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A Washington appellate court recently ruled that a trade association owed a duty of reasonable care to consumers when it formulates voluntary safety standards for products which are widely relied upon by manufacturers of those products. (Meneely v. S.R. Smith, Inc., et al.). Safety standards set by the National Spa and Pool Institute (NSPI) permitted the use of a certain diving board manufactured by S.R. Smith, Model 606, on an NSPI Type II swimming pool. The NSPI standards also set minimum dimensions for a Type II pool, including a minimum depth. In the early 1970's a study commissioned by NSPI showed that young, tall, athletic males risked serious injury when using this board and pool combination. Instead of revising the standard to ban the board from Type II pools NSPI initiated a program to encourage divers to use their hands and arms to "steer up" upon entering the water.
In 1991, the 16-year old male plaintiff broke his neck and was completely paralyzed when he dove from a S.R. Smith 606 board into a NSPI Type II pool. When installed in 1974 (after NSPI had knowledge that the board/pool combination was unsafe), the diving board was labeled as designed for use in NSPI Type II pools. Litigation ensued and the trial court ruled that NSPI owed the plaintiff and other consumers a duty to exercise due care in formulating its safety standards and to warn them of the risk of injury. The jury found NSPI breached this duty, was 60 percent responsible for the harm to plaintiff, and held NSPI liable for $6.6 million in damages.
The appellate court upheld the verdict. By promulgating industry wide safety standards that pool and board manufacturers and consumers widely relied upon, NSPI voluntarily assumed the duty to warn divers of the risk posed by this type of board when used on a Type II pool. According to the court, NSPI failed to exercise reasonable care in performing that duty when it did not change the standard after it knew that studies showed the pool and board combination was dangerous for certain divers.
States Laws VaryState law will determine whether a trade association owes a duty of care to consumers when it formulates voluntary safety standards for an industry. Courts will generally apply the law of the state in which the injury or damage occurs. Thus far the courts in fourteen states have adopted a rule that if an association undertakes to render services to another (such as publishing safety standards) which it should recognize as necessary for the protection of a third person, the association may be liable if it fails to exercise reasonable care in performing that service.
Association Policy on Safety StandardsSome trade associations have their technical committees defer to national consensus standards-writing organizations (such as National Fire Protection Association (NFPA), Society of Automotive Engineers, (SAE), American Society of Mechanical Engineers (ASME), International Standards Organization (ISO), etc.) to promulgate safety standards through a consensus process which allows input and participation from all interested parties, including product users. Other associations act as the industry's designated standards-writing organizations. In any event, whenever possible performance-based standards (as opposed to design-oriented standards) should be promoted by the association.
ConclusionThere is a possibility that the imposition of liability could chill important trade association product safety and research activities. To avoid liability it is important that when publishing product safety standards and related materials that the trade association exercise reasonable care in carrying out these activities.
Keeley, Kuenn & Reid, a Chicago based law firm with government relations affiliates in Washington, D.C., is engaged in the practice of business law, commercial litigation, employment law, taxation, antitrust, product liability, estate planning and legislative matters. Through its affiliates, the firm also meets its clients' needs in protecting intellectual property rights and international commercial law matters.
Keeley, Kuenn & Reid
200 S. Wacker Drive, Suite 3100
Chicago, IL 60606
Tel. No. (312) 782-1829
Fax. No. (312) 782-4868