Indiana Law Review


Survey of Indiana Products Liability Cases: 1987-88

Michael Rosiello*

Ronald V. Weisenberger**

I. Introduction

This Article surveys state and federal cases that affected or discussed

Indiana's products liability tort law. Although the authors were not

bound to a particular survey period, the cases included in this article

were decided during the period between June 1987 and August 1988.

The Article discusses Indiana Supreme Court' and Indiana Court of

Appeals^ decisions as well as Seventh Circuit Court of Appeals^ and

federal district court"^ cases that have applied Indiana law. In addition,

the Article discusses a recent United States Supreme Court case that

will affect Indiana products liability law.^

II. The Cases
A. A New Choice of Law Rule

In Hubbard Manufacturing Co. v. Greeson,^ the Supreme Court of
Indiana overruled one hundred years of precedent and adopted a two-

* Partner, Barnes & Thornburg, Indianapolis. A.B., Economics, Columbia Uni-
versity, 1973; J.D., Stanford University Law School, 1976.

** Associate, Barnes & Thornburg, Indianapolis. A.B., English Literature, Uni-
versity of Notre Dame, 1970; J.D. (magna cum laude), Indiana University School of
Law—Indianapohs, 1988.

Ronald V. Weisenberger passed away suddenly on March 25, 1989. From working
with Ron, I knew his intelligence, his good humor, and his zest for the challenges of

litigation. His large contribution to this Article is only one example of Ron's abihty and

capacity for hard work. The Indiana bar will be poorer because Ron was deprived of
the opportunity to pursue his profession.—Michael Rosiello

1. Hinkle v. Niehaus Lumber Co., 535 N.E.2d 1243 (Ind. 1988); Hubbard Mfg.
Co. V. Greeson, 515 N.E.2d 1071 (Ind. 1987).

2. Koske V. Townsend Eng'g Co., 526 N.E.2d 985 (Ind. Ct. App. 1988); Miller
V. Todd, 518 N.E.2d 1124 (Ind. Ct. App. 1988); Kroger Co. Sav-On Store v. Presnell,

515 N.E.2d 538 (Ind. Ct. App. 1987); Wixom v. Gledhill Road Mach. Co., 514 N.E.2d
306 (Ind. Ct. App. 1987); Hinkle v. Niehaus Lumber Co., 510 N.E.2d 198 (Ind. Ct.
App. 1987), vacated 525 N.E.2d 1243 (Ind. 1988).

3. Hager v. National Union Elec. Co., 854 F.2d 259 (7th Cir. 1988); Phelps v.

Sherwood Medical Indus., 836 F.2d 296 (7th Cir. 1987).

4. Knox V. AC & S, Inc., 690 F. Supp. 752 (S.D. Ind. 1988); Reed v. Ford
Motor Co., 679 F. Supp. 873 (S.D. Ind. 1988); Covalt v. Carey-Canada, Inc., 672 F.

Supp. 367 (S.D. Ind. 1987); McDowell v. Johns-Manville Sales Corp., 662 F. Supp. 934
(S.D. Ind. 1987); Groce v. Johns-Manville Sales Corp., 662 F. Supp. 936 (S.D. Ind.

1987).

5. Boyle v. United Technologies Corp., 108 S. Ct. 2510 (1988).

6. 515 N.E.2d 1071 (Ind. 1987).

263



264 INDIANA LAW REVIEW [Vol. 22:263

Step choice of law rule for products liability and other tort actions that

permits trial courts to apply Indiana law even if the place of injury is

another state. As the court itself noted, this new rule is not merely

academic; the differences between Indiana's substantive products liability

law and that of some other states "are important enough to affect the

outcome of the litigation."^

1. Background.—"The traditional rule in conflict of law cases in-
volving multistate torts has been to apply the substantive law of the

place of tort—the lex loci delicti rule."^ The place of the tort is "the
state where the last event necessary to make an actor liable for the
alleged wrong takes place. "^ Generally, this is the place where the injury

or death occurs. Proponents of the rule claimed that the rule "promote[s]

certainty, predictability, uniformity of result, and [is] easy to apply. "^°

Others thought that is was too mechanical and often led to unjust

results.*' In Babcock v. Jackson, ^^ the Court of Appeals of New York
adopted what has been called the "modern" or the "most significant
relationship" rule:

Justice, fairness and "the best practical result" may best be
achieved by giving controlling effect to the law of the jurisdiction

which, because of its relationship or contact with the occurrence

or the parties, has the greatest concern with the specific issue

raised in the litigation. The merit of such a rule is that "it gives

to the place 'having the most interest in the problem' paramount

control over the legal issues arising out of a particular factual

context" and thereby allows the forum to apply "the policy of

the jurisdiction 'most intimately concerned with the outcome of

[the] particular litigation.'"'^

For years Indiana has applied the lex loci rule.'"^ In Witherspoon v.

Salm,^^ the Indiana Court of Appeals attempted to reject the rule: "We
believe the more logical basis for a choice of conflicting law, could be
stated: Given a factual and legal situation, involving an actual conflict

1. Id. at 1073.

8. Maroon v. Department of Mental Health, 411 N.E.2d 404, 417 (Ind. Ct. App.

1980) (Ratliff, J., concurring).

9. Greeson, 515 N.E.2d at 1073.

10. Maroon, 411 N.E.2d at 418 (Ratliff, J., concurring).

11. Id.

12. 12 N.Y.2d 473, 191 N.E.2d 279, 240 N.Y.S.2d 743 (1963).

13. Id. at 481-82, 191 N.E.2d at 283, 240 N.Y.S.2d at 749, (citations omitted).

14. See cases cited in Hubbard Mfg. Co. v. Greeson, 487 N.E.2d 825, 827 (Ind.

Ct. App. 1986), vacated, 515 N.E.2d 1071 (Ind. 1987).

15. 142 Ind. App. 655, 237 N.E.2d 116 (1968), rev'd, 251 Ind. 575, 243 N.E.2d

876 (1969).



1988] PRODUCTS LIABILITY 265

of law, which state has the greater interest in having its law applied!' '^^

The Indiana Supreme Court reversed the appellate court's opinion^'' and

found no conflict of law issue in the case.^^ A number of federal court
decisions, applying Indiana law, had concluded that the Indiana Supreme

Court would adopt the modern, most significant relationship rule.'^

2. The Greeson Case.—In Greeson, plaintiff's decedent, an Indiana
resident, was an employee of a company that cleaned, repaired and
replaced streetlights. The defendant, an Indiana corporation, built custom

lift units for the employer and attached them to the employer's trucks.

The decedent was killed while he was working on street lights in Illinois

and while using a lift unit that defendant had manufactured and that

was licensed and housed in Illinois .^°

Plaintiff filed a wrongful death action in Indiana in which she sought

to recover under negligence and strict liability theories. On the choice
of law issue, "[t]he trial court found that Indiana had more significant

contacts with the litigation but felt constrained to apply Illinois sub-

stantive law because the decedent's injury had been sustained there. "^^

The court of appeals affirmed on the ground that this result was required

by Indiana law:

Although many states have adopted a more flexible modern
choice of law approach in these cases, Indiana has not. As the
trial court properly concluded, for suits based on tort principles,

the applicable choice of law rule in Indiana remains lex loci

delicti. In this case, [decedent] was killed in Illinois. Therefore,

Illinois will control all substantive issues which arise during the

trial of this cause. ^^

16. Id. at 670, 237 N.E.2d at 124.

17. 251 Ind. 575, 243 N.E.2d 876 (1969).

18. Id. at 580, 243 N.E.2d at 878.

19. See Gianni v. Fort Wayne Air Serv., Inc., 342 F.2d 621 (7th Cir. 1965); Watts
V. Pioneer Corn Co., 342 F.2d 617 (7th Cir. 1965). But see Bowen v. United States, 570
F.2d 1311, 1319 n.l8 (7th Cir. 1978) (stating that Indiana apparently follows the lex loci

rule).

20. 515 N.E.2d 1071, 1072 (Ind. 1987).

21. Id.

22. Hubbard Mfg. Co. v. Greeson, 487 N.E.2d 825, 827 (Ind. Ct. App. 1986),
vacated, 515 N.E.2d 1071 (Ind. 1987) (footnotes and citations omitted). Judge Ratliff,

writing for the court of appeals, made clear his disagreement with the controlling authority:
This writer continues to adhere to his belief . . . that the better rule in these

cases is the so-called "modern rule" or "most significant relationship approach"
.... Given the opportunity, our supreme court may likewise adopt the "most
significant relationship approach." However, until it does so, this court is bound
to apply those legal principles announced by the highest court of this state

including the doctrine of lex loci delicti.

Hubbard, 487 N.E.2d at 827 n.l.



266 INDIANA LAW REVIEW [Vol. 22:263

The supreme court reversed and adopted a two-step choice of law

rule for tort claims. "The first step ... is to consider whether the place
of the tort 'bears little connection' to th[e] legal action. "^^ jf j^ [^

"determined that the place of the tort bears little connection to the

legal action, the second step is to apply the additional factors."^'* The
additional factors, which "should be evaluated according to their relative

importance to the particular issues being litigated, "^^ are those listed in

the Restatement (Second) of Conflict of Laws.^^ They include: "1) the

place where the conduct causing the injury occurred; 2) the residence

or place of business of the parties; and 3) the place where the relationship

is centered."^ The Greeson court appUed the new analytical framework

as follows:

[Step 1:] The last event necessary to make [defendant] liable for
the alleged tort took place in IlHnois. The decedent was working

in Illinois at the time of his death and the vehicle involved in

the fatal injuries was in Illinois. The coroner's inquest was held

in Illinois, and the decedent's wife and son are receiving benefits

under the Ilhnois Workmen's Compensation Laws. None of these
facts relates to the wrongful death action filed against [defen-

dant]. The place of the tort is insignificant to this suit. . . .

[Step 2:] Indiana has the more significant relationship and con-

tacts. The plaintiff's two theories of recovery relate to the man-

ufacture of the lift in Indiana. Both parties are from Indiana;

plaintiff Elizabeth Greeson is a resident of Indiana and defendant

Hubbard is an Indiana corporation with its principal place of
business in Indiana. The relationship between the deceased and

Hubbard centered in Indiana. The deceased frequently visited
defendant's plant in Indiana to discuss the repair and maintenance

of the lift. Indiana law appHes.^^

Although Greeson plainly announced a change in Indiana conflict

of law doctrine, it is unclear whether (a) Indiana has abandoned lex

loci delicti for the modern "most significant contacts" rule, or (b) Indiana

has retained lex loci delicti but adopted an exception under which the

"additional factors" can be considered in some cases. In Hager v.

National Union Electric Co. ,^^ the Seventh Circuit took the latter position.

23. 515 N.E.2d at 1074.

24. Id.

25. Id.

26. Restatement (Second) of Conflict of Laws § 145 (1971).
27. 515 N.E.2d at 1073-74 (citing Restatement (Second) of Conflict of Laws

§ 145(2) (1971)).

