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Post-Sale Duties: Common Law and Post-Sale Safety Management



Merely manufacturing, designing and selling a safe product may not satisfy a product manufacturer’s legal duties. Many years ago, courts held that a manufacturer has a duty to warn product users when it learns of risks in its product after sale, even if the product was not defective when sold. In addition, the FDA has implemented significant requirements for post-market surveillance and reporting as well as undertaking appropriate recalls.

Therefore, as with all of the other areas of potential products liability, there are two legal systems that overlap and can create legal problems for medical device manufacturers – the common law as established by local courts and regulatory law as established by the FDA.

Post-sale duties are the most expansive in products liability, both in terms of scope and length of time. They start when the product is sold and last as long as that product is being used. In addition, punitive damages are frequently alleged in products liability litigation especially where products have been recalled or should have been recalled. And most punitive damage awards have some post-sale elements that are used to argue that the manufacturer or health care professional was grossly negligent.

This article will discuss the common law and the ways in which companies in general can manage these post-sale risks. The next article in the series will discuss the FDA requirements in the post-sale area, including recalls and other corrective actions. Both legal and practical requirements are important to discuss since compliance with FDA’s post-sale requirements may not be a defense in a products liability case.

Common Law

The common law generally says that a product manufacturer or seller can be liable for failing to provide a warning after sale or distribution if a reasonable person in the seller’s position would have provided such a warning. There are four factors that can be used by the jury to determine if a post-sale warning should be required:

  • The first is that a seller knows or reasonably should know that the product poses a substantial risk of harm to persons or property.
  • The second factor is that those to whom a warning might be provided can be identified and can reasonably be assumed to be unaware of the risk of harm.
  • The third requirement is that a warning can be effectively communicated to and acted on by those to whom a warning might be provided.

  • The fourth factor is that the risk of harm is sufficiently great to justify the burden of providing the warning.

The common law is clear that allegations concerning negligence in performing post-sale duties are independent of an allegation that the product was defective when sold. Therefore, selling a defective product can result in claims that the product was defective at the time-of-sale and that the manufacturer failed to issue a post-sale warning or that the post-sale recall was negligently performed.

In addition, the common law makes it clear that if the product was defective when sold, the manufacturer cannot be absolved of liability for selling a defective product merely by issuing a post-sale warning. Therefore, a manufacturer may be deemed to have complied with its post-sale duties but still be held liable for selling a defective product. And, the manufacturer could be held liable for post-sale negligence even if the product was not defective when sold.

Another part of the common law provides that the seller or distributor is not liable for a failure to recall the product unless the recall is required by statute or regulation or the seller or distributor voluntarily undertakes to recall the product and does so negligently.

Despite the fact that the common law makes this area of law much clearer by providing factors that will be used by the jury to consider in deciding whether a duty arises and is met, there are still a number of remaining questions.

  • The first is whether a state court will adopt this theory using these requirements. Some courts have done so and some have rejected it.
  • The next question is how far must a manufacturer go to learn of post-sale problems with its products? It is clear that manufacturers are not required under the common law to constantly monitor product performance in the field. However, manufacturers cannot put their head in the sand. The jury will judge what is reasonable under the circumstances. Given the significant increase in information available on the Internet, it is very likely that manufacturers will learn about more potential problems in the field and will be required to analyze and possibly take appropriate remedial actions.
  • One of the factors above is that product users can be identified and can act on this post-sale warning. This is required before the duty even arises. Therefore, if no records identifying the customers are available, a post-sale duty may not arise. Another interesting question remains as to how far a manufacturer must go to identify its customers. What would a reasonable manufacturer concerned about safety do? Establishing a “traceability” system before the product is sold is the most effective way to find customers. However, such systems take planning, considerable effort and sometimes substantial cost. This is especially interesting if the manufacturer of a component for a medical device has a post-sale problem.

The question of whether a particular manufacturer’s actions are reasonable will be case specific and decided by the jury. Despite that, the common law is clear that this duty should not be “unbounded” and “onerous” and that courts need to be careful before imposing such a duty.

Another unanswered question in a related area is whether a manufacturer has a duty to inform product customers of each safety improvement made in similar products manufactured after the sale of the less safe product. Is the fact that the product is made safer an admission that the earlier product is defective? Does the manufacturer have a duty to warn the product customer of this safety improvement and offer the improvement for sale or for free?

