Illinois Association of Defense Trial Counsel
P.O. Box 7288, Springfield, IL 62791
IDC Quarterly, Vol. 6, No. 3 (6.3.57)
Industry Associations - Tort Duty
By: Thomas R. Pender
Cremer, Kopon, Shaughnessy & Spina
Chicago
The Extent of Duty in Tort Owed by
Voluntary Trade/Industry Associations
With the threat of significant changes in product liability law looming during the last several years,
it should come as no surprise that creative plaintiff’s counsel have sought to expand liability to include
the industry trade associations that encompass certain manufacturers. There appear to be no Illinois
appellate cases which support the proposition that a non-profit, voluntary trade association owes any
duty with regard to its promulgation of safety guidelines and standards. However, other states’ courts
have adjudicated such claims, with mixed results. Lacking any Illinois authority on the subject,
defense counsel should be familiar with the pertinent cases and prepared to distinguish those which
expand the potential defendants to include trade and industry associations.
Traditionally, a duty in tort may be imposed depending upon several factors including the
foreseeability of injury; the likelihood of injury; the magnitude of the burden of guarding against the
injury; and the consequences of putting the burden on the defendant. Lance v. Senior, 36 Ill.2d 516,
224 N.E.2d 231 (1967). However, when balancing these factors, the court must also determine
whether the imposition of a duty in tort is consistent with public policy. Klikas v. Hanover Square
Condominium Association, 240 Ill.App.3d 715, 608 N.E.2d 541 (1st Dist. 1992). Public policy and
social requirements are considerations in determining whether a certain duty exists. Salvi v.
Montgomery Ward & Co., 140 Ill.App.3d 896, 489 N.E.2d 394 (1st Dist. 1986).
Illinois courts and lawmakers have often patterned tort liability based upon public policy grounds.
See, e.g., Blood And Organ Transaction Liability Act, 745 ILCS 40/1 (limiting liability against those
involved in the collection of blood and transplantation of organs); County Engineer and Highway
Superintendent Act, 745 ILCS 15/1 (granting immunity to those charged with building and
maintaining highways from civil suit by persons injured on same); Construction Contract
Indemnification for Negligence Act, 740 ILCS 35/1 (rendering void any indemnification provision
which seeks to indemnify a person or entity from their own negligence in a construction contract);
Burdinie v. Village of Glendale Heights, 139 Ill.2d 501, 565 N.E.2d 654 (1990) (refusing to impose
liability in tort upon municipality for negligence of police officer in the line of duty); Klikas v.
Hanover Square Condominium Association, 240 Ill.App.3d 715, 608 N.E.2d 541 (1st Dist. 1992)
(refusing to impose liability in tort upon landowner who voluntarily shoveled snow from city
sidewalks).
The cases discussed below illustrate that public policy considerations are not only relevant to the
balancing of factors in the analysis of the duty owed by a voluntary trade or industry group — they are
often determinative. Non-profit, voluntary trade organizations serve many laudable purposes in our
society through sponsorship of educational activities, marketing assistance, government relations,
public relations, standardization and specification within the industry and responding to consumer
needs and interests. Trade associations often serve to assist the government in areas which it does not
regulate. Webster, G., The Law of Associations, Mathew Bender (1986 ed.) Chapter 1. These policy
considerations, along with the often attenuated causal link to voluntary trade groups, have served to
insulate the groups from liability in several important cases.
The seminal defense case, and the most thoroughly and well-reasoned, is Meyers v. Donnatacci,
220 N.J.Super. 73, 531 A.2d 398 (N.J.Super. 1987), in which a New Jersey Superior Court refused to
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Illinois Association of Defense Trial Counsel
P.O. Box 7288, Springfield, IL 62791
IDC Quarterly, Vol. 6, No. 3 (6.3.57)
adopt a theory of liability against a non-profit industry group which promulgated voluntary, consensus
guidelines for the construction of above-ground swimming pools. The plaintiff, who was rendered a
quadriplegic as a result of a dive into an above-ground swimming pool, brought a strict product
liability claim against the pool manufacturer and a negligence claim against the National Spa and Pool
Institute (“NSPI”), a trade associ-ation that included the defendant manufacturer as a
member.
