By Seidlits H.B. No. 373 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to products liability. 1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-4 SECTION 1. Title 4, Civil Practice and Remedies Code, is 1-5 amended by adding Chapter 82 to read as follows: 1-6 CHAPTER 82. PRODUCTS LIABILITY 1-7 Sec. 82.001. DEFINITIONS. In this chapter: (1) "Claimant" 1-8 means a party seeking relief, including a plaintiff, 1-9 counter-claimant, or cross-claimant. 1-10 (2) "Products liability action" means any action 1-11 against a manufacturer or seller for recovery of damages arising 1-12 out of personal injury, death or property damage allegedly caused 1-13 by a defective product whether the action is based in strict tort 1-14 liability, strict products liability, negligence, 1-15 misrepresentation, breach of express or implied warranty, or any 1-16 other theory or combination of theories. 1-17 (3) "Seller" means a person who is engaged in the 1-18 business of distributing or otherwise placing, for any commercial 1-19 purpose, in the stream of commerce for use or consumption a product 1-20 or any component part thereof. 1-21 (4) "Manufacturer" means a person who is a designer, 1-22 formulator, constructor, rebuilder, fabricator, producer, 1-23 compounder, processor, or assembler of any product or any component 2-1 part thereof and who places the product or any component part 2-2 thereof in the stream of commerce. 2-3 Sec. 82.002. MANUFACTURER'S DUTY TO INDEMNIFY. (a) A 2-4 manufacturer shall indemnify and hold harmless a seller against 2-5 loss arising out of a products liability action, except for any 2-6 loss caused by the seller's negligence, intentional misconduct or 2-7 other act or omission, such as negligently modifying or altering 2-8 the product, for which the seller is independently liable. 2-9 (b) For purposes of this section, "loss" includes court 2-10 costs and other reasonable expenses, reasonable attorney's fees, 2-11 and any reasonable damages. 2-12 (c) Damages awarded by the trier of fact shall, on final 2-13 judgment, be deemed reasonable for purposes of this section. 2-14 (d) For purposes of this section, a wholesale distributor or 2-15 retail seller who completely or partially assembles a product in 2-16 accordance with the manufacturer's instructions shall be considered 2-17 a seller. 2-18 (e) The duty to indemnify under this section: 2-19 (1) applies without regard to the manner in which the action 2-20 is concluded; and, 2-21 (2) is in addition to any duty to indemnify established by 2-22 law, contract or otherwise. 2-23 (f) A seller eligible for indemnification under this section 2-24 shall give reasonable notice to the manufacturer of a product 2-25 claimed in a petition or complaint to be defective, unless the 3-1 manufacturer has been served as a party or otherwise has actual 3-2 notice of the action. 3-3 (g) A seller is entitled to recover from the manufacturer 3-4 court costs and other reasonable expenses, reasonable attorney's 3-5 fees and any reasonable damages incurred by the seller to enforce 3-6 the seller's right to indemnification under this section. 3-7 Sec. 82.003. LIABILITY OF CERTAIN VACCINE MANUFACTURERS AND 3-8 SELLERS. (a) A manufacturer or seller of a vaccine is not liable 3-9 in a products liability action based on an alleged marketing or 3-10 design defect if adequate warning or instruction is provided. 3-11 (b) This section applies only to a vaccine manufactured and 3-12 labeled in accordance with the terms of an approval or license 3-13 issued by, or other requirements of, the federal Food and Drug 3-14 Administration and which is: 3-15 (1) included in the Vaccine Injury Table of the National 3-16 Vaccine Program prescribed by 42 United States Code Section 3-17 300aa-14 or any valid regulation promulgated under that section; 3-18 or, 3-19 (2) a vaccine for use against or treatment of Human 3-20 Immuno-deficiency Virus or Acquired Immune Deficiency Syndrome. 3-21 (c) This section is not declarative, by implication or 3-22 otherwise, of the common law with respect to any product and shall 3-23 not be construed to restrict the courts of this state in developing 3-24 the common law with respect to any product which is not subject to 3-25 this section. 4-1 Sec. 82.004. INHERENTLY UNSAFE PRODUCTS. (a) In a products 4-2 liability action, a manufacturer or seller shall not be liable if: 4-3 (1) the product is inherently unsafe and the product 4-4 is known to be unsafe by the ordinary consumer who consumes the 4-5 product with the ordinary knowledge common to the community; and 4-6 (2) the product is a common consumer product intended 4-7 for personal consumption, such as sugar, castor oil, alcohol, 4-8 tobacco, and butter, as identified in Comment i to Section 402A of 4-9 the Restatement (Second) of Torts. 4-10 (b) For purposes of this section, the term "products 4-11 liability action" does not include an action based on manufacturing 4-12 defect or breach of an express warranty. 4-13 Sec. 82.005. DESIGN DEFECTS. (a) In a product liability 4-14 action in which a claimant alleges a design defect, the burden is 4-15 on the claimant to prove by a preponderance of the evidence that: 4-16 (1) there was a safer alternative design; and, 4-17 (2) the defect was a producing cause of the personal 4-18 injury, property damage or death for which the claimant seeks 4-19 recovery. 