Reports of the demise of California's deep-pockets law (Proposition 51) in strict product liability cases were apparently premature. While two recent appellate decisions had limited the measure's application in strict liability cases, one was depublished and the First District Court of Appeal has now distinguished the other. Six weeks ago, the First District held that Proposition 51 applies in strict product liability cases where multiple products caused the plaintiff's injuries and the evidence provides a basis to allocate fault among the allegedly defective products. Arena v. Owens Corning, 98 Daily Journal D.A.R. 4965 (May 14, 1998).

At first blush, the goals of Proposition 51 and strict liability appear to be at odds. Proposition 51 provides that "[i]n any action for personal injury or property damage, or wrongful death, based upon principles of comparative fault, the liability of each defendant for non-economic damages shall be several only and shall not be joint." Thus, the measure was enacted to protect defendants from paying more than their fair share of liability; the doctrine of strict liability, on the other hand, was developed to protect plaintiffs by relieving them of the burden of proving fault in certain cases.

These competing philosophies have presented California courts with a dilemma: How can Proposition 51, which expressly applies to cases based on principles of comparative fault, apply to strict liability cases where liability is apportioned without regard to fault?

Although Proposition 51 does not refer to strict liability or define "fault," until last year, appellate courts relied on a well established line of cases (decided before Proposition 51) holding that strict product liability cases were "based upon principles of comparative fault." For example, in Daly v. General Motors Corp., 20 Cal. App.3d 725, 742 (1978), the Court of Appeal allowed apportionment of fault between a strictly liable defendant and a negligent plaintiff. The Court reasoned that the purposes of strict liability would not be thwarted by allocating liability between the defendants, since the plaintiff still did not have to prove that the manufacturer was negligent.

Similarly, in Safeway Stores, Inc. v. Nest-Kart, 21 Cal.3d 322 (1978), the California Supreme Court apportioned fault between a strictly liable defendant and a negligent defendant, explaining that "[n]othing in the rationale of strict product liability conflicts with a rule which apportions liability between a strictly liable defendant and other responsible tortfeasors."

In those pre-Proposition 51 cases, of course, the injured plaintiff did not lose out, since the defendants were jointly and severally liable. Liability for non-economic damages which is several but not joint, however, could significantly reduce a plaintiff's recovery. Indeed, that was the whole point of Proposition 51. Nevertheless, until recently, there seemed little doubt that Proposition 51 applied in strict product liability cases

One of the first cases to discuss Proposition 51 in a strict product liability context was DaFonte v. Up-Right, Inc., 2 Cal.4th 593 (1992). In DaFonte, the plaintiff, who was injured at work by a defective machine, obtained a judgment against the machine's manufacturer based on strict products liability. On appeal, the California Supreme Court held that Proposition 51 had the broadest scope possible and allowed apportionment of non-economic damages between the strictly liable manufacturer and the plaintiff's employer, even though the employer had no liability for the plaintiff's injuries beyond the payment of worker's compensation benefits.

Other California courts also have addressed Proposition 51 issues without questioning its applicability in strict liability cases. See, e.g., Torres v. Xomox Corp., 49 Cal. App.4th 1 (1996); Greathouse v. Amcord, 35 Cal. App.4th 831 (1995); Sparks v. Owens-Illinois, Inc., 32 Cal. App.4th 461 (1995); Hoch v. Allied-Signal, Inc./Bendix Safety Restraints Div., 24 Cal. App.4th 48 (1994). Indeed, the one exception that the courts carved out was for cases where the defendant was only vicariously liable -- such as where an employer is liable for an employee's torts. E.g., Miller v. Stouffer, 9 Cal. App. 4th 70 (1992); Rasthian v. BRAC-BH, Inc., 9 Cal. App. 4th 1847 (1992); Strithong v. Total Investment Co., 23 Cal. App. 4th 721 (1994).

