Index

A

Abortifacient, 143

Accident investigation, 74

commercial aviation, 116-117

Accidents

automotive, 98-99

in commercial aviation, 114, 118

in general aviation, 74

Air bags, 18 n.4

Aircraft industry. See Commercial aviation;

General aviation

Airworthiness Directive (AD), 116

American Bar Association, 7, 17, 41, 42

American Legislative Exchange Council (ALEC), 33

American Tort Reform Association (ATRA), 33

Antilock braking system, 18 n.4, 93

Antitrust law, 71

Arbitration, 42

Asbestos-related injury claims, 18 n.1, 135

Automotive industry, 1, 10-11, 13, 72ff., 82ff

causes of vehicular injury, 11, 98-99, 110nn.52-54

defense strategies in liability cases, 89-90

engineering practice, 78-79

fuel tank design, 86

Intelligent Vehicle Highway System (IVHS) technologies, 98

legal environment, 87-88, 95-96

liability environment, 77-78, 83-87, 88

motivation for safety in, 94-95

opportunity for innovation in, 92-94

in public opinion, 87

regulation of, 99-101

safety innovation in, 80

tort reform and, 105-106

trial outcomes, 90

Aviation industry. See Commercial aviation;

General aviation

B

Bendectin, 125, 126

Birth defects. See Bendectin;

Thalidomide

Bullet-resistant vests, 51-52



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Product Liability and Innovation: Managing Risk in an Uncertain Environment Index A Abortifacient, 143 Accident investigation, 74 commercial aviation, 116-117 Accidents automotive, 98-99 in commercial aviation, 114, 118 in general aviation, 74 Air bags, 18 n.4 Aircraft industry. See Commercial aviation; General aviation Airworthiness Directive (AD), 116 American Bar Association, 7, 17, 41, 42 American Legislative Exchange Council (ALEC), 33 American Tort Reform Association (ATRA), 33 Antilock braking system, 18 n.4, 93 Antitrust law, 71 Arbitration, 42 Asbestos-related injury claims, 18 n.1, 135 Automotive industry, 1, 10-11, 13, 72ff., 82ff causes of vehicular injury, 11, 98-99, 110nn.52-54 defense strategies in liability cases, 89-90 engineering practice, 78-79 fuel tank design, 86 Intelligent Vehicle Highway System (IVHS) technologies, 98 legal environment, 87-88, 95-96 liability environment, 77-78, 83-87, 88 motivation for safety in, 94-95 opportunity for innovation in, 92-94 in public opinion, 87 regulation of, 99-101 safety innovation in, 80 tort reform and, 105-106 trial outcomes, 90 Aviation industry. See Commercial aviation; General aviation B Bendectin, 125, 126 Birth defects. See Bendectin; Thalidomide Bullet-resistant vests, 51-52

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Product Liability and Innovation: Managing Risk in an Uncertain Environment C Chemical industry, 47 ff. benefits of technical innovation in, 47 effects of product liability system in, 13 inhibition of innovation in, 49-52 risk management in, 47-49 risks in, 48 See also Materials suppliers Chernobyl accident, 170 Class action suits, 18 n.1, 152 Clinical trials, 123-124 Cognitive processes belief maintenance, 165 consumer's, as design factor, 15, 162-164, 183-184 individual inconsistency in, 169 information sources in, 165-167 in injured parties, 159 in law vs. engineering, 28 product-usage instruction, 180-182 in risk management experts, 169-171 in risk perception, 164-171, 179-180, 181 simplification, 164-165 in value-of-information analysis, 178 Commercial aviation, 11-12, 13, 113 ff. accident investigation, 116-117 causes of accidents, 116 development of, 113-114 excessive inspections, 118-119 motivation to safety innovation, 118 number of airplanes in, 116 pilot training, 115 product development in, 114-116 product liability system impacts, 118-119 protection against liability, 119 See also General aviation Competition in general aviation industry, 71, 75 international, 6-7, 13, 26, 34-35, 58, 75 in medical device manufacture, 58 product liability-related costs and, 40 product liability system and, 3, 43 tort reform and, 34-35 Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 56 Contraceptives, 120, 143 Controlled flight into terrain (CFIT), 116, 119 n.3 Conciliation, 42 Costs general aviation engineering process, 64 general aviation insurance, 142 general aviation liability claims, 142 health care, 38 in incentive-based regulation, 155 insurance, 26, 68, 69, 146-147 legal, 9, 17, 18 n.3, 24, 40, 42, 49-50, 126, 135 new drug development, 12, 123, 125 of noncritical performance compliance, 66-67 punitive damage awards, 136-137 retail, product liability factors in, 3, 12, 40, 67, 75 of zero-risk, 27 Crashworthiness, 77, 84 D Dalkon Shield, 18 n.1, 33, 125 Daubert v. Merrell Dow Pharmaceuticals, 91, 144-145 DDT, 170

