Strict Product Liability in the Auto Industry

With the sales of goods to the public comes responsibility on the part of the manufacturer and advertisers. Government has some responsibility to protect the public. But, what responsibilities do companies have towards their consumers? Consumers rely on businesses to provide high quality protection with reliance on product safety, especially in the auto industry. The actions and practices of the automobile industry in the past have been unchecked for many years. For most part, companies like GM, Ford, Audi and Toyota were safe from issues of liability and product quality issues because of thousands of people these organizations employed. Product liability cases against car makers has increased as well as subsequent legislation that increased the rights of consumers and other people damaged by poorly designed products. Although, the first twenty years, of the car business had few recorded issues of suits being brought against manufacturers, as production increased, the government and the public began to hold auto market responsible for products that were sold. Does it seem to matter that laws are in place holding manufacturers liable? Basically, auto manufacturers are consumed with trying to make corporate profit rather than consumer safety. They base their decision on risk benefit and cost analysis and at times rather pay the cost of litigations than to recall and fix the problem. This paper will discuss and show examples of several strict product liability cases in relations to defective design and explain the legal concepts involved. This is to express a point that auto manufactures continue to generate defective cars and despite laws continue to jeopardize human lives, which is unethical.

In the case of Macpherson v. Buick Motor Company (Macpherson v. Buick Motor

Company. 217 N.Y. 382, 111 N.E. 1050 (N.Y. 1916)) the court further defined the terms “inherently or imminently” dangerous products. What the case established is the negligence as it pertains to automotive products. This case is important because it is the stepping stone towards the term of strict liability. In 1916, the case of Macpherson vs. Buick Motor Company (Macpherson v. Buick Motor Company. 217 N.Y. 382, 111 N.E. 1050 (N.Y. 1916)), this case expanded the liability of manufacturers for injuries caused by defective products. Buick was an auto manufacturer. In their assembly of vehicles, they purchase tires and wheels from a wholesaler. After the finished product has been completed, the cars are shipped to an auto dealership for sale. Macpherson, the plaintiff, purchased one of the defective Buick vehicle (although unknown at the time). The vehicle collapsed because a spoke was made of defective wood, which shattered. Macpherson was thrown from the car and was severely injured. In the investigation, the wheels were found defective. Due to the fact that Buick did not inspect and test the vehicle for safety prior , the defective design would have been discovered. Macpherson sued Buick for negligence in not inspecting the wheels on the.  Buick claimed there was no duty of care to anyone but the immediate purchaser, which is the retailer. Buick failed to inspect the car prior to resale therefore making the dealer negligent in not making sure the car was street-worthy.

Did Buick owe a duty to care to Macpherson? Or is their duty of care toward the retailer only? Although, Buick did not produce the wheels they are responsible for the full assembly of the vehicle as it is sold as a unit in whole. They should have foreseen danger if the construction is defective and therefore is a cause for negligence. But since the retailer does not utilize the vehicle, the duty is owed to Macpherson instead of the retailer as they are the foreseeable people to buy and use the vehicle for its intended purpose.

Prior to this case, consumers could recover damages only from the retailer of the defective products. The Macpherson case still left the injured consumer with the burden of proving the manufacture had been negligent. However, negligent is difficult to prove. Thus, this case lead to the doctrine of strict product liability to hold manufacturers responsible for injuries suffered as a result of defects in the product regardless of whether the manufacture was negligent.

The auto brand, Buick Motors, was not the only vehicle that was on the market with defects. Although manufactured by General Motors, they also had other vehicles that had poor designs, as well. I have also chosen a case relating to General Motors that shows evident of legal concepts of strict liability issues, such as assumption of risk and crashworthiness doctrine. One of them is Smith vs. General Motors. In this case of Smith v. General Motors Corporation, 42 C.A.3d 1, 116 Cal.Rptr. 575 (Cal.App. 1974), Web 1974 Cal. App. Lexis 1199 (Court of Appeal of California), Verne Prior, while driving on U.S 101 under the influence of alcohol and drugs at speeds of 65 to 85 miles per hour, crashed his automobile into the left rear of a Chevrolet station wagon stopped on the shoulder of a freeway because of a flat tire. Plaintiff, Christine Smith, was sitting in the passenger seat of the parked car when the accident occurred. In the crash, the Chevrolet Station wagon was knocked into a gully, where its fuel tank ruptured. The vehicle caught fire, and Smith suffered severe burn injuries. The Chevrolet station wagon was manufactured by General Motor Corporation. Evidence showed that the fuel tank was located in a vulnerable position in the back of the station wagon, outside the crossbars of the frame. Evidence further showed that if the fuel tank had been located underneath the body of the station wagon, between the crossbars of the frame, it would have been well protected in the collision. Smith sued General Motors for strict liability. The obvious question at stake is: Should General Motors be held strictly liable for the injuries caused to Smith and under what legal concept?

