New York Law Review

Tag: products liability

  • Matter of New York City Asbestos Litigation, 27 N.Y.3d 411 (2016): Manufacturer’s Duty to Warn Regarding Combined Use of Products

    Matter of New York City Asbestos Litigation, 27 N.Y.3d 411 (2016)

    A manufacturer has a duty to warn of dangers arising from the known and reasonably foreseeable use of its product in combination with a third-party product which, as a matter of design, mechanics or economic necessity, is necessary to enable the manufacturer’s product to function as intended.

    Summary

    The New York Court of Appeals addressed the scope of a manufacturer’s duty to warn about the hazards of using its product with another company’s product. The court held that a manufacturer of a product has a duty to warn of dangers arising from the foreseeable combined use of its product with a third-party product when the third-party product is essential for the manufacturer’s product to function as intended. The court considered the manufacturer’s superior knowledge of the risks, its ability to warn, and the economic realities of product usage. The court affirmed the lower court’s decision that the manufacturer, Crane Co., had a duty to warn about the dangers of asbestos exposure when its valves were used with asbestos-containing components.

    Facts

    Crane Co. manufactured valves used in high-pressure, high-temperature steam systems. These valves required asbestos-based gaskets, packing, and insulation to function, and Crane Co. knew this. Crane Co. supplied these asbestos-containing components with its valves and marketed asbestos-based replacement parts. Ronald Dummitt, a Navy boiler technician, was exposed to asbestos dust while working with Crane Co.’s valves. He developed mesothelioma and sued Crane Co. for failure to warn.

    Procedural History

    Dummitt commenced a negligence and strict products liability action in Supreme Court. The case was consolidated with another asbestos litigation case. The trial court granted an accelerated trial preference under CPLR 3403. The jury found Crane Co. 99% liable and awarded damages. The trial court granted Crane Co.’s motion to set aside the verdict only to the extent of remitting for a new trial on damages or a stipulated reduction in damages. The Appellate Division affirmed the judgment, and Crane appealed as of right to the Court of Appeals.

    Issue(s)

    1. Whether Crane Co., as a manufacturer, had a duty to warn about the dangers of asbestos exposure resulting from the use of its valves in conjunction with third-party asbestos-containing products.

    Holding

    1. Yes, because Crane Co. had a duty to warn about the dangers of asbestos exposure resulting from the use of its valves in conjunction with third-party asbestos-containing products.

    Court’s Reasoning

    The court cited New York’s longstanding approach to products liability, emphasizing that a manufacturer is liable for injuries caused by a defective product. It differentiated between manufacturing defects, design defects, and inadequate warnings. The Court of Appeals referenced its prior ruling in *Rastelli v. Goodyear Tire & Rubber Co.* to outline considerations for determining a manufacturer’s duty when its product is used with another company’s product. The court stated that a manufacturer has a duty to warn of dangers resulting from foreseeable uses of its product of which it knew or should have known. The court considered several factors, including the manufacturer’s superior knowledge of the risks, its ability to warn, and economic considerations. The court found that Crane Co. had a duty to warn, noting its knowledge of the asbestos hazards, its supply of asbestos-containing components, and the economic necessity of using those components with the valves. The court also rejected Crane Co.’s arguments against this duty, pointing out the close connection between Crane Co.’s product and the use of asbestos-containing products.

    Practical Implications

    This case clarifies the scope of a manufacturer’s duty to warn about risks associated with using its product with other products. It emphasizes that manufacturers must warn of known dangers, including those arising from the combined use of their product and a third-party product if that third-party product is essential for the primary product to function. This ruling affects how lawyers analyze failure-to-warn claims, especially in cases involving complex products requiring the use of other products. Companies must assess whether their products require other products to function and, if so, evaluate potential risks associated with those products and issue warnings as necessary. This decision underscores the importance of comprehensive product safety assessments and effective warning systems.

  • Yun Tung Chow v. Reckitt & Colman, Inc., 17 N.Y.3d 29 (2011): Establishing the Standard for Summary Judgment in Defective Design Cases Involving Inherently Dangerous Products

    17 N.Y.3d 29 (2011)

    A defendant moving for summary judgment in a defective design case involving an inherently dangerous product must demonstrate that the product is reasonably safe for its intended use, meaning its utility outweighs its inherent danger.

