Opinion
Pеtitioner Tauber-Arons Auctioneers Company, Inc., seeks a peremptory writ of mandate to compel respondent Superior Court for the County of Los Angeles to vacate its order, granting the motion of real party in interest Doroteo Perez to specify an issue “without substantial controversy” pursuant to Code of Civil Procedure section 437c.
Perez is the plaintiff in the action entitled Perez v. Independent Crop Dusting Corporation, et al., case No. C 110988, which seeks damages for personal injuries allegedly suffered as the proximate result of a defect in a “Forsberg Model 101 ‘V’ Belt Drive Planer.” Perez suffered injury while operating the planer in the course of his employment with *271 Crystal-Like Plastics on or about March 19, 1974. The planer was acquired by Crystal-Like Plastics in February 1969, at an auction sale conducted by petitioner.
After discovery proceedings which disclosed the source of the machine, Perez moved the court for an order that it be “deemed established” that petitioner (1) “sold the subject product to the plaintiff’s employer, Crystal-Like Plastics,” (2) “is the ‘seller’ of the subject product,” and (3) “[a]s ‘seller’ of the subject product.. .is subject to the rule of strict liability imposed on sellers of products.”
In support of the motiоn, Perez relied upon the deposition of Bert Arons, the majority stockholder and secretary-treasurer of petitioner. The deposition showed that during the 18 years that Arons had been with petitioner, he had “been engaged exclusively in the business of auctioning off used machinery and equipment.” Crystal-Like Plastics purchased the planer at a public auction sale of all of the factory machinery of Henry Engineering Company, a manufacturing concern which was going out of business. Included were a wide variety of different types of machines, such as automatic screw machines, lathes, milling machines, drills, band saws, grinders, compressors and forklifts which were manufactured by a large number of different manufacturers. There was only one wood planer and it was the only Forsberg product included.
Petitioner conducted the sale at Henry Engineering Company premises. Petitioner’s compensation was a flat fee of $2,500 paid by Henry Engineering. The sale was advertised by petitioner through direct mail. The advertisement merely listed the items by manufacturer and model number and illustrated some of them. Petitioner’s services also included cleaning up the machinery to make it more attractive to purchasers but petitioner did not do maintenance or repair and sold all equipment “as is.” The title to all the machinery was transferred directly from Henry Engineering to the purchasers; this was petitioner’s practice in 99 percent of the auctions which it conducted. Arons had never seen a Forsberg planer before and had no expertise as to its design.
In opposition to Perez’ motion, petitioner relied upon the Arons deposition testimony and upon his declaration. The declaration stated that (1) “[a] substantial portion of [petitioner’s] business activity is auetion *272 ing used industrial machinery,” (2) petitioner did not take title to the planer but sold it as agent fоr Henry Engineering, (3) at the time of sale the planer was not a new machine and was sold “as is” “which in this trade means that said planer was not modified, altered, inspected, tested and/or operated by” petitioner and was, therefore, “subject to inspection by potential buyers prior to the date of auction,” and “[n]o representations of any kind were made to anyone at any time regarding the safety or quality of the Forsberg planer.”
In ruling on Perez’ motion, respondent court restated the issue thereby presented in terms of the decision of our Supreme Court in
Vandermark
v.
Ford Motor Co.
(1964)
Contentions
Petitioner contends that (1) mandate is an appropriate remedy because the order is not appealable and an appeal from an adverse judgment is not an adequate remedy; and (2) the showing made by Perez does not establish petitioner’s status as a marketer subject to strict liability for defects in the Forsberg planer.
Respondent court has not filed a return.
Perez, as real party in interest, opposes thе petition on the merits, claiming that the undisputed facts establish petitioner’s strict liability for any defect in the planer.
*273 Discussion
Summary
Mandate is an appropriate remedy. The trial court erred in declaring that petitioner was, as a matter of law, a marketer subject to strict liability for any defect in the planer. A peremptory writ shall therefore issue, directing that said order be vacated.
Mandate Is an Appropriate Remedy
The result of the trial court’s order is that petitioner is prevented from defending against Perez’ cause of action for strict liability on any basis other than the nondefective nature of the planer and such order is not appealable. As stated in
Nazaroff
v.