In the above case, General Motors Corporation manufactured a defective product, Chevrolet station wagon. In a strict liability, it is a “tort doctrine that makes manufacturers, distributors, wholesalers, retailers, and others in the chain of distribution of a defective product liable for the damages caused by the defect, irrespective of fault” (Cheeseman,2009, pg. 95). A product can be found defective in several ways such as: defect in manufacture, defect in design, failure to warn, defect in packaging, and failure to provide adequate instructions. In the above case, it is clearly a defect in the design of a product which will support an action for strict liability. According to the court cases (Smith v. General Motors Corporation, 42 C.A.3d 1, 116 Cal.Rptr. 575 (Cal.App. 1974), Web 1974 Cal. App. Lexis 1199 (Court of Appeal of California)),court held that there was a defect in the design of the Chevrolet station wagon in which Christine was seated. The defect in design consisted of placing the fuel tank in a vulnerable location in the back of the station wagon and outside of the crossbars of the frame of the vehicle. This location left the fuel tank exposed to the dangers of a collision from another vehicle. According to Cheeseman (2009, pg. 99), In evaluating the adequacy of a product’s design, the gravity of the danger posed by the design, the likelihood that injury will occur, the availability and cost of producing a safer alternative design, and social utility of the product. General Motors could have avoided liability if they took initiative to produce a safer alternative design merely by placing the fuel tank underneath the station wagon between the crossbars of the frame.

General Motors’ defense to the suit was that the defective design was not properly at issue in the case because a design is defective only if it results in a product that is unsafe for its intended use. Here, General Motors asserts, no evidence was produced to show the station wagon was unsafe for its intended use—operation on the highway. However, The court rejected this assertion, stating that this theory had been repudiated in Cronin v. J. B. E. Olson Corp., 8 C. 3d 121, 104 Cal. Rptr. 433 (Cal. 1972), where the Court stated:

“The argument that the van was built only for “normal” driving is unavailing. We agree that strict liability should not be imposed upon a manufacturer when injury results from a use of its product that is not reasonably foreseeable. Although a condition may not be the “normal” or intended use of a motor vehicle, vehicle manufacturers must take accidents into consideration as reasonably foreseeable occurrences involving their products. The design and manufacture of products should not be carried out in an industrial vacuum but with recognition of the realities of their everyday use.”

A motor vehicle manufacturer is required to foresee that, as an incident of normal operation in the environment in which his product will be used, accidents will occur, including high-speed collisions between vehicles. Because of this possibility, the manufacturer is required to design its vehicle to minimize unreasonable risks of injury and death. From this duty it follows that a motor vehicle manufacturer must take into account the possibility of a high-speed collision when it selects a location for the fuel tank in the vehicle. According to crashworthiness doctrine, it states that automobile manufacturers are under a duty to design automobiles so they take into account the possibility of harm from a person’s body striking something inside the automobile in the case of a car accident. In the case of Bass v. General Motors, the court states that the crashworthiness doctrine has “its roots in Larsen v. General Motors Corp., 391 F.2d 495 (8th Cir.1968). The manufacturer must evaluate the crashworthiness of its product and take such steps as may be reasonable and practicable to forestall particular crash injuries and mitigate the seriousness of other problems”.

