Harnessing Madison avenue: Advertising and products liability theory

Harvard Law Review

Volumn 107, Issue 4, 1994, Pages 895-912

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EID: 1542694428     PISSN: 0017811X     EISSN: None     Source Type: Journal    
DOI: 10.2307/1341998     Document Type: Article

References (119)

1. See James H. Snider, Consumers in the Information Age, FUTURIST, Jan. 1993, at 15, 15.
2. See id. All told, Americans spend a total of more than 30.6 billion hours per year watching television commercials. See id.
3. See ROBERT P. THOMAS, MICROECONOMIC APPLICATIONS: UNDERSTANDING THE AMERICAN ECONOMY 199 (1981).
4. 161 A.2d 69 (N.J. 1960).
5. 377 P.2d 897 (Cal. 1962).
6. 150 P.2d 436 (Cal. 1944).
7. See Greenman, 377 P.2d at 901 (noting that consumers rely on manufacturers' representations); Henningsen, 161 A.2d at 83 ("Under modern conditions the ordinary layman, on responding to the importuning of colorful advertising, has neither the opportunity nor the capacity to inspect or to determine the fitness of an automobile for use . . . ."); Escola, 150 P.2d at 443 (Traynor, J., concurring) (noting that consumers have been "lulled" by manufacturer-provided advertising and marketing devices).
8. In recent years, total advertising spending by U.S. manufacturers have surged in spite of the general economic downturn. In 1993, all media advertising spending is estimated to total $138.1 billion, with a projected increase of up to $146.8 billion in 1994. See Dick Marlowe, Advertising Industry Excels By Changing Shape to Fit the Medium, ORLANDO SENTINEL, Dec. 8, 1993, at C1; see also Jonathan Rowe, Gauging the Impact of Advertising, CHRISTIAN SCIENCE MONITOR, Jan. 28, 1987, at 14 ("In America, advertising is as inescapable as air." (quoting advertising expert Jean Kilbourne)).
9. In recent years, total advertising spending by U.S. manufacturers have surged in spite of the general economic downturn. In 1993, all media advertising spending is estimated to total $138.1 billion, with a projected increase of up to $146.8 billion in 1994. See Dick Marlowe, Advertising Industry Excels By Changing Shape to Fit the Medium, ORLANDO SENTINEL, Dec. 8, 1993, at C1; see also Jonathan Rowe, Gauging the Impact of Advertising, CHRISTIAN SCIENCE MONITOR, Jan. 28, 1987, at 14 ("In America, advertising is as inescapable as air." (quoting advertising expert Jean Kilbourne)).
10. The debate over whether consumers are informed about product risks and safety - and if not, how optimally to inform them - constitutes one of the prominent debates in modern products liability scholarship. See, e.g., Steven P. Croley & Jon D. Hanson, Rescuing the Revolution: The Revived Case for Enterprise Liability, 91 MICH. L. REV. 683, 770-79 (1993); William M. Landes & Richard A. Posner, A Positive Economic Analysis of Products Liability, 14 J. LEG. STUD. 535, 544-50 (1985); Alan Schwartz & Louis L. Wilde, Imperfect Information in Markets for Contract Terms: The Examples of Warranties and Security Interests, 69 VA. L. REV. 1387, 1431-62 (1983).
11. The debate over whether consumers are informed about product risks and safety - and if not, how optimally to inform them - constitutes one of the prominent debates in modern products liability scholarship. See, e.g., Steven P. Croley & Jon D. Hanson, Rescuing the Revolution: The Revived Case for Enterprise Liability, 91 MICH. L. REV. 683, 770-79 (1993); William M. Landes & Richard A. Posner, A Positive Economic Analysis of Products Liability, 14 J. LEG. STUD. 535, 544-50 (1985); Alan Schwartz & Louis L. Wilde, Imperfect Information in Markets for Contract Terms: The Examples of Warranties and Security Interests, 69 VA. L. REV. 1387, 1431-62 (1983).
12. The debate over whether consumers are informed about product risks and safety - and if not, how optimally to inform them - constitutes one of the prominent debates in modern products liability scholarship. See, e.g., Steven P. Croley & Jon D. Hanson, Rescuing the Revolution: The Revived Case for Enterprise Liability, 91 MICH. L. REV. 683, 770-79 (1993); William M. Landes & Richard A. Posner, A Positive Economic Analysis of Products Liability, 14 J. LEG. STUD. 535, 544-50 (1985); Alan Schwartz & Louis L. Wilde, Imperfect Information in Markets for Contract Terms: The Examples of Warranties and Security Interests, 69 VA. L. REV. 1387, 1431-62 (1983).
13. See, e.g., Jennifer L. Radner, Comment, Phone, Fax, and Frustration: Electronic Commercial Speech and Nuisance Law, 42 EMORY L.J. 359, 366 (1993) ("[C]ourts generally have failed to recognize the importance of persuasive advertising to consumer decision-making.").
