What This Country Needs Is One More Federal Law

Ronald Reagan holds office in part because he promised to get the federal government off the backs of business. But ever rule has its exceptions, and product liability is one of them.

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Imagine the existence of 50 different state laws designed to slove what is fundamentally a federal problem of interstate commerce. Imagine attorneys shopping among those 50 laws for the one that will give their clients' damage claims the friendliest hearings.

You have just imagined the real world of product liability law. And, more to the point you have just provided two good reasons for replacing 50 state laws with one rational federal statute, even if you don't usually favor bringing the federal government into a business situation. Product liability merits the exception because it is different from the other kinds of liability law that should remain a state concern.

The laws of negligence, for example, have no federal implications. These are the rules used when your automobile runs over your neighbor's lawn mower or when the sign in front of your warehouse, the one you were going to attach permanently next week, falls on the delivery-man's head. In negligence situations, questions concerning where the neighbor left the lawn mower or how hard the delivery van backed into the building -- the issues of comparative and contributory negligence -- play a role in reaching a judgment.

Not so with product liability, where the key word is "product." These laws, as they generally apply, provide that once a plaintiff shows that a defective product was placed in the stream of commerce and caused an injury, the rules for determining negligence all change. The greatest change is that liability without any requirement for finding negligence will lie held to exist at every point in that stream of commerce -- from manufacturer to retailer -- no matter how insignificant a role any single player, such as the distributor, may have played in that commerce. This is called the "doctrine of strict liability." It has been around for less than 25 years. Created in New Jersey, it spread like wildfire, right along with the consumer movement.

The doctrine of strict liability holds that fault is not an element in a product liability action. The absence of the need to find fault makes it easy to hold the distributor of a defective product just as liable as the manufacturer that designed and made it. The finding may not be fair, but it is logical: (a) a defective product passed through a stream of commerce; (b) the distributor is part of that stream of commerce, so (c) the distributor is liable for any injury that results.

Illinois courts are among those that have gone a bit further. They have said that there is no need to show that a distributor ever even exercised physical possession of the product. It is enough that he arranged for its sale by one party and for its purchase by another and earned a commission for his trouble. If so, he is just a sliable under this interpretation as the manufacturer or the retailer. This kind of judicial thinking holds not just in Illinois, but in most northern and western states, and especially in California.

The South is the only area of the country where the distributor still gets something of a break on product liability. North Carolina and Louisiana, for instance, lean toward requiring the plaintiff to prove at least that a distributor knew or should have known that the product sold was defective. That view can change, however, and even if it doesn't, claimants' lawyers have learned to shop among jurisdictions. When they can, they will bring their actions in a state where the law favors the claimant. Since so many products move through interstate commerce, such shopping trips are easy for the claimants lawyers but complicate life for you.

What is the answer? Do we eliminate the consumer's right to sue? Of course not. But absolutely no good reason exists why two consumers in different states should have different redress for an injury caused by a product manufactured in still a third state. Nor can I think of any defensible reason for having 50 different laws covering the same legal situation, especially since location has nothing to do with the liability at issue. If a football helmet provides adequate protection in Alabama, it is no less adequate when it is used in Michigan. Finally, is it fair to blame a company, especially a distributor, for product defects that it had no way of detecting? Would you sue the grandmother that gave the gift as well!

The Senate has held hearings and will probably vote this year on a bill that would preempt state product liability laws and mitigate some of the inequity implicit in the strict liability doctrine. If it passes there, the House will probably consider the measure next year.

The opposition has been strong. Claimants' lawyers, who do considerable business because of the laws' complexities, have raised consumers' fears that they might lose their rights to recover damages for injuries caused by defective products. That is a false issue. Consumers, in fact, won't lose their right to sue.

Other objections have been raised because the new bill would give to Congress authority now exercised by state legislators. Business, for one, is justifiably skittish of laws that hand over more power to the federal government. Ronald Reagan holds office in part because he promised to get the federal government off the backs of business. But every rule has its exceptions, and product liability is one of them. It is an area of government regulation in which a single federal law will impose a far lighter burden on efficiency and productivity than 50 state laws do.

Product liability is one new federal law we ought to have.