    Summary

    Yun Tung Chow sued Reckitt & Colman, Inc. for injuries sustained while using Lewis Red Devil Lye (RDL), a 100% sodium hydroxide drain cleaner. Chow, unable to read English, used the product incorrectly, resulting in severe burns and loss of sight in one eye. The defendants were granted summary judgment at the Supreme Court level, which was affirmed by the Appellate Division. The Court of Appeals reversed, holding that the defendants, in seeking summary judgment on a defective design claim, failed to demonstrate that the product’s utility outweighed its inherent danger. The Court clarified that simply stating the product is inherently dangerous is insufficient; the defendant must prove the product is reasonably safe for its intended purpose.

    Facts

    Plaintiff, Yun Tung Chow, an employee at a restaurant, used Lewis Red Devil Lye (RDL) to unclog a drain. Chow was unable to read English and had learned how to use RDL by observing others. On the day of the incident, he mixed approximately three spoonfuls of RDL with roughly three cups of cold water in an aluminum container. He then poured the solution down the drain, which immediately splashed back onto his face. He sustained serious burns, resulting in the loss of sight in his left eye. The product’s label contained warnings and instructions for use, including the use of protective eyewear and gloves, advising against pouring the lye directly from the container into the drain, and specifying the use of a plastic spoon.

    Procedural History

    The Supreme Court granted summary judgment in favor of the defendants. The Appellate Division affirmed the Supreme Court’s decision, but with a divided court on the defective design claim. Plaintiffs appealed to the Court of Appeals as of right based on the dissent in the appellate division. The Court of Appeals reversed the Appellate Division’s order, denying the defendant’s motion for summary judgment.

    Issue(s)

    Whether, in a defective design case involving an inherently dangerous product, a defendant moving for summary judgment must demonstrate that the product is reasonably safe for its intended use by proving its utility outweighs its inherent danger.

    Holding

    Yes, because a defendant moving for summary judgment in a defective design case must demonstrate that its product is reasonably safe for its intended use; a mere statement that the product is inherently dangerous is insufficient to warrant summary judgment.

    Court’s Reasoning

    The Court of Appeals reasoned that a product is defectively designed if its utility does not outweigh the danger inherent in its introduction into the stream of commerce. The Court emphasized that while RDL is undeniably dangerous, the defendants failed to demonstrate that its utility as a drain cleaner for laypersons outweighs the inherent risks. The Court stated that “a mere statement in an attorney’s affirmation in support of a motion for summary judgment to that effect does not result in a shift of the burden to plaintiff to then explain how RDL could be made safer.” The court also found that the plaintiff’s mishandling of the product was not the sole proximate cause of his injuries because a fact-finder could conclude that the product was so inherently dangerous that it should never have been marketed for use by a layperson. The court cited the risk-utility analysis, noting factors such as the product’s utility to the public, the likelihood of injury, and the availability of a safer design. The court noted, “Liability attaches when the product, as designed, presents an unreasonable risk of harm to the user”. Because the defendants failed to demonstrate that RDL was reasonably safe for its intended use, they were not entitled to summary judgment. The Court emphasized, even with adequate warnings, a product may be so dangerous, and its misuse so foreseeable, that a fact finder could reasonably conclude that the utility of the product did not outweigh the risk inherent in marketing it.

  • Semenetz v. Sherling & Walden, Inc., 7 N.Y.3d 194 (2006): Rejection of the Product Line Exception to Successor Liability

    7 N.Y.3d 194 (2006)

    A corporation that purchases the assets of another corporation is generally not liable for the seller’s torts unless one of four established exceptions applies; New York does not recognize a “product line” exception to this rule.

    Summary

    This case addresses whether New York should adopt the “product line” exception to the general rule against successor liability in corporate acquisitions. Sean Semenetz was injured by a sawmill manufactured by S & W Edger Works, Inc. Edger Works subsequently sold its assets to Sawmills & Edgers, Inc. The plaintiff sued Sawmills, arguing it was liable as a successor corporation. The Court of Appeals declined to adopt the “product line” exception, holding that a corporation that purchases another’s assets is not liable for the seller’s torts unless one of the four established exceptions applies. The Court reasoned that adopting the exception would be a radical change with complex economic implications best left to the legislature.

    Facts

    S & W Edger Works, Inc. sold a sawmill to Semenetz Lumber Mill, Inc. in 1998.
    In 1999, Sean Semenetz was injured while using the sawmill.
    In 2000, Edger Works sold most of its assets to Sawmills & Edgers, Inc. The purchase agreement stated Sawmills did not assume Edger Works’ liabilities, except for ordered but undelivered inventory.
    Edger Works then changed its name to Sherling & Walden, Inc.
    Sawmills manufactured sawmills at the same plant and used some of Edger Works’ former employees. It advertised itself as “formerly S & W Edger Works.”

