Products Liability Section // by C. Richard Newsome and William C. Ourand
From the FJA Journal Issue #583, March/April 2015
Post-Sale Negligence Claims in Florida Motor Vehicle Defect Cases
Imagine this: an automotive manufacturer learns about several incidents involving its vehicles which have resulted in catastrophic injuries and multiple deaths. Further investigation confirms that these incidents were caused by a dangerous defect that made the vehicles unsafe. Despite learning about the defect, the company sits on its hands and delays sending notice to either vehicle owners or the National Highway Traffic Safety Administration (“NHTSA”). Then, once the company finally gets around to sending notice, the company fails to make sure the notice adequately discloses the danger or even reaches the vehicle owners. Finally, the company fails to follow-up to make sure the defective vehicles have actually been repaired.
The scenario described above, which probably sounds very much like reality to anyone who has followed automotive defect headlines over the past year, has important ramifications in products liability lawsuits. Among other things, this sequence of events implicates the post-sale duties to warn and recall.
Post-sale duty claims are based upon the common-sense notion that a manufacturer’s obligation to avoid needlessly endangering the public does not terminate at the time of sale. Defense attorneys often argue that post-sale duties do not exist, and that even if they did exist, they would be preempted by federal law. The goal of this article is to explain why both arguments are wrong. As will be demonstrated below, Florida law recognizes the post-sale duties to warn and recall. Moreover, courts around the nation have consistently held that post-sale duty claims are not preempted in light of the clear expression of congressional intent to preserve these causes of action.
I. The Post-Sale Duty to Warn
A recent article in the “Trial Advocate Quarterly,” a legal periodical published by the Florida Defense Lawyers Association, acknowledged that “Florida courts recognize a post-sale duty to warn.….”1 But despite this admission, defense attorneys will still often try to argue that there is no post-sale duty to warn under Florida law. A review of Florida case law easily disproves this argument.
Florida’s recognition of the post-sale duty to warn extends as far back as the Florida Supreme Court’s decision in High v. Westinghouse Elec. Corp.2 The plaintiff in High had been exposed to electrical transformers which were allegedly contaminated by polychlorinated biphenyls (“PCBs”), a chemical which has been linked to “chloracne and other epidermal disorders, digestive disturbances, jaundice, impotence, throat and respiratory irritations, and severe headaches.”3 Discovery in the case revealed that the manufacturer had known that its electrical transformers were contaminated as early as 1972, but failed to provide warnings of the contamination until 1976.4 In reversing the trial court’s entry of summary judgment, the Florida Supreme Court held that the manufacturer “had a duty to timely notify the entity to whom it sold the electrical transformers … once it was advised of the PCB contamination.”5
The existence of the post-sale duty to warn was recently re-affirmed by the Third District Court of Appeal in Sta-Rite Indus., Inc. v. Levey.6 Sta-Rite involved a minor plaintiff who suffered catastrophic brain damage and was left “in a permanent vegetative state” after he was “caught in the powerful section of [an] exposed [pool] drain.”7 In affirming the jury’s finding of liability, the court reasoned:
There is little argument that a jury question was also presented as to the liability of Sta–Rite in failing reasonably to warn the purchaser and users of the pool about the extreme danger presented by a failure properly to maintain the grate, particularly in the light of similar severe accidents which occurred both before and after the sale of the pump in question.”8
Finally, in an even more recent opinion, Judge Antoon observed that: “Florida law imposes a post-sale duty to warn customers of a product’s dangerous propensities on those who have control over the manufacture or distribution of the product – those who are in a position to take any safety measures.”9
II. Negligent Recall
The duty to recall differs from the post-sale duty to warn in that the duty to recall requires the manufacturer to exercise reasonable care to repair, modify, retrofit, or otherwise eliminate or reduce the danger posed by the product.10 Although Florida courts have yet to expressly address this issue at length, other courts around the country have recognized a post-sale duty to recall by applying a traditional negligence analysis.11 In doing so, these courts have sensibly recognized that a manufacturer’s obligation to remedy the hazards it has created extends beyond the time of sale.12
