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S.
S.
Wu()USAssw@svlg.
com26ProductLiabilityIssuesintheU.
S.
andAssociatedRiskManagement4UFQIFO48VContent26.
1Introduction57626.
2Whydoproductliabilitysuitsoccur57726.
3Morerecenthigh-profileproductliabilitylitigation57926.
3.
1"Suddenacceleration"litigation58026.
3.
2GeneralMotorsignitionswitchissuesandrecall58126.
4Claimsanddefensesinproductliabilitycases58226.
4.
1Strictproductliabilityclaims58226.
4.
2Negligenceclaims58326.
4.
3Breachofwarrantyclaims58426.
4.
4Claimsunderconsumerprotectionlaws58526.
4.
5Typesofdefectsatissueinautonomousvehiclelitigation58526.
4.
6Defensesinproductliabilitycases58726.
5Managingtheriskofautonomousvehicleproductliability58826.
6Conclusions590References590M.
Maureretal.
(Hrsg.
),AutonomesFahren,DOI10.
1007/978-3-662-45854-9_26,TheEditorsandtheAuthors2015.
ProductLiabilityIssuesintheU.
S.
andAssociatedRiskManagement57626.
1IntroductionAutonomousvehicles(AVs)holdthepromiseofsavingtensofthousandsofliveseachyearintheU.
S.
,andmanymoreworldwide,reducingtraffic,savingenergy,andprovidingmobilitytothosewhocannotdriveconventionalcars.
Nonetheless,AVswillinevitablyhavesomeaccidents.
Onbalance,AVsarelikelytopreventmanymoreaccidentsthantheycause,buttherewillbeatleastsomeaccidentsinvolvingAVsthatwouldnothaveoccurredwithconventionalvehicles.
BecauseofaccidentsinvolvingAVs,someofwhichmaybecatastrophic,productliabil-itylitigation1isinevitable,especiallyincaseswhereconventionalvehicleswouldnothavecrashed.
ThethreatofmassiveproductliabilitylitigationinvolvingAVsiswidelyperceivedasoneofthechiefobstaclestoAVdevelopmentandsales,ifnotthenumberonethreat[3].
2Somebelievethatproductliabilitysuitsmaybeanexistentialthreattoautonomousdriving[33].
3Cripplingsuitscouldforcemanufacturerstoexitthemarketandmaydetersomemanufacturersfromenteringthemarketbecauseofabeliefthatthesalesarenotworththerisk.
Ifthesedirepredictionscometopass,theU.
S.
andotherpartsoftheworldexperienc-ingafloodoflawsuitsmaylosetheuseofatechnologythatwouldsavemanytimesmorelivesthanitwouldendanger.
If,however,theindustryfindseffectivewaystomanagetheriskofproductliability,itcanbringtomarketalifesavingtechnologywhilemaintainingpracticestominimizeaccidentsandresultingliability,aswellastheprofitabilityneededtoofferAVsinthemarketovertime.
ThepurposeofthischapteristoidentifyproductliabilityrisksintheU.
S.
tomanu-facturersofAVs,thesourceofthoserisks,andhowmanufacturerscanmanagethoserisks.
AfocusonU.
S.
productliabilityisimportantfromaworldwidemanufacturer'sperspectivegiventhesizeoftheU.
S.
marketandtheperceptionthattheU.
S.
isalitigiouscountry.
ProductliabilityisperceivedasagreaterthreatintheU.
S.
thaninanyothercountryoftheworld.
Section26.
2discussesthecircumstancesgivingrisetoU.
S.
productliabilitylitigationandthephenomenonofsomeU.
S.
casesresultinginhugeawardstoplaintiffsseekingcompensation.
Itexplainswhythesehugeawardsoccur.
Section26.
3analyzesthehumanandfinancialimpactsofmorerecenthighprofileproductliabilitycases.
Section26.
4discussesU.
S.
productliabilitylaw,focusingonthetypesofclaimsanddefensesarisinginproductliabilitycases.
Section26.
5coversdesignpracticesandproceduresthatmanufacturerscanusetoreducetheriskofproductliability,theuseof1Thischapterfocusesmainlyonproductliabilitylitigation,althoughtherearealsorequirementstocompelvehiclemanufacturerstorecalltheirvehiclestofixdefects.
Themanagementofliabilityandrecallrisksoverlapandtheriskmanagementprinciplesdiscussedinthischapterapplytoboth.
2"Someofthelargestobstaclestoautonomousconsumervehiclesarethelegalities[3].
"ReportsfromLloyd'sofLondonandtheUniversityofTexaslistedproductliabilityasamongthetopobstaclesforAVs[21][30].
3"[T]heworstoutcomewouldbethatsaidliabilityisn'tsortedoutsothatweneverdogetthemassmanufacturingandadoptionofdriverlesscars.
"[33]57726.
2Whydoproductliabilitysuitsoccurinsuranceasameansofshiftingandmanagingproductliabilityrisk,andotherriskmanagementtechniques.
26.
2WhydoproductliabilitysuitsoccurFirstandforemost,manufacturersfaceproductliabilitysuits,becausetheirproductsareinvolvedinaccidents.
FromtheearlydaysinthedevelopmentofAnglo-Americantort4law,theroadaccidentplayedaprominentrole.
AkeyBritishcaseinthedevelopmentofU.
S.
tortlaw,Winterbottomv.
Wright,5involvedamailcoachdriverwhowasthrownfromhishorse-drawnmailcarriageafteritbrokedown,allegedlyduetothedefendantcontractor'sfailuretomaintainthecarriageinasafecondition[32].
6Startinginthe20thcentury,thecaraccidentcausedsignificantchangesinU.
S.
productliabilitylaw.
"Productsliability,likeAmerica,grewupwiththeautomobile.
Priortotheentryofmotorcarsontothenation'shighways,'theresimplywerenotlargenumbersofproduct-relatedlawsuits.
'OnceAmericaembracedtheautomobile,itinevitablyembracedautomotiveproductssuitsaswell.
"[13]TwoofthemostsignificantproductsliabilitycasesinAmericanhistoryarosefromautoaccidents.
InMacPhersonv.
BuickMotorCo.
,thefamousAmericanjuristBenjaminCardozowritingfortheNewYorkCourtofAppealsupheldaverdictforacarownerejectedfromhisBuickcarafteradefectivewoodenwheelonthecarcollapsed[22].
7InHenningsenv.
BloomfieldMotors,Inc.
[17],8theNewJerseySupremeCourtaffirmedajuryverdictagainstChryslerandadealerafterthewifeofthepurchaserhadanaccident.
Shetestifiedthatshefeltsomethingcrackinthecar,thesteeringwheelspunsharply,thecarveeredofftheroad,andthecarstruckahighwaysignandbrickwall.
Thethreadbaredescriptionsofthecaraccidentsintheseappellatecourts'decisions,however,donotreflecttherealityofthetrialsettinginwhichlawyersfortheinjuredplain-tiffswilldescribewhatmightbeacatastrophiccaraccidentinunvarnishedandsometimeshorrificterms.
ConsideradescriptionofthefamousFordPintoaccidentwritteninMother4"Tort"means"wrong,"and"tortlaw"providesamechanismforaplaintifftoseekredressinacivil(i.
e.
,non-criminal)case.
5Itwascommoninthe19thcenturyforAmericancourtstocitecontemporaryBritishcasesasprecedents.
6InWinterbottom,thecourtdeniedrelieftotheinjuredcoachmanbecauseofalackofdirectcontractualrelationship,called"privity,"betweentheplaintiffcoachmanandthedefendantcontractor.
Thecoachmanwasnotapartythecontractinwhichthedefendantcontractorprom-isedtomaintainthecoachingoodworkingorder[32].
7Theplaintiffhadboughtthecarfromaretailer,butcouldstillsuethemanufacturerdespitethelackofprivitywiththemanufacturer[22].
Thecarwasapparentlygoing8milesperhouratthetimeoftheaccident[13].
8Thecourtrejectedprivity,awarrantydisclaimer,andlimitsofliabilityasdefensestothewarrantyclaimofthewifedriverofthecarandherhusband,theowner[17].
ProductLiabilityIssuesintheU.
S.
andAssociatedRiskManagement578Jonesmagazine.
Althoughthedescriptionbelowcomesfromawriter,9itissimilarintoneandimpacttowhataplaintiff'slawyermightsayabouthisorherclientinanopeningstatement.
Hereishowthewriterdescribestheaccident:[A]woman,whomforlegalreasonswewillcallSandraGillespie,pulledontoaMinneapolishighwayinhernewFordPinto.
Ridingwithherwasayoungboy,whomwe'llcallRobbieCarlton.
Assheenteredamergelane,SandraGillespie'scarstalled.
Anothercarrear-endedhersatanimpactspeedof28milesperhour.
ThePinto'sgastankruptured.
Vaporsfromitmixedquicklywiththeairinthepassengercompartment.
Asparkignitedthemixtureandthecarexplodedinaballoffire.
Sandradiedinagonyafewhourslaterinanemergencyhospital.
Herpassenger,13-year-oldRobbieCarlton,isstillalive;hehasjustcomehomefromanotherfutileoperationaimedatgraftinganewearandnosefromskinonthefewunscarredportionsofhisbadlyburnedbody.
[11]Inthecourtroom,theyoungboy,sobadlydisfiguredbytheaccident,wouldlikelybesittingnexttohisattorneyduringtheentiretrial.
Thejurywouldbeseatedfacinghim,andwatchinghim.
Theunspokentestimonyofhiscatastrophicinjurieswouldlikelyhaveatleastanunconsciouseffectonthejurorswatchinghim.
Despiteinstructionsfromthejudgenottopermitsympathy,bias,orprejudicetoswaytheirverdict,acarmanufacturerdefend-ingthiscasewouldhaveandifficulttimeattrial.
IntheFordPintocase,the13-year-oldboy,whoserealnamewasRichardGrimshaw,receivedajuryawardintheamountofover$2.
5millionincompensatorydamagesandanawardofpunitivedamagestopunishanddeterFordintheamountof$125million[15].
PartofthemotivationforthelargeverdictwasevidenceduringthetrialofFord'sapparentlycold-hearteddecisionnottousefairlyinexpensivepartsinitscarsthatwouldhavepreventedtheaccident.
Althoughthepunitivedamagesawardwaslaterreducedinthiscaseto$3.
5million[15],theFordPintocaseshowsthekindofawardthatispossibleinanautomobileproductliabilitycasefollowingacatastrophicaccident.
AtsomefuturetimewhenanAVmanufacturerfacesaproductliabilitytrial,wecanexpecttoseeaccidentvictimsseatedinacourtroomwithsimilargruesomedisfigurementsandstoriesofout-of-controlcarsandtragic,frightfulaccidents.
Thedefendantmanufacturer'sengineeringandbusinesspracticeswillcomeunderscrutiny.
Andajurywilllikelydecidewhetherornotthemanufacturershouldbeheldresponsiblefortheaccidents.
DuringanAV'sdesignphase,itsmanufacturer'sdesignteamwillhaveanopportunitytodiscussandmakeengineeringandbusinessdecisionsaboutthedesignofitsAVs.
Teammemberswilltalkaboutsafetyeffortsthemanufactureriswillingtoundertake.
Inthesediscussions,teammemberscanthinkmoreclearlyandassessriskmoreeffectivelybyimaginingthemselvesinacourtroomsetting,defendingtheirpracticesinlitigationarisingfromacatastrophicaccident.
9Thewriterisusingpseudonymsforthenamesofthecrashvictims,evidentlybeforethenamesofthevictimsbecamepublic.
57926.
3Morerecenthigh-profileproductliabilitylitigationWhyarejurorswillingtorendertheselargeverdictsagainstmanufacturersTheshortanswerisjuroranger.
"Angryjurorsmeanhighdamages.
"[24]Morespecifically,juriesrenderlargeverdictswhentheybecomeangryatdefendants'conduct.
Whenjuriesbecomeangry,theonlywaythattheyseetheycanredressthedefendants'wrongsistorenderverylargeverdictsagainsttheminanefforttosendamessagethattheirconductisunac-ceptable.