4-20 (b) In this section, "safer alternative design" means a 4-21 product design other than the one actually used that in reasonable 4-22 probability: 4-23 (1) would have prevented or significantly reduced the 4-24 risk of the claimant's personal injury, property damage or death 4-25 without substantially impairing the product's utility; and, 5-1 (2) was economically and technologically feasible at 5-2 the time the product left the control of the manufacturer or seller 5-3 by the application of existing or reasonably achievable scientific 5-4 knowledge. 5-5 (c) This section does not supersede or modify any statute, 5-6 regulation or other law of this state or of the United States that 5-7 relates to liability for, or to relief in the form of, abatement of 5-8 nuisance, civil penalties, cleanup costs, cost recovery, an 5-9 injunction or restitution, that arises from contamination or 5-10 pollution of the environment. 5-11 (d) This section does not apply to: 5-12 (1) a cause of action based on a toxic or 5-13 environmental tort as defined by Section 33.013 (c)(2) and (3), 5-14 Civil Practice and Remedies Code; or, 5-15 (2) a drug or device, as those terms are defined in 5-16 the federal Food, Drug and Cosmetic Act, 21 U.S.C. Section 321. 5-17 (e) This section is not declarative, by implication or 5-18 otherwise, of the common law with respect to any product and shall 5-19 not be construed to restrict the courts of this state in developing 5-20 the common law with respect to any product which is not subject to 5-21 this section. 5-22 Sec. 82.006. FIREARMS AND AMMUNITION. (a) In a products 5-23 liability action brought against a manufacturer or seller of a 5-24 firearm or ammunition that alleges a design defect in the firearm 5-25 or ammunition, the burden is on the claimant to prove, in addition 6-1 to any other elements that the claimant must prove, that: 6-2 (1) the actual design of the firearm or ammunition was 6-3 defective, causing the firearm or ammunition not to function in a 6-4 manner reasonably expected by an ordinary consumer of firearms or 6-5 ammunition; and 6-6 (2) the defective design was a producing cause of the 6-7 personal injury, property damage, or death. 6-8 (b) The claimant may not prove the existence of the 6-9 defective design by a comparison or weighing of the benefits of the 6-10 firearm or ammunition against the risk of personal injury, property 6-11 damage, or death posed by its potential to cause such injury, 6-12 damage, or death when discharged. 6-13 SECTION 2. Subchapter A, Chapter 16, Civil Practice and 6-14 Remedies Code, is amended by adding Section 16.012 to read as 6-15 follows: 6-16 Sec. 16.012. PRODUCTS LIABILITY: MANUFACTURING EQUIPMENT. 6-17 (a) In this section: 6-18 (1) "Claimant," "products liability action," "seller," 6-19 and "manufacturer" have the meanings assigned by Section 82.001. 6-20 (2) "Manufacturing equipment" means equipment and 6-21 machinery used in the manufacturing, processing, or fabrication of 6-22 property, but this section does not include agricultural equipment 6-23 or machinery. 6-24 (b) Except as provided by Subsection (c), a claimant must 6-25 commence a products liability action against a manufacturer or 7-1 seller of manufacturing equipment before the end of 15 years after 7-2 the date of the sale of the equipment by the defendant. 7-3 (c) If a manufacturer or seller expressly represents that 7-4 the manufacturing equipment has a useful safe life of longer than 7-5 15 years, a claimant must commence a products liability action 7-6 against that manufacturer or seller of the equipment before the end 7-7 of the number of years represented after the date of the sale of 7-8 the equipment by that seller. 7-9 (d) This section does not reduce a limitations period that 7-10 applies to a products liability action involving manufacturing 7-11 equipment that accrues before the end of the limitations period 7-12 under this section. 7-13 (e) This section does not extend the limitations period 7-14 within which a products liability action involving manufacturing 7-15 equipment may be commenced under any other law. 7-16 (f) This section applies only to the sale, and not to the 7-17 lease, of manufacturing equipment. 7-18 SECTION 3. TRANSITION. (a) Sections 82.002 through 82.004, 7-19 Civil Practices and Remedies Code, as added by this Act, apply only 7-20 to a cause of action commenced on or after the effective date of 7-21 this Act. A cause of action commenced before the effective date of 7-22 this Act is governed by the law in effect at the time the action 7-23 accrued and that law is continued in effect for that purpose. 7-24 (b) Sections 16.012, 82.005 and 82.006, Civil Practices and 7-25 Remedies Code, as added by this Act, apply only to a cause of 8-1 action that accrues on or after the effective date of this Act. A 8-2 cause of action that accrued before the effective date of this Act 8-3 is governed by the law in effect at the time the action accrued and 8-4 that law is continued in effect for that purpose. 8-5 (c) Section 82.001, Civil Practices and Remedies Code, as 8-6 added by this Act, takes effect on the effective date of this Act. 8-7 SECTION 4. This Act takes effect September 1, 1993. 8-8 SECTION 5. The importance of this legislation and the 8-9 crowded condition of the calendars in both houses create an 8-10 emergency and an imperative public necessity that the 8-11 constitutional rule requiring bills to be read on three several 8-12 days in each house be suspended, and this rule is hereby suspended.