Legal Definitions - market-share liability

Market-share liability is a legal principle primarily used in product liabilitylawsuits. It allows an injured party (the plaintiff) to seek compensation from multiple manufacturers of an identical, harmful product, even when they cannot definitively identify which specific manufacturer produced the product that caused their injury.

This principle applies when:

• Multiple companies produced an identical or nearly identical product.
• The product is proven to be defective or harmful.
• The plaintiff's injury was caused by this type of product.
• It is impossible for the plaintiff to identify the specific manufacturer responsible for the particular product that caused their harm.

In such cases, instead of dismissing the lawsuit due to the inability to identify a single defendant, courts may hold each manufacturer liable for a portion of the plaintiff's damages. This portion is typically determined by each company's share of the market for that product at the time the injury occurred or the product was distributed.

Examples of Market-Share Liability:

• Pharmaceutical Drug Case:

  Imagine a situation where a drug, prescribed to pregnant women decades ago to prevent miscarriage, was later found to cause a specific type of cancer in the children born to those mothers. Many different pharmaceutical companies manufactured chemically identical versions of this drug during the same period. An adult who developed this cancer sues the drug manufacturers. However, due to the passage of time and lost medical records, the individual cannot prove which specific company manufactured the pills their mother took.

  How it illustrates market-share liability: Because it's impossible to pinpoint the exact manufacturer responsible for the plaintiff's specific exposure, but it's clear the injury was caused by this type of drug, a court might apply market-share liability. Each pharmaceutical company that produced the drug during the relevant period would be held responsible for a percentage of the plaintiff's damages, based on their share of the market for that drug at the time the plaintiff's mother took it.

• Industrial Chemical Exposure:

  Consider a group of factory workers who develop a rare lung disease, which is definitively linked to prolonged exposure to a particular type of industrial solvent used in their workplace. Over several decades, numerous chemical companies supplied this identical solvent to the factory. A former worker, diagnosed with the disease, sues the solvent manufacturers. However, the factory's purchasing records are incomplete, and multiple suppliers were used interchangeably, making it impossible to determine which specific company's solvent the worker was exposed to during their critical period of exposure.

  How it illustrates market-share liability: If the worker sues all known manufacturers of that solvent, and the court finds it impossible to identify the specific company whose product caused the worker's illness, it could apply market-share liability. Each defendant chemical company would then be liable for a portion of the worker's damages, proportionate to their share of the market for that solvent during the years of exposure.

• Defective Building Material:

  Suppose a specific type of fire-retardant insulation material, manufactured by several different companies using an identical chemical formula, is later discovered to degrade over time and release toxic particles when disturbed, causing a unique respiratory illness in building occupants. A homeowner whose house was built 25 years ago develops this illness. While it's clear the insulation is the cause, the original builder used insulation from various suppliers over the years, and there's no way to determine which specific company manufactured the insulation installed in this particular home.

  How it illustrates market-share liability: The homeowner could sue all manufacturers of that specific type of insulation. If the court determines it's impossible to identify the exact manufacturer of the insulation in the homeowner's house, it could apply market-share liability. Each manufacturer would then be held responsible for a percentage of the damages based on their market share for that insulation material at the time the house was built.