IntheFordPintocase,thejuryheardevidencethatFordhadknownabouttheproblemswithitsfuelsystem.
Fordhadfoundtheproblemofrear-endcrashessplittingopenthePinto'sgastank.
Inaddition,Fordknewthatapartcosting$11couldhavepreventedtheaccident.
Nonetheless,Fordmadeacost/benefitanalysiscomparingtheoverallcostofaddingthesafetyparttothevehicleagainstthevalueoftheliveslostfromaccidentsin-volvingthevulnerability.
Fordassignedavaluetoeachhumanlifelikelylost.
AndForddecidedthattheoverallcostofthepartexceededtheoverallvalueofthehumanlivesthatwouldbesavedanddeterminedthatitthereforeshouldnotaddtheparttothePinto'sdesign.
Ford'scost/benefitcalculationseemedodioustothejurybecauseitplacedadollarvalueonhumanlife.
Inaddition,thejuryknewthattheextrapartwouldonlycost$11.
BynotaddingtheparttothePinto'sdesign,thejuryevidentlyconcludedthatFordplaceditsprofitsaheadofhumanlife.
Ford'sapparentcallousnessledtothejuryanger[15].
Inanotherfamousproductliabilitycase,aTexaslawyerobtaineda$253.
5millionver-dictagainstpharmaceuticalcompanyMerckforCarolErnst,thewidowofRobertErnst.
Mr.
ErnstdiedafterhavingtakenMerck'spainkillerVioxxforeightmonths[5].
ThejurysawinternalMerckdocumentsshowingthatthecompanywasawareoftheheartattackrisktousersbeforeitstartedmarketingthedrug.
Thedocumentsgavethejurytheimpressionthatthecompanycaredmoreaboutprofitsthanpublicsafety.
Asaresult,thejurytried,viathehugeaward,tosendamessagethatitiswrongtohideinformationaboutadrug'sdanger[14].
Althoughanappellatecourtlateroverturnedthejury'sverdict,againthecaseunderscorestheriskofhugeproductliabilityverdicts[23].
26.
3Morerecenthigh-profileproductliabilitylitigationAsnotedintheprevioussection,appellatecourtsprovidedsomerelieftoFordandover-turnedtheverdictintheVioxxcase.
Nonetheless,manufacturersshouldlooktotwomorerecentsetsofcasesinordertoanalyzethepotentialhumanandfinancialimpactofproductliabilityissues.
Section26.
3.
1coverstheso-called"suddenacceleration"phenomenoninvolvingToyotacars.
Section26.
3.
2describesthefalloutfromtheGeneralMotorsignitionswitchdefects.
Thesetwocasesshowhowmanufacturersmayneedtopayhugesumstoresolveproductliabilitylegalproceedings,whichareinadditiontothehumantollofdeathsandinjuries.
ProductLiabilityIssuesintheU.
S.
andAssociatedRiskManagement58026.
3.
1"Suddenacceleration"litigationSeveralyearsago,newsstoriesemergedconcerningaphenomenoninwhichToyotadriversreportedthattheircarsacceleratedwithoutwarningandweredifficulttostop,resultinginaccidents.
Onetypicalnewsreportstated,"NancyBernsteinfeelsluckytobealiveafterherToyotaPriuskeptaccelerating,nomatterhowhardshehitthebrakes.
'Thecar'sgoingabout70milesanhour,andI'mbeginningtogetscaredbecauseit'snotslowingdown,'Bernsteindescribed.
"[26].
Lawsuitsfollowedtheseaccidents,andfederalcasesweretransferredtotheU.
S.
DistrictCourtfortheCentralDistrictofCaliforniaforcoordinatedorconsolidatedpretrialproceedings[27].
Somereportscontendthatthe89peoplemayhavediedfromaccidentsinvolvingthesuddenaccelerationofToyotavehicles[10].
Governmentalinvestigations,however,showednoevidencethatdesignorimplementationflawsinToyotascausedunintendedacceleration[25].
Accordingly,therewassomecontroversyaboutwhetherToyotaordriverswereatfaultintheseaccidents.
Laterinthelitigation,however,areportbyexpertwitnessMichaelBarrfollowingadditionalresearchopinedthatasoftwaremalfunctionoccurredinoneofthecarsandthatthemalfunctionresultedinunintendedacceleration[4].
Barridentifiednumerousallegedproblemswiththesoftware,whichaccordingtoBarr,Toyota'sownengineershadtroubleunderstandingandcharacterizedas"spaghettilike"[4].
BarrtestifiedabouthisfindingsinanOklahomastatecourtcaseand,apparentlybasedinpartonthesefindings,thejuryinthecaseawardedcompensatorydamagesof$1.
5milliontothedriverand$1.
5milliontothefamilyofapassengerwhodiedinthecrash[35].
Thepartiesinthecase,Bookoutv.
ToyotaMotorCorp.
[7],settledthecaserightbeforeasecondphaseofthetrialtoconsiderpunitivedamagesagainstToyota[18].
Despitetheuncertaintyaboutwhatreallycausedtheseaccidents,Toyotastartedtosettlethevariouslegalactionsagainstthecompany.
TheOklahomacasemayhavebeenamoti-vatingfactor[28].
10Toyota'ssettlementpaymentssofarinclude:$1.
6billiontosettlefinanciallossclaimsinthemultidistrictlitigation[28].
$1.
2billiontosettlepotentialcriminalchargesagainstToyota[29].
$25.
5milliontosettleshareholderclaimsarisingthefailuretoreportsafetyissues[29].
$65millioninfinesforviolationsoffederalvehiclesafetylaws[29].
Thesesettlementpayoutsareinadditiontothenumerousproductliabilitylawsuitsthatremainpending,thesettlementofwhichpresumablywillcostahugesum.
Ifproductliabilitysettlementamountsexceed$1billion,thenthetotalsettlementsmayexceed$4billion.
Thecostoflegalfeesandotherinternalexpensesrelatedtoinvestigationandreme-dialmeasureswilladdevenmoretothefinalcostforToyota.
10"LegalanalystssaidthattheverdictmostlikelyspurredToyotatopursueabroadsettlementofitsremainingcases.
"[28]58126.
3Morerecenthigh-profileproductliabilitylitigation26.
3.
2GeneralMotorsignitionswitchissuesandrecallAnotherhigh-profileproductliabilityissuearosefromtherecentlyuncoveredproblemwithignitionswitchesincertainGeneralMotorscars.
Inthelate1990s,GMstartedusingnewswitchesforsmallcarstomakethemworkmoresmoothly.
"Butasitturnsout,newswitch-esinmodelssuchastheChevroletCobaltandSaturnIoncanunexpectedlyslipfrom'run'to'accessory,'causingenginestostall.
Thatshutsoffthepowersteering,makingcarshardertocontrol,anddisablesairbagsincrashes[20].
Theproblemsupposedlycausedover50accidents.
"GMsaystheproblemhascausedatleast13deaths,butsomemembersofCongressputthedeathtollnear100.
"[20]Apparently,GMengineerswereawareoftheproblembeforetheaccidents,butdecidednottoreplacetheswitches.
AninternalemailuncoveredinCongressionalhearingsdiscussedthefactthatamorerobustdesignwouldadd90centstothepriceoftheswitch,andwouldonlysave10-15centsinreducedwarrantyclaims[16].
"Thepartcostslessthan$10whole-sale.
Thefixtakeslessthananhour.
Amechanicremovesafewscrewsandconnectors,takesoffaplasticshroud,popsinthenewswitch,andthecustomerisbackontheroad.
"[12]"[T]omanypeoplefamiliarwiththeautomaker,"thereasonGMdidnotrecallthecarssooner"isacorporateculturereluctanttopassalongbadnews.
WhenGMwasstrugglingtocutcostsandbuffitsimage,arecallofitspopularsmallcarswouldhavebeenaterriblesetback.
"[12]"It'sprettyclearthatsomebodysomewherewasbeingpenny-wiseandpound-foolish,'saidMarinaWhitman,aprofessorattheUniversityofMichiganandaformereconomistatGM.
"[12]GM'sdecisionnottorecallthecarssoonerisprovingtobeacostlyone.
Congress,safetyregulators,theU.
S.
attorneyinNewYorkCity,theSEC,TransportCanada,and45stateattorneysgeneralareconductingprobesofGM.
GMisundertakingacostlyrecallofthecars.
Also,GMcreatedacompensationfundforfamiliesofcrashvictims,whichitexpectswillcostthecompany$400millionto$600million[19].
Inadditiontothecompensationfund,GMsaidthatitwillspend$1.
2billiontorepairthecarsandtrucksrecalledduringthesecondquarter,ontopofthe$1.
3billionitidentifiedforrepaircostsinthefirstthreemonthsoftheyear.
Inaddition,thecompanysetasideanadditional$874millioninthequarterforfuturerecalls.
[19]ThetotalexpenseforGMwillbehuge:"Alltold,GM'srecallshavecosttheautomakernearly$4billionthisyear.
"[19]Presumably,GMwillcontinuetopaymoreinfutureyearsaswell.
Moreover,GMwillhavetopayevenmoreforlegalfeesandotherinternalexpensesrelatedtoinvestigationandremedialmeasures.
ProductLiabilityIssuesintheU.
S.
andAssociatedRiskManagement58226.
4ClaimsanddefensesinproductliabilitycasesHavingcoveredthephenomenonofproductliabilitylitigation,thehumantollofaccidents,andthelargefinancialrisksinvolved,thissectioncoverswhatplaintiffsmustproveinordertoprevailinasuitbasedonanallegedlydefectiveproduct,aswellaswhatdefendantsmustproveinordertoassertcertaindefenses.
Typicalclaimsforplaintiffsseekingdamagesforbodilyinjuryorpropertydamagefromanaccidentare"strictproductliability,""negligence,"and"breachofwarranty.
"11MostofthelawgoverningproductliabilityintheU.
S.
isstatelaw,asopposedtofederallaw,andlawsdivergefromstatetostate.
26.
4.
1StrictproductliabilityclaimsTheeasiesttypeofclaimforaplaintifftoproveisaso-called"strictproductliability"claim.
Aplaintiffcanincludeinthesuitalmosteverybusinessinthechainofdistributionfromrawmaterialsorcomponentpartmanufacturerstomanufacturersofthefinishedproduct,distrib-utors,andretailers[13].
Strictliabilityreferstoliabilityfordefectiveproductswithoutfaultonthepartofthemanufacturerandregardlessofwhetherornotthereisacontractualrela-tionshipbetweentheplaintiffanddefendant.
Lawsvarysignificantlyfromstatetostate,andsomestatesdonotevenrecognizestrictliabilityasaviableclaim.
Nonetheless,moststates'statutoryandcommonlawstrictliabilitylawsarebasedontheformulationofstrictliabilityunderSection402AoftheSecondRestatementofTorts[2].
12AsstatedintheRestatement,inordertowinastrictliabilityclaim,theplaintiffmustproveattrial:Thedefendantsoldtheproductinquestion,Thedefendantisinthebusinessofsellingthiskindofproduct,Theproductwasdefectiveandunreasonablydangerousatthetimeitleftthedefendant'shands,Theproductisexpectedtoanddoesreachtheuserorconsumerwithoutsubstantialchangeintheconditioninwhichitissold,andThedefectwastheproximatecauseoftheplaintiff'sinjuries[2].
ThekeyissueforAVstrictliabilitydesigndefectclaimswillbewhetherthevehiclewas"defective.
"Aplaintiffmayassertthattheproductwasdefectiveinitsdesign,theproductwasdefectiveinthewayitwasmanufactured,and/orthatthedefendantfailedtoprovide11Anothertheoryofrecoveryforplaintiffsisfraud,alsoknownas"deceit"or"misrepresenta-tion,"andisbasedonfalsestatementsmadebytheselleraboutaproduct.
Misrepresentationsmaybeintentional,negligent(careless),orinnocent.
Thistypeofclaim,however,istheleastusedtheoryofrecoveryintheproductliabilitycontext[13].
12"MorethanthreequartersofAmericanjurisdictionsincorporateallorpartofthissectionintheirowndistinctbrandofstrictliability.
"[13]RestatementsoflawsummarizeanareaoflawintheU.
S.
