Ford Motor Co. v. Trejo

402 P.3d 649

FORD MOTOR COMPANY, Appellant,

v.Teresa Garcia TREJO, as the Successor-in-Interest and Surviving Spouse of Rafael Trejo, Deceased, Respondent.

No. 67843.

Supreme Court of Nevada.

FILED SEPTEMBER 27, 2017

Snell & Wilmer, L.L.P., and Jay J. Schuttert, Vaughn A. Crawford, and Morgan T. Petrelli, Las Vegas; Horvitz & Levy, LLP, and Emily V. Cuatto and Lisa Perrochet, Encino, California; Thompson Coe Cousins & Irons, L.L.P., and Michael W. Eady, Austin, Texas, for Appellant.

David N. Frederick, Las Vegas; Naylor & Braster and A. William Maupin, John M. Naylor, and Jennifer L. Braster, Las Vegas; Nettles Law Firm and Brian D. Nettles and William R. Killip, Jr., Henderson; Garcia Ochoa Mask and Ricardo A. Garcia and Jody R. Mask, McAllen, Texas; Lawrence Law Firm and Larry Wayne Lawrence, Austin, Texas, for Respondent.

Bailey Kennedy and Dennis L. Kennedy and Sarah E. Harmon, Las Vegas; Shook Hardy & Bacon, L.L.P., and Victor E. Schwartz, Washington, D.C., for Amici Curiae National Association of Manufacturers and the Alliance of Automobile Manufacturers.

Matthew L. Sharp, Ltd., and Matthew L. Sharp, Reno; Eglet & Prince and Robert T. Eglet and Erica D. Entsminger, Las Vegas, for Amicus Curiae Nevada Justice Association.

BEFORE THE COURT EN BANC.¹

OPINION

By the Court, STIGLICH, J.:

In Nevada, claims of design defect are historically governed by the consumer-expectation test. Under this test, a product is defectively designed if it "fail[s] to perform in the manner reasonably to be expected in light of its nature and intended function and [is] more dangerous than would be contemplated by the ordinary user having the ordinary knowledge available in the community." Ginnis v. Mapes Hotel Corp. , 86 Nev. 408, 413, 470 P.2d 135, 138 (1970).

In this case, the court is asked to consider adopting the risk-utility analysis for determining whether a defendant is liable for a design defect under a strict product liability theory, as set forth in the Restatement (Third) of Torts: Products Liability (Third Restatement). Risk-utility analysis differs from the consumer-expectation test in that it analyzes the reasonableness of a manufacturer's actions, rather than the product itself, in determining whether a product is unreasonably dangerous. The risk-utility test also requires plaintiffs to present affirmative proof of a reasonable alternative design.

As discussed below, the risk-utility analysis represents a substantial departure from the underlying tenets of our strict products liability jurisprudence, which does not rest on traditional concepts of fault. Further, this court strongly disagrees with the notion that a plaintiff in a strict product liability design defect action must present proof of an alternative design. Such a requirement unfairly raises a plaintiffs burden of proof, and in some cases, poses an insurmountable barrier to bringing a claim. Therefore, this court declines to adopt the risk-utility test for strict product liability design defect claims. Claims of design defect grounded on strict product liability in Nevada will continue to be governed by the consumer-expectation test.

BACKGROUND

The Ford Excursion

In 1999, appellant Ford Motor Company introduced the Ford Excursion, the largest and heaviest SUV ever produced and sold in North America. Ford based its design of the Excursion on Ford's line of Super Duty pickup trucks, such as the F250, F350, and F450.

At trial, Ford conceded that it did not perform any physical roof-crush tests on the Excursion. In 2002, Ford ran computer-simulated testing on the Excursion, using modeling that had been developed during the development of the Super Duty pickup trucks. Ford's internal guidelines required that a vehicle weighing less than 8,500 pounds have a roof strength-to-weight ratio of 1.725 pounds. The strength-to-weight ratio of the Excursion was only 1.25. If the windows were not available to act as added support (e.g., if the windows broke), the strength-to-weight ratio dropped to 0.79.

Though the Excursion's actual weight was 7,730 pounds, its gross vehicle weight rating was 8,600 pounds. Ford did not have internal guidelines for strength-to-weight ratios for vehicles weighing over 8,500 pounds. Therefore, Ford did not issue any recalls on the Excursion, or otherwise advise dealerships or the public that early versions of the Excursion did not meet Ford's internal guidelines for roof strength.

