DTCI: 15 years of court interpretation on presumption and products liability

Jeter

The Indiana General Assembly first enacted the Indiana Product Liability Act in 1978. It originally governed claims in tort, using both negligence and strict liability theories. In 1983, the General Assembly amended it to apply only to strict liability actions. In 1995, the General Assembly once again amended the IPLA to encompass theories of recovery based upon both strict liability and negligence. In 1998, the General Assembly repealed the entire IPLA and recodified it, effective July 1, 1998. The 1998 version included a statutory rebuttable presumption (the “Presumption”), which provided that products considered state of the art or approved by government regulators before manufacture were presumed not to be defective.

In the 15 years since the Presumption became a part of the IPLA, it has been invoked in a number of actions involving the design, manufacture, labeling and packaging of numerous products. This article explores Indiana court decisions that have transformed the breadth and impact of the Presumption both in its application and the requirements necessary to overcome it. These decisions include the impact of advances in technology on the Presumption’s definition, the need (or lack thereof) for expert evidence to rebut it, and the required relation to the risk of harm which is a prerequisite to receiving its benefits.

The Presumption

Under the IPLA, a plaintiff must show that “(1) the product is defective and unreasonably dangerous, (2) the defective condition existed at the time the product left the defendant’s control, and (3) the defective condition is the proximate cause of the plaintiff’s injuries.” Ind. Code § 34-20-2-1; Natural Gas Odorizing, Inc. v. Downs, 685 N.E.2d 155, 160 (Ind. Ct. App. 1997). The Presumption provides that, in a product liability action, there is a rebuttable presumption that the product that caused the physical harm was not defective and that the manufacturer or seller of the product was not negligent if, before the sale by the manufacturer, the product:

(1) was in conformity with the… state of the art applicable to the safety of the product . . . ; or

(2) complied with applicable codes, standards, regulations . . . .

Ind. Code § 34-20-5-1. The Presumption is a statutory affirmative defense that a defendant is required to plead or have litigated by consent of the parties, and the failure to do so will result in waiver. FMC Corp. v. Brown, 526 N.E.2d 719 (Ind. Ct. App. 1988).

Conformity with the generally recognized state of the art

State of the art is defined as the best technology reasonably feasible at the time the product was manufactured. Indianapolis Athletic Club, Inc. v. Alco Stand. Corp., 709 N.E.2d 1070, 1074 (Ind. Ct. App. 1999). Recognizing the impact of technological advances, earlier decisions held that the definition must be based upon the “recognized technological environment” to include “available scientific knowledge, economic feasibility, and the practicalities of implementation.” Weller v. Mack Trucks, 570 N.E.2d 1341, 1342 (Ind. Ct. App 1991), (citing Montgomery Ward v. Gregg, 554 N.E.2d 1145, 1155 (Ind. Ct. App. 1990)). The court’s early acceptance of the role of technology may have invited a more robust judicial interpretation. See Phillips v. Cameron Tool Corp., 950 F.2d 488, 490 (7th Cir. 1991) (acknowledging that the courts have “embraced the concept of technological advancement in defining state of the art.”)

Compliance with applicable codes, standards, regulations

A defendant may also trigger the Presumption by showing that a preponderance of the evidence shows that it complied with relevant minimal safety standards. Schultz v. Ford Motor Co., 822 N.E.2d 645, 653-54 (Ind. Ct. App. 2005), transfer granted, opinion vacated, 841 N.E.2d 182 (Ind. 2005), and vacated, 857 N.E.2d 977 (Ind. 2006). After an initial showing, the Presumption is mandatory and, unless rebutted, allows the conclusion that the manufacturer was not negligent. Id. The governmental compliance presumption does not arise logically but is instead a legislative fiction created to address the public policy concerns that manufacturers receive inadequate credit for complying with governmental standards. Id.

Overcoming the Presumption

Once the Presumption is established, the opposing party has a burden of producing evidence to overcome the Presumption to avoid dismissal. See Cansler v. Mills, 765 N.E.2d 698, 705 (Ind. Ct. App. 2002), overruled on other grounds by Schultz v. Ford Motor Co., 857 N.E.2d 977 (Ind. 2006). See McClain v. Chem-Lube Corp., 759 N.E.2d 1096, 1101 (Ind. Ct. App. 2001). (“[A] rebuttable presumption does not shift the burden of proof but it does impose upon the opposing party a burden of producing evidence.”) To overcome the Presumption, a plaintiff must present sufficient evidence to prove: (1) he was harmed by a product; (2) the product was sold “in a defective condition unreasonably dangerous to any user or consumer”; (3) he was a foreseeable user or consumer; (4) defendant was in the business of selling the product; and (5) the product reached plaintiff in the condition it was sold. Bourne v. Marty Gilman, Inc., 452 F.3d 632, 635 (7th Cir. 2006) (quoting I.C. § 34-20-2-1). Indiana law requires a plaintiff to show that the product in question is both “in a defective condition” and that it is “unreasonably dangerous.” Id.

The Presumption represents a significant barrier for plaintiffs because nearly every manufactured product must receive some form of regulatory approval, which activates the Presumption. The Presumption is powerful, and the opportunity to rebut is sometimes overlooked. In Rogers ex rel. Rogers v. Cosco, Inc., 737 N.E.2d 1158, 1166-67 (Ind. Ct. App. 2000), disapproved of by Schultz v. Ford Motor Co., 857 N.E.2d 977 (Ind. 2006), a 22-month-old child brought an action, through her mother, which alleged that Cosco was negligent in its manufacture, distribution and sale of a booster seat. Id. In granting summary judgment to Cosco, based largely upon the Presumption, the trial court failed to rule on a motion to strike pieces of evidence that had been designated by plaintiffs to rebut the Presumption. Id. The Court of Appeals remanded the case, holding that the issue of whether the plaintiff overcame the Presumption “rest[ed] upon the issue of whether her designated evidence met the designation requirements of Ind. Trial Rule 56.” Id.

