Complex Litigation

Court Rules on Optional Safety Devices

By Michael Hoenig - New York Law Journal - June 7, 2019

About a month ago, New York’s highest court issued a decision in Fasolas v. Bobcat of N.Y., 2019 N.Y. LEXIS 1357 (N.Y. Ct. App. May 9, 2019), an important products liability ruling regarding products made, sold or rented with certain safety equipment provided as “optional” items. In other words, the purchaser gets to decide whether the optional safety feature should be included when the product is purchased and used.

Practical realities dictate that. Some multiple-use products simply cannot have every possible design option rigidly provided as standard equipment. A feature helpful for one product use may be a hindrance, danger or disadvantage when another form of use is contemplated. So the particular utility of a multi-use product then becomes the decision of the savvy purchaser. Cost considerations are a factor too. Thus, choosing only safety option A, which the purchaser actually needs or wants, likely will be less expensive than having to purchase a product that has, not only option A, but also options B and C included as standard, which the buyer does not need.

In the new Fasolas decision, for example, the product was a Bobcat “skid-steer” loader with a bucket attachment—a “ride-on” machine that can be used for multiple light construction functions. It consists of a motorized base with wheels and hydraulic arms that can be raised and lowered. The machine can be used for different functions when connected to different attachments. It has an open front operator cab and includes rollover protection and fall protection systems as standard features. The cab is open for easy use, convenient entry and exit and to promote operator visibility. The loader can accommodate up to 150 different attachments, which are purchased separately or in kits.

Fasolas was killed while operating the Bobcat. A small tree entered the open cab, crushing him. One of the options available was a so-called “special applications kit” as a standard feature. The kit consists of a top, rear windows and front door made of a half-inch-thick plexiglass called “Lexan” (the door kit) and can be attached to the loader to enclose the cab and thereby restrict airborne material from entering that area.

Decedent’s wife sued the loader’s manufacturer, Bobcat Co., a distributor, and Taylor, a retail rental center from which Fasolas rented the machine. Plaintiff alleged that the loader was defectively designed because it did not incorporate the optional door kit as standard equipment. Plaintiff also claimed a failure to warn theory. Her expert testified that a loader with bucket attachment destined for the rental market without the “door kit” as standard equipment was defectively designed. The Lexan door could have saved Fasolas’ life by deflecting the tree from entering the cab. The expert conceded that a loader without the door kit was not defective for all uses. But he urged that the defect was present when the product was placed in the “rental market” which needed “all of the safety devices available.”

‘Scarangella’ Exception

This “rental market” theory became a pivotal legal issue because the trial court held that the so-called “Scarangella exception” to products liability—dealing with safety features that were optionally available but not purchased—was inapplicable when the product was rented by the product user. Thus, the trial judge modified the normal Pattern Jury Instruction and the jury responded with a $1 million verdict against the three defendants: 25% culpability by the manufacturer; 25% by the distributor; and 50% by Taylor, the retail rental center.

The Appellate Division affirmed, holding that the “Scarangella exception” to liability cannot be invoked where the product was sold to a buyer which, in turn, rented the product to the ultimate consumer. The Court of Appeals granted the Bobcat defendants leave to appeal, and in its decision issued May 9, rejected the “rental market distinction” as a limitation on the court’s earlier holding in the 1999 Scarangella precedent. At this point, we need to divert from the new Fasolas decision and remind ourselves what Scarangella held.

In Scarangella v. Thomas Built Buses, 93 N.Y.2d 655 (1999), a school bus driver was struck by a bus being operated in reverse in the school bus parking lot. The distributor/seller had offered, as an optional safety feature, an alarm that would automatically sound when the bus was shifted into reverse gear. The bus company eschewed the optional equipment because the alarms were noisy and the bus yard was located in a residential neighborhood where noise pollution was an issue.

The Court of Appeals held that a product that fails to incorporate safety equipment is not defective, as a matter of law, where (1) the buyer is “thoroughly knowledgeable regarding the product and its use and is actually aware that the safety feature is available”; (2) there exist “normal circumstances of use in which the product is not unreasonably dangerous without the optional equipment”; and (3) the buyer “is in a position, given the range of uses of the product, to balance the benefits and risks of not having the safety device in the specifically contemplated circumstances of the buyer’s use of the product.” When these three circumstances exist, the buyer, not the manufacturer, is in the “superior position to make the risk-utility assessment.” Thus, a “well-considered decision by the buyer to dispense with the optional safety equipment will excuse the manufacturer from liability.”

The foregoing is the gist of the Scarangella exception to strict products liability. The question of law in Fasolas was whether the exception was categorically unavailable when the ultimate user merely rented the product from the actual buyer (here the retail rental company). The Court of Appeals said, “No.” We conclude, said the Court, that “no such ‘rental market’ exclusion from Scarangella is appropriate, and that jury instructions incorporating the rental market theory espoused by plaintiff’s expert were misleading and incompatible with governing precedent. Accordingly, we reverse the Appellate Division order and remit for a new trial as to the manufacturer’s liability.” Fasolas, LEXIS, at *1.

Purchaser’s Knowledge

The trial court and the Appellate Division “misinterpreted the third Scarangella factor” which requires consideration of the purchaser’s ability, in light of the possible uses of the product, to assess the risks and benefits of purchasing the safety device given the circumstances and the contemplated uses of the product at the time of acquisition. For these purposes, “the contemplated ‘use’ of the product was not ‘rental’ or ‘placement in the rental market’—that is merely the process by which the product came into the hands of the end user.”

The preoccupation with this process “deviates from our analysis in Scarangella by shifting the focus away from the purchaser’s knowledge of the product and ability to make a reasoned judgment concerning the utility of the safety feature and toward the nature of the marketplace through which the product passed.” Fasolas, LEXIS at *14-*15. The nature of the marketplace transaction that placed the product in the end-user’s hands—“whether the product was purchased or rented—is not part of this calculus.” LEXIS at *19.

As a practical matter, the “rental market” theory would be “unworkable with respect to many products, including this one.” The undisputed proof at trial indicated that the loader had 150 attachments that served different purposes and included various safety devices, depending on their function. Under the expert’s theory, “every safety device available for every attachment would need to accompany every loader entering the rental market. This would significantly raise the cost of the product—perhaps making it prohibitively expensive and, thus, essentially inaccessible to the occasional user that had neither the means nor the desire to purchase a loader.” LEXIS at *21.

In Fasolas, the buyer of the loader—Taylor, the retail rental defendant—was thoroughly familiar with the machine, its multiple uses, attachments and optional features. It was aware of the door kit. The rental retailer was in a superior position than Bobcat to balance the benefits and risks of not purchasing the optional safety kit for the product’s contemplated use by customers such as Mr. Fasolas.

The court’s new decision could be viewed as increasing the need for machine and equipment rental companies (the actual “buyers” of the products) to become familiar with all optional features and the conditions of their use as contemplated by the renter/user. They likely need to inform and instruct their customers well regarding the appropriate conduct in operating the equipment. They should have evidence that this tutorial and briefing of the user was amply conducted.

Clearly, litigators need to study Scarangella and Fasolas to master the particulars. Since the rulings offer the potential for dismissal of the claim as a matter of law, much will ride on the facts of a given case and the three elements comprising the Scarangella exception. It’s not necessarily a slam dunk for either side. For an “optional-safety-feature” case that split the Court of Appeals 4-3, see my column, “Optional Safety Equipment and the Savvy Purchaser,” N.Y.L.J., May 11, 2009, p. 3 (analyzing Passante v. Agway Consumer Prods., 12 N.Y.3d 372 (2009).

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