Paper by Terry Morehead Dworkin
Since the 1960s, liability of manufacturers, and consequently of insurers, has been on the increase. While the amount of increase is debatable, manufacturers, insurers, and others have treated the situation as a crisis, and have turned to the state legislatures for solutions.
The increase in liability, though not necessarily in insurance premiums, was largely a result of the pro-consumer plaintiff bias, manifested by more frequent, larger jury awards and liberalization of legal theories to facilitate plaintiffs' suits. The widespread adoption of strict liability, development of new theories such as enterprise and market share liability, the erosion of traditional defenses such as the patent danger rule and state of the art, and expansion of time limits within which suit can be brought are primary examples of this legal liberalization trend. Expansion of limitation periods became the primary focus of manufacturers' and insurers' reform efforts. Efforts at state legislative reform resulted in time limitations being adopted by almost half the states, primarily in the form of statutes of repose. Over two-thirds of the states have adopted some product liability reform measures in the last six years.
These reforms, however, have not halted the expansion of manufacturer liability. Courts continue to expand theories to facilitate suits. Some of the statutory reforms are being avoided or declared unconstitutional. Damage awards, including punitive damages continue to rise. Indeed, the lack of uniformity among state reform efforts has allegedly added to the crisis. As a result, manufacturers' and insurers' reform efforts have now shifted from the state legislatures to Congress. While some piecemeal legislation, such as bills designed to deal with the asbestos problem, has been introduced, the primary focus is on legislation designed to unify state product liability law through federal codification. The proposed reforms, which would not grant federal jurisdiction, are loosely based on the Model Uniform Product Liability Act UPLA, which was designed for adoption by the states.
Despite supporters' hopes, a solution premised on the proposed legislation is questionable. Many factors militate against passage of federal legislation. Even if a bill is passed, the proposed legislation will do little to solve the more threatening, emerging product liability problems of the 1980s. Delayed-manifestation injuries, which are increasingly being diagnosed and which affect hundreds of thousands of people, are much more likely to overwhelm the tort system than any of the developments of the 1970s that the UPLA was designed to meet. Johns-Manville Corporation's recent filing for bankruptcy reorganization is a notable example of this trend. Since the proposed legislation will do little to deal with these types of injuries, efforts to pass such a bill will be largely unavailing. A better allocation of resources would be achieved by leaving to the states product liability law for traditional injuries, and marshalling reform resources behind a comprehensive compensation plan for the thousands of emerging “time-bomb”' victims.
This paper will briefly review state reform efforts, the UPLA, and their relation to the federal reform efforts. In addition, it will examine the federal reform measures in the context of the delayed-manifestation problem.
About the Author
Terry Morehead Dworkin. Assistant Professor of Business Law, Indiana University. A.B. Stanford University; J.D. Indiana University—Bloomington.
Citation
57 Tul. L. Rev. 602 (1983)