14. This is true of torts scholars of all persuasions. Scholars who argue for a return to a contract-based liability regime tend to focus on warranties and warnings as the preferred informational vehicles. Scholars arguing for retention of tort liability often point out that consumers have inadequate information to make optimal decisions, but they often are not explicit about how advertising factors into the equation.
15. Much scholarship on marshalling consumer information and market incentives to promote the functional goals of tort tends to ignore advertising and focus instead on the provision of warranties and warnings. See Sanford J. Grossman, The Informational Role of Warranties and Private Disclosure About Product Quality, 24 J.L. & ECON. 461, 464-80 (1981); George Priest, A Theory of the Consumer Product Warranty, 90 YALE L.J. 1297, 1303-07 (1981).
16. Much scholarship on marshalling consumer information and market incentives to promote the functional goals of tort tends to ignore advertising and focus instead on the provision of warranties and warnings. See Sanford J. Grossman, The Informational Role of Warranties and Private Disclosure About Product Quality, 24 J.L. & ECON. 461, 464-80 (1981); George Priest, A Theory of the Consumer Product Warranty, 90 YALE L.J. 1297, 1303-07 (1981).
17. See Richard Abel, Risk As an Arena of Struggle, 83 MICH. L. REV. 772, 785 & n.38 (1985) (book review); William J. Carney, Does Defining Constituencies Matter?, 59 U. CIN. L. REV. 385, 399 (1990).
18. See Richard Abel, Risk As an Arena of Struggle, 83 MICH. L. REV. 772, 785 & n.38 (1985) (book review); William J. Carney, Does Defining Constituencies Matter?, 59 U. CIN. L. REV. 385, 399 (1990).
19. See STEPHEN BREYER, REGULATION AND ITS REFORM 26 (1982); Howard Beales, Richard Craswell & Steven C. Salop, The Efficient Regulation of Consumer Information, 24 J.L. & ECON. 491, 492 (1981).
20. See STEPHEN BREYER, REGULATION AND ITS REFORM 26 (1982); Howard Beales, Richard Craswell & Steven C. Salop, The Efficient Regulation of Consumer Information, 24 J.L. & ECON. 491, 492 (1981).
21. Landes & Posner, supra note 9, at 548.
22. See, e.g., W. KIP VISCUSI, REFORMING PRODUCTS LIABILITY 64 (1991) ("[T]he chief inadequacy of the market is inadequate risk information. Knowledge of the risks posed by products is seldom perfect, and the usual assumption underlying products liability law is that consumers are unaware of the risks they face.").
23. A few scholars, however, steadfastly dissent from this view. See, e.g., Alan Schwartz, The Case Against Strict Liability, 60 FORDHAM L. REV. 819, 828 (1992) ("No specific studies establish that consumers have or lack sufficient information to make optimal decisions respecting product risks.").
24. See, e.g., id. at 828 ("Evidence exists . . . that consumers search for information about the attributes of expensive, dangerous, and infrequently purchased products, and that markets respond by supplying this information."); Note, Enforcing Waivers in Products Liability, 69 VA. L. REV. 1111, 1125 (1983) ("[I]nformation about specific product risks will reach the consumer through the market. Recent economic studies have shown that markets can be competitive in information just as they can be competitive in price . . . .").
25. See Grossman, supra note 12, at 479 ("[W]hen firms have tools available which they could use to convey information [about product quality] they will do so.").
26. See Marcy Magiera, Pepsi Weathers Tampering Hoaxes; It's a Textbook Case of How to Come Through a PR Crisis, ADVERTISING AGE, June 21, 1993, at 1; New Research Rating Brand Equity Finds Mercedes, Kodak Film Tops in Consumer Perceptions of Quality, PR NEWSWIRE, Jan. 9, 1990, available in LEXIS, Nexis Library, PR Newswire File ("The quality image of a brand is often a key variable in its success in the marketplace.").
27. See Marcy Magiera, Pepsi Weathers Tampering Hoaxes; It's a Textbook Case of How to Come Through a PR Crisis, ADVERTISING AGE, June 21, 1993, at 1; New Research Rating Brand Equity Finds Mercedes, Kodak Film Tops in Consumer Perceptions of Quality, PR NEWSWIRE, Jan. 9, 1990, available in LEXIS, Nexis Library, PR Newswire File ("The quality image of a brand is often a key variable in its success in the marketplace.").
28. See Priest, supra note 12, at 1297.
29. See, e.g., Mark Geistfeld, Implementing Enterprise Liability: A Comment on Henderson and Twerski, 67 N.Y.U. L. REV. 1157, 1159 n.7 (1992) ("One way consumers can observe whether a manufacturer has made investments in product safety is by evaluating product warranties . . . ."); Grossman, supra note 12, at 471 ("[T]he degree of warranty can be a sufficient statistic for the seller's information.").
30. The theory that warranties "signal" to consumers the quality of a manufacturer's product has been explored extensively. See Schwartz & Wilde, supra note 9, at 1396-97.
31. See James A. Henderson, Jr. & Aaron D. Twerski, Doctrinal Collapse in Products Liability: The Empty Shell of Failure to Warn, 65 N.Y.U. L. REV. 265, 285 (1990).
