Product liability has an impact on design engineering. This article presents the effect of liability on the electrical and computer engineering professions with regards to designing new products. The nature and history of product liability is discussed, along with specific legal cases and guidelines for warnings on labeling.

What is Product Liability?

Tort Law

In the United States, product liability cases are filed under Tort law. Tort Law is an area of common law that governs personal rights and prescribes actions to be taken to compensate those who are offended for any damages. The four most general categories of suits under tort are negligence, strict liability, intentional torts, and breach of warranty. For the sake of brevity their definitions are listed below:

  • Negligence is when the maker of a product does not reasonably investigate potential hazards or test its products.
  • Strict liability is when, despite the maker of a product’s best efforts, an injury still occurs.
  • International tort is when the maker of a product intends its product to cause harm or it chooses to ignore warnings that its products cause harm and continues to produce its product.
  • Breach of warranty is when the product does not function as advertised or as expected, causing an injury. There are several types of warranties, but the most common in product liability cases is implied warranty, which covers the expectation that the product can do the job it was designed and advertised to do.

Product Liability

In the United States, product liability is a type of tort law that governs the relationship between companies who sell goods and the consumer who purchase them. In general terms, it is the concept that companies are responsible for any damages caused by their products after the point of sale. Companies can be held accountable for physical, psychological, or property damage if the product in question contains a design defect, a manufacturing defect, or if the product did not come with adequate warnings about dangers that are not apparent to the untrained user.

Design Defects

A product is considered to have a design defect if it can be shown that, under typical use, the product suffers systematic failure, injuring the user or property in the process, or rendering the product unable to perform its intended function. An example of this type of defect in current events would be the Boeing 787 Dreamliner’s Lithium-ion batteries. The Boeing 787 is a high capacity passenger plane designed for long international flights. The batteries fail due to bad design and over heat, which could cause a loss of power, potentially causing the plane to crash, or they catch fire, which could damage vital electronics. If the batteries were implemented in any personal or property damage, Boeing could face a very serious and potentially costly product liability suit (Drew et al., 2013).

Manufacturing Defects

A product has a manufacturing defect when it can be shown that the product was either not manufactured under commonly accepted “good manufacturing practices” (GMP), or that something went wrong during the manufacturing of this particular product, rendering it potentially dangerous or unable to perform its intended function. In the US, GMP applies to companies that produce drugs and medical devices that require Food and Drug Administration (FDA) approval. In short, any company producing an FDA approved product must conform to the manufacturing and testing standards that are current to the industry. The specific language can be found in the Food, Drug, and Cosmetics Act of 1938, section 501 (b). An example of a general manufacturing defect in current events would be the F-35 B-model fuel line. The F-35 B-model is a new military aircraft that the US recently bought for $396. In one of the planes, it was discovered that a fuel line was “improperly crimped” and was leaking fuel. This defect prompted the grounded all 25 of the new aircraft. Once again, if the fuel line was found to be responsible for any personal or property damage, the company that produced the line could be held liable (Shalal-Esa, 2013).

Failure to Warn

Manufactures have a responsibility to warn customers if their product had the potential to cause harm to a person or property. If a hazard is not apparent to the typical user, the company must post warning labels on their products to insure that all users are aware of any dangers associated with the use of a given product. These include both a pictorial warning and a written warning that includes the risk, a description of the risk, and how to avoid the risk. Most companies in the US follow guidelines provided by the American National Standards Institute’s (ANSI) Z535 committee, which releases standards every five years, most recently in 2011. They can be purchased as a package from the ANSI website or individually from the National Electrical Manufacturers Association (NEMA) website.

Video 1

A video about proper warning label use. Source: Clarion Safety Systems Channel on YouTube.

Building a Case

In order to have a product liability suit, one must combine one of the three types of torts with one of the three types of product liability infractions. For example, it is possible to have a negligent failure to warn suit if a company failed to test the need to label their products at all or a strict liability for a design defect if even despite a company’s best design efforts, an injury still occurred.

