Stephen Hawking may have been the smartest guy in the world, even though he believed that “People who boast about their I.Q. are losers.”  Hawking is best known for his work on black holes.  As used in physics, a black hole describes a point-sized mass (called a “singularity”) so dense that its escape velocity exceeds the speed of light.  That effectively cuts it off from the rest of the universe, so that nothing emanates from it – hence the “black hole” terminology.  Hawking’s study (more than “study,” really since he thought most of these things up) applied the black hole concept to the entire universe, thus providing a theoretical underpinning for “Big Bang” cosmology.  Beyond that, Hawking developed laws of black hole mechanics.  He dealt with rotating black holes, and determined that contrary to their initial definition (and Hawking’s own prior work) black holes could under some circumstances emit radiation due to annihilation of particles near the event horizon (it’s complicated – you can access Hawking’s many and varied ideas here).  That radiation is now called “Hawking radiation,” and over cosmological time (trillions of years or longer) can cause black holes to evaporate and eventually explode.

He will be missed.

The massive gravity of black holes sucks in everything surrounding them and crushed it into effectively nothing but mass and spin.  We immediately thought of black holes in the legal context when we learned on Friday that the Massachusetts high court (called the “Supreme Judicial Court”) decided to recognize a form of innovator liability – imposing liability for injuries caused by generic drugs on their branded competitors. See Rafferty v. Merck & Co., ___ N.E.3d ___, 2018 WL 1354064 (Mass. March 16, 2018).

As we had feared, California did this first, adopting an extreme – even more extreme than usual − version of innovator liability in T.H. v. Novartis Pharmaceuticals Corp., 407 P.3d 18 (Cal. 2017).  In Hawking’s parlance, that would make the state a “supermassive” legal black hole.  Massachusetts isn’t as big a state, and its innovator liability theory isn’t as downright bizarre as California’s, so Rafferty probably created an intermediate-mass legal black hole.  But liability for injuries caused by products that the defendant never even made (and thus made no money from) is potentially crushing to innovator drug companies no matter what.

So what exactly did Rafferty hold?

For one thing, much more than in T.H. the Massachusetts court was quite frank that it was only doing this because preemption prevented plaintiffs purportedly injured by generic drugs from suing generic manufacturers.  There was none of this bullhockey that we got from California about innovator liability stemming from well-established negligence principles.  Before ever getting to state-law issues (or even to the facts of the case) Rafferty identified generic preemption as the problem:

This allocation of labeling responsibilities under Federal law has proved difficult to reconcile with the duties required of generic drug manufacturers under State tort law. . . .  Under Federal regulations . . . manufacturers of generic drugs − because they lack the power to change the warning labels on their products unilaterally − cannot independently fulfil these State law duties. . . .  The practical consequence is that a consumer who suffers injury arising from an inaccurate or inadequate drug warning label can sue the manufacturer for damages caused by his or her injury only if the consumer ingested a brand-name version of the drug — but not if the consumer ingested the generic version.

2018 WL 1354064, at *2 (citations omitted).  For this reason, innovator liability could not exist as a product liability claim as “product liability” is normally understood:

[U]nder our prevailing law, . . . [defendant] owes [plaintiff] no duty to warn under the law of products liability.  As noted by the judge, a manufacturer may be found liable for a failure to warn only where the product that caused the injury was made by that manufacturer; its duty of care extends only to users of its own product.

Id. at *3 (discussion of several prior Massachusetts product liability cases omitted).  Unlike California, Rafferty held that there was no basis for innovator liability in product liability (including ordinary negligence), or the Massachusetts consumer fraud statute.  See also Id. at *13 (discussing consumer protection).

But in today’s day and age, at least in Massachusetts or California, a result that produces no liability against anyone is apparently intolerable.  Thus, the court in Rafferty, using its common-law powers, made something up – product liability for “recklessness.”  Rafferty turned to “a general principle of tort law,” hitherto unknown in product liability, that “[e]very actor has a duty to exercise reasonable care to avoid physical harm to . . . all persons who are foreseeably endangered by his conduct, with respect to all risks which make the conduct unreasonably dangerous.”  Id. at *5 (quoting Jupin v. Kask, 849 N.E.2d 829, 835 (Mass. 2006)).  And what did Jupin quote for this broad, vague declaration of anyone potentially liable to everyone for anything?   Not any Massachusetts case, but rather Tarasoff v. Regents, 551 P.2d 334, 344 (Cal. 1976).  Argh‼  Even though we’re in Massachusetts, the principles of crazy California tort law are still around, expanding liability.

However, unlike the California Supreme Court, Rafferty was at least willing to “recognize[] . . . that, even where the requirements of negligence are satisfied, there may nevertheless be a public policy justification for declining to impose a duty of care where “the imposition of a precautionary duty is deemed to be either inadvisable or unworkable.”  2018 WL 1354064, at *5 (citation and quotation marks omitted).  But while “in the vast majority of . . . cases, the duty to warn would be limited to the manufacturer of the product − even if the plaintiff were to bring a general negligence claim − because the risk of harm arising from an inadequate warning would be foreseeable to a manufacturer only with respect to users of its own product,” id. at *6, prescription drugs were different, because to comply with the FDCA, innovator manufacturers are required to let generic manufacturers use their labels verbatim.