In another case involving strict product liability, Horn vs. General Motors (Horn v. General Motors Corporation, 17 C.3d 359, 131 Cal.Rptr. 78 (Cal. 1976), Web 1976 Cal.), Horn was driving her Chevrolet station wagon, which was designed and manufactured by GM. Horn swerved to avoid a collision when a car coming toward her crossed the center line and was coming at her. In doing so, her hand knocked the horn cap off the steering wheel, which exposed the area underneath the horn cap, including three sharp prongs that had held the horn cap to the steering wheel. A few seconds later, when the car hit and embankment, Horn’s face was impaled on the three sharp prongs, causing her severe facial injuries. Horn sued GM for strict liability. GM’s defense was assumption of risk again Horn. The question at stake is does GM liable to Horn in a strict product liability case and does assumption of risk valid for GM’s defense? Assumption of risk is a dense to product liability. “For the defense of the assumption of risk to apply, the defendant must prove that (1) the plaintiff knew and appreciated the risk; (2) the plaintiff voluntarily assumed the risk, and (3) the plaintiff’s undertaking of the risk was unreasonable (Cheeseman, 2009). In this case, the attached horn cap to the steering wheel of the Chevrolet station was a design defect. Could there be safer alternative methods of attaching the horn cap? How can Horn assume the risk of being injured by three prongs underneath the horn cap? . The defense of assumption of the risk cannot be applied in this case because Horn was unaware of the three hidden prongs underneath the horn cap so therefore could not have knowingly or voluntarily have assumed the risk. The court held that General Motors was strictly liable to Horn for her injuries. Horn v. General Motors Corporation, 17 C.3d 359, 131 Cal.Rptr. 78 (Cal. 1976), Web 1976 Cal. Lexis 283 (Supreme Court of California).

Like GM, ford was built on vision and innovations. Ford was the first company to introduce mass produced cars. Because of the price and reliability, the popularity of these products grew fast, so fast, that the company faced numerous labor and product problems (Hayes, 2010). When Toyota came out with the Corolla with high efficient gas mileage, Ford was on the rocks and in order to meet competition, they designed the Ford Pinto. “During the first year, the car sold over 100,000 units which signed American’s desire to buy American made products” (Dowie, 1977). Because Ford rushed the car to the market, it built the vehicle very cheaply, and allocated very little time to test the product. Given the pressure to produce a fuel efficient car is quite understandable. However, what was to happen next was inexcusable. Ford Motors Inc. has a mission statement “We are a global, diverse family with a proud heritage, passionately committed to providing outstanding products and services that improve people’s lives” (“Sample mission statements,” ). Did they comply with their mission statement? To compound the problem, both Lee Iacocca and other senior Ford employees denied that the car was dangerous; the company’s attitude toward the dilemma and the mounting number of death and other injuries associated with the car angered both the public and federal authorities into taking action.

The major known case was dated in 1972 with Grimshaw vs. Ford Motors (Grimshaw v.

Ford Motor Co., 1 19 Cal.App.3d 757, 174 Cal. Rptr. 348 (1981). Sandra Gillespie pulled her

new Pinto onto a Minneapolis highway’s merge lane. The car stalled. She was rear-ended at

28mph. The gas tank ruptured; fumes filled the car; a spark ignited; the car exploded in a ball of

fire. She died in agony a few hours later at a hospital emergency room. Her 13 year old

passenger (Richard Grimshaw) underwent many surgeries to repair his face, burnt beyond

recognition. According to Palmiter (1999) Ford was adjudged liable for compensatory and

punitive damages arising out of injuries and fatalities. The primary legal issues in the case, once

the placement of the Pinto’s fuel tanks above the rear axles were proven to have been a causal

link in the fires, were: (1) Ford’s degree of responsibility under a strict liability theory for product

defects which created safety hazards but which may not have violated then existing federal safety

standards; and (2) whether and to what extent Ford’s knowledge of the safety hazards involved

was sufficient to warrant the imposition of punitive damages. In addition, “Ford was indicted in

September 1978 and tried in an Indiana state court on three felony counts of reckless homicide in

connection with the three other Pinto related fatalities but was acquitted on March 13, 1980 by a

jury. That case raised a number of novel issues concerning the liability of Ford as a corporation

for the criminal consequences” (Palmiter, 1999).

Further into the case, it discussed an item referred to as a “risk-benefit analysis” which simply stated means the cost of compensation to the victims versus was the damage above or below the profit margin that the vehicle was generating. Palmiter (1999) states that the analysis revealed that if a predetermined number of consumers were to sue the automaker, the cost per unit sold would equal about $200,000 per vehicle in complaint compensation!

