ARIZONA HOUSE OF REPRESENTATIVES

Fifty-fourth Legislature

Second Regular Session

Senate: JUD DP 4-3-0-0 | 3rd Read 19-11-0-0

SB 1449: product liability; civil action; limitation

Sponsor:  Senator Farnsworth E, LD 12

Committee on Commerce

Overview

Outlines circumstances in which a product liability action may be brought against a seller.

History

In a product liability action where the manufacturer refuses to accept a tender of defense from the seller, the manufacturer must indemnify the seller for any judgement against the seller. The manufacturer must also reimburse the seller for reasonable attorney fees and costs in defending the action. The manufacturer is not required to indemnify or reimburse the seller if either:

1)    The seller had knowledge of the defect in the product; or

2)    The seller altered, modified or installed the product and the alteration, modification or installation was:

a)    A substantial cause of the incident giving rise to the action;

b)    Not authorized or requested by the manufacturer; and

c)    Not performed in compliance with the directions or specifications of the manufacturer (A.R.S. § 12-684).

A product liability action is defined as any action brought against a manufacturer or seller of a product for damages for bodily injury, death or property damage caused by or resulting from the manufacture, construction, design, formula, installation, preparation, assembly, testing, packaging, labeling, sale, use or consumption of any product, the failure to warn or protect against a danger or hazard in the use or misuse of the product or the failure to provide proper instructions for the use or consumption of any product. A seller is a person or entity, including a wholesaler, distributor, retailer or lessor, that is engaged in the business of leasing any product or selling any product for resale, use or consumption (A.R.S. § 12-681).

Provisions

1.    Asserts a product liability action against a seller that is not also a manufacturer of the product may be commenced or maintained only if one or more of the following apply:

a)    The seller had actual knowledge of the defect in the product;

b)    The seller altered, modified or installed the product and the alteration, modification or installation was:

i)      A substantial cause of the incident giving rise to the action;

ii)     Not authorized or requested by the manufacturer; and

iii)   Not performed in compliance with the directions or specifications of the manufacturer.

c)    The seller provided the plans or specifications for the manufacture or preparation of the product, the plans or specifications were a substantial cause of the product's alleged defect and the product was manufactured in compliance with and according to the seller's plans or specifications;

d)    The seller resold the product after the product's first sale for use or consumption, the product was not in substantially the same condition as it was at the time the product left the manufacturer's possession and the change in the product's condition was a substantial cause of the incident giving rise to the action;

e)    The seller failed to exercise reasonable care in assembling, maintaining or repairing the product at issue or in conveying to the product user or consumer the manufacturer's labels, warnings or instructions and the failure was a substantial cause of the incident giving rise to the action; or

f)     The seller made an express warranty regarding the product independent of any express warranty made by a manufacturer regarding the product, the product failed to conform to the seller's independent express warranty and the failure of the product to conform to the seller's independent express warranty was a substantial cause of the incident giving rise to the action. (Sec. 1)

2.    ☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal NoteStipulates a manufacturer must indemnify and reimburse a seller that is not also a manufacturer of the product at issue for reasonable attorney fees and costs incurred by the seller for any judgment rendered against the seller in any product liability action, where the manufacturer refuses to accept a tender of defense, unless the action was the result of one of the defined circumstances that allow for the action to be commenced or maintained against the seller. (Sec. 1)

3.    Makes technical changes. (Sec. 1)

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7.                      SB 1449

8.    Initials PRB           Page 0 Commerce

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