Defective products from China point to need for change in Georgia law
A rash of recent news stories about dangerously defective products from China points to the need to amend a tort reform law that was passed in Georgia twenty years ago. In 1987, long before so much manufacturing was outsourced to China, the Georgia General Assembly passed OCGA 51-1-11.1, which provides:
(a) As used in this Code section, the term "product seller" means a person who, in the course of a business conducted for the purpose leases or sells and distributes; installs; prepares; blends; packages; labels; markets; or assembles pursuant to a manufacturer’s plan, intention, design, specifications, or formulation; or repairs; maintains; or otherwise is involved in placing a product in the stream of commerce. This definition does not include a manufacturer which, because of certain activities, may additionally be included within all or a portion of the definition of a product seller.
(b) For purposes of a product liability action based in whole or in part on the doctrine of strict liability in tort, a product seller is not a manufacturer as provided in Code Section 51-1-11 and is not liable as such.
(c) Nothing contained in this Code section shall be construed to grant a cause of action in strict liability in tort or any other legal theory or to affect the right of any person to seek and obtain indemnity or contribution.
The legislators back in 1987 were probably thinking about protecting "mom and pop" retailers from liability due to defects in products as to which they had no influence or control. It is extremely unlikely that they had in mind a gargantuan retail chain with the power to dictate product specifications and outsource the bulk of American manufacturing to China.
Before passage of this statute, Georgia law recognized the doctrine of "ostensible manufacturer" whereby a company that puts its label on a product manufactured by another company was held responsible for the product as if it were the actual manufacturer. Courts later determined that this statute abolished the "ostensible manufacturer" doctrine in Georgia.
The situation now is that a huge percentage of manufacturing has been outsourced to China. While it is theoretically possible to sue a Chinese manufacturer, as a practical matter it enormously difficult, expensive and unrewarding to seek to hold a Chinese manufacturer fully accountable. With no feasible opportunity to seek compensation from the "ostensible manufacturer" that puts its label on a product imported from China, or to sue a "product seller" such as Wal-Mart that dictates specifications and imports vast quantities of cheap products from China, Georgians have no practical recourse for injury or death caused by defective Chinese products.
At minimum, OCGA 51-1-11.1 should be amended to provide an exception where the product seller puts its own label on a product manufactured by another company, or sells imports that were manufactured upon its order. If there are unreasonable risks associated with products manufactured in China, all that risk should not fall upon the American consumer. I haven’t worked out the wording of such an amendment, and of course the devil is in the details.
The Shigley Law Firm represents plaintiffs in wrongful death and catastrophic injury cases statewide in Georgia, and in other states subject to the multijurisdictional practice and pro hac vice rules in each state. Ken Shigley was designated as a "SuperLawyer" in Atlanta Magazine and one of the "Legal Elite" in Georgia Trend Magazine. He is a Certified Civil Trial Advocate of the National Board of Trial Advocacy, Chair of the Southeastern Motor Carrier Liability Institute and former chair of the Georgia Insurance Law Institute. He particularly focuses on cases arising from truck wrecks and accidents (tractor trailers truck wrecks, semi truck wrecks,18 wheeler truck wrecks, big rig truck wrecks, log truck wrecks, dump truck wrecks.