Interpreting for the first time the product liability statute adopted in 2011, the Wisconsin Supreme Court refuses to adopt Restatement (Third) of Torts Section 2(b) and holds that the consumer-contemplation test remains the standard for determining whether a product is “unreasonably dangerous” in a strict liability claim.
Last month, in Murphy v. Columbus McKinnon Corp., 2022 WI 109, — N.W.2d —, 2022 WL 17972321 (Dec. 28, 2022), the Supreme Court of Wisconsin interpreted the Wisconsin product liability statute for the first time following the enactment of the statute in 2011. The Court held (4-3) that in enacting the 2011 law, the legislature did not adopt the risk-utility balancing test from the Restatement of Torts (Third), and that it retained the common law consumer-contemplation test as one of the elements a plaintiff must satisfy in bringing a strict liability claim alleging a design defect. In reaching this conclusion, the Court held that considering the “foreseeable risks of harm” in a product’s design and whether there is a “reasonable alternative design” – both of which are expressly included within the risk-utility balancing test of Restatement Section 2(b) – are express elements of a design defect claim under Wis. Stat. § 895.047(1)(a). The Court further held that whether a design was “unreasonably dangerous” must be evaluated under the consumer-contemplation test to satisfy an element of a design defect claim under Wis. Stat. § 895.047(1)(b). Importantly, in a warning to practitioners and circuit courts, the Court stated that it was problematic and incorrect that the comments to jury instruction Wis. JI-Civil 3206.1 suggested that the legislature had abandoned the consumer-contemplation test. 2002 WI 109, ¶36 n.21. Citing Wis. Stat. § 895.047(6), the Court further held that the legislature’s adoption of the product liability statute did not abolish common-law product liability claims based on negligence and breach of warranty theories.
Justice Roggensack wrote the majority opinion, joined by Justices Ann Walsh Bradley, Dallet, and Karofsky (in all but two paragraphs), with Justice Hagedorn writing a separate opinion concurring in part and dissenting in part, joined by Chief Justice Ziegler and Justice Rebecca Grassl Bradley.
Wisconsin Product Liability Law
In 2011, the Wisconsin legislature passed a tort reform bill, which, among other things, created Wis. Stat. § 895.047. The statute, generally referred to as the Omnibus Tort Reform Act, altered the landscape of Wisconsin’s product liability law. 2002 WI 109, ¶25. The primary impact on Wisconsin product liability law shaped by the new legislation was a change in the test for determining a “defective” design.
Before the Omnibus Tort Reform Act, a litigant seeking to prove a strict liability design defect claim looked to the consumer contemplation test, derived from common law, to satisfy two elements of the claim: (1) that the design was “defective,” and (2) that the product was “unreasonably dangerous.” Under the common law, the consumer-contemplation test – whether a product contained an “unreasonably dangerous” defect – depended on objective test that focused on the reasonable expectations of an ordinary consumer.
The Omnibus Tort Reform Act changed that standard for strict liability claims. In pertinent part, Wis. Stat. § 895.047(1) states:
[A] manufacturer is liable to a claimant if the claimant establishes all of the following by a preponderance of the evidence:
- That the product is defective because it . . . is defective in design. . . . 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.
- That the defective condition rendered the product unreasonably dangerous to persons or property.
- That the defective condition existed at the time the product left the control of the manufacturer.
- That the product reached the user or consumer without substantial change in the condition in which it was sold.
- That the defective condition was a cause of the claimant’s damages.
For claims based on a design defect theory, subsection (a) of the new statute repeats language from the Restatement (Third) of Torts, which exclusively adopts the “risk utility” test for design defect claims and imposes on plaintiffs the burden of presenting evidence of a reasonable alternative design. Under the risk-utility balancing test, the plaintiff must show that 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 seller, and the omission of the alternative design renders the product not reasonably safe.
Which of the two competing tests to adopt had been a point of contention for the Wisconsin Supreme Court long before the 2011 enactment of the product liability statute. See Sharp v. Case Corp., 227 Wis. 2d 1, 19, 595 N.W.2d 380 (1999) (declining to adopt the Restatement (Third) of Torts § 2)). Until Murphy, however, that conflict remained unresolved, and the new product liability statute remained without interpretation by the Wisconsin Supreme Court.
The Murphy Case
In May 2013, Matthew Murphy, a line technician, suffered injures while trying to load a wooden pole from the ground onto the bed of a trailer. 2002 WI 109, ¶9. He lifted the pole using a set of metal Dixie jaw-style tongs attached to the end of the winch line of a truck-mounted boom that he operated by remote control, but the pole fell and struck him. Id. Columbus McKinnon Corporation (“CMC”) manufactured the Dixie tongs Murphy used when he was injured. Id. ¶11.
Murphy filed design defect claims against CMC under both common law negligence and strict liability (under Wis. Stat. § 895.047(1)) theories. Murphy tendered a different type of lifting tongs, the Hogg-Davis jaw-style tongs, as a safer alternative design to support both his statutory and common law negligence design defect claims. Id. Following two years of discovery, the circuit court granted summary judgment in favor of CMC. Murphy appealed. Id. ¶12.
The Wisconsin Court of Appeals reversed the circuit court’s ruling in pertinent part. In reviewing the summary judgment ruling, the court of appeals concluded that in enacting section 895.047(1)(a), the legislature “adopted the risk-utility balancing test from the Restatement (Third) to determine whether a plaintiff has established a product design defect.” Murphy v. Columbus McKinnon Corp., 2021 WI App. 61, ¶27, 399 Wis. 2d 18, 963 N.W.2d 837. The court of appeals further held, however, that the legislature retained the consumer contemplation test as the standard by which a plaintiff must show that the defendant manufacturer’s design was “unreasonably dangerous” under section 895.047(1)(b). Applying its interpretation of section 895.047, the court of appeals reversed the circuit court’s entry of summary judgment with respect to Murphy’s design defect claim supported by his tender of the Hogg-Davis jaw-style tongs as a safer alternative design. The Wisconsin Supreme Court granted CMC’s petition to review the appellate decision. Id. ¶13.
