Jahn v. Hyundai Motor Co.

The United States District Court for the Southern District of Iowa certified two questions to this court arising out of a products liability action. The two certified questions are:

1. Will the Iowa Supreme Court adopt sections 16 and 17 of the Restatement (Third) of Torts: Products Liability governing liability for enhanced injury, specifically, including rules of joint and several liability *552 and comparative fault of joint tort-feasors under sections 16(d) and 17, and defining burdens of proof under sections 16(b) and 16(c)?

2. Under the Iowa Comparative Fault Act, may the fault of a released party whose negligence was a proximate cause of the underlying accident and of the plaintiffs injuries be compared by the jury on plaintiffs enhanced injury claim against the product defendant?

For the reasons expressed below, we answer “yes” to all aspects of both questions and elaborate on our answers to provide guidance to the federal court.

I. Factual Background and Procedural History.

For purposes of the certified questions presented in this case, there are no factual disputes. The accident that gave rise to this litigation occurred when a vehicle driven by Grace Burke blew through a stop sign at an intersection in Clinton, Iowa and struck an automobile operated by Glen Jahn. After impact, the front, driver-side airbag in the vehicle driven by Jahn, a Hyundai Elantra, allegedly failed to deploy. As a result of the accident, Jahn sustained multiple serious injuries including fractures of the skull, left hip, knee, right femur, right tibia, right ankle, and arch of the foot. Jahn also allegedly suffered a closed head injury.

Jahn reached a settlement with Burke and her insurance carrier prior to filing the present action against Hyundai Motor America (HMA). In the present action, the Jahns allege that the failure of the airbag in their Hyundai Elantra to deploy upon impact caused Jahn enhanced injuries that could have been avoided absent the alleged product defect. The Jahns’ products liability claim is founded on res ipsa loquitur, strict liability, and breach of warranty.

The issue presented here is whether Burke’s fault may be compared by the jury when evaluating the Jahns’ products liability claim against HMA. The Jahns admit that Burke is a “released party” under the Iowa Comparative Fault Act. Iowa Code §§ 668.2, .7 (2003). Further, the Jahns admit that Burke’s fault was a proximate cause of the accident and a proximate cause of Jahn’s injuries. They, nevertheless, assert that Burke’s fault may not be compared by the jury in the products liability action against HMA.

HMA filed a motion to certify questions of law to this court seeking definitive rulings related to whether sections 16 and 17 of the Restatement (Third) of Torts: Products Liability should apply in this case and, if they do, how these provisions should apply to the facts and circumstances presented here. The Jahns joined in the motion. The district court granted the motion and certified two questions for our determination.

II. Discussion.

A. Position of the Parties. HMA and the Jahns both agree that the court should adopt sections 16 and 17 of the Restatement (Third) of Torts: Products Liability. The parties differ dramatically, however, on the proper interpretation of these provisions.

According to HMA, sections 16 and 17 of the Restatement treat products liability cases, including those involving enhanced injuries, like any other case involving multiparty defendants whose fault must be compared under Iowa’s Comparative Fault Act.

On the other hand, the Jahns argue that to the extent there are injuries that would have occurred from the crash alone, the *553 manufacturer is not liable for these harms. In contrast, if the manufacturer cannot apportion the injuries, it is liable for all of the injuries suffered by the plaintiff -without application of comparative fault.

B. Theory of Enhanced Injury Liability. 1

1. Background. As late as 1966, courts rejected the notion that a product manufacturer could be liable for defective products where the negligence of another party was the cause of the underlying accident. See generally Evans v. Gen. Motors Corp., 359 F.2d 822 (7th Cir.1966), overruled by Huff v. White Motor Corp., 565 F.2d 104, 110 (7th Cir.1977). The rationale was generally that manufacturers could be held liable only for injuries resulting from intended use. Id. at 825. Despite the foreseeability of automobile collisions, they were not considered an intended use. Id.

In the seminal case of Larsen v. General Motors Corp., 391 F.2d 495 (8th Cir.1968), the Eighth Circuit broke new ground. The court noted, “No rational basis exists for limiting recovery to situations where the defect in design or manufacture was the causative factor of the accident, as the accident and the resulting injury ... all are foreseeable.” Larsen, 391 F.2d at 502. As a result, the Larsen court saw no reason “why the manufacturer should not be held to a reasonable duty of care in the design of its vehicle consonant with the state of the art to minimize the effect of accidents.” Id. at 503.

