§63.15 Test to Determine Whether a Product is Defective or Unreasonably Dangerous

The Case: Ray by Holman v. BIC Corp. , 925 S.W.2d 527 (Tenn. 1996).

The Basic Facts: Plaintiff brought a products liability suit against Defendant manufacturer of a cigarette lighter. Defendant's four-year old child was left alone in a room with a lighter made by Defendant and suffered severe injuries after starting a fire with the lighter.

The Bottom Line:

• "The Tennessee Products Liability Act provides that a manufacturer or seller may be liable for injuries caused by a product that is determined to be in a 'defective condition or unreasonably dangerous at the time it left the control of the manufacturer or seller.' Tenn. Code Ann. § 29-28-105(a) (1980 Repl.). In this case, plaintiff alleges that the BIC cigarette lighter was an unreasonably dangerous product. ^FN3

  The Act defines an unreasonably dangerous product as a product [that] is dangerous to an extent beyond that which would be contemplated by the ordinary consumer who purchases it, or a product [that] because of its dangerous condition would not be put on the market by a reasonably prudent manufacturer or seller assuming that [the manufacturer or seller] knew of its dangerous condition.

  Tenn. Code Ann. § 29-28-102(8) (1980 Repl.).

  FN3 Clearly, the current Act allows recovery for injuries caused by either a product in a "'defective condition' or an 'unreasonably dangerous' product. In 1978 the General Assembly removed the requirement of establishing both conditions. 1978 Tenn. Pub. Acts, Ch. 703, § 5 (codified at Tenn. Code Ann. § 29-28-105(a)(1980 Repl.)); Smith v. Detroit Marine Engineering Corp., [712 S.W.2d 472, 474-75 (Tenn. Ct. App. 1985), perm.to appeal denied, (Tenn. 1986)."

  925 S.W.2d at 529.
• "Unquestionably, the first clause of the definition establishes a 'consumer expectation' test for determining whether a product is unreasonably dangerous. That test, defined generally as, whether the product's condition poses a danger beyond that expected by an ordinary consumer with reasonable knowledge, has been employed by many states." Id. at 529.
• "It is also unquestionable that defendant in this case would be entitled to summary judgment if the consumer expectation test is the only applicable standard for determining unreasonable dangerousness. An ordinary consumer would expect that a cigarette lighter, left in the hands of a young child, could cause danger and injury concomitant to that occurring in this case. The more difficult question is whether that conclusion ends the inquiry. Again, unquestionably, it does not." Id. at 530.
• "In addition to the consumer expectation test clearly set forth in the first clause of the statutory definition, the second clause, joined disjunctively with the first, establishes a second test. That clause provides that a product is unreasonably dangerous if a reasonably prudent manufacturer or seller, aware of the product's dangerous condition, would not put the product on the market. Tenn. Code Ann. § 29-28-102(8) (1980 Repl.). We must determine whether that test, which we will refer to as the 'prudent manufacturer' test, is a separate, distinct test from the consumer expectation test found exclusive by the district court or the risk-utility test urged by the plaintiff." Id.
• "The consumer expectation test, clearly set forth in the first clause of the definition section, derives from the [RESTATEMENT (SECOND) OF TORTS, Section 402A]. Comment (i) to that section states that before a product is deemed unreasonably dangerous it must be 'dangerous to an extent beyond that which would be contemplated by the ordinary consumer who purchases it, with the ordinary knowledge common to the community as to its characteristics.' [RESTATEMENT (SECOND) OF TORTS, § 402A, comment i]; Vincer v. Ester Williams All-Aluminum, 320 N.W.2d 794, 798-99 (Wis. 1975).^FN5 Under this test, a product is not unreasonably dangerous if the ordinary consumer would appreciate the condition of the product and the risk of injury.

  FN5 At least two states have consistently followed an exclusive consumer expectation approach. Kansas, in Lester v. Magic Chef, 641 P.2d 353 (Kan. 1982), adopted the approach as in accord with the [Restatement]'s comment i. See also Betts v. General Motors Corp., 689 P.2d 795 (Kan. 1984); Barnes v. Vega Indus., 676 P.2d 761 (Kan. 1984). Likewise, Nebraska has persisted in its exclusive use of the consumer expectation test, although there, it is referred to as a 'user-contemplation' test. Rahmig v. Mosely Machinery Co., 412 N.W.2d 56 (Neb. 1987); Adams v. American Cyanide, 498 N.W.2d 577 (Neb. Ct. App. 1992)."

