When a consumer suffers harm due to a defective product, they typically seek legal recourse by filing a product liability lawsuit against the manufacturer responsible for producing the product. However, in some cases, determining the exact manufacturer of a defective product is impossible. This is particularly true for products that were mass-produced by multiple companies over time, such as pharmaceuticals, chemicals, and medical devices.
The legal doctrine of market share liability was created to address this issue. It allows plaintiffs to recover damages from multiple manufacturers proportionally, based on their share of the market. This doctrine is essential in cases where plaintiffs have suffered injuries but cannot directly link their damages to a single manufacturer.
This article provides a detailed analysis of market share liability, including its legal foundations, applications in different industries, real-world case studies, limitations, and what consumers should do if they suffer injuries from an untraceable product.
What is Market Share Liability?
Definition and Purpose
Market share liability is a legal principle that holds multiple manufacturers responsible for injuries caused by defective products when the exact manufacturer of the product cannot be identified. Courts allocate liability based on each company’s market share, meaning that manufacturers who sold more of the product bear a larger portion of the legal responsibility.
This doctrine is especially relevant in mass tort lawsuits, where consumers are harmed by products such as prescription drugs, defective medical devices, and toxic chemicals. When victims cannot determine which specific company produced the defective product they used, market share liability ensures that manufacturers still bear financial responsibility for the harm caused by their products.
Why Market Share Liability Matters
Market share liability is significant because it ensures that injured plaintiffs are not left without a legal remedy. Without this doctrine, manufacturers could escape liability simply because a plaintiff is unable to prove exactly which company’s product caused their injury.
Additionally, market share liability promotes corporate accountability, as it discourages companies from mass-producing potentially harmful products without adequate safeguards.
A Notable Example: DES Lawsuits
One of the best-known applications of market share liability occurred in cases involving DES (diethylstilbestrol), a synthetic hormone that was marketed by multiple pharmaceutical companies and later found to cause severe reproductive health issues. Since many plaintiffs could not determine which company manufactured the DES they took, courts applied market share liability to ensure compensation for the victims.
How Does Market Share Liability Work in Lawsuits?
Legal Requirements for Market Share Liability
Market share liability applies in cases where multiple manufacturers produced the same or nearly identical product, making it impossible for the plaintiff to determine the specific manufacturer responsible. Courts allocate liability proportionally based on each company’s market share.
For a court to apply market share liability, the plaintiff must typically prove the following:
- Injury from a Defective Product – The plaintiff must show they were harmed by a product known to cause injuries.
- Multiple Manufacturers Produced the Identical Product – The lawsuit must involve a product made by multiple companies.
- Uncertainty in Identifying the Specific Manufacturer – The plaintiff cannot trace the product back to a single company.
- Substantial Market Participation – The defendant manufacturers must have sold a significant share of the product in question.
If these conditions are met, the court will assign liability based on market share data.
How Market Share is Calculated
Once the court determines that market share liability applies, each defendant is held proportionally responsible for damages.
For example, if a manufacturer controlled 30% of the market for a defective drug, that company would be responsible for 30% of the damages awarded in the lawsuit. This approach ensures that liability is distributed fairly among the manufacturers based on their involvement in selling the product.
Application of Market Share Liability in Different Industries
Pharmaceutical Liability Cases
Market share liability has been widely used in pharmaceutical lawsuits. The DES lawsuits set a precedent for holding multiple manufacturers responsible when their identical drugs caused injuries, despite plaintiffs being unable to determine which company produced the drug they consumed.
The same principle has been considered in lawsuits involving generic drug manufacturers and opioid manufacturers accused of contributing to the opioid epidemic.
Defective Consumer Products
Market share liability has also been applied to lead paint lawsuits, where multiple companies produced and distributed hazardous lead-based paints before they were banned.
Additionally, this doctrine has been used in cases involving medical device failures, especially when multiple manufacturers produced similar products that later caused injuries.
Environmental and Chemical Exposure Cases
Market share liability has been explored as a way to hold asbestos manufacturers and chemical producers accountable for widespread toxic exposure. Because toxic chemicals are often manufactured by multiple companies over many years, plaintiffs sometimes struggle to trace their exposure back to a single source.
