We’re serious – we’re not planning to give a flip answer like “an extortion racket.” No, it’s more like law school, where a first-year contracts professor began with the question “What is Chicken?” (Hint – that’s discussed in Frigaliment Importing Co., Ltd. v. BNS International Sales Corp., 190 F. Supp. 116 (S.D.N.Y. 1960)). The question of “what is product liability” is of interest to us primarily, but not exclusively, because of 21 U.S.C. §379r(e), which creates an exception for “product liability law” to what is otherwise a rather broad preemption provision governing over-the-counter (also called “monograph”) drugs.
We wrote a post in the early days of the blog – 2008 – about that particular provision, entitled “Preemption Without a Prescription,” where we discussed cases that, up to that time, had addressed the scope of §379r(e)’s saving clause. That boundary of that clause, as we explained it then, was that “suits for purely economic loss – primarily, but not exclusively, brought under state consumer protection statutes – are not ‘product liability’ actions.”
That’s still true.
We’re not repeating the 2008 post, but we will update it. Here is a list of cases not discussed in that post, which likewise hold that preemption defeats OTC drug litigation that does not involve personal injury claims: Wiltz v. Chattem, Inc., 2015 WL 3862368, at *1-2 (C.D. Cal. May 8, 2015); Bowling v. Johnson & Johnson, 65 F. Supp.3d 371, 376-77 (S.D.N.Y. 2014); Gisvold v. Merck & Co., 62 F. Supp.3d 1198, 1202-03 (S.D. Cal. 2014); Crozier v. Johnson & Johnson Consumer Cos., 901 F. Supp.2d 494, 503-05 (D.N.J. 2012) (discussing scope of §379r(e)); Delarosa v. Boiron, Inc., 818 F. Supp.2d 1177, 1188 n.7 (C.D. Cal. 2011) (discussing scope of §379r(e)); Eckler v. Neutrogena Corp., 189 Cal. Rptr.3d 339, 357-61 (Cal. App. 2015) (discussing scope of §379r(e)).
Thanks to this recent blogpost, however, we’ve become aware of another way that the definition of “product liability” is important. Down in Texas, they have a unique indemnification statute, Tex. Civ. Prac. & Rem. C. §82.002(a) that provides:
A manufacturer shall indemnify and hold harmless a seller against loss arising out of a products liability action, except for any loss caused by the seller’s negligence, intentional misconduct, or other act or omission. . . .
We’d vaguely heard of this statute before, in connection with a case, Hadley v. Wyeth Laboratories, Inc., 287 S.W.3d 847, 849 (Tex. App. 2009), which we liked because it held that prescribing physicians weren’t “sellers” of the drugs they prescribed, which means they can’t be sued for strict liability.
But §82.002(a) also means that, in Texas, the ability of an intermediate seller to recover indemnity (including counsel fees) requires that the underlying action to be one for “products liability.” That’s where the blogpost comes in. It discussed a recent case, vRide, Inc. v. Ford Motor Co., 2017 WL 462348 (Tex. App. Feb. 2, 2017), that also addressed the definition of “product liability.” vRide involved an indemnity claim brought by a lessor of a motor vehicle from the defendant, which manufactured the vehicle. The underlying claim had not been for strict liability, but rather for misrepresentation – that the vehicle did not have the attributes that the original defendant (the lessor) claimed that it did.
The court in vRide held that a misrepresentation claim did not fall within the meaning of “product liability”:
The [plaintiffs’ complaint] did not allege that the [product] was unreasonably dangerous, was defective by manufacture or design, was rendered defective because it lacked certain safety features, or was otherwise defective. Instead, the petition alleged that [defendant] represented [that the product] had certain safety features when in actuality [they] did not have those safety features. . . . In short, the [complaint] did not contain allegations that the damages arose out of personal injury, death, or property damage allegedly caused by a defective product.
2017 WL 462348, at *7. We can imagine situations in which this definition could come in useful in litigation involving OTC preemption, since it excludes from “product liability” even some actions involving (as did vRide) personal injury.
The most significant hypothetical involves a situation where the plaintiff’s injuries were caused by a generic OTC drug. In that situation, given the broad scope of preemption available in generic drug cases, one could expect plaintiffs to attempt to assert innovator liability against the branded drug manufacturer. But innovator liability is based (like vRide) on the (we believe phony) proposition that “misrepresentation” is not “product liability” and thus can extend to non-manufacturers. But if misrepresentation is not “product liability,” then the savings clause in §379r(e) would not apply, and innovator liability claims would be expressly preempted whether or not they involved personal injury. vRide would thus be precedent in favor of preemption.
That would be a good thing. And so is cross-fertilization – where a definition in a completely unrelated statute can be utilized in support of preemption.