Manufacturing Defects

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1 A SUMMARY OF PUERTO RICO PRODUCTS LIABILITY LAW Presented by: Manuel Moreda-Toldeo, Esq., McConnell Valdes While Puerto Rico is, in essence, a Civil Law jurisdiction, its legislature has never enacted any laws specifically governing the area of products liability. As early as 1969, however, the Puerto Rico Superior Court established that products liability actions in Puerto Rico were to be premised on Article 1802 of our then-applicable 19 th Century Civil Code. Shortly thereafter, in the case of Mendoza v. Cervercería Corona 97 P.R.R (1969), the Puerto Rico Supreme Court adopted the lower court s stance on this matter and premised its incorporation of the elements of the products liability cause of action provided by section 402A of the Restatement of Torts, Second on the referenced Article. Since 1969, Puerto Rico courts have further elaborated and developed the products liability doctrine, always premised on Article 1802 of the Civil Code. See Rivera-Santana v. Superior Packaging. Inc., 92 J.T.S. 165, (1992). See also McPhail v. Municipality of Culebra, 598 F.2d 603, 606 (1st Cir. 1979); Guevara v. Dorsey Laboratories. Div. of Sandoz, 845 F.2d 364, 367 (1st Cir. 1988); Montero Saldaña v. Amer. Motors Corp., 107 D.P.R. 452 (1978); Marshall v. Pérez Arzuaga, 828 F.2d 845 (1987); Santiago v. Brasil, Inc., 830 F.2d 413 (1987); Benítez-Alleral v. Alcan Aluminio Do Brasil. S.A., 857 F.2d 26 (1988); Malavé Félix v. Volvo Car Corp., 946 F.2d 967 (1991). Thus for instance, in Montero Saldaña, the Supreme Court relied on the strict liability torts principles established by the Supreme Court of California in Greenman v. Yuba Power Products, Inc., 377 P.2d 897 (Cal. 1963) and its progeny in order to reject the "unreasonably dangerous requirement of Section 402A, which had been adopted in Mendoza, and which had been premised on Article The Puerto Rico Supreme Court has in fact, constantly relied on California precedent when

2 -2- Under the present controlling guidelines, in a strict liability action in Puerto Rico, a plaintiff must, first, prove the existence of a defect in the product and, second, demonstrate that this defect was the proximate cause of the injuries he or she suffered. Failure to prove either one of these two elements requires a judgment for the defendant. See Montero Saldaña; Mendoza. Although a plaintiff need not directly establish the manufacturer's negligence, the latter has been deemed not to be the insurer of every damage his products may cause." See Mendoza, 97 P.R.R. at 499. Moreover, the assumption of risk and comparative negligence defenses have been deemed to be applicable to strict liability cases in Puerto Rico. See Montero Saldaña, 107 D.P.R. at 463. To demonstrate that a product is defective, a plaintiff must show that the product "fail[ed] to equal the average quality of similar products; in other words, that it failed the consumer expectation test. Rivera Santana, 92 J.T.S. at 10164; Montero, 107 D.P.R. at 462. To demonstrate causation, on the other hand, a plaintiff must prove that his or her injury is attributable to the defective product. Malavé Felix v. Volvo Car Corp., 946 F.2d 967, 971 (1st Cir. 1991); Rivera Santana, 92 J.T.S. at Causation cannot be established by the mere demonstration that the defendant's product possibly caused the plaintiff's injury. Malavé Félix, addressing products liability issues, and there is no reason to believe that it will refrain from doing so in the future. Although the Supreme Court has recently incorporated some European Civil Law tort doctrines in the field of causation and negligence into this body of law, their further evolution unto the product liability field is still speculative at best.

3 F.2d at 972, citing Delgado v. Boston Ins. Co., 99 P.R.R. 693, 704 (1971); Sáez v. Municipality, 84 P.R.R. 515, 523 (1962). Speculation or conjecture as to what might or could have caused a plaintiff's injuries is simply insufficient as a matter of Puerto Rico law. Malavé Félix, 946 F.2d at 972; Saez, 84 P.R.R. at 523. Rather, the plaintiff must establish: (i) the existence of a defective product, (ii) that the plaintiff was exposed to this defective product and, if the first two elements are established, (iii) that this defective product was the most likely cause of the plaintiff's injuries. Id. Under Puerto Rico law, there are three types of defects in product liability actions: (1) manufacturing defects; (2) design defects; and (3) failure to warn defects. Rivera Santana, 92 J.T.S. at Manufacturing Defects As to manufacturing defects, the Puerto Rico Supreme Court has adopted the consumer expectation test employed in Greenman, that is, that a product is defective when it fails to meet the average quality of similar products. Rivera Santana, 92 J.T.S. at Design Defects With respect to design defects, the Supreme Court of Puerto Rico has adopted the two-alternatives test set out in Barker v. Lull Engineering, 573 P2d (19 ), through which a product is deemed defective in terms of design either (1) if the product has failed to perform as safely as an ordinary consumer would expect when used in an intended or reasonably foreseeable manner, or (2) if the benefits of the challenged design do not outweigh the risk of danger inherent in such design." Rivera Santana, 92 J.T.S. at 10164, n.9. Among the relevant factors that may be taken into consideration in determining the existence of design defects are: (1) the gravity of the danger posed by the challenged design, (2) the likelihood that such danger will occur, (3) the mechanical feasibility of a safer alternative design, (4) the financial