32. See VISCUSI, supra note 16, at 146-49.
33. See Priest, supra note 12, at 1346 ("Most of us can recall occasions as consumers in which we have been uninformed about warranty content at the time of purchase. . . . [T]he large majority of consumers behave similarly . . . ."); infra note 59.
34. See id. at 1347.
35. See id.
36. See Beales, Craswell & Salop, supra note 14, at 502.
37. Courts sometimes award damages for such nonpecuniary losses as pain and suffering. See II AMERICAN LAW INSTITUTE, ENTERPRISE RESPONSIBILITY FOR PERSONAL INJURY 199-201 (1991). But see STEVEN SHAVELL, ECONOMIC ANALYSIS OF ACCIDENT LAW 134 (noting that nonpecuniary damages are difficult to estimate and recommending that courts avoid awarding such damages when the losses are small).
38. Courts sometimes award damages for such nonpecuniary losses as pain and suffering. See II AMERICAN LAW INSTITUTE, ENTERPRISE RESPONSIBILITY FOR PERSONAL INJURY 199-201 (1991). But see STEVEN SHAVELL, ECONOMIC ANALYSIS OF ACCIDENT LAW 134 (noting that nonpecuniary damages are difficult to estimate and recommending that courts avoid awarding such damages when the losses are small).
39. See Landes & Posner, supra note 9, at 548; Alan O. Sykes, Reformulating Tort Reform, 56 U. CHI. L. REV. 1153, 1165 (1989) (book review).
40. See Roberta Romano, A Comment on Information Overload, Cognitive Illusions, and Their Implications for Public Policy, 59 S. CAL. L. REV. 313, 322 (1986).
41. George A. Akerlof broached the "lemons" theory in his classic article, The Market for "Lemons": Quality Uncertainty and the Market Mechanism, 84 Q.J. ECON. 488 (1970). See also BREYER, cited above in note 14, who states that consumers are "unlikely" at the time of purchase to know if the [product] is a lemon." Id. at 28.
42. See Akerlof, supra note 33, at 488 ("[T]here is incentive for sellers to market poor quality merchandise, since the returns for good quality accrue mainly to the entire group whose statistic is affected rather than to the individual seller."). The lemons theory is perhaps best illustrated through a hypothetical. Suppose Manufacturer A's widgets are safer than those of Manufacturer B. Because of the added expenses of safety, however, A's widgets costs $20, compared to $15 for B's widgets. Consumers, however, cannot distinguish A from B based on safety. Because of A's innovations, therefore, consumers view widgets as generally safe, but purchase B's because they are cheaper. Losing its business to B, in turn, prompts A to divest in safety and reintroduce lower quality widgets into the market at $14 - triggering the competition for lemon widgets.
43. See BREVER, supra note 14, at 28.
44. See id. The airline industry is a case in point: Consumers are hard-pressed to gather comparative data about individual airline safety; however, were markets functioning optimally, one might expect to find robust competition among airlines seeking to establish themselves as safe. Chief Judge Breyer notes that airlines are quite competitive in the areas of price and service quality and suggests that airlines will enter more readily into tacit understandings to suppress competition over safety information than to enter into tacit understandings to suppress competition over price and service quality. See id.
45. See Howard Latin, "Good" Warnings, Bad Products, and Cognitive Mistakes 12-29 (1993) (unpublished manuscript, on file at the Harvard Law School Library).
46. See id. at 18.
47. See WILLIAM M. LANDES & RICHARD A. POSNER, THE ECONOMIC STRUCTURE OF TORT LAW 281 (1987).
48. See infra pp. 902-04 (cognitive section).
49. Some courts, including the Supreme Court, have articulated the need for psychological evidence under some circumstances. See, e.g., Ford Motor Credit Co. v. Milhollin, 444 U.S. 555, 568 (1980) (stating that a proper assessment of "meaningful disclosure" under the Truth In Lending Act requires "an empirical process that entails investigation into consumer psychology").
50. These errors include cognitive dissonance (the inability to remain cognizant of two conflicting ideas, ignoring or distorting evidence relevant to the truth of B in order to preserve A), the failure to consider base rates and sample sizes (impulsive and emotional decisionmaking, which ignores relevant base rates and puts much faith on very few numbers), the tendency to ignore low probability events, the misuse of "representative" and "availability" heuristics (systematic biases in processing information), and information overload (overabundance of information leading to selectively biased processing). See ROBERT COOTER & THOMAS ULEN, LAW AND ECONOMICS 415-18 (1988); JUDGMENT UNDER UNCERTAINTY: HEURISTICS AND BIASES passim (Daniel Kahneman, Paul Slovic & Amos Tversky eds., 1982); Ward Edwards & Detlof von Winterfeldt, Cognitive Illusions and Their Implications for the Law, 59 S. CAL. L. REV. 225 passim (1986).
