Malfunction Theory as a Triple Threat for the Defense

Transcription

1 Malfunction Theory as a Triple Threat for the Defense Written by: Presented by: Bruce H. Raymond and Lanell H. Allen of Raymond Law Group LLC Bruce H. Raymond of Raymond Law Group LLC And Keith Steenlage of Deere & Company

2 1. Malfunction Theory as a triple threat for the defense Application of the malfunction theory 1 can have a devastating effect on the defense of a products liability case, which is already a plaintiff-friendly environment. The malfunction theory is being utilized and developed by courts throughout the nation to relax, or even excuse proof of defect and causation in products liability cases. a. Plaintiff-friendly products liability law Products liability law essentially undid previous common law. Most notably, products liability law created a dangerous environment for any person operating in the stream of commerce by allowing claims against any defendant in the stream of commerce relative to the product with no privity requirement and without proof of fault. Further, courts did away with the traditional requirement of proving fault, or negligence - allowing strict liability against any product seller. When neither privity of contract, nor negligence is required, the burden often effectively shifts to defendants to figure out who is responsible for the harm allegedly caused to a plaintiff. Ordinarily for products liability cases in most jurisdictions, a plaintiff would need to prove that: a product was in a defective condition unreasonably dangerous to the consumer, the defect caused the injury, the defect existed at the time of sale, and the product was expected to and did reach the consumer without substantial change in condition. 2 The application of the malfunction theory to this already plaintiff-oriented body of law has the potential to expose defendants in the stream of commerce even further. The malfunction theory is being developed in most jurisdictions, some in a very relaxed manner, to provide alternate ways in which plaintiffs may successfully bring a products liability case despite the lack of direct evidence of defect and/or causation due to factors such as destruction or loss of the product in question. Under varying circumstances in different jurisdictions, courts are permitting circumstantial evidence as the basis for a prima facie products liability case in the absence of direct evidence of defect, causation, or both. 1 Sometimes referred to as the malfunction doctrine, "indeterminate defect theory," "general defect theory," or simply as "a principle of circumstantial evidence." D. Owen, supra, 53 S.C. L. Rev. 851, 873 n.123. Metro. Prop. & Cas. Ins. Co. v. Deere & Co., 302 Conn. 123, 135 (Conn. 2011) 2 Many jurisdictions have adopted the Restatement (Second) of Torts 402A: (1) One who sells any product in a defective condition unreasonably dangerous to the user or consumer or to his property is subject to liability for physical harm thereby caused to the ultimate user or consumer, or to his property, if (a) the seller is engaged in the business of selling such a product, and (b) it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.... (2) The rule stated in Subsection (1) applies although (a) the seller has exercised all possible care in the preparation and sale of his product...."

3 b. The malfunction theory is developing in a manner that relaxes and sometimes excuses the need for a plaintiff to prove a specific product defect that caused the injury A plaintiff may prevail on a strict liability claim without having to prove a specific product defect. In Welge v. Planters Lifesavers Co., the court reversed the grant of summary judgment for defendant and remanded the case despite the fact that plaintiff could not prove a specific defect causing a jar of peanuts to shatter as plaintiff was replacing the cap. Welge, 17 F.3d 209, 211 (7th Cir. Ill. 1994). The court found that plaintiff's accident was not caused by mishandling or misuse after purchase, but was more likely caused by a defect that had been introduced earlier in the stream of commerce. The court stated that a plaintiff in a products liability suit is not required to exclude every possibility, however fantastic or remote, that the defect which led to the accident was caused by someone other than one of the defendants.... Id. The court likened the products liability case to res ipsa loquitur in that an accident can itself be evidence of liability. Id. (Citations omitted). If it is the kind of accident that would not have occurred but for a defect in the product, and if it is reasonably plain that the defect was not introduced after the product was sold, the accident is evidence of the defect. Id. In Liberty Mutual Co. v. Sears, Roebuck and Co., an eye witness observed a six month old television suddenly erupt into flames during normal use. 35 Conn. Supp. 687, 689 (1979). Following an investigation, the fire marshal determined that: the cause of the fire was the television,; there was no improper use; and there were no other causes of the fire. Id. at 691. Presented with these facts, and an obvious malfunction during normal use, the court found that a jury may rely on circumstantial evidence to establish the dangerous condition of the product.... [i]n the absence of other identifiable causes.... Id. 3 As the malfunction theory continues to develop, there is a need to increase awareness of the theory and defenses thereto. 2. Malfunction theory basics 3 See e.g., Greco v. Buccioconi Eng g. Co., 407 F.2d 87, (3d Cir. 1969) (stating defect may be established when product malfunctions during normal operation); Lindsay v. McDonnell Douglas Aircraft Corp., 460 F.2d 631, (remanding after finding central part of case was whether plane was on fire during use, and if so, whether fire caused by malfunction or pilot error); Franks v. National Dairy Products Corp., 414 F.2d 682, 687 (5th Cir. 1969) (permitting inference of defect when shortening exploded during normal use, plaintiff handled product properly, and negated alternatives); Heaton v. Ford Motor Co., 248 Ore. 467, (1967) (inference available if failure of product during expected use); Anderson v. J.C. Penney Co., 149 Ind. App. 325, 327, 332 (Ind. Ct. App. 1971)(allowing inference of defect in absence of misuse or other causes when boy awoke to fire on bed which was covered by electric blanket in normal use).

