Product Liability and Innovation Managing Risk in an Uncertain Environment (1994) / Chapter Skim
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Approaches to Product Liability Risk in the U.S. Automotive Industry
Approaches to Product Liability Risk in the U.S. Automotive Industry
Pages 82-112
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From page 82... ...
Its contingent fees, blue-sky verdicts, punitive damages, and acceptance of highly suspect expert testimony remain unique to the United States. Consider today's newly graduated engineer.
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From page 83... ...
U.S. product liability law is a part of this system, albeit a very new one.
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From page 84... ...
Eminent scholars like Alan Schwartz and W Kip Viscusi have argued recently for national standards for warnings labels, and even for a uniform national vocabulary for warnings.5 Professor Viscusi has noted that "in practice hazard warnings simply give plaintiff another test that producers can fail."6 Design Cases Cases that involve product design are the most controversial part of product liability law.
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From page 85... ...
The truth is that product liability design cases are nothing less than claims of engineering malpractice. One of the first difficulties today's automotive engineers experience is that the automotive industry, entirely apart from product liability litigation, is heavily regulated in the United States, as is the automotive industry in all other leading nations of the world.
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From page 86... ...
This is the difficulty with the concept of specialized courts, whose task it would be to decide whether a given design is permissible even though all engineering design work had ended years before. Because of this, product liability design cases affect engineers in the automotive industry during the design phase of a product far less than do federal safety regulations, for which each company has extensive compliance programs in place.
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From page 87... ...
How could we have arrived at this present position? HOW IT AM BEGAN: THE WAY wit; WERE IN 1966 In the mid-1960s, many Americana believed or at least were told that automotive design engineers could easily and dramatically improve highway safety but simply refused to do it or were prevented from doing so by industry executives.
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From page 88... ...
Time and experience have ameliorated the extremity of the typical views of the mid-1960s, and in particular the belief, even among our best and brightest leaders, that the compulsion of law could force automotive design engineers readily to end highway death and injury. Of course, there has been much progress in highway safety, including automotive design, since the mid-1960s, but it has been the result of genuine scientific innovation rather than the mere implementation of fully developed mid-1960s technology, and it has been seen worldwide, rather than only in the United States.
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From page 89... ...
. we are not persuaded mat the award was so "grossly excessive" as to be beyond the power of the State to allow.22 Justice O'Connor observed that all the justices at least agreed that it is possible for a punitive damages award to be unlawfully large.23 How should an automotive manufacturer deal with this risk and the other risks that lie in product liability litigation?
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From page 90... ...
courtrooms in product liability cases, typically introduced through the testimony of expert witnesses. Many engineers in the automotive industry experienced in product liability design litigation are troubled by the scientific and engineering propositions that are too often presented to juries today.
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From page 91... ...
product liability law reinforces this demand, since liability in a product liability case can result from a mismanufactured product. Design cases, however, present notorious professional difficulty for the corporate lawyer.
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From page 92... ...
Further, there may be influences from U.S. product liability law and practice that affect design engineers but are difficult to quantify.
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From page 93... ...
product liability law in design cases, typically are hardpressed to name particular design features that would be in U.S. vehicles today but are not because of this body of law.
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From page 94... ...
Audi focused on older persons with brittle bones. Current safety features displayed included reinforced body structure, air bags, including side air bags, seat belt tensioners, web grabbers, adaptive damping, antilock braking systems, traction control, child safety seating, all-belts-to-seats,36 convertible rollover protection, air filtration, adjustable safety belt anchors, advanced navigation and mobile communications systems, night vision, and side-rear obstacle detection.
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From page 95... ...
system in design cases, many others now seem willing to state in public that this emperor may have no clothes. Consider, for example, this view expressed by Professor Alan Schwartz: Only plaintiffs' lawyers like today's products liability law ....
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From page 96... ...
product liability law during the 1980s: We posit that a pro-defense revolution began in the early to mid-1980s and continued through at least 1989. We base this assertion on declining plaintiffs' success in products litigation, on pro-defendant trends in explicit lawmaking in products cases at both trial and appellate levels, and on steadily declining products filings in federal courts.42 They have found a "widespread, independent shift in judicial attitudes,"43 and that "the declining trend in plaintiff success is matched by an equally striking but more recent decline in products filings."44 But, in the author's view, there is no evidence of such a "revolution" in General Motors' product liability experience, and presumably in that of other automotive manufacturers, of "declining plaintiffs' success in products litigation," and, on average, little or no decline in new case filings, whether it be on the federal or the state level, over the past decade.
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From page 97... ...