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Product Liability and Innovation: Managing Risk in an Uncertain Environment Defect of design, 6, 33 in automotive industry, 80 documentation for legal defense, 65-66 materials supplier liability in, 50-51 protection against, 27, 72-73, 182-183 risk of, 26-27, 84-85, 174, 175 in tort reform, 34 Defect of manufacture, 6, 30-31, 84, 174 DES, 134, 170 Discovery procedures, 17, 42, 63-64, 71-72, 90, 96 Documentation company meeting notes, 72 corporate communication practices, 72, 118 of design process, 27, 91-92 destruction of, 65 for emergency situations, liability in, 66 in general aviation industry, 63-65, 72 legal interpretation of, 64 user manuals, 66 Drug industry. See Pharmaceutical industry E Elixir Sulfanilimide, 122 Engineering automotive, 10-11, 78-79, 85-88 chemical industry, 47-48 commercial aviation, 119 corporate liability in, 85 engineers' perception of product liability, 92-93 future of, 82-83 general aviation, 9-10, 63 innovation process and, 25, 73 law and, 28 national interest and, 106 product liability defense in, 11, 13, 27, 64 in product liability system reform, 97, 101 resource allocation issues, 63-64 response to litigation in, 72-73, 91 risk management in, 91-92, 175 user behavior as design factor, 160, 162-164 Enterprise liability, 103 Environmental Protection Agency, 155, 181 European Community Directive, 7, 35, 41, 44 n.13 Expert witnesses, 74, 90-91, 127, 145-146 Express warranty, 6, 31-32, 174 F Failure to warn, 6, 175 continuing responsibility, 32-33 lack of legal standards in, 84 language issues, 32 legal interpretation of, 32-33 product-related publications and, 66 protection against, 173, 177-180 state-of-the-art defense, 32 in tort reform, 34 Federal Aviation Administration, 65, 66, 71, 74, 114, 115-116 Federal law automotive industry regulation, 85 call for reform, 6-7, 17 food and drug oversight, 122-123, 124 fund for victims of product defects, 17, 61 tort reform, 34, 41, 102-103 Federal Motor Vehicle Safety Standards, 85 Federal Tort Claims Act, 147, 150 n.17 Financial management issues, 70-71 Food and Drug Administration, 57, 60-61, 122-123, 124, 127, 172, 184 n.1

