Torts Class Notes

11/13/14
Products liability
1. Manufacturing defects
2. Design defect
a. Consumer expectations
b. Risk/utility test
3. Warnings
Monday: federal preemption
Casa Clara economic loss rule
Which things do we want governed by torts vs. contracts
Second Restatement - Evolution of products liability was focusing on manufacturing
defects focus of Second Restatement
***important to know both second and third restatement because the differences
are hotly contested.
Third Restatement normative view
Does it matter if we use strict liability or negligence?
Manufacturing defect: construction defect - think of assembly line and a product
with imperfection that is not par of the intended design
Design defect: comport with the intended specifications for the product, but the
actual design is defective.
How are you going to decide what is a design defect?
1. Consumer expectation
a. If the ordinary consumer would expect a level of safety that is not met,
then the product is defective.
b. If product fails to perform as an ordinary consumer would expect it to
perform in intended use and other uses, design is defective.
i. Application of implied warranty theory what ordinary
consumer would expect is an implied warranty
2. Risk/utility test
a. If the risks of the product outweigh the utility of the product, then it is
defective.
i. RAD = Reasonable Alternative Design Test

Hand formula was about conduct of defendant. Risk utility is really looking at all
features of the product.
These tests are not mutually exclusive. You could use one, the other, or both
QVC Case
Plaintiff roasting turkey
QVC had handles put on a multi-use pan so it could be used for turkeys
Lost control of tilting pan and sustained burns to foot
At district court level, 2 claims: strict products liability and breach of implied
warranty
Under risk utility, not liable because the pan could be used for smaller items.
Specific risk if consumer uses the pan to cook a large turkey. Overall,
benefits from pan outweigh the risks. Cost/benefit balancing similar to the
hand formula.
Under consumer expectations, liable because they advertised it as being for
use in cooking turkeys
Implied warranty = contractual obligation UCC
NY embraces risk utility test, which is why she brought both actions.
Barker v. Lull Engineering Co.
Factors court looks at in determining risk/utility
o Gravity of danger
o Likelihood danger would occur
o Mechanical feasibility of a safer design
o Financial cost of approved design
o Adverse consequences to the product and to the consumer that would
result from an alternative design
Product used on uneven ground. Manufacturer should have foreseen that
someone would use the product in such a context. Consumer expectations.
Products may pass the consumer expectations test just because the
consumers dont know what to expect. Need additional protection.
Risk/utility test might be what we need to introduce as well. Risk
utility can be a more expansive test than consumer expectations in this
context.
Define defect
Consumer expectations
o What are the expectations of consumer
o Are they met?
o If not, strict liability
Risk/utility
o Apply analysis similar to hand formula

o Sounds like negligence. Still called strict liability, but

its rooted in negligence
2nd Restatement embraces consumer expectations test
3rd Restatement bashed consumer expectations test
Fear of too many products being taken off the market because they can not
be made safe enough for the ordinary consumer
Keep in mind that everyone agrees that manufacturing defects are under strict
liability.
Reasons to reject consumer expectations: consumers are often unsophisticated and
we dont want to hold manufacturers liable for products that ultimately provide an
aggregate benefit under the risk utility test. Worried about lowering activity level,
especially with pharmaceuticals
They can adopt risk utility individually
Or they can adopt third restatement
Some jurisdictions combine tests. When looking at the risk and utility features, hone
your analysis to the expectations of consumer expectations.
Issue introduced in Barker: Burden shifting
Once you have the tests, who bears the burden
Allocation of burden of proof is essential in product liability. One of the
principle purposes of products liability is to alleviate the plaintiff of
evidentiary burdens
Cheapest cost avoider: manufacturer has superior information about risk
Plaintiff prima facie must establish defect, causation, damages
BUT in certain instances, shift burden to defendant
Burden of proof on defendant in some risk utility cases. Not just a burden of
production.
o Think about other doctrines that have burden shifting (res ipsa in
Ibarra)
o As in the QVC case, burden of proof does not ALWAYS shift in risk
utility cases. Looks like its at the courts discretion.
Henderson and Twerski dont want over deterrence.
Dont want cases that lead to liability under consumer expectations, but no
liability under risk/utility
We dont want to make everything the most safe all the time
We want an optimal level of safety
They want to embrace the risk/utility test and reject the consumer
expectation test
Risk/utility will lead manufacturers to optimal safety

Consumer expectations will make manufacturers stop manufacturing things

that have an overall social benefit
o Second restatement worried about this too. Pg 739 comment k
As long as such a product properly prepared and accompanied
by warnings, it shall not be deemed defective.
Cannot bring design defect based on consumer expectations
test if there is no manufacturing defect and adequate warnings.

