Addressing a full house in Vanderbilt Hall’s Greenberg Lounge on January 14, Mark Geistfeld spoke on “The Field of Torts in Law’s Empire.” Geistfeld, the first Sheila Lubetsky Birnbaum Professor of Civil Litigation, focused on what he called the “vexing problem” of defective design, noting that Birnbaum '65 has encountered the issue repeatedly as a longtime defender of manufacturers facing allegations of products liability. Birnbaum is co-head of the Complex Mass Tort and Insurance Group at Skadden, Arps.

Lawyers defending product manufacturers in personal injury cases face a huge challenge, Geistfeld said, because there is often a “mismatch” between a jury’s sense of justice and the standards of liability applicable under tort law. Many states have jurors apply a risk-utility test, which involves a cost-benefit analysis, and the most recent Restatement on products liability law expressly sanctions this approach. But members of the public are generally appalled at the idea of companies making a considered tradeoff between costs and safety, reasoning that corporate profits are much less important than human lives. In cases that reduce to this issue, the company is likely to lose. A second group of states use the “consumer expectations” test, which turns on whether an ordinary consumer would regard a product as unreasonably dangerous. But this, too, is problematic, Geistfeld noted. Citing a law review article by Ms. Birnbaum, he said that, when a defect is latent and the product design complicated – as is now common – it’s hard for consumers to know what to expect about how safe a product could or should have been. Due to the vagueness or absence of consumer expectations, some other evaluative standard is required, leading to the emergence of the risk-utility test and the subsequent difficulties of applying it in the courtroom.

A solution, Geistfeld suggested Solomonically, might lie in a combination of the two approaches. The fact that the ordinary consumer does not adequately understand the safety issue in question merely justifies subjecting the manufacturer to the tort duty in the first instance. Whether the product is defective is a separate question that must be answered by reference to something other than the frustration of actual consumer expectations. Consequently, Geistfeld proposes that jurors should evaluate the issue of defect by considering what a well-informed or reasonable consumer would regard as the desirable level of safety. A well-informed consumer understands that he incurs the cost of safety improvements, via increased prices, decreased functionality, and the like, or the associated injury costs in the event of an accident. To minimize costs, the reasonable consumer would select those safety designs that pass a cost-benefit test--the same outcome achieved by the risk-utility test. But because the risk-utility test is now framed in terms of consumer interests rather than corporate profits, Geistfeld concludes that jurors will find the approach to be just.

Posted January 19, 2010

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