Hollister v. Dayton Hudson Corp.

• Decision Date: 12 May 1998
• Docket Number: Civil Action No. 96-73142.
• Citation: 5 F.Supp.2d 530
• Parties: Laura HOLLISTER, Plaintiff, v. DAYTON HUDSON CORPORATION, a foreign corporation, Defendant.
• Court: U.S. District Court — Eastern District of Michigan

5 F.Supp.2d 530

Laura HOLLISTER, Plaintiff, v. DAYTON HUDSON CORPORATION, a foreign corporation, Defendant.

Civil Action No. 96-73142.

United States District Court, E.D. Michigan, Southern Division.

May 12, 1998.

Robert P. Lynn, Jr., Mineola, NY, Harvey Chayet, Thurswell, Chayet & Weiner, Southfield, Gary C. Rogers, Fraser, Trabilcock, David, Lansing, MI, Steven P. Handler, Charles M. Gering, McDermott, Will & Emery, Chicago, IL, for Plaintiff.

William J. Eaton, Rice, Galin & Traurig, Southfield, MI, for Defendant, Ralph Lauren.

Dennis M. Goebel, Harvey, Kruse, Troy, MI, for Defendant, Dayton Hudson Corp.

OPINION AND ORDER

FEIKENS, District Judge.

I. INTRODUCTION

This is a design defect product liability case. To resolve its central issue, I must apply Michigan's risk-utility test, a test which balances the magnitude of risk in the use of a product with the utility of use of that product. The Michigan Supreme Court adopted the risk-utility test for design defect product liability cases in the landmark decision, Prentis v. Yale Mfg. Co., 421 Mich. 670, 365 N.W.2d 176 (1984). "Thus we adopt, forthrightly, a pure negligence, risk-utility test in products liability actions against manufacturers of products, where liability is predicated upon defective design." Id. at 691, 365 N.W.2d 176.

A. Reasoning behind Michigan courts' adoption of the risk-utility test.

The court in Prentis noted that

while courts have accepted the social policy rationale that those injured by defective products should be compensated for their injuries ... and have agreed that manufacturers can most effectively distribute the costs of injuries, they have never gone so far as to make sellers insurers of their products and thus absolutely liable for any and all injuries sustained from the use of those products.

Prentis, 421 Mich. at 682-83, 365 N.W.2d 176.¹ The court observed that questions relating to design defects and determinations when a product is not reasonably safe because of its design are "the most agitated and controversial issues before the courts in the field of products liability." Id. at 684, 365 N.W.2d 176. Appellate courts, attempting to differentiate between various theories of recovery in design defect cases, sought to devise well-articulated distinctions. Id. at 685, 365 N.W.2d 176. Other courts attempted to control the scope of liability in design defect cases. Id. The result is several opinions in which standards for liability in design defect cases have been carefully examined by courts and debated by judges. Id. There are four general categories for determining the meaning of defect in design defect cases: (1) the risk-utility analysis (associated with Dean Wade²), which focuses upon whether a manufacturer "would be judged negligent if it had known of the product's dangerous condition at the time it was marketed," (2) a comparison of risk and utility of the product at the time of trial, (3) a consumer expectations analysis, and (4) a combination of the risk-utility and consumer-expectations tests. Id. at 685-86, 365 N.W.2d 176 (citations omitted). The court in Prentis noted that "the overwhelming consensus among courts deciding defective design cases is in the use of some form of risk-utility analysis." Id. at 686, 365 N.W.2d 176. It stated that the risk-utility analysis in the design defect context always involves assessment of decisions made by manufacturers when designing their products. Id. at 686-87, 365 N.W.2d 176. It observed that the law stands as a watchdog to ensure that manufacturers' product design decisions do not expose product users to unreasonable risk of injury. Id. at 687, 365 N.W.2d 176 (emphasis added, citation omitted).

Thus, in design defect product liability cases courts seek to satisfy the societal goal of holding manufacturers and sellers accountable for the safety of their products by striking a balance between tort liability and strict liability for physical injury caused by products. Prentis, 421 Mich. at 681, 365 N.W.2d 176. "From their earliest application, theories of products liability have been viewed as tort doctrines which should not be confused with the imposition of absolute liability." Id. at 682, 365 N.W.2d 176 (emphasis added). These theories are not strict liability theories. They do not impose liability without fault. "[A] plaintiff relying upon the rule [in product liability cases] must prove a defect attributable to the [manufacturer's product] and causal connection between that defect and the injury or damage of which he complains. When able to do that, then and only then may he recover against the manufacturer of the defective product." Id. (citing Piercefield v. Remington Arms Co., 375 Mich. 85, 98-99, 133 N.W.2d 129 (1965)).

