Last month’s article regarding the February 2005 report relating to quality control inspections performed by the State Administration of Quality Supervision and Inspection and Quarantine generated an unprecedented response (the “Report”). Accordingly, I have more information on this topic to report.

Any skilled plaintiff’s attorney will consider asserting a product liability claim when person or property has been damaged as the result of a pyrotechnics device, in addition to various other available theories of liability, such as express or implied warranty, negligence, fraud, negligent misrepresentation. It is vital that you understand that whether or not the jurisdiction of the place of sale and the place of the injury recognize strict liability; New York courts only adopted strict liability in the early 1970’s.

Strict liability claims are focused upon the condition of the product that injured the plaintiff. If the product was being used by the plaintiff in the manner intended, and if the alleged defect was such that the reasonable user would not have knowledge of the defect, then any commercial actor in the chain of commerce (for example, manufacturers, distributors and retailers) is subject to exposure to a strict products liability claim. Consequently, the plaintiff does not have to establish the existence of a contract with any of the commercial actors. The policy behind this arises from the fact that today’s consumers rarely enter into contracts directly with the manufacturers or distributors of the mass-produced and mass-marketed consumer fireworks they use, and have little, if any, capacity to assess or correct the hidden dangers attendant to using those products. It would be unreasonable to expect a consumer of fireworks to know that a particular fuse is either too short or too long. Similarly, it would be unreasonable to expect a consumer to determine that an improper chemical compound was a product component. By contrast, it may not be unreasonable to expect a licensed pyrotechnician to be deemed to be aware of, and possess the capacity to correct, a dangerous condition.

By virtue of the fact that a used pyrotechnics device leaves little, if any, evidence to examine, coupled with the fact that product testing is expensive and, oftentimes, inconclusive, a plaintiff’s lawyer has a great incentive to assert a strict products liability claim against all commercial actors. With a copy of the Chinese report in hand, a plaintiff’s lawyer can argue that the fuse was defectively designed, manufactured or installed, or that an improper chemical compound was a component of the pyrotechnics device. In those instances where a manufacturer cannot establish adherence to strict quality control procedures, the manufacturer has an uphill battle, and everyone in the chain of commerce from manufacturer to retailer can be swept up in the matter. ADVANTAGE OF DESIGN DEFECT CLAIM REGARDING LEVEL OF PROOF

In defending against a strict products liability claim the manufacturer is confronted with a double-edged sword. It would be folly for the manufacturer to admit that it has poor quality control procedures, since such an admission would support plaintiff’s theory that the pyrotechnic device was defectively manufactured. Conversely, to claim that its quality control procedures are extraordinary would expose the manufacturer to the argument that by virtue of the high quality control standards any product misfire can only be attributed to a product defect. Presently, any claim of high quality standards flies in the face of the government’s own documented investigation.

A loose corollary is the airplane manufacturing industry. Decades ago, when manufacturers began developing passenger airplanes, plane crashes were deemed an unfortunate, but expected, consequence of an inherently dangerous activity. As a result, airplane manufacturers were commonly found liable for plane crashes upon a products liability theory: manufacturers knew of the inherent danger and still went ahead with manufacturing aircraft and, as a result, they may be found liable for their actions. Today, passenger aircraft manufacturing has reached a level of sophistication, incorporating redundant systems, maintenance procedures and autopilot features that are all designed to prevent aviation malfunctions and crashes. As a result, the conventional wisdom today is that passenger aircraft crashes only occur as a manufacturing defect or negligence.

With respect to fireworks manufactured in China, the Report seemingly indicates that poor quality control procedures are rampant, presenting a double-edged sword poised at the throat of the defendants. On the one hand, a plaintiff can readily argue that the fireworks product that caused the injury was defective on the basis the findings of the Report. On the other hand, a defendant’s argument that only one item, among many, had misfired leads a reasonable person to conclude that the aberrant item was defective while the other items were not.

In my professional opinion, when plaintiffs’ lawyers get a hold of the investigative report it may be open season against United States importers, users and retailers of fireworks. Plaintiff’s lawyers know that defendants will attempt to establish misuse by the injured party; however, the blame the victim theory is often difficult to convincingly establish before a local jury of one’s peers. Plaintiffs’ lawyers know that jurors are predisposed to find in favor of the injured party that is a member of the local community, as opposed to some faceless corporation located in a remote part of the world.

As a defense, various precautionary measures are available to U.S. importers, retailers and users that are designed to diminish the exposure to claims of strict liability as a result of injury to person or property. First and foremost, understand and review the quality control procedures employed by any China manufacturer that you may do business with. Also consider the incorporation of a broad hold harmless and indemnity provision to any purchase agreement that you may enter into with a Chinese producer. Care should be taken to ensure that the language to be used is both clear, complete and, most importantly, enforceable in the United States as against the Chinese producer. Be careful, in some jurisdictions hold harmless and indemnification agreements may be found to be unenforceable under a strict liability theory on the basis that one cannot contractually limit or shift one’s exposure to liability arising from one’s own negligent act. Another precautionary measure is procurement of broad product liability insurance coverage. Lastly, to the extent that a registry of prior complaints or violations regarding a specific manufacturer is available, a search of that database would be wise. This search would not void liability; however, it may assist you in determining whether or not is it prudent to conduct business with a specific manufacturer or supplier.

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