By Jennifer L. Schuster and Carly J. Tebelman
A preliminary inquiry in defending any case brought pursuant to the Indiana Products Liability Act (IPLA) is whether the IPLA even applies to the plaintiff; that is, whether the plaintiff is considered a “user” or “consumer” under the IPLA. The Indiana Court of Appeals recently took up this issue in Davis v. Lippert Components Manufacturing, Inc., ____ N.E.3d ____, 2018 WL 1278826 (Ind. Ct. App. Mar. 13, 2018). Davis and several previous opinions of the Indiana Court of Appeals and the Indiana Supreme Court provide a useful framework for defense attorneys analyzing the status of a plaintiff as a “user” or “consumer” under the IPLA.
The IPLA governs all actions that are brought by a user or consumer against a manufacturer or seller for physical harm caused by a product, regardless of the substantive legal theories upon which the action is brought. Ind. Code § 34-20-1-1. A consumer is defined under the IPLA as:
(1) a purchaser;
(2) any individual who uses or consumes the product;
(3) any other person who, while acting for or on behalf of the injured party, was in possession and control of the product in question; or
(4) any bystander injured by the product who would reasonably be expected to be in the vicinity of the product during its reasonably expected use. Ind. Code § 34-6-2-29.
The IPLA defines “user” as having the same meaning as “consumer.” Ind. Code § 34-6-2-147.
Davis v. Lippert Components
In Davis, the trial court granted, and the Court of Appeals affirmed, summary judgment in the defendant’s favor because the plaintiff, Davis, was neither a “user” nor “consumer” under the IPLA. Davis, 2018 WL 1278826, at *1. Davis worked for Evergreen Recreational Vehicles, LLC (“Evergreen”), in Elkhart, Indiana. Evergreen manufactured towable travel trailers, including models with “areas of additional space containing flooring and furniture, which an owner could slide out when parked to provide more interior space in the trailer or in a recreational vehicle,” also known as a “slide-outs” or “boxes.” Id. Defendant Lippert Components Manufacturing, Inc. (“Lippert”), manufactured a system called the Schwintek System In-Wall Slide Out (“Schwintek System”), which was attached to the slide-out box during the manufacturing of the trailer or recreational vehicle and would allow the vehicle’s owner to expand or collapse the slide-out box. Id.
Davis worked in Evergreen’s slide-out department, where his job was to install slide-out boxes, including attaching the Schwintek System to each box. On June 17, 2014, Davis was installing a portion of a Schwintek System on the outside of a slide-out box. The slide-out box began moving out of the trailer and fell out of the trailer and onto Davis’s lower back, paralyzing him from the waist down. Id.
On appeal, Davis argued that he was a user or consumer under the IPLA because Lippert sold the unassembled Schwintek System for installation in slide-out boxes. Alternately, he argued that he was a bystander under the IPLA because the reasonably expected use of the Schwintek System was the installation by the purchaser (here, Evergreen) of its components on a trailer, and Davis was injured during that installation. Id. at *2-3.
In affirming the trial court’s decision to grant summary judgment to Lippert, the Court of Appeals held that Davis was neither a “user” nor “consumer” under the IPLA under any theory. The court also noted that
[t]o conclude otherwise would controvert the exclusivity of the remedy provided to employees like Davis in the Workers Compensation System. It would also place ultimate purchasers of a trailer or recreational vehicle in a position where their two-year time statute of limitations period to bring a claim under the IPLA would be dependent on the delivery date of a component part to a manufacturer, and not on the delivery date of the finished product to the consumer. Id. at *3 (citation and footnote omitted).
The slide-out box that Davis had worked on “was never intended or expected to reach the ultimate user or consumer in an unassembled or uninstalled form.” Id. (quotation marks and citation omitted).
