The material provided herein is for informational purposes only and is not intended as legal advice or counsel.
Please help yourself to food and drinks Please let us know if the room temperature is too hot or cold Bathrooms are located past the reception desk on the right Please turn OFF your cell phones Please complete and return surveys at the end of the seminar
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Federal
A. Magnusson-Moss Act B. Consumer Product Safety Act
B. Design Defect
1. Cannot warn later Must correct 2. Reasonable person standard 3. Federal preemptions Benefits lessened by Supreme Court
C. Warning Defect
1. Post-sale warning required, if later discovered 2. Reasonable person standard
U.C.C. Warranties
A. Express Warranties
1. Contracts 2. Advertisements and brochures
B. Implied Warranties
1. 2. 3. 4. Warranty of merchantability Warranty of fitness for particular purpose Waivers and limitations Magnusson-Moss prohibitions
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P r o d u c ts L i a b i li ty R is k
10 0 Adv ance Planning and Effort
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Handout Materials
A Primer in Protecting Your Company Against Products Liability Risk, published by Somerset Business (2001).
Seller Beware! A Timebomb Could Be Ticking Within Your Good Faith Business Practices, New Jersey Defense, Vol. 25, Issue 2 (2009). Contractual Indemnity for Product Manufacturers, New Jersey Defense, Volume 16, Issue 2 (1999).
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Good Design, Manufacturing, Sales, Distribution and Monitoring Practices Avoidance of Successor Liability The Shift of Risk to Others
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15 Ideas for Producing a Product for Which There is No Reasonable Safer Alternative Design
1) Establish a products liability loss prevention committee. 2) Keep abreast of and employ the state of the art.
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5) Keep active in related industry organizations. 6) Closely monitor and comply with applicable minimum regulatory and industry standards.
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8) Conduct safety testing. 9) Consider and design against foreseeable misuses of your product.
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2) Disclose information about the product that the buyer would deem important to his known application. 3) Avoid verbal warranties that are inconsistent with express warranties or disclaimed warranties.
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One entity acquires all or substantially all of the manufacturing assets of another entity and continues to manufacture essentially the same product line, and by doing so leaves those harmed by the transferor's products without a remedy.
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Distributor
Retailer
Injured Party
Liability Common Law Indemnity Contractual Indemnity
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Insurance Considerations
Presented By: Charles W. Miller III
Insurance Considerations
Largest Lawsuits Owens Corning Dow Chemical GM GM Phillip Morris $1.2 billion $4.25 billion $4.9 billion $20 billion $28 billion
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Insurance Considerations
Product Liability Insurance
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Insurance Considerations
Product Liability Insurance
4. Arising out of any defects in the product 5. Only as to claims arising out of products covered under the policy 6. After they have left the insureds premises
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Insurance Considerations
Recall Insurance Reimbursement for: Recall expenses Loss of profit Product rehabilitation Crisis communications
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1. 2. 3. 4.
Insurance Considerations
Practical Suggestions 1. Regular risk assessment/insurance review 2. Negotiate for the best coverage 3. Purchase needed insurance coverage
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Insurance Considerations
4. Buy sufficient policy limits 5. Use business partners coverages, if possible 6. Review coverage once it is issued
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Fact Pattern:
New Jersey distributor purchases grinding tools from Taiwanese manufacturer No formal contract between them, just purchase orders
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Fact Pattern:
(Continued)
Tools are shipped direct from Taiwan to distributor Distributor sells tools to customers in original packaging Tools fail to include recommended ANSI and OSHA warnings New Jersey resident sustains injury and sues distributor in New Jersey court
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a manufacturers product according to the manufacturers plan, intention, design, specifications or formulations, or
blends; packages; labels; markets; repairs; maintains or otherwise is involved in placing a product in the line of commerce.
N.J.S.A. 2A:58C-8
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criteria are met: a) Product seller must certify as to the manufacturers correct identity, and b) Product sellers role with respect to the product was minimal
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Statutory Protection Doesnt Apply and Product Seller is Strictly Liable if:
the identity of the manufacturer is incorrect, or the manufacturer has no known agents, facility or other presence within the United States, or
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with respect to the alleged defect or warning which caused the injury, or
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N.J.S.A. 2A:58C-9(d)
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Reporting & Recalls Under the Consumer Product Safety Improvement Act of 2008
Presented By: Haekyoung Suh
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SaferProducts.gov
Active by March 11, 2011 Consumer Portal Industry Portal
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Commission Receives Incident Report (5) Commission Publishes (10) Incident Report
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Time-Saving Strategies
Register your contact information with the Commission.
Designate a central person or unit within your company to handle all incident reports.
Develop a protocol or system to review, analyze and rapidly respond to incident reports. Establish a protocol to scan incident reports for confidential information.
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Notification
Manufacturers, distributors, and retailers of a consumer product or any other product over which the Commission has jurisdiction must notify the Commission immediately upon receipt of information that reasonably supports the conclusion that the product:
Fails to comply with an applicable consumer product safety rule or voluntary consumer product safety standard.
Fails to comply with any other rule, regulation, standard or ban enforced by the Commission. Contains a defect that could create a substantial product hazard. Creates an unreasonable risk of serious injury or death.
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Request that the Commission acknowledge receipt of your companys notification, in writing, to confirm the date of notification.
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TOTAL RECALL
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Myth #2: Id rather pay a small fine than deal with the headache and cost of a recall.
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Myth #3: I dont sell products across state lines so I dont need to worry about a federal statute.
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Please fill out the evaluation forms and return them at the registration table.