On the other hand, the Third Restatement espouses a more restrictive view, and would only recognize a duty to recall in limited factual scenarios.13 The first of these scenarios occurs where the manufacturer or distributor undertakes to perform a recall and fails to exercise reasonable care while doing so.14 This negligent recall theory is an offshoot of the general common law “undertaker” doctrine, which has been expressly adopted by the Florida Supreme Court.15
In addition to the voluntary undertaking context, the Third Restatement would also recognize a duty to recall where there was a government directive to do so.16 A duty to recall under this analysis may be triggered in motor vehicle cases in light of the federal recall laws and regulations discussed in the next section.17 Indeed, at least one federal court applying Florida law has recognized that a violation of federal recall standards can subject a defendant to a finding of negligence per se.18
III. The National Traffic and Motor Vehicle Safety Act
Motor vehicles and motor vehicle components and accessories have been regulated by the federal government since the adoption of the National Traffic and Motor Vehicle Safety Act (the “Safety Act”) in 1966.19 The Safety Act, and the rules passed by NHTSA pursuant to the Safety Act, include standards for defect notifications and recall procedures.20 Among other things, the Safety Act’s minimum defect notification requirements include sending “first class mail to the most recent purchaser known to the manufacturer.”21
The Safety Act also includes multiple “savings clauses” which preserve state tort law remedies.22 The broadest of the Safety Act’s savings clauses states that: “Compliance with a motor vehicle safety standard prescribed under this chapter does not exempt a person from liability at common law.”23 Similarly, the Safety Act contains another savings clause which specifically references the sections providing for minimal defect notification and recall standards, and states that: “A remedy under [the defect notification and recall sections] … is in addition to other rights and remedies under other laws of the United States or a State.”24
The savings clauses are a vital necessity because statistics show that the minimal federal standards leave an alarming number of vehicles known to have dangerous defects on the roadway without being repaired, resulting in needless injuries and deaths. Case in point: the Government Accountability Office (“GAO”) published a report in 2011 which found that the annual completion rate for recalls has been as low as 55 percent in recent years.25
Manufacturers have also regularly recognized the inadequacies of the minimal federal standards as they have repeatedly gone above the floor notification requirements. In fact, the 2011 GAO report noted that “[a] few manufacturers we spoke with encourage dealerships to communicate with vehicle owners through phone calls and e-mails to notify the vehicle owner of a recall and encourage them to bring the vehicle in for service.”26 Furthermore, focus group participants told the GAO that “they would be more likely to respond to defect notices if they received notice of the defect by phone or through e-mail, in addition to the standard first-class mailing . …”27
IV. Courts Have Consistently Held that Post-Sale Duty Claims are Not Preempted
The existence of post-sale duties with respect to motor vehicle defects has existed for more than 50 years at common law. For example, the Michigan Supreme Court held that General Motors had a post-sale duty to warn of latent brake defects in its 1959 decision in Comstock v. Gen Motors Corp.28 Significantly, the Comstock decision predated the initial passage of the federal law and regulations discussed in the next section by more than five years.
Nonetheless, when confronted with a post-sale failure to warn or recall theory, motor vehicle manufacturers often turn to the preemption defense in an attempt to sidestep common law liability. In doing so, they point to the defect and recall procedures contained in the Safety Act and the rules passed by NHTSA, arguing that only NHTSA can weigh in with respect to post-sale defect notifications and recalls. However, courts around the nation have consistently rejected these arguments, holding that post-sale duty claims are not preempted.