    Procedural History

    Plaintiff sued Sawmills, Edger Works, Sherling & Walden, and Semenetz Lumber, alleging strict products liability, negligence, breach of duty to warn, and breach of warranty.
    Sawmills moved for summary judgment, arguing lack of personal jurisdiction.
    Supreme Court initially denied the motion, finding that while the four Schumacher exceptions didn’t apply, Sawmills could be liable under the “product line” or “continuing enterprise” exceptions to successor liability.
    The Appellate Division reversed, finding no jurisdiction over Sawmills based on the corporate presence doctrine or long-arm statute, and holding that the product line exception dealt with liability, not jurisdiction.
    The Court of Appeals granted permission to appeal.

    Issue(s)

    Whether New York should adopt the “product line” exception to the general rule against successor liability in cases of strict products liability.

    Holding

    No, because adopting the “product line” exception would be a radical change from existing law with complex economic considerations best addressed by the legislature.

    Court’s Reasoning

    The Court declined to adopt the “product line” exception articulated in Ray v. Alad Corp., which imposes liability on a successor corporation for defects in a predecessor’s products. The rationales behind the Ray decision (destruction of plaintiff’s remedies, successor’s ability to spread risk, and fairness of burdening the successor with predecessor’s liabilities) were found unpersuasive.

    The Court noted that destruction of remedies is merely a restatement of the problem, not a justification for changing corporate law. The successor may lack the capacity to spread risk effectively, especially for small manufacturers facing insurance and pricing challenges. Additionally, imposing liability based on goodwill would force the successor to pay twice for the same asset.

    The Court emphasized the potential for “economic annihilation” of small businesses, which constitute 90% of the nation’s manufacturing enterprises. Adoption of the product line exception would deter the purchase of ongoing businesses and encourage liquidation. Further, it places liability on a party that did not put the defective product into the stream of commerce, undermining the core justification for strict products liability.

    The Court quoted City of New York, stating that the product line exception represents “a radical change from existing law implicating complex economic considerations better left to be addressed by the Legislature.” Therefore, the Court joined the majority of jurisdictions in rejecting the “product line” exception, adhering to the established Schumacher exceptions to successor liability.

  • Speller v. Sears, Roebuck & Co., 100 N.Y.2d 38 (2003): Establishing Product Defect Through Circumstantial Evidence

    100 N.Y.2d 38 (2003)

    In a products liability case, a plaintiff can prove a defect circumstantially by showing the product did not perform as intended and excluding all other causes not attributable to the defendant, without necessarily identifying a specific flaw.

    Summary

    This case concerns a house fire that resulted in death and injuries. The plaintiffs sued Sears and Whirlpool, alleging a defective refrigerator caused the fire. The defendants argued a stovetop grease fire was the cause. The Court of Appeals held that the plaintiffs presented sufficient circumstantial evidence to raise a triable issue of fact as to whether a defect in the refrigerator caused the fire, reversing the Appellate Division’s grant of summary judgment to the defendants. The court emphasized that plaintiffs are not always required to identify a specific defect, and can proceed by excluding other possible causes.

    Facts

    Sandra Speller died and her son was injured in a house fire originating in the kitchen. The plaintiffs sued Sears (retailer) and Whirlpool (manufacturer), alleging the fire was caused by defective wiring in the refrigerator. The plaintiffs could not examine or test the wiring due to the fire damage. The defendants claimed a stovetop grease fire caused the blaze based on the Fire Marshal’s report.

    Procedural History

    The Supreme Court denied the defendants’ motion for summary judgment, finding a triable issue of fact. The Appellate Division reversed, granting summary judgment to Sears and Whirlpool, reasoning that the plaintiffs failed to provide specific evidence of a defect after the defendants suggested an alternative cause. The Court of Appeals granted leave to appeal.

    Issue(s)

    Whether, in a products liability case where a specific defect cannot be identified, the plaintiff can withstand summary judgment by presenting circumstantial evidence that the product did not perform as intended and excluding other possible causes for the product’s failure.

    Holding

    Yes, because a plaintiff can prove a product defect circumstantially by showing the product did not perform as intended and excluding all other causes for the product’s failure that are not attributable to the defendants.