The consumer expectations and risk utility tests are not entirely overlapping.
Under Castro v. QVC, when might these tests be over-lapping.
In Castro, when does the jury have to be given instructions for both tests?
o When on the facts of the case, overall, look at how the product was
marketed and sold commercial about cooking turkeys
o Even though this case doesnt pass the risk/utility test, that doesnt
mean she also wont pass the consumer expectations test
o Dual purpose test/requirement
How do we decide in future cases if it meets the dual-purpose
test?
Is it marketed for a dual purpose?
o In Castro, yes
What would an ordinary consumer use the product for?
Worry that plaintiffs will describe products in certain
ways that will make it appear there are dual purposes
and then the plaintiff gets two shots with the jury.
Concern about inconsistency between outcomes of each
test combined with the varied applications of each test
Judge will only want to allow both tests if there is a
reason that the jury could come to different conclusions
under both, without the result being inconsistent.
o If inconsistent, then everything thrown out on
appeal and you need to have a whole new trial.
11/14/14
Plaintiffs prima facie case:
Design defect
o Defense: alteration/modification defense
Failure to warn
o Regulatory compliance defense
Additional defense: open and obvious

FAILURE TO WARN
Whats the extent to which these cases can be reconciled?
Hood
Liriano
Bought a saw
17 year old injured while using
meat grinder. Hand gets caught
Couldnt cut a piece of wood b/c
safety guards
Employer had removed safety
guard
Removed safety guard
Manufacturer has duty of
Saw blade flew off
creating safe product at time of
Sued saying he was not warned
sale
that the blade flew off

Modification/alteration is a
He thought that the warning was
defense
only about coming into contact
2nd circuit certifies question for
with the attached blade when the
NY CT of APP:
guard was removed
alteration/modification bars
Brings claims for design defect and
claims for design defect, but
failure to warn
does it bar claims for failure to
The saw and safety manual had
warn
explicit warnings
risk/utility test for design
Court: company doesnt need to
defect is a complicated analysis.
warn of every hazard of removing
Does adding something to a
the blade
product diminish its value.
More warnings are not always
Whats the reasonable
better
information to give to the
Worry about the negative effects of
consumer
over-warning
NY CT of APP: yes, there is
Warnings serve a secondary
liability for failure to warn, even
purpose of telling us how to
though the employer removed
accomplish a task in a better way
the safety guard
danger falling rocks no
Where is the danger so obvious
secondary benefit there
that there is no need to warn?
Overwarning can lead to a negative
Young, immigrant employee.
net social benefit
He may have not known danger
After re-trial, Liriano found
33% liable
Differences between the cases:
Knowledge of the guard
Warning of removing the guard - warnings present in Hood but not Liriano
Hood people not removing guards from table saws. Liriano people
removing guards from meat grinders

Question: anytime you have a dangerous product with a safety feature, how much
do you have to warn about not using the product without the safety guard intact?
Information overload leads you to tune out. Warning dilution: if there are eight
hazards, do you warn about all of them? Or do you only warn about the ones that
arent obvious for the consumer to know off the bat?
We want to incentivize manufacturers to effectively warn instead of over-warning to
over their liability.
Have to warn about foreseeable misuses of product
Should open and obvious defense be a strong no duty claim or a context-specific jury
question (whether it can be seen as open and obvious to the average consumer)?
Calibresi says the latter coal example. Dissent says it should be more contextspecific
Causation problem in Liriano: Hobart raises open and obvious defense and then
says theres no causation. Lack of evidence suggesting Liriano would have refused
to grind the meat or received different instructions from his supervisor had there
been a warning
Court responds: shift burden to defendant because plaintiff has met prima facie case
of showing he suffered an injury of precisely the type that the defendants failure to
warn would create. Cite to Martin v. Hertzog - buggy driver and car have accident.
Defendant driving without lights on despite regulation. Small n negligence.
Burden on defendant to show it was not the absence of lights that caused the
accident. Similar to Zuckowitz fatal condition from overdose. Absence of
evidence linking overdose to fatality as opposed to normal dosage causing fatality.
Issue of causation.
Page 9 of Liriano: rather than requiring the plaintiff to bring in more evidence to
demonstrate that his case is of the ordinary kind, the law presumes normality and
requires the defendant to adduce evidence that the case is an exception.
Accordingly, in a case like this, it is up to the defendant to bring in evidence tending
to rebut the strong inference, arising from the accident, that the defendant's
negligence was in fact a but-for cause of the plaintiff's injury. See Zuchowicz v.
United States, 140 F.3d 381, 388 nn. 6-7, 390-91 (2d Cir.1998).
MCDONALD V. ORTHO PHARMACEUTICAL
Defendant drug manufacturer has duty to inform doctor who is the learned
intermediary, but typically no duty to inform patient
o Doctor can tailor information to the needs of each unique patient
o Best medical decisions, cheapest cost avoider

