Conspiracy liability and other forms of vicarious liability are especially dangerous to manufacturers because of the risk of being held responsible for a product the company did not make or sell. Even when a company is in the chain of distribution, the prospect of being held responsible for another company’s conduct is daunting, especially when the defendant does not have access to the alleged conspirator’s employees or documents or other resources necessary to mount an effective defense.
This week in Illinois, McLean County Judge Rebecca Foley ruled that a written distribution agreement was insufficient to create a jury issue on the question of whether a manufacturer and a distributor agreed to misrepresent and/or suppress the alleged health risks associated with the product.
The court explained that conduct equally capable of an innocent (meaning non-conspiratorial) explanation as a conspiratorial explanation does not support conspiracy liability as a matter of law, regardless of how the plaintiff may characterize the distribution agreement.
Ordinary business conduct requires that parties communicate with each other and frequently engage in distribution agreements and other contacts inherent in the ordinary course of commerce. Conspiracy liability based on such contacts is not permitted under Illinois law.