51. These errors include cognitive dissonance (the inability to remain cognizant of two conflicting ideas, ignoring or distorting evidence relevant to the truth of B in order to preserve A), the failure to consider base rates and sample sizes (impulsive and emotional decisionmaking, which ignores relevant base rates and puts much faith on very few numbers), the tendency to ignore low probability events, the misuse of "representative" and "availability" heuristics (systematic biases in processing information), and information overload (overabundance of information leading to selectively biased processing). See ROBERT COOTER & THOMAS ULEN, LAW AND ECONOMICS 415-18 (1988); JUDGMENT UNDER UNCERTAINTY: HEURISTICS AND BIASES passim (Daniel Kahneman, Paul Slovic & Amos Tversky eds., 1982); Ward Edwards & Detlof von Winterfeldt, Cognitive Illusions and Their Implications for the Law, 59 S. CAL. L. REV. 225 passim (1986).
52. These errors include cognitive dissonance (the inability to remain cognizant of two conflicting ideas, ignoring or distorting evidence relevant to the truth of B in order to preserve A), the failure to consider base rates and sample sizes (impulsive and emotional decisionmaking, which ignores relevant base rates and puts much faith on very few numbers), the tendency to ignore low probability events, the misuse of "representative" and "availability" heuristics (systematic biases in processing information), and information overload (overabundance of information leading to selectively biased processing). See ROBERT COOTER & THOMAS ULEN, LAW AND ECONOMICS 415-18 (1988); JUDGMENT UNDER UNCERTAINTY: HEURISTICS AND BIASES passim (Daniel Kahneman, Paul Slovic & Amos Tversky eds., 1982); Ward Edwards & Detlof von Winterfeldt, Cognitive Illusions and Their Implications for the Law, 59 S. CAL. L. REV. 225 passim (1986).
53. A few scholars acknowledge the prevalence of cognitive errors, but argue that they sway consumers toward pessimism about product safety, which obviates the need for any informational intervention. See Schwartz & Wilde, supra note 9, at 1435-46.
54. See Bates v. State Bar of Ariz., 433 U.S. 350, 376 (1977) ("Advertising is the traditional mechanism in a free-market economy for a supplier to inform a potential purchaser of the availability and terms of exchange.").
55. See Howard A. Latin, Problem-Solving Behavior and Theories of Tort Liability, 73 CAL. L. REV. 677, 731 n.227 (1985) ("Advertising is the primary device manufacturers use to inform consumers about . . . characteristics such as safety that are not immediately apparent from inspection of the products."); Michael I. Meyerson, The Efficient Consumer Form Contract: Law and Economics Meets the Real World, 24 GA. L. REV. 583, 615 n.170 (1990) ("The seller's advertisement may be the only prepurchase information about safety available to the consumer.").
56. See Howard A. Latin, Problem-Solving Behavior and Theories of Tort Liability, 73 CAL. L. REV. 677, 731 n.227 (1985) ("Advertising is the primary device manufacturers use to inform consumers about . . . characteristics such as safety that are not immediately apparent from inspection of the products."); Michael I. Meyerson, The Efficient Consumer Form Contract: Law and Economics Meets the Real World, 24 GA. L. REV. 583, 615 n.170 (1990) ("The seller's advertisement may be the only prepurchase information about safety available to the consumer.").
57. Compare W. KIP VISCUSI, FATAL TRADEOFFS 29 (1992) ("Cars such as the Mercedes-Benz and the Acura have introduced [airbags and other safety devices], whereas the Ford Escort and the Toyota Tercel have avoided such devices, which would lead to a dramatic relative price increase.") with Rick Kranz, Airbags Spread to Most '94s; Big 3 Lead Way For Cars, Trucks, AUTOMOTIVE NEWS, May 17, 1993, at 36 (reporting that the 1994 models of the Ford Escort and the Toyota Tercel will be equipped with standard driver-side airbags).
58. Compare W. KIP VISCUSI, FATAL TRADEOFFS 29 (1992) ("Cars such as the Mercedes-Benz and the Acura have introduced [airbags and other safety devices], whereas the Ford Escort and the Toyota Tercel have avoided such devices, which would lead to a dramatic relative price increase.") with Rick Kranz, Airbags Spread to Most '94s; Big 3 Lead Way For Cars, Trucks, AUTOMOTIVE NEWS, May 17, 1993, at 36 (reporting that the 1994 models of the Ford Escort and the Toyota Tercel will be equipped with standard driver-side airbags).
59. See Anthony Ramirez, New Philip Morris Cigarette Emphasizes Less Nicotine, N.Y. TIMES, Jan. 18, 1992, § 1, at 37 (describing the competitive market for low-tar, low-nicotine cigarettes).
60. See John E. Calfee, Let Market Forces, Not the FDA, Regulate Food and Drugs, Writes B.U. Professor Calfee, ROLL CALL, available in LEXIS, Nexis Library, CURRNT File (May 21, 1992) ("Advertising and promotion that use health information can be an efficient method for disseminating useful information to consumers.").
