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    A New Era: Products Liability Law in Wisconsin

    Wisconsin’s products liability law has undergone a sea change. Changes to Wis. Stat. chapter 895 adopt a new test of defectiveness, leaving behind the analysis of consumer expectations in strict liability claims and substituting the reasonable-alternative-design standard. Plaintiffs now must meet more stringent requirements to recover for an injury caused by defective products.

    Timothy D. Edwards & Jessica E. Ozalp

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    Wisconsin LawyerWisconsin Lawyer
    Vol. 84, No. 7, July 2011

    CopyrightIn his first days as governor, Scott Walker signed into law the Omnibus Tort Reform Act, which significantly changed the landscape of Wisconsin’s products liability law. These changes, embodied in 2011 Wisconsin Act 2 (the Act), took effect on Feb. 1, 2011. The Act added three new provisions pertaining to products liability law to Wis. Stat. chapter 895. The new provisions changed the law for strict liability claims, along with a wider range of claims arising from injuries caused by defective products. This article addresses the recent changes and explains how they depart from prior law.

    In general terms, the Act’s changes to products liability law can be broken down into three categories. First, the Act replaces the broader “consumer expectations” test of defectiveness with a requirement that the plaintiff show a “reasonable alternative design” that would have reduced the risk of harm. Second, the Act makes available several defenses to manufacturers, provides for reduction of recovery by the percent of fault attributed to the plaintiff, and limits claims against sellers and distributors. Finally, the Act restricts the rarely used “risk contribution” theory in products liability cases, precluding imposition of liability in most cases when a plaintiff cannot identify the specific product that caused the injury.

    A Sea Change

    The biggest change in the Act is the adoption of a new test of defectiveness. Under this test, a plaintiff alleging that she was injured by a design defect can only recover if she produces proof of a reasonable alternative design that would have reduced the foreseeable dangers.1 This represents a move to the approach of the Restatement (Third) of Torts, a move that had been hotly debated in recent years and that split the Wisconsin Supreme Court in two 2009 cases.2

    As a general matter, strict liability is only imposed when a product is in a defective condition, a term of art in strict liability law. For many years, Wisconsin followed the consumer expectations test, embraced by the Restatement (Second) of Torts, to determine whether a product was defective.3 Under this test, a person injured by a product could hold the manufacturer or seller strictly liable by showing that 1) the product was unreasonably dangerous to the person or to his property, 2) the seller was in the business of selling the product, 3) the product was in a defective condition when it left the seller’s control, 4) the product reached the person in the same condition it was sold in, and 5) the defect was a cause of the injuries or damages.4 Alternatively, an injured person could pursue negligence claims if he had proof of specific negligent conduct.

    To establish strict liability, the plaintiff was required to show that the product was unreasonably dangerous. Under the Restatement (Second) approach, the standard for unreasonably dangerous was “dangerous to an extent beyond that which would be contemplated by the consumer who purchases it, with the ordinary knowledge common to the community as to its characteristics.”5 Whether a product contained an unreasonably dangerous defect depended on an objective test that focused on the reasonable expectations of an ordinary consumer. Thus, the standard was known as the “consumer contemplation” or “consumer expectations” test. This test was an outgrowth of strict products liability as an extension of implied-warranty law.6

    Under the Act, an injured person has to clear a higher bar to prove that a product is defective. First, the Act codifies the distinction between three forms of defect – manufacturing defect, design defect, and inadequate warning or instruction.7 To claim that a design defect made the product dangerous, the plaintiff must prove there was a reasonable alternative design that would have reduced the foreseeable dangers.8 If she claims inadequate warnings or instructions, she must now show that the foreseeable dangers would have been reduced by reasonable warnings or instructions.9 As a result of these changes, the plaintiff has the burden of showing that the omission of a safer design or a necessary warning or instruction made the product unreasonably dangerous.

    After showing that the product was defective under this new standard, the injured person can prove strict liability by showing 1) the defect rendered the product unreasonably dangerous to persons or property, 2) the product was in a defective condition when it left the seller’s control, 3) the product reached the person in the same condition it was sold in, and 4) the defect was a cause of the injuries or damages.10 Except for the new threshold requirements for establishing defectiveness, these conditions are similar to those previously required by case law.11

    The replacement of the consumer expectations test with a requirement that a plaintiff show a reasonable alternative design to establish defectiveness has been controversial. These competing standards were debated by the Wisconsin Supreme Court before the Act was passed, in part because many other states had already moved from the approach of the Restatement (Second) of Torts to that of the Restatement (Third) of Torts. Members of the court who previously opposed this shift described it as a “sea change” that would overturn more than four decades of precedent.12 Instead of requiring the plaintiff to show that the product was dangerous beyond what would be expected by an ordinary consumer, the plaintiff now carries the more exacting burden of showing a reasonable alternative to the existing design and demonstrating that the manufacturer’s failure to use that design rendered the product defective.13 This shifts the emphasis from the dangerous condition of the product to the conduct of the manufacturer.