The engineering profession does not appear to have been centrally involved in the continuing intellectual debates over the future of U.S. product liability law and practice, especially in design cases, even though, as noted previously, the allegations in these cases are of engineering malpractice.
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From page 98... ...
The Real Problem: Highway Safety U.S. product liability law has been an attempt to respond to a continuing, though progressively declining, national tragedy: death and injury on our highways as the result of the use of motor vehicles.
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From page 99... ...
But U.S. product liability law, much federal safety regulation, the safety critics, and the attention of much of the press, all for the past 25 years have focused on a tiny, statistically infinitesimal part of highway safety: defects in new vehicles.
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From page 100... ...
Performance-oriented regulations, such as the safety regulations that apply to the U.S. automotive industry, in fairness should follow the same rule.
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From page 101... ...
Only international cooperation in engineering and technology will permit the world community fully to reap the benefits of rapidly increasing technological progress. Therefore, there is a need to study not only current trends in the interpretation of product liability law and how organizations respond to them but also the ways in which the legal systems of all advanced nations, including, but not limited to, the United States treat the alleged malpractice of professional engineers.
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From page 102... ...
A number of leading litigation experts at major national law firms work virtually fulltime today for tort reform. The importance of significant change to help restore fairness in product liability litigation makes these efforts correct for our time.
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From page 103... ...
Ironically, this is, at least in general concept, what several leading torts scholars seem to have predicted 40 years ago. The Georgia Law Review recently featured an important symposium on "Modern American Tort Law."69 The symposium included articles by sev
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From page 104... ...
eral of today's leading torts scholars, including Gary Schwartz, David Owen, Michael Wells, Kenneth Simons, and lames Henderson. Modern readers are indebted to Professor Schwartz for pointing out in his article that the lanuary-February 1953 issue of the Northwestern Raw Reviews had likewise featured a symposium on "The Law of Torts." The 1953 symposium included articles from several of the leading torts scholars of that day, including Leon Green, Fleming lames, Clarence Morris, Albert Ehrenzweig, and Fowler Harper.
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From page 105... ...
optimally safe product designs and (b) universal health care, at least for catastrophic injury, then one must appreciate the reality: these two needs are well understood and are being met today, entirely without U.S.-style product liability litigation, in every other advanced, leading nation in the world except the United States.
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From page 106... ...
The ultimate resolution obviously must encourage the American engineering profession in general and American engineering innovation in particular. In the automotive sector, then, the public interest seems to lie not in preserving and increasing the role of the civil litigation system, but rather, as Mashaw and Harfst have suggested, in achieving the greatest economically beneficial reduction in motor vehicle deaths and serious injuries consistent with politically acceptable levels of regulation.82 Peter Schuck of Yale Law School assured his readers, in a recent article on the subject of legal complexity, that the existing product safety legal system in the United States is indeed relatively complex.
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From page 107... ...
When this Delphic law also emerges from an institutional black box that is itself dense and difficult to comprehend, its legitimacy the sense of "oughtness" that the lawmakers hope will attach to it is diminished.86 Professor Schuck argues that the current tax structure is a notorious example of the price society pays for needless complexity, but that: there is ample evidence of delegitimation costs in fields other than tax. A RAND study of corporate responses to modern product liability law, for example, found that the law emitted such noisy, random, and confusing signals to manufacturers that it had little effect on the product design decisions it was supposed to influence.87 Further, he notes that the main producers, rationalizers, and administrators of law legislators and their staff, bureaucrats, litigants, lawyers, judges, and legal scholars generally benefit from legal complexity while bearing few of its costs.
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From page 108... ...
Have This? Comparative Legal Analysis of Product Liability Law and the Casefor Modest Reform, 10 Loyola L.A.
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From page 109... ...
36. "All-belts-to-seats" is automotive industry jargon for a lap-shoulder safety belt system design in which all the belts are anchored to the occupant's seat rather than to the floor or elsewhere in the vehicle, such as the roof rail.
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From page 110... ...
731 (1992) , at 743-44; see also The Quiet Revolution in Products Liability: An Empirical Study of Legal Change, 37 UCLA L
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From page 111... ...
The law of torts, or civil wrongs, covers a wide range of unreasonable human activity that courts permit to be the subject of recovery in civil litigation, include unwelcome personal advances, defamation, tortious interference with business activity, and many more activities. Only one of the many branches of the law of torts is to be understood by the current phrase "tort reform": the tort of selling a defective product that has caused an injury of which the plaintiff complains.
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From page 112... ...
96, George Eads and Peter Renter, Designing Safer Products: Corporate Responses to Product Liability Law and Regulation 27-29 (1985)
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