Then last year, the Third District Court of Appeal handed down its decision in Moreno v. S.H. Kress & Co., 54 Cal. App.4th 782 (1997). In Moreno, the plaintiff suffered severe burns when loose caps for a toy cap gun exploded in his pocket. Plaintiff sued the retailer who sold the gun, as well as the importer who distributed it. At trial, plaintiff obtained a verdict based on inadequate warnings and packaging. Those defects were entirely the distributor's responsibility, but the distributor was bankrupt. The retailer was found strictly liable based on its role in the chain of distribution.

Thus, the case presented a classic deep-pocket scenario: one negligent-but-indigent defendant, and one wealthy defendant pulled into the case based only on its status, not its fault. But the Third District said the deep-pocket initiative did not apply.

Casting aside Daly and its progeny, the Moreno court refused to apply Proposition 51 to limit the retailer's liability for non-economic damages, explaining that any other result would exonerate the retailer from paying any non-economic damages and would therefore conflict with the public policy that retailers, as beneficiaries of the sales of products, must be held responsible for defective products.

Although lawyers for manufacturers, municipalities, and other traditional deep pockets breathed a sigh of relief when Moreno was depublished, their satisfaction was short-lived. Before the depublication, the Fourth District Court of Appeal relied on Moreno in Wimberly v. Derby Cycle Corp. 56 Cal. App.4th 618 (1997). Wimberly holds that a strictly liable defendant may not shift blame to others in a defective product's chain of distribution to reduce or eliminate its responsibility for damages caused by the product.

In Wimberly, plaintiff was injured in a mountain biking accident caused by a defective "fork assembly." Plaintiff sued the manufacturer of the fork assembly and the retailer who sold him the product. At trial, both defendants were found strictly liable. However, the Fourth District refused to apply Proposition 51 to apportion non-economic damages between them, relying on Moreno's "well-reasoned [though later depublished] analysis."

Efforts to depublish Wimberly were surprisingly rejected in spite of its reliance on Moreno and despite two California Supreme Court decisions which, while not dealing directly with Proposition 51, confirmed that products liability cases are based on principles of "comparative fault." See, Butram v. Owens-Corning Fiberglass, 16 Cal. 4th 520 (1997); Richards v. Owens-Illinois, Inc. 14 Cal. 4th 985 (1997). Perhaps Wimberly survived depublication because it expressly limited its scope to actions involving only strict liability claims -- not those combined with negligence theories.

Thus, the stage was set for the decision in Arena v. Owens Corning, where the plaintiff worked in a shipyard for 30 years and was exposed to asbestos products made by various manufacturers. At trial, plaintiff proved that he suffered from mesothelioma caused by his exposure to asbestos, and that products made by Owens Corning and by Asbestos Corporation Limited were substantial factors in causing his illness. The manufacturers were found jointly and severally liable for damages of more than $300,000.

On appeal, Plaintiff predictably argued that Wimberly precluded the application of Proposition 51 in any strict product liability case. The First District disagreed, holding that Wimberly was factually inapplicable because Owens Corning and ACL were not in the same chain of distribution, unlike the manufacturer and retailer of the bicycle part in Wimberly. Looking at the history of comparative negligence principles in strict liability cases, as well as at the discussion in DaFonte, the First District accorded a broad reading to the term "comparative fault" in Proposition 51. Indeed, the court noted that even Wimberly had held that Proposition 51 would apply where one defendant is strictly liable for injuries caused by a defective product and another defendant is liable for separate injuries caused by independent negligence; thus, the Arena court concluded that Proposition 51 did in fact apply in strict product liability cases where multiple products cause the plaintiff's injuries and the evidence provides a basis to allocate liability among the defective products.

Although Wimberly remains on the books, it appears to be limited to its facts, applying only in strict liability cases where plaintiff's injury is caused by a single product and the only defendants are those in the chain of distribution. Otherwise, liability for non-economic damages can be imposed only in proportion to a defendant's share of responsibility for a plaintiff's injuries.