61. Much of the evidence considered by this Note is drawn from an original survey of actual consumers. Nearly all 492 consumers surveyed were students of the Harvard Law School. Hence, it should be acknowledged at the outset that the survey population is not representative of the general population, despite the broad ethnic, geographical, and economic diversity of the student body. Another limitation of a survey approach is that it does not observe actual consumer decisionmaking; it merely asks consumers to report what persuades them, which might not be accurate. Given these limitations, the survey does not purport to be a statistically valid register of the preferences of the buying public; rather, it is presented as one set of data points to test unproven assumptions - economic and otherwise - about consumer preferences and decisionmaking processes. However, because this Note argues that advertising has a greater impact than warranties over purchase decisions about products known to be dangerous, the survey's sample selection bias would not undermine the validity of its conclusions insofar as law students - who are versed in torts and contracts - are more likely than the general public to read warranties and warnings. The survey was delivered to the campus mailbox of every J.D. and graduate student at the Harvard Law School on November 15, 1993. A lottery with a cash prize provided students with an incentive to return their surveys. Altogether, approximately 1,825 surveys were distributed; of these, 492 were returned (hence there is also a self-selected bias among those who returned the surveys). All surveys and detailed tabulations are on file at the Harvard Law School Library.
62. Among the questions in this Note's survey was the following, "Assume you are shopping for a product that is known to be potentially dangerous (e.g., automobiles, food processors, lawnmowers) and that you are concerned about safety. What information is more likely to influence your purchase decision?" Respondents were asked to choose between "safety advertising," "warranties or warnings," or "equal or neither." Of the 492 students surveyed, 53% chose "safety advertising"; 22% chose "warranties or warnings"; and 26% chose "equal or neither." In a poll conducted by the Gallup Organization for the American Society for Quality Control, 1,005 consumers were asked by pollsters what factors they look to in order to gauge the quality of a product. Of those polled, 7% said they relied upon advertising, whereas only 1% mentioned warranties. See Gallup Organization, Survey 001, Public Opinion On-Line, Sept. 1985, available in DIALOG, File No. 468.
63. This breakdown is similar to one employed by Latin. See Latin, supra note 37, at 5-8.
64. See LANDES & POSNER, supra note 39, at 274-80; Schwartz, supra note 17, at 820.
65. See COOTER & ULEN, supra note 42, at 416-17 (1988); HERBERT SIMON, MODELS OF BOUNDED RATIONALITY passim (1982); Latin, supra note 37, at 5-8.
66. Cf. Daniel Hays Lowenstein, "Too Much Puff": Persuasion, Paternalism, and Commercial Speech, 56 CIN. L. REV. 1205, 1222 (1988) (stating that most advertisements "make no pretense of appealing to rational deliberation and are imbued with the most manipulative techniques contemporary social science makes possible").
67. See Philip H. Bonello, The Role of Psychology in Direct Marketing, DM NEWS, July 20, 1992, at 43; Rowe, supra note 9, at 14; Jesus Sanchez, Marketing: Consumer Psychographic Research Examines the Why Behind the Buy, L.A. TIMES, June 5, 1990, at D6.
68. See Philip H. Bonello, The Role of Psychology in Direct Marketing, DM NEWS, July 20, 1992, at 43; Rowe, supra note 9, at 14; Jesus Sanchez, Marketing: Consumer Psychographic Research Examines the Why Behind the Buy, L.A. TIMES, June 5, 1990, at D6.
69. See Leo Bogart, Mass Advertising: The Message, Not the Measure, HARV. Bus. REV., Sept./Oct. 1976, at 107 (Much advertising for national brands only helps the advertiser to tread water. . . . [E]ver larger amounts of effort and of expensive time and space are devoted to winning attention, to standing out amidst the clamor. And, for this purpose, it has become common to use arresting technical devices.).
70. See Melvin A. Eisenberg, Text Anxiety, 59 S. CAL. L. REV. 305, 305 (1986) ("[C]onsumers who are faced with the dense text of form contracts characteristically respond by refusing to read and . . . it is reasonable for them to do so.").
71. See Salli Rasberry, Advertising Doesn't Work - The Way You Think It Does, WHOLE EARTH REV., Mar. 22, 1987, at 100, 100.
72. A majority of the students surveyed by this Note, see supra note 56, said that they do not routinely read warranties and are unlikely to be influenced in their purchase decisions by the presence or content of a warranty. First, respondents were asked, "When products you buy come with warranties, do you read them?" They were instructed to choose from the following responses: (1) "always"; (2) "frequently"; (3) "sometimes"; (4) "seldom"; (5) "never." Of the 492 respondents, 43% chose "seldom" and 9% chose "never." By contrast, 15% chose "frequently," and 2% chose "always." Finally, 30% chose "sometimes." (x̄ = 3.41; σ = ± 0.91). Second, respondents were asked, "How likely is the presence or content of a warranty to influence your decision whether to buy a particular product?" The available responses were: (1) "very likely"; (2) "likely"; (3) "somewhat likely"; (4) "unlikely"; (5) "very unlikely." Of those surveyed, 29% chose "unlikely" and 13% chose "very unlikely." By contrast, 18% chose "likely" and 3% chose "very likely." Meanwhile, 36% chose "somewhat likely." (x̄ = 3.30; σ = ± 1.02).