One of the earlier decisions to come to this conclusion is Reed v. Ford Motor Co., a 1988 opinion issued by a federal trial court in Indiana.29 In Reed, the plaintiff sought to recover punitive damages against Ford under the theory that the company “recklessly failed to adequately recall [its] product from the stream of commerce.”30 Ford argued that this claim was preempted because “state law may not impose liability for failure to take post-sale remedial actions such as a recall . . . that are within the jurisdiction of NHSTA.”31
The court flatly rejected Ford’s preemption argument, reasoning that “the first, basic step in a question of federal preemption—as it is in any question of statutory interpretation—is to read the language of the statute,” and “[i]f Ford had taken this step prior to filing its motion to dismiss it would have read [the Safety Act’s savings clause].”32 The savings clause of the Act was substantially similar at the time, specifically stating that: “Compliance with any federal motor vehicle safety standard issued under this subchapter does not exempt any person from any liability under common law.”33 After quoting the savings clause verbatim, the Reed court explained that it is “difficult to imagine a clearer expression of congressional intent not to preempt state common law.”34
This result has been left unchallenged in the more than 25 years since Reed was decided. For example, in Denton v. DaimlerChrysler Corp., the plaintiffs sought punitive damages on the grounds that Chrysler’s “recall notice was late, underinclusive, and confusing.”35 Chrysler argued that these claims were preempted by federal law and NHTSA’s regulatory presence with respect to recalls.36 Judge Story of the U.S. District Court for the Northern District of Georgia rejected this argument in a 2008 opinion, explaining:
Defendant urges this Court to conclude that NHTSA’s acquiescence in an automobile manufacturer’s recall preempts state law governing the award of punitive damages. In urging so, Chrysler cites no legal authority applicable to the context of the case at bar. The Court must conclude that compliance with standards or regulations does not insulate a defendant from compensatory or punitive damages.37
Similarly, in Great W. Cas. Co. v. Volvo Trucks N. Am., Inc., the plaintiff alleged that Volvo was negligent in failing to provide post-sale warnings after it discovered a defect in certain engines which could lead to fires.38 Volvo argued that the post-sale duty to warn claims were preempted because they conflicted with NHTSA defect notification regulations.39 Judge Lefkow of the U.S. District Court for the Northern District of Illinois disagreed in a 2010 opinion, reasoning that “Volvo’s argument is undermined . . . by the Act’s savings clauses, which provide that the Act’s notification and recall provisions, Id. §§30118–30121, are ‘in addition to’ rights and remedies available under state law.”40 The court further explained that the savings clause “indicates that the Act’s notification procedures were not intended to preempt common law tort claims.”41 Finally, the court distinguished a split of opinions in class action cases seeking court-ordered recalls as a form of injunctive relief, pointing out that: “The ‘crucial distinction’ between the recall cases and this case is that [the plaintiff] is seeking damages, a remedy that is not provided by the Act, rather than prospective injunctive relief, a remedy that is provided by the Act’s vehicle recall procedures.”42
V. Supreme Court Products Liability Preemption Jurisprudence
Although the United States Supreme Court has yet to rule on the precise issue of whether post-sale duty claims are preempted by the Safety Act, an analysis of the Court’s recent products liability preemption jurisprudence shows that the opinions discussed above have correctly resolved this issue. This analysis begins with Geier v. Am. Honda Motor Co., Inc.43
The plaintiff in Geier alleged that his 1987 Honda Accord was defective, in part, because it had not been equipped with airbags.44 This so-called “no airbag” theory was part of a trend of litigation which originated in the 1980s following the evolution of airbags as a new type of automotive safety technology.45 The issue before the Supreme Court was whether this claim was preempted by FMVSS 208, which at the relevant time had allowed auto manufacturers to choose from a range of different passive restraint systems, including airbags and automatic seatbelts.46 The Supreme Court quickly ruled that express preemption could not apply in light of the savings clause.47
Skipping right over field pre-emption, the Court then moved into an analysis as to whether the no-airbag claim would “actually conflict” with FMVSS 208.48 The Court held that the no airbag claim did conflict with FMVSS 208, reasoning that the existence of a common law duty to install an airbag would frustrate the federal government’s purpose in creating the regulation.49 This result, however, was entirely attributable to the extremely unique regulatory history that surrounded the implementation of airbags and other passive restraint systems.
