Goldberg v. Kollsman Instrument Corp.
240 N.Y.S.2d 592, 191 N.E.2d 81, 12 N.Y.2d 432 (1963)
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Rule of Law:
A manufacturer's implied warranty of fitness and merchantability for an inherently dangerous product extends to the foreseeable and intended users of that product, regardless of a lack of direct contractual privity.
Facts:
- Kollsman Instrument Corporation manufactured an airplane altimeter.
- Lockheed Aircraft Corporation manufactured an airplane, incorporating the altimeter made by Kollsman.
- Lockheed sold the completed airplane to American Airlines, Inc.
- Edith Feis was a fare-paying passenger on an American Airlines flight from Chicago to New York aboard the aircraft manufactured by Lockheed.
- The airplane crashed near La Guardia Airport in New York City.
- Feis died from injuries sustained in the crash.
- The crash was allegedly caused by a defect in the altimeter.
- Feis's administratrix sued on her behalf.
Procedural Posture:
- The administratrix for the estate of Edith Feis sued American Airlines, Lockheed Aircraft Corporation, and Kollsman Instrument Corporation in a New York trial court (Special Term).
- The causes of action against Lockheed and Kollsman for breach of implied warranties were dismissed by the trial court for lack of privity.
- Plaintiff appealed the dismissal to the intermediate appellate court, the Appellate Division.
- The Appellate Division affirmed the trial court's dismissal without opinion.
- The plaintiff was granted leave to appeal to the New York Court of Appeals, the state's highest court.
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Issue:
Does a manufacturer's implied warranty of fitness for its product extend to intended users who lack privity of contract with the manufacturer?
Opinions:
Majority - Chief Judge Desmond
Yes. A manufacturer’s implied warranty of fitness for its product extends to all its intended users, despite the lack of privity of contract. The court reasoned that a breach of warranty is not merely a violation of a sales contract but also a tortious wrong. Extending the logic from cases like MacPherson v. Buick Motor Co., which eliminated the privity requirement for negligence claims involving dangerous products, the court held that where a product like an airplane is inherently dangerous if defective, the manufacturer is liable for breach of implied warranties to the people whose use is contemplated, such as passengers. This holding is a logical and necessary result of prior decisions that chipped away at the privity doctrine. However, the court limited this liability to the manufacturer of the final product (Lockheed), dismissing the claim against the component part manufacturer (Kollsman) on the basis that holding the assembler provides adequate protection to the consumer.
Dissenting - Judge Burke
No. The implied warranty of fitness should not extend to a passenger of a common carrier who has no contractual relationship with the manufacturer of the aircraft. The dissent argued that the plaintiff purchased a service of carriage from American Airlines, not a product from Lockheed. The airline's duty is one of due care, and the passenger's rights should not be enlarged to what is effectively insurance protection simply because the airline purchased its plane from a third party. The dissent contends that if a theory of strict 'enterprise liability' is to be applied, it should be imposed on the airline, which is the dominant enterprise dealing directly with the public and is best positioned to distribute the risk of loss. The majority's decision to hold the assembler liable but not the component manufacturer is arbitrary, and such a fundamental shift toward strict liability is a matter best left to the legislature.
Analysis:
This decision represents a landmark step in the evolution of products liability law, effectively abolishing the privity requirement for breach of implied warranty claims in New York for inherently dangerous products. It signifies a crucial shift in legal thinking, re-characterizing breach of warranty from a purely contractual claim to a 'tortious wrong.' By holding the final product assembler liable, the case established a framework for channeling liability to the entity that places the completed product into the stream of commerce, influencing the later adoption of strict tort liability as articulated in the Restatement (Second) of Torts § 402A. The ruling's distinction between an assembler and a component-part manufacturer also created an important precedent for how liability is apportioned in complex manufacturing chains.
