Banks v. ICI Americas, Inc.

• Decision Date: 05 December 1994
• Docket Number: No. S94G0620,S94G0620
• Citation: 450 S.E.2d 671,264 Ga. 732
• Parties: , 63 USLW 2460, Prod.Liab.Rep. (CCH) P 14,107 BANKS et al. v. ICI AMERICAS, INC.
• Court: Georgia Supreme Court

Page 671

450 S.E.2d 671

264 Ga. 732, 63 USLW 2460, Prod.Liab.Rep.

(CCH) P 14,107

BANKS et al. v. ICI AMERICAS, INC.

No. S94G0620.

Supreme Court of Georgia.

Dec. 5, 1994.

Reconsideration Denied Dec. 20, 1994.

Robert E. Shields, Doffermyre, Shields & Canfield, Atlanta, Richard A. Childs, Columbus, for Banks et al.

Susan D. Burnell, Rogers & Hardin, Atlanta, M. Stephen Hyles, Hagler & Hyles, Columbus, Phillip S. McKinney, Rogers & Hardin, Atlanta, for ICI Americas, Inc.

Jerry J. Phillips, Knoxville, TN, Francis H. Hare, Jr., Ass'n of Trial Lawyers, Birmingham, Charles A. Mathis, Jr., Mathis, Jordan & Adams, Milledgeville, Elizabeth B. Bunce, Franklin, Taulbee, Rushing & Bunce, Statesboro, Walter H. Beckham III, Kirwan, Gager, Chesin & Parks, Atlanta, Anne W. Bloom, Trial Lawyers for Public Justice, P.C., Brian Wolfman, Public Citizen Litigation Group, Washington, DC, for amicus appellant.

HUNSTEIN, Justice.

The parents and administrator of the estate of Marlo Strum brought suit against a local boy's club, a pest control company, and ICI Americas, Inc., the manufacturer of a rodenticide called "Talon-G," alleging that nine-year-old Marlo died after ingesting an unknown amount of Talon-G, which he had found in a cabinet in an unmarked container at the boy's club serviced by the pest control company. As to ICI, plaintiffs alleged under both negligence and strict liability theories that Talon-G was defectively designed and that the product had been inadequately labelled. The case proceeded to trial, during which the boy's club and pest control company settled with plaintiffs. The jury found against ICI and awarded plaintiffs, in addition to compensatory damages (set off against amounts received from the other defendants), punitive damages in the amount of $1 million. The Court of Appeals reversed the judgment on the bases that the evidence was not sufficient to support a finding that Talon-G was defectively or negligently designed and that plaintiffs' failure to warn claim was preempted by Federal law. ICI Americas v. Banks, 211 Ga.App. 523, 440 S.E.2d 38 (1993). Writ of certiorari was granted to consider the Court of Appeals' opinion.

1. There are three general categories of product defects: manufacturing defects, design defects, and marketing/packaging defects. See Maleski, Ga. Products Liability (2nd ed.), § 5-1. In the seminal case in Georgia, Center Chemical Co. v. Parzini, 234 Ga. 868, 218 S.E.2d 580 (1975), this Court held that OCGA § 51-1-11 imposes strict liability for defective products and concluded that a product that is "properly prepared, manufactured, packaged and accompanied with adequate warnings and instructions ... can not be said to be defective." Id. at 870(4), 218 S.E.2d 580. Parzini addressed manufacturing and packaging defects and did not recognize the existence of design defects, ^{1 1} i.e., those cases where it is not possible to ascertain whether a product is "defective" by simply comparing it to a properly manufactured item from the same product line. See Maleski, supra at § 6-1. This Court nevertheless followed Parzini when directly presented with a defective design claim in Mann v. Coast Catamaran Corp., 254 Ga. 201, 326 S.E.2d 436 (1985). In Mann, the Court rejected evidence of alternative safer designs to hold that where a product was "reasonably suited for its intended purpose" and where the presence or absence of a design feature did not prevent the product "from functioning properly in its intended use, such cannot be considered defective design." Id. at 202(1), 326 S.E.2d 436.

The Court in Mann failed to recognize that the Parzini manufacturing defect analysis was not applicable to a design defect case. Unlike a manufacturing defect case, wherein it is assumed that the design of the product is safe and had the product been manufactured in accordance with the design it would have been safe for consumer use, in a design defect case the entire product line may be called into question and there is typically no readily ascertainable external measure of defectiveness. It is only in design defect cases that the court is called upon to supply the standard for defectiveness: the term "defect" in design defect cases is an expression of the legal conclusion to be reached, rather than a test for reaching that conclusion. Wade, On Product Design Defects and Their Actionability, 33 Vand.L.Rev. 551, 552 (1980); 2 American Law of Products Liability 3d (1987), § 28:1.