Superior Court
(1978)
We granted the alternative writ in this matter because the court below decided an important issue of first impression in this state which should be resolved by an appellate court decision.
Petitioner’s Status as a Marketer Subject to Strict Liability Was Not Established
In reviewing an order declaring an issue “without substantial controversy” pursuant to Code of Civil Procedure section 437c, we are bound by the rules generally applicable to review of summary judgments. In
Nazaroff
v.
Superior Court, supra,
Consequently, in the absence of any showing to the contrary, we must assume (as a fact favorable to petitioner) that the alleged defect in the Forsberg planer was'created by the original manufacturer, Forsbecg. At the time petitioner pаrticipated in the sale to Crystal-Like Plastics, the planer was secondhand, having been used by Henry Engineering Company in its manufacturing activities.
Petitioner was shown to have been engaged for many years in the business of conducting auction sales of used machinery of all categories, generally (as in this case) as agent of the owner. Though petitioner advertised the sale and cataloged the items being offered, it made no recommendation nor representation of the merit of any manufacturer’s product. Moreover, there was no showing whatever that petitioner occupied any speсial position with respect to Forsberg; Forsberg was simply one of the innumerable machinery manufacturers whose products might be auctioned secondhand by petitioner. In fact, Arons had never even seen a Forsberg planer before.
The effect of the trial court’s ruling is to make every dealer in secondhand goods strictly liable for defects created by innumerable manufacturers of the class or classes of products with which he may deal. The real issue in this case is whether the policy of the doctrine of strict liability established by the decisions of the appellate courts in this state justifies the imposition of strict liability under such circumstances.
Neither party to this proceeding claims that there are any California precedents squarely dealing with this issue. Real party, as did the trial court, relies upon several cases which have extended strict liability of
*275
the manufacturer of a defective product to include all others who “are engaged in the business of distributing goods to the public” as “an integral part of the overall producing and marketing enterprise” for the product in question.
(Vandermark
v.
Ford Motor Co., supra,
In
Kasel,
the American firearms company whose Mexican trademark licensee and affiliate manufactured and sold defective shotgun shells in Mexico was held an integral part of the marketing enterprise which sold the shells. Referring to the above authorities, the court further said
(id.,
at p. 725): “The above listed cases have stressed that under the stream-of-commerce approach to strict liability no precise legal relаtionship to the member of the enterprise causing the defect to be manufactured or to the member most closely connected with the customer is required before the courts will impose strict liability. It is the defendant’s participatory connection, for his personal profit or other benefit, with the injury-producing product and with the enterprise that created consumer demand for and reliance upon the product (and not the defendant’s legal relationship (such as agency) with the manufacturer or other entities involved in the manufacturing-marketing system)
*276
which calls for imposition of strict liability.
(Garcia
v.
Halsett, supra,
Two significant aspects of the above statements require emphasis. The first is that the defendant’s particular legal relationship is not determinative. Thus, the fact that in this case petitioner acted as an agent in the conduct of the sale is not controlling. If a manufacturer of modern “antiques” chose to market them exclusively through an “estate” auctioneer as its agent, such auctioneer patently would be a participant “in the manufacturing-marketing system.” What is significant, howevеr, is the second aspect—the requirement that defendant have a participatory connection with the enterprise which “created consumer demand for and reliance upon” the particular “injury-producing product” {ibid.), not just products of the same classification. In Kasel, it was the defendant’s participation in the enterprise which distributed and created consumer demand for “Remington Express” shot shells. In each of the other cases cited, the relevant market in which the defendant was deemed a participant was the initial distribution to the consuming public of the particular defective product of a given manufacturer.
For example, in
Vandermark,
it was the Ford dealer’s participation on a continuing basis in the initial distribution and marketing of Ford automobiles. In
Garcia
v.
Halsett
(1970)
The above California cases make it clear that the marketing enterprise, participation in which would justify imposition of strict liability for a defect created by the manufaсturer, is the enterprise by which initial distribution of the particular manufacturer’s products to the consuming public is effected. Such authorities do not, therefore, support imposition of strict liability in the case at bench where the only connection between petitioner and Forsberg products is its “random and accidental role”
(Garcia
v.
