By: Parker, et al. S.B. No. 4 A BILL TO BE ENTITLED 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) "Claimant" 1-7 means a party seeking relief, including a plaintiff, 1-8 counter-claimant, 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's fees, 2-10 and any reasonable damages. 2-11 (c) Damages awarded by the trier of fact shall, on final 2-12 judgement, be deemed reasonable for purposes of this section. 2-13 (d) For purposes of this section, a wholesale distributor 2-14 or 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's 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. 82.003. LIABILITY OF CERTAIN VACCINE MANUFACTURERS AND 3-7 SELLERS. (a) A manufacturer or seller of a vaccine is not liable 3-8 in a products liability action based on an alleged marketing or 3-9 design defect if adequate warning or instruction is provided. 3-10 (b) This section applies only to a vaccine manufactured and 3-11 labeled in accordance with the terms of an approval or license 3-12 issued by, or other requirements of, the federal Food and Drug 3-13 Administration and which is: 3-14 (1) included in the Vaccine Injury Table of the 3-15 National Vaccine Program prescribed by 42 United States Code 3-16 Section 300aa-14 or any valid regulation promulgated under that 3-17 section; or, 3-18 (2) a vaccine for use against or treatment of Human 3-19 Immuno-deficiency Virus or Acquired Immune Deficiency Syndrome. 3-20 (c) This section is not declarative, by implication or 3-21 otherwise, of the common law with respect to any product and shall 3-22 not be construed to restrict the courts of this state in developing 3-23 the common law with respect to any product which is not subject to 3-24 this section. 3-25 Sec. 82.004. INHERENTLY UNSAFE PRODUCTS. (a) In a products 4-1 liability action, a manufacturer or seller shall not be liable if: 4-2 (1) the product is inherently unsafe and the product 4-3 is known to be unsafe by the ordinary consumer who consumes the 4-4 product with the ordinary knowledge common to the community; and 4-5 (2) the product is a common consumer product intended 4-6 for personal consumption, such as sugar, castor oil, alcohol, 4-7 tobacco, and butter, as identified in Comment i to Section 402A of 4-8 the Restatement (Second) of Torts. 4-9 (b) For purposes of this section, the term "products 4-10 liability action" does not include an action based on manufacturing 4-11 defect or breach of an express warranty. 4-12 Sec. 82.005. DESIGN DEFECTS. (a) In a product liability 4-13 action in which a claimant alleges a design defect, the burden is 4-14 on the claimant to prove by a preponderance of the evidence that: 4-15 (1) there was a safer alternative design; and 4-16 (2) the defect was a producing cause of the personal 4-17 injury, property damage or death for which the claimant seeks 4-18 recovery. 4-19 (b) In this section, "safer alternative design" means a 4-20 product design other than the one actually used that in reasonable 4-21 probability: 4-22 (1) would have prevented or significantly reduced the 4-23 risk of the claimant's personal injury, property damage or death 4-24 without substantially impairing the product's utility; and 4-25 (2) was economically and technologically feasible at 5-1 the time the product left the control of the manufacturer or seller 5-2 by the application of existing or reasonably achievable scientific 5-3 knowledge. 5-4 (c) This section does not supersede or modify any statute, 5-5 regulation or other law of this state or of the United States that 5-6 relates to liability for, or to relief in the form of, abatement of 5-7 nuisance, civil penalties, cleanup costs, cost recovery, an 5-8 injunction or restitution, that arises from contamination or 5-9 pollution of the environment. 5-10 (d) This section does not apply to: 5-11 (1) a cause of action based on a toxic or 5-12 environmental tort as defined by Section 33.013 (c) (2) and (3), 5-13 Civil Practice and Remedies Code; or 5-14 (2) a drug or device, as those terms are defined in the 5-15 federal Food, Drug and Cosmetic Act, 21 U.S.C. Section 321. 