactments.
Typically, in a product-liability case, there is an instate plaintiff, an in-state judge, an in-state jury, in-state witnesses, in-state spectators, and an out-of-state defendant. When states are entirely free to craft the rules of liability any way they want, it takes little imagination to guess that out-of-state defendants as a class won't do very well. All the incentives, at both the trial-court level and the policy-making appellate-court level, favor the redistribution of wealth from out-of-state defendants to local residents, which is the reason that product-liability law becomes more and more oppressive to business as the years go by. …