Today’s guest post is by Kevin Hara, of Reed Smith, who is pinch-hitting for Steve Boranian. His post today discusses the Texas Supreme Court’s procedural reversal of a lower court’s refusal to hear an interlocutory appeal concerning application of a Texas distributor immunity statute arising in the context of an FDA-regulated drug. The distributor’s motion to dismiss had been denied by the lower court’s creation of a “product liability” limitation on the statute that was contrary to the statute’s express terms. As always, our guest posters should receive all the credit (and any blame) for their writings.
**********
It is an honor to pinch-hit for a great friend and mentor, one of the regular contributors to this esteemed blog who is enjoying a much-deserved respite. As readers of this blog are aware, Plaintiffs and their attorneys are relentlessly seek to circumvent limitations on defendants’ liability, whether through creative pleading, trying to categorize the learned intermediary rule as an affirmative defense (it is not), pleading around defenses like the statute of limitations and preemption, blatant forum shopping—a plaintiffs’ playbook favorite—or in today’s case, seeking to evade the plain language of a Texas statute that limits the liability of non-manufacturing sellers. See Tex. Civ. Prac. & Rem. Code § 82.003. (“Section 82.003”).
The Texas Supreme Court recently issued an important procedural decision granting interlocutory review for a “substantial ground for difference of opinion” as to the interpretation of Section 82.003 that will potentially eliminate liability for the distributor in this featured action and other non-manufacturing sellers in the future. That is good news, because Texas has often been problematic for product liability defendants, as the jurisdiction that invented the heeding presumption (which Texas thankfully no longer applies to prescription medical products), and a very late (if relatively enthusiastic) adopter of the learned intermediary rule.
In McKesson Medical-Surgical Inc. v. Cleveland, No. 26-0005, 2026 Tex. LEXIS 654, at *1-2 (Tex. June 26, 2026), the plaintiff died after visiting a medical spa, allegedly as a result of an infusion containing Total Parenteral Nutrition (“TPN”) electrolytes, an FDA-regulated drug that is administered intravenously to persons with impaired digestive systems due to medical conditions that inhibit their ability to process food and absorb nutrients.
The decedent’s relatives filed suit in Texas state court against the spa and the distributor of the TPN electrolytes; the latter moved to dismiss under Section 82.003. This statute provides that “[a] seller that did not manufacture a product is not liable for harm caused to the claimant by that product unless the claimant proves” one of seven possible exceptions, including the types of involvement—inter alia, product design, warnings, alterations, express warranties, or knowledge of pre-existing product defects—that are not typical of distributors that act as conduits for supplying pharmaceuticals and medical devices in their original form. See Section 82.003(a)(1)-(7). Many states have similar “sealed package” statutes designed to insulate non-manufacturing sellers from liability. This is sound policy because distributors (often named to defeat diversity) generally have no input or control over the design, manufacture, or warnings pertaining to such products. Nor would they have knowledge of any alleged defects. Therefore, statutes analogous to Section 82.003(a) are an important part of the arsenal in defending product liability actions as Bexis detailed here.
The plain language of the statute precludes liability against the distributor of the TPN electrolytes unless the plaintiffs establish one of the enumerated exceptions, and one would think that would be the end of the story. If only things were that easy. Unfortunately, that unambiguous language was not enough—at least for now. Plaintiffs argued that the statute “applie[d] only to product liability actions,” not to their claim, simply because they chose not to allege that the “TPN electrolytes were defective.” Rather, they contended that the distributor negligently created “an online portal” allowing an unlicensed purchaser to order TPN electrolytes for shipment to the spa. Cleveland, 2026 Tex. LEXIS 654, at *2-3. Notably, the statute contains no product liability limitation, nor is the “negligence” argument one of the seven exceptions to Section 82.003(a).
However, this atextual limitation was enough for the trial court to deny the distributor’s motion to dismiss, agreeing that Section 82.003(a) “[did] not apply to sellers, . . ., in cases that are not ‘product liability actions,’” while citing no appellate authority supporting its conclusion. The trial court acknowledged that the only on-point case, Lopez v. Huron, 490 S.W.3d 517 (Tex. App. 2016), was “potentially doubtful” because the statutory language did not limit its application to product liability actions. Cleveland, 2026 Tex. LEXIS 654, at *3. That doubt led the trial court to grant the distributor’s request to appeal, framing the legal question: “whether [Section] 82.003(a) . . . applies to sellers in cases that are not product liability actions or whether it applies only to sellers in ‘products liability actions’ or cases where damages are allegedly caused by defective products.” Id. (quotations omitted.)