The Larsen approach was further refined by the Fourth Circuit in Dreisonstok v. Volkswagenwerk, A. G., 489 F.2d 1066 (4th Cir.1974). In Dreisonstok, the court stated that a manufacturer’s duty extended only to designing a vehicle to avoid “ ‘unreasonable risk of injury in the event of a collision.’ ” Dreisonstok, 489 F.2d at 1070 n. 11 (quoting Larsen, 391 F.2d at 502). See generally Barry Levenstam & Daryl J. Lapp, Plaintiff’s Burden of Proving Enhanced Injury in Crashworthiness Cases: A Clash Worthy of Analysis, 38 DePaul L.Rev. 55, 61 (1988) [hereinafter Levenstam & Lapp].

Under an enhanced injury theory, the product defect is not the cause of the initial accident. As a result, the manufacturer cannot be held liable for injuries arising out of the initial collision. The manufacturer, however, is liable for enhanced injuries over and above the injuries caused by the initial collision.

2. Burden of proof. A question arises regarding the plaintiffs burden of proof to sustain an enhanced injury claim. One line of cases, often named the Huddell approach after a leading case, holds that the plaintiff has the burden of showing that the “sole cause” of the enhanced injury was a product defect. See Huddell v. Levin, 537 F.2d 726 (3d Cir.1976). According to the court in Huddell, a plaintiff in an enhanced injury case must prove: (1) the existence of a safer, practicable, alternative design, (2) the extent of the injuries the plaintiff would have suffered had the alternative design been used, and (3) “some method of establishing the extent of enhanced injuries attributable to the defective design.” Id. at 737-38.

The Huddell approach was elaborated upon in Caiazzo v. Volkswagenwerk A. G., 647 F.2d 241 (2d Cir.1981). In Caiazzo, the court stressed that the plaintiff had the *554 burden of showing not only the fact of enhanced injury but the extent of enhanced injuries attributable to the defective design. Caiazzo, 647 F.2d at 250. According to Caiazzo, if the plaintiff cannot identify what portion of the injury occurred as a result of the design defect by a preponderance of evidence, the enhanced injury claim fails. Id. at 251.

The practical impact of the Huddell rule as applied in Caiazzo is that the plaintiff has the burden of apportioning the loss and loses his enhanced injury claim if he fails to offer proof of apportionment. This approach has been adopted in a number of cases. See, e.g., Barris v. Bob’s Drag Chutes & Safety Equip., Inc., 685 F.2d 94, 99 (3d Cir.1982) (applying Pennsylvania law); Dawson v. Chrysler Corp., 630 F.2d 950, 959-60 (3d Cir.1980) (applying New Jersey law). The Huddell approach pulls apart and segregates the injuries and, as a result, principles of joint and several liability do not apply in an enhanced injury case.

A second line of cases imposes a less stringent proof requirement on plaintiffs. Under this second line of cases, often referred to as the Fox-Mitchell approach, the plaintiff must prove only that the product defect was a “substantial factor” in creating damage greater than that attributable solely to the underlying accident. See Mitchell v. Volkswagenwerk, AG, 669 F.2d 1199, 1206 (8th Cir.1982); Fox v. Ford Motor Co., 575 F.2d 774, 787 (10th Cir.1978). If the factfinder is unable to segregate the harm caused by the initial collision from the harm caused by the product defect, the manufacturer is liable for the entire injury. Mitchell, 669 F.2d at 1206.

The rationale of the Fox-Mitchell approach is generally that injuries are often indivisible and that the Huddell approach imposes an unfair burden by requiring the plaintiff to “prove the impossible.” Id. at 1203-04. In addition, the Huddell approach is criticized as inconsistent with orthodox concurrent tortfeasor theory in which apportionment of injuries is not required to impose joint liability for the entire injury. Fox, 575 F.2d at 787; see also Levenstam & Lapp, 38 DePaul L.Rev. at 70.

As is apparent, the Fox-Mitchell approach, which has been adopted in a number of cases, see, e.g., Fouche v. Chrysler Motors Corp., 103 Idaho 249, 646 P.2d 1020, 1024-25 (1982); Lee v. Volkswagen of Am., Inc., 688 P.2d 1283, 1288 (Okla.1984), produces the opposite result of Huddell in the event of indivisible injury. Under Huddell, the plaintiff has the burden of showing apportionment, usually through expert testimony, and has no enhanced injury claim if the claim is indivisible.