o Manufacturer gives as much info as possible to doctor who filters the

info and only relays whats pertinent to the patient aspect of
efficiency
o If the manufacturer fails to warn the doctor, the plaintiff can sue the
manufacturer
o If the manufacturer warns doctor and the doctor doesnt warn the
patient. This would be a lack of informed consent case.
Here, we have the patient suing the manufacturer, despite the fact that the
manufacturer has warned the doctor
Birth control different from medication used to remedy sickness
o Only see doctor once a year
o Patients driving the decision choosing options for their lifestyle
What about when manufacturer is doing direct to consumer advertising?
o Do we remove the learned intermediary defense here?
Adequacy of warning: would the word stroke have made a difference?
o One could conclude that the warnings were adequate mentioned
clots
o The issue here is about translating medical terms to laymens terms
You cant be liable for over-warning
Think about the regulatory compliance defense angle in Macdonald. Think of
role of FDA. Time difference between cases.

11/17/14
REPRINT SYLLABUS TIME CHANGES
Federal Preemption
Tort law meets regulatory systems
Is there a difference between regulating Professor Sharkey barreling out the
door vs. regulating pharmaceutical drugs?
Who should be responsible for injuries caused by drugs?
We want to think about corrective justice and whether tort reform is needed
When do you want to give people choices to opt into funds? (911 fund most
people joined) (BP fund many people opted to not join fund and sue
instead) And when do you want to obligate them into a fund? (workers
compensation)
For tomorrow: need to know not just how we calculate damages, but how
race, gender, socioeconomic bias, etc. have been imported into the system of
damages.
MACDONALD v. ORTHO
Decided in context of birth control, there is a duty to warn the end consumer
Exception to learned intermediary rule

Given the duty to warn end user, what does it take for the warning to be
adequate?
o Medical term for stroke vs. word stroke
o Warning inadequate unless it uses the exact word stroke
How do you decide what type of warning is adequate:
o It relates to whom you have the duty to warn
o Birth control warning used FDA approved language
o Argument that FDA approved the label considering that the learned
intermediary would be the audience for the warning
o If warning the end consumer, need to use simpler language
If duty to warn and if warning inadequate, heeding presumption
dramatically lowers plaintiffs burden to show that the warning would have
worked. There is the presumption that had the manufacturer not failed to
warn, the warning would have been heeded.
Regulatory compliance as a defense to design defect or failure to warn:
o Court says that regulatory compliance is some evidence of nonnegligence, but that its not dispositive.
o Analogy to custom is the regulatory standard the optimal level of
care? Or is the regulatory standard a minimum level of care?
o If its a minimum standard, then it certainly doesnt make sense that
compliance with the regulation should shield manufacturers from tort
liability.
o If its the optimal level of care, then its both the floor and the ceiling,
so manufacturers compliance with the regulation should be a
dispositive defense to tort liability.
o Sharkey asked us before: Would it ever make sense to say that breach
of the regulatory standard constitutes negligence per se, but
compliance with the regulatory standard is not a dispositive defense?
And now we know the answer is yes.
Chevelle sets up four factors:

Liability Tort Law

1. Differential Knowledge
Consider who has the best
information about the risks of the
activity to others (running to the
bus and having tree overhangs
intruding on neighbors property).
Sharkey barreling to her office has
better knowledge of the benefits to
her and the risks she may cause
others. Sharkey is also the
cheapest cost avoider not the
regulator.
Why is the regulator at a