,butdonotthemselveshavetheforceoflaw.
58326.
4Claimsanddefensesinproductliabilitycasesadequatewarningsorinstructionstotheusersoftheproduct.
OfgreatestconcernforAVlitigationaredesigndefectandfailuretowarnclaims.
Aplaintiffassertingadesigndefectwouldshowtheexistenceofa"defect"undertheapplicablestatelawtest.
CourtsintheU.
S.
applyoneofthefollowingtests:Atestbasedonwhatanordinaryconsumerwouldexpectfromaproduct,typicallyusedwherethepotentialforinjuryiscleartoconsumersfromthenatureoftheproduct.
Therisk-utilitybalancingtest,wheretheplaintiffcontendsthattherisksfromadesignoutweighthebenefitstotheconsumerorpublicfromadesign.
Theproductmanufacturertest,whichaskswhetherareasonablyprudentmanufacturerorseller,awareoftheproduct'sdangerouscondition,wouldnothaveputtheproductonthemarketifithadbeenawareoftheproduct'scondition.
Acombinationtest,whichmayshifttheburdenofprooftothemanufacturertoshowalackofdefectincertainsituations.
Theultimateissueapproach,inwhichthejuryhasthediscretiontodeterminewhetheradesignisdefective[31].
Frequently,aplaintiffassertingadesigndefectwilluseexperttestimonytoexplainwhythedefendant'sdesignisdefectiveandwillattempttoprovethatanalternativedesigncouldhavepreventedtheaccident.
Inadditiontorelyingondesigndefects,aplaintiffmayalsoassertastrictliabilityclaimbasedona"failuretowarn"theory.
Underthistheory,theplaintiffcouldcontendthatanAVwasdefectivebecausethedefendantfailedtoprovideadequatewarningsorinstructionsaboutthevehicle.
Theplaintiffwouldneedtoprovethatthewarningsdidnotadequatelyreducerisksassociatedwiththeproductorthattheinstructionswereinadequatetotelltheuserhowtousetheproduct.
26.
4.
2NegligenceclaimsAsanalternativeclaim,productliabilityplaintiffsoftenincludeanegligenceclaimintheircomplaints.
Theconceptof"negligence"referstocarelessconductthatfallsbelowthestandardofconducttowhichahypothetical"reasonableman"wouldadhere.
Aswithstrictliability,aplaintiffcanassertanegligenceclaimbasedonthedesignoftheproduct,thewayinwhichtheproductwasmanufactured,orthefailuretogiveadequatewarningsorinstructions.
Negligenceisaharderclaimforaplaintiffthanstrictliability,becausetheplaintiffmustshowsomedegreeoffaultonthepartofthedefendant.
Inordertoprevailinanegligenceclaim,theplaintiffmustprove:Thedefendantowedadutyofcaretoprovideareasonablysafeproductintermsofdesignortowarnofdangerousdefects–meetingastandardofconducttoprotectothersagainstunreasonablerisk,ProductLiabilityIssuesintheU.
S.
andAssociatedRiskManagement584Thedefendantbreacheditsdutyofcarebyfailingtoconformitsconducttothestandardofconductrequired,andThedefendant'sconductproximatelycausedtheplaintiff'sinjury[31].
26.
4.
3BreachofwarrantyclaimsInmoststatesintheU.
S.
,aplaintiffmayalsoincludeabreachofwarrantyclaiminaproductliabilitycomplaint.
Warrantiesareaffirmationsorpromisesconcerningaproductoritsperformance,features,orcharacteristics,suchasthoseconcerningthesafetyofaproduct.
Thebasisofabreachofwarrantyclaimisthattheseller'sproductdoesnotperformaspromised,ordoesnothavethefeaturesorcharacteristicspromised.
Designdefects,manufacturingdefects,orfailurestowarnmayallprovidethebasisforawarrantyclaim.
Aswithstrictliability,thequestioniswhetherornottheproductadherestothepromisesmade,regardlessofwhetherthesellerisatfaultforthefailuretoconformtothepromise.
Nonetheless,warrantyclaimsaresubjecttodefenseswithvariousdegreesofeffectiveness,includingthehistoricaldefenseof"privity"(plaintiff'slackofcontractualrelationshipwiththedefendant),therequirementthattheplaintiffprovidethesellernoticeofthebreach,andtheabilityforsellerstodisclaimwarranties[31].
InmostU.
S.
jurisdictions,purchasersofaproductortheirfamilymemberscansuecompaniesinthechainofdistributionunderawarrantytheorydespitethelackofprivity[31].
Inordertoassertabreachofwarrantyclaim,aplaintiffmusttypicallyprove:Thedefendantmadeawarranty,Theproductdidnotcomplywiththewarrantyatthetimeofthesale,Theplaintiff'sinjurywasproximatelycausedbythedefectivenatureoftheproduct,andAsaresult,theplaintiffsuffereddamage[31].
Awarrantyclaimwilltypicallyallegeoneofthreekindsofwarranties.
"Expresswarran-ties"arethoseactuallystatedbytheseller,suchasinasalescontract,warrantyprogramdocumentation,advertisements,orsalescollateral.
Theymaybewrittenororal.
Inadditiontotheexpresswarranties,thelawwillsometimesrecognizetwokindsof"impliedwarran-ties"regardingthesaleofconsumerproductsthatarisebyoperationoflaw,asopposedtoanythingtheselleractuallysaid.
Onekindofimpliedwarrantyisthe"impliedwarrantyofmerchantability.
"Thisimpliedwarrantyrequiresthesellertomakesuretheproductisfitfortheordinarypurposesofsuchproduct.
Forinstance,aconsumerwouldexpectthattheheadofahammerwouldnotflyoffthefirsttimeitisusedafterpurchase.
ThiskindofimpliedwarrantyistheonemostlikelytobeassertedagainstasellerofanAVinfuturecases.
Thesecondtypicalimpliedwarrantyisthe"warrantyoffitnessforaparticularpurpose.
"Wherethesellerknowstheparticularpurposeforwhichtheconsumerwillusetheproduct,andthebuyerisrelyingon58526.
4Claimsanddefensesinproductliabilitycasestheskillandjudgmentofthesellertoselectandfurnishsuitableproducts,thelawwillrecognizeanimpliedwarrantythattheproductwillbefitforthatpurpose.
Forinstance,ifatruckbuyertellsadealer'ssalesrepresentativethatthebuyerseeksapickupthatwillbeabletotowatrailerthroughmountainousoff-roadterrain,thenthedealerisdeemedtohavewarrantedthatthetruckrecommendedbythesalesrepresentativecan,infact,towthetraileroff-roadinthemountains.
26.
4.
4ClaimsunderconsumerprotectionlawsPlaintiffssometimesassertproductliabilityclaimsundervariousconsumerprotectionlaws.
Statelawsvary,andsomestatesdonotpermittheselawstobeusedforpersonalinjuries[1].
Theyarecommonlyusedwhenplaintiffsseekredressforallegedeconomicorfinanciallosses,suchasthediminutioninthevalueoftheirproductsduetotheallegeddefect.
ExamplesincludeCalifornia'sUnfairCompetitionLaw(UCL)[8],FalseAdvertis-ingLaw(FAL)[8],andConsumerLegalRemediesAct(CLRA)[9],aswellasequivalentlawsinotherstates.
Claimsunderthesestatutestypicallyrequireplaintiffstoprove:AviolationofthestatuteoccurredThatcausesInjurytoaconsumer.
Forinstance,theUCLprohibitsunlawful,unfair,orfraudulentbusinessactsorpractices.
TheFALbarsuntrueormisleadingadvertisingpractices.
TheCLRAprohibitsalistofunfairbusinesspractices,suchasmisrepresentingthecharacteristicsandqualitiesofaproduct.
26.
4.
5TypesofdefectsatissueinautonomousvehiclelitigationWedonotyethaveexamplesofcasesfiledagainstAVmanufacturerstosaywhatkindsofallegeddefectswilllikelyresultinlitigation.
Nonetheless,thehistoryofautomotivelitiga-tion,discussionswiththoseintheindustry,andjudgmentsaboutwhatislikelytocomesuggestthattherewillbemanysourcesofpotentialdefectsthatmaygiverisetoproductliabilitylitigation.
AVswillsharesomeofthesesourcesofdefectswithconventionalvehicles,butsomeofthemwillbeuniquetoAVs.
Thelistsofpotentialdefectsinthissectionarenotmeanttobeexclusive,andtherearemanypossiblesourcesofdefectsinconventionalandautonomousvehicles.
Somepossibledesigndefects13thatAVswillhaveincommonwithconventionalvehiclesinclude:13Anotherissueformanufacturersoffinishedproductsconcernstheirsupplychains.
CounterfeitordefectivecomponentsmayintroducemanufacturingdefectsintoAVs.
ProductLiabilityIssuesintheU.
S.
andAssociatedRiskManagement586Mechanicalorphysicaldefectsinvarioussystemsofthevehiclesortheirsafetyequipment,suchastheuseofmaterialsthatarenotstrongorthickenough,14oranexcessivelyhighcenterofgravitysubjectingthevehicletorollovers.
Defectsinelectricalcomponentsorsystemsotherthansensorsorcontrolsystemsforautonomousdriving,suchastheuseofwrongkindofcomponents,problemsintheperformanceofthecomponents,orthelackofdurabilityofthecomponents.
Software15defectsrelatingtosystemsotherthansensorsorcontrolsystemsforautonomousdriving,includinginformationsecurityvulnerabilities.
Thesedefectswilloccurinbothconventionalandautonomousvehiclesandthusexistinglawandlitigationmethodswouldapplytodetermineamanufacturer'sliability.
Nonetheless,AVsmayexperiencedefectsthatconventionalvehiclesdonot.
Again,theymaybemechanical,electronic,orsoftware.
Mechanicalorphysicaldefectsinthecontrolsystemsforautonomousmodeorthesensorsusedbytheautonomoussystems.
Asimpleexamplewouldbeweakmount-ingsforLIDARsensorswhich,iftheyfailed,mightcausetheAVtoloseitssensordatasuddenlyandcrash.
Defectsinelectricalcomponentsforsensorsorcontrolsystemsforautonomousdriving.
Softwaredefectsinthesensorsorcontrolsystemsusedforautonomousmode.
Themostinterestingandperhapsmostconcerningpotentialdefectsarethoseinthesoft-wareusedforautonomousdriving.
Someexamplesinclude:Designsthatdependoninadequatedatafromsensors,includinginsufficientamount,inaccuracy,deficientprecision,orinadequatespeedofdatainput.
Inaccuratepatternrecognition,suchastheAVfailingtobeabletorecognizeapedestrianintheroadorotherupcomingobstaclesorhazards.
Designsthatfailtoperformsafeordinarymaneuverssuchasturns,lane-keeping,distance-keeping,andmerging.
Otherproblemswithautonomousbehavior,suchasunpredictablechangesinspeedordirection.
Deficientcollisionavoidancealgorithms.
Informationsecurityvulnerabilities.
Defectsarisingfrominadequatehuman-computercoordination.
Forinstance,ifanAVswitchesbetweenautonomousandmanualmode,theAVmustalertthedriverbeforeswitchingtomanualmodeandtransitiontohumancontrolsafely.
14Forexample,theauthorwasinvolvedinonecaseinwhichtheplaintiffallegedthatthemetalinacar'stierodwasnotstrongenough,themetalfatigueexperiencedbyordinarywearofthecarweakenedthetierod,andanaccidentoccurredbecausemetalfatiguecausedthetierodtobreak.
15The"software"involvedmaybeintheformofcodebuiltintohardwareorfirmware.
58726.
4ClaimsanddefensesinproductliabilitycasesMoreover,Chapter4discussesdesigndecisionsprogrammersmustmakewhencreatingthelogicforanAVtohandlethesituationofwhenacollisionisimminentandunavoidableandthereisachoicebetweenstrikingandharmingdifferentpersons.
Forinstance,anAVmayfacethedilemmaofstrikingamotorcycleriderwearingahelmetoronewithoutahelmet,andaprogrammermightdecidethatitisbetter,ifacollisionisunavoidable,tostrikeoneortheother.