    Court’s Reasoning

    The Court of Appeals relied on the principle established in Codling v. Paglia, stating that a plaintiff “is not required to prove the specific defect” and that “[p]roof of necessary facts may be circumstantial.” To proceed without evidence of a specific flaw, a plaintiff must prove that the product did not perform as intended and exclude other causes not attributable to the defendants, as outlined in Halloran v. Virginia Chems. The court also cited the Restatement (Third) of Torts: Products Liability § 3, which allows inferring a defect if the incident ordinarily occurs due to a product defect and was not solely the result of other causes. The Court found the plaintiffs’ expert testimony sufficient to rebut the defendants’ alternative cause evidence. The experts consistently asserted the fire originated in the refrigerator and ruled out the stove. The Court rejected the argument that the plaintiffs were required to produce evidence of a specific defect after the defendants suggested an alternative cause, stating that this misinterprets the court’s role in summary judgment, which is issue identification, not issue resolution. The court emphasized that summary judgment is inappropriate where causation is disputed and “only one conclusion may be drawn from the established facts.”

  • Tanges v. Heidelberg N. Am., 93 N.Y.2d 48 (1999): Statutes of Repose as Substantive Law in Choice of Law Analysis

    93 N.Y.2d 48 (1999)

    A statute of repose, which prevents a cause of action from arising after a specified period regardless of accrual, is considered substantive law for choice-of-law purposes in New York.

    Summary

    In a products liability case filed in New York federal court, the Second Circuit certified a question to the New York Court of Appeals regarding whether a Connecticut statute of repose (§ 52-577a) barred the plaintiff’s claim. The plaintiff, a New York resident, was injured in Connecticut while using a printing press more than ten years after its sale. The Court of Appeals held that the Connecticut statute was substantive, not procedural, because it acted as a statute of repose, preventing a cause of action from ever accruing after ten years from the date of sale, thus barring the claim.

    Facts

    Danbury Printing and Litho, Inc. purchased a printing press manufactured by Heidelberg et al. in November 1983 and installed it in their Connecticut plant.

    In January 1994, more than ten years after the press was sold, Tanges, a New York resident working for Danbury Printing, was injured while operating the press in Connecticut.

    Tanges received worker’s compensation benefits and then filed a products liability action against Heidelberg et al. in federal court in New York, based on diversity jurisdiction.

    Procedural History

    The United States District Court for the Southern District of New York granted summary judgment for the defendant, holding that Connecticut General Statutes § 52-577a barred the claim.

    The Second Circuit Court of Appeals certified the question of whether Connecticut General Statutes § 52-577a bars Tanges’ claim to the New York Court of Appeals.

    Issue(s)

    Whether Connecticut General Statutes § 52-577a bars Tanges’s claim brought in the Southern District of New York?

    Holding

    Yes, because Connecticut General Statutes § 52-577a acts as a statute of repose, preventing a cause of action from ever arising more than ten years after the product’s sale, and is therefore considered substantive law in New York for choice-of-law purposes.

    Court’s Reasoning

    The court reasoned that under New York choice-of-law rules, substantive law of another state applies to the case, whereas procedural law is governed by the forum state (New York). While statutes of limitations are generally considered procedural, Connecticut General Statutes § 52-577a contains a provision of repose: “no such action may be brought against any party…later than ten years from the date that the party last parted with possession or control of the product.”

    The court distinguished statutes of limitations, which bar a remedy after a cause of action accrues, from statutes of repose, which prevent a cause of action from ever arising. The court quoted from 4 American Law of Products Liability 3d § 47:55, at 88, stating that “the period of repose has the effect of preventing what might otherwise have been a cause of action from, ever arising.”

    Because the Connecticut statute prevents a cause of action from arising, it is substantive, not merely procedural. The court noted that Connecticut’s legislature intended § 52-577a to be integrally linked to the state’s exclusive statutory cause of action for product liability. New York’s policy considerations also support treating the statute as substantive, as it discourages forum shopping.

    The court referenced Romano v Romano, 19 NY2d 444, 447, stating: “If a statute creates a cause of action and attaches a time limit to its commencement, the time is an ingredient of the cause.” Because the Connecticut statute created a cause of action and attached a time limit to its commencement, the time limit is an ingredient of the cause. Therefore, the statute is substantive.

  • Gebo v. Black Clawson Co., 92 N.Y.2d 387 (1998): Liability of a ‘Casual Manufacturer’ for Injuries

    92 N.Y.2d 387 (1998)

    A company that designs and builds a safety device for its own machinery, not for sale, is considered a ‘casual manufacturer’ and has a limited duty to warn subsequent users of known, non-obvious defects, but is not subject to strict products liability or negligent design claims.

