Products Liability Law Daily 150-foot-high MGM Grand sign is ‘product’ for strict products liability purposes
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Monday, August 3, 2020

150-foot-high MGM Grand sign is ‘product’ for strict products liability purposes

By David Yucht, J.D.

Adopting a fixed definition of "product" for purposes of strict liability was not necessary. Rather, applying the policy objectives articulated in the Restatement (Second) of Torts was sufficient to resolve whether an item was a "product."

A state appeals panel in Nevada determined that a large sign affixed atop a 150-foot pylon was a "product" within the meaning of strict products liability law. Large commercial signs, such as the one here, are "products" for purposes of strict liability when they are designed, manufactured, and sold by a party engaged in the business of selling and manufacturing such signs. The fact that the pylon sign was custom-made was insufficient to remove it from the sphere of strict liability. Consequently, the appellate court reversed the lower court's order, which had granted summary judgment to the sign manufacturer (Schueler v. Ad Art, Inc., July 30, 2020, Bulla, B.).

A worker was hired by MGM Grand to service a large pylon sign's LED display. While he was walking on the sign's interior platform, a floor panel allegedly failed, causing the worker to fall 150 feet to the ground below and suffer serious injury. Ad Art, Inc. designed and fabricated the sign in sections at its manufacturing facility, and then shipped the sign by way of truck to its customer in Las Vegas, where it was subsequently attached to the pylon. The worker asserted that Ad Art was strictly liable for his injuries and sued based on this theory. A lower court granted summary judgment in Ad Art’s favor, concluding that the sign was not a product for purposes of strict products liability. The worker appealed.

Strict products liability. The appellate court reversed the lower court. The panel determined that large fixtures such as the MGM sign may constitute "products" as defined by strict products liability law. Applying the principles set forth in the Restatement (Second) of Torts, the appellate court held that the MGM sign was a product for purposes of strict liability. The appellate court concluded that adopting a fixed definition of "product" for purposes of strict liability was not necessary. Applying the policy objectives of protecting the public and apportioning costs—as articulated in the Restatement of Torts—was sufficient to resolve the question presented. Moreover, the court concluded that a case-by-case approach was prudent because it permitted courts to analyze each case individually and adjust to changes in technology.

The appellate court noted its disagreement with the lower court over its interpretation of Calloway v. City of Reno (116 Nev. 250 (2000)). The appellate court disagreed that Calloway exempted buildings from the doctrine of strict liability. Moreover, even if Calloway did exempt buildings from strict liability, the MGM pylon sign was a commercial sign and not a building designed for human occupancy. Additionally, the Calloway decision eliminated purely economic damage cases from the scope of strict liability. Here, the worker was claiming damages for bodily injuries. The appellate court also disagreed with the lower court’s conclusion that a product must be mass-produced for it to be the subject of strict liability. Here, Ad Art was engaged in the business of making and selling commercial signs. Consequently, its products were in the stream of commerce, and permitting Ad Art to be sued under a theory of strict products liability furthered strict liability’s safety objective.

The case is No. 75688-COA.

Attorneys: William R. Brenske (Brenske Andreevski & Krametbauer) for Charles Schueler. Timothy F. Hunter (Ray Lego & Associates) for Ad Art, Inc.

Companies: Ad Art, Inc.

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