Product Liability

I. Introduction

Product liability is an area of law that is intriguing to businesses, consumers, and the media, but extremely difficult in the real world of legal practice. There is a common misconception that one can easily win a lawsuit against the manufacturer of a defective product simply because it does not function properly and someone has been injured.

In order to win a product liability case, the plaintiff must prove a violation of the applicable design and manufacturing safety standards. This requires the hiring of very expensive expert witnesses. Expert witnesses are usually engineers. These experts are needed to identify and explain and safety standards, to test the product, and to analyze how the product violated the standards. The goal is to obtain admissible evidence that the product is defective and unreasonably dangerous.

Expert witnesses in a product liability case must have professional credentials to convince the judge that they are truly qualified to address the points at issue, and to persuade the jury that the product is defective and unreasonably dangerous. The manufacturer and its insurer will surely hire their own experts in opposition to the plaintiff’s, at which point the jury’s interpretation of opinions is simply a matter of credibility. Most experts will charge between $250 and $500 per hour for any time spent reviewing the case, testing the product, preparing for trial, and testifying. This is a very important factor that plaintiffs must consider when making a claim. Plaintiffs must understand that these costs come directly out of any judgment or settlement and must be paid even if the case is lost. Plaintiffs’ attorneys realize that they will be liable for any expert fees, which is why most are reluctant to pursue a products liability claim unless there is a potential for a large judgment.

For example, suppose a plaintiff is injured by a defective product and eventually obtains a verdict for $75,000. Expert witnesses would need to be hired to prepare the case. If all the experts together spent 100 hours of time on the case, charging their customary $500 an hour, their fees alone would total $50,000. They would require payment in advance. Attorney fees at the ordinary contingency fee rate of one-third of the judgment would be $25,000. This leaves the plaintiff with nothing at all. This would be the result if the plaintiff had won! If the plaintiff lost the case, there would be no attorney fees, but the attorney would still be responsible for paying the experts out of his or her own money, or the client’s money. This is the biggest deterrent to handling products liability cases.

However, many product liability cases involving $50,000 worth of expert witness fees will produce a larger verdict than $75,000. In cases of this magnitude, the injured plaintiff will usually have incurred substantial medical bills as a result of the defective product and have sustained some sort of permanent disability or loss of earning capacity. Additionally, the injury will have caused a loss of society and companionship to person’s parent, spouse, or child. When these damages are large enough to compensate for the expenses of trying the case, then the claim is worthwhile and should definitely be considered.

The next factor to consider before filing a product liability claim is merit. Even if the damages are substantial enough to make the claim worth the expense of trial, the facts must weigh heavily in favor of the plaintiff, or no lawyer will want to handle the case. There must be clear liability on the manufacturer or seller to justify the risk and expense of losing the case.

If the greater weight of credible evidence supports the claim, and the damages are large enough to justify the expense, then the claim can be pursued under several theories of law. These theories are strict liability in tort, negligence, and breach of warranty. Lawsuits can be filed against several parties also. The parties that can be found liable for product liability include manufacturers, successor manufacturers, distributors, retailers, sellers of used equipment, and even lessors.

II. 2011 Statutory Changes

2011 Wisconsin Act 2, effective February 1, 2011 as Wis. Stat. §§ 895.046 – 895.047 brought about substantial changes in Wisconsin law that greatly affect products liability law, and render inapplicable much of the case law discussed in the sections below. The statutory changes are described in this portion of the Internet essay, but the old caselaw is presented in any event as an historical matter of interest, which might be persuasive authority under certain circumstances.

The liability of manufacturers, sellers and distributors is set forth in subsection 895.047(1) – (2) as follows:

Liability of manufacturer. In an action for damages caused by a manufactured product based on a claim of strict liability, a manufacturer is liable to a claimant if the claimant establishes all of the following by a preponderance of the evidence:

That the product is defective because it contains a manufacturing defect, is defective in design, or is defective because of inadequate instructions or warnings. A product contains a manufacturing defect if the product departs from its intended design even though all possible care was exercised in the manufacture of the product. A product is defective in design if the foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative design by the manufacturer and the omission of the alternative design renders the product not reasonably safe. A product is defective because of inadequate instructions or warnings only if the foreseeable risks of harm posed by the product could have been reduced or avoided by the provision of reasonable instructions or warnings by the manufacturer and the omission of the instructions or warnings renders the product not reasonably safe.

That the defective condition rendered the product unreasonably dangerous to persons or property.

That the defective condition existed at the time the product left the control of the manufacturer.

That the product reached the user or consumer without substantial change in the condition in which it was sold.

That the defective condition was a cause of the claimant’s damages.

Liability of seller or distributor.

