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California Supreme Court Issues Another Decision Aligning with Theme of Horvitz & Levy Amicus Brief

September 11, 2018

For the second time in the past few months, the California Supreme Court has issued an opinion that tracks the theme of an amicus brief filed by Horvitz & Levy. In this opinion, Kim v. Toyota Motor Corporation, the Supreme Court resolved a split in the lower courts on an important issue of products liability law.

The case involved an accident that occurred when William Jae Kim was driving his 2005 Toyota Tundra in the mountains on the Angeles Forest Highway. He lost control of the truck, which ran off the road and down a cliff, rendering him a quadriplegic. Kim and his wife sued Toyota for strict products liability, alleging the truck was defective because it lacked vehicle stability control (VSC)—which he claimed would have prevented the accident. Toyota had offered VCS as an option on the Tundra (and was the first pickup truck manufacturer to do so), but it was not standard equipment and Kim’s Tundra did not include it. During trial, the Kims presented testimony that Toyota included VSC on other vehicles but not the Tundra, supposedly disregarding safety risks because it saw no competitive advantage of including VSC as standard equipment when no other pickup truck manufacturer was doing so. But they argued Toyota should not have been permitted to present similar testimony that no other pickup truck manufacturer offered VSC as standard equipment, and that the decision to offer VSC as optional equipment was consistent with the industry practice of phasing in expensive, emerging technology by initially offering it only as an option. The jury rendered a defense verdict in favor of Toyota, and the Court of Appeal affirmed.

The California Supreme Court granted review to “resolve the tension among the Court of Appeal decisions” about whether defendants should be categorically prevented from presenting evidence of industry custom and practice like that offered by Toyota. Horvitz & Levy’s amicus brief for the Alliance of Automobile Manufacturers pointed out that the plaintiffs were trying to have it both ways by arguing that plaintiffs in design defect cases should be allowed to offer custom and practice evidence when it favors them (e.g., to establish the feasibility of a particular design), but defendant manufacturers like Toyota should be absolutely precluded from presenting precisely the same evidence.

In its decision, the California Supreme Court adopted that theme, expressly noting that “the rule is a two-way street.” The court further observed that “the best illustration of this point is the fact that the Kims themselves introduced precisely this type of evidence at trial in an effort to bolster their argument that Toyota designed the Tundra without standard VSC because it valued profits over safety.” The court noted that “having elicited the evidence themselves, the Kims are hardly in a position to object to its admission.”

In expressly disapproving all prior California appellate decisions that had held or suggested industry custom and practice evidence was always inadmissible in a products liability action, the California Supreme Court joined “the majority of states that have permitted the admission of evidence of industry custom and practice as relevant to, but not dispositive of, the existence of design defect under risk-benefit balancing tests.” The court concluded that a jury “may consider whether the manufacturer has complied with industry technical standards, in evaluating whether, on balance, the design is defective,” and that evidence of industry custom and practice may be relevant to evaluating “whether the product is as safely designed as it should be, considering the feasibility and cost of alternative designs.”