28. Id. at 1074.

29. 854 F.2d 259 (7th Cir. 1988).



1988] PRODUCTS LIABILITY 267

There, addressing the choice of law issue in a retaliatory discharge case,

the court stated that Greeson '* adhered to the language contained in

section 377 of the original Restatement of Conflicts, "^^ but "the [Greeson]

court also created a 'safety valve' for those cases where the application

of the basic rule would lead to application of the law of a state that

would have little connection with the underlying cause of action. . . ."^'

The authors of this Article disagree and believe that Greeson in

essence adopted the modem choice of law rule as set forth in the
Restatement (Second) of Conflict of Laws.^^ In most personal injury

actions, "the last event necessary to make an actor Hable for the alleged
wrong" determines the place of injury. Under the lex loci delicti rule,

the substantive law of the place where the injury occurs governs, but

the Greeson court held that the place of injury alone cannot be used

to determine the controUing law." Consequently, after Greeson there is

little or nothing left of the lex loci rule as such, and the "additional

factors" will have to be considered in virtually every case. Furthermore,

modern authorities retain a preference for the law of the state where

the injury occurred, ^"^ which is consistent with the two-step analysis of

the Greeson opinion. ^^ Finally, if Greeson is read as embracing the

30. Id. at 262. "The place of the wrong is the state where the last event necessary

to make an actor liable for an alleged tort takes place," Restatement (Second) of
Conflict of Laws § 377 (1934). This definition was then used to state the general principles
of lex loci delicti. Id., §§ 378-97.

31. 854 F.2d at 262.

32. The Restatement (Second) of Conflict of Laws provides:

(1) The rights and liabilities of the parties with respect to an issue in tort are

determined by the local law of the state which, with respect to that issue, has

the most significant relationship to the occurrence and the parties under the

principles stated in § 6.

(2) Contacts to be taken into account in applying the principles of § 6 to

determine the law applicable to an issue include:

(a) the place where the injury occurred,

(b) the place where the conduct causing the injury occurred,

(c) the domicil, residence, nationality, place of incorporation and place of

business of the parties, and

(d) the place where the relationship, if any, between the parties is centered.

These contacts are to be evaluated according to their relative importance with

respect to the particular issue.

Restatement (Second) of Conflict of Laws § 145 (1971).
33. Greeson, 515 N.E.2d at 1074.

34. "In an action for a personal injury, the local law of the state where the injury

occurred determines the rights and liabilities of the parties, unless, with respect to the

particular issue, some other state has a more significant relationship ... to the occurrence
and the parties. ..." Restatement (Second) of the Conflict of Laws § 146 (1971).
See also id. §§ 156-174 (stating choice of law rules for particular tort issues).

35. See id. § 146 comment c.



268 INDIANA LAW REVIEW [Vol. 22:263

modem choice of law rules for torts, the extensive authorities and analysis
under those rules will be available to assist Indiana courts and attorneys.

This will promote the choice of law values of "certainty, predictability,

and uniformity of result. . . ."^^

B. Warnings and Instructions

I. Duty to Warn About Dangers Associated with Unforeseeable
Uses.—In Hinkle v. Niehaus Lumber Co.,^^ the Indiana Supreme Court
held that a supplier has no duty to warn a purchaser about dangers

unknown to the purchaser unless "the supplier knew or had reason to
know that the product was Hkely to be dangerous when used in a
foreseeable manner . "^^

In Hinkle, plaintiff's employer, Alumax, wanted to replace the roof

over a shed in which the employer stored corrosive materials. A contractor
submitted a bid to replace the roof with fiberglass, a material that does

not corrode. The employer rejected the bid because it wanted to do the

job more cheaply. Instead, the employer decided to furnish the roofing

material and to hire the contractor to provide the labor to install it.

Even though the employer's maintenance supervisor told the employer

that sheet metal would be more expensive in the long run because it

would deteriorate faster than fiberglass, the employer purchased twenty-

eight gauge sheet metal roofing from the defendant, Niehaus. A heavier
gauge sheet metal would have been more suitable for the job, but the
roofing material would support a man's weight under normal use. Ap-

parently, the employer thought that the roof would be stronger if the

sheet metal was installed so that there was an eighteen-inch overlap. In

fact, this causes the roof to corrode more rapidly. ^^

The employer decided to use the twenty-eight gauge sheet metal and

to overlap it without consulting the supplier, who simply provided the
material requested by the employer. The supplier did not know how the
employer intended to use the sheet metal roofing. The supplier provided

no warnings or instructions with the sheet metal roofing. Six months

after the roof was installed, the employer ordered the plaintiff to repair

the roof. While the plaintiff was walking on the roof, it collapsed

because of excessive corrosion, and plaintiff was injured severely. "^^

36. Maroon v. Department of Mental Health, 411 N.E.2d 404, 418 (Ind. Ct. App.

1980) (Ratliff, J., concurring).

37. 525 N.E.2d 1243 (Ind. 1988).

38. Id. at 1245.

39. Id. at 1244.

40. Id.



1988] PRODUCTS LIABILITY 269

The trial court granted the supplier's motion for summary judgment,
and the court of appeals reversed/' According to the court of appeals,

the issue was whether the supplier had a duty to warn the employer

that the sheet metal would corrode and weaken in the corrosive envi-

ronment, that it would corrode more rapidly when overlapped excessively,
and that it was too thin to support a man's weight without additional

support."^^

The answer turns upon whether Alumax as a purchaser having
common understanding knew or should have known of these
dangerous propensities at the time it purchased this roofing

material, or whether any one or all such propensities were un-

reasonable dangers known to Alumax at that time. If Alumax
because of its common understanding knew or should have known
of all of these propensities, no duty to warn or instruct arose.

If, on the other hand, any one or more of these propensities

were unreasonable dangers unknown to Alumax, a duty to warn
or instruct Alumax at the time of sale arose as to Niehaus.'*^

The court of appeals held that the record was insufficient to determine

what the employer, as purchaser, knew or should have known about
the dangers to the plaintiff and, therefore, summary judgment was
improper. "^

The supreme court disagreed and stated that **the extent of a pur-

chaser's knowledge is not the sole criteria giving rise to a duty to

warn.'"^^ The supreme court affirmed summary judgment for defendant
because plaintiff "presented no evidence to show that [defendant] knew
or should have had any reasonable expectation that the metal roofing

sheets were to be used in an unusually corrosive environment,'"^^ and

because there was "no evidence in the record that the roofing sheets
were unreasonably dangerous when used in 'reasonably expectable han-
dling and consumption.""^^ Thus, even if the purchaser is not aware of

the dangers associated with a particular use of a product, a suppHer

has no duty to warn about those dangers if: (1) the product is not

unreasonably dangerous when used in a "reasonably expectable" way;

(2) the purchaser intends to use the product in a way that is not

41. Hinkle v. Niehaus Lumber Co., 510 N.E.2d 198 (Ind. Ct. App. 1987), vacated,
525 N.E.2d 1243 (Ind. 1988).

42. Id. at 202.

43. Id. (citations omitted).

44. Id.

45. Hinkle, 525 N.E.2d at 1245.

46. Id.

47. Id. at 1246 (quoting Ind. Code § 33-1-1. 5-2. 5(c) (1988)).



270 INDIANA LAW REVIEW [Vol. 22:263

"reasonably expectable;" and (3) the supplier has no reason to know
that the purchaser intends to use the product in a way that is not
"reasonably expectable.""*^ Indiana's products liability statute provides:

"If an injury results from handling, preparation for use, or consumption

that is not reasonably expectable, the seller is not liable under this

chapter.'"*^ Hinkle is consistent with that provision.

A notable feature of this case is Justice Givan's concurring opinion,
which Justice Pivarnik joined. Justice Givan concurred in the result but

could not agree with the majority's statement that "Indiana's Product

Liability Act imposes strict liability in tort upon sellers of a product in

a defective condition unreasonably dangerous to any user or consumer. "^^

In Justice Givan's view, "The use of the term 'strict Uability' in [the
products liability] statute is a misnomer and a corruption of the term,

for what follows in the statute is actually legislative statement of what

constitutes liability under certain acts of negligence. . . ."^^ Justice Given

concluded that, "[i]n all instances, both under the case law and the

statutory law of this state, some act of negligence is required to impose

liability. The result in this case does not transcend that principle.""

2. When Does the ''Open and Obvious Danger" Rule Preclude a
Duty to Provide Instructions About the Proper Use of a Product?—In
Kroger Co. Sav-On Store v. Presnell,^^ the court of appeals held that

a seller has a duty to instruct the buyer about the proper use of a

product to avoid dangers about which consumers are generally aware if

(a) consumers are also generally aware that there is a safe way to use
the product, and (b) the product is unreasonably dangerous if used in

this way.^"*

In Presnell, plaintiff purchased an outdoor lounge chair from de-

fendant. Defendant provided no instructions about proper use of the

48. 525 N.E.2d at 1245-46.

49. IND. Code § 33-1-1. 5-2. 5(c) (1988).
50. 525 N.E.2d at 1244.

51. Id. at 1246 (Givan, J., concurring).

52. Id. (emphasis added). The identity of negligence and strict liability theories is

widely acknowledged in the context of warnings. Ortho Pharmaceutical Corp. v. Chapman,

180 Ind. App. 33, 50, 388 N.E.2d 541, 553 (1979) ("[a]s a practical matter, [whether a

product is defective due to inadequate warnings] is determined by application of negligence

theory"). Generally, there is little or no difference between a negligent failure to warn

and an improper warning under a strict products liability theory. See id. at 44-47, 388

N.E.2d at 549-51. In a claim of defective design or manufacture, however, the concept

of "reasonableness" is addressed to the plaintiff's expectations about the use and safety

of the product, not (as in a negligence case) the defendant's actions. See, e.g., Ind. Code

§§ 33-l-1.5-2.5(a), -3(b)(1) (1988).

53. 515 N.E.2d 538 (Ind. Ct. App. 1987).

54. Id. at 544.



1988] PRODUCTS LIABILITY 271

chair. The first time plaintiff attempted to use the chair, she opened

the chair legs until they were vertical and resisted further opening. She

was injured when she sat in the chair, it collapsed, and she fell onto

a concrete patio."

Plaintiff alleged that the chair was defective and unreasonably dan-

gerous because defendant **fail[ed] to give any instruction or warnings

specifically about how to open the lounge chair to ensure that the locking
devices were properly engaged . . . ."^^ Defendant argued, among other
things, that "the danger of the chair's collapse and the manner and

method of opening the chair, were open and obvious and therefore

Kroger was under no duty to warn or instruct Presnell how to open
the chair. "5^

At trial, plaintiff testified that she knew that there were no warnings

or instructions about how to open the chair and that she did not think
that it was necessary to ask the defendant how to open the chair. ^^

Plaintiff's expert. Professor Cole, testified "that instructions were needed

with this chair because it differs from the ordinary folding chair ....