A seller or distributor of a product is not liable based on a claim of strict liability to a claimant unless the manufacturer would be liable under sub. (1) and any of the following applies:

The claimant proves by a preponderance of the evidence that the seller or distributor has contractually assumed one of the manufacturer’s duties to manufacture, design, or provide warnings or instructions with respect to the product.

The claimant proves by a preponderance of the evidence that neither the manufacturer nor its insurer is subject to service of process within this state.

A court determines that the claimant would be unable to enforce a judgment against the manufacturer or its insurer.

The court shall dismiss a product seller or distributor as a defendant based on par. (a) 2. if the manufacturer or its insurer submits itself to the jurisdiction of the court in which the suit is pending.

The defenses available to manufacturers, sellers and distributors are listed in section 895.047(3):

3. Defenses.

If the defendant proves by clear and convincing evidence that at the time of the injury the claimant was under the influence of any controlled substance or controlled substance analog to the extent prohibited under s. 346.63 (1) (a), or had an alcohol concentration, as defined in s. 340.01 (1v), of 0.08 or more, there shall be a rebuttable presumption that the claimant’s intoxication or drug use was the cause of his or her injury.

Evidence that the product, at the time of sale, complied in material respects with relevant standards, conditions, or specifications adopted or approved by a federal or state law or agency shall create a rebuttable presumption that the product is not defective.

The damages for which a manufacturer, seller, or distributor would otherwise be liable shall be reduced by the percentage of causal responsibility for the claimant’s harm attributable to the claimant’s misuse, alteration, or modification of the product.

The court shall dismiss the claimant’s action under this section if the damage was caused by an inherent characteristic of the product that would be recognized by an ordinary person with ordinary knowledge common to the community that uses or consumes the product.

A seller or distributor of a product is not liable to a claimant for damages if the seller or distributor receives the product in a sealed container and has no reasonable opportunity to test or inspect the product. This paragraph does not apply if the seller or distributor may be liable under sub. (2) (a) 2. or 3.

Subsequent remedial measures were admissible under pre-2011 law to prove the feasibility of precautionary measures. The new statute, in section 895.047(4) changed the rule as follows:

Subsequent remedial measures. In an action for damages caused by a manufactured product based on a claim of strict liability, evidence of remedial measures taken subsequent to the sale of the product is not admissible for the purpose of showing a manufacturing defect in the product, a defect in the design of the product, or a need for a warning or instruction. This subsection does not prohibit the admission of such evidence to show a reasonable alternative design that existed at the time when the product was sold.

Finally, pursuant to section 895.047(5), there is a potential defense if the product alleged to have caused the damage was manufactured 15 or more years before the claim accrued, unless the manufacturer made a specific representation that the product would last for a period beyond 15 years.

III. Parties Liable Prior to 2011 Statutory Changes

In order to bring a product liability case, the plaintiff must attempt to identify all sellers of the product, from the manufacturer to the distributors to the retailer. All are subject to liability. If any one is insolvent or unable to pay, the others may be subject to liability and collectible. Investigation of the complete chain of distribution is necessary.

Plaintiffs may have difficulty finding the correct manufacturer of a product without a costly investigation. Often, manufacturing companies are acquired or merge into larger companies. Obviously, this can complicate matters. The acquisition or merger documents must be reviewed to determine who is going to be responsible for product liability claims. The successor manufacturer may or may not have agreed to be subject to liability for products manufactured prior to the acquisition or merger. In other words, the new company may be liable for defective products created by the predecessor company under certain circumstances, but there may be a dispute over that fact.

In Tift v. Forage King Industries, Inc., 108 Wis.2d 72, 322 N.W.2d 14 (1982), the manufacturer of a chopper box, which injured the plaintiff, was acquired by another corporation. The plaintiff sued the successor corporation for product liability. Traditionally, when a corporation purchases the assets of another company, the liabilities do not succeed to the new corporation. However, the court acknowledged the exceptions under which liability can be imposed upon a purchasing corporation, listing them as follows:

when the purchasing corporation expressly or impliedly agreed to assume the selling corporation’s liability;

when the transaction amounts to a consolidation or merger of the purchaser and seller corporations;

when the purchaser corporation is merely a continuation of the seller corporation; or

when the transaction is entered into fraudulently to escape liability for such obligations.

322 N.W.2d at 15. The court applied exceptions two and three to the case and found the successor corporation to be a continuation of the predecessor company. The court held the successor corporation liable for the defective product manufactured by the original business. It should be noted, however, that courts have strictly construed the exceptions to the rule on this issue, and only impose liability on successor manufacturers under limited factual circumstances.

