Product Liability Law: Defects, Strict Liability & Key Cases

Ford's $125 Million Lesson

In 1978, a California jury awarded $128 million in damages — later reduced to $6.6 million — against Ford Motor Company in Grimshaw v. Ford Motor Co., after a rear-end collision caused a Ford Pinto's fuel tank to rupture and burst into flames, killing the driver and severely burning a 13-year-old passenger. Internal Ford documents showed that engineers had identified the fuel tank's vulnerability and that company analysts had calculated it was cheaper to pay expected injury settlements ($49.5 million) than to redesign the tank ($137 million). The jury punished that calculus with the largest punitive damages award in California history at the time.

That case crystallized product liability law's central purpose: manufacturers cannot treat human safety as a mere line item in a cost-benefit analysis. Three decades before Grimshaw, the California Supreme Court's 1963 decision in Greenman v. Yuba Power Products had already established the foundational strict liability doctrine for defective products — and changed American commerce permanently.

Three Types of Product Defects

Product liability claims fall into three categories, each requiring different proof and implicating different actors in the supply chain.

Manufacturing defects are the "bad apple" scenario: a correctly designed product was produced incorrectly. A pharmaceutical tablet with 10 times the labeled active ingredient is a manufacturing defect; the design called for the correct dose, but the production process failed. These cases are often the clearest: compare the defective unit to the intended specification.

Design Defect: Two Tests

Design defect is the most contested category because it challenges the entire product, not just one unit. Courts apply one of two primary tests:

• Consumer Expectation Test: Would the product's danger exceed what an ordinary consumer would anticipate? Older and simpler — still used in some states. Criticized for being unhelpful when products are too complex for lay consumers to have meaningful expectations.
• Risk-Utility Test: The product's risks outweigh its benefits under the Restatement (Third) of Torts. Plaintiff must typically show a reasonable alternative design (RAD) that would have reduced the risk without impairing utility or making the product prohibitively expensive.

California uses both tests depending on the case type. The Barker v. Lull Engineering Co. (1978) California Supreme Court decision established that plaintiffs can rely on either test — whichever is more favorable — shifting the burden to the defendant to prove the design's utility outweighed its risks once the consumer expectation test is satisfied.

Strict Liability: No Negligence Required

The revolutionary aspect of modern product liability law — established in Greenman and codified in the Restatement (Second) of Torts §402A — is that plaintiffs do not need to prove the manufacturer was negligent. Strict liability applies when:

• The product was defective when it left the manufacturer's control.
• The defect caused the plaintiff's injury.
• The plaintiff was using the product in a reasonably foreseeable manner.

A manufacturer who exercised every reasonable precaution but still produced a defective unit is strictly liable. This allocation of risk to producers — rather than injured consumers — reflects the policy judgment that manufacturers are better positioned to insure against risk and to build safety into their products from the outset.

The supply chain implications are significant. Any commercial seller in the chain — manufacturer, wholesaler, distributor, retailer — may face strict liability. A hardware store that sells a defective ladder it did not manufacture can be sued alongside the manufacturer. The store then has a right of indemnification against the manufacturer, but the plaintiff can target the most financially solvent defendant.

Failure to Warn and the Learned Intermediary Doctrine

Failure-to-warn claims are particularly common in pharmaceutical litigation. Drug manufacturers must warn of all known material risks associated with their products. The learned intermediary doctrine provides that a prescription drug manufacturer satisfies its warning duty by adequately informing the prescribing physician — not the patient directly — because the physician acts as a "learned intermediary" between manufacturer and patient.

The doctrine has exceptions. When manufacturers market directly to consumers (direct-to-consumer advertising), several courts have held that the learned intermediary doctrine no longer shields the manufacturer. New Jersey, California, and Michigan have recognized this exception in DTC advertising contexts.

Comment k Exception for Unavoidably Unsafe Products

Restatement (Second) §402A comment k carves out an exception to strict liability for products that are "unavoidably unsafe" — products that are incapable of being made safe for their intended use given existing technology, but that nonetheless provide substantial social utility. The paradigm example is a vaccine: all vaccines carry some risk of adverse reactions, but society benefits enormously from widespread vaccination.

Courts have applied comment k to:

• Prescription drugs and medical devices (most jurisdictions)
• Blood products contaminated before HIV was identified
• Some surgical implements and implants

The scope of comment k is contested. Some states (California pre-1988 case law) applied it categorically to all prescription drugs, shielding manufacturers from design defect claims. California's Brown v. Superior Court (1988) established that comment k applies to all prescription drugs but requires case-by-case analysis of unavoidable danger. Most courts applying the Restatement (Third) approach have moved away from comment k and toward a risk-utility analysis for medical products.

This article is for informational purposes only and does not constitute legal advice.