[and] the user would be led to believe that when the legs are vertical
and resistance is encountered, the chair is properly opened and ready

for use."^^ He also testified that defendant should have instructed users
the chair would not lock until the legs were pushed against the resistance

and past the vertical position.^

Defendant argued that the trial court erred by denying defendant's

motion for judgment on the evidence.^' The court of appeals disagreed:

One of the critical points of Professor Cole's testimony is
that even though users are generally aware of the dangers of

failing to properly open and secure the support legs of a lounge

chair, they believe there is a safe way to do it, namely, by
unfolding the legs to a vertical position until resistance is en-

countered. If people do in fact generally hold such a belief,
then it cannot be said, as a matter of law, that the risk of back

and neck injury or epilepsy from the collapse of a lounge chair

55. Id. at 539.

56. Id.

57. Id. at 540.

58. Id. at 542.

59. Id. at 544.

60. Id.

61. Id. at 543. Kroger also argued that any failure to warn claim was barred

because the absence of a warning was "open and obvious." Id. The court summarily

rejected that claim. "[I]t is the danger posed to the user that must be open and obvious

to the consumer . . . , not the absence of a warning of the danger." Id. (emphasis in

original).



272 INDIANA LAW REVIEW [Vol. 22:263

and a fall to the cement patio is open and obvious. . . .
'* Whether a danger is open and obvious depends not

just on what people can see with their eyes but also

what they know and believe about what they see. In

particular, if people generally believe that there is a

danger associated with the use of a product, but that

there is a safe way to use it, any danger there may be
in using the product in the way generally believed to be
safe is not open and obvious."

Both Cole and Presnell testified that the chair legs, when pushed

into a 90 degree vertical position, then encountered resistance.

We find this testimony was sufficient to make the following
issues questions of fact for the jury to resolve: (1) whether

Kroger had a duty to warn prospective users of the danger

inherent in the failure to properly set up the chair for use; (2)
whether the danger inherent in the failure to properly engage

and secure the support legs of the chair in a locked position

before use was open and obvious; and (3) whether the chair's

design or mechanical condition was defective and unreasonably

dangerous. ^^

Accordingly, the court held that the trial court properly denied defen-

dant's motion for judgment on the evidence.^^ Thus, Presnell stands for

the proposition that a seller has a duty to instruct the buyer how to
use the product safely if the method for doing so differs from the

method people generally believe is safe.

3. Continuing Duty to Warn.—In Reed v. Ford Motor Co.,^ Ford
moved to dismiss the plaintiff's claim that Ford had a continuing duty
to warn of alleged defects in a vehicle. The court denied the motion.
The court reasoned that the statute that defines "defective condition,"

which includes the limiting phrase "at the time [the product] is conveyed

by the seller to another party," does not relate to a failure to warn.^^

The warning provision is in a separate subpart that contains no language
limiting the time when warnings should be given. ^^ The court concluded

62. Id. at 544 (quoting Corbin v. Coleco Indus., Inc., 748 F.2d 411, 417-18 (7th

Cir. 1984)) (citations omitted).

63. Id. Summary judgment in favor of a manufacturer is proper if the plaintiff
states that she used a product in a way she believed was safe but presents no expert or
other users who testify that plaintiff's method was generally considered safe. Koske v.
Townsend Eng'g Co. ,^526 N.E.2d 985, 993 (Ind. Q. App. 1988).

64. 679 F. Supp. 873 (S.D. Ind. 1988).

65. Id. at 879 (quoting Ind. Code §§ 33-1-1. 5-2. 5(a), (b) (1988)).
66. Id.



1988] PRODUCTS LIABILITY 273

that "the Indiana legislature intended [the two subsections] to be distinct

and did not intend to have the time of sale restriction applicable to

^reasonable warnings. '"^^ The court also denied a motion to dismiss on

the theory that the time a warning must be given is limited to the time

of sale by Indiana common law.^*

C. Second Collision Cases: Will Indiana Recognize the

'*Crashworthiness'* Doctrine?

Twelve years ago, the Seventh Circuit Court of Appeals predicted

that, if given an opportunity to do so, the Supreme Court of Indiana

would adopt the '*crashworthiness" theory of liability.^^ According to

the leading case on the crashworthiness doctrine, Larsen v. General

Motors Corp.,^^ a crashworthiness or "second collision" case is one in

which "[t]he plaintiff does not contend that the design caused the accident

but that because of the design he received injuries he would not have

otherwise received or, in the alternative, his injuries would not have

been as severe. "^^ A fundamental rationale underlying the crashworthiness
doctrine is that automobile accidents are foreseeable. ^^ Consequently, the

argument runs, the manufacturer should be held to a duty of reasonable

care to design the automobile "consonant with the state of the art to

minimize the effect of accident. "^^

Unlike most tort actions, in a crashworthiness case someone other

that the defendant causes the accident—the first collision—that leads to
the plaintiff's injuries. Thus, in order to accept the crashworthiness

theory one must accept the proposition that the plaintiff can separate

the cause of the first collision and its resulting harm from the cause
of the second collision and its resulting harm.^"^

67. Id.

68. Id. at 879-80.

69. Huff V. White Motor Corp., 565 F.2d 104, 109 (7th Cir. 1977).

70. 391 F.2d 495 (8th Cir. 1968).

71. Id. at 497.

72. Id. at 502.

73. Id. at 503.

74. In Larsen, the leading crashworthiness case, the court noted:

Any design defect not causing the accident would not subject the manufacturer
to liabihty for the entire damage, but the manufacturer should be Hable for

that portion of the damage or injury caused by the defective design over and

above the damage or injury that probably would have occurred as a result of

the impact or collision absent the defective design.

Id. at 503. This apportionment-of-harm issue is the subject of one of the major debates

among the courts. Compare Huddell v. Levin, 537 F.2d 726 (3d Cir. 1976) with Mitchell
V. Volkswagenwerk, AG, 669 F.2d 1199 (8th Cir. 1982). The Huddell court held, "[Tjhe
plaintiff must offer some method of establishing the extent of enhanced injuries attributable



274 INDIANA LAW REVIEW [Vol. 22:263

In Miller v. Todd,^^ plaintiff requested the court of appeals to

recognize the crashworthiness doctrine, but the court did not decide the

issue. ^^ In Miller, plaintiff was injured in a motorcycle accident. She

alleged that the motorcycle was defective

—

i.e., not crashworthy—because
it did not have crash bars. Defendants argued that the absence of crash

bars is open and obvious. "^^

The court decUned the opportunity to recognize the crashworthiness

doctrine:

The critical inquiry is whether the manufacturer has provided

a product in a defective condition unreasonably dangerous to

to the defective design." 537 F.2d at 738. The Mitchell court found that Huddell was

asking the plaintiff to bear an impossible burden: "A rule of law which requires a plaintiff
to prove what portion of indivisible harm was caused by each party and what might have

happened in lieu of what did happen requires obvious speculation and proof of the

impossible." 669 F.2d at 1205.

The counter-argument was well-stated in Huddell:

It was plaintiff, not G.M., who introduced divisibility into the litigation by
arguing that the accident was survivable but for the defect in the design of the

head restraint. Plaintiff cannot have the argument both ways. Plaintiff may not
argue that the ultimate fact of death is divisible for purposes of establishing

G.M.'s liability and then assert that it is indivisible in order to deny to G.M.

the opportunity of Umiting damages. . . . We simply do not accept the G.M.
the opportunity of limiting damages. . . . We simply do not accept the proposition
that suing for wrongful death suffices to convert limited, second collision,

enhanced injuries liability into plenary liability for the entire consequences of

an accident which the automobile manufacturer played no part in precipitating.

537 F.2d at 739.

Those who refuse to follow Huddell usually reason that the law should require the
defendant rather than the faultless plaintiff to prove which portion of plaintiff's injuries

were caused by the uncrashworthy design and which portion would have occurred despite

the design. See, e.g., Huddell, 537 F.2d at 746 (Rosenn, J., concurring). As a matter of

policy, the defendant should bear this burden. This rationale disintegrates, and should

not apply, if the plaintiff sues on a strict liability theory under which the defendant is

liable without fault. See, e.g., Ind. Code § 33-1-1. 5-3(b)(l) (1988). This rationale makes
even less sense if the plaintiff's fault caused or contributed to the cause of the accident.

Even if it is improper to consider the plaintiff's conduct when determining whether a
design is defective, it is proper to consider the plaintiff's conduct when deciding whether,
as a matter of policy, the plaintiff or the defendant must prove the causal relationship

between the design and plaintiff's injuries.

In a case decided after the survey period, Masterman v. Veldman's Equip., Inc.,

530 N.E.2d 312 (Ind. Ct. App. 1988), the court of appeals sided with those courts following

the Huddell case. The court cited two reasons for imposing the burden of proof on the
plaintiff. First, plaintiff must prove the "specific injuries causedhy the defective product."

Id. at 317 (emphasis added). Second, the rule apportions liability for damages in accordance

with the fauh of the manufacturer or seller. Id. at 318. —Ed.
75. 518 N.E.2d 1124 (Ind. Ct. App. 1988).
76. Id. at 1125-26.

77. Id. at 1125.



1988] PRODUCTS LIABILITY 275

the user. . . . The plaintiff must establish a latent defect before

the focus narrows on whether the hidden danger created an

unreasonable risk of harm. Only then do we consider the extent

of a manufacturer's duty to design and produce a crashworthy

vehicle.

As a matter of law, the absence of crash bars on a motorcycle

is an open and obvious danger to the ordinary user.^^

Accordingly, the court affirmed the summary judgment in favor of
defendants.^^

The court, however, did discuss the crashworthiness doctrine:

The crashworthiness doctrine recognizes that the intended

use of a vehicle encompasses the inevitability of collisions and

requires the manufacturer to design a vehicle reasonably safe

for those foreseeable risks. . . . [TJhere is no Indiana caselaw

or statutory authority recognizing the doctrine. However, our

resolution of this appeal does not depend upon whether Indiana
adheres to the crashworthiness doctrine. The crashworthiness

doctrine is merely a variation of the strict liability theory, ex-

tending a manufacturer's liability to situations in which the defect

did not cause the accident or initial impact, but rather increased

the severity of the injury. ^°

In Wixom v. Gledhill Road Machinery Co.,^^ plaintiffs argued for
precisely this theory of liability. In Wixom, plaintiff's decedent had been
driving on an icy road when another car, driven by Waltz, struck the
rear of decedent's car. The collision caused decedent's car to skid out
of control, across the median, and into the path of a snowplow. The
blade of the snowplow penetrated the passenger compartment of the
car, killed the decedent, and injured another occupant, also a plaintiff. ^^

Plaintiffs sued the blade manufacturer. They alleged that, because

the accident was foreseeable, the manufacturer should have provided

torus segments on the blade to reduce the risk that the blade would

penetrate the passenger compartment. Consequently, they alleged, the

blade was defective and the defective condition became "operative" when
the car struck the blade. ^^ The trial court granted the manufacturer's

78. M at 1126 (citations omitted) (emphasis in original).
79. Id. at 1125.

80. Id. at 1125-26 (citations omitted).

81. 514 N.E.2d 306 (Ind. Ct. App. 1987).