Distributors or retailers can also be subject to product liability, despite those products being developed by a separate company. In most cases, a manufacturer sells its product to a distributor or retailer, who then makes the product available to consumers without substantial change in the product’s original condition. However, many participants in the product or supply chains, involving manufacturers, distributors, and retailers, do make considerable changes to the original product before tendering it to the public. The changes include not only overall design and manufacturing additions, but also component parts, packaging, labeling and warnings.

In Westphal v. E.I. du Pont de Nemours & Co., Inc., 192 Wis.2d 347, 531 N.W.2d 386 (Ct. App. 1995), the plaintiff brought a products liability claim against a supplier of an industrial grade product called Teflon, which was contained in an implant device manufactured by a company called Vitek. E.I. du Pont supplied the Teflon and facts indicated that the Teflon underwent an eight-step manufacturing process by Vitek before being implanted. The court noted that such substantial change in the products condition barred recovery against E.I. du Pont.

Even retailers of used goods can be sued under product liability law. In Nelson v. Nelson Hardware, Inc., 160 Wis.2d 689, 467 N.W.2d 518 (1991), the plaintiff brought suit against a hardware store that had sold him a used shotgun. In this case, the used shotgun fell from a loft where it had been placed and went off, shooting an adolescent boy in his hand. The gun had not been cocked and the safety lock was in place. The plaintiff brought action against the store that sold him the gun after the manufacturer had gone bankrupt. The trial court granted summary judgment in favor of the store on grounds that a product liability claim could not be made against a seller of used goods. The court of appeals reversed that decision and it was appealed again to the Supreme Court. The Supreme Court made it clear that sellers of used goods are just as subject to product liability claims as sellers of new goods. The court stated as follows:

The conclusion of the court of appeals that sec. 402A is applicable is clearly correct. The working of sec. 402A, the policy for the rule as set forth in the Restatement commentary, and the explication of the reason for sec. 402A and the policy explanation set forth at length in Dippel v. Sciano impel our conclusion that the buyers of used goods are not precluded from the protection of sec. 402A simply because the product is not purchased new.
467 N.W.2d at 522.

Plaintiffs have the right to sue a lessor of a product as well as a manufacturer. This possibility was recognized in Kemp v. Miller, 154 Wis.2d 538, 453 N.W.2d 872 (1990). In this case, the plaintiff was injured when her rental car broke down on a highway and caused her to crash into an abutment. The plaintiff sued the car rental agency for products liability. The trial court denied the claim, reasoning that the agency was not a manufacturer or seller of the car, and that, therefore, the plaintiff had no basis for a claim. The Supreme Court reversed this decision, though, and noted that a lessor places products into the stream of commerce, just as a manufacturer or seller. Furthermore, a lessor is in a much better position to insure against product liability by adjusting prices. Lessors also advertise and implicitly represent that their products are safe for lessees. The court ruled on this issue as follows:

Accordingly, we hold that a commercial lessor may be held strictly liable in tort for damages resulting from the lease of a defective and unreasonably dangerous product. We further hold that such liability extends not only to design and manufacturing defects but also to defects which arise after the product leaves the manufacturer’s control.
453 N.W.2d at 879.

In many instances, the unique relationship between the plaintiff and defendant is controlling. For example, in Estate of Cook v. Gran-Aire, Inc., 182 Wis.2d 330, 513 N.W.2d 652 (Ct. App. 1994), the court dismissed a product liability claim brought against a flight instruction and charter service company. A man was killed while taking flight instruction by Gran-Aire in one of its planes when a wing separated from the plane. The court held that Gran-Aire was not engaged in the business of leasing the plane and that the pilot never obtained complete control or possession of the plane. Rather, the Gran-Aire instructor, who was inside the plane instructing the pilot, at least shared control of the plane. Therefore, since the pilot failed to establish a lessor-lessee relationship, his estate’s claim was barred under strict product liability.

IV. Strict Liability in Tort Prior to 2011 Statutory Changes

The doctrine of strict liability in tort law is probably the most frequent theory pursued by a plaintiff in a products liability case. Strict liability holds the manufacturer or seller liable as a matter of law. In the Restatement (Second) of Torts, §402A (1965), strict liability is explained and its elements are defined as follows:

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

the seller is engaged in the business of selling such a product,
and

it is expected to and does reach the user or consumer without substantial change in the condition in which it is sold.

The rule stated in subsection (1) applies although

the seller has exercised all possible care in the preparation and sale of is product, and

the user or consumer has not bought the product from or entered into any contractual relation with the seller.

