Are You at Risk?
/by Amy A. Marasco/
Standards that have market relevance can attract mischief. Though
many participants in the voluntary consensus standards development
process understand that the specified game rules for participation
provide for fairness and due process, many are not fully aware
of the legal issues that can arise when these rules are not properly
followed. Due process in itself is not a defense to legal claims,
but it is a safeguard that prevents mischief from taking hold
and improperly influencing the resulting standard.
This article looks at ways in which the antitrust laws and negligence
principles can be implicated in relation to
standards development activity.
Competitive Effects of Voluntary
The benefits and procompetitive effects of voluntary standards
are not in dispute. Standards do everything from solving issues
of product compatibility to addressing consumer safety and health
concerns. Standards also allow for the systemic elimination of
non-value-added product differences (thereby increasing a users
ability to compare competing products), reduce costs, and often
simplify product development. They also are a fundamental building
block for international trade.
As the Court of Appeals for the First Circuit explained in Clamp-All Corp. v. Cast Iron Soil Pipe Institute:
The joint specification development, promulgation, and adoption
efforts would seem less expensive than having each member of CISPI
[a trade association] make duplicative efforts. On its face, the
joint development and promulgation of the specification would
seem to save money by providing information to makers and to buyers
less expensively and more effectively than without the standard.
It may also help to assure product quality. If such activity,
in and of itself, were to hurt Clamp-All by making it more difficult
for Clamp-All to compete, Clamp-All would suffer injury only as
result of the defendants joint efforts having lowered information
costs or created a better product.... And, that kind of harm is
not unreasonably anticompetitive. It brings about the very benefits
that the antitrust laws seek to promote.(1)
Therefore, the analysis of any possible anti-competitive effects
a standard may have must, under the rule of reason, be weighed
against its procompetitive and positive effects. This, however,
is somewhat easier said than done.
Enforcement agencies such as the Department of Justice and the
Federal Trade Commission and the courts may confront difficulties
when applying the rule of reason to standardization activities.
A cost-benefit analysis or consideration of possible alternative
standards may require a technical expertise that these bodies
often admittedly lack. The obvious alternative is to leave the
resolution of technical issues to the experts who participated
in the standards development process and focus instead on the
process itself. Focusing on the standards development process
has the benefit of (1) being easier for courts and enforcement
agencies to analyze, (2) providing clear guidance to the business
community, and (3) being designed (and, if necessary, modified)
to reduce if not eliminate the possibility of anti-competitive
This has been ANSIs approach in promulgating and maintaining
the ANSI Procedures for the Development and Coordination of American National
Standards, and it has been effective. In its role as the accreditor of U.S.
standards developing organizations (SDOs), ANSI seeks to further
the integrity of the standards development process and to determine
whether candidate standards meet the necessary criteria to be
approved as American National Standards. ANSIs approval of these
standards is intended to verify that the principles of openness
and due process have been followed and that a consensus of all
interested parties has been reached. These requirements ensure
that the playing field for standards development is a level one.
If a standard is developed according to ANSI requirements, there
should be sufficient evidence that the standard has a substantive
reasonable basis for its existence and that it meets the needs
of producers, users and other interest groups. If a vote on a
standard was or is somehow perceived as having been subtly manipulated,
any person or entity who is materially affected by or otherwise
interested in the standard whether a voting member of the consensus
body or a public commentator can appeal the decision. The grounds
for an appeal to ANSI include issues such as lack of balance on
the consensus body, dominance by any person or entity, inadequate
response to a negative comment (again whether from a voting member
of the committee or a public commentator), and improper restraint
of trade concerns. The appeals process, and the requirement that
all consensus bodies seek to have representatives from a balanced
group of interested parties, assures that no one interest can
manipulate the process unfairly. The ANSI system is designed so
that contrary evidence proffered by opponents of the standard
must be properly addressed and responded to or else the standard
will fail to achieve ultimate approval.
Is this system absolutely foolproof? The answer is no. But it
offers several advantages to other methods of evaluating whether
anti-competitive activity is present in the standards development
First, ANSIs system only requires a procedural and process-based
review and not a dissection of the technical merits of the standard.
As noted earlier, due process in and of itself is not and can
never be a complete defense to an antitrust claim. However, the
value of an open system and due process-based procedures derives
from the fact that they are designed in large measure to cause
antitrust-related issues to surface as early in the process as
possible. Many of the current procedural requirements were fashioned
in response to court decisions that highlighted where the process
previously lent itself to the possibility of improper manipulation.