4 A plaintiff in a product liability action may be able to establish a prima facie case by providing evidence of the nature of a product s malfunction under circumstances that give rise to an inference that the malfunction would not have occurred absent a defect existing at the time of sale. Products liability cases may arise out of a product malfunction that damages or completely destroys a product that is the basis of the products liability case. 4 As a result, plaintiff would not be able to produce direct evidence of a specific defect. The malfunction theory essentially allows a plaintiff to present circumstantial evidence of a defect or evidence of an unspecified dangerous condition when direct evidence is unavailable or there is insufficient evidence to identify the specific defect. Additionally, application of the malfunction theory allows the plaintiff to present circumstantial evidence that rules out reasonable secondary causes in lieu of direct evidence of causation. a. Sources that contribute to and inform the malfunction theory Given that the malfunction theory implicates permissible inferences for a fact-finder absent direct evidence, the theory essentially operates as a rule of evidence. As such, the rules of evidence and the Restatement (Third) of Torts, Products Liability, as a synthesis of and historical perspective on the common law, have contributed to and have informed the development of the malfunction theory. According to 3 of the Restatement (Third) of Torts, Products Liability 3, Circumstantial Evidence Supporting Inference of Product Defect: It may be inferred that the harm sustained by the plaintiff was caused by a product defect existing at the time of sale or distribution, without proof of a specific defect, when the incident that harmed the plaintiff: (a) was of a kind that ordinarily occurs as a result of product defect; and (b) was not, in the particular case, solely the result of causes other than product defect existing at the time of sale or distribution. Restatement (Third), Torts, Products Liability 3, p. 111 (1998). The commentary clarifies that quite apart from the question of what type of defect was involved, the plaintiff need not explain specifically what constituent part of the product failed. For example, if an inference of defect can be appropriately drawn in connection with the catastrophic failure of an airplane, the plaintiff need not establish whether the failure is attributable to fueltank explosion or engine malfunction. Id. 3 c. The plaintiff, however, must establish by a preponderance of the evidence that the incident was not solely the result of causal factors other than defect at time of sale. The defect need not be the only cause of the incident; if 4 This situation also may result when a product is discarded or destroyed prior to expert inspection, which may give rise to a claim for spoliation of evidence.

