• Video

Product Liability and Economic Justice

Professor Gregory Dolin explores the emergence of product liability law as a response to the complexities of modern economic supply chains. He discusses how courts resolve the challenge of determining liability in a complex manufacturing process by placing the burden on manufacturers, who can more efficiently distribute the financial risk across their consumer base. Gregory Dolin is a Professor of Law at the University of Baltimore School of Law. As always, the Federalist Society takes no position on particular legal or public policy issues; all expressions of opinion are those of the speaker. #no86 #law #lawschool #lawstudent #tortlaw https://youtube.com/watch?v=RjCH2L1C67M

Transcript

Product liability is a fairly new concept, although not entirely. And it's a fairly new concept because the economy we live in is fairly new. What was the economy like in the 18th century and 17th century? Odds are you probably never left the city you were born in. Odds are you probably shopped for your bread and your horseshoes and your whatever, in the same shop that your parents shopped in. Right? And odds are that stuff that you bought were manufactured also locally. So there was no long supply chain. And so there was no necessarily, thought given this idea, what happens when somebody in manufacturing sells it to a first middleman, second middleman, et cetera, and eventually gets into the hands of the consumer. Somewhere along those lines, something went awry. Who should the consumer be able to sue? Right? It's only one thing with the modern economy that developed, we needed to come up with a theory as to how to deal with that problem. And product liability is in some sense an answer to that problem. It is both an answer kind of to the efficiency problem, but also in terms of kind of economic justice, right? One of the kind of classic cases came out from California where a person who basically grabs a Coca-Cola bottle, it explodes - back when they’re glass bottles - it explodes in their hand and severely cuts the hand. And so a suit is brought against Coca-Cola and the company says it was fine when it left our factory, how do you know it didn't get damaged somewhere in between by the truck driver that banged it against the wall. And maybe that's why a crack formed. Maybe that's why it exploded. And the California Supreme Court says, look, we have an injured party here. They will never know where in that stream of commerce the bottle got damaged. So what are our options? And ultimately, most of the time the question in torts is really, it's just one question, who ought to pay for that delta between how the world looked this morning and how it looks in this afternoon after the accident. That's it. It's a question of who ought to pay. And the Supreme Court of California says, look, we can stick this waitress who picked up this bottle and whose hand is exploded with the entirety of the bill. Or, you know, she doesn't know whether it's a truck driver, because the truck driver will say the same thing. Well, how do you know it didn't left damage to Coca-Cola plant? Or we can say, look, we can impose this damage on Coca-Cola. Which maybe in some sense a little unfair, but they're a big company. They can spread that cost to all the consumers. They can raise the price of their bottle by 0.01 cent across all their sales. Most consumers will not even notice it, right? And thus, Given the fact that we never know which bottle will explode, it's just one of those chance things that happens. Sometimes you'll get a great bottle, sometimes you won't. Overall, across in the long run, it will work out, right? So each consumer will pay just a little bit more for the, you know, for the fact that most of the time they're getting a safe bottle.

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