What is Market Share Liability?

The legal concept of market share liability was created more than 30 years ago through the famous ruling by the 1980 California Supreme Court in Sindell v. Abbott Laboratories. It provides for plaintiffs in a suit against a manufacturer of a product, where others may also manufacture the same or similar product, to receive proportionate compensation from all parties that are jointly and individually liable for any damages caused.

To bring a cause of action against a defendant who caused harm to a plaintiff, the plaintiff need not be able to prove which of the manufacturers produced the product if such information is unknown. This was indeed the case in Sindell v. Abbott Laboratories; the plaintiff was a victim of a drug taken by her mother, causing her to contract cancer, although she could not identify the manufacturer. The concept is closely akin to that of enterprise liability, which holds that companies engaged in an industry-wide practice may be held liable if the practice is found to do harm.

Why Does the Need for Market Share Liability Exist?

Market share liability provides individuals with a tool to hold accountable corporations that manufacture products that cause harm and damages. This removes an element of burden of proof from the plaintiff. It places a proportionate share of liability on each of the parties who may be adjudicated as having been liable for harm.

As an example, companies A, B, and C are jointly and individually involved in the manufacture, marketing, promotion, and sale of a drug found to cause cancer. A plaintiff brings an action before a court, but is unable to determine which of the three companies actually manufactured the product. If the court finds sufficient evidence to support the claim of the plaintiff that all three companies benefitted in equal or unequal proportions from the sale of the drug, each company would be found proportionately liable.

Recent Cases and Future Market Share Liability

In its 30-year history since the Sindell decision, plaintiffs have attempted to apply the findings of the court to other products that have multiple defendants and are deemed to cause the same harm as that which was the basis of the Sindell case (a synthetic female estrogen hormone named diethylstilbesterol, or DES, that has been linked to cervical cancer and birth defects). These attempts to bring suit against the manufacturers of asbestos, cigarettes, products containing benzene, and breast implants have not had the same level of success with the courts as the Sindell case.

The New Jersey Supreme Court has arguably done the most to advance the context in which market share liability should be viewed with regards to a tort action brought against a manufacturer. In 1989 (Shackil v. Lederle Labs, 116 N.J. 155, 168), the court declined to apply the concept to a vaccine case and in another case from 1994 (Cecil Becker v. Baron Brothers, 138 N.J. 145, 160), setting forth the following forecast:

“… to apply the market share liability theory requires a product that is produced by multiple defendants that is uniformly similar and where the plaintiff has been exposed to but one or some of them, and through circumstances beyond the plaintiff’s control, it cannot be determined which manufacturer supplied the product that injured the plaintiff.”

Oliver Adams is a freelance writer based in Athens, Georgia who focuses on Employee Discrimination, Product Liability, the Uniform Commercial Code, Contract Law, Banking Law and other areas as well.