In Davis, the Court of Appeals noted that both parties cited Vaughn v. Daniels Co. (West Virginia), in support of their arguments. Id. at *2 (citing Vaughn, 841 N.E.2d 1133 (Ind. 2006)). In that case, defendants Daniels Co. (“Daniels”) and Solar Sources, Inc. (“Solar”), entered into a contract under which Daniels agreed to build a coal plant on Solar’s premises. Vaughn, 841 N.E.2d at 1136. Vaughn, an employee of Daniels’ subcontractor, suffered injuries during the construction of a sump for the coal plant. Vaughn sued Daniels and Solar and asserted, in part, strict liability claims under the IPLA. The trial court granted Daniels’ and Solar’s motion for summary judgment on all claims. Id. at 1136. The Court of Appeals reversed summary judgment on Vaughn’s IPLA claim, finding that he was a user or consumer under the IPLA. Id. at 1136–37.
On transfer, the Supreme Court reversed the holding of the Court of Appeals on Vaughn’s IPLA claim and held that Vaughn was neither a user nor consumer under the IPLA. Id. at 1136, 1142–43. Because Solar ordered a completed coal plant, Vaughn’s assembly of the sump did not constitute “use” of the coal plant under the IPLA. “‘[U]se’ of the product occurs only after it is delivered in the state contemplated by the arrangement between the seller and buyer.” Id. at 1143. The Supreme Court agreed with Daniels that it had a contractual duty to complete construction of the coal plant before delivery to Solar, so the sump “could not and did not ‘reach the user or consumer [Solar] without substantial alteration in the condition in which the product is sold by the person sought to be held liable.’” Id. at 1139 (alteration in original) (quoting Ind. Code § 34-20-2-1(3)). Vaughn and the subcontractor for which he worked “were not yet dealing with the product that Solar had agreed to purchase. For that reason, neither Vaughn nor anyone else was a user of the product at the time it was still in the process of assembly and installation.” Id.
Thiele v. Faygo Beverage
The Supreme Court in Vaughn also noted that its holding conformed with the Court of Appeals’ holding in Thiele v. Faygo Beverage, Inc. Vaughn, 841 N.E.2d at 1142 (citing Thiele, 489 N.E.2d 562 (Ind. Ct. App. 1986)). In that case, plaintiff Thiele, an employee of the Kroger Company (“Kroger”), was struck in the eye by a piece of glass from a bottle of Faygo soda, which shattered while Thiele was moving a case of bottles in a Kroger warehouse for later shipment to a Kroger store. Thiele sued Faygo, in part, based on a theory of strict product liability under a prior version of the IPLA. Thiele, 489 N.E.2d at 566, 584–85 (citing Ind. Code § 330101.503(a) (1982)). The trial court granted Faygo’s motion for summary judgment. Id. at 566.
The Court of Appeals, among other findings, affirmed the trial court’s award of summary judgment to Faygo on Thiele’s IPLA claim, holding that Thiele was neither a user nor consumer and therefore could not sue under a theory of strict product liability. Id. at 588. The court held that the terms “user” and “consumer” did not include wholesalers, retailers, other intermediaries, or their employees, including Thiele. Id. (citing Whittaker v. Fed. Cartridge Corp., 466 N.E.2d 480 (Ind. Ct. App. 1984)).
The court likewise held that Thiele was also not a “bystander” under the IPLA because he came into contact with the product before its “sale” to a “first consuming entity.” Id. (citing Whittaker, 466 N.E.2d 480; Restatement (Second) of Torts § 402(A) cmt. o (Am. Law Inst. 1965)). But the court noted that
the rationale behind extending the protection of strict liability theory to bystanders seems equally applicable to the employees of those entities in the distributive chain preceding the sale of a product to the “first consuming entity.” Such an employee and such bystander are both foreseeably subject to harm caused by a defective product; neither is able to protect himself from such harm by choosing to deal with only reputably safe products. Id.
Notwithstanding this dicta, the court maintained that the Indiana legislature did not intend for intermediaries or their employees to be able to file claims under the IPLA. Id.