Michigan cases clearly do not say that simply because a plaintiff suffers a severe injury when using a product that liability must be imposed on the manufacturer of that product, i.e., strict liability. Similarly, Michigan product liability cases do not infer negligence, based on severity of injury. Michigan cases do not impose on manufacturers the obligation to foresee all possible injury from their products. Society benefits most when product users bear appropriate responsibility for their use of products. Careless users of products should not be subsidized by more careful users through payment of higher product prices because of claims against manufacturers. The court in Prentis struck a balance between traditional negligence and strict liability when it adopted the risk-utility test to distribute burdens fairly between users and manufacturers of products. Id. at 690-91, 365 N.W.2d 176.

B. Michigan law parallels the Proposed Restatement (Third).

Although Michigan has not adopted the Proposed Final Draft of the Restatement (Third) of Torts: Product Liability § 2 (April 1, 1997), the Michigan risk-utility test is consistent with the principles of section 2(b), which states:

A product: ... (b) is defective in design when the foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative design by the seller or other distributor, or a predecessor in the commercial chain of distribution, and the omission of the alternative design renders the product not reasonably safe;

RESTATEMENT (THIRD) OF TORTS: PRODUCT LIABILITY § 2 (Proposed Final Draft, 1997) (emphasis added). The reasoning in Michigan cases is consistent with the reasoning detailed in Comment a. to this section. Comment a. states that because design defects cannot be determined by reference to the manufacturer's standards (those being the very standards plaintiffs attack as unreasonable), "[s]ome sort of independent assessment of advantages and disadvantages, to which some attach the label `risk-utility balancing,' is necessary. Products are not generically defective merely because they are dangerous." RESTATEMENT (THIRD) OF TORTS: PRODUCT LIABILITY § 2 (Proposed Final Draft, 1997), cmt. a. This comment states that trade-offs are necessary to determine costs more fairly and efficiently borne by those who incur them, and costs better borne by products users and consumers as a group through liability imposed on product sellers, with subsequent reflection of this liability in product prices. Id.

Society benefits most when the right, or optimal, amount of product safety is achieved. From a fairness perspective, requiring individual users and consumers to bear appropriate responsibility for proper product use prevents careless users and consumers from being subsidized by more careful users and consumers, when the former are paid damages out of funds to which the latter are forced to contribute through higher product prices.

Id. (emphasis added). In a fair and efficient liability system, the balancing of risks and benefits "in judging product design" must be done "in light of the knowledge of risks and risk-avoidance techniques reasonably attainable at the time of distribution" of the product. Id. (emphasis added).

C. Distributor/seller liability is the same as manufacturer liability.

This suit is against a distributor/seller of a product. In a design defect product liability case, a distributor's liability is the same as the manufacturer. Gregory v. Cincinnati Inc., 450 Mich. 1, 34-35, 538 N.W.2d 325 (1995).

II. CHOICE OF LAW

Plaintiff Laura Hollister's injury occurred in Illinois. When she filed this case, Hollister was (and still is) a Michigan citizen domiciled in Ingham County. Defendant Dayton Hudson Corporation (Hudson) is a foreign corporation doing continuous business in Michigan.³ This court has diversity jurisdiction pursuant to 28 U.S.C. § 1332. Venue is proper under 28 U.S.C. §§ 1391(a)(3) & (c). Thus, the substantive law of Michigan, including its choice of law rules, must be applied. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496-97, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941); Erie R.R. Co. v. Tompkins, 304 U.S. 64, 74-77, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). Michigan's lex fori rule for deciding choice of law issues in tort cases, as delineated in Sutherland v. Kennington Truck Serv., Ltd., 454 Mich. 274, 562 N.W.2d 466 (1997); Olmstead v. Anderson, 428 Mich. 1, 400 N.W.2d 292 (1987); and Sexton v. Ryder Truck Rental, Inc., 413 Mich. 406, 320 N.W.2d 843 (1982), requires this.

III. MICHIGAN'S PURE RISK-UTILITY TEST

In a design defect product liability case a plaintiff must show that the action is based on a design defect. Prentis, 421 Mich. at 682-83, 365 N.W.2d 176. Recovery for an injury caused by a defect in a product may be obtained if the product's design, the result of an intentional design decision of the manufacturer, is not sufficiently safe. Id.

Owens v. Allis-Chalmers Corp., 414 Mich. 413, 326 N.W.2d 372 (1982), and Reeves v. Cincinnati, Inc., 176 Mich.App. 181, 439 N.W.2d 326 (1989), are important cases in the evolution of the Michigan risk-utility test. In Owens, the Michigan...