In addition, proper procedures are of little value if they are
not followed in practice. As a result, in addition to the review
ANSI undertakes when a standard is submitted to it for approval
as an American National Standard, the Institute also has implemented
a mandatory standards developer audit program. The program is
designed both to verify an accredited developers compliance with
ANSI requirements and to provide guidance on more efficient or
effective ways to address various aspects of the standards development
Negligence and Other Tort Liability Grounds
From time to time claims have been asserted against standards
developers, particularly those that develop safety-related standards,
on the ground that the developer promulgated an allegedly unsafe
or otherwise insufficient standard. Historically and in most jurisdictions,
the courts have dismissed these types of claims on the ground
that standards developers do not owe a duty to a person injured
by a product or set of circumstances to which the developers
standard applies. Courts generally have held standards developers
liable only upon a showing that (1) the developer acted in bad
faith, (2) the standards were to some degree compulsory, or (3)
the developer had the power to control the operations of the companies
that manufactured the particular products involved.
For example, in Meyers v. Donnatacci(2) (hereafter Meyers), the plaintiff suffered severe injuries when he dove into an
in-ground swimming pool. He alleged a variety of claims against
the National Spa and Pool Institute (NSPI), including negligence.
The court granted NSPIs motion for summary judgment.
At issue in Meyers was NSPIs Suggested Minimum Standards for Residential Swimming
Pools. Before promulgating the standard, NSPI commissioned a
number of different studies on pool safety and, in turn, distributed
a number of pamphlets to the general public on safe pool use.
The court posed the key issue as whether a trade association/standards
developer that performs research, conducts surveys, promulgates
standards, and holds itself out as an expert in the area of safety
standards in swimming pools owes a duty to a consumer who is
using a product manufactured and/or installed by one of its members.
The court in Meyers found that there is no such duty as a matter of law. The court
explained that the relevant factors included:
--The absence of a special relationship between plaintiff and
NSPI. The plaintiff never received any information from NSPI or
had any direct contact with NSPI.
--NSPIs services are principally directed to its membership and
not the public at large.
--The process of promulgating standards was voluntary and the
results reflected a consensus of those who participated. The views
of non-NSPI members were sought, including public officials and
--None of NSPIs activities increased the risk of harm to the
plaintiff. The hazard of shallow-water diving existed independently
of any acts on the part of NSPI.
--Compliance with the standard was voluntary. NSPI had no authority
to mandate compliance nor did it attempt to force its members
to comply. NSPI had no power to control the operations of its
--If NSPI ceased its operation or discontinued providing the consensus
standards, there was no suggestion that its membership would cease
production of the related products.
Finally, the Meyers court noted that not-for-profit trade associations serve many
laudable purposes in our society, including developing voluntary
consensus standards, and suggested that such public interest benefits
should not be lightly discouraged.(3)
A Duty of Care
Since late 1996, there have been at least three decisions in which
the court held that a standards developer does owe a duty of care
to those impacted by the application of the developers standards.
The first such decision was Snyder v. American Assoc. of Blood Banks(4) (hereafter Snyder). In Snyder, the plaintiff brought claims of strict liability, breach of warranty,
negligence and consumer fraud against the American Association
of Blood Banks (AABB) alleging that he had contracted AIDS from
a transfusion of blood received during open-heart surgery. At
the time of the plaintiffs operation, the precise cause and mode
of transmission of AIDS were still matters of contention among
health professionals. The court noted that AABB was a private,
tax-exempt trade association that was recognized as the leader
in setting blood-banking standards. A jury found AABB negligent
for not recommending that its member blood banks conduct surrogate
testing of donated blood for HIV.
On appeal the New Jersey Supreme Court held that AABB owed a duty
of care to persons receiving blood from its member blood banks
and found that AABB had breached this duty to the plaintiff. The
court relied in part on the fact that AABB was the governing body
of a significantly self-regulated industry, and noted that, as
a practical matter, a blood bank cannot operate unless it is accredited
by AABB and maintains that accreditation by complying with AABB
standards. AABB dictates how its members should obtain, screen
and distribute blood, and it inspects its members to ensure compliance.
The Snyder court based its decision on common-law negligence principles,
evaluating the foreseeability of injury, nature of the risk, relationship
of the parties and impact on the public. The courts finding of
a duty was explained as follows:
Society has not thrust on the AABB its responsibility for the
safety of blood and blood products. The AABB has sought and cultivated
that responsibility.... By words and conduct, the AABB invited
blood banks, hospitals, and patients to rely on the AABBs recommended
practices. The AABB set the standards for voluntary blood banks.
At all relevant times, it exerted considerable influence over
the practices and procedures of its member banks....
