The governor recently vetoed changes to a statute that would have implemented a major change to Nevada’s product liability law making it more difficult for consumers to sue retailers in certain cases. Traditionally, when a person is injured from a defective or dangerously designed product, that person can sue the retailer, distributor, manufacturer, and any other party in the supply chain who took part in making that product and getting it out to the consumer. Usually, though, unless the end seller has altered the product in some way, it is only the manufacturer and designer who ultimately have responsibility to the injured consumer. For that reason, many states have now altered the common law to allow for sellers and distributors to be sued only in cases where for some reason the manufacturer was not available to compensate the injured person. As of May 2015, the Nevada lawmakers were poised to pass regulation that would have added this hurdle for injured consumers in Nevada.
What the proposed product liability law says
The proposed NRS 41 would have read that only a manufacturer can be sued for product liability unless certain exceptions apply including :
- when a seller has control over the design and making of a product,
- when the seller alters the product,
- when the product was re-sold in a modified condition,
- when the seller failed to exercise reasonable care which caused the harm,
- when the seller knew of a defect in the product,
- when the seller created certain warranties which the product did not meet,
- when the manufacturer cannot be sued within Nevada,
- when the manufacturer cannot be found,
- when the manufacturer is bankrupt.
In essence, unless there is some basis for independent liability against a seller, sellers would no longer be sued simply for being part of the supply chain. Often, the only result of suing a seller was to cause an innocent seller to incur attorneys’ fees when ultimately, the manufacturer was liable for causing the defect to exist.
However, the governor appears to have sympathized with consumer friendly concerns raised during senate hearings. Injured parties may not know whether a seller altered a product, and for that reason, they need to sue before the statute of limitations runs out, allowing discovery to begin and the culpable party to come to light. The new law would have made it more costly for consumers to bring lawsuits by requiring them to sue manufacturers, conduct discovery to see if the product was altered, and then go back and amend their complaints if the retailers could properly be added. As the law stands now, the seller can be named from the outset, and if they did not alter the product or do anything other than just sell it, they will get dismissed and the manufacturer will bear liability. Assuming the manufacturer can be found and has funds to pay the injured party, it is much simpler to dismiss a seller then to add them to a suit, begin new phases of discovery, push back deadlines, and create a complicated mess of a lawsuit.
So, Nevada continues to be a consumer friendly state wherein the hurdles that some states are implementing to protect sellers will not exist. Hopefully this is a trend we will continue to see so injured consumers can continue to get fair compensation and not be deterred complicated legal hurdles.