Wisconsin Supreme Court’s Interpretation of the Product Liability Statute
Before the Supreme Court, CMC argued that by enacting Wis. Stat. § 895.047(1), the legislature adopted the Restatement (Third) of Torts’ risk-utility test as completely replacing the common law consumer contemplation test. Id. ¶26. By contrast, Murphy asked the Court to apply the plain, unambiguous language of § 895.047(1). Murphy argued that the legislature enacted “a unique, hybrid products liability claim that includes five requirements, but which retains the consumer-contemplation test.” Id. ¶27. The parties also disputed whether the enacted product liability statute retained the common law distinction between strict liability and negligence product liability claims. Id. ¶¶ 26-27.
In interpreting the product liability statute, the Court turned to its now-familiar process of statutory interpretation by looking first to the plain language of section 895.047. Id. ¶29. In doing so, the Court concluded that subsection (1)(a) – which requires that the plaintiff identify a safer, alternative design – is clear, unambiguous, and does not incorporate the “risk-utility balancing” test. Id. ¶¶29-33. Although the Court acknowledged that subsection (1)(a) mirrors language from the Restatement (Third) of Torts § 2(b), id. ¶13, the Court noted that subsection (1)(a) lacks express language directing courts to incorporate or apply the risk-utility balancing test. Id. ¶35.Without a clear indication from the legislature that the “statute should be interpreted by superimposing extra-statutory language,” the Court held that it “will not read Restatement language … into a statute, simply because the legislature selectively adopted some wording from the Restatement.” Id.
The Court rejected CMC’s argument that the language “not reasonably safe” used in section 895.047(1)(a) could not be read in harmony with the language “unreasonably dangerous” used in subsection (1)(b). Id. ¶37. The statute’s plain language, the Court held, is clear in showing that the legislature codified language from the Restatement (Third) of Torts in subsection (1)(a) and the common-law consumer-contemplation test in (1)(b). Id. As further grounds for its ruling, the Court noted that the legislature expressly stated its intent in section § 895.046(1g) that the product liability statute was enacted in part “to return tort law to its historical, common law roots.” Id. ¶38.
The Supreme Court also declined to adopt comment (f) to Restatement (Third) of Torts § 2(b), which recites a list of factors that a factfinder applying the risk-utility test may consider in determining whether an alternative design is reasonable and whether its omission renders a product not reasonably safe, and upon which the court of appeals relied. Id. ¶41. Consistent with their continuing adherence to common-law product liability principles, the justices indicated that other factors identified in Wisconsin’s common law, most notably the Supreme Court’s decision in Sumnicht v. Toyota Motor Sales, U.S.A., Inc., 121 Wis. 2d 338, 372, 360 N.W.2d (1984), may persuasively inform the statute’s application. Id.
Finally, the Court set forth the five requirements a plaintiff must allege and prove to move forward with a strict product liability claim based on a design defect. First, a plaintiff must show that the foreseeable risks of the product could have been reduced or avoided by the adoption of a reasonable alternative design and defendant’s omission of a reasonable alternative design rendered the product not reasonably safe. Second, a plaintiff must prove that the consumer-contemplation test as set out in section 895.047(1)(b) (for strict liability claims based on a defective design) has been met. Finally, the remaining three factors of a section 895.047(1) claim, set forth in subsections (c), (d), and (e), must be met. Id. ¶40.
In the course of construing section 895.047, the Court rejected CMC’s argument that the legislature’s adoption of section 895.047 did away with design defect claims based on a common-law negligence theory. Again, turning to the plain text of the statute, the Court observed that section 895.047(6) “plainly states the products liability section ‘does not apply to actions based on a claim of negligence or breach of warranty.’” Id. ¶39. Consequently, the Court held that the adoption of section 895.047 “does not extinguish a plaintiff’s ability to bring a claim in negligence against a product manufacturer.” Id.
Applying its construction of the requirements of section 895.047(1), the Supreme Court held that Murphy’s strict product liability claim presented genuine issues of material fact to be resolved by a jury, and it affirmed the court of appeals in reversing summary judgment and remanding the case to the circuit court for further proceedings. Similarly, the Court found that genuine issues of material fact remained to be resolved by a jury in a trial of Murphy’s product liability claim based in negligence.
Murphy is significant because the Supreme Court did not follow the modern trend of adopting the risk-utility balancing test set forth in the Restatement of Torts (Third) or read comment f to the Restatement into the analysis for design defect claims brought under Wisconsin’s new product liability statute. Rather, the Supreme Court has unambiguously declared that the plain language of section 895.047(1), which incorporates existing common law principles, provides the only requirements for a plaintiff to prevail on a strict liability claim based on an allegedly defective product design. Moreover, the Court has rejected any notion that the adoption of the statute did away with product liability claims brought under common-law negligence or breach of warranty theories. This decision is not without consequence: for the last decade, practitioners have operated with the understanding that in adopting section 895.047(1), the legislature abandoned—or discarded as stated by the comments in Wis. JI-Civil 3206.1—the consumer-contemplation test. This is not true and is problematic according to the Supreme Court, and, at a minimum, will require the pattern jury instructions for strict product liability claims to be rewritten.
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