The Snyder decision in New Jersey was subsequently followed by a New York
state court that also held that AABB owed a duty of care to those
receiving blood or blood products from its member blood banks
(see Weigand v. New York University(5)).
The third recent decision finding the existence of a duty of care
surfaced in 1998. A jury in the Superior Court of the State of
Washington for the County of Benton awarded the plaintiff in Meneely v. S.R. Smith, Inc. et al. (hereafter Meneely) $11 million in damages, 60% of which was to be paid by the National
Spa and Pool Institute. NSPI is an ANSI-accredited standards developer
but the standard at issue in Meneely had not been approved as an American National Standard so the
judge did not permit the introduction at the trial of any evidence
related to ANSI. NSPI appealed the jury verdict in Meneely and that appeal is still pending.
In Meneely the plaintiff became a paraplegic after diving into a backyard
pool. He alleged that NSPI was negligent in setting its residential
pool safety standards. During the trial there was a factual debate
as to whether the pool and diving board in question were in compliance
with any relevant NSPI standard. Prior to the trial NSPI sought
to have the negligence and related product liability claims dismissed
as a matter of law. In summary fashion, the trial court sided
with the plaintiff who argued that NSPI did owe a duty of care
in developing standards and disseminating information about them:
Initially, NSPI had no statutory duty or judicially-imposed duty
to promulgate industry-wide diving depth or board labeling standards.
However, when it voluntarily did so, the law imposed a duty of
acting carefully because it was foreseeable that member manufacturers
would follow them and divers would be injured if the standards
These types of decisions may be of concern to ANSI-accredited
standards developers in part because they could encourage would-be
plaintiffs to include standards developers as defendants in personal
injury lawsuits. Even if standards developers are able ultimately
to extract themselves from such lawsuits and have the claims against
them dismissed on legal grounds, they still have to incur the
related legal expenses and expend significant resources to bring
about that result.
No Duty of Care
Since the decisions in Snyder, Weigand, and Meneely described above, at least three decisions have been issued holding
that standards developers do not owe a duty of care to ultimate
consumers. The first such decision is Commerce and Industry Insurance Co. v. Grinnell Corp.(7) (hereafter Grinnell). In this case, the plaintiffs asserted that the National Fire
Protection Association (NFPA) was liable for the damage resulting
from a warehouse fire. The plaintiffs alleged that NFPA failed
to provide sufficient warnings and was negligent in promulgating
safety standards relating to the storage of warehouse merchandise.
The Grinnell court granted NFPAs motion for summary judgment. With regard
to the failure to warn claim, the court found that the relationship
between NFPA and the occupant of the building in question was
too remote to warrant the imposition of such a duty. The court
also dismissed the plaintiffs claims that NFPA was negligent
in developing the standards in question and distinguished the
circumstances in Grinnell from those in Snyder:
[M]ost courts have focused on the amount, if any, of control a
trade association wields over the behavior of its members concerning,
for example, the proper implementation of its standards
. By contrast,
the NFPA does not list, inspect, certify or approve any products
or materials for compliance with its standards. It merely sets
forth safety standards to be used as minimum guidelines that third
parties may or may not choose to adopt, modify or reject. Thus,
NFPA has no control over whether or which jurisdictions adopt
its voluntary standards
. Finally, even if plaintiffs could establish
a duty on the part of the NFPA, they point to no evidence that
the NFPA failed to exercise reasonable care in promulgating its
A second recent decision involved three carpenters who were injured
installing a wood truss system. The Truss Plate Institute (TPI)
had disseminated a pamphlet entitled Bracing Wood Trusses: Commentary
and Recommendations, which the manufacturer of the truss system
had provided to the carpenters. The manufacturer claimed that
TPI failed to provide adequate instructions and adequate warnings
for the safe erection of roof trusses. The court in Bailey v. Edward Hines Lumber Co.(8) (hereafter Bailey) distinguished the decisions in Snyder, Weigand, and King and held that TPI owed no duty to the carpenters in this case.
The Bailey court emphasized that TPI had no ability to oversee or control
access to their recommendations or their use. The court also reiterated
that standards developers provide a significant benefit to society
and that public policy considerations mitigated in favor of not
finding a duty under the circumstances presented in Bailey.
The third recent decision again involved the American Association
of Blood Banks (AABB), which had been sued in a California state
court. In this case, the plaintiff was a child who contracted
AIDS in 1984 from a blood transfusion administered to him during
surgery shortly after his birth to correct a congenital heart
defect. The arguments raised by the plaintiff against AABB were
very similar to those raised in the Snyder case discussed above.