In addition to the analysis report entered into evidence, the plaintiff’s attorney charged vehicles design was flawed; the ideal of “ordinary care” was introduced which the law identifies as the care an ordinary man would exercise under his duty. The standard of balancing approach was also cited in this case which examines defamation and the level of ownership on both parties when a tort is established. In addition, ethical considerations such as the Ford’s obligation to have corrected serious issues with their product once those problems had been identified. The court also cited that Ford gave little or no thought to the health and safety of both their customers and their people on America’s roads. However, the true catalyst for the verdict levied against Ford Motor Company was its inhumane cost analysis that expressed human life in terms of dollars as well as the fact that Ford acted frequently in its negligent acts.

In early 2009 Toyota vehicles begin to experience what was labeled as ‘sudden acceleration’ problems with their automobiles. Toyota would attempt to blame the driver and not their automobiles. Within six months of their first reported claims (White and Secrecy, 2010) a number of accidents had been reported by Toyota owners. The main complaint of sudden acceleration was that the floor mats and gas pedal. According to Autosafety.org, Toyota and NHTSA identified the electronic throttle as the most like source of the sudden acieration defect. However, Toyota continued, and still continues today, to dismiss concerns about its throttle control and has looked at the floor mat issue only, as it was cheap fix (Emison, 2009). To follow was the largest recall in automotive history (White and Secrecy, 2010) . Because the issue of product liability is so new, there have not been any of the reported 327 cases finalized in California where Toyota is headquarter, the state is negotiating with various parties to consolidate their case into one large class action lawsuit. Toyota should be liable for the death and injuries of defective vehicles. Clearly it was a manufacturing defect and design defect. The design of the floor should have been re-evaluated to make sure it met the standards. In the design defect it is a foreseeable risk that could have been avoided. A floor mat that is attached from the mounting device can detach. It is not permanently locked in to the mount but yet the mat is slide into a hook. There is no assurance that it would not unhook and slide forward to the gas pedal. In addition, there could have been an alternative design to prevent the floor mats from jamming under or on top of the gas pedal. The cost of fixing this minor defect would be inexpensive. Furthermore, Toyota did not have any warning defect label on the floor mat. What happens if an aftermarket floor mats are used in the vehicle instead of the original one? The substitute floor mat could be thicker or wider causing a potential jam to the gas pedal. With failure to warn, Toyota would still be liable because they did not provide a disclaimer that only Toyota floor mats made for that specific vehicle was necessary. The floor mat is only one of many of Toyota’s defective design problems, as there are many more involved. Ranking one of the top car manufacturers, Toyota is under scrutiny as they claim the floor mats are the cause of the acceleration problem. Is this simple response meant to assure consumers that their vehicles are safe with this simple and easy fix? What is the NHTSA doing to protect us? As a Toyota owner myself, I am worried about driving the vehicle as my car is on the list of for acceleration problems. Driving alongside of other Toyota owners can be just as dangerous, too. The family that was burned to death in a rental Lexus vehicle while on vacation had 911 on the phone trying to stop the vehicle. Being helpless as they Plymouth themselves in the horrific death. Therefore, auto manufactures should be held 100% accountable for safety defects. Toyota has promised to recall all the floor mats as a cheap fix, but there are other issues that are still causing the accerlation problems. Thus, how many more human lives have to be lost before the class action suit will win? This is another example of corporations whose motive is making profits. The cost of human lives is unimportant compared to the cost of just paying the litigations and class action suits. It ends up being the cheaper route. Ethical?

In conclusion, the responsibility of businesses is to protect the consumers. This requires the auto industry to do more than just obeying the law. It requires them to give safety the priority warranted by the product; abandon the misconception that accidents results solely from consumer misuse; monitor closely the manufacturing process itself; review the safety implications; provide full detail about product performance and promptly investigate consumer complaints. This report has focused on the level of liability and responsibility held by the companies that produce automobiles. The quality of the market appears to be predicated on both quality and greed. The largest issue that surrounds automotive product issues is that the result of poor quality, an attempt to lower cost, or greed can and has resulted in thousands of deaths over the years. Although state and federal regulators have implemented regulations to combat such issues, the mere size and resources of these companies make it very difficult for the common man to fight and win in court.