Successor Liability for Defective Products: A Redesign Ongoing
38 Pages Posted: 7 Oct 2007 Last revised: 20 Sep 2009
Successor products liability - cases where an injured plaintiff sues a successor business for a defective product sold by a predecessor business - is a doctrine still under development in the courts, and the doctrine's unsettled nature seems destined to continue over the next several years. Jurisdictions may be roughly divided into three categories. Several take a restrictive approach toward liability in such cases (sometimes called the "traditional approach"), allowing it only when relatively rare exceptions to a general no-liability rule apply. Several other jurisdictions are less restrictive with successor products liability, allowing recovery under the "product line" or "continuity of enterprise" approaches in addition to the traditional exceptions allowing liability. A third set of courts, also represented by several jurisdictions, have not yet firmly established an approach. Following a 1999 law review article by one of this article's authors supporting the less restrictive product line and continuity of enterprise approaches, and some subsequent judicial support for the article's position, some scholars responded that the less restrictive approaches are unfair to predecessor businesses in cases involving unforeseeable risks. This article challenges such concerns, demonstrating that in practice courts rarely impute knowledge of unknowable risks even under strict products liability, and that truly unforeseeable risks are in any event relatively rare. The article also analyzes recent trends in successor products liability, finding a mixed picture with some jurisdictions recently adopting one or both of the less restrictive approaches, and other courts adopting or hinting that they may adopt the restrictive traditional approach. The article concludes that none of the approaches seem likely to become a strong majority doctrine in the near future, but that corrective justice and public policy concerns favor utilizing the less restrictive approaches.
Keywords: products liability, successor liability
JEL Classification: K13, K22
Suggested Citation: Suggested Citation