The Innocent Sellers Fairness Act Gathers Crowd of Co-sponsors

A building supply dealer sells a hammer to his attorney. The attorney’s son goes out and hammers rocks, injuring his eye in the process. The customer-attorney then sues the dealer.

This sad but true anecdote was conveyed to members of the U.S. House of Representatives by the sponsors of a bill designed to protect innocent sellers of products from such unfair lawsuits. The bill, H.R. 989, known as the Innocent Sellers Fairness Act (ISFA), was introduced Feb. 12, 2007 by U.S. reps Dan Boren (D-OK) and Steve Chabot (R-OH) and has picked up 40 co-sponsors as of May 10, 2007. The bill is easy to read, concisely worded and is intended “to prevent undue disruption of interstate commerce by limiting civil actions brought against persons whose only role with regard to a product in the stream of commerce is as a lawful seller of the product.”

The only way for the seller to be held liable for an injury or monetary loss resulting from a product under this bill is if the claimant in a lawsuit proves one or more of the following conditions:

(1) The seller was the manufacturer of the product.
(2) The seller participated in the design of the product.
(3) The seller participated in the installation of the product.
(4) The seller altered, modified, or expressly warranted the
      product  in a manner not authorized by the manufacturer.

The bill is designed to protect sellers because, “as a result of product liability, sellers are often brought into litigation despite the fact that their conduct had nothing to do with the accident or transaction giving rise to the lawsuit, and may therefore face increased and unjust costs due to the possibility or result of unfair and disproportionate damage awards.” The bill, therefore, seeks to protect “innocent” sellers from unnecessary, unfair and potentially expensive product liability lawsuits.

The IFSA will likely significantly reduce the cost of litigation and insurance to sellers of products. The costs of defending frivolous lawsuits are especially financially draining to small businesses. Anything that reduces the number of frivolous lawsuits against sellers would help them conserve resources they could put to use to keep their companies profitable. If enacted, the IFSA would apply to any civil action involving a product that was sold to the claimant on or after the date of its enactment.

On the day the IFSA was introduced to in the U.S. House it was referred to the House Judiciary and to the House Energy and Commerce committees. As of May 10, 2007, there has been no further legislative action on the bill.