That led to more obstruction. The intermediate appellate court denied the petition, ruling that the distributor failed to show “‘a substantial ground for difference of opinion’ regarding the controlling legal question.” Id. at *4. That court also concluded that the absence of authority contrary to Lopez weighed against allowing the appeal. Id. Fortunately, the Texas Supreme Court disagreed—finding that while the existence of conflicting authority “strongly suggests a substantial ground for difference of opinion,” . . . “an actual conflict” is unnecessary “when the statute is subject to competing reasonable interpretations.” Id. The Texas high court cited the “express acknowledgment” in Lopez that its conclusion was at odds with Section 82.003(a)’s text as enough to establish “that reasonable jurists could disagree with Lopez regarding Section 82.003(a)’s scope.” Id. Conversely, the trial court acknowledged Section 82.003(a) has more than one plausible interpretation and that the Texas Supreme Court had yet to render a definitive decision on the issue. Accordingly, there was “a substantial ground” for differing opinions under Tex. Civ. Prac. & Rem. Code § 51.014(d)(1) (providing the usual “controlling question” and “substantial grounds” test for interlocutory appeals by permission). The Texas Supreme Court specifically stated that the “substantial ground for difference of opinion” standard is broad, rather than restrictive, designed to permit appeals of “genuinely disputed legal questions in varied contexts.” Cleveland, 2026 Tex. LEXIS 654, at *5 n.1.
Further, while not deciding whether principles of statutory construction—discussed in the appellate court opinion—merited following Lopez, the Texas Supreme Court highlighted that the “potential clash with Section 82.003(a)’s plain text substantiates that an interlocutory appeal is appropriate.” Id. at *5. The court rejected the court of appeal’s reliance on “passing comments” in another case that stated only “that non-manufacturing sellers are not liable for product defects,” finding that action “indisputably involved alleged product defects.” Id., citing Amazon.com, Inc. v. McMillan, 625 S.W.3d 101, 109 (Tex. 2021).
Against that backdrop, the Texas Supreme Court ruled that the appellate court erred in concluding that the distributor failed to satisfy the criteria for Section 51.014(d)(1) and never addressed the statute’s second requirement—whether “an immediate appeal . . . may materially advance the ultimate termination of the litigation.” Id., citing Section 51.014(d)(2). In contrast, the trial court ruled an immediate appeal would “resolve a dispositive legal question prior to trial . . . because a ruling in [the distributor’s] favor” on Section 82.003(a) would “eliminate all potential claims.” Id. at *5-6. The court favorably cited prior appeals that obviated discovery burdens, “eliminate[d] the need for further litigation,” or would be dispositive of at least some of the claims against the defendants. Id. at *6.
Plaintiffs argued an immediate appeal would “neither streamline the litigation nor dispose of all claims,” and that resolution of the applicability of the enumerated exceptions in Section 82.003(a) would not result in the distributor’s dismissal. Id. That was a straw man, as plaintiffs never alleged they met Section 82.003(a)’s exceptions, and therefore, if the statute applied, it would dispose of all the claims against the distributor—sufficient to satisfy Section 51.014(d)(2). Id. at *6-7. The Supreme Court emphasized that this was “precisely the kind of case in which an immediate appeal would allow for the efficient correction of error instead of risking the waste of judicial and party resources.” Id. at *7 (emphasis added).
Thus, the “court of appeals erred in concluding that there was no substantial ground for difference of opinion” and should have granted the request for an appeal because “(1) the statutory construction question has not been decided by this Court and has more than one plausible answer and (2) resolution of the question may materially advance the litigation’s termination.” Id. Thankfully, the court granted the petition for review and ordered the appellate court to accept the appeal. Id. The Texas Supreme Court’s decision is one step in the right direction and gives the distributor and other sellers hope for the future. This case still bears watching for a Texas two-step: a successful appeal and dismissal of the distributor under Section 82.003(a).





