Digital Commons @ Georgia Law LLM Theses and Essays Student Works and Organizations 1-1-1988 Forum Shopping in Products Liability Actions: A Comparison Between the United States, France and Germany Lothar W. Baum University of Georgia School of Law Repository Citation Baum, Lothar W., "Forum Shopping in Products Liability Actions: A Comparison Between the United States, France and Germany" (1988). LLM Theses and Essays. 117. https://digitalcommons.law.uga.edu/stu_llm/117 This Article is brought to you for free and open access by the Student Works and Organizations at Digital Commons @ Georgia Law. It has been accepted for inclusion in LLM Theses and Essays by an authorized administrator of Digital Commons @ Georgia Law. Please share how you have benefited from this access For more information, please contact [email protected]. FORUM SHOPPING IN PRODUCTS LIABILITY ACTIONS: A COMPARISON BETWEEN THE UNITED STATES, FRANCE AND GERMANY by LOTHAR WILHELM BAUM A Thesis Submitted to the Graduate Faculty of The University of Georgia in Partial Fulfillment of the Requirements for the Degree MASTER OF LAWS ATHENS, GEORGIA 1988 lA\N LIBRARY ~": UNIVERSITY OF GEORGrA FORUM SHOPPING IN PRODUCTS LIABILITY ACTIONS: A COMPARISON BETWEEN THE UNITED STATES, FRANCE AND GERMANY by LOTHAR WILHELM BAUM Approved: ;;ful/I)(} I/u~u Date 4/26/1938 Major Professor / J ••... \' t 1 \1 t v' L ..~ \,J",{,'1'i . l Date 4/26/1988 Chairman, Reading Committee Approved: f}L~ Graduate Dean &- Date Table of Contents I. Introduction 1 a) Plaintiff pursuant to Art.4 . b) Defendant pursuant to Art.3 (1 )- (2 ) . 2. Standard of Liability according to Art.6 of the EC Directive . 9 a) Product according to Art.2 EC Direc- tive ............... 9 b) Types of Defects .... 9 (1) Presentation of the Product .. 10 (2) Presumable-Reasonable Use of a Product .•....... 11 (3) Time product was put into Cir- culation . 11 3. Defense under the EC Directive 11 a) Exception of Art. 6 (II) and Art.7(e) 11 b) Other Defenses . 13 4 • Derogations pursuant to Art. 15 EC Directive 13 iii iv 5. Damages and Limits on Liability under the Directive . 14 C. Effect of the EC Directive 14 III. Products Liability in the United States, Federal Re- public of Germany and France today . 17 A. Parties to a Products Liability Claim . 17 1. In the United States . 18 a) Plaintiff . 18 b) Defendants . 19 2. In the Federal Republic of Germany .. 20 a) Plaintiff . 20 b) Defendant . 21 3. In France 23 a) User/End Consumer as Plaintiff 23 b) Defendant . 23 4. Differences and Conclusions 24 B. Standard of Liability ... 26 1. In the United States . 27 a) Breach of Warranty . 28 b) Negligence . 30 c) Strict Liability in Torts 31 2. In the Federal Republic of Germany .... 36 a) Under Current Law - until August 1988 37 (1) Breach of Warranty .... 37 (2) Positive Breach of Contract 39 - v (3) Extra-contractual Products Liability - § 823 BGB 40 (4) Special Acts: Pharmaceutical Act . 44 b) Under the new 'ProdHaftG' 44 3. In France . 46 a) Contractual Liability . 46 b) Extra-contractual Compensation (Code of Obligations) . 48 c) Special Laws in France . 49 4. Conclusions and Differences . 50 C. Defenses . 51 1. In the United States . 52 a) Product Modifications and Subsequent Repairs . 52 b) Mi suse . 53 c) Proximate Cause . 53 c) Assumption of Risk, Contributory and Comparative Negligence .... 54 d) Disclaimer and Limitations on Liabili ty . 56 2. In the Federal Republic of Germany . 58 a) Under Current Law . 58 b) Under the ProdHaftG . 59 c) Comparative Fault . 60 3. In France . 61 a) Defenses of the Manufacturer . 61 vi b) Disclaimer of Liability . 62 4. Sununary . 63 D. Statutes of Limitations . 63 1. In The united States . 64 a) Statutes of Limitations . 64 b) Statutes of Repose . 64 2. In the Federal Republic .•....... 65 a) Under Current Law . 65 b) Under the ProdHaftG . 66 3. In France . 67 4. Sununary . 68 E. Burden of Proof . 68 1. In the united States . 69 2. In Federal Republic of Germany . 72 a) Under current Law . 72 b) Under ProdHaftG . 73 3. In France . 74 4. Conclusion and Differences .. .... 75 E. compensation and Damages ....... 76 1. In the United States . 76 a) Damages in general .... 76 b) Collateral Source Rule . 78 c) Punitive Damages . 79 d) Multiple Defendants . 79 2. In the Federal Republic of Germany . 80 a) Under Current Law . 80 b) Under the New ProdHaftG . 83 vii 84 85 86 86 89 90 G. Summary and Conclusion 91 IV. Jurisdiction ......... ........ 95 1. In the United States . ...... 95 a) In General ..... 96 b) Forum non conveniens .... 101 2. In the Federal Republic of Germany 103 2. In France . 106 a) Foreign Defendants in French Courts . 106 b) Foreign Plaintiffs . 107 4. European Convention on the Jurisdiction of Courts and the Recognition and Enforce- ment of Judgments in Civil and Commer- cial Matters . 