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LAW PANEL OFFERS NEW RULE FOR DESIGN DEFECT CASES

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NEW YORK-A new standard for product liability suits adopted by a prominent legal scholars' group could make it more difficult for plaintiffs to win their suits in some states.

The American Law Institute voted last month to grant final approval to the "Restatement Third of Torts: Products Liability," the first revision of the seminal work on tort law in more than 30 years.

The ALI is a Philadelphia-based organization of lawyers, judges and law professors. The institute publishes restatements, which are treatises on various areas of the law that judges and lawyers often cite as authoritative documents on a given subject.

Under the Restatement, plaintiffs would be required to show that an alternative design would not only have been reasonable but also would have made the product safer overall.

The authors of the restatement say this standard is already in effect in most states.

But if adopted by states that have a lesser standard, "it will be a more difficult test to meet," said Alan Lazarus, a partner with Preuss, Walker & Shanagher L.L.P. in San Francisco who represents defendants in product liability suits.

However, some plaintiffs attorneys and legal scholars contend that the restatement will make it excessively difficult for plaintiffs in many states to win their suits claiming a product suffers from a design defect.

According to its critics, the reasonable alternative design theory is different from the law that exists in the majority of states. Rather than the reasonable alternative design theory, critics said that either the consumer expectations test, which looks at what a reasonable consumer would expect from a product, or the risk utility test, which examines the risks of the product against its overall value to the user, are more common and should have been adopted by the Restatement.

Under Section 2(b) of the Restatement, a product is "defective in design when the foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative design. . .and the omission of the alternative design renders the product not reasonably safe."

"It's a joke," said John Vargo, an attorney with the Indianapolis firm of Pardieck, Gill & Vargo, who represents plaintiffs and who last year published a 472-page law review article critical of the Restatement. "It has no academic integrity whatsoever if they want to follow what the states say," he said, disagreeing that a majority of the states already follow this rule.

"This was written to protect corporations and insurance companies and prevent consumers from recovering in suits," Mr. Vargo charged. He maintains that only a few states have adopted the reasonable alternative design theory.

"It's not a consumer-oriented test," said Jerry Phillips, a professor at the University of Tennessee Law School who has written on the new Restatement provisions. "It's an attempt to change the law in a regressive fashion."

Others disagree.

"It's a refinement of the law and not a changing of the law," said M. Stuart Madden, professor at Pace University School of Law in White Plains, N.Y., and author of a two-volume work on product liability.

One of the Restatement's authors, James Henderson, a professor at Cornell Law School in Ithaca, N.Y., says the restatement represents the law in the overwhelming majority of states. He read Mr. Vargo's work and investigated its results, but "it is wrong," he said. "Flat-out wrong."

"We looked at the cases, spent several years altogether, and we decided between us what's the right thing, the sensible thing, and also the majority position," Mr. Henderson added.

As in reading tea leaves, where two people can reach different conclusions, both sides have read the cases and drawn different results.

"Both the reporters and plaintiffs' bar are reading the same cases and finding among these cases support for different conclusions," said Mr. Madden. "This happens frequently in law."

Into the confusion on determining the current state of the law stepped the Connecticut Supreme Court.

In a May 27 decision, a week after the adoption of the Restatement by the ALI, the court rejected the rule adopted by the ALI, saying its own analysis "reveals that the majority of jurisdictions do not impose upon plaintiffs an absolute requirement to prove a feasible alternative design."

"In our view," the court continued, "the feasible alternative design requirement imposes an undue burden on plaintiffs that might preclude otherwise valid claims from jury consideration."

And the prospect of having suits dismissed because of the new rule is perhaps what most concerns the critics.

They contend that to present an alternative design will mean proving it is in fact a valid alternative. And this contention, they say, is based not on conjecture but on the comments that follow Section 2(b).

Comment (f) says that a number of factors can be considered in determining whether the proposed alternative design is indeed reasonable. These include "the likely effects of the alternative design on production costs; the effects of the alternative design on product longevity, maintenance, repair and esthetics; and the range of consumer choice among products."

"That means we have to show it would have been out on the market," Mr. Vargo said.

Mr. Phillips of the University of Tennessee said that if a state adopts the new Restatement's theory, the trial judge has the discretion of forcing the plaintiff to bring in a prototype of the new design to support the contention that the new design is indeed a reasonable alternative, despite Comment (f) further stating no prototype is required.

"These are just factors and are not ironclad," counters Victor Schwartz, a member of the advisory board that helped draft the Restatement. "They are just considerations."

Drafters of the Restatement say the adoption of the reasonable alternative design theory is a more practical method of trying cases.

Aaron Twerski, the other author of the Restatement and professor at Brooklyn Law School, said the newly adopted standard means a plaintiff simply may present an expert witness to testify about the alternative design. "If you can't do that, you don't have a design case," he said.

"The reason they do this is that otherwise the juror is left in neverland," Mr. Schwartz said. "All this does is track what good plaintiffs lawyers do in actual practice."

It's too early to tell how many states will adopt the new rule, but Mr. Madden said that one state, Georgia, has already done so and at least one, Connecticut, has rejected it.

Mr. Vargo said the rule "is so far out and so corporate-oriented, I don't think states will follow it," he said.

Despite the sometimes heated and lengthy objections, the drafters stand by their work.

"In the long term, the rule will wear well because it's sensible and reasonable and in fact it reflects the reality of practice," said Mr. Twerski. "It reflects the reality of how products liability cases are tried and how they have to be tried."