    Summary

    Scott Gebo, an employee of Knowlton Specialty Papers, was injured while operating an embossing unit that had been modified by Filtration Sciences, the prior owner of the mill. Gebo sued Filtration Sciences, alleging strict products liability, negligent design, failure to warn, and breach of warranty. The New York Court of Appeals held that Filtration Sciences, as a ‘casual manufacturer’ who built the safety device for its own use, had a duty to warn of known defects, but this duty was satisfied because Gebo’s employer was aware of the resin-related problems that caused the accident. The court affirmed the dismissal of Gebo’s claims.

    Facts

    Filtration Sciences purchased an embossing unit in 1966 and made modifications, including adding a safety guarding system to protect operators from the nip point of high-speed rollers. This guarding system included a panel that, when raised, protected the operator. However, the system could fail if resin, a byproduct of the paper manufacturing process, built up on a microswitch, allowing the unit to operate with the guard panel down. Gebo was injured when his hand became caught in the unguarded nip point. Filtration Sciences later sold the paper mill to Knowlton Specialty Papers, Gebo’s employer, prior to the accident.

    Procedural History

    Gebo sued Filtration Sciences in Supreme Court, alleging several causes of action. The Supreme Court granted summary judgment to Filtration Sciences, dismissing all claims. The Appellate Division affirmed. The New York Court of Appeals granted leave to appeal and affirmed the Appellate Division’s decision.

    Issue(s)

    Whether a company that designs and builds a safety device for its own use, and not for market sale, can be held liable under theories of strict products liability or negligent design to a subsequent user injured by the device.

    Holding

    No, because Filtration Sciences was a “casual manufacturer” that built the protective guarding system for its own use, not for sale or transfer. As such, it had only a limited duty to warn of known defects, a duty that was satisfied in this case because the employer was already aware of the danger.

    Court’s Reasoning

    The court distinguished Filtration Sciences from typical manufacturers, noting that strict liability is imposed on manufacturers who place defective products into the stream of commerce. However, the court found that Filtration Sciences was a “casual manufacturer” because it designed and assembled the guarding system for its own use, not for sale. Citing Sukljian v. Ross & Son Co., 69 N.Y.2d 89 (1986), the court stated that casual sellers (and by analogy, casual manufacturers) have only a duty to “warn the person to whom the product is supplied of known defects that are not obvious or readily discernible.” The court reasoned that the policy justifications for imposing strict liability on manufacturers—such as their ability to understand the design and safety of their products—do not apply to casual manufacturers. The court also rejected the negligence claim, stating that the duty of a casual manufacturer is limited to warning of known, non-obvious defects. Here, the court found that Knowlton Specialty Papers, Gebo’s employer, was aware of the resin-related problems that caused the accident, thus negating any causal connection between Filtration Sciences’ alleged failure to warn and Gebo’s injuries. Moreover, because the employer was aware of the problems, the danger was “readily discernible.” The court quoted from Restatement (Second) of Torts § 395, Comment b, explaining that the responsibilities for manufacturers rests “upon the foreseeability of harm if proper care is not used; upon the representation of safety implied in the act of putting the product on the market; and upon the economic benefit derived by the manufacturer from the sale and subsequent use of the chattel.” These considerations did not apply to Filtration Sciences because it did not derive significant commercial benefit from the sale of the mill, and the injury was not foreseeable when the guarding system was designed.

  • Liriano v. Hobart Corp., 92 N.Y.2d 232 (1998): Duty to Warn Despite Product Modification

    Liriano v. Hobart Corp., 92 N.Y.2d 232 (1998)

    A manufacturer may have a duty to warn against foreseeable dangers arising from substantial modifications to its product, even if the substantial modification defense would preclude liability under a design defect theory.

    Summary

    Liriano, a minor, was injured while using a meat grinder with a removed safety guard. He sued Hobart, the manufacturer, alleging failure to warn. The court addressed whether a manufacturer’s liability for failure to warn could exist when the “substantial modification” defense would bar a design defect claim. The court held that a duty to warn could exist, emphasizing the manufacturer’s superior position to understand product modifications and issue warnings, and the relative ease of providing warnings compared to redesigning products against all potential modifications. However, the court also noted limits to this duty, particularly when the danger is open and obvious or when the user already possesses knowledge of the specific hazard.

