August 16, 2019

Justices Address Product Liability of Component-Part Manufacturer; Brewer v. PACCAR, Inc.

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In Indiana, claims that an individual was injured by a defectively designed product are governed by the Indiana Product Liability Act. But who is at fault for the lack of safety features, the component-part manufacturer or the final manufacturer? In this case, the Court lays down some rules of the road on component-part product liability claims.

PACCAR manufactures “glider kits,” a component part that becomes an operable over the-road semi-truck after a purchaser installs an engine, transmission, and exhaust system. The glider kit created a forty-foot blind spot directly behind the semi. But PACCAR did not include certain safety features—such as a rear-view window, a backup alarm, a backup camera, or backup flashers—to alleviate the dangers associated with the blind spot when the semi is reversed.

W&W Transport purchased glider kits from PACCAR, rather than new vehicles, so it could install its preferred engines in its semi-truck fleet. W&W bought a sleeper-cab glider kit in 2015 and added the pieces necessary to make it an operable over-the-road semi-truck.

In 2016, Miller was backing the semi at a construction site, when he pinned Brewer between the back of the truck and a trailer. Brewer died as a result of his injuries.

Brewer’s widow filed a wrongful death claim against PACCAR, asserting a defective design claim under the IPLA. PACCAR moved for summary judgment, arguing that it had no duty to install those safety features as it manufactured the glider kit, not the truck. The trial court granted PACCAR’s motion, and the Court of Appeals reversed. The Court then accepted transfer.

The Court began its analysis with the recognition that the IPLA subjects the manufacturer of “a component part of a product” to liability for defective design. But the question is whether PACCAR, as the component-part manufacturer, owed a duty to install the safety features. The Court called the prior Indiana caselaw on this issue “sparse,” but it had established one rule:

under the IPLA, component-part manufacturers may have no duty, as a matter of law, to install safety features when the component part can be put to a variety of uses that prevent the component manufacturer from reasonably knowing whether and how safety features should be included.

Given the sparsity of Indiana cases dealing with the issue, the Court took guidance from two sources: federal caselaw and section 5 of the Restatement (Third) of Torts: Products Liability. After analyzing these sources, the Court then held the following:

under the IPLA, a manufacturer who produces a component part with only one reasonably foreseeable use has no duty, as a matter of law, to install safety features if: (1) the final manufacturer was offered the safety features and declined them; or (2) the component part, once integrated, can be used safely without those safety features.

In this case, the glider kit had one reasonably foreseeable use—to be turned into an over-the-road semi-truck. And there was a genuine issue of fact regarding whether (1) PACCAR offered the allegedly necessary safety features or (2) that the integrated glider kit can be used safely without them. Therefore, summary judgment for PACCAR was inappropriate.

A lesson can be learned from the evidence the Court relied upon when determining that there was a genuine issue of material fact. PACCAR designated an affidavit from one of its engineers, which stated that PACCAR offered, but W&W did not choose, certain safety features. But PACCAR also designated W&W’s response to a request for admissions, in which W&W “denies that it was provided with a list of options from which to identify or select the options that i[t] desired.” The Court found that PACCAR “did not provide anything,” such as an invoice, to refute this denial. Ergo, a genuine issue of material fact existed.

Finally, the Court recognized a “sophisticated-user defense” to a defective-design claim under the IPLA. The defense was previously recognized in connection with inadequate warning claims. This defense “typically exempts a manufacturer from providing warnings about a product’s potential dangers when the users of the product are—or should be—already aware of them.”

Both IPLA claims for inadequate warnings and those for defective design are based in negligence. To recover damages, a plaintiff asserting either type of claim “must establish that the manufacturer or seller failed to exercise reasonable care under the circumstances in designing the product or in providing the warnings or instructions.” In other words, both design defect claims and inadequate-warning claims focus on the reasonableness of the manufacturer’s conduct. Accordingly, both types of duty—to design a product with adequate safety features and to provide adequate warnings—may hinge on a user’s knowledge or level of sophistication.

A user’s sophistication is a fact-sensitive inquiry, and the Court identified some but not all of the factors to be considered when making that inquiry. PACCAR essentially asserted this defense, but the Court found that “this defense is suited for the trier of fact, not for summary judgment.”

Lessons:

  1. Component-part manufacturers can be liable for defective design under the Indiana Product Liability Act.
  2. A component-part manufacturer has no duty to install safety features if: (1) the final manufacturer was offered the safety features and declined them; or (2) the component part, once integrated, can be used safely without those safety features.
  3. Indiana recognizes a “sophisticated user” defense to a defective design product liability claim.