73. See Gary T. Schwartz, Myth of the Ford Pinto Case, 43 RUTGERS L. REV. 1013, 1049 & n.143 (1991) ("[W]hen consumers do read selectively, there is inadequate reason to believe that they are shrewd enough to identify the warnings that are most relevant to their safety." (emphasis in original)).
74. Among students surveyed by this Note, see supra note 56, more indicated a likelihood to read warnings than to read warranties. Respondents were asked, "When products you buy come with warranties, do you read them?" They were instructed to choose from the following responses: (1) "always"; (2) "frequently"; (3) "sometimes"; (4) "seldom"; (5) "never." Of those surveyed, 33% chose "frequently," and 10% chose "always." By comparison, 26% chose "seldom," and 2% chose "never." Meanwhile, 29% chose "sometimes." (x̄ = 2.79; σ = ± 0.997).
75. Courts have long recognized the effect of advertising on consumer expectations. See Leichtamer v. American Motors Corp., 424 N.E.2d 568, 578 (Ohio 1981) (upholding the admission into evidence of commercial advertising to establish consumer expectations about product safety); Hamon v. Digliani, 174 A.2d 294, 297 (Conn. 1961) (noting that consumers are very likely to choose products "glowingly described" on television); Baxter v. Ford Motor Co., 12 P.2d 409, 411-12 (Wash. 1932) (holding that representations made in promotional literature created warranty liability even without privity of contract).
76. RESTATEMENT (SECOND) or TORTS § 402A, cmt 1 (1966) ("The article 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.").
77. See Leichtamer, 424 N.E.2d at 578 ("The commercial advertising of a product will be the guiding force upon the expectations of consumers with regard to the safety of a product, and is highly relevant to a formulation of what those expectations might be.").
78. See Phipps v. General Motors Corp., 363 A.2d 955, 958 (Md. 1976); Richard C. Ausness, Strict Liability for Chattel Leasing, 48 PITT L. REV. 273, 325 & n.285 (1987); Joseph A. Page, Generic Product Risks: The Case Against Comment k and For Strict Tort Liability, 58 N.Y.U. L. REV. 853, 887 (1983).
79. See Phipps v. General Motors Corp., 363 A.2d 955, 958 (Md. 1976); Richard C. Ausness, Strict Liability for Chattel Leasing, 48 PITT L. REV. 273, 325 & n.285 (1987); Joseph A. Page, Generic Product Risks: The Case Against Comment k and For Strict Tort Liability, 58 N.Y.U. L. REV. 853, 887 (1983).
80. See MARSHALL S. SHAPO, PRODUCTS LIABILITY AND THE SEARCH FOR JUSTICE 75 (1993) ("[E]ven a quarter century ago, in what now appears as a medieval period of advertising techniques . . . judges were reciting the idea that those techniques 'lull' consumers."); Richard C. Ausness, Unavoidably Unsafe Products and Strict Products Liability: What Liability Rule Should be Applied to the Sellers of Pharmaceutical Products?, 78 KY. L.J. 705, 744 n.226 (1989-90) ("[R]epresentations of safety made in advertisements not only cause consumers to underestimate product risks, but in some cases they may even nullify a consumer's consent to assume such risks.").
81. See MARSHALL S. SHAPO, PRODUCTS LIABILITY AND THE SEARCH FOR JUSTICE 75 (1993) ("[E]ven a quarter century ago, in what now appears as a medieval period of advertising techniques . . . judges were reciting the idea that those techniques 'lull' consumers."); Richard C. Ausness, Unavoidably Unsafe Products and Strict Products Liability: What Liability Rule Should be Applied to the Sellers of Pharmaceutical Products?, 78 KY. L.J. 705, 744 n.226 (1989-90) ("[R]epresentations of safety made in advertisements not only cause consumers to underestimate product risks, but in some cases they may even nullify a consumer's consent to assume such risks.").
82. Attempts to hold manufacturers liable for marketing campaigns depicting automobiles traveling at speeds far exceeding the speed limit have not met with success. See Schemel v. General Motors Corp., 384 F.2d 802 (7th Cir. 1967), cert, denied, 390 U.S. 943 (1968). See generally Gina M. DeDominicis, Note, No Duty at Any Speed?, 14 HOFSTRA L. REV. 403 407-31 (1986) (discussing efforts to determine automobile manufacturer liability in speed-related accidents).
83. The Camel cigarette company has sparked controversy by allegedly using its "Joe Camel" mascot to increase the appeal of its product among children. See Dolores Kong, Do Ads Lure Youngsters to Drink, Smoke?, BOSTON GLOBE, Apr. 27, 1992, at 41.
84. For example, Smith & Wesson drew fire for allegedly attempting to create a market for handguns among women by way of a model called the "Ladysmith." See Maggie Jones, Gunmakers Target Women; Marketing Towards Women, WORKING WOMAN, July 1993, at 10, 10. For a discussion of other legal ramifications, see Debra Dobray & Arthur J. Waldrop, Regulating Handgun Advertising Directed Toward Women, 12 WHITTIER L. REV. 113 (1991), in which they argue that such advertising might give rise to strict liability under abnormally dangerous or mispresentation doctrines, see id. at 128-30.