Plaintiffs often encounter the additional hurdle of getting a defendant’s interaction with regulators admitted as evidence for purposes of rebuttal. See In re Trasylol Prods. Liab. Litig., 763 F. Supp. 2d 1312, 1329-30 (S.D. Fla. 2010), (holding that evidence or testimony pertaining to conflicts with a federal agency is generally irrelevant to a plaintiff’s state law claims and thus inadmissible); Webstyer v. Pacsetter, Inc., 259 F. Supp. 2d 27, 37 (D.C. 2003), (Plaintiff cannot create an issue of fact regarding a state-law tort claim through evidence about the defendant’s communications with federal agencies.)

Expert testimony not required

In 2002, Cansler represented the biggest setback yet to the Presumption. 765 N.E.2d at 701-707. Cansler involved a motorist who filed a negligence claim against the automobile manufacturer due to the failure of his car’s airbag to inflate at the time of the accident. Id. at 701. General Motors filed for summary judgment, arguing that they were entitled to the Presumption and attaching the vehicle’s Motor Vehicle Safety Standard Certification, which relates to the applicable federal standards for occupant crash protection contained in 49 C.F.R. § 571.208 (1994). Id. at 705. The documentation showed that the vehicle was equipped with a supplemental inflatable restraint system in conformity with “applicable safety regulations and crash protection requirements and injury criteria.” Id. To rebut the Presumption, the plaintiff designated the testimony of his mechanic. Id. at 701.

Seeking to exclude the mechanic’s testimony, General Motors argued that the plaintiff had to designate expert testimony in order to rebut the Presumption. Id. at 706. Citing the 13 hours spent by the mechanic repairing the vehicle, the court held:

We find that this designated evidence was enough to rebut the presumption . . . .

Id. at 707. Cansler restricted use of the Presumption by opening the aperture for plaintiffs to rebut it using nonexpert evidence that will reduce a plaintiff’s time and cost.

Relation to the risk at issue

The Court of Appeals sought to narrow the Presumption further in Wade v. Terex-Telelect, Inc., 966 N.E.2d 186, 188 (Ind. Ct. App. 2012). In Wade, the plaintiff brought a product liability action for injuries he sustained when he fell from an aerial passenger bucket attached to a truck. Id. at 190. He specifically claimed that the liner of the bucket blocked the interior recess that provided a step. Id. Plaintiff sued Terex, the manufacturer of the truck. Id. At trial, Terex had a board-certified safety professional testify that he had reviewed applicable American National Standards Institute rules as well as Occupational Safety and Health Administration regulations and that, in his opinion, the bucket on the liner inside the truck complied with federal standards and was the best technology available at the time Id. at 190-91. Terex called several other experts, including an engineer and the drafter of the ANSI rules, to testify as to the safety of the bucket liner and its regulatory compliance. Id.

In response, the plaintiff argued that no evidence was presented to support the giving of a jury instruction on the Presumption. Id. at 192. Specifically, he alleged that none of Terex’s witnesses presented evidence that a bucket with no interior step was the best technology reasonably feasible. Id. at 193. Further, he claimed that Terex did not present sufficient evidence that the bucket complied with any applicable government standards because neither of the standards cited by Terex was applicable to egress from the truck’s bucket. Id. The court agreed, holding:

State of the art evidence must be relevant to the risk at issue. The fact that a product may be in conformity with the generally recognized state of the art applicable to a particular risk does not make it state of the art for all purposes. Thus, while the braking system on an automobile may be state of the art in terms of its ability to stop a car travelling at a designated rate of speed within a designated distance from the time the brakes are applied, such evidence would not be relevant in a products liability case

where the braking system caused a fire in the vehicle.

Id. at 193 (emphasis added).

Terex had also argued, through its expert witnesses, that the truck’s bucket met all applicable government regulations, which would also trigger the Presumption. The court went further in rejecting this argument, finding that the applicable regulations did not specifically address the liner within the bucket:

Nowhere in [applicable regulations] is there a requirement for or prohibition of an interior step in buckets or liners. Rather, the standards are silent regarding interior steps. As a result, there was no relevant evidence presented regarding any government standard applicable to interior steps in buckets or bucket liners. Therefore, there was not sufficient evidence presented to support Terex’s contention that the liner at issue complied with applicable government regulations.

Id. at 195 (emphasis added). The “relation to risk” requirement significantly narrows the universe of regulatory compliance and state-of-the-art evidence that will be helpful to a defendant to those matters that go directly to the plaintiff’s claimed injury. One could think of numerous parts of various products that are not specifically covered by government regulation.

Conclusion

In the end, litigators should make no mistake: the statutory Presumption within the IPLA is alive and well. See Gresser v. Dow Chemical Co., Inc. 989 N.E.2d 339 (Ind. Ct. App. 2013), (EPA approval of pesticide meant product did not pose “unreasonable risk” and entitled defendant to summary judgment under the statutory presumption.) However, 15 years of court interpretation has resulted in a few significant restrictions that manufacturers and their attorneys should know. Only time will tell what the next 15 years have in store.•

Mr. Jeter is an associate in the Indianapolis office of Barnes & Thornburg LLP and is an active member of the DTCI’s Products Liability Section. The opinions expressed in this article are those of the author.