Products Liability and Economic Activity: An Empirical Analysis of Tort Reform’s Impact on Businesses, Employment, and Production

INTRODUCTION .......................................................................................... 258 I. THE EVOLUTION OF PRODUCTS LIABILITY LAW ...................... 262 A. Early American Law ....................................................... 263 B. Modern American Law ................................................... 265 C. The Liability “Crisis” ...................................................... 266 D. A Period of Reform .......................................................... 267 1. Statutes of Repose .............................................. 269 2. Reforms to Product-Seller Liability ................ 270 3. Reforms to Joint and Several Liability .......... 271 4. Reforms to the Collateral Source Rule ........... 272 5. Noneconomic Damage Caps .............................. 272 6. Punitive Damage Caps ...................................... 274 7. Comparative Negligence ................................... 275 8. Other State-Level Reforms ............................... 276 9. Federal Reforms .................................................. 276 II. BENEFITS AND COSTS OF PRODUCTS LIABILITY LAW ............. 278 A. Benefits of Products Liability Law .............................. 279 1. Compensation of Victims................................... 279 2. Improvements in Product Safety ..................... 281 3. Reduction in Purchases of Risky Products .... 285 B. Costs of Products Liability Law ................................... 285 1. Excessive Transaction Costs ............................ 286