4 -4- cost of an improved design, and (5) the adverse consequences to the product and to the consumer that would result from an alternative design." Barker, 573 P.2d at 455. The Puerto Rico Supreme Court has also adopted the burden of proof standard established in Barker for design defect cases. Barker essentially held that: because evidentiary matters pertaining to design of the injury product, e.g., the feasibility and cost of alternative designs are technical matters peculiarly within the manufacturer's knowledge, once the plaintiff makes a prima facie showing that the injury was proximately caused by the product's design, the burden should appropriately shift to the defendant to prove, in light of the relevant factors, that the product is not defective. To satisfy the preceding risk-benefit test, a plaintiff is required to prove only that the design of the product was a proximate cause of the injury. Bernal, at 45. It is not the plaintiff's burden to show, under the risk-benefit analysis, that the risks involved in the design outweigh their benefits. Id. at 46. The defendant, on the other hand, has the burden of highlighting all the benefits of its product's design before the jury. This includes providing technical information that is peculiar and readily available to the manufacturer. Such as, information tending to prove that any alternate design would entail unreasonable costs, would not be cost-effective, is impractical and interferes with the product s performance or creates other increased risks. Unlike the risk-benefit test, the consumer expectation test requires that the plaintiff prove by a preponderance of the evidence all the facts necessary to show (1) that the design of the product that injured plaintiff was the same as the design of the product when it left the defendant's possession; (2) that the product failed to perform as safely as an ordinary

5 -5- consumer of that product would expect; (3) that the design of the product was a proximate cause of plaintiff's injury (4) that the product was used in a manner reasonably foreseeable by the defendant; and (5) the nature and extent of plaintiff s injuries. As with the risk-benefit test, however, defendants exposed to consumer expectation tests have the burden of proving by a preponderance of the evidence that, on balance, the benefits of the design of the product as a whole outweigh the risk of danger inherent in such design. 3. Failure to Warn Defects Even if a product is free of manufacturing and design defects, it will nevertheless be considered defective if the manufacturer fails to offer adequate warnings or instructions with respect to the inherent dangers and risks associated with use of the product. This duty extends to all product uses that are reasonably foreseeable to the manufacturer. Failure to give such warnings will expose the manufacturer to liability if it is proven that he knew, or should have known of the danger in question. Rivera Santana, 92 J.T.S. at and cases cited therein. As with any tort action, the following defenses are available under Puerto Rico law for products liability claims: (a) waiver by running of statute of limitations, (b) assumption of risk; and (c) comparative negligence. The applicable statute of limitations for tort actions, including strict liability, fraud, negligence and implied warranty actions, is one (1) year from the time the aggrieved person had knowledge of the injury. Article 1868 of the Puerto Rico Civil Code; Kaiser v. Armstrong World Indus. Inc., 872 F. 2d 512, 515 (1st. Cir. 1989). Knowledge is defined as both "notice of the injury" and "notice of the person who caused it". Kaiser, supra, at page 516. Notice of the injury "occurs when there exists some outward or physical sign through which the aggrieved

6 -6- party may become aware and realize he or she has suffered a damage even if at the time its full scope and extent cannot be weighed." Delgado Rodriguez v. Nazario de Ferrer, 88 J.T.S. 63, Rosado Serrano v. E.I. DuPont de Nemours and Co., 797 F. Supp 98, 100 (D.P.R. 1992). Notice of the person who caused it "occurs when plaintiff knew or with the degree of diligence required by law should have known whom to sue." Id. (citing Santiago Hodge v. Parke Davis & Co., 833 F. 2d 6, 8 (1st Cir. 1987)). Under Puerto Rico law, the defense of "assumption of risk" might have the result of either precluding any recovery from defendant or of reducing plaintiff's recovery by the percentage of negligence attributable to plaintiff. The same occurs with regard to comparative negligence: a plaintiff's negligence will reduce his or her recovery from defendant in proportion to his or her own comparative negligence. In addition, his or her negligence will be deemed attributable to other plaintiffs claiming damages on a derivative basis. Hence, if plaintiff "John Doe" was 30% negligent, the amounts to be recovered by his wife and children, assuming they are entitled to such recovery, will also be reduced by 30%, even though they were not negligent. A defense of failure to mitigate damages might also preclude or limit a plaintiff s chances of recovery if he or she fails to take the necessary steps to reduce or contain the damages suffered, that is, unless the situation is one in which no such amelioration is possible. Computec Systems Corp. v. General Automation Inc., 599 F. Supp. 819, 828 (D.P.R. 1984). Last, but not least, a defense of "absorption of fault" might preclude plaintiff from recovering anything at all if his or her own negligence is disproportionately greater than any that might be attributable to the defendant. F:\ATTY\LIT\MM\Miscelaneo\Product Liability Practice Group\Artículos\SummarPR Law

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