By Dan Jaffe on May 10, 2017
In Davis v. Dunham’s Athleisure Corp. (E.D. Mo., 2017), the U.S. District Court for the Eastern District of Missouri recently ruled that a firearms retailer was not entitled to the protection of Missouri’s “innocent seller” statute because it gave additional warnings and directions to the buyer beyond the manufacturer’s warnings. In Davis, the plaintiff bought a used rifle from the defendant retailer, Dunham’s Athleisure Corporation. The rifle was sold to Dunham’s by Century International Arms, Inc. Plaintiff was injured when the rifle exploded. Dunham’s moved for dismissal under the Missouri “innocent seller” statute, §537.762.1, RSMo.
The Missouri statute provides that a defendant whose liability is based solely on its status as a seller in the stream of commerce may be dismissed from a products liability suit claim in which another defendant is properly before the court from whom total recovery for plaintiff’s claim can be had. The motion must be accompanied by an affidavit stating that the defendant is aware of no facts or circumstances upon which a verdict might be reached against it other than its status as a seller in the stream of commerce.
The purpose of the Missouri statute is to allow a retailer or other seller whose liability is based solely on being in the chain of distribution to be released at an early stage rather than having to wait until the completion of litigation to obtain indemnity from another defendant. Malone v. Schapun, Inc., 965 S.W.2d 177 (Mo. App. E.D., 1997). Granting the motion results in a dismissal without prejudice. It allows a downstream seller to avoid the costs and fees of litigation via an early motion to dismiss, but also protects the plaintiff’s interests because the statutory order of dismissal remains interlocutory until final disposition of the suit by settlement or judgment, and may be set aside for good cause shown at any time prior to final disposition. Thus, the action may still proceed against a dismissed defendant if it later appears to be more than a mere seller in the chain of distribution.
In Davis, Dunham’s gave the following warnings and directions, which were signed and acknowledged by plaintiff: “You should always keep the barrel pointed in a safe direction, even when dry firing, loading or unloading. In the event of an accidental discharge, no injury can occur if the barrel is pointed in a safe direction.” Dunham’s also provided detailed instructions on the procedures to be followed by the user in checking and cleaning the rifle before use. The Plaintiff (“Davis”) acknowledged that if Dunham’s had not provided such warning and instructions, Davis would have had no basis to oppose Dunham’s motion to dismiss, and asserted liability against it solely on that ground. The Court of Appeals concluded that Dunham’s liability was not based solely on its status as a seller in the stream of commerce, but also on a claim that it was independently negligent in its development, packaging and/or sale of the rifle by virtue of the additional warnings and directions it provided.
At least 15 States have somewhat similar “innocent seller” statutes to Missouri’s.[1] The lesson of Davis v. Dunham is that retailers and other downstream distributors should understand that the effect of providing additional warnings or directions intended to prevent accidents is likely to be losing the protections of such statutes. A seller which believes that additional warnings or directions are needed would be well advised to require the manufacturer to provide them, as well as to provide contractual defense and indemnity for product defect claims against it. It is rarely sound for a retailer to undertake what is primarily the duty of the product manufacturer.
[1] Texas, Georgia, Washington, Tennessee, Ohio, North Carolina, Minnesota, Kentucky, Kansas, Iowa, Illinois, Idaho, Delaware, South Dakota and Nebraska.