5 the plaintiff can prove that the most likely explanation of the harm involves the causal contribution of a product defect, the fact that there may be other concurrent causes of the harm does not preclude liability under this Section. But when the harmful incident can be attributed solely to causes other than original defect, including the conduct of others, an inference of defect under this Section cannot be drawn. Evidence may permit the inference that a defect in the product at the time of the harm-causing incident caused the product to malfunction, but not the inference that the defect existed at the time of sale or distribution. Such factors as the age of the product, possible alteration by repairers or others, and misuse by the plaintiff or third parties may have introduced the defect that causes harm. Id. The malfunction theory has been applied both narrow and broad approaches by different courts and remains in a state of flux. b. Broad application examples: Cassisi v. The Maytag Co., et al, 396 So. 2d 1140 (Fl. 1981), he court reversed summary judgment in favor of the defendants. There was expert testimony that a fire likely emanated from the electrical system in a 19 month-old dryer that was normally used and had never been repaired or serviced. The expert could not identify a specific defect, as the dryer was damaged by the fire. Further, the expert could not negate other causes of the accident for which the defendant would not be responsible. The court noted that the malfunction itself under the conditions presented was enough for jury consideration as to defect at time of injury and at time of sale. The court also indicated that plaintiff did not need to present expert testimony as to proof of defect, because potential alternate causes would have been equally speculative. The user s testimony of the accident facts alone may be sufficient to bring a case to a jury. [T]he facts essential for the inference's application are simply proof of the malfunction during normal operation. Id. at The court noted that the malfunction theory is founded upon strong policy considerations, similar to res ipsa loguitur, of common sense assumptions that an accident would not have occurred in ordinary course of events without a defect and supports the purpose of products liability law to protect consumers and to ensure costs of product-related injuries are borne by those who took part in putting the products in the stream of commerce. Upon deliberation of whether the dryer was defective at the time of sale, the jury could consider factors such as the product's age, the length of the product's use, history of use, the severity of its use, the state of its repair, its expected useful life, and whether it was subjected to any abnormal operations. Moraca v. Ford, 66 N.J. 454, 332 A.2d 599 (1975) This case involved an approximately 6 month-old Lincoln Continental that had been driven close to 11,000 miles, was bought new, was properly driven, and was well maintained, when it suddenly left roadway and crashed into a tree after the steering mechanism locked despite the driver s efforts to steer the vehicle. Despite the complex nature of an automobile, the court noted that the accident itself under the conditions

6 presented 5 tended to negate other possible causes of accident and indicated more likely than not a malfunction in the steering system. The court made clear that a jury issue as to liability is presented even if a plaintiff cannot identify a specific defect, so long as a plaintiff has sufficient proof to permit an inference that the accident was caused by some defect. The court further clarified that a plaintiff may establish through circumstantial evidence that the defect existed at the time of sale. A plaintiff is not required to prove a specific manufacturer s defect if plaintiff can submit proof sufficient to invoke application of the circumstantial evidence rule which would permit an inference that accident was caused by some defect, even if unidentifiable. To determine if a defect existed at the time of sale, the jury may consider factors such as age, prior use in relation to expected life span, durability, and effective operability without maintenance. 6 c. Some courts have applied a more restrictive approach In the opinion of the author, he more restrictive application of the malfunction theory is the better reasoned approach. The lesson from these jurisdictions is that if a plaintiff has little proof as to defect and causation, plaintiff should be required to rule out other causes. In a situation where the plaintiff already has the advantage of utilizing strict liability, it makes sense to narrowly construe a rule that may relieve the plaintiff of proving a specific defect and causation. There is a danger that broad application of the malfunction theory may have the effect of making product sellers into insurers. 5 At the scene of the accident the roadway curved to the right gradually. It had started to rain. While driving in the right hand lane at a speed of about miles an hour, plaintiff heard a gink in the front of his car and the steering mechanism suddenly locked and would not respond to plaintiff's efforts to steer the vehicle which skidded to the right, off the road, across the right shoulder and into a field where it struck a tree. Moraca v. Ford, 66 N.J. at See also, Lindsay v. McDonnell Douglas Aircraft Corp., 460 F.2d 631 (8th Cir. 1972) (despite possible alternate causes such as pilot disorientation and lack of proof of specific defect that caused plane crash, plaintiff was entitled to jury consideration because sufficient to show the crash was caused by unspecified defect and no other cause likely); Stewart v. Budget Rent-A-Car Corporation, 52 Haw. 71, 470 P.2d 240 (1970) (user's testimony of the circumstances of the accident is a generally accepted method to establish proof of a defect as carefully driven vehicle does not leave the road in absence of a defect in car); Kuisis v. Baldwin-Lima-Hamilton Corp., 457 Pa. 321, 319 A.2d 914 (1974) (no direct evidence of specific defect but circumstantial evidence of malfunction in use and 5 earlier incidents of malfunctions of the lock sufficient to support a jury finding that the locking mechanism malfunctioned in absence of other identifiable causes); Worsham v. A.H. Robins Co.., 734 F.2d 676, 683 (11th Cir. 1984)( plaintiff is entitled to inference that defect was present when product malfunction occurs that would not have, but for a defect); Beauregard v. Cont'l Tire N. Am., Inc., 435 Fed. Appx. 877, 880 (11th Cir. 2011) (same); Miller v. Allstate Ins. Co., 650 So. 2d 671 (Fla. Dist. Ct. App. 3d Dist. 1995) (new Cadillac only a few months old at the time of the accident with user testimony as to normal operation when accelerator stuck which caused the loss of control and collision with the nearby wall, sufficient to invoke product defect inference); Greco v. Bucciconi Engineering Co., 283 F. Supp. 978 (W.D. Pa. 1967), aff'd, 407 F.2d 87 (3d Cir. 1969) (often cited for inference of product defect both at time of injury and time of sale from given set of circumstances of the accident itself).

