Friday, June 19, 2009

Geistfeld on Products Liability and Consumer Choice

Giestfeld Mark Geistfeld (NYU) has posted an article entitled "The Value of Consumer Choice in Products Liability" on SSRN.  I always learn from his work.  Here is the abstract:

Tort law has always recognized the principle expressed by the Latin maxim volenti non fit injuria, or "a person is not wronged by that to which he or she consents." The absence of consent is part of the prima facie case for tort liability, distinguishing tortious behavior from socially acceptable behavior. Nevertheless, the value of consumer choice in strict products liability is surprisingly unclear. Consider the liability rules governing defects of product design or warning, the most important categories of product defect. According to the Restatement (Third) of Torts: Products Liability, "[t]he emphasis is on creating incentives for manufacturers to achieve optimal levels of safety in designing and marketing products." The optimal level of safety has no apparent connection to the amount of safety that would be chosen by consumers, because "consumer expectations do not play a determinative role in determining defectiveness." Whether a product is defective in these cases instead depends on "[a] broad range of factors," including "the nature and strength of consumer expectations regarding the product." In some cases, consumer expectations can be "ultimately determinative" of the liability question, but it is not apparent why the liability rules exclusively rely on consumer choice in only these cases but not others. Consumer choice could also limit liability under the assumed-risk rule, and yet assumption of risk is not an independent defense in products liability, deepening the impression that this body of tort law undervalues individual choice.

The impression is misleading. Strict products liability appropriately values consumer choice. The value of consumer choice, however, is obscured by the way in which the Restatement (Third) has de-emphasized the importance of consumer expectations. Properly understood, the value of consumer choice not only justifies the liability rules in the Restatement (Third), it also provides the key to understanding the important limitations of strict products liability, including those based on assumed risks.


ADL

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