NSPI did not manufacture or design swimming pools or swimming equipment. Rather, it was a
non-profit trade
association comprised of several hundred representatives from swimming pool manufacturers, the Red
Cross, YMCA groups, coaches, teachers and physicians. In 1974, NSPI promulgated a revised set of
standards entitled “Suggested Minimum Standards for Residential Swimming Pools” The standard
was developed by circulation to the membership, committee involvement, solicitation of comments,
meetings, consultation from outside research firms and consensus voting. Later, these voluntary
standards were distributed to the public for a fee and were also available to the membership.
Thereafter, pamphlets, brochures and other materials were published and made available to the general
public free of charge. The information published was advisory and the use thereof was within the
discretion and control of the individual user.
The pool in which the plaintiff was injured was manufactured five years after the publication of the
NSPI standards. It contained no warnings against diving into shallow water. The plaintiff’s allegations
against NSPI, grounded in negligence, were that they were aware of the correlation between shallow
water diving and spinal cord injuries as early as 1974 and despite this knowledge, failed to take action
to prevent the harm. Alternatively, plaintiff charged that NSPI assumed the duty to acquire and
disseminate pool safety information it acquired through research and that its members relied upon
NSPI’s standards, thus foregoing their own research, resulting in the plaintiff’s injury.
In ruling that a trade association owed no duty of care and assumed no duty of care not otherwise
owed to any user of a product manufactured and/or designed by members of that association, the court
enunciated several factors: (1) no special relationship existed between the plaintiff and NSPI; (2) the
process of promulgating the standards was voluntary and the results reflected the consensus of those
who chose to respond; (3) NSPI had no authority to enforce compliance with its standards; (4) Neither
admission nor continued membership in NSPI was premised upon compliance with promulgated
consensus standards; (5) the information published was advisory and use thereof was within the
discretion and control of the individual user; (6) there was no evidence that NSPI suppressed any
information that it obtained prior to promulgation of the standards; (7) NSPI could not foresee that
plaintiff would be injured as he was; and (8) NSPI was a non-profit trade association which made
laudable contributions to the industry by way of sponsoring educational activities, assisting in
marketing, maintaining government relations, research, establishing public relations, standardization
within the industry, gathering data and responding to consumer and member needs and interests. The
court refused to raise NSPI to the status of a rule-making body since the facts clearly did not support
such liability and which public interest dictated strongly against.
The Meyers opinion includes a discussion of two New York cases which the New Jersey Superior
court relied upon, one of which involved above-ground swimming pools and, the other, truck tire rims.
See, Beasock v. Dioguardi Enterprises, Inc., 130 Misc.2d 25, 494 N.Y.S.2d 974 (Sup.Ct. 1985);
Howard v. Poseidon Pools, Inc., 133 Misc.2d 50, 506 N.Y.S.2d 523 (Sup.Ct. 1986), cited in Meyer at
401 (“Two New York courts have refused to impose a duty of care upon trade associations under
similar circumstances.”).
The Beasock decision includes another thorough recitation of the facts and policies underlying the
court’s decision to grant summary judgment to the Tire and Rim Association (TRA), a not-for-profit
Ohio corporation whose primary function was to promote dimensional standards with the automotive
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Illinois Association of Defense Trial Counsel
P.O. Box 7288, Springfield, IL 62791
IDC Quarterly, Vol. 6, No. 3 (6.3.57)
industry for tires and rims. All tire and rim manufacturers were eligible for membership in the
association, which had 15 committees to assist in various functions, including the promulgation of
design standards and engineering design information. The standards were not mandatory and were not
enforced by TRA. Although the Beasock court recognized a duty upon one who disseminates
erroneous information, the court did not find a sufficient relationship between this trade association
and the injured plaintiff to justify imposition of such a duty in this case. The court also noted the lack
of economic benefit to TRA in their activities as another reason why imposing such a duty would be
unfair.