82. Id. at 307.

83. Id.



276 INDIANA LAW REVIEW [Vol. 22:263

motion for summary judgment, and the court of appeals affirmed. ^"^

The court affirmed the judgment on two grounds. First:

GledhilPs liabiHty, if any, could only have become ^'operative''

at the time it placed such product into the stream of commerce,

not afterward. Gledhill was not in actual or constructive pos-

session or control of its snowplow blade at the time the accident

. . . occurred. Thus, the trial court correctly determined Waltz's

negligent rear-ending of the Wixom vehicle was an act intervening
between Gledhill's allegedly wrongful act and the Wixom's in-
juries and death. ^^

Second, the alleged defect merely created a condition that made the
injuries possible because of Waltz's negligent act; when the defendant
merely creates a condition that makes subsequent injury-producing neg-

ligent acts possible, those negligent acts are not foreseeable, as a matter

of law, and the condition cannot be the proximate cause of the injuries. ^^

Unless motor vehicle manufacturers are singled out as a special class

of defendants, *'' there is no legally sound basis for distinguishing Wixom
from an automobile crashworthiness case.^^ As a matter of common
sense, if not common law, it is no more foreseeable that automobile
accidents will occur than that snowplows will be used on icy roads and

that a car may sHde across any icy road into the path of the snowplow.
If Wixom is the law, it is difficult to see how the crashworthiness
doctrine can be.^^

84. Id. at 306.

85. Id. at 308.

86. Id. at 308-09.

87. The Larsen court noted, "We think the duty of the use of reasonable care
in design to protect against foreseeable injury to the user of a product . . . should be

and is equally applicable to all manufacturers." Larsen v. General Motors Corp., 391

F.2d 495, 504 (8th Cir. 1968). The court expressly rejected the idea that the "crashworthiness

doctrine should apply only to automobile manufacturers." Id.

88. The crashworthiness doctrine has been appHed to vehicle manufacturers where

the plaintiff was not a passenger. See Knippen v. Ford Motor Co., 546 F.2d 993 (D.C.

Cir. 1976); Green v. Volkswagen of Am., Inc., 485 F.2d 430 (6th Cir. 1973); Passwaters

V. General Motors Corp., 454 F.2d 1270 (8th Cir. 1972). Thus, Wixom cannot be
distinguished on the ground that plaintiffs were not passengers in the manufacturer's

allegedly defective product.

89. It is likely that Wixom is not the law. In Masterman v. Veldman's Equip.,
Inc., 530 N.E.2d 312 (Ind. Ct. App. 1988), the court of appeals, apparently oblivious to

Wixom, specifically held, in reversing the grant of summary judgment to the seller and
manufacturer of the snowplow mount which allegedly enhanced the Mastermans' injuries,

that the Mastermans did have a cause of action for those injuries. Id. at 315.

—

Ed.



1988] PRODUCTS LIABILITY 277

D. Design Defects: The Open and Obvious Danger Rule Does Not
Preclude Liability if the Manufacturer's Conduct Is Willful and

Wanton

In Koske v. Townsend Engineering Co.,^ a divided court of appeals

held that the open and obvious danger rule "does not necessarily preclude

a manufacturer's liability for claims of willful or wanton misconduct

asserted by the injured plaintiff. ''^^ In Koske, the plaintiff worked in

a meat processing plant. Her primary job station was adjacent to a

skinner/slasher machine manufactured by the defendant. The skinner/

slasher processed pork jowls. Ordinarily a conveyor moved the jowls
into the machine's rotating blades. The machine had no safety guards. ^^

Sometimes the machine became a production bottleneck. When that
happened, plaintiff assisted on the machine. One day the machine had
been shut down and sanitized. Because the machine had been sanitized,
the conveyor was sHck. In addition, the jowls that were being processed

were frozen and stiff, so it was necessary to push the jowls into the

blades. Consequently, plaintiff used one jowl to push another into the

machine. She had used this procedure often. This time the jowl that

she was using to push slid over the other jowl, and plaintiff's hand

was caught in the machine.^

Defendant advertised that the machine had * improved operator safety"

because the operator's hands would be at least eighteen inches from the

blades. Nevertheless, defendant knew that under certain conditions the
conveyor would not automatically feed jowls into the blades. Defendant

was aware of several similar accidents in other meat processing plants.

In a letter to a meat processing company written ten months before
plaintiff's accident, defendant acknowledged the potential safety hazard

and urged that the machine be removed as soon as possible. Less than

a month after plaintiff's accident, defendant recalled the machine and
stated that it was aware of **several instances" where the machine had

caused or was thought to have caused hand or arm injuries.^'* Experts
agreed that the machine was not adequately guarded. Defendant replaced

the model plaintiff had used with a new model that had guards and
safety switches. The new model also had a warning sign.^^

Plaintiff sought recovery **under a theory of strict liability for a

defective design resulting in an unreasonably dangerous product and

90. 526 N.E.2d 985 (Ind. Ct. App. 1988)

91. Id. at 990.

92. Id. at 987.

93. Id.

94. Id. at 987-88.

95. Id. at 988.



278 INDIANA LAW REVIEW [Vol. 22:263

under a theory of willful and wanton misconduct. '*^^ Plaintiff argued

that the open and obvious danger rule should not bar claims based on

blameworthy conduct. Defendant argued that a product with an open

and obvious danger is not defective or unreasonably dangerous. Thus,

it did not willfully or wantonly provide a product that was defective.^''

The trial court concluded that the open and obvious danger rule barred
plaintiff's claim and granted defendant's motion for summary judgment.^^

The court of appeals reversed. The court, reasoning by analogy to

Bridgewater v. Economy Engineering Co.,^ found: **the defenses of
contributory willful or wanton misconduct and incurred risk adequately

cover a claim of willful or wanton misconduct without borrowing other

doctrines. "*°° Consequently, "if the injured person was reckless with

regard to his or her own safety, recovery against even a reckless man-
ufacturer will be barred. . . ."^°* The court noted that the open and

obvious danger rule announced in Bemis Co. v. Rubush^^^ expressly

applied only to product liability actions based on negligence or strict

liability. ^°^ The court reasoned:

A fortiori, consistent limitation of the principle would entail
application of the open and obvious danger rule to product

liability claims involving only negligence and strict liability ac-

tions.

The rationale for precluding the open and obvious danger

rule as an automatic bar to recovery for a plaintiff in claims

of willful and wanton misconduct is not hard to find. The focus

of willful misconduct is not on the product but on the culpability

of the manufacturer. When a manufacturer acts recklessly, re-
flecting a callous sacrifice of consumer safety for the benefit of

the enterprise, the scope of a manufacturer's legal responsibility

for injuries from its defective products should reflect that measure

of its culpability. The manufacturer maintains a powerful position

of control over product safety and has the opportunity to consider

the potential legal consequences flowing from its conduct. ^^

The court stated that **[t]he obviousness of the danger is but one

factor. "^^^ In order to recover under a wanton and willful conduct

96. Id.

97. Id. at 990.

98. Id. at 988.

99. 486 N.E.2d 484 (Ind. 1985).

100. Koske, 526 N.E.2d at 991.

101. Id.

102. All N.E.2d 1058 (Ind. 1981).

103. Koske, 526 N.E.2d at 991.

104. Id. (citations omitted) (emphasis in original)

105. Id.



1988] PRODUCTS LIABILITY 279

theory, '*the defendant must have knowledge of facts sufficient to imply

that he knew the plaintiff would not extricate himself from the peril. ''^^

According to the court, whether plaintiff acted unreasonably and whether

defendant knew that plaintiff would not be able to extricate herself from

a danger known to defendant were genuine issues of material fact that
precluded summary judgment. '°^

There was some evidence for a factfinder to conclude that

Townsend knew that an unacceptable number of serious injuries

were caused by its machine, knew that the machine was a safety

hazard, and yet resisted recalling the machine in reckless disregard

of the known probable consequences. ^^^

Judge Neal dissented. He found no evidence to support plaintiffs
claim that defendant's conduct was willful and wanton^^ and also wrote:

I fail to perceive any connection between the mental state of

the- Manufacturer, a necessary element where wanton and willful

conduct is alleged, and the open and obvious rule. Before liability

can be impressed upon a manufacturer the defect must be hidden

and not normally observable, thus creating a latent danger in

the use of the product. . . . [T]he open and obvious concept is

addressed to the knowledge and mental processes of the user.

When he perceives the danger and continues to use the product,
the original act of the manufacturer, or his mental state, is no

longer a causative factor. "°

E. The '*Learned Intermediary** Doctrine Applies to Medical Devices

In Phelps V. Sherwood Medical Industries, ^^^ the Seventh Circuit

Court of Appeals, applying Indiana law, extended the "learned inter-

mediary" doctrine to medical devices."^ Previously, the Court of Appeals

106. Id.

107. Id. at 991-92.

108. Id. at 992.

109. Id. at 993 (Neal, J., dissenting).

110. Id.

111. 836 F.2d 296 (7th Cir. 1987).

112. The court relied on the definition of medical "device" in the Food, Drug and

Cosmetic Act, Pub. L. No. 717, 52 Stat. 1048 (codified as amended at 21 U.S.C. §§ 301

to 392 (1982)). 836 F.2d at 298-99. The act as amended defines medical "device" as

an instrument, apparatus, implement, machine, contrivance, implant, in vitro

reagent, or other similar or related article, including any component, part, or

accessory, which is

—

(1) recognized in the official National Formulary, or in the United States



280 INDIANA LAW REVIEW [Vol. 22:263

of Indiana had held, in Ortho Pharmaceutical Corp. v. Chapman, ^^^

that the doctrine applies to an oral contraceptive available only with a

prescription. ""* According to the Chapman court:

Where a product is available only on prescription or through
the services of a physician, the physician acts as a "learned

intermediary" between the manufacturer or seller and the pa-

tient. ... [I]f the product is properly labeled and carries the

necessary instructions and warnings to apprise the physician of

the proper procedures for use and the dangers involved, the

manufacturer may reasonably assume that the physician will
exercise the informed judgment thereby gained in conjunction

with his own independent learning, in the best interest of the
patient."^

Accordingly, a prescription drug ** manufacturers [sic] duty to warn

extends only to the medical profession, and not the ultimate users. "^*^

The rationale for the rule is that

Prescription drugs are Hkely to be complex medicines, esoteric

in formula and varied in effect. As a medical expert, the pre-
scribing physician can take into account the propensities of the

drug, as well as the susceptibilities of his patient. His is the

task of weighing the benefits of any medication against its

potential dangers. The choice he makes is an informed one, an

individualized medical judgment bottomed on a knowledge of

both patient and palliative. '^^

Pharmacopeia, or any supplement to them,

(2) intended for use in the diagnosis of disease or other conditions, or

in the cure, mitigation, treatment, or prevention of disease, in man or other
animals, or

(3) intended to affect the structure or any function of the body of man
or other animals, and which does not achieve any of its principal intended

purposes through chemical action within or on the body of man or other
animals and which is not dependent upon being metabolized for the achieve-

ment of any of its principal intended purposes.

