Utah Says Good-Bye to the Passive Retailer Doctrine in Products Liability
For years, practitioners, insurers, retailers and judges have operated under principle that if the manufacturer of a defective product is known, those retailers who sold the product have no liability. This practice dates back, at least, to Sanns v. Butterfield Ford, 2004 UT App 203, 94 P.3d 301 (2004). That all changed on December 1, 2017 when the Utah Supreme Court overruled Sanns and implemented a new application of Utah's strict product liability law and the Liability Reform Act. See Bylsma v. R.C.Willey, 416 P.3d 595 (Utah 2017)
Justice Durrant's majority opinion radically changed the landscape in product liability litigation. He stated:
"We begin by reversing the district court’s dismissal of the Bylsmas’ strict products liability and breach of warranty claims. We do so based on our rejection of the court of appeals’ conclusion in Sanns v. Butterfield Ford and its progeny that “passive retailers” are immunized from liability under the LRA in cases where the manufacturer is named in the suit. We correct the Sanns court’s misreading of the LRA by noting that, because the statute preserves our strict products liability doctrine, retailers like R.C. Willey—along with all others in a product’s chain of distribution—are strictly liable for breaching their duty not to sell a dangerously defective product."
In a few paragraphs, the Utah Supreme Court upended the manner in which practitioners pursue and defend product liability cases in Utah. Prior to this ruling, the only issue was whether the manufacturer was properly identified and named in the lawsuit. If it was, those passive retailers were routinely dismissed on summary judgment.
Now, however, product liability attorneys will be forced to create and implement other strategies when defending "passive retailer" clients. Whether it be spin off litigation for indemnity, third party practice, or other methods one thing is certain -- product liability law in Utah just took a sharp turn in the opposite direction.
Good-bye to the "passive retailer" doctrine in Utah.
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