This definition was initially adopted in Wisconsin, and explained in detail in Dippel v. Sciano, 37 Wis.2d 443, 155 N.W.2d 55 (1967). The issue before the court was whether privity of contract was necessary in order to make a claim for strict liability in tort against the seller of a defective product. The court decided that privity of contract is not always required. In this case, the plaintiff brought action against the seller of a pool table that broke and amputated part of the plaintiff’s foot when it fell. The seller argued that the plaintiff had no contractual relationship with the seller. The court opined that the product liability claim could be brought under the theory of strict liability in tort, and it enumerated the five key elements of proof as follows:

that the product was in defective condition when it left the possession or control of the seller,

that it was unreasonably dangerous to the user or consumer,

that the defect was a cause ( a substantial factor) of the plaintiff’s injuries or damages

that the seller engaged in the business of selling such product or, put negatively, that this is not an isolated or infrequent transaction not related to the principal business of the seller, and

that the product was one which the seller expected to and did reach the user or consumer without substantial change in the condition is was when he sold it.

37 Wis.2d at 460.

The doctrine of strict liability was recommended as the proper cause of action because of its independence from contract law as well as traditional notions of negligence law. The court in Dippel stated as follows:

From the plaintiff’s point of view the most beneficial aspect of the rule is that it relieves him of proving specific acts of negligence and protects him from the defenses of notice of breach, disclaimer, and lack of privity in the implied warranty concepts of sales and contracts.
37 Wis.2d at 460.

The application of the Restatement (Second) of Torts, section 402A in Dippel was a landmark decision, in that it established strict liability law in Wisconsin for the first time. However, it failed to address whether the strict liability law would protect an injured bystander from a defective product. Howes v. Hansen, 56 Wis.2d 247, 201 N.W.2d 825 (1972), was the first case to decide this issue. In this case a two-year-old boy came into contact with a lawnmower that amputated his right foot. The lawnmower was owned and being operated by another person. The boy’s family sued the manufacturer of the lawnmower under the theory of strict liability in tort. Defendants argued that, according to Dippel, strict liability extends relief to the “user” or “consumer” of a product, not to bystanders.

The court looked beyond the express definition of strict liability and into the reasons for the doctrine. In Dippel, the court noted that the seller of a defective product has liability in tort that is completely unique from any contractual obligations. The court was also quick to remind the defendants that ordinary care and foreseeability, which are factors of negligence, play no part in strict liability. See Haase v. Badger Mining Corp., 2004 WI 97, 682 N.W.2d 389, 397 (2004)(holding that “Foreseeability is not an element considered in strict product liability claims, but instead is an element of negligence”). As mentioned earlier, strict liability is much more akin to the doctrine of negligence per se, or negligence as a matter of law. The court in Howes also noted that a user is different than a consumer, in that a user is not necessarily one to whom warranties, promises of safety, and reliability are assured. Therefore, bystanders are have virtually the same relationship to manufacturers as a user, and should be protected under strict liability. The court ruled as follows:

To date there have been roughly 10 jurisdictions which have adopted the extension of strict tort liability to bystanders who are innocently injured. The prevailing reason for the extension has been the feeling that there is no essential difference between the injured user or consumer and the injured bystander. The reasons for the initial adoption of strict liability are uniformly felt to apply equally to the bystander. . .

Thus we conclude that the trial court did not err in overruling the appellant’s demurrer on the grounds that the concept of strict liability applied for the protection of the bystander here. In extending this potential liability, we are further implementing the policy that a manufacturer should be strictly liable in tort when he places a defective article on the market “that causes injury to a human being.
56 Wis.2d at 260.

As set forth in Dippel, one of the elements of strict liability must be that the seller is engaged in the business of selling the product. Another element is that the product must have been intended to reach and did reach the user without substantial change in its original condition. See Hasse, supra (holding that silica sand inhaled by plaintiff had undergone substantial change in size from pulverization by purchasing-employer since its sale, thereby precluding a strict liability claim against seller-mining company). A manufacturer or seller is held strictly liable when a defective product is unreasonably dangerous and has not changed substantially since it was sold. This standard holds true for manufacturers or sellers of component parts of a larger product as well. In City of Franklin v. Badger Ford Truck Sales, Inc., 58 Wis.2d 641, 207 N.W.2d 866 (1973), the court ruled as follows:

Where there is no change in the component part itself, but it is merely incorporated into something larger, and where the cause of harm or injury is found, as here, to be a defect in the component part, we hold that, as to the ultimate user or consumer, the strict liability standard applies to the maker and supplier of the defective component part. Where the component part is subject to further proceeding or substantial change, or where the causing of injury is not directly attributable to defective construction of the component part, the result might be different.
207 N.W.2d at 869- 70.