3. Application of comparative fault. Another disputed issue relates to the relationship between enhanced injury claims and comparative fault. The majority view is that the principle of concurrent causation applies to cases involving enhanced injuries and, as a result, the principles of comparative fault apply. See, e.g., Montag by Montag v. Honda Motor Co., 75 F.3d 1414, 1419 (10th Cir.1996); Gen. Motors Corp. v. Farnsworth, 965 P.2d 1209, 1218 (Alaska 1998); Daly v. Gen. Motors Corp., 20 Cal.3d 725, 144 Cal.Rptr. 380, 575 P.2d 1162, 1169-70 (1978); Estate of Hunter v. Gen. Motors Corp., 729 So.2d 1264, 1273-75 (Miss.1999); Harsh v. Petroll, 584 Pa. 606, 887 A.2d 209, 218 (2005); Duncan v. Cessna Aircraft Co., 665 S.W.2d 414, 428 (Tex.1984).

The majority view may be supported in part on the ground that it imposes upon users the responsibility to safely use products and that it would be unfair to impose costs of substandard plaintiff conduct on manufacturers, who would presumably *555 pass on some or all of those costs to users and consumers, including those who use and consume products safely and wisely. See William J. McNichols, The Relevance of the Plaintiffs Misconduct in Strict Tort Products Liability, the Advent of Comparative Responsibility, and the Proposed Restatement (Third) of Torts, 47 Okla. L.Rev. 201, 283-84 (1994).

A minority of cases, however, do not apply comparative fault principles or at least limit their application in the enhanced injury context. See, e.g., Binakonsky v. Ford Motor Co., 133 F.3d 281, 288 (4th Cir.1998); D’Amario v. Ford Motor Co., 806 So.2d 424, 426 (Fla.2001); Andrews v. Harley Davidson, Inc., 106 Nev. 533, 796 P.2d 1092, 1095 (1990); Green v. Gen. Motors Corp., 310 N-J.Super. 507, 709 A.2d 205, 209 (1998); Alami v. Volkswagen of Am., Inc., 97 N.Y.2d 281, 739 N.Y.S.2d 867, 766 N.E.2d 574, 575 (2002). Some of these cases, however, arise in jurisdictions applying contributory negligence and may have been motivated by a desire to prevent the harsh result of completely denying a plaintiff recovery where the plaintiffs negligence was modest. See, e.g., Binakonsky, 133 F.3d at 284; Andrews, 796 P.2d at 1095; Restatement (Second) of Torts § 402A cmt. n, at 356 (1965). The minority viewpoint has its adherents in the academic literature. See generally Robert C. Reichert, Limitations on Manufacturer Liability in Second Collision Actions, 43 Mont. L.Rev. 109 (1982).

The reasoning behind the minority line of cases is often that a manufacturer has a duty to minimize the injurious effect of a crash no matter how the crash is caused and has a duty to anticipate foreseeable negligence of users and third parties. As noted by the New Jersey Supreme Court, “ ‘[ojnee it is established that the defendant has a duty to protect persons from the consequences of their own foreseeable faulty conduct, it makes no sense to deny recovery because of the nature of the plaintiffs conduct.’ ” Green v. Sterling Extruder Corp., 95 N.J. 263, 471 A.2d 15, 20 (1984) (quoting Patricia Marschall, An Obvious Wrong Does Not Make a Right: Manufacturer’s Liability for Patently Dangerous Products, 48 N.Y.U. L.Rev. 1065, 1088 (1973)). This viewpoint was reiterated in Jimenez, where the court observed that “the concept of ‘enhanced injury’ effectively apportions fault and damages on a comparative basis; defendant is liable only for the increased injury caused by its own conduct, not for the injury resulting from the crash itself.” Jimenez v. Chrysler Corp., 74 F.Supp.2d 548, 566 (D.S.C.1999), rev’d in part and vacated in part by Jimenez v. DaimlerChrysler Corp., 269 F.3d 439 (4th Cir.2001). In addition, some cases support the minority rule on the ground that product manufacturers should be encouraged to design products that protect the user in the event of an accident. Andrews, 796 P.2d at 1095.

C. Restatement (Third) of Torts. Against the above clash of court cases and academic antlers, the American Law Institute in the Restatement (Third) of Torts: Products Liability considered the proper approach to enhanced injury claims in sections 16 and 17.

Section 16 of the Restatement (Third): Products Liability provides:

(a) When a product is defective at the time of commercial sale or other distribution and the defect is a substantial factor in increasing the plaintiffs harm beyond that which would have resulted from other causes, the product seller is subject to liability for the increased harm.

(b) If proof supports a determination of the harm that would have resulted from other causes in the absence of the product defect, the product seller’s lia *556 bility is limited to the increased harm attributable solely to the product defect.

(c) If proof does not support a determination under Subsection (b) of the harm that would have resulted in the absence of the product defect, the product seller is liable for all of the plaintiffs harm attributable to the defect and other causes.