108 5. Service of Process 109 6. Conclusion ..... ..... 111 V. Choice of Law/Conflicts of Laws . 114 A. In United States . 114 1. Traditional Approach . 114 2. In Product Liability Actions . 115 viii B. Federal Republic of Germany 117 l 1. The General Rule 117 2. Public Policy Exceptions 118 C. In France 119 1. Basic APproach 119 2. The Hague convention on the Law APplicable to Product Liability 120 D. Conclusions and Differences 122 123 VI. Reco ition and Enforcement of Forei 123 A. In the united States . 124 1. Basic Factor of Comity . 2. The Uniform Foreign Country Money Judgment 125 Recognition . 126 B. In the Federal Republic of Germany . 126 1. Recognition-according to § 328 ZPO 128 2. Enforcement pursuant to §§ 722, 723 ZPO 128 C. In France . 130 D. Enforcement within the Euro ean Communit . 131 E. Conclusion ........ 133 VII. Forum shopping . 133 A. The United States . 136 B. Germany and France . 139 C. The "Best" Forum . ................... 140 VIII. Conclusion l ix ......... • 143 Endnotes ... .... ... • 203 Bibliography . I. Introduction According to the understanding of most Europeans, pro- ducts liability actions in United States courts are charac- terized by the tremendous amounts of money which a plaintiff might recover as damages for her claims. This picture does not tell the whole truth, but provides an opportunity to raise some questions. Should the foreign victim always try to sue the American manufacturer in the United States? Be- cause of the changes which the new Directive on products liability in the European Communities will bring, this ques- tion assumes increased significance. In Europe, the new EC Directive on products liability was recently promulgated on July 25, 1985. According to the Directive, the various member states of the EC1, have until August 1, 1988 to adopt the new Directive.2 The Directive, which contains elements of French and United States laws and rules governing products liability, is supposed to implement a system which is more directed towards 'strict liability' than the most current legal sys- tem in Europe. So far, some states - like United Kingdom and Spain - have already enacted laws consistent with the EC 1 2 standard. 3 The declared goal of the Directive is to move farther towards a uniform european legal system. The EC Directive is merely a step on this route. In transnational actions, in lawsuits where parties from different nations are involved, there is always the question of where a lawsuit should be brought. The impor- tance of this question lies in the fact that the laws of the forum might decide whether the plaintiff succeeds or looses. Today, the possibility of getting involved in a transnation- al legal dispute is increasing, due to the constant rise in international trade between the nations.4 The goods which are sold to private consumers5 in a country are often im- ported or, at least, contain parts from foreign manufac- turers. Sometimes goods, although manufactured abroad, are labeled with the name of a home producer or trader. A pur- chaser of goods who is injured by a defect might have sever- al options on the forum in which to bring his lawsuit. Depending on which part was defective and what exactly caused the injury, the assembler, the part-manufacturer, or the various sellers can be the potential defendant of such claims. Provided that the defendants are from different countries, actions might be brought abroad and at home. Seeking the most favorable country in such a situation is known as 'forum shopping,.6 This term was first used in the US legal literature7, where, due to the fact that the 50 states of the United States have different rules of torts and contract law, 'forum shopping' is a commonplace 3 phenomena. 8 However, until recently, this problem has hard- ly received any attention in Europe.9 This is quite aston- ishing in light of the importance of this problem even in the European context.10 The prevailing view in Europe of forum shopping is a quite negative one.11 However, since efforts on harmonization of the international law of con- flicts have been thus far unsuccessful, 'forum shopping' cannot be avoided. The chance that an international legal system for transnational disputes will be established is rather unlikely. For certain groups of countries, for instance the mem- ber states of the European Community, the chance for har- moni~ation of products liability laws is more likely, but only to a certain degree. Even in the EC, however, where the legal harmonization is one of the major goals, distinc- tions between the various member states will not disappear. Therefore, even in the future, in claims involving parties from different countries, the lawyer will have to consider where the institution of an action is the most favorable for his client.