The common law makes it clear that the manufacturer has no duty to inform product customers of safety improvements. However, a problem arises if the safety improvement was made because of some problem in the field. If so, then arguably, the manufacturer is fixing a defective product and then may be required to offer this “fix” to its customers. If the manufacturer reports this issue to the FDA, they are most likely going to require that the safer product be offered to prior owners.

In some situations, some courts have found it reasonable to impose a duty to inform prior customers of safety improvements. This has occurred when there is a continuing relationship between the manufacturer and the purchaser, the market is limited, and the cost of providing notice of the safety improvement is negligible. These factors would seem to apply to products like medical diagnostic equipment where the manufacturer is supplying service and maintenance services.

How a manufacturer analyzes each safety improvement is very important. There is no “bright line test” for a manufacturer to rely on. A part of the analysis is whether it is likely that a jury would consider the less safe product defective. If so, the manufacturer should offer this improvement to prior customers at cost or for free.

Even if the less safe product would not be considered defective but the safety improvement significantly improves safety, then the manufacturer should strongly consider offering this improvement to prior customers in the interest of safety. In that case, the manufacturer should be able to charge for the improvement since the customer would have paid it for it when they originally purchased the product.

Post-sale management

Establishing an effective and defensible post-sale management program is imperative to meet your common law duties as well as satisfy FDA requirements. First, let’s discuss such programs in general.

Product safety policy and post-manufacture action plan

A manufacturer should be guided in its implementation of a post-sale program by a formal product safety policy. The policy serves as a guidepost for overall product safety. In addition to this general statement of product safety, a manufacturer should consider having a post-sale action plan. This document establishes procedures for analyzing the need for post-sale action and for implementing whatever action is determined to be appropriate.

Both of these documents are part of good business practices and could be helpful in defending any litigation that might arise. It is important to point to a document, endorsed by the board of directors, the chief executive officer, the president or general manager, which confirms a manufacturer's desire to market safe products and to identify and remedy any post-sale problems that come to their attention.

Information network

The foundation of a post-sale program is established in an information network that will allow a company to determine how its product is performing in the marketplace. This information is necessary for the manufacturer to ultimately make decisions about what, if any, post-sale action might be necessary.

A manufacturer has a number of readily available sources of information. For example, notices of claims or accidents might provide information on the types of products that are failing, the mode of failure, and possible misuse of the product. Lawsuits will provide the same information, as well as reports from plaintiffs' experts that may provide further insight into how the product could be made safer. Customer complaints and warranty returns from patients or health care providers are fertile sources of information. A pattern of complaints and returns may indicate that a product is failing in a particular mode on a regular basis.

An inordinate number of sales of a particular component part may indicate that this part is failing prematurely. Of course, observations by sales personnel and by service personnel who are actually out in the field talking to health care personnel are also invaluable sources of information. Post-sale information can also come from competitors during trade association meetings or meetings of standards groups. Lastly, post-sale information, albeit some of it unsubstantiated or even incorrect, is now on the Internet. Some companies monitor the Internet, especially sites where customers might visit, to see what is being said about their products.

Analyzing the post-sale information

Once a manufacturer has obtained and investigated all relevant information, it must determine whether post-sale action is necessary. Good business practices and good litigation planning require that someone be in charge of the post-sale program. Juries want to know that some person or specific group has the responsibility of managing this problem.

Generally, some type of product safety committee should analyze the information. This committee should include representatives from various areas of the company, including engineering, service, sales, marketing and legal. It is also very important that the lawyer who is advising the committee be experienced in products liability and regulatory law.

The committee analyzing the post-sale information should hold regular meetings. This is important, both to make certain that information is being reviewed on a timely basis and to show a jury that the company is acting reasonably in how it handles its post-sale analysis. The number of persons who are allowed to attend should be limited and anyone who takes notes at these meetings should write them carefully.

Determining whether post-sale action is necessary under the common law requires applying the factors identified in case law to the facts learned through the information-gathering network. If there are a number of injuries involving the same product, with the same basic failure mode, it most likely will be necessary to take some type of post-sale remedial action.

If the gathered information reveals a few incidents involving property damage out of many products in the field, it may be important to take note of the incident, but no post-sale action may be necessary. A manufacturer must simply apply the factors to the information gathered, keeping in mind that the primary objective is to make safe products, prevent accidents, and, if necessary, present itself as a responsible company to the jury.