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Product Liability and Innovation: Managing Risk in an Uncertain Environment Frye v. United States, 141 Fuel tank design, 86 G General aviation, 1, 9-10, 62 ff., 68 ff. accident investigation, 74 aftermarket manufacturers, 71 aircraft certification rules, 66 component industry, 68-69, 70-71 corporate communications in, 72 corporate practice, 70-72, 73-74 effects of product liability system in, 13, 67, 70-74 engineering environment, 63 engineering resource allocation in, 63-64 expenditures in noncritical areas, 66-67 industry status, 62, 68-69, 70, 142 international competition in, 75 kit planes, 69-70 manufacturer-regulator relationship in, 71 See also Commercial aviation H Halcion, 126 Hawaii, 35 Health care system, 17, 38, 105, 127 Heart valves, 54, 55, 58 Hiring practices, 74 I Incentive-based regulatory statutes, 155, 157 Injury statistics, 23, 39-40 automotive, 98-99, 110 nn.52-54, 111 n.55, 118 commercial aviation, 118 consumer product-related, 38 pertussis, 140 Innovation. See Obstacles to innovation; Safety innovations; Technical innovations Innoculations. See Vaccines Insurance, 113 ff. for component/materials suppliers, 71 damage awards and, 136-137, 139 general aviation industry, 68, 69 industry status, 131, 138 innovation and, 26, 138, 143 joint-and-several liability, 134, 139 legal environment and, 135-136, 143, 148-149 liability principles, 134 product liability system and, 14, 131-132 against punitive damages, 89 regulatory environment, 146-147 in resolution of liability cases, 89 scientific knowledge and, 135 scientific testimony and, 139-142 state law, 133-134 swine flu vaccine program, 136 systemic reform, 146-147 tort reform and, 104-105, 137 trends, 2-3 underwriting practices, 132-133 Insurance Services Office, 132-133 International comparisons automobile industry regulation, 85 automotive safety and liability system, 80 damage awards, 35, 43 n.3 product liability law, 7, 34-35, 50, 82 product liability system trends, 41, 89-90, 148-149 research needs, 16 safety innovation, 10 social services, 38, 127 vehicle design, diversity in, 92 International competition, 6-7, 13, 26, 40, 75

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Product Liability and Innovation: Managing Risk in an Uncertain Environment Investigational New Drug Application (IND), 123 Investor liability, 71 J Japan, 7, 80, 89, 92-94 Junk science, 14, 91, 127, 135, 138 ff. L Larsen v. General motors, 153 Legal process alternative settlement mechanisms, 42 automotive liability cases, 89-90 bases of product liability cases, 6, 30-33 behavioral research and, 171-176 cognitive style in, 28 corporate approaches to liability protection, 143-144 corporate communication practices and, 72, 118 corporate preparation for, 74-75 cost of, 9, 17, 18 n.3, 24, 40, 42, 49-50, 126 court-led reform, 95-96, 103-107 defense strategies in automotive cases, 89-90 discovery procedures, 17, 42, 63-64, 71-72, 90, 96 engineering documentation in, 27, 63-65 enterprise liability, 103 in expanded regulatory system, 154-156 general aviation industry defendants, 69 institutional differentiation in, 106-107 interpretation of outcomes, 25-26, 86, 171-172 investment of engineering resources in, 72-73 joint and several liability, 5, 7, 134, 139 jury sympathy in awards, 134 number of tort cases, 39 pharmaceutical industry as defendant, 125-126 precedent vs. lawmaking in, 33, 83, 102 problems of, 95-97 producer indemnification, 146 scientific testimony in, 14, 17, 28, 74, 90-91, 127, 135, 139-142, 144-146 statute of repose, 35 theoretical basis of tort law, 24, 83-84 tort system vs. statutory system, 152-154 U.S. tradition, 37-38, 43, 83-84 See also Obstacles to innovation; Tort reform M Manufacturing processes, 30, 47-48, 73 Marketing express warranty issues in, 31, 32 legal risk in, 72 new drug application process and, 124 risk management in, 173 Massachusetts, 34, 35 Materials suppliers, 1, 8-9, 13 in commercial aviation, 114 diminishing number of, 59, 69, 70-71 in general aviation industry, 68-69, 70-71 inhibition of innovation in, 49-52 legal indemnification for, 60, 61 in medical device manufacturing, 50-51, 58-61 societal interests and, 53 See also Chemical industry

