Texas SC: Auto auctions not liable for defective vehicles
Texas Supreme Court
AUSTIN - Drivers can't hold auto auctioneers liable for defective vehicles, the Texas Supreme Court decided March 28.
The justices reversed the 13th District appellate court in Corpus Christi, which ruled that Big H Auto Auction should have replaced tires on a 1993 Ford Explorer before selling it to dealer Progresso Motors.
Justice Scott Brister wrote, "…imposing a duty on auto auctioneers to discover and repair defects would require them to go into a side business other than their own."
The Explorer rolled over in Mexico, killing driver Jose Angel Hernandez Gonzalez.
His widow, Graciela Gomez de Hernandez, and 11 other plaintiffs sued Big H Auction in Hidalgo County.
They also sued tire maker Bridgestone/Firestone, claiming it recalled the Explorer's tires a few weeks before Big H auctioned the Explorer. In addition, they sued Ford Motor Company and Progresso Motors.
Big H moved for summary judgment and the trial judge granted it.
The appellate court reversed the decision, reasoning that product liability law applies to anyone who introduces a product into the stream of commerce.
The Supreme Court rejected that reasoning. Brister wrote, "…we have applied strict liability only to businesses that are in the same position as one who sells the product."
He wrote, "Businesses that play only an incidental role in a product's placement are rarely in a position to deter future injuries by changing a product's design or warnings."
Consumers normally expect a manufacturer to stand behind a product, Brister wrote.
"Unquestionably, ignoring a recall may run the risk of severe injury," he wrote. "But there are a huge number of recalls, and the risks they involve vary widely."
Since 1966, he wrote, companies have recalled more than 390 million vehicles, 46 million tires and 42 million child safety seats.
Big H auctions about 1,000 vehicles a week, Brister wrote, and it doesn't inspect or repair them unless buyers request those services and pay for them.
"Many of the cars sold at its auctions need repairs, and some have to be towed on and off the auction block," he wrote. "Moreover, Big H does not sell to the public."
"The car here was sold under a red light, indicating the car was being sold 'as is,'" Brister wrote. "Generally, those who buy a product 'as is' accept the risk of potential defects…"
He wrote, "Imposing a different duty here would effectively prohibit car dealers from selling cars 'as is.'"
He concluded, "…one's moral duty to warn of known dangers does not impose a legal duty to discover and remedy unknown dangers too."