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Winsor v. Glasswerks PHX2/4/2003
1145, 1154 (1st Cir. 1974) (failure to place product in the stream of commerce was outweighed by the fact that the successor is "profiting from an exploiting all of the accumulated good will which the products have earned, both in its outward representations of continuity and in its internal adherence to the same line of equipment").
C. Modification of Successor Liability Laws is Best Left to the Legislature.
We find it unnecessary to discuss in detail the competing policy concerns involved in modifying Arizona's successor liability laws. It is clear to us, regardless of the relative merits of both the present rule and the proposed exceptions, that this issue is best left to the legislature.
We do not suggest that we are without the judicial power to broaden successor liability as requested. Rather, our holding is only that in this particular case we should refrain from exercising that power, and defer to the legislature in its representative capacity, because (i) the core issue is one of policy for the legislature, (ii) predictability in our commerce should be encouraged, (iii) the proposed exceptions modify or minimize fundamental principles of tort liability, and (iv) our present rule already allows for liability against certain successor corporations. We elaborate below.
(i). The Core Issue is One of Policy for the Legislature.
The core problem that makes successor liability an issue is that the manufacturer of the product is not financially viable. Thus, the policy issue is whether the costs of injury should be shifted from the original manufacturer to its successor. As other courts have recognized, this is the type of policy issue "best handled by legislatures with their comprehensive machinery for public input and debate." Leannais v. Cincinnati, Inc., 565 F.2d 437, 441 (7th Cir. 1997); see also Myers v. Putzmeister, Inc., 596 N.E.2d 754, 758 (Ill. App. Ct. 1992); Holifield v. Setco Indus., Inc., 168 N.W.2d 177, 181 (Wis. 1985), rev'd on other grounds by, Hansen v. A.H. Robins, Inc., 335 N.W.2d 578 (Wis. 1983). As the Colorado Court of Appeals noted, " f liability of successor corporations is to be expanded because the successor may be better suited to pay the costs of injuries, it should be done so by the legislature." Johnston v. Amsted Indus., Inc., 830 P.2d 1141, 1145 (Colo. Ct. App. 1992). This was because the policy issue turns on such factors as:
Whether or not a successor corporation has the ability to gauge the risks of liability, insure against those risks, and spread the costs among the consuming public depends upon a wide variety of factors, such as the potential size and economic strength of successor corporations, the availability of commercial insurance, and the cost of the insurance. Id.
The Illinois Court of Appeals has similarly ruled:
hile the Illinois courts have been struggling with this issue, none have adopted the approach and most have looked to the legislature for direction in this area. The legislature's role in this situation is especially important in light of the other statutory prerogatives governing corporations doing business in the state of Illinois. Myers, 596 N.E.2d. at 759 (emphasis added).
That the issue is one of policy for the legislature is also evidenced by the argument that the best solution to the underlying problem may be one that only the legislature is empowered to implement. For instance, one proposed solution is that "some form of bond or other security [could be] posted by the predecessor manufacturer in an amount not to exceed the net value of the predecessor at time of transfer." Restatement ยง 12, Reporters' Note, cmt. b; see Mich
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