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Product Liability and Innovation: Managing Risk in an Uncertain Environment Mediation, 42 Medical device manufacture, 1, 9, 13, 54 ff. advances in, 54-55 benefits of, 54-55, 61 biological challenges in, 55 component/materials suppliers in, 50-51, 58-61 future of, 60-61 implant technology, 54-55, 59 improving liability environment for, 60-61 inhibition of innovation in, 50-51 public expectations, 60 supply of quality materials for, 59 Misrepresentation, innocent, 6, 31-32, 174 Mississippi, 33-34 Multi-Door Courthouse, 42 N National Transportation Safety Board, 74, 117 Negligence contributory, 5-6 as legal standard, 5-6, 141 regulatory standards and, 157 New Drug Application (NDA), 124 North Dakota, 33 O Obstacles to innovation in automotive industry, 10, 13, 78-79, 92-94 in chemical industry, 50-52 in commercial aviation, 118 destruction of unnecessary documentation, 65 engineering environment, 72-73 in general aviation, 10, 13, 62, 67 industry-specific differences, 12-13 in insurance industry, 138 legal environment as, 14, 49-50, 53, 142-143, 151 in medical device manufacturing, 9, 13, 50-51, 58, 59-61 negative effects of, 26, 53 open-ended liability, 34 in pharmaceutical industry, 12, 13, 121, 125, 143 in regulatory environment, 100, 121 Occupational Safety and Health Act, 155 Orphan drugs, 12, 125, 146 P Pacemakers, 54, 55 Patent issues, 12, 125 Peer review, 145 Personal injury awards federal fund for, 17, 61 limitation of, 147 reform recommendations, 17, 41 in regulatory system, 156 terms of, 96-97 tort reform, 33 trends, 2, 3, 39 See also Punitive damages Personnel policies, 73-74 Pertussis vaccine, 140 Pharmaceutical industry, 11, 12, 120 ff. express warranty issues in, 31 insurance in, 136 in litigation, 125-126 new drug development, 120-121, 123-125, 184 nn.1-2 obstacles to innovation in, 143 regulatory environment, 120, 121-123, 127-128 tort reform and, 127 Pharmaceutical Manufacturers Association, 127 Policymaking, institutional differentiation and, 106-107

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Product Liability and Innovation: Managing Risk in an Uncertain Environment Probabilistic risk assessments, 177 Product development in automotive industry, 78-79 in chemical industry, 48-49 in commercial aviation, 11-12, 13, 114-116 consumer behavior as design factor, 5, 160, 162-164, 183-184 corporate transactions and, 70-71 inhibition of innovation in, 50-52, 78 in medical device manufacture, 55-57 in pharmaceutical industry, 12, 120-121, 123-125 process, 172-174 Product liability system automotive industry and, 83-87, 88, 92-94 commercial aviation and, 118-119 conflicting assessments of, 3-4, 26, 28-29, 151, 163-164 corporate practice and, 8-13, 12-13, 40-41, 70-72, 73-74, 143-144 course of reform, 16-17 future of, 82-83, 100-101 general aviation industry and, 63, 67 good qualities of, 7-8, 41, 43 insurance industry and, 131-132, 148-149 insurance trends, 138 international comparison, 7, 10, 34-35, 38 legal trends, 5-6, 16, 24, 30, 31, 32, 33-34, 36, 39-40, 50, 83-84 , 95-96, 125-126 misperceptions of, 39-41 as motivation for safety innovation, 10-11, 41, 63, 75-76, 80 opportunities for improvement, 41-43 pharmaceutical industry and, 120, 125-126 problems in, 75-76 public concern, 1-2 research needs, 16, 101 role of, 24, 38, 80-81, 96 schema, 174-175 societal expectations in, 15, 17-18, 24, 60 trends, 2-3, 15-16, 40-41, 87-88 Product stewardship, 48-49 Prozac, 125 Public concern, 1-2, 17-18, 168-169 commercial aviation safety, 119 as motivation to safety improvement, 11-12 Punitive damages, 134 excess, 52, 88-89 insurance against, 89, 136-137, 139 limitation of, 147 role of, 88 in tort-regulatory reform, 33-34, 154 trends, 39 R Recalls of products, 33 Refused take-offs (RTOs), 116, 119 n.2 Regulatory system, 151 ff. aircraft certification, 66, 115 automotive industry, 85, 99-101 aviation industry, 114, 115-116 general aviation, 63, 71 impact on innovation, 100 insurance industry, 146-147 legal liability and, 14-15 manufacturer-regulator relationship and, 71 medical devices, 55-57 pharmaceutical industry, 120, 121-123, 127-128 reform of, 15, 17, 154-156 role of, 15, 126 as source of liability claim, 65

