Torts - Cases, Principles, and Institutions Fifth Edition, 2016a

Witt & Tani, TCPI 9. Liability without Fault?
regime of Winterbottom against Wright. Professors Polinsky and Shavell, for example, argue that
product sellers and manufacturers are motivated to produce safe products by market forces:
consumer products that are unreasonably dangerous will go unsold. They observe further that
many products, such as pharmaceuticals, are designed, manufactured, and marketed under strict
regulations.
Consequently, product liability might not exert a significant additional influence on
product safety for many products—and empirical studies of several widely sold
products lend support to this hypothesis. A second benefit of product liability is
that it can improve consumer purchase decisions by causing product prices to
increase to reflect product risks. But because of litigation costs and other factors,
product liability may raise prices excessively and undesirably chill purchases. A
third benefit of product liability is that it compensates victims of product-related
accidents for their losses. Yet this benefit is only partial, for accident victims are
frequently compensated by insurers for some or all of their losses. . . . Opposing the
benefits of product liability are its costs, which are great.
A. Mitchell Polinsky & Steven Shavell, The Uneasy Case for Product Liability, 123 HARV. L.
REV. 1437 (2010).
2. The bystander problem. What would the Winterbottom rule mean for injured bystanders
and other injured third parties? Take for example a bystander to the coach accident in
Winterbottom who is injured by the collapsing coach. Should such a person have an action
against the coach-maker for injuries caused by the coach-maker’s negligence? If not, why not?
The answer cannot be that such plaintiffs ought to have protected themselves by contract. These
people were not in a position to demand contractual protection against the risk of injury. They
could, of course, purchase insurance against general risks of accident and injury. But why should
the injured bystander bear these costs as a general matter rather than the coach-maker?
Regardless of the merits, the caselaw on product injuries began to develop certain
exceptions to the Winterbottom privity rule. Eventually, the exceptions culminated in a decision
by Judge Cardozo in the New York Court of Appeals.
MacPherson v. Buick Motor Company, 111 N.E. 1050 (N.Y. 1916)
CARDOZO, J.
The defendant is a manufacturer of automobiles. It sold an automobile to a retail dealer.
The retail dealer resold to the plaintiff. While the plaintiff was in the car, it suddenly collapsed.
He was thrown out and injured. One of the wheels was made of defective wood, and its spokes
crumbled into fragments. The wheel was not made by the defendant; it was bought from another
manufacturer. There is evidence, however, that its defects could have been discovered by
reasonable inspection, and that inspection was omitted. There is no claim that the defendant knew
of the defect and willfully concealed it. . . . The charge is one, not of fraud, but of negligence.
The question to be determined is whether the defendant owed a duty of care and vigilance to any
one but the immediate purchaser.
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