Because neither Parzini nor Mann addresses the appropriate test for reaching the legal conclusion that a product's design specifications were partly or totally defective, we hold that the analysis therein will henceforth not be utilized in products liability design defect cases. ²

To arrive at the appropriate test for reaching the legal conclusion that a product's design specifications were partly or totally defective, this Court has conducted an exhaustive review of foreign jurisdictions and learned treatises. That review has revealed a general consensus regarding the utilization in design defect cases of a balancing test whereby the risks inherent in a product design are weighed against the utility or benefit derived from the product. See, e.g., 1 Am.L.Prod.Liab., § 1:49; Preliminary Draft No. 1 (April 20, 1993) Restatement (Third) of Torts: Products Liability, § 101, Reporters' Notes to Comment G; O'Reilly & Cody, The Products Liability Resource Manual (General Practice Section of the American Bar Association 1993) § 6.04, p. 66. This risk-utility analysis incorporates the concept of "reasonableness," i.e., whether the manufacturer acted reasonably in choosing a particular product design, given the probability and seriousness of the risk posed by the design, the usefulness of the product in that condition, and the burden on the manufacturer to take the necessary steps to eliminate the risk.

When a jury decides that the risk of harm outweighs the utility of a particular design (that the product is not as safe as it should be), it is saying that in choosing the particular design and cost trade-offs, the manufacturer exposed the consumer to greater risk of danger than he should have. Conceptually and analytically, this approach bespeaks negligence.

Birnbaum, Unmasking the Test for Design Defect: From Negligence [to Warranty] to Strict Liability to Negligence, 33 Vand.L.Rev. 593, 610 (1980).

The balancing test that forms the risk-utility analysis is thus consistent with Georgia law, which has long applied negligence principles in making the determination whether a product was defectively designed. ³ Accord Hunt v. Harley-Davidson Motor Co., 147 Ga.App. 44(4), 248 S.E.2d 15 (1978), in which it was noted that "[a]lthough the benefits of safer products are certainly desirable, there is a point at which they are outweighed by the cost of attaining them." (Emphasis supplied.) See also Maleski, supra at §§ 5-5 and 6-2. Therefore, because the risk-utility analysis is consistent with Georgia law and represents the overwhelming consensus among courts deciding design defect cases, 1 Am.L.Prod.Liab., supra at § 1:50, we conclude that the better approach is to evaluate design defectiveness under a test balancing the risks inherent in a product design against the utility of the product so designed. Hence, we hereby adopt the risk-utility analysis.

Numerous lists of factors to be considered by the trier of fact in balancing the risk of the product against the utility or benefit derived from the product have been compiled by various authorities. One factor consistently recognized as integral to the assessment of the utility of a design is the availability of alternative designs, in that the existence and feasibility of a safer and equally efficacious design diminishes the justification for using a challenged design. O'Brien v. Muskin Corp., 94 N.J. 169, 463 A.2d 298, 305 (1983). See 78 ALR4th 154. The alternative safer design factor reflects the reality that

[i]t often is not possible to determine whether a safer design would have averted a particular injury without considering whether an alternative design was feasible. The essential inquiry, therefore, is whether the design chosen was a reasonable one from among the feasible choices of which the manufacturer was aware or should have been aware.

2 Am.L.Prod.Liab., supra at § 28:14, p. 28. Indeed, the reasonableness of choosing from among various alternative product designs and adopting the safest one if it is feasible is considered the "heart" of design defect cases, ⁴ 78 ALR4th 154 § 2, since it is only at their most extreme that design defect cases reflect the position that a product is simply so dangerous that it should not have been made available at all. See O'Brien, supra, 463 A.2d at 306; Prosser and Keeton, The Law of Torts (5th ed.) § 96, pp. 688-689.

We agree with the importance placed on the alternative safer design factor and now hold that in determining whether a product was defectively designed, the trier of fact may consider evidence establishing that at the time the product was manufactured, an alternative design would have made the product safer than the original design and was a marketable reality and technologically feasible ⁵. Rix v. General Motors Corp., 222 Mont. 318, 723 P.2d 195, 202(II) (1986). Anything to the contrary in Mann is disapproved.

We recognize that in setting forth a test under the risk-utility analysis for the determination whether a manufacturer should be liable for an entire product line, no finite set of factors can be considered comprehensive or applicable under every factual circumstance, since such matters must necessarily vary according to the unique facts of each case. Such diverse matters as competing cost trade-offs, tactical market decisions, product development and research/testing demands, the idiosyncrasies of individual corporate management styles, and federal and other regulatory restrictions can enter into a...