    Timothy D. Edwards Jessica E. Ozalp

     

    Timothy D. Edwards, Wayne State 1989, is a partner at Axley Brynelson LLP, Madison. He is chair of the firm’s electronic discovery and record management team.

    Jessica E. Ozalp, U.W. 2010 cum laude, is an associate at the firm practicing in litigation.

    Effects on Products Liability Cases

    The reasonable-alternative standard brings Wisconsin in line with the Restatement (Third) of Torts approach, which a majority of other states now use.14 Proponents of the consumer expectations test have argued that the reasonable-alternative standard protects manufacturers at consumers’ expense. They contend that the new law will require an expensive battle of the experts in every design case. Fewer claims will be successful under the new standard, with its heavier proof burdens on plaintiffs and increased defense options for manufacturers.

    Proponents of the reasonable-alternative standard have criticized the consumer expectations test as too vague, unreliable, and illogical for design defect cases. They deny that the shift favors manufacturers, pointing out that one defense available before, the “open and obvious danger” doctrine, will no longer apply because the focus will shift to the product and away from the injured person. When the supreme court addressed the issue in 2009, Justice Prosser argued that the new approach is based on the “commonsense” concept that liability should only attach when harm is reasonably preventable.15 Justice Gableman likewise advocated for a move to the Restatement (Third) approach, calling the consumer expectations test “a horse-and-buggy in a space-age era.”16

    Whether one agrees or not, the new standard means that consumer expectations (as such) no longer are relevant to findings about whether a product’s design is defective or unreasonably dangerous. Fewer claimants will recover because they must show the manufacturer had a safer option available and chose to use the dangerous design instead. This is the most fundamental of the Act’s changes to Wisconsin law on products liability, but it is only one of several.

    Other Changes Limiting Strict Liability

    The Act provides a list of statutory defenses for manufacturers that function as exceptions to liability, even when the plaintiff establishes negligence.17 For example, proven intoxication or drug use by the claimant at the time of the injury creates a rebuttable presumption that the use of alcohol or drugs caused the injury.18 A product is presumptively not defective if it satisfied applicable federal or state standards at the time of sale.19 A court must dismiss any claim for damages caused by a product’s inherent characteristic, if ordinary consumers would recognize it as such.20 Finally, the liability of a defendant is reduced by the percentage of harm attributable to the claimant’s misuse, alteration, or modification of the product.21

    Sellers and distributors also have statutory defenses under the Act. For example, they cannot be strictly liable for injury caused by a product unless they have contractually assumed manufacturing, design, or warning duties from the manufacturer.22 In addition, sellers or distributors are not liable if they received the product in a sealed container and did not have a reasonable opportunity to test or inspect the product.23 A seller may, however, be liable in cases in which the claim against the manufacturer meets the new criteria but the manufacturer is judgment proof.24

    The Act also changes the rules of admissibility regarding subsequent remedial measures.25 Plaintiffs can no longer bolster a defective product case by introducing evidence that a company later took remedial measures to make the product safer.26 Such evidence is only admissible to show that a reasonable alternative design existed at the time the product was sold, but not to show manufacturing defect, design defect, or a need for a warning or instruction.27

    Finally, the Act creates a statute of repose on products liability claims.28 This new provision bars all claims involving products manufactured more than 15 years before the injury.29 There are two exceptions: one for damages caused by a latent disease, and the other when the manufacturer promised that the product would last more than 15 years.30

    Apportionment of Fault

    The Act also changed the effects of contributory negligence, or apportionment of fault, on a claimant’s recovery in strict products liability cases.31 Under the Act, a plaintiff who is 51 percent or more responsible for his or her own injury cannot recover damages from a manufacturer or seller;32 by the same token a defendant, such as a manufacturer, cannot be jointly and severally liable unless it is at least 51 percent responsible for the harm.33

    As before, the law reduces the amount of recovery by the plaintiff’s percentage of responsibility.34 However, the Act added a new provision completely barring recovery for any plaintiff who is at least 51 percent responsible for the injuries.35 Under section 895.045(3)(a), the fact-finder must first determine whether the injured party has any right to recover from manufacturers, sellers, and so on, by apportioning responsibility. This means assigning percentages of total causal responsibility for the injury among the claimant, the defective condition of the product, and any contributory negligence of another person.36

