Issue link: http://read.dmtmag.com/i/91455
Rental ("Understanding and Reducing Product Liability Claims" continued from page 32) "unreasonably dangerous" (despite being "very dangerous"). Manufacturers and suppliers (such as lessors) of such prod- ucts are, however, still charged with the responsibility for providing proper instructions and warnings of the risks and dangers associated with using their products (see "Warning Defects" above), so that consumers can make informed decisions regarding whether and how to use them. As one might guess, the fact that a plaintiff need not prove that an equipment lessor did anything wrong (or failed to do something it should have done) has resulted in a raft of litigation against rental operators throughout the country, most of whom, of course, never participate in the design, manufacture or alteration of their equipment, other than perhaps to specify sizes, colors, configurations, etc. Origins How, then, did such an extreme, and some would argue "antibusiness" law come to exist in the first place, and why? The current state of the law began as a reaction to the old English "privity rule," which provided that only direct customers could sue providers of goods and services (Winterbottom v. Wright, 10 M&W, 109, England, 1842). In 1852, a New York Appeals Court departed from the privity rule in the famous case of Thomas v. Winchester (6 N.Y. 397), establishing the "imminent danger to human life" doctrine by finding a party who incorrectly labeled deadly belladonna as harmless "extract of dandelion" liable to the wife of a druggist's customer, even though the labeler and the customer's wife were clearly not in privity. The Court eluded the lack of privity issue by adopting the rule that a party who puts falsely labeled poison into the market and thus "puts human life in imminent danger" should respond in damages to the ultimate consumer. Thus began, slowly at first, a series of judicial expansions of the concept of "products liability," including: n MacPherson v. Buick (217 N.Y. 382, 111 N.E. 1050, 1916), a case in which a driver injured as a result of a collapsed wheel was permitted to recover damages from Buick Motor Company despite a lack of privity (the plaintiff purchased his vehicle from a dealer, rather than Buick). This differs from Thomas v. Winchester because MacPherson didn't involve a product that posed an imminent danger to human life (poison), but only a defective wheel. n Escola v. Coca-Cola Bottling Co. (24 Cal. 2d 453), dramatically expanded the products liability concept in 1944. In Escola, a waitress successfully sued Coca-Cola Bottling Company of Fresno, Calif., for injuries suffered when a bottle of Coca-Cola exploded in her hand. The California Supreme Court held that negligence need not be proven at all (only that a defect existed in a product manufactured by the defendant). Thus, after Escola, liability could arise in any case where a latent product 34 | www.cedmag.com | Construction Equipment Distribution | November 2012 Requirements for Strict Products Liability Claims In short, an equipment seller or lessor may be liable for all personal injuries and property damage caused by any piece of equipment it provides if: 1. Participation. It participated in the design, manufacture, and/or provision of warnings regarding the safe use, operation, transportation, storage, distri- bution, lease or rental of, any product made available to customers. (Note: "Participation" has not been officially adopted in any standard form, but courts generally appear to require some degree of active involvement) 2. Defect. The equipment was defective, and there- fore unreasonably dangerous, in terms of its design, manufacture or the warnings provided at the time it was provided. 3. Causation: As a result of the defect, any person suffers personal injuries and/or property damage. Note: A showing that the lessor failed to perform a duty or was negligent may not be required. In fact, the equipment owner/lessor may not even know of the defect. Such claims may be made not only by the customer, but also by any other affected party (even a bystander). defect caused harm to an individual who made "normal and proper" use of an unmodified product (which, unsurprisingly, set off a landslide of questionable claims by supposedly "injured" parties). n Greenman v. Yuba Power Products (59 Cal. 2d 57, 1963), which was arguably the pivotal moment in the expansion of products liability law because it finally dispensed with the "fault" concept entirely, holding a manufacturer strictly liable to a consumer injured by a shop tool that none of the parties knew was defective, reasoning that "a manufacturer is strictly liable in tort when an article he places on the market, knowing that it is to be used without inspection for defects, proves to have a defect that causes injury to a human being." In 1965, the Restatement (2nd) of Torts endorsed the validity of "strict products liability," and the courts' expansion of the concept accelerated. Through the 1960s and '70s, defect standards were reduced or disregarded entirely, and liability was extended to all parties (other than providers of financing) involved in the manufacturing, distribution, sale and leasing of defective products (See, for example, Cintrone v. Hertz; and Francioni v. Gibsonia Truck Corp., 372 A.2d 736, S.Ct. Pa., 1977). Just as important, the array of potential plaintiffs was also significantly expanded. Bystanders and others who might "foreseeably" be impacted are now permitted to maintain strict products liability lawsuits (See, for example, Elmore v. American Motors Corp., 70 Cal. 2d 578, 1969).