Extracted from Law360
In 1967, the Speed Equipment Manufacturing Association (SEMA) hosted its first trade show in a basement under what was then Dodger Stadium in Los Angeles. Around 3,000 automotive enthusiasts and distributors of after-market and custom component parts were in attendance. Fast forward nearly 50 years and SEMA (later renamed the Specialty Equipment Market Association) currently hosts the largest trade show in Las Vegas, drawing more than 60,000 international and domestic buyers of automotive products and more than 140,000 spectators.
In 2015 alone, more than 2,500 new specialty automotive products, component parts and tools were unveiled at the SEMA trade show. What was once a niche association of after-market hot rod fanatics and small component-part companies now includes a large number of individuals and businesses that perform automotive restoration and customization. This growing phenomenon is not confined to trade shows; it is also evident on television, where there are nearly 75 different programs exclusively devoted to automotive-related topics. Automotive customization is a $16 billion industry, and with the explosion of 3-D printers and software, the democratization of custom manufacturing will continue to spread to shade-tree gearheads and suburban garages alike.
In a prior Law360 article,[1] we posed the hypothetical question of whether hobbyists who restore and customize classic cars (many of whom flock to the SEMA trade show every year) should be subject to strict liability when they sell or swap 3-D printing designs and actual component parts. A recent law review article by Stanford Law School Professor Nora Engstrom has fueled the current debate about whether the expansion of 3-D printing technology that allows individuals to manufacture anything from small parts to entire automobiles will pose challenges under existing product liability doctrine.
Engstrom posited that once “hobbyist inventors [] start selling some of the complex, sophisticated and dangerous products they create, [] certain individuals who purchase their creations will, unfortunately but inevitably, sustain injuries.”[2] Commentators like Engstrom fear that the “commercial” seller requirement in the Restatement of Torts will limit liability and leave many injured parties without legal recourse. However, a closer look at the history of strict liability — especially in the automotive context — reveals that the discussion over whether and how to separate “commercial” sellers from “occasional” or “casual” sellers actually predates the first SEMA trade show.
Under current strict liability doctrine, “[o]ne engaged in the business of selling or otherwise distributing products who sells or distributes a defective product is subject to liability for harm to persons or property caused by the defect.”[3] The comments to the Restatement (Third) of Torts make clear that this rule “applies only to manufacturers and other commercial sellers and distributors who are engaged in the business of selling or otherwise distributing the type of product that harmed the plaintiff.”[4] Whether a particular seller meets this definition is a question of law to be determined by the court.[5]
Before the advent of strict liability in the 1960s, a plaintiff could only bring an action against a defendant seller if there was privity of contract. Strict liability in effect merged the concept of breach of implied warranty, which does not require negligence, with the concept of negligence, which does not require contractual privity.[6] Over time, courts have likewise expanded the boundaries of strict liability beyond manufacturers, commercial sellers and distributors to include lessors, dealers and used product retailers. For example, in a landmark decision in 1965, the Supreme Court of New Jersey held the lessor of a truck fleet strictly liable for the lessee’s injuries.[7] Noting the “long accepted [] fact that defective trucks and cars are dangerous instrumentalities on highways ... [that] present great potentiality for harm to other highway users as well as to their own drivers and passengers,” the court concluded that the law cannot accept any distinction in the liability of a motor vehicle lessor and a new car manufacturer.[8]
Car dealers are also subject to strict liability for defective work, repairs or replacements performed on a vehicle. In Court v. Grzelinski, the Supreme Court of Illinois found that the plaintiff pled a valid cause of action for strict liability where the complaint alleged that the defendant car dealer improperly assembled, installed and positioned a defectively designed gasoline tank such that “no adequate devices were used which would prevent the tank from exploding.”[9]
The Supreme Court of Kansas recently went one step further and, after surveying precedents from other states, sided with the “slight minority” in holding that strict liability should be applied to sellers of used products.[10] The court reasoned that not only does the text of the Restatement of Torts make no distinction between sellers of used and new products, but the purpose of strict liability is to achieve maximum protection for the injured party and promote the public interest by discouraging the sale of defective products.[11] In particular, the seller of a used motor vehicle must be held responsible for its defects because “[o]therwise, the buyer and the general public are bearing the enterprise liability stemming from the introduction of the dangerously defective used vehicle onto the public highways.”[12]
In short, the caselaw establishes that anyone who causes a product to enter or pass through the stream of commerce can be held strictly liable for the harm caused by its defects.[13] This same logic and public policy will no doubt be cited when a serious injury case turns on an alleged defect in a 3-D printed automotive product — even when the seller is an individual who only has a printer and a garage instead of a large manufacturing business. In light of the evolution of the “commercial” seller definition, many courts will likely view the current debate over liability for 3-D printed designs and products as simply “new parts in an old box.”[14]
[1] Colin K. Kelly & Jenny A. Mendelsohn, 3-D Printing Meets Strict Liability in the Auto Industry, Law360 (Dec. 4, 2014), http://www.law360.com/articles/600957/3-d-printing-meets-strict-liability-in-the-auto-industry.
[2] Nora Freeman Engstrom, 3-D Printing and Product Liability: Identifying the Obstacles, 162 U. Pa. L. Rev. Online 35, 37, (2013), https://www.pennlawreview.com/online/162-U-Pa-L-Rev-Online-35.pdf.
[3] Restatement (Third) of Torts: Prods. Liab. § 1; see also Restatement (Second) of Torts: Prods. Liab. § 402A.
[4] Restatement (Third) of Torts: Prods. Liab. § 1, cmt. c.; see also Restatement (Second) of Torts: Prods. Liab. § 402A, cmt. f.
[5] Restatement (Third) of Torts: Prods. Liab. § 1, cmt. c.
[6] Restatement (Third) of Torts: Prods. Liab. § 1, cmt. a.
[7] Cintrone v. Hertz Truck Leasing, 45 N.J. 434, 456 (1965).
[8] Id. at 449–50.
[9] 72 Ill.2d 141, 145–46 (1978); see also Realmuto v. Straub Motors, 65 N.J. 336, 344–45 (1974).
[10] Gaumer v. Rossville Truck & Tractor Co., 292 Kan. 749, 768–75 (2011).
[11] Id. at 765.
[12] Id. at 770–71 (quoting Turner v. Int’l Harvester Co., 133 N.J. Super 277, 288–89 (1975)).
[13] See, e.g., Peterson v. Safway Steel Scaffolds Co., 400 N.W.2d 909, 914 (S.D. 1987); Burch v. Sears, Roebuck & Co., 320 Pa. Super. 444, 456 (1983); Nickel v. Hyster Co., 412 N.Y.S.2d 273, 274–75 (1978).
[14] Brogan v. Rosenn, Jenkins & Greenwald LLP, No. 08–CV-6048, (Pa. Ct. Com. Pl. Apr. 22, 2013) (referring to the application of old discovery rules to new discovery debates as “simply new wine in an old bottle”).