7 Martin v. E-Z Mart Stores, Inc., 464 F.3d 827, (8th Cir. 2006) the court upheld the district court's summary judgment in favor of defendants because plaintiffs did not offer sufficient evidence negating other potential causes, such as wear and tear or misuse. The accident occurred when one of two cigarette lighters in plaintiff's shirt pocket caught fire. The court stated that the mere fact of an accident does not support a conclusion that the product was defective. There was not enough evidence to rise above conjecture. Harrison v. Cairns Pontiac of Marlow Heights, Inc., 77 Md. App. 41; 549 A.2d 385 (1988) - the court upheld summary judgment in favor of defense in a case where a fire ignited either within or behind the instrument panel on the dash of a motor vehicle as it was being driven by one of the plaintiffs. Plaintiffs evidence was insufficient to establish a prima facie case of a defect at the time of manufacture, as the vehicle was more than five years old and had travelled more than 58,000 miles. With no direct evidence of defect, the malfunction itself could not overcome the lapse of time coupled with continued use for a jury to be permitted to infer that any defect existed at the time of manufacture. Id. at Metropolitan Property and Casualty Insurance Co. v. Deere and Company, et al., 302 Conn. 123, 25 A. 3d 571 (2011). This case involved a product liability subrogation action brought by the insurer of homeowners whose home was damaged by a fire. The plaintiff claimed that a defect in the electrical system of a lawnmower manufactured by Deere and Company, which was parked in the homeowners garage, caused the fire. Following a jury verdict for plaintiff, Deere and Company appealed, claiming several trial errors, including that there was insufficient evidence to sustain the jury s verdict pursuant to the malfunction theory. The court agreed that plaintiff lacked sufficient evidence to establish its products liability claim and reversed the trial judge and entered judgment in favor of Deere and Company without remand. 7 See also, Sochanski v. Sears, Roebuck & Co., 689 F.2d 45 (3d Cir. 1982)( evidence of a malfunction not a substitute for the need to establish product defect, rather a specific application of the general rules of proof in products liability cases whereby plaintiff may meet burden of proving defect either by identifying specific dereliction by manufacturer or an unexplained occurrence after eliminating all reasonable explanations other than defect); Walker v. General Electric Co., 968 F.2d 116, 120 (1st Cir. 1992) (evidence of malfunction of a six-yearold toaster causing house fire not a substitute for need to establish product was defective and insufficient evidence of defect at time of sale); Nissan Motor Co. v. Armstrong, 145 S.W.3d 131 (Tex. 2004) (product defects had to be proved, not simply inferred from large number of complaints, and other causes ruled out); Ford Motor Co. v. Ridgway, 135 S.W.3d 598 (Tex. 2004) (expert testimony that fire originated in engine due to suspected malfunction not enough to transcend conjecture because expert declined to eliminate all portions of the fuel system as possible cause of fire and insufficient proof linking alleged defect to time of manufacture); Nationwide Rentals Co. v. Carter, 298 Ark. 97 (Ark. 1989) (plaintiff required to negate other causes if he is unable to show that the product was supplied with a defect).

