A few quick thoughts about the massive Dell battery recall:

The relatively new Restatement (Third) of Torts: Product Liability proposes some modifications of the common law duty to warn after a sale (as opposed to a duty to warn — i.e., on the packaging — before a sale).

Of course, a manufacturer remains strictly liable for any damages proximately caused by a manufacturing defect before a post-sale warning or recall is announced. Under the Restatement (Third), Section 11, there is still never a “duty to recall,” unless imposed by the government.

Previously, the determination of whether there was a “duty to warn after the sale” was no different than any other test for duty: Did the benefits of a post-sale warning outweigh the costs?

On the benefits side: How many defective products were sold? How many are likely still in use? What is the probability and nature of the danger resulting from the defect?

As for the costs of warning: How geographically diverse are the customers? How easy or difficult would it be to communicate the warning — would a press release be sufficient? Is the product likely to have been resold? And, almost uniquely relevant to Dell, does the manufacturer have a customer database?

I think most would agree that under this old balancing test, it is unsurprising that Dell choose to warn about the defect, and indeed to take the added step of initiating a recall.

Under the new Restatement (Third) test (Section 10), meanwhile, the analysis is a bit more manufacturer-friendly. In order to find a duty to warn after sale, each of four separate conditions must be met:

1. There must be a substantial risk of harm (i.e., even if the cost to warn would be low).
2. There must be easily identifiable users, who are unlikely to be aware of the harm.
3. There must be an easy way to communicate the warning.
4. The risk of harm must significantly outweigh the cost of warning.

So the cost-benefit analysis must not only tilt toward a post-sale warning, but it almost has to be a slam-dunk: very high risk and very low cost.

On the other hand, as customer databases become more common, email marketing lists become ubiquitous and news is spread not just by manufacturers and media but also by cyberspace (such as this post), the cost to warn approaches zero and the duty test essentially reduces to “Is the risk high enough to warrant a post-sale warning?” Which is arguably less manufacturer friendly than the old paradigm. So even though the Restatement nominally reduces liability for manufacturers, in practice it may actually increase it.

The more things change…

Meanwhile, I haven’t found any evidence yet of class actions against Dell being formed or potential plaintiffs being solicited. But it’s probably just a matter of time.

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Speaking of battery litigation, you may also have heard or are part of the other infamous “battery scandal” — the massive iPod battery class action. I am/was a member of the class and blogged about it here.

Filed under: Apple