    Facts

    Luis Liriano, a 17-year-old, was injured while using a commercial meat grinder at his job. The grinder, manufactured by Hobart in 1961, originally had a safety guard. The guard was removed before Liriano’s accident. Hobart became aware that many purchasers were removing the safety guards. In 1962, Hobart began issuing warnings about using the grinder without the guard. No warnings existed on the machine at the time of Liriano’s injury. Super Associated, Liriano’s employer, acquired the grinder with the safety guard intact, but the guard was removed while in Super’s possession.

    Procedural History

    Liriano sued Hobart in New York State Supreme Court, Bronx County, alleging negligence and strict products liability. Hobart removed the case to the U.S. District Court for the Southern District of New York and impleaded Super Associated. The District Court dismissed all claims except the failure-to-warn claim. A jury found Hobart 5% liable and Super 95% liable. A partial retrial assigned Liriano 33 1/3% responsibility. Hobart appealed, arguing the court should have decided the duty to warn issue in its favor as a matter of law. The Second Circuit certified the question to the New York Court of Appeals.

    Issue(s)

    Whether manufacturer liability can exist under a failure to warn theory in cases in which the substantial modification defense would preclude liability under a design defect theory, and if so, is such manufacturer liability barred as a matter of law on the facts of this case, viewed in the light most favorable to the plaintiff?

    Holding

    Yes, manufacturer liability can exist under a failure to warn theory in cases in which the substantial modification defense would preclude liability under a design defect theory because the factors militating against imposing a duty to design against foreseeable post-sale product modifications are either not present or less cogent with respect to a duty to warn against making such modifications.

    Court’s Reasoning

    The court distinguished between design defect claims and failure-to-warn claims. While a manufacturer is not liable for injuries caused by substantial alterations to a product by a third party that render the product defective or unsafe, the court reasoned that the duty to warn is separate. The court reasoned that the duty to warn focuses on the foreseeability of the risk and the adequacy of the warning, which is a less complex analysis than design decisions. The court noted that “unlike design decisions that involve the consideration of many interdependent factors, the inquiry in a duty to warn case is much more limited, focusing principally on the foreseeability of the risk and the adequacy and effectiveness of any warning.” The court also stated that “the burden of placing a warning on a product is less costly than designing a perfectly safe, tamper-resistant product.” Therefore, the court concluded that it is not infeasible nor onerous, in some cases, to warn of the dangers of foreseeable modifications that pose the risk of injury.
    The court acknowledged limitations to the duty to warn, particularly where the danger is open and obvious or the user has actual knowledge of the specific hazard, quoting Prosser and Keeton, Torts § 96: “there should be no liability for failing to warn someone of a risk or hazard which he [or she] appreciated to the same extent as a warning would have provided.” However, whether a danger is open and obvious is most often a jury question.

  • Rastelli v. Goodyear Tire & Rubber Co., 79 N.Y.2d 289 (1992): No Duty to Warn About Another’s Defective Product

    79 N.Y.2d 289 (1992)

    A manufacturer of a non-defective product has no duty to warn about potential dangers arising from the use of its product in conjunction with another manufacturer’s defective product, where the first manufacturer did not contribute to the defect, had no control over it, and did not produce it.

    Summary

    Francene Rastelli sued Goodyear for the wrongful death of her husband, who was killed when a multi-piece tire rim exploded while he was inflating a Goodyear tire. The rim was manufactured by Firestone and Kelsey-Hayes, not Goodyear. Rastelli argued Goodyear had a duty to warn about the dangers of using its tires with multi-piece rims and that Goodyear engaged in a concerted action with other manufacturers to suppress safety information. The New York Court of Appeals held that Goodyear had no duty to warn about a defect in another manufacturer’s product and that the evidence was insufficient to establish a concerted action claim because it only showed parallel activity.

    Facts

    John Wunderlich was killed in June 1984 while inflating a Goodyear tire mounted on a multi-piece rim. The rim, an RH5 model, consisted of parts manufactured by Firestone and Kelsey-Hayes. Goodyear did not manufacture or sell the rim or its parts. The Goodyear tire was compatible with some, but not all, multi-piece rim assemblies. Rastelli, as administratrix, sued Goodyear and other rim manufacturers alleging negligence, strict products liability, breach of warranty, and concerted action.

    Procedural History

    The Supreme Court denied Goodyear’s motion for summary judgment. The Appellate Division modified, granting summary judgment to Goodyear on the breach of warranty claims but otherwise affirmed, finding sufficient evidence for the concerted action, strict products liability, and negligence claims. Goodyear appealed to the New York Court of Appeals by leave of the Appellate Division.

