The risk/utility test has been a fixture of products liability law for decades. The test provides that a product is unreasonably dangerous, that is, defective, if its risks outweigh its utility. To determine whether a product is unreasonably dangerous, a jury balances a product’s risk against its utility by considering a variety of factors, including whether a safer alternative design existed and whether the dangers inherent in the product were either obvious or adequately disclosed by a warning provided to consumers.
By its nature, the test is not easily susceptible to summary determination. All of the factors are to be balanced; none is to be dispositive. Manufacturers, distributors and retailers faced with factually dodgy design defect claims were unable to eliminate them before trial and were forced to face a jury where anything can happen. As a result, plaintiffs’ lawyers were able to exert undue settlement leverage in even weak cases.
About twenty years ago, the tide began to shift. Courts, often prodded by legislatures, elevated the existence of a safer alternative design from a factor to be considered to an element of a products liability action. If a plaintiff cannot prove that an alternative design existed that was technologically and economically feasible and that would have significantly reduced the risk of injury without substantially impairing the product’s utility or creating a different risk of harm, then he cannot recover.
Now, the Texas Supreme Court has held that, as a matter of law, a product is not unreasonably dangerous where its risks are obvious. Whether this heralds a change in the law or is simply a reaction to a particularly weak case will have to be seen. What is clear, however, is that the court for the first time since it adopted the risk/utility test in the 1970s held that an obvious risk was not a design defect – something that it expressly refused to do just six years ago.
In Genie Industries v. Matak, the court rendered judgment for the defendant, Genie, holding that a lift manufactured by Genie was not defective as a matter of law. Genie designed the lift to be used indoors, to be easily moved by a single worker when not in use and to fit through a normally sized door. The lift was capable of lifting a worker 40 feet in the air. Because it was designed to be man-portable and to fit through a door, the body of the lift was not large enough to keep the lift from falling over when extended. To support the weight of the lift and to prevent it from tipping over, the lift was designed with detachable outriggers. The outriggers were equipped with adjustable jacks which ensured that each outrigger was firmly pressed against the ground.
The lift was not designed to be moved once set up and extended. The only way to move the lift would be to loosen the jacks so that the outriggers were no longer in contact with the ground. Disengaging part of the lift’s support system with a worker 40 feet in the air is almost guaranteed to cause the lift to topple, injuring or killing the worker. Genie warned against this risk by placing warning stickers on the lift and including a warning in the manual.
Given the context, it is perhaps not surprising that a work crew did exactly what Genie and common sense told them not to do: they loosened the jacks in an attempt to move the lift with a co-worker in the lift basket 40 feet in the air above them. The lift toppled, killing the co-worker. His family sued alleging that the lift was defectively designed. The jury found in the plaintiff’s favor.
Although it found, albeit grudgingly, that there were safer alternative designs, the court held that the lift was not unreasonably dangerous as a matter of law. This is, on its own, a significant result. Texas law, like that of many other states, does require that a plaintiff show both that a product is unreasonably dangerous and that a safer alternative design exists. But, the Texas Supreme Court has never held that a product was not unreasonably dangerous as a matter of law without at least impliedly finding that there was no safer alternative design. Previously, when the court has held a product to be not unreasonably dangerous as a matter of law, it has found that remedying the alleged defect would destroy the product’s utility. In all practical respects, this is just another way of saying that there was no safer alternative design.
In Genie Industries, however, the court found that the obviousness of the danger of attempting to move the lift when it was extended made the lift not unreasonably dangerous as a matter of law. The court relied in part on the common sense notion that attempting to move equipment that was not meant to be moved with a rider high in the air is extremely dangerous. It also relied on statistical evidence suggesting that accidents involving attempts to move the lift were extremely rare. The court viewed this evidence as proof that few were willing to engage in such obviously dangerous activity. The Genie Industries court, thus, reasoned that the risk of injuries due to the lift tipping over was minimal.