Specifically, the Court found that the Department of Transportation (“DOT”) had been carefully examining how to phase in passive restraint systems since 1970.50 In fact, the DOT had initially passed passive restraint regulations in 1974, only to be met with public uproar and congressional rebuke following the wildly unpopular implementation of ignition interlock devices.51 Licking its wounds, the DOT waited until the 1980s to approach the passive restraint system issue again, and this time purposefully did so in a manner that gave auto manufacturers a wide array of choices, rather than forcing their hand as to any one type of system in particular.52 The DOT hoped that the array of choices would both encourage more technological development, and also ensure that the public would not again rebel against the use of passive restraint systems.53 The Court found that, in light of this very special set of circumstances, a state tort duty to install an airbag would conflict with the DOT’s objectives in allowing manufacturers to choose form an array of passive restraint systems.54
Less than ten years after Geier was decided, the Court again issued another landmark products liability preemption decision in Wyeth v. Levine.55 In Wyeth, the plaintiff’s right forearm and hand were amputated after she developed gangrene as a result of being administered Wyeth’s Phenergan anti-nausea medication through an “IV-push” method.56 The evidence presented at trial showed that the “IV-Push” method results in an increased risk of the corrosive medication entering an artery and causing gangrene, whereas administration through an “IV-Drip” method would almost entirely eliminate that risk.57 The jury found that Wyeth was negligent by failing to properly disclose the risk of administering the medication by using the “IV-Drip” method.58 Following in the footsteps of Honda, Wyeth argued that allowing the state jury’s finding of liability to stand would frustrate “Congress’s purpose to entrust an expert agency to make drug labelling decisions that strike a balance between competing objectives.”59 Wyeth further claimed that this process represented both a “floor” and a “ceiling” with respect to drug labelling requirements, and correctly noted that the Food and Drug Administration (“FDA”) itself had once described the requirements as such.60
The Supreme Court saw through Wyeth’s arguments, observing that the single FDA statement not only contradicted statements of FDA intent at other times, but more importantly contradicted congressional intent.61 In gleaning congressional intent, the Court placed great importance on the fact that the federal statutory scheme at issue had not been modified to include an express preemption of state common law claims during its 70-year history.62 Accordingly, the Court determined that Congress’s “silence on the issue, coupled with its certain awareness of the prevalence of state tort litigation, is powerful evidence that Congress did not intend FDA oversight to be the exclusive means of ensuring drug safety and effectiveness.”63 Indeed, the Court noted that the federal government had long regarded state tort law “as a complementary form of drug regulation.”64 Finally, the Court distinguished the circumstances in Geier, where the “DOT conducted a formal rulemaking and then adopted a plan to phase in a mix of passive restraint devices.”65
Post-sale duty claims against auto manufacturers are not barred by obstacle preemption for the same reasons that the labelling claims in Wyeth were not preempted. As in Wyeth, Congress has consistently expressed a clear intent to preserve common law claims regarding motor vehicle safety. This intent is shown by the fact that Congress included savings clauses preserving common law claims in the initial version of the Safety Act passed in 1966 and has kept those savings clauses in place despite amending the Safety Act several times.
Geier represents an aberration from the clear expression of congressional intent to preserve common law tort claims with respect to motor vehicle safety. The “no airbag” theory was an invention of the 1980s that came around at the same time that the federal government passed regulations with the goal of allowing motor vehicle manufacturers to choose from an array of specifically enumerated passive restraint systems as that technology evolved. In sharp contrast, the common law duty to engage in post-sale remedial actions predates the Safety Act, and Congress specifically preserved these common law duties by providing that the “notification and recall provisions, are ‘in addition to’ rights and remedies available under state law.”66 In doing so, Congress allowed for common law post-sale duties to continue to serve a vital complementary role in motor vehicle safety in the same fashion as the common law pharmaceutical claims at issue in Wyeth.
Florida, like many other states, has long recognized that a manufacturer’s obligation to avoid needlessly endangering the public does not terminate at the time of sale. And despite automotive manufacturers’ attempts to hide behind federal standards, courts around the country have consistently recognized that common law claims for post-sale failure to warn and recall are not preempted.
1 Michael Drahos, et. al., Danger Ahead: The Changing Face of Failure to Warn Claims, TRIAL ADVOC. Q. 28, 32 (2014).
2 610 So.2d 1259 (Fla. 1992).
