Ford Motor Company v. Teresa Gacia Trejo, 133 Nev., Advance Opinion 68, No. 67843 (Sept. 27, 2017).

Background

The Ford Motor Company (Ford) appealed a jury verdict in a strict liability design defect case, in which Ford unsuccessfully argued an alternative design defect test should have been included in the jury instructions. The plaintiff Teresa Gacia Trejo was driving a 2000 Ford Excursion on a highway with her husband Rafael Trejo sitting in the passenger seat. When Ms. Trejo attempted to change lanes, the trailer she was pulling fishtailed causing her to lose control of the vehicle. The Excursion rolled between 1.5 and 2.5 times before resting upside down. Ms. Trejo stated “the roof was so crushed that [she] was unable to see Rafael.” Ms. Trejo was able to climb out of the vehicle, but her husband died at the scene.

Ms. Trejo subsequently filed a lawsuit against Ford for the death of her husband on a strict products liability theory. The evidence at trial revealed Ford’s internal manufacturing guidelines required that vehicles “weighing less than 8,500 pounds have a roof strength-to-weight ratio of 1.725 pounds.” The 2000 Excursion had an actual weight of 7,730 but a “gross vehicle weight rating of 8,600 pounds.” However, the strength-to-weight ratio of the 2000 Excursion was 1.25 pounds.

At trial, Ms. Trejo’s expert gave his opinion that Mr. Trejo’s death was caused by hyperflexion, a theory that when the roof caved in it broke Mr. Trejo’s neck and pinned his neck in such a position that it caused him to suffocate. Ms. Trejo argued Ford should have reinforced the roof to meet the 1.725 strength-to-weight ratio. Ford presented the alternate theory of “torso augmentation,” arguing that on the first rollover, Mr. Trejo broke his neck and died instantly “because the moment the Excursion turned upside down, the weight of Rafael’s body ‘diving’ into the roof caused his neck to break.”

Jury Instructions

The stock instructions for strict products liability design defect cases in Nevada are based on the “consumer-expectation” test, the test that Nevada has followed for some time. However, Ford asked the district court to adopt the “risk utility” test as laid out in the Third Restatement. The district court denied Ford’s request to submit jury instructions based on the risk utility test and gave the jury the stock instructions that “reflected the current state of the law.” The jury found in favor of Ms. Trejo, finding the Excursion’s roof had a design defect and was the proximate cause of Mr. Trejo’s death. Ford appealed the verdict and the denial of the risk utility test jury instructions.

The Risk Utility Test

Ford asked the Nevada Supreme Court to adopt the risk utility test in strict products liability design defect cases. This test combines a negligence standard with a requirement that a plaintiff provide an alternative design that would have been better. Under the risk utility test found in the Third Restatement, a product “is defective in design when the foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative design…and the omission of the alternative design renders the product not reasonably safe.” In support of adoption, Ford argued many jurisdictions have adopted the risk utility test, claiming the test: (1) “better allows a jury to analyze complex cases in which consumer expectations are less clear,” and (2) “provides a lay jury with a concrete framework in which to analyze complex or technical product.”

The Consumer-Expectation Test

Design defect is a strict tort liability claim. Under the consumer-expectation test, products are defectively designed if “they fail to perform in the manner reasonably to be expected in light of their nature and intended function.” The test is based on the viewpoint of an ordinary user because “defective products are ‘more dangerous than would be contemplated by the ordinary user having the ordinary knowledge available in the community.’” The Nevada Supreme Court explained Nevada has “consistently” followed the consumer-expectation test in manufacturing and design defect cases.

After reviewing the merits of the risk utility test versus the consumer-expectation test, the Nevada Supreme Court declined to adopt the risk utility test, holding:

[T]he proposed advantages of the risk-utility test over the consumer-expectations test are largely overstated. Further, as discussed below, the adoption of negligence standards into strict products liability, as well as the affirmative requirement that plaintiffs provide proof of a reasonable alternative design, stands contrary to the public policy supporting Nevada’s long-standing use of the consumer-expectation test.

In other words, under the risk utility test, the jury must decide whether the manufacturer negligently chose one design over a better alternative design, instead of imposing strict liability for a design defect under the consumer-expectation test. The Court further explained its belief that the consumer-expectation test adequately assists juries in complex cases because it does not “require any degree of scientific understanding about the product itself” to determine whether a product failed to perform as safely as an ordinary consumer would expect the product to perform.

Drawbacks of the risk-utility test

The Nevada Supreme Court held the risk-utility test goes against the Nevada public policy of adopting a strict liability standard by injecting a negligence standard into the test. “The requirement that plaintiffs must provide proof of a reasonable alternative design is not supported by Nevada law and poses an unfair burden to many prospective plaintiffs.” The Court explained the risk-utility test would require plaintiffs to come up with an alternative design that should have been used by the manufacturer before even filing a lawsuit. This is unfair to plaintiffs, the Court explained, because the manufacturing defendants usually have all the information about potential design alternatives, yet they could move to dismiss plaintiffs’ complaints (who are not experts in the manufacturing field) at the outset of lawsuits because the complaints do not lay out an alternative design argument. Requiring a plaintiff to obtain an expert at the outset would be cost prohibitive and economically fatal for small defect cases.

Another drawback the Court found was some products may be defectively designed and unreasonably dangerous although there is no “feasible alternative design” available. Lastly, the Court found the risk-utility test focuses on the risks the manufacturer could foresee in the product as opposed to what the reasonable expectations of a consumer were.

Although the Court rejected the risk-utility test, the Court pointed out most of the test’s factors can still be introduced under the consumer-expectation framework. For example, the Court stated evidence of the advantages and disadvantages of alternative designs could be introduced, including whether they are cost-prohibitive, or how the alternative designs would affect product function, “longevity, maintenance, repair, and esthetics.” Furthermore, evidence of owner’s manuals, instructions, warnings, and advertising could be introduced to show consumer expectations.

Relevance

Based on the five to one decision in this case, Nevada is not abandoning the consumer-expectation test anytime soon in strict product liability design defect claims. The Court concluded its opinion with: “Nevada will continue to be governed by the consumer-expectation test, which we believe best supports the policy reasons allowing recovery under the theory of strict products liability.”

Furthermore, now that the Nevada Supreme Court has clearly stated its expectation to follow the consumer-expectation test, Nevada defendants involved in design defect cases know to focus their discovery and defenses on the elements of this test. Defendants will not need to waste their energy on trying to win a case by convincing a court to adopt the risk-utility or any other alternative test.

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