21 U.S.C. § 321(h) (1982).

113. 180 Ind. App. 33, 388 N.E.2d 541 (1979).
114. Some courts have not applied the learned intermediary doctrine to oral con-

traceptives and have extended the manufacturer's duty to warn beyond the doctor to the

consumer. See cases cited in Phelps, 836 F.2d at 299. "[Sjince the dispenser of those

products may not be a physician (as in a cHnic), the careful balancing of risks to the
individual patient may not occur, and therefore an extended warning is appropriate." Id.

115. Chapman, 180 Ind. App. at 44, 388 N.E.2d at 549 (quoting Terhune v. A.H.

Robins Co., 90 Wash. 2d 9, , 577 P.2d 975, 978 (1978)).
116. Chapman, 180 Ind. App. at 43, 388 N.E.2d at 548.

117. Id. at 44, 388 N.E.2d at 549 (quoting Reyes v. Wyeth Laboratories, Inc., 498

F.2d 1264, 1276 (5th Cir.), cert, denied sub nom. Wyeth Laboratories v. Reyes, 419 U.S.

1096 (1974)).



1988] PRODUCTS LIABILITY 281

In Phelps, a surgeon, Rubush, inserted a catheter into Phelp's heart

that defendant, Sherwood, had manufactured. The surgeon attached the

catheter with a "purse-string" suture. Later, while a nurse attempted

to remove the catheter, it broke, and part of it remained in plaintiffs

heart. The nurse testified that she would not have attempted to remove

the catheter had she known that it was sutured to plaintiff's heart."*
Rubush testified that he was aware that the catheter had broken in

similar situations and that suturing the catheter as he had done would

prevent its removal."^ Only doctors could lawfully purchase the cath-

eter,
^^o

Plaintiff alleged that the catheter was defective because, instead of

stretching before separating, it broke. Defendant had provided a warning

to the surgeon. Plaintiff did not argue that this warning was inadequate,

but he claimed that defendant had a duty to warn plaintiff, or at least

to warn the nurse. *^^ Defendant argued that its duty to warn extended

only to the surgeon, who should have passed the warning on to the
nurse and plaintiff. ^^^

A jury returned a verdict for defendant. On appeal, plaintiff argued
that the trial court erred when it instructed the jury on the defendant's

duty to warn.^2^ The trial court instructed the jury that the surgeon was

the user of the catheter, and

If you find from the evidence in this case that Doctor Rubush

had knowledge, in his intended use of this Defendants' [sic]

catheter, that there was danger of breaking of said catheter upon

attempted removal because of the route and obstructions existent

in the application of this catheter, then you are instructed that

the Defendants had no duty to warn with respect to such potential

properties since they were already known to the user, the op-
erating surgeon. ^^

The Seventh Circuit affirmed. First, the court determined that the

surgeon was a "user or consumer." ^^^ The court noted that, under the

statute, ^^^ a "user or consumer" includes ''any other person who, while

acting for or on behalf of the injured party, was in possession and

lis. Phelps, 836 F.2d at 299.

119. Id.

120. Id. at 302.

121. Id. at 300.

122. Id.

123. Id.

124. Id. (emphasis in original).

125. Id. at 301-03.

126. IND. Code § 33-1-1.5-2 (1988)



282 INDIANA LAW REVIEW [Vol. 22:263

control of the product in question . . . ."^^^ The court also noted that

the term '^consumers*' includes "not only those who in fact consume
the product, but also who prepare it for consumption ... /'^^^ and
that *'user" includes ^' those who are utilizing [the product] for the
purpose of doing work upon it . . . ."^^^ The court reasoned:

[The surgeon] received the label warning from Sherwood and

thus should certainly be considered as a **user" of the catheter.

[The surgeon] also fits into the Restatement's definition of '*con-

sumer" since he prepared and employed the catheter for ultimate

**consumption" by Phelps. Even more significantly, he utilized

the catheter for the purpose of surgery. '^^

Second, relying on Chapman and Ingram v. Hook's Drugs, Inc.,^^^
the court determined that the **learned intermediary" doctrine appUes

to medical devices: ^^^

In Chapman, the prescription drug manufacturer discharged

its duty to warn by warning a patient's physician. The physician

then had a duty to inform himself of the drug's propensities

before using it on his patients. This "learned intermediary"

exception has equal application to those cases concerning medical

devices. Phelps tries here to distinguish the Indiana law regarding

prescription drugs from situations involving medical devices. Yet

this Court can find no principled basis for such a distinction.

Applying Chapman and Ingram to this field, it was up to Dr.
Rubush, the heart surgeon who, according to the evidence, knew
the risks and benefits of this kind of catheter usage, to warn

Phelps. 133

Because "medical devices" includes a broad variety of products,

Phelps is an important extension of the learned intermediary doctrine.

The term "medical devices" includes products that persons other than

127. Phelps, 836 F.2d at 301 (emphasis in original) (citing Ind. Code § 33-1-1.5-

2 Supp. 1983).

128. Phelps, 836 F.2d at 302 (emphasis in original) (citing Restatement (Second)

OF Torts § 402A comment 1 (1977)).
129. Phelps, 836 F.2d at 302 (emphasis in original) (citing Restatement (Second)

OF Torts § 402A comment 1 (1977)). C/. Thiele v. Faygo Beverage, Inc., 489 N.E.2d

562 (Ind. Ct. App.) ("user or consumer" does not include seller's employee who handles
the product before the consumer buys it).

130. Phelps, 836 F.2d at 302-03.

131. 476 N.E.2d 881 (Ind. Ct. App. 1985).

132. Phelps, 836 F.2d at 303.

133. Id. (citations omitted).



1988] PRODUCTS LIABILITY 283

doctors may lawfully obtain. ^^"^ Phelps seems to include those products,
but plaintiffs may argue that the ''learned intermediary" doctrine should
apply to products that only a doctor may lawfully obtain. Because
Indiana law limits the conditions under which a doctor is liable for

failing to warn^^^ and limits a plaintiff's damages even if the doctor is

liable,'^ both plaintiffs and defendants are likely to test the scope of

the Phelps holding.

F. Split Authority in the Southern District: Does the Discovery Rule

Apply to the Statute of Repose?

Section five of the Indiana Product Liability Act^^'^ continues to be

the subject of several published opinions. ^^^ That section provides:

[A]ny product liability action in which the theory of liability is

negligence or strict liability in tort must be commenced within
two (2) years after the cause of action accrues or within ten

(10) years after the delivery of the product to the initial user

or consumer; except that, if the cause of action accrues more

than eight (8) years but not more than ten (10) years after the

initial delivery, the action may be commenced at any time within
two (2) years after the cause of action accrues.

^^^

Recently, judges in the Southern District of Indiana have considered

whether the statute of repose bars a plaintiff's action if the product,

asbestos, caused injuries that did not manifest themselves within the

134. For example, water treatment devices that are generally available to the public

are an integral part of hemodialysis treatment for some persons with end-stage renal

disease. These devices treat the water that is mixed, in a dialysis machine, with a concentrated

solution. The diluted solution passes through an artificial kidney, which removes, from

the patient's blood, the wastes that the natural kidneys are unable to remove. A more
or less ordinary water treatment device, when used for such purposes, is a "machine . . .
intended for use in the . . . treatment ... of disease, in man . . . ." 21 U.S.C. § 321(h)
(1982). Consequently, it would be a medical device, at least when used for the medical

purpose.

135. See Kranda v. Houser-Norborg Medical Corp., 419 N.E.2d 1024 (Ind. Ct.

App.) (1981), reh'g denied 424 N.E.2d 1064 (1981), appeal dismissed 459 U.S. 802 (1982);

Revord v. Russell, 401 N.E.2d 763 (Ind. Ct. App. 1980).
136. See Ind. Code § 16-9.5-2-2 (1988).
137. Act approved March 10, 1978, Pub. L. 141, § 28, 1978 Ind. Acts 1298, 1308-

10 (codified as amended at Ind. Code §§ 33-1-1.5-1 to -5 (1988)).
138. Among the pubhshed opinions that have considered section five are: Barnes

V. A.H. Robins Co., 476 N.E.2d 84 (Ind. 1985); Dague v. Piper Aircraft Corp., 275 Ind.

520, 418 N.E.2d 207 (1981); Orr v. Turco Mfg. Co., 484 N.E.2d 1300 (Ind. Ct. App.

1985); Whittaker v. Federal Cartridge Corp., 466 N.E.2d 480 (Ind. Ct. App. 1984); Scalf

V. Berkel, Inc., 448 N.E.2d 1201 (Ind. Ct. App. 1983).

139. Ind. Code § 33-1.5-1-5 (1988).



284 INDIANA LAW REVIEW [Vol. 22:263

Statutory period of repose. One judge held that the statute did not bar
plaintiff's action;^^ the other judge held that it did.^"*^

1. Background.—The leading case dealing with the statute of repose
provision is Dague v. Piper Aircraft Corp.^"^^ In Dague, the Indiana
Supreme Court held: **the action must be brought within two years after

it accrues, but in any event within ten years after the product is first

delivered to the initial user or consumer, unless the action accrues more

than eight but less than ten years after the product's introduction into

the stream of commerce. "^'^^ The product was an airplane that the

defendant, the manufacturer, first had sold on March 26, 1965. The
airplane crashed on July 7, 1978, and plaintiffs decedent died on

September 5, 1978. Plaintiff filed her wrongful death action on October

I, 1979.^"^ Although plaintiff filed her action within two years after the

crash, the court held "that section five of the Product Liability Act

bars plaintiff's action in this cause, inasmuch as the damages incurred

by plaintiff occurred more than ten years after the product was first

placed in commerce. "^'^^ The court also held that plaintiff did not have

a vested common law right in her cause of action and that the legislature
did not exceed its constitutional authority when it enacted the statute
of repose and effectively precluded any action against product manu-

facturers for injuries that occur more than ten years after the product

is delivered to the first user or consumer. ^"^^

In Barnes v. A.H. Robins Co.,^"^^ the supreme court held that a
cause of action accrues and the two-year personal injury statute of

limitations^"** begins to run on the date that the plaintiff knew or should

140. Covalt V. Carey-Canada, Inc., 672 F. Supp. 367 (S.D, Ind. 1987), question

certified to Indiana Supreme Court, 860 F.2d 1434 (7th Cir. 1988); accord Blaker v. U.S.

