Ray Ex Rel. Holman v. BIC Corp.
925 S.W.2d 527, 1996 Tenn. LEXIS 467 (1996)
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Rule of Law:
Tennessee's products liability statute provides two independent tests to determine if a product is unreasonably dangerous: the consumer expectation test and the prudent manufacturer test. The prudent manufacturer test requires a risk-utility analysis, weighing the product's risks against its benefits to determine if a reasonably prudent manufacturer would market it.
Facts:
- Erma Holman lived in a Memphis apartment with her two minor sons, Frederick and Donnie Ray.
- A friend left a cigarette lighter, manufactured by BIC Corporation, in the Holman apartment.
- On September 3, 1982, Holman left her four-year-old son, Frederick, alone while she walked his older brother to the school bus stop.
- While Holman was gone, a fire broke out in the apartment.
- Frederick sustained serious injuries from the fire, including incapacitating brain damage.
- The lawsuit alleged that the fire was started by the BIC lighter, which was not child-resistant.
Procedural Posture:
- Erma Holman, on behalf of her minor son Frederick, sued BIC Corporation in the United States District Court.
- Holman alleged that BIC's disposable lighter was an 'unreasonably dangerous' product.
- BIC Corporation moved for summary judgment.
- The district court granted summary judgment in favor of BIC Corporation.
- Holman, as the plaintiff-appellant, appealed the decision to the Sixth Circuit Court of Appeals.
- The Sixth Circuit Court of Appeals certified a question of state law to the Tennessee Supreme Court for clarification.
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Issue:
Does Tennessee Code Annotated Section 29-28-102(8), in addition to the consumer expectation test, provide for a separate and distinct test, such as a risk-utility test, for determining whether a product is 'unreasonably dangerous'?
Opinions:
Majority - White, Justice
Yes, the Tennessee Products Liability Act, at Tenn. Code Ann. § 29-28-102(8), provides two separate and distinct tests for determining if a product is unreasonably dangerous: the consumer expectation test and the prudent manufacturer test. The court holds that the prudent manufacturer test inherently requires a risk-utility balancing analysis. The plain language of the statute defines 'unreasonably dangerous' using two clauses joined by the disjunctive 'or.' The first clause establishes the buyer-oriented 'consumer expectation test,' which asks if a product is dangerous beyond what an ordinary consumer would contemplate. The second clause establishes the seller-oriented 'prudent manufacturer test,' which asks if a reasonably prudent manufacturer, knowing of the product's dangerous condition, would place it on the market. These are two distinct tests with different focuses and evidentiary requirements. The prudent manufacturer test, by its nature, requires an analysis of whether a manufacturer was 'prudent' in marketing the product, which involves balancing factors like the product's utility, the likelihood and severity of harm, and the availability and cost of safer alternatives—the core of a risk-utility analysis.
Analysis:
This decision officially clarifies that Tennessee law provides two alternative theories for plaintiffs in design defect cases, preventing summary judgment for defendants solely on the basis that a product's dangers are open and obvious. By explicitly incorporating a risk-utility analysis into the prudent manufacturer test, the court aligns Tennessee with a more modern approach to products liability. This shift ensures that the reasonableness of a manufacturer's design choices can be scrutinized, even for products with commonly known dangers, which is particularly significant for cases involving complex products where a consumer may lack a basis for safety expectations.
