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Simmons v. Mark Lift Industries10/24/2005
sed assets used to make allegedly defective airplane because plaintiff did not have a claim at time of bankruptcy sale and so there was no property right to be deprived or claim to be divested); Schweitzer v. Consolidated Rail Corp., 758 F.2d 936, 941-44 (3d Cir. 1985) (discharge in bankruptcy does not discharge a product liability claim when claimant does not have a sustainable cause of action at the time of the discharge); In re Schwinn Bicycle Co., 210 B.R. 747 (Bankr. N.D. Ill. 1997) (bankruptcy court order approving sale of assets, which indicated successor-purchaser would not be regarded as successor in interest, could not bind plaintiff subsequently injured while using exercise equipment manufactured by predecessor; even assuming order was intended to have such an effect, applying it to accident victim whose product liability claim arose after sale of assets, and who had received no notice or opportunity to participate in bankruptcy process, would violate due process and bankruptcy notice requirements); Lefever v. K.P. Hovnanian Enterprises, Inc., 734 A.2d 290, 295-301 (N.J. 1999) (federal bankruptcy law did not preclude forklift operator's product liability claim against successor who purchased assets at bankruptcy sale because bankruptcy proceeding did not deal with his claim; court noted that successors who purchase assets at bankruptcy sale may be held liable in other contexts, including liability for environmental contamination, delinquent pension fund contributions, and age discrimination claims).
In sum, I conclude Simmons may maintain a state law-based product liability claim under a successor liability theory against a successor corporation which purchased the predecessor's assets in a voluntary sale approved by the federal bankruptcy court.
3. AVAILABILITY OF OTHER POTENTIAL DEFENDANTS
Terex urges we find it may not be held liable as a successor because Simmons may look to seller, BPS Equipment, for recovery. Terex asserts that when other entities may answer in damages to Simmons under a strict liability or negligence theory, it is unnecessary to hold a successor corporation liable in a product liability action.
I agree with the majority this argument is without merit and conclude the answer to Question 3 is "yes," a plaintiff may maintain a product liability claim under a successor liability theory against a defendant when there are one or more other viable product liability defendants. The status and availability of a seller or other potential defendants are irrelevant in determining the issue of a successor corporation's liability in a product liability action. To hold otherwise would be to grant a fortuitous windfall to a successor, if a plaintiff should prevail, while unfairly and improperly placing the entire burden of responding to the plaintiff's damages on remaining defendants.
CONCLUSION
In Question 1, I disagree with the majority's decision to rely exclusively on Brown, 128 S.C. 428, 123 S.E. 97. A successor corporation which purchases the assets of a predecessor may be held liable in a product liability action for an allegedly defective product manufactured by the predecessor when an analysis of the facts and circumstances reveals it is appropriate to hold the successor liable as a mere continuation of the predecessor. In Question 2, I agree with the majority a plaintiff may maintain a product liability claim under a successor liability theory grounded in state law against a successor corporation which purchased the predecessor's assets in a voluntary sale approved by the federal bankruptcy court. I disagree with the majority's decision to rely exclusively on Brown in determining the issue of successor liability.
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