Mineral Prods. Co., 688 F. Supp. 1300 (S.D. Ind. 1987).

141. Knox V. AC & S, Inc., 690 F. Supp. 752 (S.D. Ind. 1988); accord England
V. Asbestos Corp., No. IP 81-163-C (S.D. Ind. Feb. 13, 1987).

142. 275 Ind. 520, 418 N.E.2d 207 (1981).

143. Id. at 525, 418 N.E.2d at 210.

144. Id. at 522, 418 N.E.2d at 209.

145. Id. at 526, 418 N.E.2d at 211.

146. Id. at 528-30, 418 N.E.2d at 212-13.

147. 476 N.E.2d 84 (Ind. 1985).

148. Ind. Code § 34-1-2-2 (1988). Barnes was based upon a certified question from
the Seventh Circuit:

"When does a cause of action accrue within the meaning of the Indiana Statute
of Limitations for personal injury accidents, Ind. Code § 34-1-2-2, and the
Indiana Statute of Limitations for Products Liability actions, Ind. Code § 33-
1-1.5-5, when the injury to the plaintiff is caused by a disease which may have
been contracted as a result of protracted exposure to a foreign substance?"

Barnes, 476 N.E.2d at 85. The supreme court's discussion appeared to be limited to the

two-year limitations statute. See, e.g., 476 N.E.2d at 87 ("[Wje find that ... the statute



1988] PRODUCTS LIABILITY 285

have discovered the causal connection between her injuries and the

defective product or negligent act, if the injuries are the result of

protracted exposure to a seemingly innocent, foreign substance that

'^causes changes so subtle and latent that they are not discoverable to

the plaintiff until they manifest themselves many years later. "^"^^ In
Barnes, plaintiffs had filed their actions more than two years after the

product had caused the harm, less than two years after the plaintiffs

actually discovered the causal connection between the product and their

injuries, and less than ten years after the product had been delivered

to the initial user.^^^

In Walters v. Owens-Corning Fiberglass Corp.,^^^ the Seventh Circuit

held that the Barnes discovery rule applies to actions based on protracted

exposure to asbestos products. In Walters, the plaintiff, who had worked
as an asbestos insulation applicator from 1950 to 1975, learned in

February 1978 that he had an asbestos-related disease. He filed his
complaint approximately two years later. ^" The court rejected defendants'

argument that the Barnes rule does not apply to asbestos and held that,

"exposure to asbestos products over a period of twenty-five years (and

presumably lesser periods) constitutes ^protracted exposure to a foreign

substance.'"^"

2. The Facts and Arguments.—In Covalt v, Carey-Canada, Inc.^^"^
and Knox v. AC & S, Inc.,^^^ the defendants moved for summary
judgment on the ground that the plaintiffs filed their complaints more

than ten years after the last delivery of asbestos insulation to their

employers. ^^^ The defendants contended that the statute of repose pro-

of limitations in such causes commences to run from the date the plaintiff knew or should

have discovered that she suffered an injury or impingement. . . ."). The facts stated in

Barnes indicate that the statute of repose did not bar plaintiffs' claims under any reading

of the statute; each plaintiff had sued within ten years of the initial insertion of her

Dalkon shield. 476 N.E.2d at 84-85.

149. Barnes, at 86.

150.

151.

152.

153.

154.

155.

156. In Knox, the plaintiff presented evidence that there had been some asbestos

deliveries within the period of repose, and the defendants submitted affidavits that indicated

that all asbestos deliveries ceased outside the repose period. Id. at 759. Consequently, the

court held that "a question of fact remains concerning whether the plaintiff can prove
delivery and exposure to any of the defendants' products during the period of repose,

so as to avoid the effect of the statute of repose and its absolute bar to plaintiff's cause

of action." Id.

Id. at 84-85.

781 F.2d 570 (7th Cir. 1986).

Id. at 571.

Id. at 572.

672 F. Supp. 367 (S.D. Ind. 1987)

690 F. Supp. 752 (S.D. Ind. 1988)



286 INDIANA LAW REVIEW [Vol. 22:263

vision is an absolute bar to actions that are filed outside the repose

period.

Both the plaintiffs and the defendants presented persuasive arguments

for their respective positions. The plaintiffs relied on Barnes and Walters
and argued that the Dague statute of repose rule does not apply in
asbestos cases because their injuries were not discoverable within the

repose period. Indeed, there is language in the Barnes opinion that seems

to support this position:

The [discovery] rule is based on the reasoning that it is incon-

sistent with our system of jurisprudence to require a claimant

to bring his cause of action in a limited period in which, even

with due diligence, he could not be aware a cause of action

exists. In the typical tort claim, injury occurs at the time the

negligent act is done and the claimant is either aware of the

injury, or at least the cause of the injury, and is put on notice

to determine the extent of that injury. The claimant, therefore,

has the whole statutory time provided for in the limitations

statutes to make his determinations and bring his cause of action.
The problem comes about when the act, seemingly innocent,

causes changes so subtle and latent that they are not discoverable

to the plaintiff until they manifest themselves many years later. ^^^

In addition, the Barnes court expressly stated that the legislature's au-

thority to limit the time in which a plaintiff can file an action is not

so broad that the legislature can provide for a period that '*is so

manifestly insufficient that it represents denial of justice." ^^^ Finally, in

Dague the statute of repose barred plaintiffs action because '^damages
incurred by plaintiff occurred more than ten years after the product was

first placed in commerce. "^^^ In the asbestos cases, the damages incurred

by the plaintiff occur, or at least the effects may begin to occur, within
the repose period, but they are not discoverable until after the repose

period expires. In such cases, plaintiffs argued, Dague does not apply, ^^

and Barnes applies by analogy, if not directly.

The defendants relying on Dague, argued that the statute of repose

absolutely precludes any action that is filed outside the repose period,

157. Barnes v. A.H. Robins Co., 476 N.E.2d 84, 86 (Ind. 1985).
158. Id.

159. 275 Ind. at 526, 418 N.E.2d at 211.

160. That is, plaintiffs may argue, these asbestos cases are distinguishable from
Dague. In Dague, the harm occurred after the repose period; in the asbestos cases the

harm occurred, or may have occurred, during the repose period, but it was not discoverable
until the repose period expired. Of course, the question is whether this distinction has

any legal significance.



1988] PRODUCTS LIABILITY 287

and noted that in both Barnes and Walters the courts considered only

the time that plaintiff's cause of action accrued and the statute of

Umitations began to run. Neither court considered the statute of repose.

In both cases, plaintiffs had filed their complaints within the repose

period. In addition, the language of the statute expressly provides only

one exception to the general rule that the plaintiff must commence the
action within ten years after the product is delivered to the first user

or consumer: where the cause of action accrues more than eight but

less than ten years after the product is delivered to the first user or

consumer. If, as in Dague, the cause of action accrues after the ten

year period, the plaintiff simply has no cause of action. This is the

legislature's statement of policy—no manufacturer can be exposed to
liability more than twelve years after it places a product in the stream

of commerce in Indiana. As the Dague court held, a plaintiff has no
vested interest in a common law rule, and the legislature has the power
and authority to limit the time when plaintiff may commence a cause
of action. ^^'

3. The Opinions.—In Covalt,^^^ Judge McKinney denied defendants'
motion for summary judgment. The court relied on Barnes and distin-
guished Dague:

Here we are not concerned with introduction of a product into
the market place [as in Dague]. Here we are concerned with
exposure of a foreign substance causing disease. The Barnes case

discusses the Dague case and concludes that in disease cases
**[t]he problem comes about when the act, seemingly innocent,
causes changes so subtle and latent that they are not discoverable

to the plaintiff until they manifest themselves many years later."
Responding to that concern and seeming unfairness and in rec-

ognition of the difference between injury and disease, the Barnes

case set a discovery rule to apply in protracted exposure to

hazardous substance cases. To do otherwise is to exclude latent
disease victims from our system of jurisprudence. No such intent
should be ascribed to the Indiana Legislature or the Indiana

Supreme Court. . . .

[T]he Barnes Court's opinion clearly sets a standard in disease

cases and makes disease cases different than cases caused by
products which injure individuals. In other words, it is this

Court's opinion that in the State of Indiana the ten (10) year

statute of repose still applies to cases like Dague or in any case

16L 275 Ind. at 529, 418 N.E.2d at 213.

162. Covalt V. Carey-Canada, Inc., 672 F. Supp. 367 (S.D. Ind. 1987), question

certified to Indiana Supreme Court, 860 F.2d 1434 (7th Cir. 1988).



288 INDIANA LAW REVIEW [Vol. 22:263

in which the injury to the plaintiff resulted from a product that

was introduced into the stream of commerce ten years prior to
the injury. The exception carved to that rule by Barnes is an

exception that deals only with diseases from protracted exposure

to foreign substances. That is, protracted exposure as opposed

to a one-time injury causing event.*"

In Knox,^^ Judge Tinder granted defendants' motion for summary
judgment '*with respect to any initial delivery and exposure that occurred

more than twelve years prior to the filing of this action. ''^^^ The court

rejected plaintiff's argument that Barnes creates an exception to the

statute of repose:

Barnes should not be read so expansively. In Barnes, both of

the claims resulted from exposure to the hazardous substance

within the period of repose and thus, the precise question in

this case simply was not addressed. In addition, Dague Corp.,
has clearly established that the statute of repose places an outside

limit on liability of twelve (12) years for a products Hability

cause of action in Indiana. Dague is still the law in Indiana
and it dictates that the statute of repose bars an action for

damages 'incurred by the plaintiff more than . . . ten years
after the product was first placed in commerce." There is no

language in the statute of repose which permits this court to

infer that treatment under Dague would differ from the absolute
bar to plaintiff's claim for an injury-inflicting defect occurring

outside the period of repose in a case where the product causes

disease with a long latency period prior to manifestation.*^^

Nevertheless, Judge Tinder was concerned about the rule he beUeved he

was duty-bound to apply:

[T]he primary purpose of the statute of repose, that of recog-

nizing the improvements of product design and safety that come

163. Id. at 368 (quoting Barnes, 476 N.E.2d at 86 (citation omitted)).

164. Knox V. AC & S, Inc., 690 F. Supp. 752 (S.D. Ind. 1988).
165. Id. at 759. The Knox court's reference to a 12-year time period was based

upon the exception in the statute of repose that:

[I]f the cause of action accrues more than eight (8) years but not more than

ten (10) years after the initial delivery, the action may be commenced at any
time within two (2) years after the cause of action accrues.

Ind. Code § 33-1-1.5-5 (1988). If there was no delivery of the product within 12 years
of the filing of the action, the claim is barred even assuming the remote theoretical

possibility that the cause of action was first discovered, and so accrued, on the last day

of the ten-year period.

166. 690 F. Supp. at 759 (quoting Dague, 275 Ind. at 526, 418 N.E.2d at 211

(citation omitted)).