85. For example, Smith & Wesson drew fire for allegedly attempting to create a market for handguns among women by way of a model called the "Ladysmith." See Maggie Jones, Gunmakers Target Women; Marketing Towards Women, WORKING WOMAN, July 1993, at 10, 10. For a discussion of other legal ramifications, see Debra Dobray & Arthur J. Waldrop, Regulating Handgun Advertising Directed Toward Women, 12 WHITTIER L. REV. 113 (1991), in which they argue that such advertising might give rise to strict liability under abnormally dangerous or mispresentation doctrines, see id. at 128-30.
86. These goals are broadly defined as reducing the aggregate cost of accidents (including costs of prevention) and providing for general deterrence. See GUIDO CALABRESI, THE COSTS OF ACCIDENTS: A LEGAL AND ECONOMIC ANALYSIS 26 (1970).
87. See Croley & Hanson, supra note 9, at 770-79.
88. Under this theory, prices would reflect all costs of accidents. See A. MITCHELL POLINSKY, AN INTRODUCTION TO LAW AND ECONOMICS 97-99 (2d ed. 1989).
89. For purposes of. this Note, strict liability is loosely defined as a tort regime in which a plaintiff must only prove causation. Tort scholars, of course, diverge widely in their descriptive and normative articulations of what "strict liability" entails. Compare James A. Henderson, Jr. & Aaron D. Twerski, Closing the American Products Liability Frontier: The Rejection of Liability Without Defect, 66 N.Y.U. L. REV. 1263, 1268 (1991) (arguing that further expansion of strict liability is "impossible") with Croley & Hanson, supra note 9, at 767-95 (arguing that current manufacturer liability should be made even more absolute to cover even "residually-preventable" accidents).
90. Richard A. Posner, Strict Liability: A Comment, 2 J. LEG. STUD. 205, 211 (1973).
91. See BREYER, supra note 14, at 28; Bailey H. Kuklin, The Asymmetrical Conditions of Legal Responsibility in the Marketplace, 44 U. MIAMI L. REV. 893, 946 (1990) ("[P]roducers may be reluctant to advertise safety data for fear of alarming potential consumers."); Stephen D. Sugarman, Doing Away with Tort Law, 73 CAL. L. REV. 555, 562 n.15 (1985) ("Perhaps one reason for inadequate consumer information is that producers face disincentives to advertise safety."). Another approach within tort would treat advertising representations as tantamount to warranties, enforceable as a contractual express warranty even in the absence of privity. Such strict "claims" liability would be established by the mere airing of the advertisement, regardless of whether a particular consumer was influenced by the ad or not. See Wayne K. Lewis, Toward a Theory of Strict "Claim" Liability: Warranty Relief for Advertising Representations, 47 OHIO ST. L.J. 671, 691 (1986). This scheme would attack the narrower problem of false and deceptive advertising; it would not, however, address the problem of underinvestment in product safety and advertising. Indeed, strict "claims" liability might actually deter bold and aggressive advertising campaigns, which would reduce the sum total of information in the marketplace.
92. See BREYER, supra note 14, at 28; Bailey H. Kuklin, The Asymmetrical Conditions of Legal Responsibility in the Marketplace, 44 U. MIAMI L. REV. 893, 946 (1990) ("[P]roducers may be reluctant to advertise safety data for fear of alarming potential consumers."); Stephen D. Sugarman, Doing Away with Tort Law, 73 CAL. L. REV. 555, 562 n.15 (1985) ("Perhaps one reason for inadequate consumer information is that producers face disincentives to advertise safety."). Another approach within tort would treat advertising representations as tantamount to warranties, enforceable as a contractual express warranty even in the absence of privity. Such strict "claims" liability would be established by the mere airing of the advertisement, regardless of whether a particular consumer was influenced by the ad or not. See Wayne K. Lewis, Toward a Theory of Strict "Claim" Liability: Warranty Relief for Advertising Representations, 47 OHIO ST. L.J. 671, 691 (1986). This scheme would attack the narrower problem of false and deceptive advertising; it would not, however, address the problem of underinvestment in product safety and advertising. Indeed, strict "claims" liability might actually deter bold and aggressive advertising campaigns, which would reduce the sum total of information in the marketplace.
93. See BREYER, supra note 14, at 28; Bailey H. Kuklin, The Asymmetrical Conditions of Legal Responsibility in the Marketplace, 44 U. MIAMI L. REV. 893, 946 (1990) ("[P]roducers may be reluctant to advertise safety data for fear of alarming potential consumers."); Stephen D. Sugarman, Doing Away with Tort Law, 73 CAL. L. REV. 555, 562 n.15 (1985) ("Perhaps one reason for inadequate consumer information is that producers face disincentives to advertise safety."). Another approach within tort would treat advertising representations as tantamount to warranties, enforceable as a contractual express warranty even in the absence of privity. Such strict "claims" liability would be established by the mere airing of the advertisement, regardless of whether a particular consumer was influenced by the ad or not. See Wayne K. Lewis, Toward a Theory of Strict "Claim" Liability: Warranty Relief for Advertising Representations, 47 OHIO ST. L.J. 671, 691 (1986). This scheme would attack the narrower problem of false and deceptive advertising; it would not, however, address the problem of underinvestment in product safety and advertising. Indeed, strict "claims" liability might actually deter bold and aggressive advertising campaigns, which would reduce the sum total of information in the marketplace.
