Reverberations from the Collision of Tort and Warranty (Products Liability Law Symposium in Memory of Professor Gary T. Schwartz)

In his famous Stanford Law Review article, When Worlds Collide,\u27 Professor Marc Franklin foretold the troubles for American law in the impending collision of the tort of strict liability with the warranty of merchantability.2 We daily suffer the reverberations from that collision as courts struggle with the proper application of strict tort liability and breach of warranty in products liability cases. Lawyers who have not studied Article 2 of the Uniform Commercial Code (U.C.C.) are surprised to learn that virtually every buyer who has a strict tort claim for an injury caused by a defective product also has a potential claim in warranty for the same injury.3 Of course, the converse is not true; many unmerchantable products are not unreasonably dangerous, 4 cannot fulfill strict tort\u27s physical harm requirement,5 and therefore cannot be the source of a strict tort claim. These products might cause loss of revenue or commercial disappointment but do not threaten life, limb or property. Thus, the courts must not only untangle tort from warranty where each is available, but also draw the line that marks warranty\u27s exclusive domain. This line is sometimes called the economic loss doctrine; loss that is solely economic may be recovered in warranty but not in tort.6 In Part II of this Essay, I discuss the early development of strict tort, the framers of which could not have foreseen the later erosion of warranty defenses. In Part III, I discuss the reverberations of the collision of strict tort and warranty, as evidenced by cases in which courts have struggled with the proper application of those theories in the products liability context. In Part IV, I discuss several cases that reach conflicting conclusions about the availability of damages in tort or warranty where there has been no overt failure of the plaintiff\u27s product. As I suggest below, this is a significant reverberation from the collision of tort and warranty, for the courts have sometimes confused tort and warranty, sometimes confused liability with remedy, and frequently failed to identify the theory that they were considering. In Part V, I conclude by noting that if, as appears, some damages are often available in warranty in these cases, but not in tort, then the cases raise questions as to which outcome is better and about the res judicata effect of a modest warranty recovery on a later and larger potential tort recovery. I start by defending this endeavor. Why would anyone, who did not have to do so, write about the collision of tort and warranty? Lawyers and judges must deal with this mess in our law, but any right thinking law professor could content himself with criticizing the current regime and explaining why it should be radically modified. If there were even the smallest prospect of that modification, such criticism and explanation would be justified. But there is no prospect for real reform. Having been through a fourteen-year attempt to revise the parts of Article 2 that are much farther from the heat than the warranty of merchantability, I am certain that the National Conference of Commissioners on Uniform State Laws (NCCUSL) could not propose, nor the states adopt, a uniform law on products liability that would take the place of warranty and tort. The plaintiffs\u27 lawyers would be bitter and effective opponents of such a change, and the defense bar would pay no more than lip service. Indeed, the difficult birth of the Restatement (Third) of Torts: Products Liability (Products Liability Restatement) in the American Law Institute (ALI),7 where any proposal needs only the vote of the membership and not the vote of any state legislature, indicates that a more radical reform would not pass the state legislatures without great difficulty. That being so, I content myself with repair of a small part of the collision\u27s damage