The Toyota Recall and the Failures of Product Liability Law

Writing at Forbes, University of Chicago law professor Richard Epstein argues that the Toyota recall scandal offers a good opportunity to consider just how far product liability law has strayed from cases (like that of Toyota) where a product fails during the course of ordinary use:

As an old-style libertarian, I have long argued for a narrow definition of product defect that stresses the traps that products may create for people who use them in a normal and proper fashion. The mainstream business skeptics, led by the late John Wade, dismissed that definition as hopelessly narrow. By the late-1960s they persuaded courts to adopt a "risk/utility" analysis that empowers a jury to decide whether "the foreseeable risks of harm could have been reduced or avoided by some alternative design that renders a product not reasonably safe."

This broad definition sweeps within its confines the modern "crashworthiness" case that lets a jury hold a manufacturer liable when a drunk driver wraps his car around a telephone pole while driving 80 miles per hour. After all, that side panel could have been thicker or the gas tank relocated. Note that in theory every single car of the same make or model could be treated defective once a single jury decides that a certain design feature is not up to snuff.

But now ask this question. Does every automobile manufacturer recall each model car that some jury deems defective under this exotic risk/utility analysis? Not on your life. This broad standard allows runaway juries to conclude that every car on the road suffers from dozens of design defects. Try to cure them all simultaneously and the jury-rigged vehicle would be an overweight tank that could not move, let alone get decent gas mileage. Modern product liability law is an expensive litigation game operated by and for the benefit of lawyers. Rarely does anyone pay the slightest attention to how these cases come out in choosing their next car.

Read the whole thing here.