Product Warning Labels-Do They Protect Manufacturers From

Product Liability Lawsuits? Essay, Research Paper

Product Warning Labels-Do They Protect Manufacturers?

MG260, Business Law I

We have all purchased a new consumer product with several labels, stickers, and product inserts containing warnings, disclaimers and oversimplified directions. The warnings can actually be humorous at times as illustrated in the following examples:

? On Sears hair dryer: Do not use while sleeping

? On Marks & Spencer Bread Pudding: Product will be hot

after heating.

? On Rowenta Iron: Do not iron clothes on body.

? On Nytol (a sleep aid): Warning: May cause drowsiness.

? On a Swedish chainsaw: Do no attempt to stop chainsaw

with your hands.

(http://www.tagmag.com/spam)

Obviously, with a little common sense, your average consumer can avoid the injuries that the above statements are attempting to warn against. One can argue that these warnings provide protection to the manufacturers against lawsuits based upon personal injury.

There are many infamous cases where damages were awarded to consumers due to a personal injury resulting from what is claimed to be negligence, failure to warn or a product defect. According to public opinion, some of these lawsuits are frivolous and are causing the decline of our civil justice system. An examination of cases against tobacco companies will provide us with some conflicting information regarding product warning labels. Do they provide manufacturers with adequate protection against this type of lawsuit?

By law, product manufacturers are responsible to give a reasonable warning when the product they manufacture poses a foreseeable risk of injury or harm. Courts use the following factors to consider a manufacturer’s duty to warn: “the magnitude or severity of the likely harm, the ease or difficulty of providing an appropriate warning, and the likely effectiveness of a warning” (Mallor, etal. 377) in addition to the manufacturer’s ability to reasonably foresee the risk.

Are people drying their hair while sleeping or ironing clothes while wearing them foreseeable risks? As lawsuits become more outrageous, so do the warnings and there is an outcry for reform in our civil justice system to minimize frivolous lawsuits. According to a poll conducted by Nation’s Business magazine (February, 1998) 2/3 of the businesses that responded had been named as defendants in product liability lawsuits. An overwhelming majority felt that frivolous lawsuits are definitely a problem and that “people who file lawsuits (should) pay the defendant’s legal fees if they lose”. Eighty percent were in favor of a “federal law being enacted to supersede conflicting state laws on the liability of a company if someone using it’s product is injured”.

Courts use a risk/utility analysis to determine whether the risks associated with certain inherently unsafe products are reasonable. To make the determination, courts weigh the availability of safer alternatives and whether the risks of using the product outweigh that product’s utility. The myriad of lawsuits against tobacco companies certainly raise this issue to a point of controversy.

Do the warning labels placed on cigarettes and tobacco products preclude most personal injury claims against the manufacturers? In a recent case brought against R. J. Reynolds, an ex-smoker suffering from terminal cancer was awarded $20 million in punitive damages and $1.7 million in compensatory damages. “The jury found that the tobacco companies acted with malice, that they knew the health hazards of smoking and deliberately misled the public about the dangers of smoking” (CNN.com). The plaintiff, Leslie Whiteley prevailed in this case even though every single pack of cigarettes she ever purchased was affixed with the attorney general’s warnings against the dangers of smoking. Defense attorney, William Ohlemeyer commented “Mrs. Whiteley never smoked a pack of cigarettes that didn’t have a health warning on it that was written by the Surgeon General.” She did not begin smoking until after the federal government made this a requirement for all cigarette packages, but the warning labels did not protect the company from liability in this case. The plaintiff’s attorney, Madelyn Chaber was quoted as saying “Warning labels are one thing, but they don’t give the company a license to lie”.

This award is potentially disastrous to the tobacco industry. One is left to wonder if the jury’s decision was based mostly on the high level of emotion associated with this dying woman’s claim. If based on the risk/utility analysis, the jury can be assumed to have found that cigarettes pose a risk much higher than any utility they provide. If the jury’s decision is based upon this analysis, one could reasonably assume that we will not have seen the last of this type of award. Comments from the plaintiff’s attorney and the jury seem to suggest that the verdict is based more upon the company’s misrepresentation as to whether or not nicotine is addictive.

“If ever a substance deserved the designation ‘inherently unsafe’, it is nicotine, the psychoactive ingredient in tobacco.” (”Are Warnings Good Enough?” 55). Modern research suggests that heavy smokers who go just two hours without a cigarette show brain wave activity that is so severely disrupted that there is virtually no ability to process information. This is consistent with other addictive substances.