1988] PRODUCTS LIABILITY 289

with time, is not served in cases such as this one. The statute

of repose essentially protects a manufacturer from being forever

liable for its products, in essence rewarding a manufacturer for

ongoing improvements. However, asbestos and substances like

it are not subject to design and safety improvements. Asbestos

will not and most probably can not improve and [sic] with time.

In fact, the evidence suggests that asbestos always will be a

dangerous product. As a result, it does not appear in any way
to fall within the rationale of the rule; thus, the application of

the statute in these types of cases creates a harsh result without

advancing the countervailing policy interests underlying the adop-

tion of the statute of repose.

The court also recognizes that the severity of the ruling in

this case is magnified in hght of the long latency period between

exposure and manifestation in an asbestos case. Asbestosis is

beheved to have a manifestation period of between ten (10) to

twenty-five (25) years or longer. Thus, in many, if not most

instances, the plaintiff's cause of action will be time-barred before

he knew or reasonably could have known that such cause of
action existed. This result seems wholly inconsistent with our

system of jurisprudence. In essence, the decision to adopt a

discovery statute of limitations has little practical effect, because

where as here, there is a long latency period of disease, the

plaintiff is denied his day in court. Essentially, with the adoption

of the discovery statute of limitations the plaintiff is given

something with one hand, but it is immediately taken away with

the other by the operation of the statute of repose. The statute
of repose functions to bar the claim even though the plaintiff

neither knew nor reasonably could have known that the claim
existed at the time it became time-barred.

It is possible that the Indiana courts in interpreting the

legislative intent with respect to the statute of repose would find

that the repose period in an asbestos case was "so manifestly

insufficient that it represents a denial of justice," and thus, the

Indiana court might adopt the interpretation advanced by the

plaintiff in this case. However, as a court sitting in diversity

with the guidance of Barnes and Dague, this court cannot pre-

sume to do so.^^^

4. Postscript—On November 7, 1988, the Seventh Circuit Court of
Appeals certified the following question to the Supreme Court of Indiana:

167. Id. at 760 (quoting Barnes, 476 N.E.2d at 86 (citation omitted)).



290 INDIANA LAW REVIEW [Vol. 22:263

'*Whether a plaintiff may bring suit within two years after discovering
a disease and its cause, notwithstanding that the discovery was made
more than ten years after the last exposure to the product that caused

the disease.
"^^^

G. The Federal Statute of Limitations in the Superfund

Amendments of 1986 Does Not Preempt Indiana's Statute of Repose
in an Asbestos Worker's Action Against His Former Employer's

Asbestos Supplier

Section 309(a)(1) of the Superfund Amendments and Reauthorization
Act of 1986'^^ (SARA) amended the Comprehensive Environmental Re-

sponse, Compensation, and Liability Act of 1980^''^ (CERCLA) to add
a federal exception to some state statutes of limitations.

In the case of any action brought under State law for personal

injury, or property damages, which are caused or contributed

to by exposure to any hazardous substance, or pollutant or

contaminant, released into the environment from a facility, if

the applicable limitations period for such action (as specified in

the State statute of limitations or under common law) provides
a commencement date which is earlier than the federally required
commencement date, such period shall commence at the federally
required commencement date in lieu of the date specified in such
State statute. I'^i

The '* federally required commencement date" is '*the date the plaintiff
knew (or reasonably should have known) that the personal injury or

property damages . . . were caused or contributed to by the hazardous

substance or pollutant or contaminant concerned. "^^^

In the district court, the plaintiffs in Covalt and Knox argued that
SARA preempted Indiana's products Uability statute of repose. ^^^ The
Knox court held that SARA did not preempt the statute in a wrongful
death action brought by the wife of a deceased asbestos worker against

asbestos manufacturers. ^'^'^ Because, in the district court, the Covalt court

held that the statute of repose did not preclude plaintiffs' similar action,

168. Covalt V. Carey Canada, Inc., 860 F.2ci 1434, 1441 (7th Cir. 1988).

169. Pub. L. No. 99-499, 100 Stat. 1615 (codified as amended at 42 U.S.C.A. §§
9601-9675 (West Supp. 1988)).

170. Pub. L. No. 96-510, 94 Stat. 2767 (codified as amended at 42 U.S.C.A. §§
9601-9675 (West Supp. 1988)).

171. 42 U.S.C. § 9658(a)(1) (Supp. IV 1986).

172. Id. at § 9658(b)(4)(A).

173. IND. Code § 33-1-1.5-5 (1988).
174. Knox V. AC & S, Inc., 690 F. Supp. 752, 754-58 (S.D. Ind. 1988).



1988] PRODUCTS LIABILITY 291

the court did not reach the preemption issue. '^^ The court did certify

an interlocutory appeal to the Seventh Circuit.

In Covalt V. Carey Canada, Inc.,^'^^ the Seventh Circuit held that

SARA did not preempt the statute of repose in an asbestos worker's
action against the manufacturers that supplied raw asbestos to the plain-

tiff's former employer. '^^ The court reasoned that neither SARA nor
CERCLA appHed to the claim because, **[a]sbestos encountered at work
is not a toxic waste, and the Superfund Act is about inactive hazardous

waste sites. "*^^

The Seventh Circuit relied heavily on legislative reports. ^^^ These

reports indicate that CERCLA focuses on *' abandoned and inactive
hazardous waste disposal sites. "^^^ Other reports indicate that "SARA
. . . does not change the focus or structure of CERCLA. "^^^ The court
therefore concluded:

The Superfund Act regulates waste dumps and other leakages
"into the environment". The interior of a place of employment

is not "the environment" for purposes of CERCLA—at least
to the extent employees are the injured persons—and 309(a)(1)
therefore does not apply to Covalt' s claim. Covalt could not

have taken advantage of 309(a)(1) had he developed asbestosis

while on the job, and there is no reason why the statute should
apply to him because he quit before becoming ill and sued Carey

175. Covalt V. Carey-Canada, Inc., 672 F. Supp. 367, 368 (S.D. Ind. 1987), question

certified to Indiana Supreme Court, 860 F.2d 1434 (7th Cir. 1988).

176. 860 F.2d 1434 (7th Cir. 1988).

177. Id. at 1436.

178. Id. at 1437.

179. Id. at 1437-38. In particular the court relied on a Senate Committee on

Environment and Public Works report: Superfund Section 301(e) Study Group, 97th
Cong., 2d Sess., Injuries and Damages from Hazardous Wastes—Analysis and Im-
provement OF Legal Remedies: A Report to Congress in Compliance with Section
301(e) of the Comprehensive Environmental Response, Compensation, and Llability
Act of 1980 (P.L. 96-510) (Comm. Print 1982) [hereinafter Section 301(e) Study]. Covalt,
860 F.2d at 1438. That report indicates that actions such as the one in Covalt are excluded

from CERCLA:
Instances when hazardous substances may be released in other than waste form
. . . are expressly exempted from the enforcement provisions of the Act. Thus,

the emphasis of this report, similar to the emphasis of CERCLA, is on remedying
the adverse consequences of improper disposal, improper transportation, spills,

and improperly maintained or closed disposal sites.

Section 301(e) Study, supra, at 41, quoted in Covalt, 860 F.2d at 1438.

180. H. Rep. No. 9,601,016, 96th Cong., 2d Sess. 22, reprinted in 1980 U.S. Code
Cong. & Admin. News 6119, 6125, quoted in Covalt, 860 F.2d at 1437.

181. Covalt, 860 F.2d at 1437.



292 INDIANA LAW REVIEW [Vol. 22:263

Canada instead of [his former employer] Proko. The Superfund

Act does not preempt Indiana's statute of repose. ^^^

H. The Statute of Repose Does Not Limit a Manufacturer's
Liability if Some, But Not All, of Plaintiff's Injuries Occurred

Within the Repose Period

In McDowell v. Johns-Manville Sales Corp. ^^^ and a companion case
decided the same day, Groce v. Johns-Manville Sales Corp.,^^"^ the court

held that a plaintiff could recover for harm that occurred outside the
repose period if some of plaintiff's injuries occurred within the repose

period. ^^^

In McDowell and Groce, plaintiffs had worked with asbestos from
1966 to 1975 and from 1959 to 1974 respectively. The defendant had

delivered no asbestos to plaintiff's employer after 1976. In McDowell,

doctors diagnosed plaintiff's asbestos related disease in June of 1980,

and in Groce the diagnosis was made on February 15, 1980. Each
plaintiff filed negligence and strict liability claims within two years after

the diagnosis.'*^

In each case, defendant moved for summary judgment and argued
that "to the extent plaintiff's claims are based upon exposure to asbestos

delivered by [defendant] to plaintiff's employer more than ten years
before this action was commenced, [defendant] is entitled to judgment

on those claims. "^^^ Defendant argued that plaintiffs could only recover

damages for harm that was caused by exposure to asbestos within the
ten-year repose period.

The court denied summary judgment in both cases:

[Defendant's] attempt to divide liability finds no support in the

case law and this argument has been rejected by other courts.

The court finds that [plaintiff's] claim is timely under Ind. Code
33-1-1.5-5 in that [defendant] last delivered asbestos to her em-

ployer in 1976 which falls within the ten-year cutoff date.^^^

182. Id. at 1439.

183. 662 F. Supp. 934 (S.D. Ind. 1987).

184. 662 F. Supp. 936 (S.D. Ind. 1987).

185. McDowell, 662 F. Supp. at 936; Groce, 662 F. Supp. at 938.

186. McDowell, 662 F. Supp. at 935; Groce, 662 F. Supp. at 937.

187. McDowell, 662 F. Supp. at 936; see also Groce, 662 F. Supp. at 937.

188. McDowell, 662 F. Supp. at 936 (citations omitted); see also Groce, 662 F.

Supp. at 938. The court relied on two unpublished opinions: Troxell v. Johns-Manville

Sales Corp., No. 81-C-307 (S.D. Ind. Oct. 7, 1986) and Thurston v. Johns-Manville Sales

Corp., No. 81-C-243 (S.D. Ind. Sept. 5, 1986).