3 Id. at 1260-61.
4 Id. at 1263
5 Id. at 1263
6 909 So.2d 901 (Fla. 3d DCA 2004)
7 Id. at 903.
8 Id. at 905 ((citing, among other sources, the Restatement (Third) of Torts: Prod. Liab. §10 (1998) (entitled “Liability of Commercial Product Seller or Distributor for Harm Caused by Post-Sale Failure to Warn”)) (emphasis added).
9 Florio v. Manitex Skycrane, LLC, Prod. Liab. Rep. (CCH) P 18549 (M.D. Fla. 2010).
10 47 A.L.R.5th 395, Products Liability: Manufacturer’s Postsale Obligation to Modify, Repair, or Recall Product, at §2.
11 Jeffrey A. Lamken, Efficient Accident Prevention As A Continuing Obligation: The Duty to Recall Defective Products, 42 Stan. L. Rev. 103, 106 (1989).
15 Clay Elec. Co-op., Inc. v. Johnson, 873 So.2d 1182 (Fla. 2003); see also Restatement (Third) of Torts: Prod. Liab. §11 (1998); cf. Thomas v. Bombardier Recreational Products, Inc., 682 F. Supp. 2d 1297, 1302 (M.D. Fla. 2010) (“Defendant argues that Florida law does not recognize such a duty to recall or retrofit a product and that there is no evidence of a voluntary undertaking or government agency mandate to recall the product.”)
16 Restatement (Third) of Torts: Prod. Liab. §11 (1998)
17 49 U.S.C. § 30101, et seq.
18 Rosen v. J.M. Auto Inc., 07-61234 -CIV, 2008 WL 9901501, at *4 (S.D. Fla. 2008) (citing Lowe v. Gen. Motors Corp., 624 F.2d 1373 (5th Cir. 1980)).
19 49 U.S.C. §30101, et seq.
21 49 U.S.C. §30118; 49 C.F.R. § 577.7.
22 William W. Buzbee, Asymmetrical Regulation: Risk, Preemption, and the Floor/ceiling Distinction, 82 N.Y.U.L. REV. 1547, 1550 (2007).
23 49 U.S.C. § 30103(e)
24 49 U.S.C. § 30103(d).
25 Government Accountability Office, Auto Safety: NHTSA Has Options to Improve the Safety Defect Recall Process (June 2011) at pp. 24-25, available at http://www.gao.gov/assets/320/319698.pdf.
26 Id. at p. 30.
27 Id. at p. 20.
28 358 Mich 163, 177-78; 99 NW2d 627, 634 (1959).
29 679 F. Supp. 873 (S.D. Ind. 1988)
30 Id. at 880.
35 CIVA 106CV-2682-RWS, 2008 WL 5111222, at *2 (N.D. Ga. 2008)
36 Id. at *2 n.3.
38 08-CV-2872, 2010 WL 4222924, at *1 (N.D. Ill. 2010)
39 Id. at *4.
42 Id. at *5 (citations and quotations omitted).
43 529 U.S. 861, 869 (2000).
44 Id. at 865.
45 Kurt B. Chadwell, Automobile Passive Restraint Claims Post-Cipollone: An End to the Federal Preemption Defense, 46 BAYLOR L. REV. 141, 181 N.2 (1994); 2 OWEN & DAVIS ON PROD. LIAB. §18:10 (4TH ED.).
46 Geier v. Am. Honda Motor Co., Inc., 529 U.S. 861, 8674-75 (2000).
47 Id. at 868.
48 Id. at 874.
50 Id. at 875-883.
55 555 U.S. 555 (2009).
56 Id. at 559.
57 Id. at 561.
58 Id. at 562.
59 Wyeth, 555 U.S. at 573.
60 Id. at 575.
61 Id. at 578.
62 Id. at 575.
64 Id. at 578.
65 Id. at 580.
66 Great W. Cas. Co. v. Volvo Trucks N. Am., Inc., 08-CV-2872, 2010 WL 4222924, at *5 (N.D. Ill. 2010).