94. Cf. Latin, supra note 45, at 678-82 (arguing for the shifting of tort liability to the best problem-solving actor).
95. See, e.g., Stephen F. Williams, Second Best: The Soft Underbelly of Deterrence Theory in Tort, 106 HARV. L. REV. 932, 943 (1993) ("Instead of using the elaborate machinery of nonwaivable tort liability as a substitute for data, society would use data pure and simple . . . .").
96. VISCUSI, supra note 16, at 65. Viscusi's proposed regulatory scheme would attack the problem of imperfect consumer information through establishing a national warnings policy. See id. at 155-56.
97. See Cigarette Labeling and Advertising Act, 15 U.S.C. §§ 1331-1341 (1988).
98. For example, cigarette makers bury health warnings within advertisements in order to prevent consumers from noticing them. See Beales, Craswell & Salop, supra note 14, at 530 & n.104.
99. For a general discussion of regulation of advertising and regulatory and constitutional issues that such regulation provokes, see Robert Pitofsky, Beyond Nader: Consumer Protection and the Regulation of Advertising, 90 HARV. L. REV. 661 passim (1977).
100. Cf. Beales, Craswell & Salop, supra note 14, at 494 (criticizing congressional legislation of information).
101. See id. at 516-21. Content-based regulations of information also risk running afoul of the First Amendment. See generally Dee Pridgen & Ivan L. Preston, Enhancing the Flow of Information in the Marketplace: From Caveat Emptor to Virginia Pharmacy and Beyond at the Federal Trade Commission, 14 GA. L. REV. 635, 656-65 (1980) (describing the relationship between the First Amendment and FTC regulations).
102. See Sugarman, supra note 75, at 654-59.
103. See Williams, supra note 77, at 943-44.
104. See CALABRESI, supra note 70, at 26.
105. This proposal is not intended to replace tort liability; it could coexist with strict liability or work autonomously. There is room for an interplay between strict liability and the SSGS - for example, a penalty default approach that would permit manufacturers to escape liability on a showing that they informed buyers of product risks through advertising (or adequate warnings).
106. The Consumer Safety Product Commission (CSPC) would probably be the best agency to entrust this authority, given that the CSPC's stated purpose, inter alia, is "[t]o assist consumers in evaluating the comparative safety of consumer products." 16 C.F.R. § 1000.1 (a)(2) (1993).
107. This Note acknowledges that broad-based regulation could pose new problems. Manufacturers would certainly lobby furiously to influence the ultimate selection of attributes and the grading process. The proposal, if implemented, could well require a costly expansion of the CPSC. An alternative would be for the CPSC to incorporate by reference the ratings system of a private consumer institution, such as Consumer Reports. Currently, Consumer Reports adheres to a policy of not permitting manufacturers to advertise the results of its ratings. However, it is only through encouraging manufacturers to advertise their ratings that a competition over safety can best be spurred.
108. 1 U.S.C. § 343 (Supp. 1990).
109. See H.R. REP. No. 538, 104st Cong., 2d Sess. 8-9 (1990), reprinted in 1990 U.S.C.C.A.N. 3336, 3338-39.
110. Products deemed potentially dangerous by a regulatory agency would be chosen for inclusion in the SSGS. Such products might include automobiles, tools and machinery, appliances with blades or moving parts, and hazardous perishables such as tobacco and alcoholic products.
111. See How CU Tests Cars, Annual Auto Issue, 58 CONSUMER REPORTS 189, 196-202 (Apr. 1993).
112. See Automobile Tires, 58 CONSUMER REPORTS 61, 100-04 (Feb. 1993).
113. This describes when a rotating blade jams in a cut, prompting a saw to recoil toward its user. Saw manufacturers can reduce the risk of kickbacks through such safety features as trigger switches and slip clutches. See Circular Saws, 57 CONSUMER REPORTS 681, 708-11 (Nov. 1992).
114. See Alan Schwartz & Louis L. Wilde, Intervening in Markets on the Basis of Imperfect Information: A Legal and Economic Analysis, 127 U. PA. L. REV. 630, 682 (1979) ("[O]nce it has been decided that a market is behaving non-competitively, the preferable state response is not to regulate prices or to prohibit the use of specific contract terms; the better response is to attempt to increase competition in the market.").
115. Beales, Craswell & Salop, supra note 14, at 513.
116. See Cigarette Labeling and Advertising Act, 15 U.S.C. §§ 1331-1341 (1988).
117. See Schwartz & Wilde, supra note 9, at 1462 (stating that the "best remedy" for many imperfect information problems is to remove barriers to comparison shopping).
118. See Beales, Craswell & Salop, supra note 14, at 535-56.
119. See POLINKSY, supra note 72, at 1-2, 148.