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