Are retailers liable when they sell defective products? NJ court says yes

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A federal court in New Jersey has ruled that retailers can be found strictly liable when they sell defective products. The decision comes after a court case involving a car battery that exploded in a consumer's hands.

U.S. District Court Judge Peter G. Sheridan found for the plaintiff in his Nov. 2 decision. In the case (DeGennaro v. Rally Manufacturing, 09-cv-443), the plaintiff claimed injury after a lead-acid battery he had just purchased at an Ocean Township Pep Boys exploded in his hand and against his body. He sued both the manufacturer and the retailer.

Based upon the evidence, the judge ruled that Pep Boys' management "knew or should have known" that the battery had the propensity to explode because of the heat-sealed packaging. Pep Boys was, therefore, not allowed to take advantage of certain safe-harbor provisions that can protect sellers from product liability.

"The plaintiff's bar successfully argued that the use of heat-sealed packaging was inappropriate because it failed to properly ventilate the batteries," said Thomas C. Regan, of the law firm LeClair Ryan (which was not involved in the case). "Pep Boys filed a motion for summary judgment on the product liability claims, seeking to take advantage of the safe-harbor provisions of the New Jersey Products Liability Act, but the court wouldn't hear of it."

He’s warning retailers that the ruling could affect them.

"It puts the onus on retailers to be thoroughly familiar with the products they sell and the packaging in which those products are delivered,” said. “Further, it is likely this opinion will be cited in other product liability actions, including failure-to-warn cases in which plaintiffs sue retailers because they were not told about product defects. It is imperative that retailers deal with these issues proactively in order to protect their consumers and themselves from liability."

Safe harbor provisions only protect product sellers under certain circumstances. "They have to be able to identify a manufacturer against whom relief may be obtained, and they cannot have created the defect in the product in the first place," Regan said. "If they knew or should have known of the product defect, they cannot seek safe harbor. Likewise, they cannot have controlled the product's design, manufacture, packaging or labeling."

Regan advises retailers to redouble their efforts to become aware of any defects associated with the products they sell and, of course, to consult a lawyer if defects are discovered.

In the DeGennaro case, there was some evidence that Pep Boys was aware of the possibility that the lead-acid batteries in question could explode, and yet continued to sell them.

"The message for retailers is clear — you are responsible for the products leaving your store, and it is therefore your legal responsibility to make sure they are safe," Regan said.

Posted by Holly Wagner

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