5-16 (e) This section is not declarative, by implication or 5-17 otherwise, of the common law with respect to any product and shall 5-18 not be construed to restrict the courts of this state in developing 5-19 the common law with respect to any product which is not subject to 5-20 this section. 5-21 Sec. 82.006. FIREARMS AND AMMUNITION. (a) In a products 5-22 liability action brought against a manufacturer or seller of a 5-23 firearm or ammunition that alleges a design defect in the firearm 5-24 or ammunition, the burden is on the claimant to prove, in addition 5-25 to any other elements that the claimant must prove, that: 6-1 (1) the actual design of the firearm or ammunition was 6-2 defective, causing the firearm or ammunition not to function in a 6-3 manner reasonably expected by an ordinary consumer of firearms or 6-4 ammunition; and 6-5 (2) the defective design was a producing cause of the 6-6 personal injury, property damage, or death. 6-7 (b) The claimant may not prove the existence of the 6-8 defective design by a comparison or weighing of the benefits of the 6-9 firearm or ammunition against the risk of personal injury, property 6-10 damage, or death posed by its potential to cause such injury, 6-11 damage, or death when discharged. 6-12 SECTION 2. Subchapter A, Chapter 16, Civil Practice and 6-13 Remedies Code, is amended by adding Section 16.012 to read as 6-14 follows: 6-15 Sec. 16.012. PRODUCTS LIABILITY: MANUFACTURING EQUIPMENT. 6-16 (a) In this section: 6-17 (1) "Claimant," "products liability action," "seller," 6-18 and "manufacturer" have the meanings assigned by Section 82.001. 6-19 (2) "Manufacturing equipment" means equipment and 6-20 machinery used in the manufacturing, processing, or fabrication of 6-21 property, but this section does not include agricultural equipment 6-22 or machinery. 6-23 (b) Except as provided by Subsection (c), a claimant must 6-24 commence a products liability action against a manufacturer or 6-25 seller of manufacturing equipment before the end of 15 years after 7-1 the date of the sale of the equipment by the defendant. 7-2 (c) If a manufacturer or seller expressly represents that 7-3 the manufacturing equipment has a useful safe life of longer than 7-4 15 years, a claimant must commence a products liability action 7-5 against that manufacturer or seller of the equipment before the end 7-6 of the number of years represented after the date of the sale of 7-7 the equipment by that seller. 7-8 (d) This section does not reduce a limitations period that 7-9 applies to a products liability action involving manufacturing 7-10 equipment that accrues before the end of the limitations period 7-11 under this section. 7-12 (e) This section does not extend the limitations period 7-13 within which a products liability action involving manufacturing 7-14 equipment may be commenced under any other law. 7-15 (f) This section applies only to the sale, and not to the 7-16 lease, of manufacturing equipment. 7-17 SECTION 3. TRANSITION. (a) Sections 82.002 through 82.004, 7-18 Civil Practices and Remedies Code, as added by this Act, apply only 7-19 to a cause of action commenced on or after the effective date of 7-20 this Act. A cause of action commenced before the effective date of 7-21 this Act is governed by the law in effect at the time the action 7-22 accrued and that law is continued in effect for that purpose. 7-23 (b) Sections 16.012, 82.005 and 82.006, Civil Practices and 7-24 Remedies Code, as added by this Act, apply only to a cause of 7-25 action that accrues on or after the effective date of this Act. A 8-1 cause of action that accrued before the effective date of this Act 8-2 is governed by the law in effect at the time the action accrued and 8-3 that law is continued in effect for that purpose. 8-4 (c) Section 82.001, Civil Practices and Remedies Code, as 8-5 added by this Act, takes effect on the effective date of this Act. 8-6 SECTION 4. This Act takes effect September 1, 1993. 8-7 SECTION 5. The importance of this legislation and the 8-8 crowded condition of the calendars in both houses create an 8-9 emergency and an imperative public necessity that the 8-10 constitutional rule requiring bills to be read on three several 8-11 days in each house be suspended, and this rule is hereby suspended.