The Trejos' accident

On December 16, 2009, respondent Teresa Trejo, a resident of Las Vegas, was driving a 2000 Ford Excursion, with a trailer attached, through New Mexico. Her husband Rafael Trejo was seated in the passenger seat. While driving on the highway, Trejo attempted to change lanes to make room for merging traffic. The trailer attached to the Excursion started to fishtail. Trejo swerved, and though the Excursion slowed, it began to roll, somewhere between 1.5 and 2.5 times.

After the rollover sequence, the Excursion came to rest upside down. Trejo managed to remove her seatbelt and exit the Excursion through the driver's side window. She went to the passenger side of the vehicle, but the roof was so crushed that Trejo was unable to see Rafael. She returned to look through the driver's side window. Trejo saw Rafael, who could not move but was looking back at her. Trejo later testified that Rafael's eyes were moving at this time. A couple driving by assisted Trejo in removing Rafael from the vehicle. Emergency services arrived shortly thereafter and confirmed that Rafael had died.

Trejo's suit against Ford

Trejo subsequently filed a complaint against Ford, alleging a design defect in the roof of the Excursion and seeking damages based on twin theories of strict products liability and common law negligence. The case proceeded to trial solely on the strict products liability theory. During trial, Trejo presented expert testimony to support her theory of "hyperflexion"—that the roof of the Excursion crushed, breaking and pinning Rafael's neck, and causing him to suffocate. Trejo also presented evidence that Ford could have reinforced the roof of the Excursion for an additional $70 in production costs, adding an additional 70 pounds of weight to the Excursion.

Ford presented evidence supporting its theory of "torso augmentation"—that Rafael died during the first rollover, because the moment the Excursion turned upside down, the weight of Rafael's body "diving" into the roof caused his neck to break, killing him instantly. Ford also disputed the feasibility of Trejo's proposed reinforcement to the roof design of the Excursion.

While settling jury instructions, Ford requested the district court to give design defect instructions based on the "risk-utility" test set forth in the Third Restatement.² To this end, Ford requested Instruction nos. 21, 22, and 23. The parties also provided the district court with agreed upon alternatives to these instructions, nos. 21A, 22A, and 23A, in the event the court declined to adopt the Third Restatement. Noting that Nevada has not adopted the Third Restatement approach to claims of design defect, the district court declined to give Ford's requested instructions. The district court instead gave the parties their agreed-upon alternatives which were stock instructions and reflected the current state of the law.

Ultimately, the jury returned a special verdict in favor of Trejo, answering in the affirmative the following two questions: (1) whether the 2000 Ford Excursion's roof was defective in design, and, if so, (2) whether the 2000 Ford Excursion's roof design defect was a proximate cause of Rafael Trejo's death. The district court entered judgment on the jury's $4.5 million damages award and granted in part and denied in part Ford's subsequent motion to retax costs. Ford filed a motion for judgment as a matter of law or for a new trial, which the district court denied. Ford now appeals.

DISCUSSION

To determine whether a product is defective in its design under strict tort liability, Nevada has long used the consumer-expectation test. Ginnis, 86 Nev. at 413, 470 P.2d at 138. Under the consumer expectation test, a plaintiff must demonstrate that a product "failed to perform in the manner reasonably to be expected in light of its nature and intended function and was more dangerous than would be contemplated by the ordinary user having the ordinary knowledge available in the community." Id.

In 1998, the drafters of the Third Restatement proposed the risk-utility test for strict product liability design defect claims. Under this test, a product "is defective in design when the foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative design ... and the omission of the alternative design renders the product not reasonably safe." Restatement (Third) of Torts: Prods. Liab. § 2(b) (Am. Law Inst. 1998). Thus, under the risk-utility test, in addition to proving elements of negligence, plaintiffs also bear the new burden of proving a "reasonable alternative design." Id.

On appeal, Ford urges this court to adopt the risk-utility test for claims of strict product liability design defect and argues that the district court erred in failing to instruct the jury regarding risk-utility analysis. Regardless of the analysis used, Ford argues that Trejo failed to prove that Rafael's death was proximately caused by a defect in the Excursion's roof design. For the reasons stated below, this court declines to adopt the risk-utility test. The risk-utility test, especially its requirement of proof of a reasonable alternative design, would prove fundamentally unfair to Nevada plaintiffs. Instead of being allowed to bolster their case with evidence of an alternative design after the discovery process, a plaintiff would face the barrier of establishing a reasonable alternative design from the outset, even in those cases where no reasonable design may exist, or where the defendant is in complete control of the...