Products liability and electric tractor-trailers
From an insurance perspective, electrifying tractor trailers brings issues that will need to be prepared for, like the potential for product liability claims.
Large trucks, eighteen wheelers, tractor trailers. However you refer to them, they are, in many ways, the lifeblood of the U.S. economy. They deliver products, packages, toys, fuel, chemicals and more throughout the United States. Some of these transports are short haul (think less than 250 miles round trip) and some are long haul (think cross-country). Regardless of the length of the trip, we’ve all seen a large truck on the road. However, while there are many passenger vehicles that have moved to either fully electric (think Tesla) or a hybrid version of an internal combustion engine and electric (most, if not all major brands offer this option), the move to electrify large trucks has not moved as quickly. This is likely because of the numerous technology issues that precede such a move and the costs associated with such a change. However, from an insurance perspective, electrifying tractor trailers brings other issues that will need to be addressed and prepared for, such as the potential for product liability claims and coverage questions.
One of the issues that could potentially arise is the impact a battery could have on the range and durability of larger trucks. Current batteries for passenger vehicles weight approximately 1,100 pounds. Given the size of tractor trailers, it is not inconceivable that the batteries necessary to power them could exceed 5,000 pounds. That’s over two tons just for the battery. The increased weight from the battery pack could lead to a host of other problems with the truck, such as increased or faster-than-normal wear on tires or brakes. There is always a chance that a battery could fail or explode. What these issues mean for the insurance industry is the need for increased scrutiny into these advances and the knowledge of how to prepare for any litigation.
In New York, products liability law on design remains a “not reasonably safe” standard. Products that are dangerous to use in society are not foreclosed so long as they are “reasonably safe.” What that means will depend on the product, its ambit of use and misuse, the steps needed to be taken to make its use reasonably safe, the precise factual circumstances in the case and the interface of plaintiff’s conduct.
The case of Buchanan v. Mack Trucks, Inc., 113 A.D.3d 716 (N.Y. App. Div. 2014) is a good example of how manufacturers of batteries for large trucks can address claims that a battery is defective and how insurers can prepare their coverage for such claims. In Buchanan, the plaintiff was a driver of a truck manufactured and sold by the defendant to plaintiff’s employer. The vehicle driver’s seat collapsed, fell or tipped from its base, causing the plaintiff to be injured. Mr. Buchanan brought suit for breach of warranty and strict liability based on design and manufacturing defects. The defendant impleaded the manufacturer of the subject seat and both defendants moved for summary judgment on the issue of defective design and strict products liability. The Appellate Department held that both defendants established their prima facie entitlement to judgment as a matter of law dismissing the cause of action to recover damages for strict products liability based upon a defective design by submitting transcripts of deposition testimony and expert affidavits, which established that the subject seat design was “state-of-the-art” and reasonably safe.
For insurers, when assessing the risk a company poses, especially in the transportation space, they need to understand their client’s business and what type of fleet the company maintains. If a company is using electric tractor trailers, both the insurer and the transportation company need to be aware of these potential product liability claims and how they can impact the business. Further, the insurance company, if they are insuring the battery company, needs to know the status of any product they manufacture and be aware of where that product stands in terms of its design, i.e., is it state of the art.
Designers and manufacturers of batteries will be able to push back on these claims by arguing their products are not defectively designed. For example, in a New York jurisdiction, if a plaintiff were to allege that a company defectively designed its battery for a tractor trailer, the plaintiff must show (1) that the manufacturer marketed a product which was not reasonably safe in its design; (2) that it was feasible to design the product in a safer manner; and (3) that the defective design was a substantial factor in causing the plaintiffs injury. Ramirez v. Sears Roebuck and Co., 286 A.D.2d 428 (N.Y. App. Div. 2001). Given the current state of electrifying large trucks, the argument can be made that it was arguably not feasible to design a battery in a safer manner.
If a defendant properly raises the argument, it will place the burden on the plaintiff to come forward with competent proof. The plaintiff would then have to show that the product’s risks outweighed its utilitarian features and that the product, therefore, was not reasonably safe. Ultimately, while we will certainly see more of these cases, manufacturers have a host of defenses available to them to combat these allegations. Defendant vehicle/battery manufacturers should document everything they do, identify any patents they may hold and what testing they’ve performed to be able to support the arguments that their products are state of the art and are not defectively designed. This will also allow insurers to better understand and evaluate the risk exposure a potential company raises with their business.
These views are the author’s own.
Adam Dolan is a partner at the litigation law firm of Gfeller Laurie LLP in New York City. He may be reached at: adolan@gllawgroup.com.