Iftheprogrammermakessuchadecisionanddesignsthesoftwaretoimplementthatdecision,thiskindofdesigndecisioncouldbethesubjectofaproductliabilitysuitfromthepersonstruckbyoperationofthesoftware.
26.
4.
6DefensesinproductliabilitycasesDefendantsmayassertanumberofdefensesagainstaproductliabilitycase.
Themostcom-montypesofdefensesrelatetotheconductoftheplaintiff.
Insomecases,thedefendantcontendsthattheplaintiff'snegligentconductcausedorcontributedtoanaccident.
Theviabilityofadefensebasedonaplaintiff'sownnegligencedependsonstatelawandthetypeofclaim,butadefendantmayalsouseitasevidenceofasupersedingcauseofanaccident.
Inaddition,someaccidentsoccurbecauseaplaintiffmisusedormodifiedaproduct.
Insomecases,aplaintiffissaidtohave"assumedtherisk"ofanopen,obvioushazard,suchasthepossibilityofbeingstruckbyagolfballonthelinks.
Finally,aplaintiffmaynotbeabletorecoveralldamagesifheorshefailedinsomewaytomitigatethedamages.
ManyofthesedefensesmayhavelimitedapplicationtopersonsdrivingAVsinauton-omousmode.
Iftheplaintiffwasnotincontrolofthevehicleatthetimeoftheaccident,theplaintiffcouldnothavedrivencarelessly.
OnceAVsenterthemassmarket,asellercannotrealisticallycontendthattheplaintiffassumedtheriskofdrivingavehicleusingnewanduntestedtechnology.
Nonetheless,itislikelyovertimethatsomepeoplewillmodifytheirAVsortrytoabusethesensorsorcontrolsystemsforfun.
Inthesecases,ifanaccidentoccurs,thedefendantmaypointtothisconductasadefense.
Moreover,defensesbasedonaplaintiff'sconductcouldreduceorbaraplaintiff'srecoverywhentheplaintiffwasnotadriveroftheAV,suchasapedestriancarelessly(orintentionally)dartingoutinfrontofanAVfasterthananyhumanormachinecouldreact.
TheotherkeydefenseinAVlitigationwilllikelybea"stateoftheart"defensetoadesigndefectclaim.
Thebasisofthisdefenseisthatthemanufacturercouldnothavepro-ducedasaferdesignatthetimeofsalebecausesaferdesignswerenottechnologicallyfeasiblethen.
Suchadefenseisvalidinsomestateswhilenotinothers[13].
1616Anothertypicalproductliability-specificdefenseistheeconomiclossdoctrine,whichbarsproductliabilitytortclaimswheretheclaimeddamagesarefinancialandnotforbodilyinjuryordamagetopropertyotherthantheproductitself.
Moreover,federallawmaypreemptsomestatelawclaims,becauseU.
S.
federallawtrumpsstatelawsinconsistentwithit.
Also,ifaproductismeanttobeusedbya"sophisticateduser"orprovidedbya"sophisticatedinterme-diary,"thesellermayhaveadefenseundercertaincircumstances,althoughthisdefenseisun-likelytoapplytoAVs.
Finally,ifamanufacturercreatesaproductpursuanttogovernmentspecification,itmayhavea"governmentcontractordefense.
"ProductLiabilityIssuesintheU.
S.
andAssociatedRiskManagement58826.
5ManagingtheriskofautonomousvehicleproductliabilityHavingcoveredthenatureofproductliability,thepotentiallyhugeexposureforlosses,jurorangerthatleadstohugejuryverdicts,andthenatureofproductliability,Inowturntotheissueofhowmanufacturerscanmanagetheriskofproductliabilitylitigation.
17Firstandforemost,managingtheserisksrequiresaproactiveapproach.
Byplanningtoday,manufacturerscanbepreparedfortheinevitablesuitslater.
First,planningcanenablethemtomakesaferproductsthatarelesslikelytocauselitigation-triggeringacci-dentsinthefirstplace.
Second,byplanningahead,manufacturerscanincreasetheirchanc-esofwinningthecasesthataccidentsdotrigger.
Aproactiveapproachtodesignsafetywithacomprehensiveriskmanagementprogramestablishesupfrontamanufacturer'scommit-menttosafety.
Whentheinevitablesuithappenslater,themanufacturer'scounselhasastorytotellthejuryastowhyitsproductsweresafeandhowthemanufacturercaredaboutsafety.
Second,manufacturersshouldconsiderthecommitmenttheymaketoproductsafetyusingsuchaproactiveapproach.
Onecommentatorstated,"Themosteffectivewayfor[counselfor]acorporatedefendanttoreduceangertowardhisorherclientistoshowallthewaysthattheclientwentbeyondwhatwasrequiredbythelaworindustrypractice.
"[24].
Meetingminimumstandardsisinsufficientbecauseofjurorskepticismabouttherigorofstandardssetorinfluencedbyindustryandbecausejurorsexpectcorporateclientstoknowmoreaboutproductsafetythana"reasonableperson"–thestandardforjudgingtheconductofdefendantsunderthelaw[24].
"Asuccessfuldefensecanalsobesupportedbywalkingjurorsthroughtherelevantmanufacturingordecision-makingprocess,showingallofthetesting,checking,andfollow-upactionsthatwereincluded.
Jurorswhohavenofamiliaritywithcomplexbusinessprocessesareoftenimpressedwithallofthethoughtthatwentintotheprocessandalloftheprecautionsthatweretaken.
"[24]Eventhoughaccidentsdooccur,andinanytrialsettinganaccidentorproblemdidoccur,adefendant'sproactiveapproachwouldshowthejurythatthemanufacturertriedhardtodotherightthing[24].
Consequently,effortstogoaboveandbeyondtheminimumstandardswoulddiffusejurorangerandmitigatethemanufacturer'srisk.
Third,manufacturersshouldrecognizethatriskmanagementisaprocessthatbeginswithacarefulriskanalysislookingatthetypes,likelihood,andimpactofissuesinthedesignofAVs.
Onceariskassessmentiscomplete,theycanreviewtheresultsandanalyzechangesindesignandengineeringpracticestoaddresstheseissues,prioritizerisksandriskmitigationmeasures,andimplementtheprioritizedriskmitigationmeasures[34].
Inconnectionwiththeriskmanagementprocess,manufacturerscanobtainguidancefromanumberofstandardsbearingonriskmanagementandsafety:17Ispeakhereofproductliabilitylitigation,althoughtheriskmanagementtechniquesherealsoapplytopreventingtheneedforcostlyproductrecalls.
58926.
5ManagingtheriskofautonomousvehicleproductliabilityISO31000"Riskmanagement–Principlesandguidelines"(regardingtheriskmanagementprocess).
SoftwaredevelopmentguidelinesfromtheMotorIndustrySoftwareReliabilityAssociation.
IEC61508Functionalsafetyofelectrical/electronic/programmableelectronicsafety-relatedsystems(safetystandardforelectronicsystemsandsoftware).
ISO26262familyof"FunctionalSafety"standardsimplementingIEC61508forthefunctionalsafetyofelectronicsystemsandsoftwareforautos.
WhileadherencetotheprinciplesofinternationalstandardsdoesnotguaranteethatanAVmanufacturerwillavoidliability,adherencetostandardsbolstersthecredibilityofamanufacturer'sriskmanagementprogram.
Moreover,thestandardsprovideaframeworkbywhichmanufacturerscanbuildasetofcontrolsfortheirriskmanagementprocess.
Consequently,anAVsafetyprogrambuiltoninternationalstandardslaysthefoundationforalaterdefenseofamanufactureraccusedofbuildinganunsafeAV.
Fourth,AVmanufacturersshouldobtaininsurancecoveragetomanageproductliabilityrisk.
Arobustinsuranceprogramwillpermitmanufacturerstoshifttheriskofproductliabilitytoinsurancecarrierswhowill,underissuedpolicies,defendandindemnifyman-ufacturersforsettlementsandjudgmentspaidtoresolvethirdpartyclaims.
Currently,theinsuranceindustryisjustbeginningtocometogripswiththeinsuranceimplicationsofAVs[21].
Wecanexpecttoseetheinsuranceindustryprovidethirdpartycoveragetomanu-facturersforaccidents,andprobablyprivacyandinformationsecurityrisksaswell.
WhiletheindustryhasnohistoricaldataforanactuarialapproachtounderwritingAVrisks,theindustrywillprobablylookbyanalogytoconventionalvehiclesandmobiledevicesforlossexperiences[6].
AVmanufacturerscanfindcarrierswillingtowritebespokepoliciestailor-madetotheirneeds.
Eventuallyothercarrierswillenterthemarketandoffermorestan-dardizedpolices,therebyreducingpremiumcoststomanufacturersoverthelongrun.
Fifth,manufacturerscanworktogetheronindustryriskmanagementinitiatives,suchas:Participationinstandardseffortstopromotesafetyandsecuritywithintheindustryandamongcomponentmanufacturers;Collaboratingwithothermanufacturersintradegroupsand(subjecttoantitrustconcerns)purchasingconsortia;withthepurchasingpoweroflargernumbersofmanufacturers,theindustrymayhavegreaterleveragewithcomponentmanufacturerstopromotesafedesignandmanufacturingprocesses;andParticipationininformationsharinggroupsthatcancollaboratetodevelopbestpracticestoimproveproductsafety.
Sixth,manufacturerscanmanagetheriskofhugejuryawardsbycertainpre-litigationstrategies.
Forinstance,theymaywanttoengagejuryconsultantsthatassistthedefenseofproductliabilitycasestoidentifyriskfactorsforthemanufacturerandthetypesofconductthattriggerjuroranger.
Inaddition,manufacturersmaywanttoidentifyandcultivateaProductLiabilityIssuesintheU.
S.
andAssociatedRiskManagement590groupofdefenseexpertstheycanusetoeducatejurorsaboutvariousengineering,infor-mationtechnology,andsafetyconsiderations.
Moreover,counselformanufacturersmaywanttojoinspecialtybarsfordefensecounselforpurposesofsharinginformation,briefs,andotherworkproduct.
Finally,manufacturerscanmaximizetheirsuccessinfutureproductliabilitytrialsbyfocusingoneffectiverecordsandinformationmanagement(RIM).
EffectiveRIMmaywincases,whilepoorRIMmaylosecases.
Documentsandrecordsproducedcontemporane-ouslywiththemanagementofasafetyprogramcancorroboratethetestimonyofwitness-es,provideahistoricalrecorddocumentingamanufacturer'ssafetyefforts,andsendthemessagethatthemanufacturercaresaboutsafety.
26.
6ConclusionsOneofthetop,ifnotthetop,challengeautonomousvehiclemanufacturersfaceistheriskofproductliabilitysuitsandrecallsinthewakeofaccidentsresultingindeathsandcata-strophicinjuries.
Lawsuitsinwhichmanufacturersappearcallous,placingprofitsoversafety,facetheriskofhugeliabilities.
Recentreportsabout"suddenacceleration"inToyotacarsandproblemswithGeneralMotors'ignitionswitchesshowthatthesecompaniesarepayingmultiplebillionsofdollarstoresolvelegalclaims.
PlaintiffshaveanumberofclaimstheycanassertagainstAVmanufacturers,althoughmanufacturersmayhavedefens-esaswell.
VariouskindsofdefectsmaycropupwithAVs,althoughproblemswithsoft-ware,logic,autonomousbehavior,andprogrammerdecisionsonAVbehaviorincrashesaretopconcerns.
Nonetheless,manufacturerscanmanageproductliabilityriskthroughcarefulplanning,astrongcommitmenttosafety,aneffectiveriskmanagementprocessbeginningwithathoroughriskanalysis,adherencetointernationalstandards,obtainingrobustinsurancecoverage,collaborationwithothermanufacturers,pre-litigationlegalstrategies,andeffectiverecordsandinformationmanagementpractices.
Insum,thethreatofcripplingproductliabilitylitigationintheUnitedStatesposesaprofoundconcernformanufacturersofautonomousvehicles,butstartingproactiveengineeringdesignstrategiesforsafetyriskmanagementandlegalstrategiestoanticipatefuturelitigationnowcanplacemanufacturersinthebestpositiontomaximizeproductsafetyandminimizeproductliabil-ityinupcomingdecades.