8 Although a principal argument against the triple threat of the malfunction theory was that the theory was inapplicable due insufficient evidence, the concomitant argument was that plaintiffs liability experts should have been precluded as their opinions lacked sufficient foundation and required speculation. As a result, the opinions arguably did not meet the legal standards for reliability, as established in the landmark case of Daubert v. Merrell Dow. Pharm., Inc., 509 U.S. 579, 113 S. Ct. 2786, 125 L. Ed. 469 (1993). This is an especially powerful tool against the malfunction theory, as the specific defect and/or cause of an accident or injury are unknown. This often leaves experts with unsupported opinions rather than the scientific foundation required by the Daubert standard. Daubert and its substantial line of case law is a powerful defense tool, as it can be used to attack expert opinion even if the malfunction theory is applied to the case. Defendants may argue that the expert should be precluded or that certain testimony is inadmissible pursuant to the Daubert requirement that scientific evidence should be subjected to a flexible test to determine the reliability of scientific evidence before it is submitted to a jury. Id. In the Deere case, the defense argued that the court should have precluded plaintiff s liability experts based on failure to rule out other causes and failure to apply the methodology in a reliable manner to their investigation. The Connecticut Supreme Court unanimously found that when direct evidence of a specific defect is unavailable, a jury may rely on circumstantial evidence to infer that a product that malfunctioned was defective at the time it left the manufacturer's or seller's control if the plaintiff presents evidence establishing that (1) the incident that caused the plaintiff's harm was of a kind that ordinarily does not occur in the absence of a product defect, and (2) any defect most likely existed at the time the product left the manufacturer's or seller's control and was not the result of other reasonably possible causes not attributable to the manufacturer or seller.... These two inferences, taken together, permit a trier of fact to link the plaintiff's injury to a product defect attributable to the manufacturer or seller. A plaintiff may establish these elements through the use of various forms of circumstantial evidence, including evidence of (1) the history and use of the particular product, (2) the manner in which the product malfunctioned, (3) similar malfunctions in similar products that may negate the possibility of other causes, (4) the age of the product in relation to its life expectancy, and (5) the most likely causes of the malfunction. Metro. Prop. & Cas. Ins. Co. v. Deere & Co., 302 Conn. at The Court stated: [t]his approach is different from the approach taken by the Restatement (Third) of Torts, Products Liability, 3, which does not take a definite position as to the weight to be given to the age of the product in determining whether an inference may be drawn. Instead, it simply lists the age of the product as one factor among others to be weighed in considering whether other causes are responsible for the defect in a product that causes an accident. See Restatement (Third), supra, 3, comment (d), p Notwithstanding the vagueness in the Restatement (Third), it is noteworthy that, in every illustration in the commentary to 3 in which the Restatement (Third) indicates that liability is warranted, the accident involves a new product. J. Hoffman, supra, 36 S. Tex. L. Rev. at 368. Notwithstanding the Restatement's ambiguous position on the issue, case law generally supports