On October 28, 1999, the California Court of Appeal for the Fourth
District, Division 1, upheld the lower courts grant of summary
judgment to AABB on the ground that AABB did not owe a duty of
care to third parties such as the plaintiff when it voluntarily
undertook to set blood-bank safety standards (see NNV v. American Association of Blood Banks(9)). Among other things, the court based its decision on the lack
of scientific evidence presented by the plaintiff to show that
there was a close connection between the AABBs recommendations
and his injury; he presented only speculation that adoption of
the particular standards might have prevented his infection.
The court further noted that the problem of how best to test blood
for the AIDS virus was, at the time in question, still a matter
of contested debate in the medical and scientific community. If
under then-current medical thinking there were acceptable alternative
approaches, it would be unfair in hindsight to require that the
medical community always make the correct selection:
We conclude a professional medical association such as the AABB
should not face liability for making a choice among competing
scientific and medical opinions when the medical and scientific
community has reached no consensus on the proper approach to a
medical situation and there is no showing the association was
involved in any fraud or bad faith.
The court further noted that as a matter of public policy, society
benefits from the work done by private sector standards developers:
Leaving these matters solely in the hands of government agencies,
which is a possible result of imposing liability here, would not
further the publics interests nor guarantee the safety of the
nations blood supply. It would limit debate and would deprive
medical practitioners, scientists and governmental agencies of
a valuable resource.
In its decision, the NNV court directly addressed the conflicting
decision in the Snyder case. The NNV court found the reasoning in Snyder to be flawed because there was insufficient evidence presented
that in 1984 the injuries to these types of plaintiffs was foreseeable
given the unresolved debate within the community of relevant experts.
The NNV court accused the Snyder court of using a hindsight approach. The NNV court also noted
that, contrary to the Snyder courts view, imposing liability on AABB would not further the
goals of preventing future harm. Instead, it would likely chill
debate on public health issues and deter private sector associations
from undertaking this valuable work.
Standards developing organizationsand the experts that populate
these groupsserve an important public interest function in devising
American National Standards. It can be argued that the public
interest is both served and protected if the standards developer
is accredited by ANSI and meets the Institutes requirements for
openness, balance, consensus, and other due-process safeguards.
It also is arguable that courts should therefore not impose on
ANSI-accredited standards developers a duty of care to end users
without some control by the developer over the related manufacturers/producers
implementation of the standards or else intentional misconduct
on the part of the developer.
The entire voluntary consensus standards system will be severely
hampered in its ability to continue its valuable work if standards
developers are forced to incur substantial legal and other costs
in defending themselves from antitrust and negligence claims.
1 Clamp-All Corp. v. Cast Iron Soil Pipe Institute, 851 F.2d 478
(1st Cir. 1988) (Breyer, C.J.) (citation omitted; emphasis in
2 Meyers v. Donnatacci, 220 N.J. Super. 73, 531 A.2d 398 (Law
3 See also Beasock v. Dioguardi Enterprises, Inc., 130 Misc. 2d.
25, 494 N.Y.S.2d 974 (Sup. Ct. Monroe Co. 1985) (the court held
that a duty of care will not be imposed on a standards developer
absent a relationship with the manufacturer sufficient to exercise
control over the culpable conduct); and Howard v. Poseidon Pools,
Inc., 133 Misc. 2d 50, 506 N.Y.S.2d 523 (Sup. Ct. Allegheny Co.
1986) (the court found that NSPI owed no duty to the plaintiff,
holding that for the developer to be responsible for the [alleged]
negligence of the manufacturer, it must appear that such defendant
controlled the tort-feasing manufacturer).
4 Snyder v. American Assoc. of Blood Banks, 676 A.2d 1036 (N.J.
5 Weigand v. New York University, 172 Misc. 2d 716, 659 N.Y.S.2d
395 (Sup. Ct. N.Y. Co. 1997) (hereafter Weigand).
6 Plaintiffs Brief In Opposition to Defendant NSPIs Motion to
Dismiss Plaintiffs Negligence and Product Liability Act Claims.
See also King v. National Spa & Pool Institute, Inc., 570 So.
2d 612 (Ala. 1990) (court held that NSPIs voluntary undertaking
to promulgate minimum safety design standards
made it foreseeable
that harm might result to the consumer if it did not exercise
that care) (hereafter, King).
7 Commerce and Industry Insurance Co. v. Grinnell Corp., 1999
U.S. Dist. LEXIS 11269 (D. La. July 14, 1999).
8 Bailey v. Edward Hines Lumber Co., 308 Ill. App. 3d 58, 719
N.E.2d 178 (Ill. App. 1999)
9 N.N.V. v. American Association of Blood Banks, 89 Cal. Rptr.
2d 885 (Oct. 28, 1999) (hereafter NNV).