1988] PRODUCTS LIABILITY 293

Consequently, if the allegedly defective product is one that causes **a

disease which may have been contracted as a result of protracted exposure
to a foreign substance, "^^^ and if plaintiff was exposed to the product

within the repose period, then plaintiff may recover damages for the
harm caused by exposure to the product even if some of the exposure

and some of the harm occurred outside the repose period. '^^

/. The Government Contractor Defense

In Boyle v. United Technologies Corp.,^^^ the United States Supreme

Court held that federal law pre-empts state tort actions against federal

military contractors in some instances and held:

Liability for design defects in military equipment cannot be

imposed, pursuant to state law, when (1) the United States
approved reasonably precise specifications; (2) the equipment

conformed to those specifications; and (3) the supplier warned

the United States about the dangers in the use of the equipment

that were known to the supplier but not to the United States. ^^^

In Boyle, a Marine helicopter pilot was killed when his helicopter
crashed into the waters off the coast of Virginia. He survived the crash
but drowned because he was unable to escape from the helicopter. The

pilot's father brought a diversity action against the hehcopter manu-

facturer. He alleged that the defendant improperly repaired the heli-
copter's automatic flight control system and that the defendant had

designed the escape hatch defectively. For example, plaintiff alleged that

the escape hatch was designed improperly to open out of, instead of

into, the helicopter. Consequently, the water pressure on the submerged

helicopter prevented the hatch from opening. ^^^

The Fourth Circuit Court of Appeals reversed a jury verdict in favor

of the plaintiff and held, among other things, that liability for the
allegedly defective design of the escape hatch was barred as a matter

189. McDowell, 662 F. Supp. at 935; see also Groce, 662 F. Supp. at 937.

190. The statute of repose does not deal with this issue; it merely limits the time

in which a plaintiff must commence an action. Ind. Code § 33-1-1.5-5 (1988). If McDowell
and Groce are read together with Covalt v. Carey-Canada, Inc., 672 F. Supp. 367 (S.D.

Ind. 1987), then a plaintiff may commence an action against, for example, an asbestos
manufacturer more than 12 years after he was last exposed to the asbestos and also

recover damages for exposure to the asbestos that occurs several years before that. If so,

the statute of repose does not provide the safe harbor that it appeared to provide for

manufacturers of products that cause latent disease after prolonged exposure.

191. 108 S. Ct. 2510 (1988).

192. Id. at 2518.

193. Id. at 2513.



294 INDIANA LAW REVIEW [Vol. 22:263

of federal law because the defendant was a military contractor. ^^'^ The

Supreme Court granted certiorari. ^^^

1. The Pre-Emption Issue.—The Court determined that Boyle pre-
sented facts that affected uniquely federal interests and that the conflict

between the federal interests and state law was substantial enough to

declare that federal law pre-empted state law even though there was no

legislation granting immunity to government contractors. ^^^

In most fields of activity, to be sure, this Court has refused to

find federal pre-emption of state law in the absence of either

a clear statutory prescription or a direct conflict between federal

and state law. But we have held that a few areas, involving
"uniquely federal interests" are so committed by the Constitution

and laws of the United States to federal control that state law

is pre-empted and replaced, where necessary, by federal law of

a content prescribed (absent explicit statutory directive) by the

courts—so-called '^federal common law.''
The dispute in the present case borders upon two areas that

we have found to involve such "uniquely federal interests. "'^^

Those areas are (a) federal obligations and rights under contracts and

(b) the civil liabihty of federal officials for acts committed in the course

of their duties. '^^ The Court found that the first area was significant

even though "[t]he present case does not involve an obhgation to the

United States under its contract, but rather liability to third persons, "'^^

and found that even though "[t]hat liability may be styled one in tort,
... it arises out of performance of the contract. "^^ The Court found
that the second area was significant even though "[t]he present case

involves an independent contractor performing its obligation under a

procurement contract, rather than an official performing his duty as a

federal employee. "^^^

We think the reasons for considering these closely related
areas to be of "uniquely federal" interest apply as well to the

civil liabilities arising out of the performance of federal pro-

curement contracts. ...

194. Boyle v. United Technologies Corp., 792 F.2d 413, 414-15 (4th Cir. 1986),

vacated, 108 S. Ct. 2510 (1988).

195. 479 U.S. 1029 (1986).

196. 108 S. Ct. at 2513-16.

197. Id. at 2513-14 (citations omitted).

198. Id. at 2514.

199. Id.

200. Id.

201. Id.



1988] PRODUCTS LIABILITY 295

Moreover, it is plain that the Federal Government's interest

in the procurement of equipment is implicated by suits such as

the present one—even though the dispute is between private
parties. . . . The imposition of liability on Government con-

tractors will directly affect the terms of Government contracts:

either the contractor will decline to manufacture the design

specified by the Government, or it will raise its price. Either

way, the interests of the United States will be directly affected.^^^

The Court also determined that the conflict between the federal

interests and state law was significant enough to require pre-emption of

state law.

Here the state-imposed duty of care that is the asserted basis

of the contractor's Hability (specifically, the duty to equip hel-

icopters with the sort of escape-hatch mechanism petitioner claims

was necessary) is precisely contrary to the duty imposed by the

Government contract (the duty to manufacture and deliver hel-

icopters with the sort of escape-hatch mechanism shown by the

specifications).^^^

2. The Boyle Federal Common Law Rule.—Having decided that
federal law pre-empted state law, the Court then had to determine the

applicable federal law.

The Fourth Circuit had reasoned by analogy from the rule of Feres

V. United States,^^ which held that the Federal Tort Claims Act does

not cover injuries that members of the military receive in the course of

military service. In a companion case to Boyle, the Fourth Circuit stated

that if military contractors are liable, they will pass the cost of this

liability on to the government and '*[s]uch pass-through costs would,

of course, defeat the purpose of the immunity for military accidents

conferred upon the government itself. "^°^ The Supreme Court rejected
this rationale because **the Feres doctrine, in its application to the present

problem, logically produces results that are in some respects too broad

and in some respects too narrow. "^^ The rule is too broad because it
would grant immunity to a government contractor even if the product

that caused the injury was purchased from stock and had a particular

design feature in which the government had no significant interest. ^*^''

202. Id. at 2514-15 (citations omitted).

203. Id. at 2516.

204. 340 U.S. 135, 146 (1950).

205. Tozer v. LTV Corp., 792 F.2d 403, 408 (4th Cir. 1986), cert, denied, 108
S.Ct. 2897 (1988).

206. 108 S. Ct. at 2517.

207. Id.



296 INDIANA LAW REVIEW [Vol. 22:263

The rule is too narrow because Feres applies only to injuries to persons

in the mihtary and "it could not be invoked to prevent, for example,

a civilian's suit against the manufacturer of fighter planes, based on a

state tort theory, claiming harm from what is alleged to be needlessly
high levels of noise produced by the jet engines. "^^^

Instead of relying on Feres^ the Court reasoned by analogy from

the provision in the Federal Tort Claims Act that precludes suits against

the government
*

'based upon the exercise or performance or the failure

to exercise or perform a discretionary function or duty.^^

We think that the selection of the appropriate design for
military equipment to be used by our Armed Forces is assuredly
a discretionary function within the meaning of this provision.

It often involves not merely engineering analysis but judgment

as to the balancing of many technical, military, and even social
considerations, including specifically the trade-off between greater

safety and greater combat effectiveness. And we are further of
the view that permitting **second-guessing" of these judgments

through state tort suits against contractors would produce the

same effect sought to be avoided by the FTCA exemption. The
financial burden of judgments against the contractors would

ultimately be passed through, substantially if not totally, to the

United States itself, since defense contractors will predictably

raise their prices to cover, or to insure against, contingent liability

for the Government-ordered designs. To put the point differently:
It makes little sense to insulate the Government against financial

liability for the judgment that a particular feature of military

equipment is necessary when the Government produces the equip-
ment itself, but not when it contracts for the production. In
sum, we are of the view that state law which holds Government
contractors liable for design defects in military equipment does

in some circumstances present a "significant conflict" with fed-

eral policy and must be displaced.

Liability for design defects in mihtary equipment cannot be

imposed, pursuant to state law, when (1) the United States
approved reasonably precise specifications; (2) the equipment

conformed to those specifications; and (3) the supplier warned

the United States about the dangers in the use of the equipment

that were known to the suppHer but not to the United States.
The first two of these conditions assure that the suit is within

the area where the policy of the "discretionary function" would

208. Id.

209. Id. (quoting 28 U.S.C. § 2680(a) (1982)).



1988] PRODUCTS LIABILITY 297

be frustrated

—

i.e., they assure that the design feature in question

was considered by a Government officer, and not merely by the

contractor itself. The third condition is necessary because, in its

absence, the displacement of state tort law would create some

incentive for the manufacturer to withhold knowledge of risks,

since conveying that knowledge might disrupt the contract but

withholding it would produce no liability. ^^^

3. Effect on Indiana Products Liability Law.—If Boyle applies only
to military equipment, then it will have only a limited direct effect on

Indiana's products liability law. On the other hand, if, as the dissent
fears,^^* the contractor's defense applies to products other than military

equipment, then it will have more far-reaching effects. The government

may specify and purchase virtually any product, and the discretionary
function rationale applies as well to escape exits in government buildings

as it does to escape hatches in government helicopters. In Boyle, the

Court assumed an activist's role and approved the contractor's defense

even though Congress has been silent on the issue^'^ and even though

the issues in Boyle merely bordered upon uniquely federal interests. ^^^

Consequently, firms that supply non-military equipment to the govern-

ment have reason to expect that the Court will extend Boyle to their

products. In addition, Boyle's rationale may apply by analogy to Indiana's
discretionary functions provision. ^'"^ If so, Boyle's scope may indeed be
"breathtakingly sweeping. "^^^

III. Conclusion

Both the statute of repose provision^^^ and the "open and obvious

danger" rule^^^ continued to produce significant litigation as parties

explored subtle distinctions or asked the courts to consider new and
difficult situations. Although Greeson^^^ will certainly change the outcome

210. Id. at 2517-18 (citations and footnotes omitted).

211. Id. at 2520 (Brennan, J., dissenting) ('*the Court's newly discovered Government

contractor defense . . . applies not only to military equipment . . . but (so far as I can

tell) to any made-to-order gadget that the Federal Government might purchase after

previewing plans—from NASA's Challenger space shuttle to the Postal Service's old mail
cars").

212. The dissent wrote that Congress had been "conspicuously" silent, "having

resisted a sustained campaign by Government contractors to legislate for them some

defense." Id. at 2519-20 (Brennan, J., dissenting).

213. 108 S. Ct. at 2514.

214. IND. Code § 34-4-16.5-3(6) (1988).
215. See Boyle, 108 S. Ct. at 2520 (Brennan, J., dissenting).

216. See supra text accompanying notes 137-90.

217. See supra text accompanying notes 53-63, 90-110.

218. See supra text accompanying notes 6-36.



298 INDIANA LAW REVIEW [Vol. 22:263

of some products liability actions and Boyle^^^ will certainly effect at

least a limited class of cases, the impact of the other cases discussed

in this Article is not certain. Many of the cases raised as many questions
as they answered, such as, whether the statute of repose is a "discovery"

statute^^ and whether the
*

'government contractor's defense" will apply

to non-military contractors or to state government contracts.^^^ Federal

courts continued to influence Indiana's products liability law because

litigants continued to ask them to decide important questions about

Indiana law. As Boyle shows, federal courts can influence Indiana's
products liability law in other ways as well.

219. See supra text accompanying notes 191-215.

220. See supra text accompanying notes 137-68.

221. See supra text accompanying notes 204-10.