Douglas v. E. & J. Gallo Winery

In Douglas v. E. & J. Gallo Winery (1977) 69 Cal.App.3d 103, the employer, engaged primarily in manufacturing and selling wine, had elected to manufacture, both for its own use and for sale to the public, scaffolding. A scaffold on which plaintiff was working fell, injuring him. The court applied the dual capacity doctrine and allowed a suit at law for defective design against Gallo as manufacturer. The Court stated "An employer qua employer enjoys the cloak of immunity weaved by the worker's compensation law. But when an employer engages in the dual capacity of manufacturer of a product for sale to the public, the employer assumes all of the duties and liabilities of such manufacturer. In electing to manufacture elevator scaffolding for the public rather than obtaining it from a third party manufacturing firm, the defendant should be held to the standard of care of manufacturers generally." The Gallo court said (at p. 113): "Limitations on the remedy of an injured employee should not be extended beyond the purposes of the workers' compensation law. Failure to apply the dual capacity doctrine to the manufacturer who sells to the public would unduly restrict the injured person's remedy. There is no reason to relieve a manufacturer who sells to the public of liability as a manufacturer by the chance circumstance that the defendant manufacturer also happens to be an employer of the injured person. The deterrent value of a manufacturer's liability to promote the manufacture of sale products is effectively reduced if recovery is limited to workers' compensation."