Cooperative Power Association v. Westinghouse Electric Corp.

493 N.W.2d 661 (1992)

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Cooperative Power Association v. Westinghouse Electric Corp.

Supreme Court of North Dakota
493 N.W.2d 661 (1992)

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  • Written by Sean Carroll, JD

Facts

Westinghouse Electric Corporation (Westinghouse) (defendant) sold a defective transformer to the Cooperative Power Association (CPA) (plaintiff). The defect damaged the transformer but nothing else. CPA brought a products-liability suit against Westinghouse in federal district court. Westinghouse filed a motion for summary judgment, arguing that CPA’s damages can be remedied in contract law only, not in tort law. The district court certified to the Supreme Court of North Dakota the question of whether a manufacturer of a machine sold in a commercial transaction could be held liable in tort for economic loss, which was caused by a failure of a component part of the machine that caused damages to the machine only.

Rule of Law

Issue

Holding and Reasoning (Johnson, J.)

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Casebooks

Products Liability

Key Terms

  • Strict LiabilityImposition of liability upon a defendant regardless of the defendant’s conduct or fault. Under strict liability in the tort context, an actor is liable regardless of whether the actor was negligent or otherwise culpable. Strict liability in the tort context is imposed only in limited circumstances; it may be applied in cases involving abnormally dangerous activities, injuries caused by animals, and products liability. In criminal law, strict liability imposes criminal liability with no proof of fault. Strict liability may extend to all elements of a crime or only to some elements. In many jurisdictions, strict liability is also known as absolute liability.
  • NegligenceConduct that falls below the expected standard of care that a reasonably prudent person would have exercised under like circumstances.
  • Economic-Loss DoctrineRule stating that commercial contracting parties may not bring tort claims against one another for pecuniary losses if adequate contract remedies exist. The economic-loss doctrine bars recovery for pure economic loss in negligence and strict-liability actions absent any other injury unless a special relationship existed between the parties.

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