    Issue(s)

    1. Whether Goodyear may be subject to concerted action liability under the alleged facts in this product liability action.
    2. Whether Goodyear has a duty to warn against its non-defective tire being used with an allegedly defective tire rim manufactured by others.

    Holding

    1. No, because the plaintiff only demonstrated parallel activity among rim manufacturers, which is insufficient to establish a concerted action claim.
    2. No, because Goodyear had no control over the rim’s production, did not place it in the stream of commerce, and its tire did not cause the rim’s defect.

    Court’s Reasoning

    Regarding the concerted action claim, the Court stated that “[i]t is essential that each defendant charged with acting in concert have acted tortiously and that one of the defendants committed an act in pursuance of the agreement which constitutes a tort.” The court found that the plaintiff’s allegations and exhibits showed only parallel activity among the rim manufacturers, such as campaigning for OSHA regulations and lobbying against a ban on multi-piece rims. This was insufficient to prove an agreement or common scheme to commit a tort. Citing Hymowitz v. Lilly & Co., the court emphasized that parallel activity alone is not enough to justify holding one manufacturer liable for another’s product.

    Regarding the duty to warn, the Court declined to impose a duty on Goodyear to warn about another manufacturer’s product’s defects. The court reasoned that Goodyear’s tire was not defective, and the accident would not have occurred if a sound rim had been used. The Court distinguished cases where the combination of two sound products creates a dangerous condition. Here, the defect was solely in the rim, and Goodyear had no role in its production or distribution. “Goodyear had no control over the production of the subject multipiece rim, had no role in placing that rim in the stream of commerce, and derived no benefit from its sale. Goodyear’s tire did not create the alleged defect in the rim that caused the rim to explode.”

  • In re DES Market Share Litigation, 79 N.Y.2d 301 (1992): Right to Jury Trial in Market Share Liability Cases

    In re DES Market Share Litigation, 79 N.Y.2d 301 (1992)

    Plaintiffs in DES (diethylstilbestrol) cases have a constitutional right to a jury trial on the issue of market share liability, as market share is an integral part of the tort cause of action for money damages and not a separate equitable proceeding.

    Summary

    This case addresses whether DES plaintiffs are entitled to a jury trial on the issue of market share, a liability theory adopted in Hymowitz v. Lilly & Co. The New York Court of Appeals held that plaintiffs possess a constitutional right to a jury trial regarding market share. The court reasoned that establishing market share is a factual component of the plaintiffs’ underlying tort claims for money damages, not a separate equitable action. Severing and consolidating the market share issue for trial does not extinguish the right to a jury trial. The court affirmed the Appellate Division’s order, ensuring plaintiffs’ right to a jury trial on the market share issue.

    Facts

    DES, a synthetic estrogen, was prescribed to pregnant women from 1947 to 1971 to prevent miscarriages. It was later found to cause vaginal adenocarcinoma and other health problems in the daughters of women who took DES. Due to the difficulty in identifying the specific manufacturer of the DES ingested by their mothers, many DES plaintiffs were unable to pursue traditional tort claims. In Hymowitz, the Court of Appeals adopted a market share theory, holding manufacturers liable based on their share of the national DES market. Following Hymowitz, the market share issue was severed from individual DES cases and consolidated for a single trial.

    Procedural History

    The Supreme Court, Erie County, denied plaintiffs’ motion for a jury trial on the market share issue, deeming it a newly created remedy and not a cause of action itself. The Appellate Division reversed, holding that Hymowitz modified a pre-existing legal cause of action and that the plaintiffs were thus entitled to a jury trial. The Court of Appeals granted leave to appeal.

    Issue(s)

    Whether DES plaintiffs are constitutionally entitled to a jury trial on the issue of market share liability.

    Holding

    Yes, because market share determination is an integral part of the plaintiffs’ cause of action for money damages and not a separate equitable proceeding.