In Howard the plaintiff was rendered a quadriplegic after attempting a dive into a four feet deep,
above-ground swimming pool. Plaintiff brought suit against the National Spa and Pool Institute on
four theories: negligent misrepresentation, strict product liability, breach of warranty and negligence.
Like the court in Beasock, this court refused to find a duty owed by the NSPI to the injured plaintiff,
based primarily upon the lack of any evidence that NSPI controlled the manufacturer of the injurycausing product.
A
lso
probative
to
the
Meyers
court
was
a
federal
court
decision from Indianapolis which held that a trade association owed no duty to convey the
dangers of working with a pesticide called CCA. In Evenson v. Osmose Wood Preserving, Inc., 760
F.Supp. 1345 (S.D.Ind. 1990), the plaintiff was a wood treatment worker allegedly injured by
exposure to the pesticide CCA who brought a products liability action against the pesticide’s
manufacturer and a trade association called the American Wood Preserving Institute. The court
determined that plaintiff failed to establish that AWPI owed him a duty to communicate the dangers of
CCA. AWPI was a trade association that did not manufacture, sell, distribute, design, test, conduct
safety research on, or set standards for CCA. There was no relationship upon which plaintiff could
base a claim for negligence against AWPI. Evenson, 760 F.Supp. at 1349.
The Evenson court relied upon a Mississippi federal court decision involving the National Auto
Parts Association (NAPA), a non-profit membership organization which provides marketing and
consulting services to its member companies. In Harmon v. National Automotive Parts Association,
720 F.Supp. 79 (N.D.Miss. 1989) the plaintiff was injured by a car battery which exploded in his face.
The battery had been purchased by plaintiff at a NAPA authorized dealer. In addition to the marketing
services which NAPA provided to its members, it also licensed the use of its trademark by
manufacturers and members, although it charged no fee for the use of its name. Distribution of the
parts was effected by five corporations who were members and licensees of NAPA. Sales were made
from independently owned parts dealers who were also NAPA members. The various member
companies contributed to fund national advertising under the NAPA name; however, NAPA itself did
not manufacture, market, test, inspect, distribute, or warehouse any products.
The Harmon court concluded that Mississippi product liability law should not be extended to a
trade association that markets a product and allows the use of its name on the product. One of the
court’s central reasons for the decision relates to the public policy interests served by trade
associations:
The evidence shows that NAPA is not so directly connected with the manufacture or sale of this
battery to be liable under a straightforward application of any product liability theory.
... Perhaps the one overriding concern behind the court’s decision is that extension of liability for
a defective product to one in NAPA’s position does not serve the public policy interests that
have guided the development of products liability law in this country. The general idea behind
that development has been to place liability for injuries caused by defective products on those
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Illinois Association of Defense Trial Counsel
P.O. Box 7288, Springfield, IL 62791
IDC Quarterly, Vol. 6, No. 3 (6.3.57)
most readily able to spread the cost among all consumers — i.e., those in a position to control
the price of the product. NAPA is a nonprofit organization with apparently no control over the
price of the products sold under its name.
Harmon, 720 F.Supp. at 82. See, also, Klein v. Council of Chemical Associations, 587 F.Supp. 213,
225 (E.D.Pa. 1984) (chemical trade associations which did not manufacture or sell product were not
liable although they conducted research regarding products).
