The Second Circuit Court of Appeals has dismissed claims against two U.S.-based companies sued for injuries allegedly caused by the defectively designed transmission of an all-terrain vehicle (ATV) involved in an accident that occurred in England. Emslie v. Borg-Warner Auto., Inc., No. 10-2285 (2d Cir., decided August 25, 2011).

As to the company that designed the transmission more than 30 years earlier and sold all of its rights to the design 26 years before the manufacture and sale of the transmission at issue, the court affirmed the grant of its summary judgment motion. According to the court, the company could not be held liable because it did not place the transmission “into the stream of commerce.” The court cautioned, however, that liability for design defect could have fallen on the company “if only a short time had passed following its sale” or if, before the sale, “it had already placed transmissions into the stream of commerce with awareness of its unreasonable design defect,” adding, “[t]he considerations that support the imposition of strict liability are highly fact specific.”  

As to the company that actually made the transmission and had purchased the rights to its design, the court affirmed the lower court’s dismissal of claims against it under the forum non conveniens doctrine. In this regard, the court observed, “the plaintiffs are residents and citizens of Scotland, the accident occurred in England, the ATV remains in England, both nonparty witnesses to the accident are British residents residing in England, and [the defendant] is subject to suit in the British courts.”