Shook Attorneys Provide Insight on Revised Innocent Seller Statute

Shook Partners Brian Jackson and John Lyons, with Associate Henry Adams, have authored a commentary for Missouri Lawyers Weekly on a revision to the state's innocent seller statute that altered the way the law functioned. "Using the local party provision, plaintiffs routinely named local sellers at the onset of product liability cases to fight the non-resident manufacturer’s attempts to remove the case to federal court," they explain. "When manufacturers sought removal based on diversity and fraudulent joinder, plaintiffs argued that the local party provision forced the federal court to consider the local retailer as a party for the purposes of diversity jurisdiction, despite their immunity."

"In 2019, Missouri’s legislature overhauled the state’s judicial venue rules, and while doing so, it revised the innocent seller statute to remove the local party provision. The provision was omitted and former subsection (7) moved up to fill its place," the authors note. "With that amendment, it appeared that nonresident manufacturers could now remove cases from Missouri state court when the only resident defendant is a local retailer." The effect of the change was untested until late 2020, when a Missouri court found that the updated statute did not preclude a finding of fraudulent joinder.

"The 2019 amendment to Missouri’s innocent seller statute remedied many issues the local party provision caused," Adams, Jackson and Lyons assert. "With the provision removed, non-resident manufacturers will face less uncertainty, local retailers will face less litigation and Missouri state courts will no longer be forced to accommodate litigation with no real local interest. Missouri’s revised innocent seller statute now protects resident defendants as originally contemplated."