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C. Some "third party" problems including a look at the "bystander." V. A few gratuitous "warnings" based on the speaker's experience with smoking and health litigation--with particular emphasis'on r the use and misuse of statistics (or--Should you be a sdientis t, live in Nebraska and sleep less?). VI. Closing.

WIiLN TO WARN - WIiY - AND IIOW BY DAVID R. HARDY A BIRD'S-EYE VIEW OF PRODUCTS LIABILITY LAW Before getting into the body of my talk which deals with the problem of "when to warn - why - and how", let me briefly re- view the evolution of the law in the area of products liability. My purpose is to point out the tremendous change which has been taking place in this area of the law in the past few years. The original rule which Winterbottom v. Wrightl in 1842 could be stated as follows: developed from the case of and prevailed into this century "A seller of goods is not liable for damages caused by their defects to anyone except his immediate buyer. " in the well known case of MacPherson v. Buick Motor Co.,2 decided in 1916, Judge Cardozo dealt this rule, as it related to negli- gence, its death knell. That decision is now considered universal law, although I might point out that some vestiges of the rule re- main in certain states. For example, I am presently representing a cigarette manufacturer in a lawsuit in Alabama. Under Alabama law it is necessary to plead and prove that a product is "imminently" or "inherently" dangerous in order to maintain an action for negli- gence against a remote seller of the product, This example

Following the foregoing remarks by the judge, defense counsel moved forr a mistrial. The motion was proraptly denied and some additional comments made by the Court: "The observations as to the ability of a plaintiff in contradiptinction of the ability of a defendant, corporate defendant, to obtain the necessary material in preparation for a trial is a matter which is clear. The re- sources are incomparable. The availability of material to the plaintiff and the avail- ability of material to the defendant is cer- tainly incomparable. "I think this should be said more often. I think the judges should say it more often. Because it is true, it's clearly true, taat the purpose of a government is to secure the life, liberty and the pursuit of happiness of people, human beings. "And there is a difference. One would be totally unrealistic if he didn't recognize the proposition that corporate entities have ac- quired such vast power and strength and wealth that in many instances they exceed the power and the wellbeing of their creator. "For example, in the State of Delaware where many off the corporations have their genesis, their conception, that little State of Delaware doesn't have the power, the strength or the wealth of General Motors. "And this isn't the first case in which I've made these observations. In a General Motors case of Cadillac Boat and Marine Company Versus General Motors I made the observation that it is an awesome experience for an individ- ual to be sued by or sue General Motors. It's an awesome experience for an individual to be sued by the United States Government. It's an overwhelming experience. And justice must be

just finished trying; and if lawyers are to be lectured and criticized for defending their clients--then, gentlemen, we had better all look to see of our powder is dry. I do not mean to paint too bleak a picture. A:products 14 liability case can still be successfully defended. Like•most trial lawyers I am reluctant to talk about my own cases, particu-• larly those which I have won. However, I feel compelled to try to recall for you the result of a case recently concluded in Warsaw, Missouri--13 dayG, one hour and 22 minutes ago, as a mat- ter of fact. My client was the American Tobacco Company--now American Brands-- and the charge was lung cancer. The jury verdict for American in this case represented the seventh con,-~ecutive ruling in favor of a cigarette manufacturer during the several years of such litigation. There have been no verdicts for a plaintiff and no settlements. More than sixty cases in all have been dismissed or determined in defendant's favor. Some specific suggestions with respect to.warnings may be helpful at this point and it is to these specifics which I now turn.

Fede,ral Insecticides, Fungicides and Rocaenticide Act; Flammable Fabrics Act; Federal Food, Drug and Cosmetics Act; and Cigarette Labeling and Advertising Act. Violation of these acts may result in your product being- .• considered per se defective. •

involves some risk of harm, "if only from over c.onsumption." I quote from the Restatement: "Good whisky is not unreasonably dangerous merely because it will make some people drunk, and is especially dangerous to alcoholics; but bad whiskey, containing a dangerous amount of fusel oil, is unreasohably dangerous. Good tobacco is not unreasonably dangerous merely because the effects of smoking may be harmful; but tobacco containing something like marijuana may be unreasonably dangerous. Good butter is not unreasonably dangerous merely because, if such be the case, it deposits cholesterol in the arteries and leads to heart attacks;.but bad butter, contaminated with poisonous fish oil, is unreasonably dangerous."12 in addition, if a danger is obvious.then it is not beyond that which would be contemplated by the oridinary customer who purchases it, with the ordinary knowledge of the community as to its characteristics. By our definition, therefore, such a prod- uct is not unreasonably dangerous and not defective. Many of the cases arising in this area involve the absence of safety devices, such as the lack of a shield over the moving parts of farm machin- ery. These cases involve an objective rather than a subjective test. The objective test has been followed by most courts, but let me add as a word of caution that a few judges and some legal commentators are beginning to criticize this rule. If, therefore, you are concerned with a product which could be made safer by the addition of an inexpensive safety device, or if your product is likely to be used by children, then I think you are running a risk in relying on the fact that a danger is obvious.