Halsett, supra,
The only California case we have found which imposed strict liability upon the seller of used machinery is
Green
v.
City of Los Angeles
(1974)
There are no California cases dealing with the question whether a defendant who is in the business of selling secondhand products, who has
*278
not modified or rebuilt them, is strictly liable for defects in their оriginal manufacture or design. We must look, therefore, for guidance in this respect in the decisions from other jurisdictions and in the policy of this state which underlies the extension of strict liability not only to manufacturers but to all those who participate as “an integral part of the overall producing and marketing enterprise” of the product in question.
(Vandermark
v.
Ford Motor Co., supra,
Though there is a paucity of out-of-state precedent, there are cases upholding, as well as cases denying, strict liability of secondhand dealers. The authority most nearly in point, however, withholds imposition of strict liability upon dealers in used goods under circumstances not excluded by real party’s showing in this case. The policy considerations upon which this holding is based are consistent with those which underlie our doctrine. We consequently find it appropriate to adopt such holding as the rule in this state.
A case upholding strict liability is
Turner
v.
International Harvester Company
(1975)
The rule stated in Turner might be applicable to petitioner in this case if the planer failed to meet the public’s “justifiable expectations regarding safety, quality and durability of used goods” (ibid.) 1 as a result of modification, dilapidation or misuse. There is nothing in the record, however, to show that the defect relied upon is such as to render the planer defective on this basis. It may well have been in exactly the same condition as it was when new, in which event it is difficult to conceive how it could fail to meet justifiable expectations as to used goods which, at best, are only as safe as they were when new.
In
Tillman
v.
Vance Equipment Co.
(1979)
“While dealers in used goods are, as a class, capable like other businesses of providing for the compensation of injured parties and the allocation of the cost of injuries caused by the products they sell, we are not convinced that the other two considerations identified in Fulbright weigh sufficiently in this сlass of cases to justify imposing strict liability on sellers of used goods generally.
“Our opinions have discussed, on other occasions, what we called in
Fulbright
the ‘implied representational aspect’ of the justification for strict products liability. In
Heaton
v.
Ford Motor Co.,
“... It is an expectation which is the result of the manufacturer’s or sellеr’s placing the article in the stream of commerce with the intention that it be purchased. This expectation is given legal sanction by the law through an assumption that the seller, by so placing the article in the stream of commerce, has represented that the article is not unreasonably dangerous if put to its intended use.’265 Or. at 268 ,509 P.2d at 532 . This representational aspect, the opinion continues, ‘... is one of limitation in an attempt to keep [the expansion of strict liability doc *281 trine] within manageable and logical bounds and to keep the liability from being absolute.’ Id.
“By identifying this purpose of limitation we recognized that the court’s role in defining the kinds of cases in which the law will permit a jury to find an expectation of safety serves a policy function. See, also, id. at 293-294,509 P.2d 529 (Denecke, J., dissenting) and Cornelius v. Bay Motors, supra,258 Or. at 581-582 ,484 P.2d 299 (O’Connell, C. J., concurring).
“We consider, then, whether the trier of fact may infer any representation as to safety from the sale of a used product.
“We conclude that holding every dealer in used goods responsible regardless of fault for injuries caused by defects in his goods would not only affect the prices of used goods; it would work a significant change in the very nature of used goods markets. Those markets, generally speaking, operate on the apparent understanding that the seller, even though he is in the business of selling such goods, makes no particular representation about their quality simply by offering them for sale. If a buyer wants some assurance of quality, he typically either bargains for it in the specific transaction or seeks out a dealer who routinely offers it (by, for example, providing a guarantee, limiting his stock of goods to those of a particular quality, advertising that his used goods are specially selected, or in some other fashion). The flexibility of this kind of market appears to serve legitimate interests of buyers as well as sellers.
“We are of the opinion that the sale of а used product, without more, may not be found to generate the kind of expectations of safety that the qpurts have held are justifiably created by the introduction of a new product into the stream of commerce.