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1Introduction57626.
2Whydoproductliabilitysuitsoccur57726.
3Morerecenthigh-profileproductliabilitylitigation57926.
3.
1"Suddenacceleration"litigation58026.
3.
2GeneralMotorsignitionswitchissuesandrecall58126.
4Claimsanddefensesinproductliabilitycases58226.
4.
1Strictproductliabilityclaims58226.
4.
2Negligenceclaims58326.
4.
3Breachofwarrantyclaims58426.
4.
4Claimsunderconsumerprotectionlaws58526.
4.
5Typesofdefectsatissueinautonomousvehiclelitigation58526.
4.
6Defensesinproductliabilitycases58726.
5Managingtheriskofautonomousvehicleproductliability58826.
6Conclusions590References590M.
Maureretal.
(Hrsg.
),AutonomesFahren,DOI10.
1007/978-3-662-45854-9_26,TheEditorsandtheAuthors2015.
ProductLiabilityIssuesintheU.
S.
andAssociatedRiskManagement57626.
1IntroductionAutonomousvehicles(AVs)holdthepromiseofsavingtensofthousandsofliveseachyearintheU.
S.
,andmanymoreworldwide,reducingtraffic,savingenergy,andprovidingmobilitytothosewhocannotdriveconventionalcars.
Nonetheless,AVswillinevitablyhavesomeaccidents.
Onbalance,AVsarelikelytopreventmanymoreaccidentsthantheycause,buttherewillbeatleastsomeaccidentsinvolvingAVsthatwouldnothaveoccurredwithconventionalvehicles.
BecauseofaccidentsinvolvingAVs,someofwhichmaybecatastrophic,productliabil-itylitigation1isinevitable,especiallyincaseswhereconventionalvehicleswouldnothavecrashed.
ThethreatofmassiveproductliabilitylitigationinvolvingAVsiswidelyperceivedasoneofthechiefobstaclestoAVdevelopmentandsales,ifnotthenumberonethreat[3].
2Somebelievethatproductliabilitysuitsmaybeanexistentialthreattoautonomousdriving[33].
3Cripplingsuitscouldforcemanufacturerstoexitthemarketandmaydetersomemanufacturersfromenteringthemarketbecauseofabeliefthatthesalesarenotworththerisk.
Ifthesedirepredictionscometopass,theU.
S.
andotherpartsoftheworldexperienc-ingafloodoflawsuitsmaylosetheuseofatechnologythatwouldsavemanytimesmorelivesthanitwouldendanger.
If,however,theindustryfindseffectivewaystomanagetheriskofproductliability,itcanbringtomarketalifesavingtechnologywhilemaintainingpracticestominimizeaccidentsandresultingliability,aswellastheprofitabilityneededtoofferAVsinthemarketovertime.
ThepurposeofthischapteristoidentifyproductliabilityrisksintheU.
S.
tomanu-facturersofAVs,thesourceofthoserisks,andhowmanufacturerscanmanagethoserisks.
AfocusonU.
S.
productliabilityisimportantfromaworldwidemanufacturer'sperspectivegiventhesizeoftheU.
S.
marketandtheperceptionthattheU.
S.
isalitigiouscountry.
ProductliabilityisperceivedasagreaterthreatintheU.
S.
thaninanyothercountryoftheworld.
Section26.
2discussesthecircumstancesgivingrisetoU.
S.
productliabilitylitigationandthephenomenonofsomeU.
S.
casesresultinginhugeawardstoplaintiffsseekingcompensation.
Itexplainswhythesehugeawardsoccur.
Section26.
3analyzesthehumanandfinancialimpactsofmorerecenthighprofileproductliabilitycases.
Section26.
4discussesU.
S.
productliabilitylaw,focusingonthetypesofclaimsanddefensesarisinginproductliabilitycases.
Section26.
5coversdesignpracticesandproceduresthatmanufacturerscanusetoreducetheriskofproductliability,theuseof1Thischapterfocusesmainlyonproductliabilitylitigation,althoughtherearealsorequirementstocompelvehiclemanufacturerstorecalltheirvehiclestofixdefects.
Themanagementofliabilityandrecallrisksoverlapandtheriskmanagementprinciplesdiscussedinthischapterapplytoboth.
2"Someofthelargestobstaclestoautonomousconsumervehiclesarethelegalities[3].
"ReportsfromLloyd'sofLondonandtheUniversityofTexaslistedproductliabilityasamongthetopobstaclesforAVs[21][30].
3"[T]heworstoutcomewouldbethatsaidliabilityisn'tsortedoutsothatweneverdogetthemassmanufacturingandadoptionofdriverlesscars.
"[33]57726.
2Whydoproductliabilitysuitsoccurinsuranceasameansofshiftingandmanagingproductliabilityrisk,andotherriskmanagementtechniques.
26.
2WhydoproductliabilitysuitsoccurFirstandforemost,manufacturersfaceproductliabilitysuits,becausetheirproductsareinvolvedinaccidents.
FromtheearlydaysinthedevelopmentofAnglo-Americantort4law,theroadaccidentplayedaprominentrole.
AkeyBritishcaseinthedevelopmentofU.
S.
tortlaw,Winterbottomv.
Wright,5involvedamailcoachdriverwhowasthrownfromhishorse-drawnmailcarriageafteritbrokedown,allegedlyduetothedefendantcontractor'sfailuretomaintainthecarriageinasafecondition[32].
6Startinginthe20thcentury,thecaraccidentcausedsignificantchangesinU.
S.
productliabilitylaw.
"Productsliability,likeAmerica,grewupwiththeautomobile.
Priortotheentryofmotorcarsontothenation'shighways,'theresimplywerenotlargenumbersofproduct-relatedlawsuits.
'OnceAmericaembracedtheautomobile,itinevitablyembracedautomotiveproductssuitsaswell.
"[13]TwoofthemostsignificantproductsliabilitycasesinAmericanhistoryarosefromautoaccidents.
InMacPhersonv.
BuickMotorCo.
,thefamousAmericanjuristBenjaminCardozowritingfortheNewYorkCourtofAppealsupheldaverdictforacarownerejectedfromhisBuickcarafteradefectivewoodenwheelonthecarcollapsed[22].
7InHenningsenv.
BloomfieldMotors,Inc.
[17],8theNewJerseySupremeCourtaffirmedajuryverdictagainstChryslerandadealerafterthewifeofthepurchaserhadanaccident.
Shetestifiedthatshefeltsomethingcrackinthecar,thesteeringwheelspunsharply,thecarveeredofftheroad,andthecarstruckahighwaysignandbrickwall.
Thethreadbaredescriptionsofthecaraccidentsintheseappellatecourts'decisions,however,donotreflecttherealityofthetrialsettinginwhichlawyersfortheinjuredplain-tiffswilldescribewhatmightbeacatastrophiccaraccidentinunvarnishedandsometimeshorrificterms.
ConsideradescriptionofthefamousFordPintoaccidentwritteninMother4"Tort"means"wrong,"and"tortlaw"providesamechanismforaplaintifftoseekredressinacivil(i.
e.
,non-criminal)case.
5Itwascommoninthe19thcenturyforAmericancourtstocitecontemporaryBritishcasesasprecedents.
6InWinterbottom,thecourtdeniedrelieftotheinjuredcoachmanbecauseofalackofdirectcontractualrelationship,called"privity,"betweentheplaintiffcoachmanandthedefendantcontractor.
Thecoachmanwasnotapartythecontractinwhichthedefendantcontractorprom-isedtomaintainthecoachingoodworkingorder[32].
7Theplaintiffhadboughtthecarfromaretailer,butcouldstillsuethemanufacturerdespitethelackofprivitywiththemanufacturer[22].
Thecarwasapparentlygoing8milesperhouratthetimeoftheaccident[13].
8Thecourtrejectedprivity,awarrantydisclaimer,andlimitsofliabilityasdefensestothewarrantyclaimofthewifedriverofthecarandherhusband,theowner[17].
ProductLiabilityIssuesintheU.
S.
andAssociatedRiskManagement578Jonesmagazine.
Althoughthedescriptionbelowcomesfromawriter,9itissimilarintoneandimpacttowhataplaintiff'slawyermightsayabouthisorherclientinanopeningstatement.
Hereishowthewriterdescribestheaccident:[A]woman,whomforlegalreasonswewillcallSandraGillespie,pulledontoaMinneapolishighwayinhernewFordPinto.
Ridingwithherwasayoungboy,whomwe'llcallRobbieCarlton.
Assheenteredamergelane,SandraGillespie'scarstalled.
Anothercarrear-endedhersatanimpactspeedof28milesperhour.
ThePinto'sgastankruptured.
Vaporsfromitmixedquicklywiththeairinthepassengercompartment.
Asparkignitedthemixtureandthecarexplodedinaballoffire.
Sandradiedinagonyafewhourslaterinanemergencyhospital.
Herpassenger,13-year-oldRobbieCarlton,isstillalive;hehasjustcomehomefromanotherfutileoperationaimedatgraftinganewearandnosefromskinonthefewunscarredportionsofhisbadlyburnedbody.
[11]Inthecourtroom,theyoungboy,sobadlydisfiguredbytheaccident,wouldlikelybesittingnexttohisattorneyduringtheentiretrial.
Thejurywouldbeseatedfacinghim,andwatchinghim.
Theunspokentestimonyofhiscatastrophicinjurieswouldlikelyhaveatleastanunconsciouseffectonthejurorswatchinghim.
Despiteinstructionsfromthejudgenottopermitsympathy,bias,orprejudicetoswaytheirverdict,acarmanufacturerdefend-ingthiscasewouldhaveandifficulttimeattrial.
IntheFordPintocase,the13-year-oldboy,whoserealnamewasRichardGrimshaw,receivedajuryawardintheamountofover$2.
5millionincompensatorydamagesandanawardofpunitivedamagestopunishanddeterFordintheamountof$125million[15].
PartofthemotivationforthelargeverdictwasevidenceduringthetrialofFord'sapparentlycold-hearteddecisionnottousefairlyinexpensivepartsinitscarsthatwouldhavepreventedtheaccident.
Althoughthepunitivedamagesawardwaslaterreducedinthiscaseto$3.
5million[15],theFordPintocaseshowsthekindofawardthatispossibleinanautomobileproductliabilitycasefollowingacatastrophicaccident.
AtsomefuturetimewhenanAVmanufacturerfacesaproductliabilitytrial,wecanexpecttoseeaccidentvictimsseatedinacourtroomwithsimilargruesomedisfigurementsandstoriesofout-of-controlcarsandtragic,frightfulaccidents.
Thedefendantmanufacturer'sengineeringandbusinesspracticeswillcomeunderscrutiny.
Andajurywilllikelydecidewhetherornotthemanufacturershouldbeheldresponsiblefortheaccidents.
DuringanAV'sdesignphase,itsmanufacturer'sdesignteamwillhaveanopportunitytodiscussandmakeengineeringandbusinessdecisionsaboutthedesignofitsAVs.
Teammemberswilltalkaboutsafetyeffortsthemanufactureriswillingtoundertake.
Inthesediscussions,teammemberscanthinkmoreclearlyandassessriskmoreeffectivelybyimaginingthemselvesinacourtroomsetting,defendingtheirpracticesinlitigationarisingfromacatastrophicaccident.
9Thewriterisusingpseudonymsforthenamesofthecrashvictims,evidentlybeforethenamesofthevictimsbecamepublic.
57926.
3Morerecenthigh-profileproductliabilitylitigationWhyarejurorswillingtorendertheselargeverdictsagainstmanufacturersTheshortanswerisjuroranger.
"Angryjurorsmeanhighdamages.
"[24]Morespecifically,juriesrenderlargeverdictswhentheybecomeangryatdefendants'conduct.
Whenjuriesbecomeangry,theonlywaythattheyseetheycanredressthedefendants'wrongsistorenderverylargeverdictsagainsttheminanefforttosendamessagethattheirconductisunac-ceptable.
IntheFordPintocase,thejuryheardevidencethatFordhadknownabouttheproblemswithitsfuelsystem.
