United States: Eastern District Of Wisconsin Grants Summary Judgment On Hip Component Manufacturer's Negligence Claims But Denies Summary Judgment On Strict Liability Claims.

Last Updated: June 26 2017
Article by Rachel B. Weil

Last week, like most weeks during the past year, we spent a lot of our time on airplanes. One of those trips fell on a day with "lots of weather."  All of our flights were delayed, although we were luckier than many.  When we landed at Dulles for our connecting flight home, the queue at the customer service booth comprised hundreds of stranded passengers looping around and around like the approach to Space Mountain, hoping, with varying degrees of impatience and panic, to reschedule canceled flights.  But our connecting flight was only late – very late.  We sat at our gate for almost three hours, then were finally allowed to board.  We buckled in, we watched a taciturn flight attendant demonstrate the seat belts we were already wearing, and then we sat.  For forty more minutes.  (By now, it was 12:30 a.m.)  Finally, the "flight deck" made an announcement:  we were sitting still because the trash can in the galley lacked a lid, and this was a "safety hazard" that had to be rectified before we could take off.  And so we were waiting for the "caterer," a contractor, to bring a new trash can.  Eventually, a truck pulled up, but it was carrying the wrong type of trash can.  Ultimately, someone went next door to a plane that was done flying for the night — as all sane people were, by that point – and stole a trash can.  And we were on our way.

So who was at fault?   Was it the contractor, which (twice) provided the wrong trash can? Or was it the airline, which shall remain nameless because (trust me) it doesn't need any more bad publicity and which specified and installed the trash can?  Depends on the nature of the claim, under a (very very) loose interpretation of today's decision from the Eastern District of Wisconsin.

In Janusz v. Symmetry Medical, Inc., 2017 U.S. Dist. LEXIS 88895 (E.D. Wis. June 9, 2017), the plaintiffs alleged that the femoral neck of their artificial hips systems broke, requiring additional surgeries to replace the hip system.  The femoral neck was a component, manufactured by the defendant according to specifications and instructions provided by the hip system's fabricator (which was bankrupt by the time of suit).  The plaintiffs asserted claims sounding in negligence and strict liability against both companies, and the component manufacturer moved for summary judgment, asserting the so-called "contract specification defense" to the plaintiffs' claims.  This is a component part manufacturer's defense, and not one we have ever discussed here.  Hence, our interest in Janusz.

Under this defense, a manufacturer that "makes a product strictly in accordance with the design specifications of another is not liable in negligence unless the specifications are so obviously defective and dangerous that a contractor of reasonable prudence would have been put on notice that the product was dangerous and likely to cause injury." Januscz, 2017 U.S. Dist. LEXIS 88895, at *11 (citation omitted).  And, while this defense is not among the five defenses listed in Wisconsin's product liability statute, the court held that the statute supplemented but did not supersede common-law doctrines that weren't inconsistent with it.  While Wisconsin common law had not adopted the contract specification defense, either, it had adopted the "government contractor defense," the underlying principles of which — declining to hold a contractor liable when it manufactured a product according  to the specifications of another – overlap those of the contract specification defense.  Under the government contractor defense, a contractor that "makes a product strictly in accordance with the design specifications of another is not liable in negligence unless the specifications are so obviously defective and dangerous that a contractor  of reasonable prudence would have been put on notice that the product was dangerous and likely to cause injury." Id. at *12 (citation omitted).  This is essentially the same test used in the contract specification defense generally. See Restatement (Third) of Torts: Products Liability §5, Reporters' Note to Comment a (1998) (a "majority of courts" hold "that a manufacturer of a component part . . . cannot be held strictly liable . . . so long as the specifications provided are not so obviously dangerous that it would be unreasonable to follow them") (citation and quotation marks omitted).

In Januscz, however,  the court drew a distinction between negligence and strict liability that does not exist generally.  It held that, "[i]ntuitively," it made sense that "an entity that has no role in designing a product should bear no liability if the product is defectively designed." Id. at *12.  But "that intuitive  reaction follows only when plaintiff's theory of recovery is negligence." Id. (citations omitted).  And, "in Wisconsin, product liability was and is a matter of strict liability." Id. at *13 (citations omitted).  In the strict liability context, unlike in negligence, "the focus is on the dangerousness of the product regardless of the defendant's conduct.  Thus, a defendant may be blameless but strictly liable." Id. (internal punctuation and citations omitted).  The court concluded that, given  the  "recent codification of product liability law reaffirming Wisconsin's commitment to  the principles of  strict liability, if  presented with a question of whether the contract specification defense applies to a question of strict liability under Wisconsin law, the Wisconsin Supreme  Court would hold  that it does not." Id. at *24. Januscz declared that "strict liability means strict liability.   It exists to shift costs associated with unsafe products to those  who are in the best position to disperse  those costs (be it through insurance, indemnification,  or some other means." Id. at *25.  And, the court held, the "contract specification defense significantly undermines the policies underlying strict liability.  Therefore, the court concludes that the defense does not exist  under Wisconsin law." Id. at *26.

This result is simply wrong under Wisconsin law. The Januscz court completely failed to cite the most relevant case, Schreiner v. Wieser Concrete Prod., Inc., 720 N.W.2d 525 (Wis. 2006), in which the Wisconsin Supreme Court expressly adopted Restatement Third §5 as "consistent with Wisconsin law." Id. at 530.  Thus, Wisconsin law does not distinguish between negligence and strict liability, particularly in the context of product specifications and component parts. See also Spychalla v. Boeing Aerospace Operations Inc., 2015 WL 3504927, at *3 n.2 (E.D. Wis. June 3, 2015) (recognizing Wisconsin's adoption of §5 after enacting of tort reform statute).  Indeed, after correctly holding that the Wisconsin tort reform statute only "supplements" the common law Januscz failed even to cite Restatement Third §5 – the relevant Wisconsin common law for component parts under Schreiner.  If anything, the statute reinforces use of the Third Restatement in Wisconsin, since the statute generally adopted that Restatement alternative design defect test and its "not reasonably safe" defect terminology. See Wis. Stat. §895.047(1)(a) ("A product is defective in design if the foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative design by the manufacturer and the omission of the alternative design renders the product not reasonably safe.").

Rather than actually follow Wisconsin law, the court simply repeated the truism that "strict liability does not mean absolute liability."  2017 U.S. Dist. LEXIS 88895, at *26 (emphasis in original).  To wit, a component manufacturer could escape liability if its component part underwent substantial change when it was included in the assembled device.  But, the court held, the defendant's femoral neck component did not undergo such change.  And so the court denied summary judgment on the plaintiffs' strict liability claims, though it granted summary judgment for the component manufacturer on the plaintiffs' negligence claims.

While this interesting decision appears thorough at first glance, in fact it completely omits essential Wisconsin law, Schreiner and Restatement Third §5, and thus its discussion of the philosophical underpinnings of strict liability, based on Restatement Second §402A, which Wisconsin no longer follows, is (to be polite) open to question.  We hope that the defendant eventually convinces the court of the error of its ways.

This article is presented for informational purposes only and is not intended to constitute legal advice.

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