Butler v. City of Peru
In Vaughn, despite holding that Vaughn was neither a “user,” “consumer,” nor “bystander” under the IPLA, the Supreme Court stated that assembly or installation, like product maintenance, could constitute “use” under the IPLA under different circumstances. Vaughn, 841 N.E.2d at 1139–40. For example, in Butler v. City of Peru, 733 N.E.2d 912 (Ind. 2000), the Supreme Court held that the plaintiffs’ decedent, a school maintenance worker who was electrocuted while performing maintenance on a school’s electrical transmission system, was considered a “user” under the IPLA, both because he was an employee of the product’s final user, the school, and because “‘maintenance may be a part of the product’s reasonably expected use.’” Vaughn, 841 N.E.2d at 1140 (quoting Stegemoller v. ACandS, Inc., 767 N.E.2d 974, 976 (Ind. 2000) (citing Butler, 733 N.E.2d at 919)).
The Vaughn court also cited the Restatement (Second) of Torts, section 402A, noting that assembly, installation, or maintenance could constitute “use” under the IPLA.
Comment 1 to section 402A states that “users” of products include “those who are passively enjoying the benefit of the product, as in the case of passengers in automobiles or airplanes, as well as those who are utilizing it for the purpose of doing work upon it, as in the case of an employee of the ultimate buyer who is making repairs upon the automobile which he has purchased.” Comment 1 also states that “consumers” include “not only those who in fact consume the product, but also those who prepare it for consumption” and that “consumption includes all ultimate uses for which the product is intended.” Comment d is consistent with this view, stating that the rule of strict liability in section 402A “extends to any product sold in the condition, or substantially the same condition, in which it is expected to reach the ultimate user or consumer.” Id. at 1140–41 (quoting Restatement (Second) of Torts § 402A).
Thus, the Vaughn Court noted that Butler and the comments to section 402A supported the conclusion that “use” of a product could include maintenance and assembly “where a manufacturer expects a product to reach the ultimate user or consumer in an unassembled or uninstalled form.” Id. at 1141 (emphasis added).
The Court of Appeals in Davis did not reach the question whether an owner of a travel trailer who had purchased a system such as the Schwintek System “could be considered a user or consumer under the IPLA if injured during the installation on the owner’s own travel trailer.” Davis, 2018 WL 1278826, at *3. However, based on the Butler and Vaughn opinions, it seems likely that a hypothetical owner of a travel trailer who purchased an unassembled slide-out box system and suffered injuries while installing that system on his travel trailer could be considered a user under the IPLA.
Thus, it appears that the key inquiry in analyzing whether a plaintiff is a user or consumer under the IPLA is whether the product at issue was in the possession of its ultimate purchaser or user, in the state of completion contemplated by the manufacturer for delivery to that purchaser or user, at the time of the plaintiff’s alleged injury. In Davis, Vaughn, and Thiele, the courts found that plaintiffs, who had worked with the products at issue before final sale, were neither “users” nor “consumers” under the IPLA. The plaintiffs in Davis and Vaughn were both injured while assembling unfinished products (in Davis, a travel trailer, and in Vaughn, a coal plant). In Thiele, the plaintiff worked in a Kroger warehouse as part of the distribution chain of Faygo soda bottles before their ultimate sale in Kroger grocery stores. In Butler, on the other hand, the decedent was killed while performing maintenance on an electrical system after its installation on the property of the school where he worked. The Vaughn court then expanded on Butler by stating that assembly or installation by the purchaser, like maintenance, could be considered “use” of the product at issue if the manufacturer intended to deliver an unassembled or uninstalled product to the purchaser. It follows that plaintiffs are not necessarily disqualified from being considered “users” or “consumers” under the IPLA simply because they install, assemble, or perform maintenance on a product.•
Ms. Schuster is a managing associate in the Indianapolis office of Frost Brown Todd LLC and is the publications chair of the DTCI Products Liability Section. Ms. Tebelman is an associate in the Indianapolis office of Frost Brown Todd LLC. The opinions expressed in this article are solely those of the authors.