(d) A seller of a defective product that is held liable for part of the harm suffered by the plaintiff under Subsection (b), or all of the harm suffered by plaintiff under Subsection (c), is jointly and severally liable or severally liable with other parties who bear legal responsibility for causing the harm, determined by the applicable rules of joint and several liability.

Restatement (Third) of Torts: Products Liability § 16, at 235-36 (1998). Section 17 provides:

(a) A plaintiffs recovery of damages for harm caused by a product defect may be reduced if the conduct of the plaintiff combines with the product defect to cause the harm and the plaintiffs conduct fails to conform to generally applicable rules establishing appropriate standards of care.

(b) The manner and extent of the reduction under Subsection (a) and the apportionment of plaintiffs recovery among multiple defendants are governed by generally applicable rules apportioning responsibility.

Id. § 17, at 256.

With respect to the issue of indivisible harm in an enhanced injury case, the language of section 16(c) supports the Fox-Mitchell approach. This interpretation is confirmed by the Reporter’s Note to section 16, which expressly states that the Fox-Mitchell approach is the majority viewpoint and is embraced in the Restatement (Third). Id. § 16 reporter’s note to cmt. d, at 244. The Reporter’s Note emphasizes, however, that section 16(c) does not formally shift any burden of proof to the defendant. Id. Instead, according to the Reporter’s Note,

if the plaintiff has established that the product defect increased the harm over and above that which the plaintiff would have suffered had the product been non-defective, and if, at the close of the case, proof does not support a determination of the harm that would have resulted in the absence of the product defect, then the defendant is liable for all the harm suffered by the plaintiff.

Id.

On the issue of application of comparative fault, the Restatement (Third) section 17(b) indicates that generally applicable comparative fault principles should apply among multiple defendants. The official comments to section 17, however, address only the issue of apportionment of plaintiffs’ fault. The Reporter’s Note emphasizes that a majority of courts utilize comparative fault to reduce the recoveries of product liability plaintiffs, but does not discuss the issue of applying comparative fault principles among defendants. Id. § 17 reporter’s note to cmt. a, at 259-60.

D. Iowa Case Law on Enhanced In-jmy. We begin discussion of Iowa law with a review of our prior approach to “indivisible injuries” — where two or more separate negligent acts or omissions result in an indivisible injury. In Meek v. Long, 258 Iowa 1309, 1314, 142 N.W.2d 385, 388-89 (1966), the court held that where the injuries to a plaintiff resulting from two separate accidents were indivisible, the defendant should not be permitted to benefit from the inability to attribute all damages to one incident or the other.

The holding of Meek was extended to situations involving separate defendants in *557 Tremor v. B.P.E. Leasing, Inc., 158 N.W.2d 4 (Iowa 1968). In Treanor, the plaintiff sought to recover for personal injuries allegedly suffered in two separate automobile accidents. Treanor, 158 N.W.2d at 5. We held that to the extent there were indivisible damages, both defendants would be jointly and severally liable for injuries which could not with reasonable certainty be attributed solely to the other. Id. at 7.

There are two Iowa Supreme Court cases subsequent to Meek and Treanor that deal with the question of enhanced injuries arising out of a single accident. In Hillrichs v. Avco Corp., 478 N.W.2d 70, 71-72 (Iowa 1991), a farmer brought an action against a manufacturer and an implement dealer after his hand was crushed in the husking bed of a corn picker. While being used to pick corn, the implement became plugged with corn husks. Hillrichs, 478 N.W.2d at 71. Unable to unplug the husking bed, the plaintiff reached into the equipment with a gloved hand. Id. at 72. The glove on his right hand entangled in the rollers, trapping the plaintiffs hand for approximately one-half hour and resulting in significant injuries. Id. The plaintiff claimed that the corn picker was unreasonably dangerous because: (1) “it lacked an interlocking shield over the rollers that would disengage the power source when the shield was removed” and (2) “it lacked an emergency shut-off device” that would be triggered when a foreign body became entangled in the machine. Id.

At trial, the plaintiff sought jury instructions and verdict forms requiring the jury to apportion damages arising from the initial entanglement in the machine from damages caused by the failure of the machine to shut off power upon becoming entangled. Id. The trial court declined to give the plaintiffs requested instructions on apportionment. Id.

At first, the jury returned a verdict finding the plaintiff seventy percent at fault, the manufacturer twenty-five percent at fault, and the dealer five percent at fault. Id. The jury also found, however, that the defendants’ fault was not a proximate cause of the plaintiffs injuries. Id. The trial court rejected the verdicts as inconsistent and directed the jury to reconsider the issues consistent with the instructions. Id. The jury then returned a verdict finding the plaintiff one hundred percent at fault. Id.

