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In the movie Thank You for Smoking, lobbyists for the tobacco, alcohol, and firearm industries got together periodically at a DC watering hole to swap stories about the challenges of representing unpopular clients under increasing scrutiny by the federal government.  Hilarity ensued, along with some other stuff we do not remember very well.  Of course, there are many trade associations in DC focused on a variety of industries, some of which are not terribly popular.  We probably would not have counted the cosmetics industry in that camp, except maybe when it comes to concerns about animal testing.  If we did not do what we do, then we might also not have counted a trade association for the cosmetics industry among likely targets for the plaintiffs in an MDL otherwise centered on product liability claims related to certain talcum powder products.  But we know plaintiffs sue a range of entities other than manufacturers, typically when they are looking to increase the chance that the litigation will stick in the court they prefer, find deep pockets, or muddy the waters in ways they find beneficial.  Such claims rarely succeed because their legal footing tends to be shaky.

We have discussed cases through the years about attempts to impose liability on publishers, research entities, certifying bodies, and sales representatives, for instance, to say nothing of entities that innovated a drug or other medical product (but did not sell what the plaintiff claimed produced her injury).  There also have been a handful of cases discussing the liability of trade associations.  When we saw the recent decision from the talcum powder MDL in the District of New Jersey, we thought it made sense to revisit the subject.  In re Johnson & Johnson Talcum Powder Products Marketing, Sales Practices, and Products Liability Litigation, MDL No. 2738, slip op. (D.N.J. June 16, 2021), concerns a summary judgment motion filed by a trade association defendant called Personal Care Products Counsel (“PCPC”).  Plaintiffs asserted common law negligence, fraud, fraudulent concealment, and civil conspiracy (based on fraud) against PCPC, completed discovery, and, after some procedural steps we will skip, faced PCPC’s motion to get rid of all claims.  The first step was deciding choice of law between DC—where PCPC is based—and New Jersey, with PCPC preferring the former and plaintiffs preferring the latter.

As often happens, the choice of law inquiry was not a forgone conclusion and included some substance even though the court found no pertinent conflict between DC and NJ law.  The core allegation against the PCPC was that it knew talcum powder posed a risk of ovarian cancer for a long time, did not tell consumers about its knowledge, and helped the manufacturer defendants hide that risk from consumers.  The allegedly actionable conduct spanned more than three decades and included petitioning federal and state governments and interacting with FDA, which regulated the talcum powder products at issue under the Food, Drug & Cosmetic Act.  Plaintiffs tried to establish a conflict between DC and NJ law by arguing that the (usually pretty good for defendants) NJPLA applied.  However, plaintiffs had not asserted any NJPLA claims against the PCPC.  Nonetheless, the court went ahead and determined that any claims against the PCPC could not fly under the NJPLA, which limited liability to “manufacturers and sellers.”  Despite the statutory language, plaintiffs argued that PCPC still engaged in “marketing within the definition” of the NJPLA.  Id. at 13.  This argument failed because there was “no evidence that PCPC was in any way involved or exercised control over the marketing” of the products at issue. 13-14.  And no trade association had ever been found to be a “seller” under the NJPLA, something previously rejected by the same court for a “research and development company that performed drug safety and surveillance functions for the manufacturer.”  Id. at 14.  The downside of finding that the NJPLA did not apply was that there was no possible finding that the NJPLA had abrogated or subsumed the NJ common law claims.

The broader impact was that the rest of the decision proceeded under NJ and DC law.  It did not, however, get as far as evaluating the Noerr-Pennington Doctrine, which makes sense because it is a defense and a constitutional one at that.  Under NJ and DC law, the asserted common law claims each failed for plaintiffs’ failure to raise a genuine issue as to at least one element.  Negligence was first and the first element in negligence is always duty.  The surveyed cases from NJ, DC, and elsewhere made clear that trade associations only take on duties to consumers “where the trade association is able to exert control over its members and enforce its safety standard and regulations.”  Id. at 22.  From what we know about trade associations, such control is going to be the exception not the rule.  It was here too as plaintiffs argued that “publishing standards for testing,” publishing a handbook with definitions for cosmetic ingredients, and having a website describing the PCPC’s goal as helping consumers make informed decisions.  The factual record on each of these did not support control or the creation of a duty.  While the inquiry was fact-intensive, other trade associations may take comfort in statements like “[t]he issuance of such voluntary guidance cannot create a legal duty of care to the general public” and “‘public statements espousing aspirational goals, statements of generic intent, or statements vowing or acknowledging that [the association] has duty’ do not ‘constitute promised that would create a legal duty based on a voluntary undertaking.’”  Id. at 24 (funky internal quotation in the original).

Next up were fraud and fraudulent concealment, which were considered together.  Both required reliance and plaintiffs had no evidence of that.  No deposition testimony or even affidavit supported that a single plaintiff in the MDL “knew that PCPC existed or otherwise relied on any statement made by PCPC regarding the safety of talc powder products.”  Id. at 28.  Knowing what sort of self-serving statements end up in plaintiff affidavits when there is a low risk of contradiction or penalty, that lack of such evidence is striking.  It was also the “death knell” for the fraud-based claims.  Id.

Conspiracy also fell because it is not an independent claim in NJ or DC.  Instead, it was premised on the unsupported fraud claims.

We do not claim to know the merits of this MDL or the similar litigation proceeding in other courts.  We have most often discussed them in terms of personal jurisdiction.  (See here and here but something different here.)  We do know, however, that trade associations, like researchers, publishers, innovators, etc., generally have no place as defendants in cases where someone is seeking to recover for an injury from a product.  In the vast majority of the cases we have seen, the product liability claims against the manufacturers and/or sellers of the product should be what decides if the plaintiff can recover.  If she cannot, then the law should not expand to create potential liability for entities or individuals that did not manufacturer or sell the product in an attempt to provide the plaintiff with another chance to recover.