    Once the percentages are determined, a manufacturer is treated like a person under the new law, which follows the same principles set forth in subsection (1) of section 895.045. Subsection (1) applies different standards to recovery from a defendant who is less than 51 percent causally negligent than it does to recovery from a defendant who is 51 percent or more causally negligent.37 This subsection was not changed by the Act. If the defendant’s responsibility is below 51 percent, section 895.045(1) limits the recovery from that defendant to the percentage of responsibility assigned to it. But if the defendant’s responsibility is 51 percent or more, it is jointly and severally liable for all the damages, minus any percentage of contributory negligence assigned to the plaintiff.38 In other words, no tortfeasor found to be less than 51 percent causally negligent can be held jointly and severally liable for the plaintiff’s total damages. Section 895.045(3)(d)
    (added by the Act) follows this same rule when there are multiple defendants, but only if the claim is not barred by a finding under (3)(a) that the plaintiff was more than 50 percent responsible.

    Previously, the partial overlap between negligence and strict liability theories allowed for different interpretations of section 895.045(1). Wisconsin courts have given mixed signals as to how subsection (1) applied in products liability cases. In Fuchsgruber v. Custom Accessories Inc., the supreme court considered whether to apply the comparative negligence rule in strict products liability actions.39 The court concluded that it did not apply because “[s]trict liability for injuries caused by defective and unreasonably dangerous products ... is liability in tort, not liability for negligence.” The court explained the following:

    “[S]trict product liability is not negligence; the concept of contributory negligence is simply borrowed from negligence law and transplanted in product liability theory for purposes of making the defense available to sellers. Neither the availability of this defense, nor the availability of contribution rights among defendants, means that strict product liability is actually negligence for all intents and purposes, including application of the comparative negligence statute.”40

    Subsequent appellate decisions have illustrated the complex issues associated with comparative negligence and cases involving product liability.41 The Act clarifies that the same principle does apply in products liability claims against entities like manufacturers and sellers. The effect is that only one entity can be jointly and severally liable, because only one can be at least 51 percent responsible for the injuries. Thus the Act resolved the uncertainty whether Wisconsin imposes joint and several liability on manufacturers (as opposed to persons) who contributed to the plaintiff’s injury, regardless of their percentage of fault. Now, a plaintiff cannot recover from any entity if his own portion of the fault is 51 percent or more. Further, any entity that is less than 51 percent responsible cannot be held jointly and severally liable for the total damages.

    Limiting Risk Contribution

    The Act reinforces the requirement of specific product identification for all types of claims arising from products. The new law limits the holding of Thomas v. Mallet,42 and its high profile (but rarely applied) theory of risk contribution, known in other states as “market share” liability. Under the Thomas approach, certain circumstances render a manufacturer (or a seller or distributor) liable for damages arising from the type of product it produced, even without evidence that it produced the specific defective product that caused the injury.43 In Thomas, the court allowed a claim to proceed against seven manufacturers of white lead-carbonate pigment (used in lead paint), despite the plaintiff’s inability to prove which specific products poisoned him as a child.44 As a result, the manufacturers could be held jointly and severally liable for the injuries.

    The Act narrows this unusual exception to specific product identification. Now, if a plaintiff cannot identify the specific product and manufacturer responsible, he must name as defendants the manufacturers who collectively made at least 80 percent of the product sold in Wisconsin during the relevant production period and must also prove that:

    • no recovery is available elsewhere;
    • nothing other than the identical product could have caused the injury; and
    • the manufacturer or seller manufactured or sold an identical product, in the form used by the claimant, during the relevant time period, in the same geographic market, without any labeling or identifying characteristic.45

    Nonspecific claims also are time-barred as of 25 years after the manufacturer or seller stops manufacturing or selling the identical product.46

    Conclusion

    The Act makes substantial changes to Wisconsin’s products liability law. The policy considerations behind these changes to Wisconsin law are much debated. Whether one agrees or not, these new changes will ensure that fewer products liability claims will lead to recovery of damages. Section 895.047(1) works the farthest reaching change, leaving behind the analysis of consumer expectations and substituting the reasonable-alternative-design standard. The other new provisions in section 845.047 likewise set forth more stringent requirements to meet before one may recover for an injury caused by defective products. Section 895.045(3) eliminates all liability of other parties when a plaintiff is 51 percent or more responsible. Section 895.046 strictly limits the option of pursuing manufacturers on a risk contribution theory when the specific defective product cannot be identified. While Wisconsin remains “open to business,” only time will tell whether these changes provide a fair and reasonable framework for resolving products liability disputes.

    Endnotes

    1 Wis. Stat. § 895.047(1)(a) (2011). All subsequent references to Wisconsin Statutes also are to the 2011 version.

    2 Horst v. Deere & Co., 2009 WI 75, 319 Wis. 2d 147, 769 N.W.2d 536; Godoy v. E.I. du Pont de Nemours & Co., 2009 WI 78, 319 Wis. 2d 91, 768 N.W.2d 674.

