Page 6 - Litigation

S6 | MONDAY, FEBRUARY 24, 2014 | Litigation | NYLJ.COM

Does Product Design Liability

Exist Outside the Chain

Of Distribution?

In New York, the answer may be yes.

K
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particularly the policy behind the creation
BY JOHN G. POWERS of strict products liability law.5 The New York
Court of Appeals adopted strict products
AND NINA I. BROWN
B liability in Codling v. Paglia in 1973.6 There,
lack letter products liability law requires the court discussed policy considerations
a party to be within the “chain of dis- inherent in the economic realities of mass
tribution” in order to be liable under
production and distribution that led the court
theories of strict liability or breach of war- in the interest of “justice and common sense”
ranty for an injury caused by a defective prod- to place the risk of harm for defective prod-
uct.1 Since New York law essentially collapses ucts and the associated inancial burdens of
the two distinct bodies of tort law—strict those harmful consequences on the “manu-
products liability and negligent product facturers” who place those products in the
design/manufacture—into one standard,2 a stream of commerce.7 The doctrine creates
signiicant question is posed as to whether incentives for safety-motivated improvements
the party who is responsible for the design, to a product’s design and manufacture by
if outside the chain of distribution, may be assigning liability for unreasonably designed
sued by a person injured by a defective prod- and unsafe products to those parties that are Warner summary judgment, holding that it injuries, no ability to conduct safety tests,

uct that was manufactured and distributed best placed to “discover the defect[s] and was not an appropriate defendant because it and no possibility of improving the design
by others.
correct [them] to avoid injury to the pub- had not placed the product at issue into the to diminish the risk of harm.”15 The court,
This situation often arises where a particu- lic.”8 In Emslie v. Borg Warner Automotive, stream of commerce as required to establish however, noted that the transfer of the design
lar product line and its design are purchased the Second Circuit addressed the question a claim for defective design.12
from Borg-Warner to Recreative may not, in all
by a wholly new company who becomes of whether a predecessor product designer The district court relied upon the fact that circumstances, have insulated Borg-Warner
responsible for the product’s subsequent could be held liable along with the subsequent Borg-Warner had sold its rights, title, and from potential liability, indicating in dicta that
manufacture and distribution. In New York, product manufacturer for an injury created interest in the transmission, had no control it was passing on the question of whether the
the question of whether the original design- by a product manufactured after the product or involvement with the manufacture of the outcome would be the same if the transfer
er bears any continuing liability in tort for design left the original designer’s control.
speciic transmission or vehicle at issue in the of the product line and the incident were
injuries occurring after the product’s design Emslie v. Borg-Warner. In Emslie, the suit, and had not been in a position to modify relatively close in time.16 The court likewise
left its control is answered largely through plaintiff was injured in 2005 while riding as or improve upon the transmission design or did not address “whether Borg-Warner would
consideration of two cases: Emslie v. Borg- a passenger on an ATV that overturned.9 The correct defects in the design.13 Because the be liable if, prior to its sale to Recreative, it
Warner Automotive3 issued by the U.S. Court accident was alleged to have been caused district court held that Borg-Warner “played had already placed the transmissions into
of Appeals for the Second Circuit, and Sage in part by a law in the transmission.Borg- no role in placing the transmission at issue the stream of commerce with awareness of
10
v. Fairchild-Swearington4 issued by the New Warner Automotive was the original designer into the stream of commerce,” it was not liable its unreasonable design defect.” Id.
York Court of Appeals.
and manufacturer of the transmission, but for the design of the transmission. Id.
Sage v. Fairchild-Swearington. The
sold the rights to manufacture the product The Second Circuit afirmed, holding that unsuccessful plaintiffs in Borg-Warner relied
Analysis
to defendant Recreative Industries in the imposing strict liability on Borg-Warner would heavily on Sage v. Fairchild-Swearington, a
mid-1970s, along with “the design, manufac- not reasonably serve the rationale for strict New York Court of Appeals case where a
The answer to the question posed lies in turing tools, and inventory in order to build liability because it was not in the best position plaintiff was injured when she caught her
the public policy behind tort liability, and
the transmissions.”11 Plaintiffs premised their to have eliminated the danger.14 The Second hand on a hook attached to the doorway of
claim against Borg-Warner upon the theories Circuit referenced the policy underlying the a cargo compartment on an aircraft manu-
of strict liability and negligence premised imposition of strict products liability, inding factured by defendant.17 The hook itself was
JOHN G. POWERS is a partner and NINA I. BROWN is upon its role as the original designer of the that Borg-Warner, having sold all rights to the a replacement part that had not been made
an associate at Hancock Estabrook, where they both alleged defectively designed transmission. design at issue, “had no ability to learn from by the defendant, but rather had been fabri-
work in the litigation practice.
The district court, however, awarded Borg-
experience whether its design was causing
cated and installed by plaintiff’s coworkers