Attorneys who represent people injured by allegedly defective products face a hurdle to recovery when the product is made up of a number of different component parts, all manufactured by various defendants. The news generally is not good for plaintiffs: Strict products liability is limited for component-part manufacturers when the component part is integrated into the final product before distribution.
The law favors businesses that make parts that go into a final product. In Bostrom Seating Inc. v. Crane Carrier Co. (2004), the Texas Supreme Court adopted the approach of the Restatement (Third) of Torts: Products Liability (1998) to component-part manufacturers’ liability.
The restatement allows strict liability for a component-part manufacturer only if: 1. The component itself is defective, and the defect causes harm, or 2. the component-part manufacturer "substantially participates in the integration of the component into the design of the product," the integration causes the product to be defective, and the defect causes harm.
In Bostrom Seating, the plaintiff sued garbage-truck manufacturer Crane Carrier, after the garbage truck he was driving rolled over during a wreck, and he was seriously injured. Crane Carrier then sought indemnification from Bostrom Seating, the component-part manufacturer of the seat in the truck.
The Texas Supreme Court noted two admissions: The plaintiff’s expert witness admitted that "just the seat in and of itself" was not defective, and Crane’s attorney admitted in his opening statement during the trial of the underlying case that "there isn’t anything wrong with the seat."
Citing the restatement with approval, the court rejected Crane’s claim for indemnification. The court reasoned that Crane was in "total control" of the design of an allegedly defective restraint system and that Bostrom, "playing no part in the design of the truck, cannot be held liable for its possible defectiveness."
Given this high threshold plaintiffs must cross, attorneys must understand when a component part qualifies as defective. The comments to the restatement indicate that, if a cut-off switch is sold in defective condition because of loosely connected wiring, the switch’s manufacturer may be independently liable after the switch is integrated into another product. Likewise, if motorcycle headlights intended for off-road use fail on bumpy roads, the headlight manufacturer may be independently liable.
The same principles determine the component manufacturer’s duty to provide instructions and warnings to the end user. Although the component seller "is required to provide instructions and warnings to the component buyer," the component seller is under no duty to warn the sophisticated end-manufacturer of dangers that arise from "the special purpose" to which the end-manufacturer puts the component, according to the comments.
Plaintiffs can focus on creating a fact issue regarding whether component parts functioned properly. In Willowbrook Foods Inc. v. Grinnell Corp. (2004), a fire in a turkey fryer destroyed a building and its contents. Emerson manufactured a key component part of the fryer: the temperature controllers that allegedly should have shut off power to heating elements to prevent oil from reaching ignition temperature. Emerson argued that it merely manufactured "off-the-shelf" component parts, it did not participate in the overall design of the fryer, and there was no evidence of any defect in the controllers.
The 4th Court of Appeals in San Antonio held that affidavits from several experts created a fact issue on the plaintiffs’ claims against Emerson. The affidavits stated that there was a failure within the controllers’ electronics that resulted in a "run away heating process," and that moisture or oil contamination likely prevented the controllers from working properly.
Plaintiffs also should focus on whether component-part manufacturers fulfilled their duties to warn. One case involved what’s called a rifle-barrel blank. It’s an unfinished rifle component used as part of the barrel of a fully assembled rifle; essentially, it’s a long, hollow pipe. In Olympic Arms v. Green (2004), a gun owner sued Olympic Arms, the manufacturer of a rifle-barrel blank that injured him when it exploded. Olympic Arms argued that it could not be liable to the plaintiff because the final manufacturer of the gun at issue, a gunsmith, caused any defect in the rifle barrel by altering the gun-barrel blank.
The 1st Court of Appeals in Houston disagreed, noting that "Olympic was aware that the gunsmiths to whom it sells had to remove steel from the rifle barrel blanks that it manufactures and sells, and that, if too much steel is removed, then its product may fail," and that Olympic’s duty to warn was "commensurate with its knowledge of the intended use of its product."
Plaintiffs’ lawyers also should explore who controlled the design decisions. In Morina v. Johnson Controls Inc. (2012), the plaintiff alleged that the seat in his Ford Expedition failed. Seat-manufacturer Johnson Controls argued that it was not liable because it manufactured the seat in accordance with Ford’s specifications and Ford integrated the seat into its completed vehicle.
The U.S. District Court in the Eastern District of Texas, applying Texas law, distinguished the case from Bostrom Seating, because there was evidence in Morina of three things: the seat itself was defective, the seat’s "seatback pivot" design failed in the crash, and Johnson Controls, not Ford, decided to use the seatback pivot design for the seat.
What constitutes "substantial participation" in the design of a finished product?
The comments to the Restatement give the following guidance on what constitutes substantial participation:
The manufacturer or assembler of the integrated product may invite the component seller to design a component that will perform specifically as part of the integrated product or to assist in modifying the design of the integrated product to accept the seller’s component. Or the component seller may play a substantial role in deciding which component best serves the requirements of the integrated product. . . .
The mere existence of an instruction manual supplied by the component-parts manufacturer isn’t enough to create liability. In Toshiba International Corp. v. Henry (2004), the plaintiff was injured as he was operating an scrap-winder machine. Toshiba manufactured an inverter — a device in the scrap-winder’s switch panel that regulated power to the scrap winder — but another company incorporated the inverter into the scrap-winder machine. Toshiba provided a detailed manual with the inverter, containing instructions and schematics for system designers and installation personnel.
The 6th Court of Appeals in Texarkana held that Toshiba could not be liable under a products-liability theory, noting that various experts in the case testified that the Toshiba manual "doesn’t specifically say how to design a switch panel," and that the manual "clearly shows that a switch can be added and this problem avoided."
Even providing technical assistance may not be enough for a court to find liability. In Smith v. Robin America Inc. (2012), carbon monoxide emissions from a portable generator killed several members of a household. Fuji manufactured an engine incorporated into the generator. Fuji argued that it did not substantially participate in the integration of the engine into the generator. The plaintiffs argued that Fuji substantially participated in the integration by designing the engine specifically for the generator and by sending its engineers to the generator-manufacturers’ facilities to work hand-in-hand in the design and integration process.
The 5th U.S. Circuit Court of Appeals, applying Texas law, upheld summary judgment for Fuji, characterizing Fuji’s technical assistance to the generator manufacturer as "minimal" and citing the restatement’s comment that providing technical services or advice does not, in and of itself, constitute substantial participation in the integration of the component into the design of the final product.
In Texas, plaintiffs face significant obstacles when trying to hold component-part manufacturers responsible for their injuries. Manufacturers of component parts found in defective products are independently liable only if the component itself is defective or the component-part manufacturer substantially participates in the integration of the component into the design of the product.