When a defective product causes injury, multiple parties may bear legal responsibility. Understanding the chain of distribution helps identify all potential defendants and maximize your chances of full compensation.
The Chain of Distribution
Products pass through many hands before reaching consumers. The chain of distribution includes everyone involved in getting the product from raw materials to the end user. Under product liability law, every commercial entity in this chain can potentially be held liable for defects.
This broad liability ensures injured consumers can find a solvent defendant even when the original manufacturer is bankrupt, foreign, or otherwise unreachable.
Manufacturers
The manufacturer is typically the primary defendant in product liability cases. This includes companies that design products and oversee production, contract manufacturers who produce products for brand owners, and parent companies that control manufacturing subsidiaries.
Manufacturers are strictly liable for defects regardless of fault. They control design decisions, production processes, and quality control—making them primarily responsible for product safety.
Component Part Manufacturers
Products often incorporate components made by specialized suppliers. Component manufacturers can be liable when their parts cause injury, even though they didn't make the final product.
Examples include tire manufacturers when tire defects cause vehicle accidents, brake component makers when brakes fail, electronic component suppliers when electronics malfunction, and chemical suppliers when materials prove toxic.
Component liability depends on whether the defect existed in the component itself or arose from how the final manufacturer used it.
Assemblers
When separate entities assemble products from components, assemblers may be liable for defects introduced during assembly. Even if all components are non-defective, improper assembly can create dangerous products.
Assemblers may also be liable for failing to inspect components or identify integration problems that make the assembled product unsafe.
Wholesalers and Distributors
Wholesalers and distributors move products from manufacturers to retailers. While they don't make products, they can be held strictly liable in most states simply for placing defective products into the stream of commerce.
This liability exists even though distributors typically can't inspect products for defects. The policy rationale is that distributors profit from product sales and should share responsibility for ensuring safe products reach consumers.
Retailers
Retailers—including brick-and-mortar stores and online sellers—sell products directly to consumers. Retailers can be liable for defective products they sell, even though they didn't manufacture or inspect them.
Retailer liability serves consumers by providing a local, accessible defendant. Retailers can then seek indemnification from manufacturers and distributors up the chain.
Online Marketplace Liability
Online platforms like Amazon and eBay present evolving liability questions. When platforms merely connect buyers with third-party sellers, they may avoid product liability. However, when platforms take greater control—warehousing products, handling fulfillment, or appearing as the seller—they may be treated as distributors or retailers.
Courts are increasingly holding online marketplaces liable, particularly when third-party sellers are foreign and unreachable.
Importers
Importers who bring foreign products into domestic commerce can be treated as manufacturers for liability purposes. This ensures consumers have a domestic defendant when foreign manufacturers are beyond reach.
Importers should verify product safety before importing, as they assume substantial liability exposure.
Successor Corporations
When companies are sold or merged, successor liability may make acquiring companies responsible for defects in products the predecessor sold. Corporate restructuring cannot eliminate liability for products already in consumers' hands.
Successor liability rules vary by state but generally apply when the successor continues the same product line or business.
Strategic Considerations
Naming multiple defendants has strategic advantages. It provides multiple insurance policies and sources of recovery. If one defendant is judgment-proof, others may pay. Defendants often point fingers at each other, revealing information helpful to your case.
Your attorney should investigate the entire distribution chain to identify all potentially liable parties and their insurance coverage.