“As to the risk-reduction aspect of strict products liability, the position of the used-goods dealer is normally entirely outside the original chain of distribution of the product. As a consequence, we conclude, any risk reduction which would be accomplished by imposing strict liability on the dealer in used goods would not be significant enough to justify our taking that step. The dealer in used goods generally has no direct relationship with either manufacturers or distributors. Thus, there is no ready channel of communication by which the dealer and the manufacturer can exchange information about possible dangerous *282 defects in particular product lines or about actual and potential liability claims.
“In theory, a dealer in used goods who is held liable for injuries caused by a design defect or manufacturing flaw could obtain indemnity from the manufacturer. This possibility supports the argument that permitting strict liability claims against dealers in used goods will add to the financial incentive for manufacturers to design and build safe products. We believе, however, that the influence of this possibility as a practical factor in risk prevention is considerably diluted where used goods are involved due to such problems as statutes of limitation and the increasing difficulty as time passes of locating a still existing and solvent manufacturer.
“Both of these considerations, of course, are also obstacles to injured parties attempting to recover directly from the manufacturer. However, although the provision of an adequate remedy for persons injured by defective products has been the major impetus to the development of strict product liability, it cannot provide the sole justification for imposing liability without fault on a particular class of defendants.
“For the reasons we have discussed, we have concluded that the relevant policy considerations do not justify imposing strict liability for defective products on dealers in used goods, at least in the absence of some representation of quality beyond the sale itself or of a special position vis-a-vis the original manufacturer or others in the chain of original distribution. Accord: Rix v. Reeves,23 Ariz.App. 243 ,532 P.2d 185 (1975). [Fns. omitted.]”
As regards defects created by the original manufacturer, Tillman states a sound rule limiting liability of dealers in used equipment. Under the rule as stated, a Cadillac dealer who promotes the sale of new Cadillacs by offering “near new trade-ins” which are represented as “specially selected” may incur liability in respect of an original design defect in a car which he did not originally sell, both as a participant in the enterprise that created consumer demand and by generating “the kind of expectations of safety that the courts have held are justifiably created by the introduction of a new product into the stream of commerce.” (id., at p. 1304.) The ordinary used products dealer, however, will not be strictly liable for such defects created by the manufacturer.
*283
The rule stated in
Tillman
is consistent with the policy underlying the doctrine of strict liability as developed in this state and most recently announced by our Supreme Court in
Price
v.
Shell Oil Co., supra,
The ordinary used machinery dеaler has no continuing business relationship with the manufacturer in the course of which he can adjust the cost of protection from strict liability. Consequently, the rationale which underlies
Vandermark
simply is inapplicable to such a dealer. Moreover, the risk reduction which was sought in
Vandermark
on the assumption that “the retailer himself may play a substantial part in insuring that the product is safe or may be in a position to exert pressure on the manufacturer to that end” (
*284 The Oregon rule limiting liability of secondhand dealers in respect of defects created by the original manufacturer is, therefore, consistent with the public policy which underlies the California strict liability doctrine.
Accordingly, we conclude that it was not appropriate for the trial court to declare that petitioner, as a marketer, was strictly liable on account of any defect in the Forsberg planer. Should the defect relied upon be a design defect created by the original manufacturer, the facts so far adduced would support nonliability for they show that petitioner had no special position vis-á-vis the original manufacturer and in fact played nо more than a random and accidental role in the distribution of the Forsberg planer. It is unnecessary to decide whether petitioner may be strictly liable if the defect proven is the result of subsequent modification, dilapidation or misuse.
The petition is granted. Let a peremptory writ of mandate issue commanding respondent court to set aside and vacate its order of October 1, 1979, determining that the issue of petitioner’s liability as a marketer of the Forsberg planer is without substantial controversy, and to enter an order denying real party’s motion for such an order.
Cobey, J., and Allport, J., concurred.
The petition of real party in interest for а hearing by the Supreme Court was denied March 20, 1980. Mosk, J., was of the opinion that the petition should be granted.
Notes
The “unreasonably dangerous” test has been rejected in California as a necessary factor.
(Cronin
v.
J.B.E. Olson Corp.
(1972)
This circumstance also increases the potential for injustice if dealers in used products are subjected to strict liability in respect of original design defects as plaintiffs now need only show proximate causation between design and injury, whereupon defendants have the burden of proof to justify the design under the risk benefit standard.
*284
(Barker
v.
Lull Engineering Co., supra,