Torres v. Goodyear Tire & Rubber Co

In Torres v. Goodyear Tire & Rubber Co., 163 Ariz. 88, 786 P.2d 939 (1990), Goodyear, a tire manufacturer, essentially disclaimed responsibility for a defective tire produced by its wholly owned British subsidiary and trademark licensee, Goodyear GB. Noting that Arizona's product liability statutes included a broad definition of "manufacturer," see A.R.S. 12-681(1), the supreme court determined that under Arizona law a trademark licensor may be held liable where a licensee marketed the defective, unreasonably dangerous product as the licensor's, where the licensor's relationship with the technical manufacturer or seller made it a significant participant in the enterprise by which the product is brought to market, and where the licensor controlled or had the ability to control the design, manufacture, or quality of the merchandise. 163 Ariz. at 96-97, 786 P.2d at 947-48. The Arizona Supreme Courtextended liability to a "trademark licensor for injuries caused by defects in a product produced and distributed by its licensee." 163 Ariz. at 88, 96, 786 P.2d at 939, 947. The court did so even though the licensor's "participation in research, design, manufacture, distribution, and sale was technically accomplished through its wholly owned subsidiaries." Id. at 94, 786 P.2d at 945. In deciding as it did, the court stated that "the application of strict liability does not hinge on the technical limitations of the term seller or manufacturer." Id. at 92, 786 P.2d at 943. the Court limited its extension of strict liability to "trademark licensors who significantly participate in the overall process by which the product reaches its consumers, and who have the right to control the incidents of manufacture or distribution." Id. at 95-96, 786 P.2d at 946-47.