What is the test for a manufacturer to be held liable for the economic loss of a plaintiff in a motor vehicle accident?

California, United States of America


The following excerpt is from Robinson Helicopter Co., Inc. v. Dana Corp., 102 P.3d 268, 22 Cal.Rptr.3d 352, 34 Cal.4th 979 (Cal. 2004):

In Jimenez v. Superior Court, supra, 29 Cal.4th 473, 127 Cal.Rptr.2d 614, 58 P.3d 450, we set forth the rationale for the economic loss rule: "`The distinction that the law has drawn between tort recovery for physical injuries and warranty recovery for economic loss is not arbitrary and does not rest on the "luck" of one plaintiff in having an accident causing physical injury. The distinction rests, rather, on an understanding of the nature of the responsibility a manufacturer must undertake in distributing his products.' [Citation.] We concluded that the nature of this responsibility meant that a manufacturer could appropriately be held liable for physical injuries (including both personal injury and damage to property other than the product itself), regardless of the terms of any warranty. [Citation.] But the manufacturer could not be held liable for `the level of performance of his products in the consumer's business unless he agrees that the product was designed to meet the consumer's demands.' [Citation.]" (Id. at p. 482, 127 Cal.Rptr.2d 614, 58 P.3d 450.)

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