  Id .
• "By contrast, the prudent manufacturer test imputes knowledge^FN6 of the condition of the product to the manufacturer. The test is whether, given that knowledge, a prudent manufacturer would market the product. Phillips v. Kimwood Machine Co., 525 P.2d 1033, 1036 (Or. 1974).

  FN6 Some versions of a prudent manufacturer test may deem the manufacturer to have actual knowledge of the product's dangerousness, despite the unreasonableness of that assumption. Other approaches deem the manufacturer to have actual knowledge of the product's dangerousness only to the extent that a reasonable manufacturer should have known. The former is a strict liability approach, the latter a traditional negligence approach. [Birnbaum, Unmasking the Test for Design Defect: From Negligence to Warranty to Strict Liability to Negligence, 33 Vand. L. Rev. 593, 618 (1980) (hereafter Birnbaum, supra at -----)."

  Id .
• "We see distinct and important differences in the consumer expectation and the prudent manufacturer tests under our statute. First, the former requires the consumer to establish what an ordinary consumer purchasing the product would expect. The manufacturer or seller's conduct, knowledge, or intention is irrelevant. What is determinative is what an ordinary purchaser would have expected. Obviously, this test can only be applied to products about which an ordinary consumer would have knowledge. By definition, it could be applied only to those products in which 'everyday experience of the product's users permits a conclusion . . . .' Soule v. General Motors Corp., 882 P.2d 298, 308 (Ca. 1994) (emphasis in original). For example, ordinary consumers would have a basis for expectations about the safety of a can opener or coffee pot, but, perhaps, not about the safety of a fuel-injection engine or an air bag.
  
  Alternatively, the prudent manufacturer test requires proof about the reasonableness of the manufacturer or seller's decision to market a product assuming knowledge of its dangerous condition. What the buyer expects is irrelevant under this test. In contrast to the consumer expectation test, the prudent manufacturer test is more applicable to those circumstances in which an ordinary consumer would have no reasonable basis for expectations. Accordingly, expert testimony about the prudence of the decision to market would be essential." Id. at 531.
• "The straight-forward, unambiguous language of our statute establishes two distinct tests for ascertaining whether a product is unreasonably dangerous: the consumer expectation test and the prudent manufacturer test. In addition to having completely different focuses, the two tests have different elements which require different types of proof. The two tests are neither mutually exclusive nor mutually inclusive. While the statute does not limit applicability of the tests, the prudent manufacturer test will often be the only appropriate means for establishing the unreasonable dangerousness of a complex product about which an ordinary consumer has no reasonable expectation. Likewise, it may form the sole basis for establishing liability for a product whose dangerousness is the result of a latent defect." Id.
• "Our research has revealed that, in reality, what plaintiff refers to as the risk-utility test is more correctly an analysis which involves the balancing of numerous factors. Under the approach, the court balances the usefulness of the product against the magnitude of risk or danger likely to be caused by the product. [Prosser & Keeton on Torts 699 (P. Keeton ed 5th ed. 1984)]." Id. at 532.
• "In order to determine whether the second test in our statute, which we have called the prudent manufacturer test, anticipates a risk-utility analysis, we turn to the most commonly used description of both. Generally stated, the prudent manufacturer test imposes liability in circumstances in which a reasonably prudent manufacturer with knowledge of a product's dangerousness would not place the product in the stream of commerce. As expanded by Dean Wade, the test has evolved into a consideration of various factors which must be weighed to determine whether the manufacturer was reasonably prudent. The factors include the usefulness and desirability of the product, the safety aspects of the product, the availability of a substitute product which would meet the same need, the manufacturer's ability to eliminate the unsafe character, the user's ability to avoid danger, the user's awareness of the danger, and the feasibility of spreading the loss. [Wade, On the Nature of Strict Tort Liability for Products, 44 Miss. L. J. 825, 837-38 (1973)]. Thus, Dean Wade summarizes the test as follows: 'A [product] is not duly safe if it is so likely to be harmful to person [or property] that a reasonable prudent manufacturer, who had actual knowledge of its harmful character, would not place it on the market.' Id. at 39-40.^FN7

