University of Baltimore Law Forum, Vol. 38, No. 2, pp. 127-150, Spring 2008
25 Pages Posted: 11 Jun 2009
Date Written: Spring 2008
In products liability cases, the injured plaintiff must demonstrate the necessary causal connection between the defective product and the plaintiff's injuries. Nevertheless, in some limited cases, plaintiffs allege an increased risk of harm for the future, rather than any actual present, injury. Often these cases involve asbestos and prescription drugs.
Of particular interest are cases in which the plaintiff claims “purely economic loss.” Pure economic loss damages are “damages for inadequate value, costs of repair and replacement of the defective product, or consequent loss of profits - without any claim of personal injury or damage to other property.” The justification for the economic loss doctrine is that the plaintiff who has received “insufficient product value” should sue in contract, rather than tort. In Lloyd v. General Motors Corp., the Court of Appeals of Maryland rejected the majority rule in American products liability law by holding that unmanifested product defects, defects that have not caused personal injury, can still be actionable. The court reinstated a class action brought by plaintiff buyers against automobile manufacturers who sold cars alleged to contain defective seatbacks. The seatbacks had yet to cause any actual injuries to the plaintiff class members, as the alleged defects had not even manifested themselves. Nevertheless, the Court of Appeals of Maryland reasoned that, since the alleged defects could potentially cause serious injury or death, the cost of repairing the seatbacks was actionable in consumer protection, in contract, and in tort.
In this article, I argue that Lloyd is an unfortunate, unwarranted, and unnecessary extension of tort law. Assuming arguendo that the seatbacks were defective, plaintiffs had adequate remedies in consumer protection and contract. By recognizing a products liability tort remedy in this situation, the Court of Appeals of Maryland is in conflict with Maryland precedent, with the majority of American jurisdictions, and with the underlying goals and rationales of products liability law. As such, Lloyd is a departure in both theory and practice.
Keywords: products liability, Maryland, pure economic loss damages, contract law, tort law, remedies, Lloyd v. General Motors Corporation
JEL Classification: K12, K13,
Suggested Citation: Suggested Citation
Korzec, Rebecca, Lloyd V. General Motors Corporation: An Unfortunate Detour in Maryland Products Liability Law (Spring 2008). University of Baltimore Law Forum, Vol. 38, No. 2, pp. 127-150, Spring 2008. Available at SSRN: https://ssrn.com/abstract=1416822