 |
 |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|
|
|
|
Simmons v. Mark Lift Industries10/24/2005
al manufacturer or a successor - are in the best position to protect the public from defective products by evaluating the risks and ensuring they place a reasonably safe product in the stream of commerce. Furthermore, this approach would encourage existing corporations to produce safe products because, knowing they will be unable to offer themselves for sale free of successor liability, they will have an additional incentive to manufacture safer products in order to maximize the corporation's market value if sold.
I reject as speculative and unfounded the argument that holding a successor liable in a product liability action will damage business interests or prompt rash decisions by corporations. Terex has not cited, nor have I found, any studies or evidence demonstrating that the view I propose would inhibit asset-based transactions, lead to increased piecemeal sales, or discourage large-scale transfers. Potential legal liability often is a factor every responsible corporation must consider; however, it is not the driving or primary force behind every decision. Successors contracting for an asset transfer in a free market, when they intend to continue the basic enterprise, will negotiate a price which reflects the fair market value of the transfer, taking heed of the risk of future claims. A successor also may factor in the cost of purchasing successor liability insurance. See e.g. Savage Arms, 18 P.3d at 56-58.
The traditional rule on successor liability "was designed for the corporate contractual world where it functions well. It protects creditors and dissenting shareholders, and facilitates determination of tax responsibilities, while promoting free alienability of business assets." Polius v. Clark Eqpt. Co., 802 F.2d 75, 78 (3d Cir. 1986). However, courts have come to recognize, as I would, "that the traditional rule of non-liability was developed not in response to the interests of parties to product liability actions, but rather to protect the rights of commercial creditors and dissenting shareholders following corporate acquisitions, as well as to determine successor corporation liability for tax assessments and contractual obligations of the predecessor. Strict interpretation of the traditional corporate law approach leads to a narrow application of the exceptions to non-liability, and places unwarranted emphasis on the form rather than the practical effect of a particular corporate transaction." Ramirez, 431 A.2d at 815-16.
I agree with the New Jersey Supreme Court that it is somewhat anomalous and rather perplexing that after the long journey from the seminal product liability case of MacPherson v. Buick Motor Co., 111 N.E. 1050 (N.Y. 1916), the drafters of the Restatement (Third) of Torts and courts rejecting successor liability in this context would frame the issue solely in terms of contract law and essentially ignore product liability law. See Lefever v. K.P. Hovnanian Enterprises, Inc., 734 A.2d 290, 294-95 (N.J. 1999). The better view, as outlined above, is that strict liability in tort may be imposed on a successor corporation in a product liability action in a manner which allows corporations to protect their interests and yet still fulfills the goals of product liability law.
2. EFFECT OF FEDERAL BANKRUPTCY COURT ORDER ON VIABILITY OF PRODUCT LIABILITY ACTION BASED ON STATE LAW
I agree with the majority that a plaintiff may maintain a product liability claim in South Carolina under a successor liability theory against a defendant which purchased only the assets of a voluntarily bankrupt selling company in a transaction approved by the federal bankruptcy court. As explained in Question 1, I part with the majority in its exclusive relianc
Page 1 2 3 4 5 6 7 8 9 10 11 12 13 14 South Carolina Personal Injury Attorneys
Personal Injury Lawyers
|
| |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|