  FN7 Dean Keeton's prudent manufacturer test similarly relies on balancing of various factors, but differs in the time at which knowledge of the harmful character is imputed. [Keeton, Manufacturer's Liability: The Meaning of "Defect" in the Manufacture and Design of Products, 20 Syracuse L. Rev. 559, 568 (1969)]. Since statute resolves this issue, the distinction between the Keeton and Wade approach is of no consequence to our analysis. [Tenn. Code Ann. § 29-28-105(b) (1980 Repl.)]."

  Id .
• "In effect, the prudent manufacturer test, by definition, requires a risk-utility analysis. The determination of whether a product is unreasonably dangerous turns on whether, balancing all the relevant factors, a prudent manufacturer would market the product despite its dangerous condition. Naturally, a prudent manufacturer would consider usefulness, costs, seriousness and likelihood of potential harm, and the myriad of other factors often lumped into what plaintiff called a risk-utility test, see Bank v. ICI Americas, Inc., 450 S.E.2d 671, 673 (Ga. 1994) (citing Preliminary Draft No. 1 (April 20, 1995) [Restatement (Third) of Torts: Products Liability, § 101, Reporter's Notes to comment g]). These factors mirror those designated by Deans Wade and Keeton as appropriate for consideration under the prudent manufacturer test." Id.
• "Stated more precisely, we hold that the prudent manufacturer test set forth in the Tennessee Products Liability Act requires a risk-utility balancing of factors, including those factors identified as part of the Wade-Keeton prudent manufacturer test.^FN10

  FN10 These factors include:
  
  (1) The usefulness and desirability of the product - its utility to the user and to the public as a whole.
  
  (2) The safety aspects of the product - the likelihood that it will cause injury, and the probable seriousness of the injury.
  
  (3) The availability of a substitute product which would meet the same need and not be as unsafe.
  
  (4) The manufacturer's ability to eliminate the unsafe character of the product without impairing its usefulness or making it too expensive to maintain its utility.
  
  (5) The user's ability to avoid danger by the exercise of care in the use of the product.
  
  (6) The user's anticipated awareness of the dangers inherent in the product and their avoidability, because of general public knowledge of the obvious condition of the product, or of the existence of suitable warnings or instructions.
  
  (7) The feasibility, on the part of the manufacturer, of spreading the loss by setting the price of the product or carrying liability insurance.
  
  [Wade, On The Nature of Strict Tort Liability for Products, 44 Miss. L. J. 825, 837-38 (1973)]."

  Id . at 533.
• "The test under our statute does not include a shifting of the burden of proof to defendant. Rather, the burden remains on plaintiff in a products liability action to establish injury as a result of an unreasonably dangerous product. Plaintiff may meet this burden either by establishing that the product was dangerous beyond that contemplated by an ordinary consumer (consumer expectation test) or by establishing that a reasonably prudent manufacturer, assumed to know the product's dangerous condition, would not have marketed the product (prudent manufacturer test employing risk-benefit analysis)." Id.
• "Our statute does not limit the application of either test to only certain types of actions. Nonetheless, the consumer expectation test will be inapplicable, by definition, to certain products about which an ordinary consumer can have no expectation. Despite the potentially overlapping nature of the tests, plaintiff here relied only on the second test, which we have defined as requiring consideration of numerous factors. Our statute clearly authorizes plaintiff to attempt to establish the unreasonable dangerousness of a product by employing a prudent manufacturer test which includes a risk-utility balancing approach." Id.

Other Sources of Note: Jackson v. General Motors Corp ., 60 S.W.3d 800 (Tenn. 2001) (application of consumer expectation test to seatbelts and explanation of its use as to other products); Pemberton v. American Distilled Spirits Co., 664 S.W.2d 690 (Tenn. 1984) (dangers of grain alcohol are open and obvious and thus defendant manufacturer had no duty to warn).

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