Case Studies: Market Share Liability in Action
Sindell v. Abbott Laboratories (1980)
One of the most influential cases was Sindell v. Abbott Laboratories (1980), where a plaintiff sued multiple DES manufacturers after developing reproductive cancers linked to the drug. The California Supreme Court ruled in favor of the plaintiff, establishing the market share liability doctrine.
The decision meant that each manufacturer was held responsible for a percentage of damages based on their share of the DES market.
Hymowitz v. Eli Lilly & Co. (1989)
A similar case, Hymowitz v. Eli Lilly & Co. (1989), reinforced the doctrine. The New York Court of Appeals ruled that DES manufacturers should be held liable in proportion to their market share, setting a major precedent for product liability lawsuits.
Skipworth v. Lead Industries (1997)
Not all cases have resulted in courts applying market share liability. In Skipworth v. Lead Industries (1997), a child suffering from lead poisoning sued multiple paint manufacturers under the market share theory.
However, the court ruled that the paint formulas varied significantly between manufacturers, making it impossible to apply market share liability. This case demonstrated the limitations of the doctrine.
Challenges and Criticisms of Market Share Liability
Difficulty in Determining Market Share
One major challenge is the difficulty in determining accurate market share data. Courts rely on historical sales records, which may be incomplete, inaccurate, or unavailable. This can result in companies overpaying or underpaying in lawsuits.
Risk of Unfair Liability Distribution
Some manufacturers with small market shares may end up paying more than their fair share, while others escape liability due to missing market data.
Potential for Overcompensation or Undercompensation
Market share liability allows plaintiffs to win cases without proving that a specific manufacturer’s product caused their injury, which some consider unfair to defendants.
What Should Consumers Do If Injured by an Unidentifiable Product?
Consult a Product Liability Lawyer
An experienced attorney can help determine whether market share liability applies and whether a lawsuit is possible.
Document All Relevant Evidence
Medical records, receipts, and product packaging can serve as crucial evidence in proving exposure to a defective product.
Join a Mass Tort or Class Action Lawsuit
When multiple plaintiffs have suffered similar injuries from the same type of product, group litigation can strengthen the case and increase the likelihood of a successful outcome.
Frequently Asked Questions (FAQ) on Market Share Liability
Can I sue multiple manufacturers under market share liability?
Yes, market share liability allows plaintiffs to sue multiple manufacturers when they cannot identify the specific company that made the defective product. Courts distribute liability based on each company’s share of the market for that product, ensuring that manufacturers collectively bear responsibility for the harm caused.
What evidence do I need to prove liability in a market share case?
To support a claim under market share liability, plaintiffs typically need to provide medical records showing the injury caused by the defective product, purchase records or prescription history linking them to the type of product used, and expert testimony that establishes the connection between the product and the injury. Courts may also require evidence that multiple manufacturers produced identical or substantially similar versions of the product in question.
How do courts calculate each manufacturer’s responsibility?
Courts assign liability to each defendant based on their market share percentage during the time the product was distributed. If a company held 20% of the market for the defective product, it would be responsible for 20% of the damages awarded. In some cases, where exact market share data is unavailable, courts estimate liability based on available sales records and industry reports.
What happens if market share data is not available?
If precise market share data is not available, courts may rely on estimates based on historical sales records, industry reports, and expert analysis. Some jurisdictions use an adjusted liability approach, holding manufacturers liable based on their likely contribution to the total supply of the defective product. This method helps ensure that plaintiffs can still receive compensation even when exact market figures are unknown.
Can I still receive compensation if I don’t know which manufacturer made the product I used?
Yes, that is the primary purpose of market share liability. This doctrine was developed to help plaintiffs who cannot identify the specific manufacturer of a defective product. As long as multiple companies produced an identical product and the plaintiff can prove that the product caused their injury, the court can assign proportional liability to the responsible manufacturers.
Contact Fulginiti Law Today
Market share liability plays a crucial role in product liability law, providing compensation to victims who might otherwise have no legal remedy. While controversial, it ensures that manufacturers remain accountable for defective products even when a plaintiff cannot identify the exact manufacturer responsible.
If you or a loved one suffered harm from a defective product, it is essential to seek legal advice immediately. Contact Fulginiti Law today to discuss your options. Do not wait—protect your rights now.
