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Montana bill would change rules for lawsuits over defective products

Montana State Capitol
Posted at 4:54 PM, Mar 24, 2023

HELENA — A bill under consideration at the Montana Legislature would make big changes in how people can sue for damages when they believe a product was defective.

Senate Bill 216, sponsored by Sen. Steve Fitzpatrick, R-Great Falls, passed through the Senate last month and had its first committee hearing in the House on Friday. Supporters and opponents painted very different pictures of what effects it would have on people seeking to sue.

“I think it’s ultimately about restoring a little bit more fairness and balance into the process,” said Fitzpatrick.

“We would be an outlier here if Senate Bill 216 was passed,” said Al Smith, executive director of the Montana Trial Lawyers Association.

Fitzpatrick, the Senate majority leader and an attorney, told MTN he saw SB 216 as a set of common-sense changes to the state’s product liability laws. The bill drew support Friday from business representatives, including the Montana Chamber of Commerce and Montana Manufacturing Association, who said it would create a more business-friendly climate in the state.

SB 216 would add several defenses that manufacturers could claim if they’re sued for damages, like that a federal or state government agency approved the product before it went on sale, or that the user hadn’t followed a safety warning attached to the product.

The bill also would generally bar claims that a product is defective if it was first sold at least ten years ago.

“I think the idea is that after ten years – there's been conditions, there's been changes – that it's unreasonable to assume that the product is going to work as well as it did on the day you bought it,” Fitzpatrick said.

Exceptions would include when the seller knew about and concealed a safety issue or negligence, and if a product’s warranty or advertisements claim a longer usable life than 10 years.

SB 216 would also prevent a lawsuit against a retailer who simply sold a defective product and didn’t have any other role in its manufacture. Fitzpatrick said Montana retailers pulled into these cases still have to face lengthy proceedings, expenses and insurance claims, even if they’re found to have done nothing wrong.

“It just drives up costs for small businesses, and it really is unfair when you think about it,” he said.

Opponents to SB 216 included trial lawyers, union representatives and people who’ve sued under the current law.

Todd Copenhaver said during Friday’s hearing that he was burned while handling a propane cylinder, and he filed suit claiming the cylinder had a faulty valve. He said the company took responsibility, and he credited Montana’s liability law.

“It just doesn’t make sense to change it to save a corporation,” he said. “It makes sense to keep it to save the consumer, the people that use it.”

Smith said the changes in SB 216 would make it much harder for people to hold out-of-state companies responsible.

“I think that we want to have a court system that's open to all people for all injuries,” he said. “Otherwise, what's the point of having the courts if the people can’t access?”

Smith said retailers are sometimes added to cases, but they’re not typically the ones who pay significant damages. One reason they could be included is that attorneys have trouble identifying the manufacturer of a product.

“If you go into a hardware store and pick up a tool, you may have four or five different LLCs behind that before you find the manufacturer,” he said. “You bring in the retailer; they're the ones that help set up that chain.”

Fitzpatrick argued retailers are brought into these cases because it makes it easier to bring a case in state court instead of federal court, and many attorneys feel that is a more favorable venue for liability cases.

“I think if you are legitimately injured by a defective product, you are still going to be able to prosecute a claim,” he said.

SB 216 passed the Senate 33-17 with all but one Republican in favor and all Democrats opposed. The House Judiciary Committee took no immediate action on the bill after Friday’s hearing.