Determining whether post-sale action is necessary also involves an analysis of any applicable government laws or regulations that provide criteria for making this decision. This will be discussed in the next article.

Determining post-sale action

Once the manufacturer has identified a post-sale hazard that should be remedied, it must decide what post-sale action to take. There are a number of available options. The most appropriate action will depend on the severity of harm and the likelihood of personal injury or property damage. For example, the problem may be corrected by simply sending a safety notice to distributors or health care professionals. If there is concern about the notice reaching the ultimate user/purchaser of the product, the safety notice should be sent directly to them. Of course, a manufacturer's ability to do this will depend on its ability to locate its purchasers and product users.

If the severity of the harm and the likelihood of the injury are significant and a warning is insufficient, a manufacturer might go to the field and retrofit the allegedly defective product. Depending on the ease with which the product can be returned to the manufacturer, a retrofit in the hospital might be appropriate. If retrofitting the product does not result in the elimination of the hazard, or if a retrofit is simply not feasible for the product, it may be necessary to recall the product.

As previously discussed, the manufacturer needs to consider the available post-sale options under the common law and also identify any FDA laws or regulations that apply. The FDA, once they learn of a problem, will classify the level of risk which helps define the extent of the post-sale activities they would like to see.

Adequacy of post-sale remedial measures

Whether a manufacturer decides to warn, retrofit or recall, it is very important that the initial notice of the post-sale action be properly written and contain the appropriate message. Any communication made by a manufacturer to a dealer or customer or health care provider will be judged according to the same adequacy standards as warnings are generally judged.

This means that a letter notifying someone of a product problem should most likely describe the hazard, the consequences of the hazard, and how to avoid the hazard. The best information-gathering network in the world and the best safety committee is useless if the communication that is ultimately sent is inadequate to motivate the recipient to take action.

Recall letters should be written very clearly and be very explicit. This means that if a manufacturer has experienced prior accidents or prior injuries, it should probably say so in the letter, describing the general nature of the problem and the types of injuries. A manufacturer should be careful not to understate the problem.

The letter should be written keeping in mind that it will be read by potential future plaintiffs who will challenge its adequacy in future litigation if they are injured. This should not preclude a manufacturer from writing the letter, but should encourage them to write it in a way that will be helpful in defending any litigation that might arise. The manufacturer may even want to perform a small focus group survey to confirm that the reader understands the communication and is inclined to follow its instructions.

Under the common law, there is little guidance on how to adequately communicate a post-sale program. The cases also are not particularly helpful in determining whether a post-sale program has been performed adequately. FDA regulations and guidelines do provide some guidance, and they should be considered, but it is clear that compliance with FDA requirements may not be a defense in a products liability case. The plaintiff can still argue that the manufacturer should have exceeded these requirements.

In determining the adequacy of the program, the manufacturer must consider what percentage of success is adequate. Anything less than a 100% success rate leaves the possibility that there is a hazardous product still in the hands of patients or users and that such a defect could cause injury and result in a lawsuit. With the exception of implantables where 100% success is required, there is no standard response rate. However, whatever you do, there is always the argument that you could have done more.

It is possible for a jury to believe that the manufacturer engaged in an adequate post-sale program and find the manufacturer not liable for an injury suffered by a user of the defective product. Juries expect manufacturers to engage in comprehensive post-sale programs, but do not expect a 100 percent success rate.

Unfortunately, while a jury might feel that the manufacturer's post-sale program was reasonable and adequate, it would still be possible for them to hold the manufacturer liable for selling a defective product in the first place. In other words, initial liability for selling a defective product cannot be cut off by undertaking a post-sale remedial program that is not 100 percent effective.


Manufacturers need to establish a system that is commensurate with the risks they face to identify potential product safety problems, to analyze the problems keeping in mind the common law and any applicable regulatory law, and to undertake an effective remedial program that adequately deals with the safety problem and is defensible if accidents occur. While this may not prevent liability for selling defective products if accidents occur, it will hopefully minimize the possibility of government fines and punitive damages.

Kenneth Ross

Kenneth Ross is Of Counsel to the Minneapolis office of Bowman and Brooke LLP where he practices in the areas of product safety and liability prevention and advises manufacturers, product sellers and insurers on ways to identify, evaluate and minimize the risk of products liability and contractual liability. These guides do not constitute legal advice and are very general. You should consult competent legal counsel or Medmarc Loss Control before acting on any of the information in these guides.

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