Colorado has codified much of its product liability law at C.R.S. § 13-21-401, et seq. Product liability actions include claims for strict liability, negligence, or breach of warranty. Colorado law prohibits plaintiffs from filing strict product liability actions against sellers unless they are also “manufacturers.” In addition to the commonly-understood definition, “manufacturer” includes sellers who do any of the following:

• Know a product is defective;
  
• Provide specifications for a products’ manufacture;
  
• Modify a product;
  
• Exercise control over the manufacturing process; or
  
• Own or are owned by the manufacturer.

Principal distributors or sellers may also be deemed manufacturers where jurisdiction cannot be obtained over the actual manufacturer of a product.

Types of Defects

Under Colorado law, there are three types of strict liability product claims: manufacturing defects, design defects, and defects based on inadequate instructions or warnings.

A product has a manufacturing defect when it fails to conform to a manufacturer’s specifications and, as a result, creates a risk of harm to persons or property that would not ordinarily be expected.

Colorado courts have developed two tests to determine whether a design defect exists. These tests are applied in cases involving products that are complex and largely beyond the knowledge and experience of the ordinary consumer. The “consumer expectation test” relies in large part upon the Restatement (Second) of Torts § 402A comment I (1965), which provides that “[t]he articles sold must be dangerous to an extent beyond that which would be contemplated by the ordinary consumer who purchases it, with the ordinary knowledge common to the community as to its characteristics. The second test, the risk-benefit test, has been favored by Colorado courts of late. It provides that “[a] product is unreasonably dangerous because of a defect in its design if it created a risk of harm to persons or property which is not outweighed by the benefits to be achieved from such design.” Despite the trend towards the risk-benefit test, the consumer expectation test has never been expressly rejected in Colorado.

Colorado courts consider a number of factors when determining the existence of a defect under the risk-benefit test. These include the following:

• The usefulness and desirability of the product, i.e., its utility to the user and the public as a whole;
  
• The safety aspects of the product, i.e., the likelihood that it will cause injury and the probable seriousness of the injury;
  
• The availability of substitute products which would meet the same need and not be as unsafe;
  
• The manufacturer’s ability to eliminate the unsafe characteristics of the product without impairing its usefulness or making it too expensive to maintain its utility;
  
• The user’s ability to avoid danger by the exercise of care in the use of the product;
  
• The user’s anticipated awareness of the dangers inherent in the product, and the ability of the user to avoid such dangers based on general public knowledge of the obvious condition of the product or of the existence of suitable warnings or instructions; and
  
• The feasibility, on the part of the manufacturer, of spreading the loss by setting the price of the product or carrying liability insurance.

The existence of a reasonable design alternative is a factor in the risk-benefit analysis, but it is not necessary to establish a design defect claim.

Colorado law also recognizes a defect where a product’s warnings or instructions are inadequate. Generally, in such cases, the manufacture will not be held liable for a failure to warn unless it is shown that the defendant either knew, or should have known in the exercise of due care, of the risk or hazard that it failed to warn against. A manufacturer has a duty, however, where it knows or should know of a risk, to appropriately label the product, giving due consideration to the likelihood of an accident and the seriousness of the consequences from a failure to warn. A product defect may also exist where a product is not accompanied by warnings or instructions for use which adequately inform the ordinary user of any specific risk of harm which may be involved in any intended or reasonably expected use or any failure to properly follow instructions when using the product for any intended or reasonably expected use.

Presumptions

Colorado’s product liability statute establishes several presumptions. However, it should be noted that several of these presumptions have been substantially altered by case law. The first statutory presumption is that a product is not defective and that the manufacturer or seller was not negligent if the seller or manufacturer can establish either of the following:

• That before the sale, the product conformed to the state of the art applicable to the product at the time of sale; or
  
• That the product complied with any applicable code, standard, or regulation adopted by the United States or any agency of the United States or of the State of Colorado.

Advancements in design, manufacturing, testing, labeling, warning, and various other areas which occur after the product is sold by the manufacturer are not admissible for any purpose other than to show a duty to warn.

The statute also provides that if the manufacturer’s failure to comply with a government code, standard, or regulation in effect at the time of sale that contributed to the claim, such noncompliance creates a rebuttable presumption that the product was defective or negligently manufactured. Colorado has enacted special product liability statutes applying to actions arising out of the use of fire arms and ammunition.

Comparative Fault

Plaintiffs in product liability actions are subject to a comparative fault standard similar to that imposed on other tort plaintiffs. Under the standard, the trier of fact must determine whether the plaintiff was at fault in bringing about the harm and, if so, to what extent. The plaintiff’s award is then reduced proportionately. For example, if the plaintiff is found to be 10% at fault for the harm, the trier of fact will reduce his or her recovery by that much. However, unlike the standard applicable to other tort actions, there is no 50% bar to recovery. Therefore, a plaintiff who is found to be 90% at fault for a $100,000 loss can still collect $10,000 from the manufacturer.

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