On appeal, this court held that the plaintiffs’ claim for “enhanced injuries” against the manufacturer should have been submitted to the jury. Id. at 75. The court, however, disagreed with plaintiffs’ apportionment theory. We stated:

Although plaintiff suggests that any percentage of fault that might be assigned to him with respect to the initial entanglement in the machinery may not be assessed to him on the trial of his enhanced injury claim, we disagree with that contention. The fault of the plaintiff, if any, in becoming entangled in the machinery would be a proximate cause of the enhanced injury as well as the initial injury.

Id. at 76. Although Hillrichs involved an enhanced injury case where the defendant alleged comparative fault of the plaintiff, the rationale of the case would seem to apply to cases where a defendant sought to compare its fault with that of a codefen-dant or released party.

Thirteen months later, this court decided Reed v. Chrysler Corp., 494 N.W.2d 224 (Iowa 1992). In Reed, an injured passenger brought a products liability action against an automobile manufacturer for injuries arising from a one-vehicle accident. Reed, 494 N.W.2d at 225. An intoxicated driver lost control of his vehicle, which ultimately slammed into a concrete *558 bridge abutment, rolled, and traveled three hundred feet on the road upside down on its roll bar. Id. at 225-26. The plaintiff, a backseat passenger, suffered severe injuries in the mishap. Id. at 226. Like the driver, he was also intoxicated. Id.

The plaintiff in Reed claimed that the vehicle had a defective windshield and removable hardtop. Id. at 227. The district court granted the defendant a directed verdict on the ground that the plaintiff failed to present evidence of an alternative design, practicable under all the circumstances. Id.

We reversed the district court’s grant of a directed verdict. Id. As a threshold matter, we held that the plaintiff had generated a jury question on whether there was an alternative design that was practicable under all the circumstances. Id. at 227-28. We then went on to consider other elements of a crashworthiness claim. Specifically, we considered whether Reed presented sufficient evidence to show what injuries would have resulted if the safer design method had been used. Id. at 228. We held that Reed offered sufficient evidence to show that the injury to his arm would not have occurred if the vehicle had a more safely-designed metal top. Id.

We also addressed the question of the admissibility of the driver’s and Reed’s intoxication. Id. at 229-30. We held that the evidence was inadmissible. Id. at 230. We recognized that in Hillrichs we held that a plaintiffs comparative fault could be used against him in a claim for enhanced injuries. Id. We, nevertheless, reconsidered Hillrichs and held that a plaintiffs comparative fault should not be so assessed in a crashworthiness case unless it is shown to be a proximate cause of the enhanced injury. Id. (abrogating Hill-richs). Because there was no evidence that the driver’s or Reed’s intoxication had any bearing on how Reed’s injuries were enhanced, the evidence of intoxication was inadmissible. Id.

The core rationale of the result in Reed was expressed as follows:

The theory [of an enhanced injury claim], which presupposes the occurrence of accidents precipitated for myriad reasons, focuses alone on the enhancement of resulting injuries. The rule does not pretend that the design defect had anything to do with causing the accident. It is enough if the design defect increased the damages. So any participation by the plaintiff in bringing the accident about is quite beside the point.

Id. This rationale is consistent with the minority view that comparative fault principles do not apply to claims of enhanced injury.

The Reed decision drew a sharp dissent. Id. (Carter, J., concurring in part and dissenting in part). The dissent argued that under Iowa’s comparative fault framework, fault “resulting” in injuries was to be compared with a strict liability defendant in an enhanced injury case. Id. at 231. Unlike the majority, the dissent argued that the plaintiffs negligence was a proximate cause of the enhanced injury and that the conduct of the manufacturer was not an intervening cause in the case. Id. The dissent asserted that the ordinary rules of proximate cause should apply in enhanced injury cases and that, in the comparative fault setting, any fault of the plaintiff or other person should be compared against the fault of the manufacturer. Id. The dissent is a clear articulation of the majority view which has prevailed in a number of jurisdictions and which has been embraced in the Restatement (Third) of Torts section 17(b).

*559 Neither Reed nor Hillrichs directly considered whether to follow the approach of Huddell or Fox-Mitchell on the question of indivisible injury. The Reporter’s Note to the Restatement (Third) observed that the court in Hillrichs stated, “ ‘Damages may be awarded ... when the only dispute is the amount of damages and the evidence affords a reasonable basis for estimating the loss.’ ” Restatement (Third) § 16 reporter’s note to cmt. d, at 251 (quoting Hillrichs,