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Product Liability and Innovation: Managing Risk in an Uncertain Environment tort system and, 99-101, 126, 148, 152-156 U.S. tradition, 37-38 victim compensation in, 156, 157 Research and development (R&D), 50-51, 59-60, 65, 91, 114-115, 123 -124, 157 Research needs, 16, 42, 101 Risk assessment in chemical industry, 49 consumer behavior as factor in, 15, 160, 161, 162-164, 176-184 definition of risk in, 167-168 experts, 169-171 individual cognitive processes in, 164-171 in insurance underwriting, 14, 132-133, 138-139 manufacturer liability, 34 new aviation products, 114-115 of potential product-use problems, 176-177 probabilistic, 177 swine flu vaccine, 136 tort system uncertainty and, 133 in unknown technologies, 170-171 Risk comparison, 179-180 Risk management in chemical industry, 47-49 in commercial aviation, 115-119 consumer behavior as factor in, 15 consumer role in, 163-164 in corporate communications, 72, 118 corporate practice in, 13, 72, 74-75, 118 in design process, 26-27, 72-73 in general aviation engineering, 63-67 as good business practice, 48 insurance as, 14 in insurance industry, 134 in new product development process, 173-174 in pharmaceutical regulation, 121-124 strategies for, 16 zero-risk, 5, 27 RU-486, 143 S Safety innovation in automotive industry, 80, 94-95 behavioral focus in, 15, 98-99 in commercial aviation, 113-114, 118 disincentives, 15, 18 n.4 in general aviation industry, 63 motivation for, 10-11, 12, 41, 75-76, 80, 94, 118 risk homeostasis and, 183 Schuck, Peter, 106-107 Schwartz, Alan, 84, 95, 99 Schwartz, Gary T., 87-88, 99, 104 Scientific testimony, 14, 17, 74, 90-91, 127, 135, 144-146 insurance and, 139-142 Silkwood v. Kerr McGee, 156 Social services system, 17, 38, 104-105, 127 Social values, 15, 17-18 in definition of risk, 167-168 in technology risk trade-offs, 23-24 State law inconsistency in, 133 insurance regulation, 134 interstate commerce and, 6 tort reform, 33-34, 41, 102-103 trends, 3 State-of-the-art knowledge, 3, 5, 17, 25, 32, 35, 52 inadequacy of, 141, 142 in insurance underwriting, 135 Statute of limitations, 34 Statute of repose, 35, 76 Swine flu vaccine, 136

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Product Liability and Innovation: Managing Risk in an Uncertain Environment T Technical innovation in chemical materials, 47 in commercial aviation, 114-116 inherent risk in, 24-25, 49 insurability of, 135 in medical device manufacture, 54-55 public evaluation of, 165-166 speed of, 79 vs. technical correction, 10, 79 See also Obstacles to innovation; Safety innovation Texas, 33, 34 Thalidomide, 120-121, 122 Three Mile Island, 170 Tort reform call for federal standards, 6-7, 127 contract law in, 147-148 damage award limits, 147 engineers in reform of, 97, 101 expanded regulation vs., 99-101 express warranty issues in, 32 federal initiatives, 34 general aviation industry and, 76 incentive-based regulatory statutes, 155-156, 157 insurance and, 137 international competition and, 34-35 meaning of, 111 n.61 need for, 6, 151, 157 pharmaceutical industry, 127 prospects for, 97, 102-103 public understanding, 2 recommendations, 7, 41, 52 regulatory reform vs., 126, 148 research needs, 42 scientific evidence, 14, 17, 127 social insurance system and, 104-105, 127 state initiatives, 33-34, 102-103 statute of limitations, 34 statutory reform vs., 152-154 TXO Production Corporation v. Alliance Resources, 88 U University research, 65 V Vaccines, 61, 136, 140 Viscusi, W. Kip, 84, 99 W Waller, Patricia, 92-93 Warranty cards, 32-33 Whooping cough, 140 Workplace injuries/fatalities, 23, 100 baseline risk standards, 153 express warranty issues in, 31 Z Zero-risk, 5, 27