Perhaps the most crucial elements of strict liability are proving that a product is both defective and unreasonably dangerous. In order for a product to be defective, it must not conform to adequate specifications and industry standards. That is, the product must fail to perform its intended purpose or fail to meet the expectations of the ordinary consumer. This point was set forth in Sumnicht v. Toyota Motor Sales, 121 Wis.2d 338, 360 N.W.2d 2 (1984). The court acknowledged that Wisconsin is committed to the consumer-contemplation test to evaluate design defects, which was explained as follows:

Under the consumer-contemplation test, as so stated in Section 402A of the Second Restatement of Torts, a product is defectively dangerous if it is dangerous to an extent beyond that which would be contemplated by the ordinary consumer who purchased it with the ordinary knowledge common to the community as to the product’s characteristics.
30 N.W.2d at 15.

A product is unreasonably dangerous if it presents an unforeseen, obscure, and unobvious risk of harm to its consumer. Such a risk of harm must also be without adequate warning for it to be considered unreasonable. Many products, such as knives and guns, are inherently dangerous. Nevertheless, these products are not considered unreasonably dangerous because they are fit for the ordinary purpose of their existence. In other words, an ordinary consumer would reasonably understand that a knife is dangerous and can cause injury.

The case of Arbet v. Gussarson, 66 Wis.2d 551, 225 N.W.2d 431 (1975), involved a claim for strict liability against the manufacturer of an automobile. The facts involved a rear-end collision, which ruptured the gas tank causing gas to spew into the passenger compartment and ignite. The fire caused substantial injuries and burns to the driver and passenger. Experts testified that the design of the automobile was unsafe. The court, in determining whether the design was unreasonably dangerous, stated as follows:

It must be noted also that the design characteristics complained of in the instant case were hidden dangers, not apparent to the buyer of the car, and not the subject of a manufacturer’s warning. This is a different case, therefore, then [sic] a case where a plaintiff sues the manufacturer of a Volkswagen and complains that the car was designed to small to be safe. Such a defect could hardly be said to be hidden.
. . .
Thus, . . . , since the ordinary consumer would expect a Volkswagen to be less safe in an accident than, say, a Cadillac, the smallness of the car with the attendant danger would not per se render it inherently dangerous. Rather it must contain a dangerous defect whose presence an ordinary consumer would not reasonably expect.
2225 N.W.2d at 435.

The court in Sumnicht summed up the meaning of “defective and unreasonably dangerous” as follows:

Thus, the test in Wisconsin of whether a product contains an unreasonably dangerous defect depends upon the reasonable expectations of the ordinary consumer concerning the characteristics of this type of product. If the average consumer would reasonably anticipate the dangerous condition of the product and fully appreciate the attendant risk of injury, it would not be unreasonably dangerous and defective. This is an objective test and is not dependent upon the knowledge of the particular injured consumer, although his knowledge may be evidence of contributory negligence under the circumstances.
Vincer, 69 Wis.2d at 332.
Sumnicht v. Toyota Motor Sales , 121 Wis.2d at 370, 360 N.W.2d at 16 (1984).

This test represents a guideline to help determine whether a product is “defective.” Such a determination depends on the independent facts and circumstances of each individual case.

In Ransome v. Wisconsin Electric Power Co., 87 Wis.2d 605, 275 N.W.2d 641 (1979), the court ruled that electricity can be defective and unreasonably dangerous when it causes substantial damages to people or property. In this case, a lightning bolt led to a surge of electricity inside a home, causing a fire and substantial property damage. Plaintiffs brought a strict products liability claim against the electric company for the damages caused by its product, electricity.

The court ruled that the electricity passed through the electric meter that was supposed to gauge the voltage and failed to do so. The court reasoned as follows:

To classify electricity as a product, by virtue of the definition we have set forth above, is warranted, indeed mandated, by the social policies which underlie and justify the imposition of strict liability on sellers who place dangerously defective products into the stream of commerce. We agree with the trial court’s conclusion that electricity can be a product within the meaning of sec. 402A and therefore subject to principles of strict liability in tort in appropriate cases.
275 N.W.2d at 648.

A product is unreasonably dangerous if it is dangerous beyond the extent contemplated by an ordinary consumer. If a product is known or should have been known to be dangerous by the manufacturer, then the manufacturer has a duty to warn. A lack of an adequate warning can render a product unreasonably dangerous. The manufacturer must warn against all foreseeable uses and misuses of the product. Tanner v. Shoupe, 228 Wis.2d 357, 596 N.W.2d 805 (Ct. App. 1999).