WIlEN TO WARN - 1111Y - AND HObd }3Y DAVI D R. HARDY I. A bird's-eye view of products liability law. .• A. Where do we stand today? B. Where are we headed? ("All that is past is prologue.") II. When a warning,should be given. . A. When a prouuct would otherwise be "unreasonably dangerous"--what about "obvious," dangers or unusual uses of a product which may make it dan- gerous? B. Is there a continuing duty to warn? C. Statutory duties. III. Why warnings should be given--their function generally. A. The nature of products and man--how "safe" must a B. C. D. product be? Protection for the consumer. proper use of a product. Protection for the seller. A comparison with positive warning should be given. Communication to--whom? instructions P Adequacy--what is the yardstick? about

'i'hese: are statistical associations and they have great appeal for most people. They are not, however, proof of cause and effect. They invite inquiry but do not answer it. The cigarette controversy has probably generated more statistics than any other--and in an age when we desire to solve problems quickly--these statistics have produced what have seemed to some a solution to the immense mysteries of cancer and heart disease. But medical proof has proved elusive--as many of our detractors have found--at least in Court. No manufacturer of consumer goods is immune from the same sort of attack based on equally spurious grounds. One lesson to be learned is that a healthy skepticism with regard to statistical associations is in order. Another is that if one industry has to accept mandatory labeling which, in effect, says use this product at your own risk--others may find themselves next in line. If one industry is denied access to TV and radio ad- vertising--others may be next. If one industry becomes the object of anti-product advertising--others can expect similar attention: Caution: Candy may rot your teeth. Caution: Steak may clog your arteries. Caution: Milk and Butter may dangerously increase your cholesterol. Caution: Cocoa Cola may rot your, teeth. The list is endless --

than restating it as it then existed, there can be little doubt but that today 402A is a restatement of law as it exists in this country. This is not to say that all jurisdictions have adopted 402A or that all those which have adopted strict tort liability follow every provision of 402A; however, it is probably now the general rule. When you consider that in 1958 no state could be said to have adopted strict tort liability, and that until 1916 the rule which developed from Winterbottom v. Wright6 in 1842 held sway in this country, then you have some idea of the rate of development of the law in this area. Our legal past is a prologue to the likelihood of con- tinued change and, as the philosopher, Santayana, put;.it, "Those who cannot remember the past are condemned to repeat it." Having looked, therefore, at the state of products liability law in the not too distant past and compared it with the present state of the law, the next question is obvious. Where are we headed? Are we now about to enter a period of stability or are the recent changes I have pointed out to you just the beginning steps in the implementation of a new concept of social justice in which "risk allocation" and not "fault" will become the basis of liability? As one who believes that liability should not exclude "fault" al- together, I hope for the former but fear the latter. What does the Restatement say? I quote:

Russell Baker recently wrote an essay called "The Good Things that Undone Poor Gum"25 in which he "looked up" and ques- tioned--in humorous form--the warnings which attend modern life. He wrote: ,. "They buried Gumbacher last week. The death certificate said he died of Coliosirus Gravis, more commonly known as the spreading decline, but his friends know better. Gumbacher was slowly scared to death by the combined efforts of several thousand national campaigns to help him live longer." Russell Baker follows with a list of the dangers about which Gum was publicly and repeatedly warned: Air Conditioning Fried Eggs Fats Weight Gain Weight Loss Milk Alcohol Air Pollution Cigarettes Artificial Sweeteners Sleep Sitting Jogging Sunshine Poor Gum worried himself to death and didn't survive to hear the latest warning: "Attempts to prolong life may be fatal." There is no record of a lawsuit by Gum's widow based on failure to warn, but we who have represented cigarette manuf ac- turers over the years are not as shocked as some of you may be by the possibility off suits against the manufacturers of air condi- tioners, milk'producers or whiskey distill.ers. And we are acutely