Fordhadfoundtheproblemofrear-endcrashessplittingopenthePinto'sgastank.
Inaddition,Fordknewthatapartcosting$11couldhavepreventedtheaccident.
Nonetheless,Fordmadeacost/benefitanalysiscomparingtheoverallcostofaddingthesafetyparttothevehicleagainstthevalueoftheliveslostfromaccidentsin-volvingthevulnerability.
Fordassignedavaluetoeachhumanlifelikelylost.
AndForddecidedthattheoverallcostofthepartexceededtheoverallvalueofthehumanlivesthatwouldbesavedanddeterminedthatitthereforeshouldnotaddtheparttothePinto'sdesign.
Ford'scost/benefitcalculationseemedodioustothejurybecauseitplacedadollarvalueonhumanlife.
Inaddition,thejuryknewthattheextrapartwouldonlycost$11.
BynotaddingtheparttothePinto'sdesign,thejuryevidentlyconcludedthatFordplaceditsprofitsaheadofhumanlife.
Ford'sapparentcallousnessledtothejuryanger[15].
Inanotherfamousproductliabilitycase,aTexaslawyerobtaineda$253.
5millionver-dictagainstpharmaceuticalcompanyMerckforCarolErnst,thewidowofRobertErnst.
Mr.
ErnstdiedafterhavingtakenMerck'spainkillerVioxxforeightmonths[5].
ThejurysawinternalMerckdocumentsshowingthatthecompanywasawareoftheheartattackrisktousersbeforeitstartedmarketingthedrug.
Thedocumentsgavethejurytheimpressionthatthecompanycaredmoreaboutprofitsthanpublicsafety.
Asaresult,thejurytried,viathehugeaward,tosendamessagethatitiswrongtohideinformationaboutadrug'sdanger[14].
Althoughanappellatecourtlateroverturnedthejury'sverdict,againthecaseunderscorestheriskofhugeproductliabilityverdicts[23].
26.
3Morerecenthigh-profileproductliabilitylitigationAsnotedintheprevioussection,appellatecourtsprovidedsomerelieftoFordandover-turnedtheverdictintheVioxxcase.
Nonetheless,manufacturersshouldlooktotwomorerecentsetsofcasesinordertoanalyzethepotentialhumanandfinancialimpactofproductliabilityissues.
Section26.
3.
1coverstheso-called"suddenacceleration"phenomenoninvolvingToyotacars.
Section26.
3.
2describesthefalloutfromtheGeneralMotorsignitionswitchdefects.
Thesetwocasesshowhowmanufacturersmayneedtopayhugesumstoresolveproductliabilitylegalproceedings,whichareinadditiontothehumantollofdeathsandinjuries.
ProductLiabilityIssuesintheU.
S.
andAssociatedRiskManagement58026.
3.
1"Suddenacceleration"litigationSeveralyearsago,newsstoriesemergedconcerningaphenomenoninwhichToyotadriversreportedthattheircarsacceleratedwithoutwarningandweredifficulttostop,resultinginaccidents.
Onetypicalnewsreportstated,"NancyBernsteinfeelsluckytobealiveafterherToyotaPriuskeptaccelerating,nomatterhowhardshehitthebrakes.
'Thecar'sgoingabout70milesanhour,andI'mbeginningtogetscaredbecauseit'snotslowingdown,'Bernsteindescribed.
"[26].
Lawsuitsfollowedtheseaccidents,andfederalcasesweretransferredtotheU.
S.
DistrictCourtfortheCentralDistrictofCaliforniaforcoordinatedorconsolidatedpretrialproceedings[27].
Somereportscontendthatthe89peoplemayhavediedfromaccidentsinvolvingthesuddenaccelerationofToyotavehicles[10].
Governmentalinvestigations,however,showednoevidencethatdesignorimplementationflawsinToyotascausedunintendedacceleration[25].
Accordingly,therewassomecontroversyaboutwhetherToyotaordriverswereatfaultintheseaccidents.
Laterinthelitigation,however,areportbyexpertwitnessMichaelBarrfollowingadditionalresearchopinedthatasoftwaremalfunctionoccurredinoneofthecarsandthatthemalfunctionresultedinunintendedacceleration[4].
Barridentifiednumerousallegedproblemswiththesoftware,whichaccordingtoBarr,Toyota'sownengineershadtroubleunderstandingandcharacterizedas"spaghettilike"[4].
BarrtestifiedabouthisfindingsinanOklahomastatecourtcaseand,apparentlybasedinpartonthesefindings,thejuryinthecaseawardedcompensatorydamagesof$1.
5milliontothedriverand$1.
5milliontothefamilyofapassengerwhodiedinthecrash[35].
Thepartiesinthecase,Bookoutv.
ToyotaMotorCorp.
[7],settledthecaserightbeforeasecondphaseofthetrialtoconsiderpunitivedamagesagainstToyota[18].
Despitetheuncertaintyaboutwhatreallycausedtheseaccidents,Toyotastartedtosettlethevariouslegalactionsagainstthecompany.
TheOklahomacasemayhavebeenamoti-vatingfactor[28].
10Toyota'ssettlementpaymentssofarinclude:$1.
6billiontosettlefinanciallossclaimsinthemultidistrictlitigation[28].
$1.
2billiontosettlepotentialcriminalchargesagainstToyota[29].
$25.
5milliontosettleshareholderclaimsarisingthefailuretoreportsafetyissues[29].
$65millioninfinesforviolationsoffederalvehiclesafetylaws[29].
Thesesettlementpayoutsareinadditiontothenumerousproductliabilitylawsuitsthatremainpending,thesettlementofwhichpresumablywillcostahugesum.
Ifproductliabilitysettlementamountsexceed$1billion,thenthetotalsettlementsmayexceed$4billion.
Thecostoflegalfeesandotherinternalexpensesrelatedtoinvestigationandreme-dialmeasureswilladdevenmoretothefinalcostforToyota.
10"LegalanalystssaidthattheverdictmostlikelyspurredToyotatopursueabroadsettlementofitsremainingcases.
"[28]58126.
3Morerecenthigh-profileproductliabilitylitigation26.
3.
2GeneralMotorsignitionswitchissuesandrecallAnotherhigh-profileproductliabilityissuearosefromtherecentlyuncoveredproblemwithignitionswitchesincertainGeneralMotorscars.
Inthelate1990s,GMstartedusingnewswitchesforsmallcarstomakethemworkmoresmoothly.
"Butasitturnsout,newswitch-esinmodelssuchastheChevroletCobaltandSaturnIoncanunexpectedlyslipfrom'run'to'accessory,'causingenginestostall.
Thatshutsoffthepowersteering,makingcarshardertocontrol,anddisablesairbagsincrashes[20].
Theproblemsupposedlycausedover50accidents.
"GMsaystheproblemhascausedatleast13deaths,butsomemembersofCongressputthedeathtollnear100.
"[20]Apparently,GMengineerswereawareoftheproblembeforetheaccidents,butdecidednottoreplacetheswitches.
AninternalemailuncoveredinCongressionalhearingsdiscussedthefactthatamorerobustdesignwouldadd90centstothepriceoftheswitch,andwouldonlysave10-15centsinreducedwarrantyclaims[16].
"Thepartcostslessthan$10whole-sale.
Thefixtakeslessthananhour.
Amechanicremovesafewscrewsandconnectors,takesoffaplasticshroud,popsinthenewswitch,andthecustomerisbackontheroad.
"[12]"[T]omanypeoplefamiliarwiththeautomaker,"thereasonGMdidnotrecallthecarssooner"isacorporateculturereluctanttopassalongbadnews.
WhenGMwasstrugglingtocutcostsandbuffitsimage,arecallofitspopularsmallcarswouldhavebeenaterriblesetback.
"[12]"It'sprettyclearthatsomebodysomewherewasbeingpenny-wiseandpound-foolish,'saidMarinaWhitman,aprofessorattheUniversityofMichiganandaformereconomistatGM.
"[12]GM'sdecisionnottorecallthecarssoonerisprovingtobeacostlyone.
Congress,safetyregulators,theU.
S.
attorneyinNewYorkCity,theSEC,TransportCanada,and45stateattorneysgeneralareconductingprobesofGM.
GMisundertakingacostlyrecallofthecars.
Also,GMcreatedacompensationfundforfamiliesofcrashvictims,whichitexpectswillcostthecompany$400millionto$600million[19].
Inadditiontothecompensationfund,GMsaidthatitwillspend$1.
2billiontorepairthecarsandtrucksrecalledduringthesecondquarter,ontopofthe$1.
3billionitidentifiedforrepaircostsinthefirstthreemonthsoftheyear.
Inaddition,thecompanysetasideanadditional$874millioninthequarterforfuturerecalls.
[19]ThetotalexpenseforGMwillbehuge:"Alltold,GM'srecallshavecosttheautomakernearly$4billionthisyear.
"[19]Presumably,GMwillcontinuetopaymoreinfutureyearsaswell.
Moreover,GMwillhavetopayevenmoreforlegalfeesandotherinternalexpensesrelatedtoinvestigationandremedialmeasures.
ProductLiabilityIssuesintheU.
S.
andAssociatedRiskManagement58226.
4ClaimsanddefensesinproductliabilitycasesHavingcoveredthephenomenonofproductliabilitylitigation,thehumantollofaccidents,andthelargefinancialrisksinvolved,thissectioncoverswhatplaintiffsmustproveinordertoprevailinasuitbasedonanallegedlydefectiveproduct,aswellaswhatdefendantsmustproveinordertoassertcertaindefenses.
Typicalclaimsforplaintiffsseekingdamagesforbodilyinjuryorpropertydamagefromanaccidentare"strictproductliability,""negligence,"and"breachofwarranty.
"11MostofthelawgoverningproductliabilityintheU.
S.
isstatelaw,asopposedtofederallaw,andlawsdivergefromstatetostate.
26.
4.
1StrictproductliabilityclaimsTheeasiesttypeofclaimforaplaintifftoproveisaso-called"strictproductliability"claim.
Aplaintiffcanincludeinthesuitalmosteverybusinessinthechainofdistributionfromrawmaterialsorcomponentpartmanufacturerstomanufacturersofthefinishedproduct,distrib-utors,andretailers[13].
Strictliabilityreferstoliabilityfordefectiveproductswithoutfaultonthepartofthemanufacturerandregardlessofwhetherornotthereisacontractualrela-tionshipbetweentheplaintiffanddefendant.
Lawsvarysignificantlyfromstatetostate,andsomestatesdonotevenrecognizestrictliabilityasaviableclaim.
Nonetheless,moststates'statutoryandcommonlawstrictliabilitylawsarebasedontheformulationofstrictliabilityunderSection402AoftheSecondRestatementofTorts[2].
12AsstatedintheRestatement,inordertowinastrictliabilityclaim,theplaintiffmustproveattrial:Thedefendantsoldtheproductinquestion,Thedefendantisinthebusinessofsellingthiskindofproduct,Theproductwasdefectiveandunreasonablydangerousatthetimeitleftthedefendant'shands,Theproductisexpectedtoanddoesreachtheuserorconsumerwithoutsubstantialchangeintheconditioninwhichitissold,andThedefectwastheproximatecauseoftheplaintiff'sinjuries[2].
ThekeyissueforAVstrictliabilitydesigndefectclaimswillbewhetherthevehiclewas"defective.
"Aplaintiffmayassertthattheproductwasdefectiveinitsdesign,theproductwasdefectiveinthewayitwasmanufactured,and/orthatthedefendantfailedtoprovide11Anothertheoryofrecoveryforplaintiffsisfraud,alsoknownas"deceit"or"misrepresenta-tion,"andisbasedonfalsestatementsmadebytheselleraboutaproduct.
Misrepresentationsmaybeintentional,negligent(careless),orinnocent.
Thistypeofclaim,however,istheleastusedtheoryofrecoveryintheproductliabilitycontext[13].
12"MorethanthreequartersofAmericanjurisdictionsincorporateallorpartofthissectionintheirowndistinctbrandofstrictliability.
"[13]RestatementsoflawsummarizeanareaoflawintheU.
S.
,butdonotthemselveshavetheforceoflaw.
58326.