Regulation
2. Ability to pay
Chevelle considers the law and
economics incentive-driven view
of tort law (considers hand
formula conception)
Hand formula intends to get actor
to do cost benefit analysis of harm
But what about plaintiffs who are
judgment proof? They are not
incentivized to take care
Why doesnt insurance take care of
this? Only works if insurance is
aware of the risky activities and

disadvantage in terms of
knowledge?
The risks to others are factdependent. The risk of barreling
out depends on how crowded
things are at what times.
A regulatory agency would need to
constantly survey areas to try to
match the knowledge Sharkey
would have as the one barreling
out.
U.S. relies more on individuals
bringing tort claims to regulate
harms than other countries

3. Administrative Costs
In order to regulate through
agency, would need to create an
agency capable of constant, ex ante
monitoring.
Alternatively, under a liability
system, administrative costs only
occur when a case arises.

can raise the premium in response.

But loss spreading through
insurance may further deincentivize person to take care
UNLESS, insurance company
monitoring behavior and is
experience-rated (experiencerated = if doctor, premium
increases with number of med mal
cases)
With regulation, you can send
people in ex ante and close a
place down. Different from
judgment-proof situation you
run into with tort law.
4. Escaping suit
Hand formula is dependent on the
court and jury getting damages
right and on any individual has
been harmed coming forward to
bring a lawsuit.
If a defendant knows that certain
people will never come forward,
they can continuously avoid suit.
Sometimes you might be hurt and
you dont know which of several
manufacturers hurt you. You
either turn to regulation or to
market share liability.

Choices about institutional comparative advantages do you like juries or

regulatory agencies?
This chart leaves out ability of tort law to serve compensatory goals.
(Sharkey arg) Chevelle would say its efficient and best serving justice to
have tort liability lead actors to take the optimal level of care and set up taxes
and transfers
Chevelle also leaves out interest group theory. Centralization vs no
centralization and whether one can be influenced more by interest groups or
not
Also leaves out fact that we have primarily state tort law and primarily
federal regulation. Do we want things regulated at the national level? The
federal vs state question tends to be tied to whether we want public
regulatory agencies vs private tort law. We could have congress issue federal
tort law. Or we could have more state regulatory agencies.

Wyeth vs. Levine even though drug approved by FDA, plaintiff can bring a
failure to warn claim
o Maybe this is the right result always and we dont want FDA approval
to be optimal level of care because they have close ties to the
pharmaceutical agencies and are not keeping on top of changes
o New risks can come to light throughout the life of a drug
Do we trust FDA post-market regulation?
Or do we want tort liability to deal with new risks?

PREEMPTION
Express
Implied
o Field
o Conflict
Impossibility
Obstacle

Were focusing on federal preemption of state tort law. But, you can have
federal preemption with a state statute as well.
Supremacy clause: if clash between federal and state law, federal law reigns
supreme
What did the FDA say in McDonald they said what they were doing was
separate from tort law. Not what the FDA is saying now.
If you are a defendant raising federal preemption, if successful, the case is
dismissed. Very powerful defense.
1992 Supreme court decided Chipalone. First time the Supreme Court read
congresss use of the word requirements to apply to state tort law. Was
previously only used for state regulatory law. Since then, preemption raised
as defense in most product liability cases.
Express preemption means congress has included an explicit provision in the
statute saying that state law should be preempted.
Everyone agrees that congress can decide whether state laws are preempted.
The reason this area of the law is murky is because congress is never clear on
preemption. Preemption clauses, when included, still use the word
requirements
Geier raises express preemption claim, but there is no express preemption.
Case becomes an implied preemption case. Court infers preemption from the
regulatory structure
Field preemption: broader form of preemption than conflict. Epstein is
pretty much the only person who argues for field preemption. The doctrine
is a stretch and people dont typically raise it as a defense anymore
o Example: Because the FDA so stringently regulates ex ante what drugs
come to market and what the labels say, the field of drug liability
should be entirely preempted.
Conflict preemption

o Impossibility irreconcilable tension between federal law and state

tort law.
Federal law says do x state law says dont do x
o Obstacle
Possible to comply with both federal and state law, but
complying with state law will frustrate the federal regulatory
scheme and objectives.
Wyeth v. Levine
o FDA took position that their regulation should oust state tort liability
o Majority and dissent agree with doctrinal framework
Majority: FDA paid no more than passing attention
Dissent: FDA was heavily involved in determining what was
optimal
It matters what type of evidence we have from the regulatory
agency
At the same time, we do not defer to the agency if the agency
claims preemption
o FDA put out proposed rule saying this rule will not preempt. Final
rule published saying this rule preempts
Supreme court concerned about this procedural irregularity