History of Product Liability

In the past, a manufacturer of a product was only liable to its end users if the user bought a product directly from the manufacturer. If there was any middle-man, such as a grocery store, the middle man would be liable for selling the defective product product. This was justified under the English common law concept of “privity of contract,” which implies that a contract between two people cannot affect a third party not involved in that contract. In this case, the contract between the middleman and the end user is a separate contract than the one from the middleman to the manufacturer, and therefore the end user has no contract with the manufacturer. In 1916, that changed with the landmark case of MacPherson v. Buick Motor Co.. In this case, Mr. MacPherson was injured when a wheel on his vehicle failed. This is the first case in which privity of contract was overturned because it was shown that the wheel could have been found to be defective via inspection, lending precedence to negligence cases.

In 1944, the California Supreme Court ruled on Escola v. Coca-Cola Bottling Co. In this case, a bottle of Coca-Cola exploded in the hand of Ms. Escola, injuring it. The judge ruled in favor of Ms. Escola because the bottle must have been defective when it shipped from Coca-Cola, voiding the separate contract between the delivery company and the restaurant. The affirming opinion by Roger Traynor set the guidelines for future cases of strict liability.

Finally, in 1963, the California Supreme Court ruled on Greenman v. Yuba Power Products, Inc., again changing the rules regarding product liability. Mr. Greenman was operating a power tool, manufactured by Yuba Power Products, a combination saw, drill and wood lathe, when the tool failed and a piece of wood hit him in the head. Mr. Greenman sued Yuba ten and a half months later saying that the company was negligent and that they had breached implied warranties. The judge ruled in favor of Mr.Greenman saying that there was no need to prove any warranty, and that the company was strictly liable for their products if it causes injury when used properly, largely citing Escola v. Coca-Cola in the ruling. This case set the stage for other states to adopt strict liability in cases of tort, and now most states in the US have strict liability laws.

Case Study

Infar-Red, Inc. has designed a new 3-D metal printer. As a new entrant in to the metal printing market, Infar-Red has contracted your help to make sure that they are safe from any product liability suits. The new metal printer uses a 3-D alignment table in conjunction with an arc welder to construct 3-D object based on a computer layout. While welding the machine and extruded metal get extremely hot, and can stay hot for some time after welding. Additionally, the light produced by the arc welder can damage eyes if views directly and for extended periods of time. What suggestions or changes would you make to protect Infar-Red Inc. from liability?

As mentioned above, there are two main issues that must be addressed with the design. The first one that we will look at is the heat generated. The risk to the customer can be mitigated using one of several methods. The first is to have a warning sticker posted prominently on the device, preferably so that it is in view of the user at all times. The sticker should contain a graphical depiction of the danger, as well as a text explanation that the device can cause severe burns. Another option is to include the warnings in the user manual, with a corresponding sticker on the devise to read the user manual thoroughly before use. The same warning should appear in the manual that would have appeared on the sticker, with both text and graphical warnings explaining the dangers. Having both would be preferable.

The second safety issue with the device in its current configuration is that it is harmful to the user’s eyes if protective eyewear made for this application is not used. Additionally, anyone who is in view of the device, a pedestrian for instance, can also be injured and Infar-Red could be held liable. This can be addressed in a similar manner as with the previous problem, including warning stickers so that users are aware that the device should only be used with correct eyewear and everyone within view of the device should have eyewear as well. Alternatively, the device can be modified in such a way as to include a built in shielding that must be sealed in order for the device to operate. This type of solution might be preferable because of the potential dangers to un-knowing third parties who could be hurt.

The device should also come with a user manual detailing the proper use of the device so that customers are not injured due to incorrect use. As with any product, this device should be tested for manufacturing defects prior to sale.

Application to Senior Project

Product Liability does not directly apply to our ECE senior projects, as, in most cases, they will not be sold to the public and are generally only to be used as prototypes. The reason this topic is useful to most students in this class, and why it is important to include in this handbook, is that after this class, when we are engineers, we will be responsible for the safety of our customers. Through bad design, manufacturing, or labeling, people could be injured or killed by the products we design, and it is our responsibility to insure that that does not happen. Additionally, we should all be familiar to the laws and regulations that govern the products we design when and if they go to market. Not knowing these regulations puts the companies we work for at risk of costly law suits and generally tarnishes company image, again costing the company money in the long run. By knowing the basics of product liability, you should be able to avoid costly mistakes and become a greater asset to your company.

Cited References

Additional Sources

  • Jasper, Margaret C. (2001). The Law of Product Liability, second edition. Dobbs Ferry, N.Y.: Legal Almanac Series, Oceana Publications. OCLC WorldCat Permalink: http://www.worldcat.org/oclc/48676381