As mentioned earlier, a product can be rendered unreasonably dangerous despite a manufacturer’s diligence in the design and manufacture of that product. In Green v. Smith & Nephew AHP, Inc., 245 Wis. 2d 722; 629 N.W.2d 727 (2001), the court held that a defective product, unreasonably dangerous to a small percentage of people, may still subject the manufacturer to strict products liability. In this case, a nurse suffered a severe allergic reaction to the latex gloves she wore on the job. She brought action under strict liability against the manufacturer of the latex gloves. Testimony revealed that only a peculiarly small percentage of the population was susceptible to allergic reactions from the latex, and that all adequate and appropriate preparation was used in manufacturing the gloves. The court held, however, that the gloves were still defective and unreasonably dangerous to a not-insignificant percentage of the population, thereby imposing liability on the manufacturer. The manufacture contended that it followed all the appropriate designs and utilized proper production mechanisms. Nevertheless, the court noted that a product may be defective and unreasonably dangerous even though there are no alternative, safer designs.

The theory of strict liability in tort does not automatically entitle victims to damages, however. In other words, it does not impose absolute liability.

The potential strict liability of the seller nevertheless allows the defendant to submit evidence in opposition to the cause of action. Defense testimony is permitted to show that there may have been contributory negligence on behalf of the plaintiff with any misuse of a product. If the plaintiff is found to have misused, abused, or altered the product’s condition before being injured, his or her claim may be barred or reduced under Wisconsin’s contributory negligence statute, section 895.045.

In Hansen v. New Holland North America, Inc., 215 Wis.2d 649, 574 N.W.2d 250 (Ct. App. 1997), the court addressed available defenses for the defendant in a product liability case. The court discussed the open and obvious doctrine that had previously granted immunity to manufacturers, in that, if the danger was open and obvious to the consumer, then it could not have been unreasonably dangerous. The court in this case, however, reasoned as follows:

We agree with the Hansens’ contention that focusing solely on the user’s conduct will frustrate public policy considerations underlying product liability law. A danger that is open and obvious to a consumer is equally apparent to the manufacturer. Concentrating only on the user’s conduct ignores the manufacturer’s responsibility for producing that danger, and indeed creates an incentive for manufacturers to ensure that hazards are in fact open and obvious, possibly minimizing needed safeguards and exposure to liability for designing dangerous products.
574 N.W.2d at 254.

V. Negligence Prior to 2011 Statutory Changes

Plaintiffs in a products liability case can pursue their claim under a strict liability theory as well as under the theory of ordinary negligence. A plaintiff is not required to select one cause of action over the other, despite their differing elements of proof. In a subsequent amended complaint to the Howes case mentioned earlier, the trial court ruled that strict liability in tort is closely related to negligence per se, and cannot be pursued simultaneously with an ordinary negligence claim. On appeal, however, the Supreme Court overruled the trial court and noted its err as follows:

We here declare that when two grounds of negligence are alleged it does not categorically follow that the plaintiff must always elect one of the two grounds of negligence for submission to the jury.
Howes v. Deere & Co ., 71 Wis.2d 268, 238 N.W.2d 76, 79 (1976).

A claim for product liability can be brought under theories of negligent design, manufacture or negligent inspection. All of these theories stem from the doctrine of ordinary negligence. In order to prove negligence, the plaintiff must show that a duty existed, that the duty was breached, and that such breach was a substantial factor in causing physical injuries. These are the basic elements of all negligence claims.

A duty is established when it can reasonably be foreseen that an action or non-action will result in probable harm. Manufacturers have a duty to consumers to produce reasonably safe products and to warn of any known or foreseeable dangers associated with the product. Unlike strict liability in tort, foreseeability plays an important role in negligence. If a manufacturer can reasonably foresee a danger with its product, it has the duty to prevent that danger or at least to provide an adequate warning. This duty to warn is often presented by plaintiffs in product liability cases.

In Anderson v. Alfa-Laval Agri, Inc., 209 Wis.2d 337, 564 N.W.2d 788 (Ct. App. 1997), a small child was seriously injured after he ingested a caustic chemical in a cup at a milk house. The plaintiff brought action under negligent design and failure to warn. The court ruled that the absence of an adequate warning of a known danger constitutes negligence as a matter of law. The court noted, however, that a breach of duty does not in and of itself impose liability. Substantial and proximate cause of actual injuries must also be proven.

A claim for negligent design can be proven even without proof that the product was unreasonably dangerous. In fact, all that needs to be shown is that the product was designed with a lack of ordinary care and that such lack of care caused actual harm. This law was set forth in Greiten v. LaDow, 70 Wis.2d 589, 235 N.W.2d 677 (1975). In this case, a board that unexpectedly retracted from its intended position and fell on the plaintiff’s head caused serious injury. Plaintiff brought an action under a negligence theory to get around having to prove the product was defective and unreasonably dangerous. The court noted this strategy and acknowledged that it can be done, as long as it can be proven that a lack of ordinary care was utilized, which was a substantial factor in causing the injury. Justice Heffernan clarified the court’s interpretation of negligence law and its ruling in this case in his concurring opinion as follows:

Accordingly, in the instant case, where the action is grounded on negligence, it was necessary for the plaintiff to show that the respondent LaDow, in the exercise of ordinary care, should have foreseen that his design and method of installation would be unreasonably dangerous to others. This, as the majority opinion correctly points out, he did not prove and, therefore, he cannot recover. It is boilerplate law that, merely because a product or an operation is not as safe as possible, because there are better methods of manufacture or performing an operation does not lead to the conclusion that the method employed was undertaken with a lack of ordinary care or the product was defective. But the crucial question in the analysis of this case is that, where negligence is asserted, it is necessary to prove what was done and to prove that what was done was foreseeably hazardous to someone. The duty is one of ordinary care.
235 N.W.2d at 685.

In a later case involving a similar issue, the court followed the precedent established in Greiten. In Sharp v. Case Corp., 227 Wis.2d 1, 595 N.W.2d 380 (1999), a minor boy had both his arms gruesomely amputated below both elbows by a hay baling tractor. The boy was clearing loose hay from the rollers when the tractor suddenly self-started and pulled the boy’s hands and arms into the baler. The boy’s guardian brought a product liability action against the manufacturer on several grounds, including strict liability and negligence. The jury found the tractor not to be unreasonably dangerous, thereby barring the strict liability claim. However, the jury did find the manufacturer negligent and awarded a large verdict. Defendants argued that the jury’s verdict was inconsistent and should be invalidated. The Court responded by citing Grieten and noted as follows:

In cases subsequent to Greiten, this court repeatedly rejected the contention that a jury’s findings were inconsistent when the jury found that a manufacturer’s conduct was negligent with regard to a product but that the product defect was not unreasonably dangerous in the strict products liability sense.

595 N.W.2d at 387. The court affirmed the trial court’s decision and strengthened the precedent distinguishing a strict liability in tort claim from a negligence action.

As mentioned above, proof of negligence requires a showing that a duty existed and was breached by the manufacturer. This is usually the most difficult aspect of a negligence claim in product liability. Courts and juries have differed in their respective opinions regarding this issue. In Morden v. Continental AG, 235 Wis. 2d 325; 611 N.W.2d 659, 2000 WI 51(2000), the issue of whether a duty existed and was subsequently breached was the focus of the case. In this case, the plaintiff was severely injured and suffered quadriplegia when her vehicle flipped over after her two rear tires blew out on the highway. The plaintiff brought action under strict liability and negligence against the tire manufacturer. Facts indicated that the tires were made with insufficient adhesion at the point where the tires ruptured. The strict liability claim was barred because of the jurors’ differing interpretations of the facts, in that they could not agree on all elements required of strict liability. The jury did find, however, that the manufacturer was negligent in its design and manufacture of the tires, and found that this negligence was the cause of the accident. The trial court approved the jury’s verdict, noting that it was reasonably foreseeable to Continental that its design posed an unreasonable risk of injury. Continental appealed the trial court’s order. The court of appeals then reversed the trial court’s verdict, concluding that the Mordens had not proved that Continental breached a duty of care to them. The court reasoned that the Mordens had failed to present evidence that Continental knew or should have known the design or manufacture of the tires was unsafe.

The plaintiff then appealed to the Supreme Court on the issue of whether the facts demonstrated of breach of duty. The Supreme Court reversed the decision of the court of appeals and reinstated the trial court’s order of judgment. The court ruled that the jury in this case reasonably could have concluded that Continental’s failure to take the available precaution of using a double-wrap cap splice constituted a lack of ordinary care, even if the record is silent about whether Continental conducted tests on the single-wrap cap splice.

VI. Warranty Liability

Product liability claims can also be based under warranty liability. Warranties usually are tendered along with a product to insure against a product defect or underperformance. Warranties can be created through written contracts between the manufacturer or seller and the consumer. They can also be created orally when a seller expressly or implicitly guarantees a certain performance or safety. Regardless of how such warranty is created, a consumer must be sure that it was not disclaimed in a similar fashion. Often, ignorant and/or arrogant sellers will promise a certain function of a product in effort to make a sale, but there will be a disclaimer to any promises or guarantees made by the seller that is hidden somewhere with the sale.

In order to bring an action under warranty liability, the plaintiff must prove there was a warranty established, whether contractual, express, or implied, and that such warranty was not disclaimed in any way. Next, the plaintiff must prove a breach of such warranty, and notice of such breach must be furnished within reasonable time.

