Developer liability for harm to business or consumer

(a) In general In any liability action, the developer shall be liable to a claimant if the claimant establishes by a preponderance of the evidence— (1) that— (A) the developer failed to exercise reasonable care with respect to the design of the covered product; and (B) the failure to exercise reasonable care was a proximate cause of harm to the claimant; (2) that— (A) the developer failed to exercise reasonable care with respect to providing adequate instructions or warnings applicable to the covered product that allegedly caused the harm that is the subject of the complaint; and (B) the failure to exercise reasonable care with respect to providing adequate instructions or warnings was a proximate cause of harm to the claimant; (3) that— (A) the developer made an express warranty applicable to the covered product that allegedly caused the harm that is the subject of the complaint; (B) the covered product failed to conform to the warranty; and (C) the failure of the covered product to conform to the warranty was a proximate cause of harm to the claimant; or (4) that— (A) the covered product was, at the time of sale or distribution, in a defective condition unreasonably dangerous when used or misused in a reasonably foreseeable manner; and (B) the defective condition was a proximate cause of the harm to the claimant. (b) Defective design (1) In general In any liability action against a developer alleging that a covered product is unreasonably dangerous because of a defective design, as described in subsection (a)(1), the claimant shall be required to prove that, at the time of sale or distribution of the covered product by the developer, the foreseeable risks of harm posed by the covered product could have been reduced or avoided by the adoption of a reasonable alternative design by the developer, and the omission of the alternative design renders the covered product not reasonably safe. (2) Manifestly unreasonable design Notwithstanding paragraph (1), in a liability action described in that paragraph, if the design of a covered product is found to be manifestly unreasonable, a claimant shall not be required to prove the existence of a reasonable alternative design. (3) Circumstantial evidence supporting inference of covered product defect In a liability action described in subsection (a)(1), it may be inferred that the harm sustained by the claimant was caused by a covered product defect existing at the time of sale or distribution, without proof of a specific defect, when the incident that harmed the claimant— (A) was of a kind that ordinarily occurs as a result of covered product defect; and (B) was not, in the particular case, solely the result of causes other than covered product defect existing at the time of sale or distribution. (4) Noncompliance and compliance with required covered product safety statutes or regulations (A) Noncompliance For purposes of a liability action described in subsection (a)(1), if a covered product does not comply with an applicable covered product safety statute or administrative regulation, the covered product shall be deemed defective with respect to the risks sought to be reduced by the statute or regulation. (B) Compliance For purposes of a liability action described in subsection (a)(1), the court may consider a covered product’s compliance with an applicable covered product safety statute or administrative regulation in determining whether the covered product is defective with respect to the risks sought to be reduced by the statute or regulation, but such compliance does not preclude as a matter of law a finding of covered product defect. (c) Failure to warn (1) In general For purposes of a liability action described in subsection (a)(2), a covered product shall be considered defective because of inadequate instructions or warnings if— (A) the foreseeable risks of harm posed by the covered product could have been reduced or avoided by the provision of reasonable instructions or warnings by the developer; and (B) the omission of the instructions or warnings renders the covered product not reasonably safe. (2) Adequate instruction or warning For purposes of paragraph (1), an adequate instruction or warning is one that a reasonably prudent person in the same or similar circumstances would have provided with respect to a reasonably foreseeable risk and that communicates sufficient information on the reasonably foreseeable risks and safe use of the covered product, taking into account the characteristics of, and the ordinary knowledge common to, an ordinary user of the covered product. (3) Knowledge In a liability action described in subsection (a)(2), the claimant shall be required to prove that, at the time the covered product left the developer’s control, the developer knew of or, in light of then-existing scientific and technical knowledge, reasonably should have foreseen, the risk that caused the claimant’s harm. (4) Open and obvious (A) In general In a liability action described in subsection (a)(2), a developer shall not be liable for failure to instruct or warn about a foreseeable risk that is open and obvious to the user of the covered product, taking into account the characteristics of, and the ordinary knowledge common to, an ordinary user of the covered product. (B) Minors For purposes of subparagraph (A), a risk shall be presumed to not be open and obvious to a user of a covered product who is under 18 years old. (5) Noncompliance and compliance with required covered product safety statutes or regulations (A) Noncompliance In a liability action described in subsection (a)(2), if a covered product does not comply with an applicable covered product safety statute or administrative regulation, the covered product shall be deemed defective due to inadequate instructions or warnings with respect to the risks sought to be reduced by the statute or regulation. (B) Compliance In a liability action described in subsection (a)(2), the court may consider a covered product’s compliance with an applicable covered product safety statute or administrative regulation in determining whether the covered product is defective due to inadequate instructions or warnings with respect to the risks sought to be reduced by the statute or regulation, but such compliance does not preclude as a matter of law a finding of covered product defect. (d) Strict liability of developer for unreasonably dangerous or defective covered products (1) In general In a liability action described in subsection (a)(4), the developer of a covered product shall be strictly liable for harm caused by the defective condition of the covered product, notwithstanding— (A) that the developer exercised all possible care in the design or distribution of the covered product; or (B) that the claimant did not purchase the covered product directly from the developer or otherwise enter into a contractual relationship with the developer. (2) Substantial modification A developer shall not be liable under subsection (a)(4) for harm solely caused by a substantial modification.