The language of these cases provides capacious support for a defense argument that the public
policy is best served by in encouraging voluntary trade groups to promulgate safety literature and
research. The so-called “chilling effect” of such an imposition of liability is a very real threat and must
be brought to the court’s attention. See, e.g., Smith v. Black & Decker (U.S.), Inc., 272 Ill.App.3d 451,
650 N.E.2d 1108 (3d Dist. 1985) and Carrizales v. Rheem Mfg. Co., Inc., 226 Ill.App.3d 20, 589
N.E.2d 569 (1st Dist. 1991). For the same reasons the Superior Court of New Jersey refused to find a
duty of care in Meyers, defense practitioners defending this type of claim should be prepared to argue
that the Illinois Supreme Court would rule consistently with the Meyers holding. The public policy
reasoning behind the Meyers holding is equally compelling to the interests of the citizens and vast
manufacturing/business interests of Illinois.
The most compelling decision to impose a duty in tort on a voluntary trade group, again the
National Spa & Pool Institute, is King v. National Spa & Pool Institute, Inc., 570 So.2d 612 (Ala.
1990), where the Alabama Supreme Court ruled that the NSPI owed a duty once it voluntarily
undertook to promulgate safety standards. However, the King court did temper it’s decision by noting
they had reviewed the New Jersey Meyers decision at length and admitted that, “...we might have
reached the same result under the facts in Meyers as the New Jersey Superior Court did...” King, 570
So.2d at 618.
Instead, the King court analyzed liability under the Restatement (2d) of Torts, Section 324
provisions relating to voluntary undertaking. See also, Arnstein v. Manufacturing Chemists
Association, Inc., 414 F.Supp. 12 (E.D.Pa. 1976). However, the voluntary undertaking theory is
narrowly limited in Illinois and may not necessarily be a source of liability for a trade association in
Illinois. Is the plaintiff proceeding on a theory that the trade association provided certain safety
guidelines, instructions or warnings relating to a given topic, but eschewed any mention of the hazard
which caused the injury to his or her client? Or, is the plaintiff claiming that the trade association’s
guidelines did address the hazard in question, but did so negligently? This is a critical distinction and
one acknowledged by the Illinois Supreme Court as determinative on the issue of duty. Frye v.
Medicare-Glaser Corp., 153 Ill.2d 26, 605 N.E.2d 557 (1992).
In Frye, the case dealt with the warnings provided by a pharmacist who dispensed a prescription
drug which, when combined with alcohol, resulted in the customer’s death. The estate sued the
pharmacy on a common law negligence theory for failing to warn the decedent of the danger in
mixing the drug with alcohol and of the potential side effect of drowsiness. The record revealed that
there were several warning stickers that the pharmacist could have placed on the bottle and that the
decision as to which to apply was left to the pharmacist’s discretion. The pharmacist chose to apply an
orange sticker which read, “may cause drowsiness,” and a symbol of a drowsy eye. The pharmacist
omitted a warning about the dangers of combining the drug with alcohol.
The Illinois Supreme Court analyzed the case using a simple “reasonableness” framework with
reliance upon Illinois law relating to voluntary undertakings. The court found that the pharmacist
initially owed no duty to attach any warning not specified in the physician’s prescription. Thus, the
omission of a warning relating to alcohol consumption was not a breach of the standard of care.
However, having voluntarily undertaken to provide warnings as to drowsiness, the pharmacist had to
act reasonably in so doing. The court ruled that the pharmacist did act reasonably under the facts.
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Illinois Association of Defense Trial Counsel
P.O. Box 7288, Springfield, IL 62791
IDC Quarterly, Vol. 6, No. 3 (6.3.57)
Additionally, the court expressly rejected the estate’s argument that the pharmacist, having undertaken
to provide one warning, had a duty to provide all warnings relating to the product.
Thus, under the law of Frye and King, an argument may be made that a trade association is liable if
guidelines, instructions or warnings are given, but are given unreasonably. However, the failure to
address a topic or subject in the guidelines should not result in liability. Of course, practitioners should
be prepared to argue that neither Frye, nor the Alabama Supreme Court decision in King, should
transcend the public policy considerations favoring voluntary industry/trade groups. The estimable
services provided by industry and trade associations without any concern for profit far outweigh the
objective of tort law, and particularly product liability law, of imposing liability against those in the
commercial chain of responsibility.
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