Assuming that this type of lawsuit will arise regardless of product warnings, companies should design a strategy to prepare for possible failure-to-warn and product liability lawsuits. There is a call for reform of failure-to-warn law moving away from “strict liability” toward a system that considers negligence of the manufacturer. This would mean “juries will not be asked to consider if there could have been a better warning but rather if the warning given was reasonable.” (”Defending Against Failure-to-Warn Lawsuits”). This may stop some of the ridiculous warning labels we discussed earlier.

Manufacturers must be fully aware of the hazards presented by the use of their products. Engineers or industrial hygienists should evaluate products using medical and scientific data about the components, design, and packaging of the product. Accurate records must be kept so that if a lawsuit is filed, the company can show documentation of its evaluation of the risks associated with the product. Warning labels accompanying the finished products should be clear, concise, and easy to understand. Manufacturers must also communicate directions for the safe use and handling of the product. Explicit statements should be made about unsafe uses for the product that the manufacturer can reasonably foresee.

Defending against such lawsuits requires investigation, discovery and trial. To build a strong defense against failure-to-warn, a very in-depth investigation should be conducted into the “manufacture and sale, development and distribution and the use and handling” of the product. Key company personnel should be notified and information should be organized.

During the discovery phase, the plaintiff’s legal team and the defense team exchange evidence, facts, and witness lists with one another. Therefore, the defendant in such a suit may have to produce company documents to be used as evidence by the plaintiff. Company officials are compelled to answer any questions posed to them by the plaintiff’s legal team under oath in depositions and provide interrogatories (written answers to formal questions). It is the defense team’s job to respond to all “document requests, object to any improper questions and ensure depositions are taken according to court rules.” (”Defending Against Failure to Warn Lawsuits”).

Many of the claims against tobacco companies are substantiated by an “extensive trail of internal memos that prove they knew (”Are Warnings Good Enough?” 55). the addictive affects of nicotine. Various cigarette companies have been studying the affects of nicotine since as early as 1940. Within two decades, tobacco industry insiders were “‘way ahead of the outside’ in their understanding of nicotine, according to Jack Henning-field, a researcher at the National Institute on Drug Abuse”. (”Are Warnings Good Enough?” 55). Excerpts from documents made public during the discovery phase of a suit brought against Brown & Williamson Tobacco Corporation were published by The New York Times. The documents uncovered research taking place over decades which concluded that smoking cigarettes causes disease and is a “habit of addiction”. (”Are Warnings Good Enough?” 55). Attempts by Browns & Williamson Tobacco Company to withhold these documents and cover up this knowledge proved damaging in court.

The majority of all failure-to-warn cases are settled out of court. If, after the discovery phase, the case is not settled out of court, it moves on to a trial. After the discovery phase, the only company employees who remain involved are those who will be testifying as witnesses during the trial. Sometimes months or even years lapse before a trial actually begins, which makes thorough preparedness for trial absolutely necessary for success.

These cases can last several years if they go to trial and be financially devastating to a company. Companies who are committed to standing on principle and defending themselves throughout a trial send a message to other potential plaintiffs in similar cases. Large out-of-court settlements encourage others to file suit, but if a company successfully defends against a failure-to-warn lawsuit, similar claims are often deterred.

Tobacco companies have established a tough “fight to the death” reputation when it comes to personal injury suits. Not many attorneys are willing to take on such cases. Allegations of tough tactics used with terminally ill plaintiffs including lengthy depositions, motions for immediate autopsy, and virtually anything else to discredit the plaintiff deter others from filing suit. Most of the plaintiffs are “blamed” for assuming the risk and the consequences of smoking and for not having the willpower to drop the nasty habit.

Manufacturers of consumer products must be aware of the possibility of product liability lawsuits in every phase of the manufacturing process. To adequately defend against such claims, every aspect of the product from concept to design to production to shipping must be examined. Detailed records must be kept in throughout each process. Another important consideration is the way in which consumers actually use the product. Manufacturers must be able to anticipate just about every use and misuse possible for each product and warn against every possible hazard in very clear and concise language. Even when the manufacturer goes to great length to warn consumers against possible hazards of the product, these warnings are not always sufficient protection from failure-to-warn lawsuits. The manner in which each lawsuit is defended against can also provide a deterrent against such suits in the future.

Mallor, Jane and A. James Barnes, Thomas Bowers, Michael Phillips,

and Arlen Langvardt. Business Law and the Regulatory Environment.

Boston, MA: Irwin McGraw-Hill, 1998.

“Are warnings good enough?” U.S. News & World Report 8 April 1991:

v110 n3 p55

Zegart, Dan. “Breathing fire on tobacco.” The Nation 28 August 1995:

v261 n6 p193

Siegfried, Willis A. “Defending Against Failure-to-Warn Lawsuits.”

Engineering and the Law 20 August 1998

www.tagmag.com/spam

www.cnn.com