Texas Chain…Of Distribution

With a global economy more and more products are being shipped to the United States from foreign countries daily.  When these products fail, it is expensive and time consuming to seek recovery from the foreign manufacturer.  But before throwing out your products claim, look at your state’s laws on pursuing those entities in the chain of distribution of the product.  For example, distributors usually coordinate the sale of the product from the manufacturer to the seller and many times never even touch the product.  Despite their limited role of organizing the transfer of the goods, their liability can be unlimited in some circumstances.

In Texas, if you establish that the manufacturer of the product is insolvent or not subject to the jurisdiction of the court then the distributor can be held fully liable for the damages caused by the product as though they were, in fact, the manufacturer.  See Civil Practice & Remedies Code § 82.003.  Many distributors try to insulate themselves from liability in Texas by pleading the manufacturer is a "responsible third party" under Section 33.004 of the Civil Practice & Remedies Code.  This type of plea allows the distributor to put the manufacturer’s name on the jury charge when the manufacturer is not a party to the litigation so the jury can then decide the percentage of responsibility between the manufacturer and the distributor.  Logically, jurors are going to put the majority of responsibility on the manufacturer who made the product as opposed to the distributor who may never have even touched the product.  Don’t be fooled by this bit of legal maneuvering by a distributor.  The "responsible third party" statute only applies when both parties are negligent.  Under Section 82.003, the distributor can be held liable for the damages associated with the defective product without any negligence on the part of the distributor.  Since the distributor’s responsibility for the product arises from the statutorily imposed guidelines of Section 82.003 of the Civil Practice & Remedies Code and not from any negligent act it did or failed to do, the distributor cannot escape liability by trying to push a percentage of fault onto the manufacturer under Section 33.004. 

Each state has its own laws regarding the liability of distributors and those should be reviewed before closing a claim for a defective product manufactured overseas.

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Posted in chain of distribution, Civil Practice & Remedies Code § 33.004, Civil Practice & Remedies Code § 82.003, Products Liability, Texas

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