Under Massachusetts law, people that are injured by defective products have a right to pursue claims for damages against anyone in the chain of distribution of the product, including the manufacturer. While, in some instances, it is easy to determine who should be named as a defendant in a product liability case, in cases in which another company purchased the company that originally sold the product, it can be difficult to ascertain who is liable for the alleged harm. Recently, the United States District Court for the District of Massachusetts discussed successor liability in a case in which the plaintiff alleged he was injured by a defective vehicle. If you sustained injuries due to a dangerous product, it is wise to speak with an assertive Massachusetts product liability attorney regarding what claims you may be able to pursue.
It is alleged that the plaintiff suffered significant injuries in a car accident. He subsequently filed a product liability lawsuit in Massachusetts state court against the defendant, alleging the car was dangerously designed and manufactured. The defendant was not the company that manufactured the car, however, but was the company that purchased certain assets from the original manufacturer when the original manufacturer filed for bankruptcy. Under the Master Transaction Agreement approved by the bankruptcy court, the defendant agreed to assume liability for any product liability claim arising out of motor vehicle accidents occurring after the sale. The defendant removed the action to federal court pursuant to 28 U.S.C. 1332 and then filed a motion to dismiss, arguing that the court lacked jurisdiction over the defendant.
Successor Liability for Harm Caused by Defective Products
Generally, a successor company does not assume the liabilities of its predecessor. There are exceptions to the general rule, however, such as in cases in which the purchaser expressly or impliedly agrees to take on such liabilities. In such cases in which a successor can be held liable for its predecessor’s acts, the predecessor’s contacts with a forum may be imputed to the successor.