4Claimsanddefensesinproductliabilitycasesadequatewarningsorinstructionstotheusersoftheproduct.
OfgreatestconcernforAVlitigationaredesigndefectandfailuretowarnclaims.
Aplaintiffassertingadesigndefectwouldshowtheexistenceofa"defect"undertheapplicablestatelawtest.
CourtsintheU.
S.
applyoneofthefollowingtests:Atestbasedonwhatanordinaryconsumerwouldexpectfromaproduct,typicallyusedwherethepotentialforinjuryiscleartoconsumersfromthenatureoftheproduct.
Therisk-utilitybalancingtest,wheretheplaintiffcontendsthattherisksfromadesignoutweighthebenefitstotheconsumerorpublicfromadesign.
Theproductmanufacturertest,whichaskswhetherareasonablyprudentmanufacturerorseller,awareoftheproduct'sdangerouscondition,wouldnothaveputtheproductonthemarketifithadbeenawareoftheproduct'scondition.
Acombinationtest,whichmayshifttheburdenofprooftothemanufacturertoshowalackofdefectincertainsituations.
Theultimateissueapproach,inwhichthejuryhasthediscretiontodeterminewhetheradesignisdefective[31].
Frequently,aplaintiffassertingadesigndefectwilluseexperttestimonytoexplainwhythedefendant'sdesignisdefectiveandwillattempttoprovethatanalternativedesigncouldhavepreventedtheaccident.
Inadditiontorelyingondesigndefects,aplaintiffmayalsoassertastrictliabilityclaimbasedona"failuretowarn"theory.
Underthistheory,theplaintiffcouldcontendthatanAVwasdefectivebecausethedefendantfailedtoprovideadequatewarningsorinstructionsaboutthevehicle.
Theplaintiffwouldneedtoprovethatthewarningsdidnotadequatelyreducerisksassociatedwiththeproductorthattheinstructionswereinadequatetotelltheuserhowtousetheproduct.
26.
4.
2NegligenceclaimsAsanalternativeclaim,productliabilityplaintiffsoftenincludeanegligenceclaimintheircomplaints.
Theconceptof"negligence"referstocarelessconductthatfallsbelowthestandardofconducttowhichahypothetical"reasonableman"wouldadhere.
Aswithstrictliability,aplaintiffcanassertanegligenceclaimbasedonthedesignoftheproduct,thewayinwhichtheproductwasmanufactured,orthefailuretogiveadequatewarningsorinstructions.
Negligenceisaharderclaimforaplaintiffthanstrictliability,becausetheplaintiffmustshowsomedegreeoffaultonthepartofthedefendant.
Inordertoprevailinanegligenceclaim,theplaintiffmustprove:Thedefendantowedadutyofcaretoprovideareasonablysafeproductintermsofdesignortowarnofdangerousdefects–meetingastandardofconducttoprotectothersagainstunreasonablerisk,ProductLiabilityIssuesintheU.
S.
andAssociatedRiskManagement584Thedefendantbreacheditsdutyofcarebyfailingtoconformitsconducttothestandardofconductrequired,andThedefendant'sconductproximatelycausedtheplaintiff'sinjury[31].
26.
4.
3BreachofwarrantyclaimsInmoststatesintheU.
S.
,aplaintiffmayalsoincludeabreachofwarrantyclaiminaproductliabilitycomplaint.
Warrantiesareaffirmationsorpromisesconcerningaproductoritsperformance,features,orcharacteristics,suchasthoseconcerningthesafetyofaproduct.
Thebasisofabreachofwarrantyclaimisthattheseller'sproductdoesnotperformaspromised,ordoesnothavethefeaturesorcharacteristicspromised.
Designdefects,manufacturingdefects,orfailurestowarnmayallprovidethebasisforawarrantyclaim.
Aswithstrictliability,thequestioniswhetherornottheproductadherestothepromisesmade,regardlessofwhetherthesellerisatfaultforthefailuretoconformtothepromise.
Nonetheless,warrantyclaimsaresubjecttodefenseswithvariousdegreesofeffectiveness,includingthehistoricaldefenseof"privity"(plaintiff'slackofcontractualrelationshipwiththedefendant),therequirementthattheplaintiffprovidethesellernoticeofthebreach,andtheabilityforsellerstodisclaimwarranties[31].
InmostU.
S.
jurisdictions,purchasersofaproductortheirfamilymemberscansuecompaniesinthechainofdistributionunderawarrantytheorydespitethelackofprivity[31].
Inordertoassertabreachofwarrantyclaim,aplaintiffmusttypicallyprove:Thedefendantmadeawarranty,Theproductdidnotcomplywiththewarrantyatthetimeofthesale,Theplaintiff'sinjurywasproximatelycausedbythedefectivenatureoftheproduct,andAsaresult,theplaintiffsuffereddamage[31].
Awarrantyclaimwilltypicallyallegeoneofthreekindsofwarranties.
"Expresswarran-ties"arethoseactuallystatedbytheseller,suchasinasalescontract,warrantyprogramdocumentation,advertisements,orsalescollateral.
Theymaybewrittenororal.
Inadditiontotheexpresswarranties,thelawwillsometimesrecognizetwokindsof"impliedwarran-ties"regardingthesaleofconsumerproductsthatarisebyoperationoflaw,asopposedtoanythingtheselleractuallysaid.
Onekindofimpliedwarrantyisthe"impliedwarrantyofmerchantability.
"Thisimpliedwarrantyrequiresthesellertomakesuretheproductisfitfortheordinarypurposesofsuchproduct.
Forinstance,aconsumerwouldexpectthattheheadofahammerwouldnotflyoffthefirsttimeitisusedafterpurchase.
ThiskindofimpliedwarrantyistheonemostlikelytobeassertedagainstasellerofanAVinfuturecases.
Thesecondtypicalimpliedwarrantyisthe"warrantyoffitnessforaparticularpurpose.
"Wherethesellerknowstheparticularpurposeforwhichtheconsumerwillusetheproduct,andthebuyerisrelyingon58526.
4Claimsanddefensesinproductliabilitycasestheskillandjudgmentofthesellertoselectandfurnishsuitableproducts,thelawwillrecognizeanimpliedwarrantythattheproductwillbefitforthatpurpose.
Forinstance,ifatruckbuyertellsadealer'ssalesrepresentativethatthebuyerseeksapickupthatwillbeabletotowatrailerthroughmountainousoff-roadterrain,thenthedealerisdeemedtohavewarrantedthatthetruckrecommendedbythesalesrepresentativecan,infact,towthetraileroff-roadinthemountains.
26.
4.
4ClaimsunderconsumerprotectionlawsPlaintiffssometimesassertproductliabilityclaimsundervariousconsumerprotectionlaws.
Statelawsvary,andsomestatesdonotpermittheselawstobeusedforpersonalinjuries[1].
Theyarecommonlyusedwhenplaintiffsseekredressforallegedeconomicorfinanciallosses,suchasthediminutioninthevalueoftheirproductsduetotheallegeddefect.
ExamplesincludeCalifornia'sUnfairCompetitionLaw(UCL)[8],FalseAdvertis-ingLaw(FAL)[8],andConsumerLegalRemediesAct(CLRA)[9],aswellasequivalentlawsinotherstates.
Claimsunderthesestatutestypicallyrequireplaintiffstoprove:AviolationofthestatuteoccurredThatcausesInjurytoaconsumer.
Forinstance,theUCLprohibitsunlawful,unfair,orfraudulentbusinessactsorpractices.
TheFALbarsuntrueormisleadingadvertisingpractices.
TheCLRAprohibitsalistofunfairbusinesspractices,suchasmisrepresentingthecharacteristicsandqualitiesofaproduct.
26.
4.
5TypesofdefectsatissueinautonomousvehiclelitigationWedonotyethaveexamplesofcasesfiledagainstAVmanufacturerstosaywhatkindsofallegeddefectswilllikelyresultinlitigation.
Nonetheless,thehistoryofautomotivelitiga-tion,discussionswiththoseintheindustry,andjudgmentsaboutwhatislikelytocomesuggestthattherewillbemanysourcesofpotentialdefectsthatmaygiverisetoproductliabilitylitigation.
AVswillsharesomeofthesesourcesofdefectswithconventionalvehicles,butsomeofthemwillbeuniquetoAVs.
Thelistsofpotentialdefectsinthissectionarenotmeanttobeexclusive,andtherearemanypossiblesourcesofdefectsinconventionalandautonomousvehicles.
Somepossibledesigndefects13thatAVswillhaveincommonwithconventionalvehiclesinclude:13Anotherissueformanufacturersoffinishedproductsconcernstheirsupplychains.
CounterfeitordefectivecomponentsmayintroducemanufacturingdefectsintoAVs.
ProductLiabilityIssuesintheU.
S.
andAssociatedRiskManagement586Mechanicalorphysicaldefectsinvarioussystemsofthevehiclesortheirsafetyequipment,suchastheuseofmaterialsthatarenotstrongorthickenough,14oranexcessivelyhighcenterofgravitysubjectingthevehicletorollovers.
Defectsinelectricalcomponentsorsystemsotherthansensorsorcontrolsystemsforautonomousdriving,suchastheuseofwrongkindofcomponents,problemsintheperformanceofthecomponents,orthelackofdurabilityofthecomponents.
Software15defectsrelatingtosystemsotherthansensorsorcontrolsystemsforautonomousdriving,includinginformationsecurityvulnerabilities.
Thesedefectswilloccurinbothconventionalandautonomousvehiclesandthusexistinglawandlitigationmethodswouldapplytodetermineamanufacturer'sliability.
Nonetheless,AVsmayexperiencedefectsthatconventionalvehiclesdonot.
Again,theymaybemechanical,electronic,orsoftware.
Mechanicalorphysicaldefectsinthecontrolsystemsforautonomousmodeorthesensorsusedbytheautonomoussystems.
Asimpleexamplewouldbeweakmount-ingsforLIDARsensorswhich,iftheyfailed,mightcausetheAVtoloseitssensordatasuddenlyandcrash.
Defectsinelectricalcomponentsforsensorsorcontrolsystemsforautonomousdriving.
Softwaredefectsinthesensorsorcontrolsystemsusedforautonomousmode.
Themostinterestingandperhapsmostconcerningpotentialdefectsarethoseinthesoft-wareusedforautonomousdriving.
Someexamplesinclude:Designsthatdependoninadequatedatafromsensors,includinginsufficientamount,inaccuracy,deficientprecision,orinadequatespeedofdatainput.
Inaccuratepatternrecognition,suchastheAVfailingtobeabletorecognizeapedestrianintheroadorotherupcomingobstaclesorhazards.
Designsthatfailtoperformsafeordinarymaneuverssuchasturns,lane-keeping,distance-keeping,andmerging.
Otherproblemswithautonomousbehavior,suchasunpredictablechangesinspeedordirection.
Deficientcollisionavoidancealgorithms.
Informationsecurityvulnerabilities.
Defectsarisingfrominadequatehuman-computercoordination.
Forinstance,ifanAVswitchesbetweenautonomousandmanualmode,theAVmustalertthedriverbeforeswitchingtomanualmodeandtransitiontohumancontrolsafely.
14Forexample,theauthorwasinvolvedinonecaseinwhichtheplaintiffallegedthatthemetalinacar'stierodwasnotstrongenough,themetalfatigueexperiencedbyordinarywearofthecarweakenedthetierod,andanaccidentoccurredbecausemetalfatiguecausedthetierodtobreak.
15The"software"involvedmaybeintheformofcodebuiltintohardwareorfirmware.
58726.
4ClaimsanddefensesinproductliabilitycasesMoreover,Chapter4discussesdesigndecisionsprogrammersmustmakewhencreatingthelogicforanAVtohandlethesituationofwhenacollisionisimminentandunavoidableandthereisachoicebetweenstrikingandharmingdifferentpersons.
Forinstance,anAVmayfacethedilemmaofstrikingamotorcycleriderwearingahelmetoronewithoutahelmet,andaprogrammermightdecidethatitisbetter,ifacollisionisunavoidable,tostrikeoneortheother.