The Uniform Commercial Code (U.C.C.) governs almost all sales. The U.C.C. governs merchants, which it defines as manufacturers or sellers who hold themselves out as having a particular knowledge or skill of the specific trade involved. The U.C.C. holds merchants subject to liability for breach of implied warranties with every sale. Wis. Stats. §402.314 and §402.315 hold merchants accountable for implied warranties of merchantability with each sale, i.e., that each product will be fit for the ordinary purpose of its use. These statutes intend to protect consumers from faulty products notwithstanding an unsatisfactory disclaimer.

The U.C.C. will protect merchant warranty disclaimers, however, as long as they meet the specifications of Wis. Stats. §402.316. This statute allows merchants to exclude or modify warranties by including the words “merchantability” and “fitness for a particular purpose” in conspicuous writing. Such disclaimer must be open and obvious to the consumer and disclaim all express or implied warranties of merchantability and fitness for a particular purpose. If these standards are met, the consumer may be barred from recovery for breach of warranty.

Determining whether a product is merchantable can be a difficult issue. In Takera v. Ford Motor Co., 86 Wis.2d 140, 271 N.W.2d 653 (1978), the plaintiff sued under warranty liability. The plaintiff claimed that his car was unmerchantable because of improper corrosion treatment and other installation problems. The court ruled that the car was in fact merchantable at the time of sale. Facts indicated that the car had been driven over 75,000 miles in about 33 months. The court held that the rust problems alleged did not render the car unfit for driving, and therefore, was not unmerchantable.

The court also addressed the issue of timeliness of disclaimers in this case. Facts indicated that Ford’s disclaimer of implied warranties was given at the time of delivery, which was subsequent to the time of the purchase agreement. The court noted that such disclaimer was ineffective because of its tardiness, although such a determination was not required given the aforementioned decision regarding merchantability. The court made the following remarks on this issue:

One of the purposes for the disclaimer requirement is to protect the buyer from unexpected and unbargained language. Sec. 402.316, Stats., official U.C.C. Comment. This purpose would be defeated if a manufacturer could disclaim implied warranties after the contract for sale has been entered into and at a time when the automobile is delivered. . . This disclaimer was ineffective because it was made subsequent to sale. However, even if this implied warranty did survive, as the trial court seems to have concluded, the auto was in fact merchantable, so any implied warranty was not breached.
271 N.W.2d at 656-57.

VII. Several, But Not Joint Liability

Today, successfully prosecuted product liability cases are rare in Wisconsin. The reasons, as explained above, rest with the burden of proof, the expense of litigation, and the risk of losing. Another important and very strong deterrent of product liability cases has been the enactment of Wis. Stats. §895.045, regarding several liability. In 1995, this statute was amended to replace the doctrine of joint and several liability. Under the old law, product liability cases were far easier to win, and more lucrative for plaintiffs. Joint and several liability means that as long as one defendant was held liable for any percentage of damages, and the plaintiff’s contributory negligence did not exceed the defendant’s percentage of causal negligence, the plaintiff could collect all damages from that one defendant. A 1% causally negligent defendant could conceivably owe a multi-million dollar judgment for damages.

Wis. Stats. §895.045, however, now holds that unless a defendant’s causal negligence exceeds 50%, the defendant is only liable for the portion of plaintiff’s damages up to its respective percentage of fault. That is, if a defendant was found only 10% comparatively negligent, that defendant must only pay 10% of the total damages. This is a problem in most product liability cases, as most develop into a third party claim.

Many product liability cases emerge from situations where an employee is injured at work by an industrial machine, such as a punch press or drill. In these situations, a worker will be injured and sue the manufacturer of the machine since employers are relieved of any liability beyond that governed by worker’s compensation. The machine manufacturer will certainly make a cross-claim against the employer and any other entity along the production or supply line. Usually, the employer is allocated a substantial percentage of comparative negligence, as it often did not comply with safety standards or OSHA regulations. For instance, many employers will take off protection guards on machines in order to speed up production on an assembly line. This substantially reduces the percentage of fault assessed against the manufacturer. Once all liability is allocated among the parties, the manufacturer’s liability will be diluted significantly. Thus, under Wis. Stats. §895.045, the manufacturer will only be responsible for paying that diminished proportion of damages to the plaintiff. This often is not enough to compensate for the expenses of litigation, which can escalate to incredibly high amounts when expert testimony is needed.

In Fuchsgruber v. Customer Accessories, Inc., 244 Wis.2d 758, 628 833 (2001), the Wisconsin Supreme Court held that the Wisconsin comparative negligence statute requires a comparison of negligence between the plaintiff and all sellers of a defective product combined, rather than individually. The defendant-sellers may have a separate comparison of negligence between themselves for contribution, but at trial, the plaintiff’s conduct is only compared against the contribution of the product toward the accident and injuries. This allows a plaintiff to prevail in some cases where the manufacturer cannot be sued and an innocent wholesaler or retailer is the only seller on the hook.