What is Successor Liability and Who is Responsible? Rick Williams Advises Law360

August 2015

Who’s responsible for a defective product that may cause an injury: the seller of a manufacturing/distribution company or the buyer? In the Law360 article, “Successor Liability in Calif: Where to Point the Finger,” Partner Richard Williams examines why Ray v. Alad Corp. is a game changer in product liability lawsuits and how to avoid product liability. Mr. Williams cautions product manufacturers/distributors to be extremely careful when they purchase the same type of company because courts are now finding that the successor may be held liable for the predecessor’s defective products. Traditionally, a successor is not held responsible for the predecessor’s liabilities, unless there was a consolidation or merger, fraud, a continuation of the original business, an agreement or an implied agreement to assume all debts and liabilities. However, the California case Ray v. Alad Corp. birthed the product line successor exception that states if the successor destroyed the plaintiff’s remedies caused by the acquisition has the ability to assume the risk role, or it’s fair to require the successor to assume responsibility, then they will be held responsible for the defective products. “A case by case analysis is required and should be undertaken in any situation involved a defective product claim against an original manufacturer or distributor, or any entity in the stream of commerce or chain of distribution that has been sold to a successor interest.” Mr. Williams advises business owners to do their due diligence when acquiring a product manufacturer/distributor and never to assume that the traditional rules apply. Read full article. If you live in North Carolina, you may wish to approach Hardison & Cochran, attorneys at law, if you experience harm or an injury as a direct result of a defective product, like the 3M earplugs used in the military.

Please Note: This article is necessarily general in nature and is not a substitute for legal advice with respect to any particular case. Readers should consult with an attorney before taking any action affecting their interests.