Iftheprogrammermakessuchadecisionanddesignsthesoftwaretoimplementthatdecision,thiskindofdesigndecisioncouldbethesubjectofaproductliabilitysuitfromthepersonstruckbyoperationofthesoftware.
26.
4.
6DefensesinproductliabilitycasesDefendantsmayassertanumberofdefensesagainstaproductliabilitycase.
Themostcom-montypesofdefensesrelatetotheconductoftheplaintiff.
Insomecases,thedefendantcontendsthattheplaintiff'snegligentconductcausedorcontributedtoanaccident.
Theviabilityofadefensebasedonaplaintiff'sownnegligencedependsonstatelawandthetypeofclaim,butadefendantmayalsouseitasevidenceofasupersedingcauseofanaccident.
Inaddition,someaccidentsoccurbecauseaplaintiffmisusedormodifiedaproduct.
Insomecases,aplaintiffissaidtohave"assumedtherisk"ofanopen,obvioushazard,suchasthepossibilityofbeingstruckbyagolfballonthelinks.
Finally,aplaintiffmaynotbeabletorecoveralldamagesifheorshefailedinsomewaytomitigatethedamages.
ManyofthesedefensesmayhavelimitedapplicationtopersonsdrivingAVsinauton-omousmode.
Iftheplaintiffwasnotincontrolofthevehicleatthetimeoftheaccident,theplaintiffcouldnothavedrivencarelessly.
OnceAVsenterthemassmarket,asellercannotrealisticallycontendthattheplaintiffassumedtheriskofdrivingavehicleusingnewanduntestedtechnology.
Nonetheless,itislikelyovertimethatsomepeoplewillmodifytheirAVsortrytoabusethesensorsorcontrolsystemsforfun.
Inthesecases,ifanaccidentoccurs,thedefendantmaypointtothisconductasadefense.
Moreover,defensesbasedonaplaintiff'sconductcouldreduceorbaraplaintiff'srecoverywhentheplaintiffwasnotadriveroftheAV,suchasapedestriancarelessly(orintentionally)dartingoutinfrontofanAVfasterthananyhumanormachinecouldreact.
TheotherkeydefenseinAVlitigationwilllikelybea"stateoftheart"defensetoadesigndefectclaim.
Thebasisofthisdefenseisthatthemanufacturercouldnothavepro-ducedasaferdesignatthetimeofsalebecausesaferdesignswerenottechnologicallyfeasiblethen.
Suchadefenseisvalidinsomestateswhilenotinothers[13].
1616Anothertypicalproductliability-specificdefenseistheeconomiclossdoctrine,whichbarsproductliabilitytortclaimswheretheclaimeddamagesarefinancialandnotforbodilyinjuryordamagetopropertyotherthantheproductitself.
Moreover,federallawmaypreemptsomestatelawclaims,becauseU.
S.
federallawtrumpsstatelawsinconsistentwithit.
Also,ifaproductismeanttobeusedbya"sophisticateduser"orprovidedbya"sophisticatedinterme-diary,"thesellermayhaveadefenseundercertaincircumstances,althoughthisdefenseisun-likelytoapplytoAVs.
Finally,ifamanufacturercreatesaproductpursuanttogovernmentspecification,itmayhavea"governmentcontractordefense.
"ProductLiabilityIssuesintheU.
S.
andAssociatedRiskManagement58826.
5ManagingtheriskofautonomousvehicleproductliabilityHavingcoveredthenatureofproductliability,thepotentiallyhugeexposureforlosses,jurorangerthatleadstohugejuryverdicts,andthenatureofproductliability,Inowturntotheissueofhowmanufacturerscanmanagetheriskofproductliabilitylitigation.
17Firstandforemost,managingtheserisksrequiresaproactiveapproach.
Byplanningtoday,manufacturerscanbepreparedfortheinevitablesuitslater.
First,planningcanenablethemtomakesaferproductsthatarelesslikelytocauselitigation-triggeringacci-dentsinthefirstplace.
Second,byplanningahead,manufacturerscanincreasetheirchanc-esofwinningthecasesthataccidentsdotrigger.
Aproactiveapproachtodesignsafetywithacomprehensiveriskmanagementprogramestablishesupfrontamanufacturer'scommit-menttosafety.
Whentheinevitablesuithappenslater,themanufacturer'scounselhasastorytotellthejuryastowhyitsproductsweresafeandhowthemanufacturercaredaboutsafety.
Second,manufacturersshouldconsiderthecommitmenttheymaketoproductsafetyusingsuchaproactiveapproach.
Onecommentatorstated,"Themosteffectivewayfor[counselfor]acorporatedefendanttoreduceangertowardhisorherclientistoshowallthewaysthattheclientwentbeyondwhatwasrequiredbythelaworindustrypractice.
"[24].
Meetingminimumstandardsisinsufficientbecauseofjurorskepticismabouttherigorofstandardssetorinfluencedbyindustryandbecausejurorsexpectcorporateclientstoknowmoreaboutproductsafetythana"reasonableperson"–thestandardforjudgingtheconductofdefendantsunderthelaw[24].
"Asuccessfuldefensecanalsobesupportedbywalkingjurorsthroughtherelevantmanufacturingordecision-makingprocess,showingallofthetesting,checking,andfollow-upactionsthatwereincluded.
Jurorswhohavenofamiliaritywithcomplexbusinessprocessesareoftenimpressedwithallofthethoughtthatwentintotheprocessandalloftheprecautionsthatweretaken.
"[24]Eventhoughaccidentsdooccur,andinanytrialsettinganaccidentorproblemdidoccur,adefendant'sproactiveapproachwouldshowthejurythatthemanufacturertriedhardtodotherightthing[24].
Consequently,effortstogoaboveandbeyondtheminimumstandardswoulddiffusejurorangerandmitigatethemanufacturer'srisk.
Third,manufacturersshouldrecognizethatriskmanagementisaprocessthatbeginswithacarefulriskanalysislookingatthetypes,likelihood,andimpactofissuesinthedesignofAVs.
Onceariskassessmentiscomplete,theycanreviewtheresultsandanalyzechangesindesignandengineeringpracticestoaddresstheseissues,prioritizerisksandriskmitigationmeasures,andimplementtheprioritizedriskmitigationmeasures[34].
Inconnectionwiththeriskmanagementprocess,manufacturerscanobtainguidancefromanumberofstandardsbearingonriskmanagementandsafety:17Ispeakhereofproductliabilitylitigation,althoughtheriskmanagementtechniquesherealsoapplytopreventingtheneedforcostlyproductrecalls.
58926.
5ManagingtheriskofautonomousvehicleproductliabilityISO31000"Riskmanagement–Principlesandguidelines"(regardingtheriskmanagementprocess).
SoftwaredevelopmentguidelinesfromtheMotorIndustrySoftwareReliabilityAssociation.
IEC61508Functionalsafetyofelectrical/electronic/programmableelectronicsafety-relatedsystems(safetystandardforelectronicsystemsandsoftware).
ISO26262familyof"FunctionalSafety"standardsimplementingIEC61508forthefunctionalsafetyofelectronicsystemsandsoftwareforautos.
WhileadherencetotheprinciplesofinternationalstandardsdoesnotguaranteethatanAVmanufacturerwillavoidliability,adherencetostandardsbolstersthecredibilityofamanufacturer'sriskmanagementprogram.
Moreover,thestandardsprovideaframeworkbywhichmanufacturerscanbuildasetofcontrolsfortheirriskmanagementprocess.
Consequently,anAVsafetyprogrambuiltoninternationalstandardslaysthefoundationforalaterdefenseofamanufactureraccusedofbuildinganunsafeAV.
Fourth,AVmanufacturersshouldobtaininsurancecoveragetomanageproductliabilityrisk.
Arobustinsuranceprogramwillpermitmanufacturerstoshifttheriskofproductliabilitytoinsurancecarrierswhowill,underissuedpolicies,defendandindemnifyman-ufacturersforsettlementsandjudgmentspaidtoresolvethirdpartyclaims.
Currently,theinsuranceindustryisjustbeginningtocometogripswiththeinsuranceimplicationsofAVs[21].
Wecanexpecttoseetheinsuranceindustryprovidethirdpartycoveragetomanu-facturersforaccidents,andprobablyprivacyandinformationsecurityrisksaswell.
WhiletheindustryhasnohistoricaldataforanactuarialapproachtounderwritingAVrisks,theindustrywillprobablylookbyanalogytoconventionalvehiclesandmobiledevicesforlossexperiences[6].
AVmanufacturerscanfindcarrierswillingtowritebespokepoliciestailor-madetotheirneeds.
Eventuallyothercarrierswillenterthemarketandoffermorestan-dardizedpolices,therebyreducingpremiumcoststomanufacturersoverthelongrun.
Fifth,manufacturerscanworktogetheronindustryriskmanagementinitiatives,suchas:Participationinstandardseffortstopromotesafetyandsecuritywithintheindustryandamongcomponentmanufacturers;Collaboratingwithothermanufacturersintradegroupsand(subjecttoantitrustconcerns)purchasingconsortia;withthepurchasingpoweroflargernumbersofmanufacturers,theindustrymayhavegreaterleveragewithcomponentmanufacturerstopromotesafedesignandmanufacturingprocesses;andParticipationininformationsharinggroupsthatcancollaboratetodevelopbestpracticestoimproveproductsafety.
Sixth,manufacturerscanmanagetheriskofhugejuryawardsbycertainpre-litigationstrategies.
Forinstance,theymaywanttoengagejuryconsultantsthatassistthedefenseofproductliabilitycasestoidentifyriskfactorsforthemanufacturerandthetypesofconductthattriggerjuroranger.
Inaddition,manufacturersmaywanttoidentifyandcultivateaProductLiabilityIssuesintheU.
S.
andAssociatedRiskManagement590groupofdefenseexpertstheycanusetoeducatejurorsaboutvariousengineering,infor-mationtechnology,andsafetyconsiderations.
Moreover,counselformanufacturersmaywanttojoinspecialtybarsfordefensecounselforpurposesofsharinginformation,briefs,andotherworkproduct.
Finally,manufacturerscanmaximizetheirsuccessinfutureproductliabilitytrialsbyfocusingoneffectiverecordsandinformationmanagement(RIM).
EffectiveRIMmaywincases,whilepoorRIMmaylosecases.
Documentsandrecordsproducedcontemporane-ouslywiththemanagementofasafetyprogramcancorroboratethetestimonyofwitness-es,provideahistoricalrecorddocumentingamanufacturer'ssafetyefforts,andsendthemessagethatthemanufacturercaresaboutsafety.
26.
6ConclusionsOneofthetop,ifnotthetop,challengeautonomousvehiclemanufacturersfaceistheriskofproductliabilitysuitsandrecallsinthewakeofaccidentsresultingindeathsandcata-strophicinjuries.
Lawsuitsinwhichmanufacturersappearcallous,placingprofitsoversafety,facetheriskofhugeliabilities.
Recentreportsabout"suddenacceleration"inToyotacarsandproblemswithGeneralMotors'ignitionswitchesshowthatthesecompaniesarepayingmultiplebillionsofdollarstoresolvelegalclaims.
PlaintiffshaveanumberofclaimstheycanassertagainstAVmanufacturers,althoughmanufacturersmayhavedefens-esaswell.
VariouskindsofdefectsmaycropupwithAVs,althoughproblemswithsoft-ware,logic,autonomousbehavior,andprogrammerdecisionsonAVbehaviorincrashesaretopconcerns.
Nonetheless,manufacturerscanmanageproductliabilityriskthroughcarefulplanning,astrongcommitmenttosafety,aneffectiveriskmanagementprocessbeginningwithathoroughriskanalysis,adherencetointernationalstandards,obtainingrobustinsurancecoverage,collaborationwithothermanufacturers,pre-litigationlegalstrategies,andeffectiverecordsandinformationmanagementpractices.
Insum,thethreatofcripplingproductliabilitylitigationintheUnitedStatesposesaprofoundconcernformanufacturersofautonomousvehicles,butstartingproactiveengineeringdesignstrategiesforsafetyriskmanagementandlegalstrategiestoanticipatefuturelitigationnowcanplacemanufacturersinthebestpositiontomaximizeproductsafetyandminimizeproductliabil-ityinupcomingdecades.
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