Software Liability: Why a Michigan Federal Court Decision is Relevant to Product Manufacturers Nationwide


Numerous products in our day-to-day lives incorporate or consist of software. The legal system, however, has been hesitant (at best) to bring software within traditional product liability regimes. Courts have grappled with whether to consider software a product and have largely found that it is not. However, a recent decision in the Western District of Michigan holds that software is a product—Holbrook v. Prodomax Automation Ltd., No. 1:17-cv-219, 2021 U.S. Dist. LEXIS 178325 (W.D. Mich. Sept. 20, 2021). While Holbrook may be an outlier, it is significant. It bucks the trend, and potential defendants should be aware of it.

Background: Holbrook involved a wrongful death suit arising out of an accident on a robotic assembly line. The decedent’s estate (Plaintiff) brought a common-law negligence claim against multiple defendants, including the manufacturer who designed, built, and installed the assembly line. Plaintiff’s claim was based, among other things, on the software controlling the robots.

The manufacturer defendant argued that Plaintiff could not assert common-law negligence because the software programming was a product under the Michigan Product Liability Statute (MPLS), and consequently under Michigan law the MPLS was the sole remedy for a design defect claim.

Holbrook’s Analysis: Because the Michigan Supreme Court had not addressed whether software should be considered a product under the MPLS, the District Court put itself in the state Supreme Court’s proverbial shoes to answer the question. First, it analyzed whether the Supreme Court would find that the assembly line programming by itself was a product or, alternatively, was a component of a product. Either would qualify under the MPLS. Second, the Court analyzed whether the software was a design feature of the program, which would make Plaintiff’s claim a design defect claim under the MPLS.

The Court answered both questions affirmatively.

First, the Court found that the programming constitutes a product under the MPLS. The Court engaged in statutory construction because the MPLS offers a recursive definition of “product,” merely defining it as “includ[ing] any and all component parts to a product.” The Court leaned on the dictionary definition of “part” as “[a]n integral portion, something essentially belonging to a larger whole; that which together with another makes up a whole.” Accordingly, the Court explained that the programming was an “integral” and “essential” part of the assembly line, because the robotic components could not have been orchestrated to move within the line without the programming. Thus, the programming was a product.

The Court further found that Plaintiff’s claim amounted to design defect because it was based on a death caused by the programming in the assembly line, and Plaintiff argued that the software should have been programmed another way. Moreover, the Court held that the programming was a design feature because the software instructed the robots whether to perform their assembly functions or not, i.e., it determined whether subparts of the assembly line would be in operation while other subparts of the line were under maintenance or had been shut down for safety concerns—a key issue in Plaintiff’s theory of liability.

Plaintiff offered several unsuccessful counterarguments. Plaintiff argued that the programming was not part of the design because it was not programmed until the assembly line was completely installed. The Court rejected this, reasoning, “that the programming was completed at the facility does not make it any less a part of the product’s design.” The Court also declined Plaintiff’s invitation to follow the definition of “product” in the Third Restatement of Torts or in the most recent edition of the Black’s Law Dictionary, which limits a product to “tangible personal property.” Michigan courts and the state legislature had not relied on either definition, and the MPLS defines the term “product” more broadly than the Third Restatement does.

Implications: Although Holbrook is potentially pioneering in some respects, it is not the last word on the issue. For example, Holbrook is of limited precedential value because it is a district court decision interpreting a novel question under state law. Additionally, it is a unique holding to the extent that the Restatement of Torts and Black Law’s Dictionary definition of product carried little weight for reasons peculiar to the legislative history of the MPLS.

Overall, although the Holbrook decision is an outlier, every change in the law starts with a court stepping out of the line of orthodoxy. It remains to be seen whether it is vanguard or aberration, a question only the Michigan state courts can answer. Regardless, defendants in this area should be aware of its reasoning and potential significance.

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