    3 Vincer v. Esther Williams All-Aluminum Swimming Pool Co., 69 Wis. 2d 326, 330 n.2, 230 N.W.2d 794 (1975) (citing Restatement (Second) of Torts § 402(A) (1962)); see also Horst, 2009 WI 75, ¶¶ 63, 68, 319 Wis. 2d 147 (reaffirming the use of the consumer expectations test in Wisconsin).

    4 Vincer, 69 Wis. 2d 326; Dippel v. Sciano, 37 Wis. 2d 443, 460, 464, 155 N.W.2d 55 (1967).

    5 Restatement (Second) of Torts § 402(A) (1962).

    6 Horst, 2009 WI 75, ¶ 69, 319 Wis. 2d 147.

    7 Wis. Stat. § 895.047(1)(a). See Godoy, 2009 WI 78, ¶ 29, 319 Wis. 2d 91, for a summary of Wisconsin case law making the same distinction. Note that the standard for showing a manufacturing defect did not change in the new law, but the standard for design defects and failure to adequately warn changed significantly.

    8 Wis. Stat. § 895.047(1)(a).

    9 Id.

    10 Wis. Stat. § 895.047(1)(a)-(e).

    11 See supra note 4 and accompanying text.

    12 Horst, 2009 WI 75, ¶ 85, 319 Wis. 2d 147 (Crooks, J., concurring) (pointing out that 42 years of precedent had followed the consumer contemplation test, since Dippel v. Sciano, 37 Wis. 2d 443, 155 N.W.2d 55 (1967)); Godoy, 2009 WI 78, ¶ 59, 319 Wis. 2d 91 (Bradley, J., concurring).

    13 Wis. Stat. § 895.047(1)(a).

    14 Godoy, 2009 WI 78, ¶ 95, 319 Wis. 2d 91 (Prosser, J., concurring).

    15 Id. ¶ 99 (Prosser, J., concurring) (citing Restatement (Third) of Torts § 2(b) (1998)).

    16 Horst, 2009 WI 75, ¶ 94, 319 Wis. 2d 147 (Gableman, J., concurring).

    17 Wis. Stat. § 895.047(3).

    18 Wis. Stat. § 895.047(3)(a).

    19 Wis. Stat. § 895.047(3)(b).

    20 Wis. Stat. § 895.047(3)(d).

    21 Wis. Stat. § 895.047(3)(c).

    22 Wis. Stat. § 895.047(2)(a)1.

    23 Wis. Stat. § 895.047(3)(e).

    24 Wis. Stat. § 895.047(2)(a).

    25 Wis. Stat. § 895.047(4).

    26 Id.

    27 Id.

    28 Wis. Stat. § 895.047(5).

    29 Id.

    30 Id.

    31 Wis. Stat. § 895.045(3).

    32 Wis. Stat. § 895.045(3)(b).

    33 Wis. Stat. § 895.045(3)(d).

    34 Wis. Stat. § 895.045(3)(c).

    35 Wis. Stat. § 895.045(3)(b).

    36 Wis. Stat. § 895.045(3)(a).

    37 Erik J. Pless, Wisconsin’s Comparative Negligence Statute: Applying It to Products Liability Cases Brought Under a Strict Liability Theory, 71 Wis. Law. 8 (August 1998).

    38 Wis. Stat. § 895.045(1).

    39 Fuchsgruber v. Custom Accessories Inc., 2001 WI 81, 244 Wis. 2d 758, 628 N.W.2d 833.

    40 Id. ¶ 27.

    41 See Thomas v. Bickler, 2002 WI App 268, 258 Wis. 2d 304, 654 N.W.2d 248 (lake club and fireworks company, found 50 percent liable and 19 percent liable respectively for spectator’s injury during fireworks display, were not jointly and severally liable for damages under comparative negligence statute); but see Industrial Risk Ins. v. American Eng. Testing Inc., 2009 WI App 62, 318 Wis. 2d 148, 769 N.W.2d 82 (applying joint and several liability in strict liability suit by warehouse owner against manufacturer who was found 10 percent liable in causing property damage, despite comparative negligence statute’s requirement that defendant be at least 51 percent liable to become jointly and severally liable).

    42 Thomas v. Mallett, 2005 WI 129, 285 Wis. 2d 236, 701 N.W.2d 523.

    43 Id. ¶ 27.

    44 Id. ¶¶ 133-37.

    45 Wis. Stat. § 895.046(4).

    46 Wis. Stat. § 895.046(5).




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