    Court’s Reasoning

    The Court of Appeals based its decision on Article I, § 2 of the New York Constitution, which guarantees the right to a jury trial in cases where it was traditionally available. CPLR 4101 also codifies this right for actions seeking a judgment for a sum of money only. The court rejected the argument that Hymowitz created a new equitable remedy, stating that Hymowitz merely modified the traditional causation requirement by allowing liability based on market share rather than direct identification of the manufacturer. The court emphasized that determining market share remains a factual issue essential to establishing the defendants’ culpability. The court stated, “[W]hen we used the word ‘equitable’ in Hymowitz, we were not categorizing the market share theory; rather, we were indicating the extent to which our decision was compelled by simple fairness.” The Court further reasoned that the market share inquiry is not a preliminary issue but is directly tied to the ability of the plaintiffs to recover damages. “The market share percentages for each of the 24 years and the concomitant determination of each defendants’ ultimate culpability will dictate the ability of all plaintiffs to recover damages in their main actions.” Severing the issue for trial does not eliminate the right to a jury trial. The Court also dismissed the argument that the complexity of the market share proceeding transforms it into an equitable cause of action. The court concluded that the right to a jury trial remains intact because market share is a legal issue within a tort action for money damages.

  • Bellevue South Associates v. HRH Construction Corp., 78 N.Y.2d 282 (1991): Economic Loss Rule in Products Liability

    Bellevue South Associates v. HRH Construction Corp., 78 N.Y.2d 282 (1991)

    In a commercial transaction, when a product injures only itself, causing economic loss, the purchaser’s remedy lies in contract law, not in tort law based on strict products liability.

    Summary

    Bellevue South Associates sued HRH Construction and Circle Industries for breach of contract and Masonite for strict products liability, seeking damages for defective floor tiles. The New York Court of Appeals held that Bellevue could not recover replacement costs from Masonite in tort, as the damages were purely economic. The court reasoned that in a commercial context, where the product damages only itself, contract law provides the appropriate remedy. However, the court also found that Circle’s claim for indemnification against Masonite based on breach of implied warranty should have been submitted to the jury.

    Facts

    Bellevue contracted with HRH for the construction of a housing complex, specifying Hartco floor tiles. HRH subcontracted with Circle, who substituted Masonite tiles. Circle partially owned Masonite but did not disclose this to HRH or Bellevue. The architect approved the substitution with a condition about adhesive coverage. The tiles delaminated (separated) after installation, causing problems throughout the complex. Bellevue sued HRH, Circle, and Masonite to recover the cost of replacing the tiles.

    Procedural History

    The trial court dismissed most claims, but the jury found HRH and Circle liable for breach of contract and Masonite liable for strict products liability. The trial court granted judgment notwithstanding the verdict on HRH’s contractual indemnity claim against Circle, but denied Circle’s indemnification claim against Masonite. The Appellate Division affirmed. Masonite and Circle appealed.

    Issue(s)

    1. Whether a plaintiff can recover replacement costs against a tile manufacturer in tort (strict products liability) when the only damages are to the product itself.
    2. Whether the flooring subcontractor should be indemnified by the tile manufacturer on a theory of breach of implied warranty.

    Holding

    1. No, because in a commercial context, when a product injures only itself and the damages are purely economic (replacement costs), the remedy lies in contract law, not tort law.
    2. Yes, because an implied warranty between Circle and Masonite existed, and Circle’s indemnification claim based on this theory should have been submitted to the jury.

    Court’s Reasoning

    The court reasoned that strict products liability is designed to protect consumers from injury caused by defective products, not to resolve commercial disputes where the product damages only itself. The court favored the approach established in East River S. S. Corp. v. Transamerica Delaval, holding that a manufacturer has no duty to prevent a product from injuring itself in a commercial relationship. The court stated that the nature of the defect (less than 100% adhesive coverage), the type of injury (delamination, not personal injury or property damage), the manner of the injury (gradual failure), and the damages sought (replacement costs) indicated that plaintiff’s remedy was in contract law, not tort law. The court also stated, “Commercial interests, together with the fear of liability for any injuries that might occur, are a powerful incentive for such plaintiffs, without the need to open another avenue of redress in the law of torts.”

    Regarding Circle’s indemnification claim, the court stated that the Uniform Commercial Code creates an implied warranty between Circle and Masonite. The court held that Circle’s implied warranty indemnity claim against Masonite should not have been dismissed simply because the plaintiff’s implied warranty claims against HRH and Circle were dismissed. The court also rejected the Appellate Division’s reasoning that Circle’s relationship with Masonite barred the indemnification claim because Circle wasn’t an “innocent party.” Instead, the relevant inquiry is whether Circle has a meritorious implied warranty indemnity claim against Masonite and whether Masonite has any valid defenses to that claim. The court stated, “To recover implied warranty indemnity, Circle must show both the existence and breach of the warranty and that the breach was the proximate cause of plaintiff’s damages”.