9 The Court emphasized that, in order to prevent liability based upon speculation, cases relying upon the malfunction theory should proceed to trial only when the plaintiff's evidence is sufficient to establish that it is more probable than not that the plaintiff's injury was caused by a defect in a particular product that can fairly be attributed to the manufacturer and not some other cause. Id. at Based on this premise, the Court held that the trial court should have granted the defendant's motion for a directed verdict on the ground that the plaintiff's evidence was insufficient, as a matter of law, to implicate the malfunction theory. Although we conclude that the plaintiff's evidence was sufficient to permit the jury to infer that the fire started within the tractor and that the fire most likely started as a result of a failure in the tractor's electrical system, the plaintiff's evidence did not support an inference that any defect existed in the electrical system when the tractor left the defendant's manufacturing facilities or at the time it was sold, as the plaintiff alleged. Id. at The Court stated that plaintiff failed to present sufficient evidence to eliminate other reasonably possible secondary causes of the defect and to establish that the fire in the tractor most likely resulted from a defect attributable to the defendant. Id. at It was possible that improper maintenance and improper use contributed to the accident, especially given that the tractor operated without issue for more than four years and any issues that developed, did so after a dealer performed a tune-up. Id. Evidence of the four years of normal operation and use of the properly functioning tractor weakened any potential link to an electrical failure that could be attributed to Deere at the time of manufacture or sale. Furthermore, because the evidence established that the tractor was not new or nearly new when it malfunctioned, the plaintiff was required to [but did not] present additional evidence to explain how the tractor could have had a defect in the electrical system when it left the defendant's manufacturing facilities yet function without problems for several years before failing in July, Id. The plaintiff s experts were unable to state that any claimed defect in the electrical system of the tractor was present when it was sold. In fact the experts had to speculate as to the cause of the fire. When the plaintiff's own expert concedes that speculation would be required to determine whether the fire resulted from anything attributable to the defendant, and there is no other evidence to link the defect to the defendant, a reasonable juror would have to resort to speculation to infer liability on the part of the defendant by a preponderance of the evidence.... [T]he trial court should not have permitted the jury to infer the existence of a defect attributable to the defendant on that basis. Id. limiting the doctrine to new or nearly new products, in the absence of additional evidence linking the product defect to the manufacturer. Id., 360, Metro. Prop. & Cas. Ins. Co. v. Deere & Co., 302 Conn. at 148.

10 As speculation is often required in cases where plaintiffs rely on circumstantial evidence to prove the existence of a defect and/or the cause of an accident, attacking the foundation for the expert opinions can prevent a plaintiff from compiling enough evidence to warrant reliance on the malfunction theories for necessary inferences. Many courts have precluded expert testimony for a variety of reasons. 9 9 See, e.g. Maher v. Quest Diagnostics Inc., et al, 269 Conn. 154, 847 A.2d 978 (2004)(medical testimony unreliable where expert reviewed noncase specific literature on cancer doubling rates); Prentice v. Dalco Electic, Inc. et al, 280 Conn. 336, 907 A.2d 1204, 2006 Conn. LEXIS 385 (2006)(case reversed and remanded for new trial where expert testimony lacked scientific foundation and required validity assessment); Fireman s Fund Ins. Co. v. Canon, U.S.A., Inc., 394 F.3d 1054 (8 th Cir. 2005)(experimental testing did not meet NFPA standards); Patterson v. Central Mills, Inc., 64 Fed. Appx. 457 (6 th Cir. 2003)(expert had no specific training regarding warnings on clothing and had authored no peer-reviewed articles); Free v. Bondo-Mar-Hyde Corp., 25 Fed. Appx. 170 (4 th Cir. 2002)(portion of testimony based on witness opinion rather than scientific, technical or other specialized knowledge); Wilson v. Bradlees of New England, Inc., 250 F.3d 10 (1 st Cir. 2001)(medical chemical expert not permitted to testify to usages and practices in silk-screening industry or commercial feasibility of printing shirt logos with flame retardant ink); Nelson v. Tennessee Gas Pipeline Co., 243 F.3d 244 (6 th Cir. 2001)(failure to account for alternative causes of injury);weisgram v. Marley, 169 F.3d 514 (8 th Cir. 1999) aff d 528 U.S. 440, 110 S.Ct (2000)(unqualified, speculative, unreliable); Pride v. Bic Corp., 218 F.3d 566 (6 th Cir. 2000)(methodologies too unreliable); MASB-SEG Property/Casualty Pool, Inc. v Metalux, 2003 WL (Mich.App. 2003)(expert concerned with only one source of ignition; failed to consider others); American Family Ins. Group v. JVC Americas Corp., 2001 WL (2001)(engineering expert not qualified to offer opinion on burn patters and general fire origin theory).