Tomorrow: volunteers re whether Wyeth v Levine is rightly or wrongly decided and

recap of regulation of brand name and generic pharmaceuticals

11/18/14
Wyeth v. Levine
Drug administered through IV push method gangrene in arm amputation
Settled with physicians assistant, now pursuing drug manufacturer
How do we feel about preemption destroying state tort law claims against
drug manufacturers? Helpful to think about which parties they can recover
from. Med mal suit not barred by preemption.
Court finds no preemption
Question 1: Is there an express preemption provision?
FDCA = congressional statute includes express provision for medical
devices
Question 2: Is there implied preemption?
Geier is precedent for implied preemption
o NITSA distinctly wanted a menu of safety device options. Variation
was the optimal point.
Look at congressional intent
Look at regulation promulgated by the agency

Field preemption? Not likely

Conflict preemption impossibility or obstacle?
o Impossibility preemption is a high standard
In Wyeth, impossibility preemption barred by CBE Changes
being effected FDA policy drug manufacturer can add a
warning to the label while simultaneously submitting a request
to FDA for a label change. Manufacturer bears responsibility
for the content of its label at all time
o Obstacle preemption

Generic drugs
Dont have to go through clinical trials
Can apply for approval once brand name patent expires
Congress wanted generics to get approved quickly to introduce competition
and reduce costs
Labeling must be identical
Generic must show bio-equivalence
If generic changes label, it violates FDA regulation. This leads to
impossibility preemption
State law generic substitution doctor prescribes brand name and you get
generic from the pharmacy
FDA proposed rule: generics should be subject to the CBE
o People worry this will cause generic drugs to become far more
expensive
Brand name updates label and generic doesnt: failure to update
o Split in circuit as to whether there is obstacle preemption
o Cause of action arises only due to FDA regulation
California allowed someone to sue the brand name drug manufacturer for
failure to warn after they took the generic drug
DAMAGES
Compensatory compensate loss
o Economic (pecuniary)
Lost wages
Medical expenses
o Noneconomic (non-pecuniary)
Pain and suffering
Loss of enjoyment of life (hedonic)
Very few jurisdictions allow damages for loss of
enjoyment of life
Punitive punish

Legal fiction that money damages can repair a moral wrong

Whats the incentive to take care when the damages for wrongful death are
lower than the damages for permanently disabling someone
Were trying to get to the optimal level of care and we know that activities
that yield social benefits have risks. Again, seeking balancing point.
Example of over-deterrence: vaccines. Established vaccine fund instead

Most current value of life = $9 million

Pg 585 McMillan v. City of New York

o Judge Weinstein refused to use race-based stats to calculate life
expectancy
Pg 585 Migdal v. Abu Hanna
o Lost earning potential of 5 year old girl
o Israeli Supreme Court declined to use race/gender-based charts
o Didnt want to give varied compensation to the same injuries

Emotion-based damages
Per diem method of measuring damages break it down into pain suffered
each hour/day/year
o Designed to lead to large awards based on a quantifiable measure
Should it be true that the same thing can happen to two people, but the
person who falls to pieces gets more $ than the person who is able to be
stronger?
Skepticism about people claiming more emotional damages than they
actually have
People learn to adapt to certain types of situations do we want to measure
damages as increasing over time or remaining linear when they will suffer
less as they adapt over time?
People take out insurance to cover financial losses, but people dont take out
insurance for emotional harms. Why should we allow tort law to act as
overarching insurance?
MacDougal
Cognitive awareness of pain is essential to pain and suffering.
Pain and suffering should not be a separate category from loss of enjoyment
of life
o Too imprecise to measure one. Two categories would be worse
o Two categories would lead to overly large awards. Gets into punitive
damages.