In contrast, the court found that the utility of the lift was high. The court noted that the lift was meant to be light, portable and relatively inexpensive. The court found that the lift’s narrow footprint when not extended and relatively low weight (both of which contributed to its inherent instability if the outriggers were detached) allowed the lift to be used indoors in a wide variety of work environments increasing its utility. Comparing the relatively low risk of injury raised by moving an extended lift to the lift’s large utility, the court found that the lift was not unreasonably dangerous as a matter of law.
Genie Industries represents a significant change in Texas law. Up to now, the Texas Supreme Court had repeatedly held that whether an avoidable risk was apparent and its dangers obvious were factors to be considered but not a bar to liability. Just six years ago, the court expressly rejected (as it had numerous times in the past) calls to make the open and obvious nature of the risk determinative. Then, the court reasoned that “if it is reasonable for a product’s designer to incorporate a design that eliminates an open and obvious risk, the product reaches a more optimum level of safety by incorporating the safer design than by keeping the current design with the open and obvious risk.” To make obviousness of a risk a bar to liability, the court reasoned, would not provide sufficient encouragement to manufacturers to “reach an optimum level of safety in designing their products.”
In Genie Industries, the court reached the opposite result. It found that there was a safer alternative design for the product. Under its traditional jurisprudence, the court should have allowed the jury’s verdict in favor of the plaintiff to stand in order to encourage Genie and other lift manufacturers to eliminate even obvious dangers. It did not. Despite the existence of a safer alternative design, the court rendered judgment for Genie holding that the obviousness of the risk of tipping the lift while attempting to move it dispositive on the design defect claim.
So has Texas reverted to the old common law open and obvious danger rule? Probably not – or at least not expressly. The Genie Industries court did not expressly adopt the open and obvious danger rule. Nor did it overrule its prior cases refusing to adopt that rule or reject their reasoning. Instead, it analyzed each of the risk/utility factors in light of the obvious danger finding that each could only lead to the determination that the lift was not unreasonably dangerous. In some net effect, the court utilized the rule without expressly saying so. Whether the court’s failure to expressly address the open and obvious danger rule is significant or simply semantic gamesmanship designed to pave the way to adopting the rule in a later case remains to be seen.
There are three takeaways from Genie Industries. First, in appropriate cases, defendants in design defect cases should stress the obvious nature of the risks that the plaintiffs claim should be remedied by an alternative design. They should move for summary judgment on that ground and ask trial courts to instruct juries that the obviousness of a risk can be determinative in resolving whether a product is unreasonably dangerous. Second, evidence that accidents of the type suffered by the plaintiff are rare may be dispositive. At the very least, defendants should make such arguments. Third, the court has once again suggested that trial courts in Texas need to take a more active role in weeding out weak design claims prior to trial.
In the meantime, Genie Industries represents another step away from the balancing of factors inherent in the risk/utility test to the elevation of certain factors as bars to liability. When it adopted the risk/utility test in the 1970s, the Texas Supreme Court (and other states’ courts) envisioned a fluid balancing of a product’s risk versus its utility using a variety of factors. And, for about twenty years, courts maintained that no single factor was dispositive. This changed in the 1990s when courts began to make the existence of a safer alternative design a prerequisite to liability. And now, another twenty years later, the Texas Supreme Court has suggested that risks that are open and obvious are not design defects to be remedied.
 58 Tex. Sup. Ct. J. 832, 2015 WL 2173786 (May 8, 2015)(slip op.)
 E.g., Timpte Industries v. Gish, 286 S.W.3d 311 (Tex. 2009). In that case, the product was an open-top trailer which had a 5-inch rail running along the top of its sides. The driver had climbed onto the rail to load the trailer and fell off. He sued alleging that the rail was too narrow. The court affirmed summary judgment for the manufacturer because a wider rail would have increased the weight of the trailer (limiting its capacity) and would have presented a more inviting danger. In other words, the plaintiff failed to show that his proposed alternative design was either reasonable or safer.
 Timpte Industries, 286 S.W.3d at 314.
Published September 3, 2015.