How Product Liability Law Holds Manufacturers Accountable for Defects

A Single Defective Product Can Generate Billions in Verdicts Across Thousands of Cases

Johnson & Johnson's talcum powder litigation resulted in a $2.1 billion Supreme Court-affirmed verdict in 2021 in favor of women who developed ovarian cancer. Takata's defective airbag inflators—linked to at least 19 deaths in the United States—triggered the largest automotive recall in U.S. history, involving over 70 million vehicles. GM's defective ignition switches, connected to at least 124 deaths, generated over $900 million in settlements and a $900 million criminal penalty. Product liability law is the legal mechanism that creates accountability for these failures—transforming corporate cost-benefit calculations by making defective products financially catastrophic rather than merely embarrassing.

Product liability law in the United States is primarily state common law, though federal regulatory standards—enforced by agencies like the Consumer Product Safety Commission (CPSC) and the National Highway Traffic Safety Administration (NHTSA)—set baseline safety requirements that interact with private litigation.

Three Theories of Product Liability

Every product liability claim must fit one of three theories. Each requires proof of different elements and rests on different doctrinal foundations.

Manufacturing defect claims are the most straightforward: the product was supposed to be built one way but was built another. Design defect claims are more contested because they challenge the entire product line rather than a single unit. Failure to warn claims—also called marketing defects—focus on whether the product came with adequate instructions and risk disclosures.

Strict Liability vs. Negligence

The landmark case Greenman v. Yuba Power Products, Inc., 59 Cal. 2d 57 (1963), written by Justice Roger Traynor, established strict products liability in California—holding manufacturers liable for defective products without requiring proof of negligence. This doctrine spread rapidly. The Restatement (Second) of Torts § 402A formalized strict liability in 1965, and most states adopted it.

• Under strict liability, the plaintiff need not prove the manufacturer was careless—only that the product was defective and the defect caused the injury.
• The Restatement (Third) of Torts: Products Liability (1998) modified this framework, applying strict liability only to manufacturing defects and requiring a risk-utility test for design defects and warnings.
• Negligence theories remain available and are sometimes preferred because they allow recovery for economic loss in jurisdictions that bar such recovery under strict liability.
• Breach of warranty claims under the Uniform Commercial Code (UCC) Article 2 provide an alternative theory, particularly for commercial buyers.

Design Defect: The Consumer Expectations and Risk-Utility Tests

Courts apply two primary tests for design defect, and jurisdictions differ on which applies:

• Consumer expectations test: A product is defective in design if it fails to perform as safely as an ordinary consumer would expect when used as intended or in a reasonably foreseeable manner. Favored in California and several other states.
• Risk-utility test: A product is defective if the risks of the design outweigh its benefits when evaluated by factors including probability of harm, severity of harm, availability of reasonable alternatives, and the manufacturer's ability to eliminate the risk. Favored in most jurisdictions and endorsed by the Third Restatement.

The Supply Chain: Who Can Be Sued

Product liability extends through the entire distribution chain.

Approximately 30 states have enacted "innocent seller" statutes that protect non-manufacturing retailers from strict liability when the manufacturer is solvent and identifiable. Plaintiffs in those states must name the manufacturer or prove the retailer was independently negligent.

Federal preemption is a growing battleground. Manufacturers increasingly argue that compliance with federal regulatory standards—FDA approval, NHTSA standards—preempts state tort claims. The Supreme Court's divided decisions in this area, including Wyeth v. Levine, 555 U.S. 555 (2009) and Mutual Pharmaceutical Co. v. Bartlett, 570 U.S. 472 (2013), have produced inconsistent results that depend heavily on the specific regulatory context.

This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for legal guidance.