We are not going to beat around the bush today. When we see a “prediction” of an “expansion” of state law by a federal court, we have only one question. What about Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938)? That should have been a front and center question for the court in In re: Fluoroquinolone Products Liability Litigation, 2021 WL 396819 (Feb. 4, 2021). We’ll give the court credit for not ignoring Erie completely. Although perhaps the partial acknowledgement is worse than none at all. Faced with a question of Illinois law that had not been addressed by that state’s highest court, the MDL court recognized that its role was to “predict” how that court would rule on the issue. Id. at *5. But the MDL court stopped short. It neglected the rest of Erie doctrine which provides that
[a] federal court in diversity is not free to engraft onto those state rules exceptions or modifications which may commend themselves to the federal court, but which have not commended themselves to the State in which the federal court sits.
Day & Zimmerman, Inc. v. Challoner, 423 U.S. 3, 4 (1975). In other words, a federal court sitting in diversity is not supposed to expand state law. If a state has not recognized a cause of action, an MDL court should not be the first to do so. Erie is a conservative doctrine aimed at ensuring that federal judges do not displace state law. Where a state’s highest court has ruled on the issue, Erie means applying that rule. Where a state’s highest court has not, “[t]he proper function” of a federal court “is to ascertain what the state law is, not what it ought to be.” Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487, 497 (1941). But that is precisely what the Cipro MDL court did when it predicted that Illinois would apply innovator liability, despite not a single Illinois state court ever having done so and contrary to Illinois Supreme Court decisions otherwise requiring product identification. It decided what it thought Illinois law should be, rather than applying what it is.
Defendant, the brand manufacturer, moved to dismiss the claims of a plaintiff who admitted to only using the generic drug which was not manufactured or sold by defendant. Those claims included product liability failure to warn, negligence, breach of express and implied warranties, fraud, negligent misrepresentation, fraudulent concealment, and consumer protection. In re: Fluoroquinolone Prods. Liab. Litig., at *2.
With no law on directly on point, defendant argued that the governing law in Illinois, as decided by the Illinois Supreme Court, was that “[e]ach manufacturer owes a duty to plaintiffs who will use its drug or be injured by it. However, the duty is not so broad as to extend to anyone who uses the type of drug manufactured by a defendant[.]” Id. at *6 (quoting Smith v. Eli Lilly, 560 N.E.2d 324, 343 (Ill. 1990)). So, per the highest court in Illinois, a fundamental requirement of bringing suit for harm caused by a product is that you must sue the manufacturer of the product you used, not the manufacturer of a similar product.
Not only is this the controlling law of Illinois, the Cipro MDL court admitted that the concept of innovator liability, or what it calls “warning label liability,” is a minority view. It decided to read into Illinois law something that was neither recognized by that state or even by a majority of courts to have reviewed the issue. Rather, it relied on one decision by an Illinois federal court that also ran roughshod over Erie to predict this expansion of Illinois tort law. Id. A decision that was recently rejected by In re Zantac (Ranitidine) Products Liability Litigation, MDL No. 2924 (S.D. Fla. Dec. 31, 2020)(predicting 35 states would reject innovator liability, including Illinois). Also ignoring the Sixth Circuit’s prediction that innovator liability claims would fail under Illinois law. See In re Darvocet, Darvon, and Propoxyphene Prods. Liab. Litig., 756 F.3d 917, 944 (6th Cir. 2014).
The sum total of all of this is that the question of whether a generics warning label claim could be brought against the brand manufacturer is far from settled in Illinois and the majority of courts to consider Illinois law on the issue have held the state would not recognize the claim. Given this set of circumstances, the Cipro MDL court had no basis on which to create new Illinois law. Even if at some time in the future the MDL court turns out to be correct, a notion we loathe to even suggest, the fact is – that is not the law now and that is the only law a federal court sitting in diversity can apply.
Ultimately, the Cipro MDL court placed plaintiff’s claims into two buckets – products liability claims and warning label claims. While the MDL court was willing to find that the brand manufacturer owed a duty to the generic user, it determined that it was a “limited” liability that only extended to injuries caused by the label. In re Fluoroquinolone, at *9. As an aside, it is difficult to understand how an action called “warning label liability” is divorced from or independent of products liability. The label and its contents are part of the product. In a failure to warn context, it is the label that plaintiff alleges is defective. Hence, it is products liability. Calling a claim that a label is deficient anything else is the worst case of form over substance. Here again the court chose to ignore the Sixth Circuit which held that warnings claims are in fact products claims. See In re Darvocet.
This separation of warnings versus products claims gets even more difficult to understand in practice. Dismissing the breach of warranty claims is straightforward. They fail for lack of privity. Id. at *10. But what about failure to warn claims? First, the court dismisses plaintiff’s strict liability failure to warn claim because strict liability can only be imposed against an entity in the distributive chain, which the brand manufacturer is not. Id. at *9. Then the court dismisses plaintiff’s negligent failure to warn claim because that claim requires “an analysis of the condition of the product.” Id. The product plaintiff used is not the one manufactured by the defendant, so that claim is not viable.
The MDL court’s analysis changes when it comes to plaintiff’s fraud and misrepresentation claims. Here, the court found that plaintiff could pursue these claims against the brand manufacturer based on allegations that the brand label did not contain certain warnings. But we are left wondering how that differs from plaintiff’s failure to warn claims. Plaintiff is making the same allegations in each cause of action. He was not properly warned and as a result he was injured by the drug. Allowing failure to warn claims to masquerade as fraud and misrepresentation claims just so they can be brought against the brand defendant is a severe distortion of tort law, both generally and in Illinois.