Joint Subcommittee Studying Products Liability Law

September 3, 1997, Richmond

At the subcommittee's first meeting, members heard testimony regarding the current status of Virginia's products liability law, a comparative analysis of other states' laws, and a summary of recent trends in this area. Members focused much of their discussion and debate on the American Law Institute's recent adoption of Section 402A of the Third Restatement of Torts concerning products liability law.

Overview of Products Liability Law

A University of Richmond law professor provided members of the joint subcommittee with an overview of products liability law. In most jurisdictions throughout the United States, a consumer who is injured by a defective product has a wide array of legal remedies from which to choose. The principal theories a consumer may rely on are negligence, breach of warranty actions under the Uniform Commercial Code, and strict liability.

Although Virginia law provides for product liability suits in negligence and breach of warranty, Virginia is one of five states that have not adopted some form of strict liability in tort remedy in products liability actions. Of the 45 states with a strict liability remedy, most have adopted some form of Section 402A (Second Restatement of Torts) on products liability, which was drafted in 1963 by the American Law Institute. Section 402A(2nd) imposes strict liability on manufacturers for product defects resulting from the manufacturing process regardless of the level of care used by the manufacturer. The professor noted that Section 402A(2nd) has been praised for advancing a number of important policies. Namely, strict liability promotes compensation and loss spreading. Serious losses among a small number of consumers injured by defective products can best be borne by all consumers who pay for these losses through increased prices or by manufacturers who obtain insurance. In addition, strict liability provides manufacturers with an incentive to develop and produce safe products.

Despite Section 402A(2nd)'s advancement of important public policies, many commentators have criticized the section's effectiveness because it focuses primarily on manufacturing defects and generally does not focus on two other crucial areas of products liability law: defective design and defective warnings. Others have criticized the section as being excessively pro-consumer, to the detriment of the manufacturing industry.

Recent Developments in Products Liability Law

In response to criticism and difficulties associated with the original version of Section 402A(2nd), members of the American Law Institute have recently drafted Section 402A of the Third Restatement of Torts on products liability. The professor testified that the new version of Section 402A provides a reasonable and unified approach to products liability law by (i) addressing causes of action for defective manufacture, defective design, and defective warnings, and (ii) providing an objective framework of law that more fairly balances the interests of consumers and manufacturers.

The professor urged the joint subcommittee to recommend the adoption of Section 402A(3rd) for several reasons. First, due to the limited number of civil cases they adjudicate, the Virginia Supreme Court has not been able to keep pace with the rapidly evolving legal trends affecting Virginia consumers, manufacturers, and sellers. The adoption of 402A(3rd) would provide a uniform and predictable framework of law, thereby preventing conflicting interpretations by federal and state courts. Second, the Virginia consumer presently does not have the same legal rights afforded to citizens of other states, and consumers pursuing a negligence action often face insurmountable problems of proof in their cases, problems that could be avoided under the new restatement version. The professor also asserted that the adoption of Section 402A(3rd) will not hamper Virginia's competitiveness in the global marketplace nor unfairly target manufacturers for excessive personal injury awards.

Business Perspective

Two members of the Virginia Manufacturer's Association Business Law Committee addressed the subcommittee on their perspective on the current status of products liability law in Virginia. VMA's first speaker, a partner at the law firm of Mays & Valentine and author of a book on Virginia products liability law, urged the subcommittee not to recommend the adoption of Section 402A(3rd). He contended that manufacturers throughout the country view Virginia's products liability law as fair and reasonable to both consumers and manufacturers and that subcommittee members should proceed cautiously in considering changes to a system of law that is in good working order. In addition, he noted that no consumer groups are urging revision of Virginia products liability law, and no studies indicate that plaintiffs in Virginia receive fewer product liability judgments or lower monetary awards. As a final note, the speaker recommended that the subcommittee consider the effects of federal legislation in this area and observe the experience of other states who may adopt Section 402A(3rd) before it reaches any final conclusions on this matter.

VMA's second speaker, the assistant general counsel for Reynolds Metals Company, likewise urged the subcommittee not to adopt the latest restatement section on products liability. He asserted that while Virginia's current system of products liability law is fair, the absence of procedural protections against frivolous lawsuits and the inability to seek summary judgment under some circumstances has tilted the balance in favor of the consumer in such actions. In addition, the speaker submitted that the adoption of the original restatement version on products liability in Texas and Alabama has resulted in serious abuses and inequitable awards and that the adoption of Section 402A(3rd) in Virginia would have similar consequences.

Future Activities

After hearing the presentations at the subcommittee's initial meeting, and following discussions with interested parties and subcommittee members, Chairman Bennett has decided that there is insufficient reason for further action by the panel at this time. Accordingly, all future subcommittee meetings have been canceled.