With generic drugs, it is not merely foreseeable but certain that the warning label provided by the brand-name manufacturer will be identical to the warning label provided by the generic manufacturer, and moreover that it will be relied on, not only by users of its own product, but also by users of the generic product.

Id. at *6 (emphasis original).  Innovator liability thus exists to make innovator manufacturers pay for having complied with the “require[ments]” of the regulatory scheme imposed by the “Hatch-Waxman amendments,” and for no other reason. Id.

Where a brand-name drug manufacturer provides an inadequate warning for its own product, it knows or should know that it puts at risk not only the users of its own product, but also the users of the generic product.  Consequently, this is the rare (perhaps the only) type of case involving a manufactured product where the requirements of general negligence may be satisfied even where the requirements of products liability are not.

Id. at *6 (emphasis added).

“Perhaps the only” – there it is, a unique, expansive duty imposed on a non-manufacturing innovator pharmaceutical company because its FDA-approved warning is deemed inadequate under state law, with the duty expanded to include generic drug users because the defendant is forced by Hatch Waxman to let generic manufacturers (who are equally subject to the federal requirement) use its labeling verbatim.  Under Rafferty, innovator liability is a consequence of a branded drug company’s compliance with the FDCA, and nothing else.  In and of itself, this massive transfer of liability based on conformity with the requirements of federal law raises serious preemption issues.

Back to Rafferty’s rationale.

Unlike California, the Massachusetts court in Rafferty at least had the good sense to recognize that there were countervailing public policy considerations implicated by making a drug manufacturer liable for injuries caused by competing products:

[I]f consumers of generic drugs were allowed to recover damages for a brand-name manufacturer’s negligent failure to warn, it would be far more difficult for the manufacturer to shoulder these costs, for three reasons.

First, these costs would not be incurred until after the brand-name manufacturer’s patent monopoly expires and generic competitors enter the market, at which point the brand-name manufacturer will have suffered a precipitous decline in sales of its product. . . .

Second, because prices drop with generic drug competition, the sales of generic drugs may exceed the sales generated during the patent monopoly period, and may even continue indefinitely, long after the brand-name manufacturer has moved on to focus on other patented products. . . .

Third, because . . . [f]ederal preemption bars any generic drug consumer from bringing a failure to warn claim against any generic manufacturer, all such claims would be brought only against the brand-name manufacturer . . ., leaving the brand-name manufacturer without any ability to share the costs of litigation, or of a damage award or settlement, with the generic manufacturer.

Rafferty, 2018 WL 1354064, at *7-8 (citations and quotation marks omitted).  Innovator manufacturers are thus “not in the best position to bear its [innovator liability’s] costs.”  Id. at *8.  Such liability “impose[s] on brand-name manufacturers an additional ‘cost of production’ for products that, in reality, they no longer produce.”  Id.

What is a “cost of production” for a “product[] that, in reality [is] no longer produce[d]”?  Quite frankly, it is a cost that must inevitably be inequitably recouped, because the only way a drug manufacturer will pass along that cost is to consumers of other, non-defective products.  With all the brouhaha lately about reducing the price of prescription drugs, innovator liability is a recipe for increasing those costs substantially.

[A]s a matter of public policy . . . allowing a generic drug consumer to bring a general negligence claim for failure to warn against a brand-name manufacturer poses too great a risk of chilling drug innovation, contrary to the public policy goals embodied in the Hatch-Waxman amendments.

Id. at *10.

Nonetheless, liability uber alles prevailed.  Precedent be damned.  Id. at *11 (“we find ourselves in the minority of courts that have decided this issue” – see our scorecard).  “The widespread use of generic drugs means that, if we decline to impose any liability on brand-name manufacturers, countless consumers would be left without a remedy.”  Rafferty, 2018 WL 1354064, at *9.  Rather than letting the state legislature (let alone Congress, which enacted Hatch-Waxman) balance large-scale public policy concerns, Rafferty created innovator liability for “reckless” conduct:

In other types of cases where we have circumscribed liability for public policy reasons, we have nevertheless consistently recognized that there is a certain core duty − a certain irreducible minimum duty of care, owed to all persons − that as a matter of public policy cannot be abrogated: that is, the duty not to intentionally or recklessly cause harm to others.

Id.  Thus, Rafferty professed to “tolerate[] ordinary negligence but draw[] the line at recklessness.  Id.

But did it really?  There are two types of “reckless” conduct, as explained in Restatement (Second) of Torts §500 (1965) (defining “reckless disregard”).  One is where the “actor knows, or has reason to know, . . . of facts which create a high degree of risk of physical harm to another, and deliberately proceeds to act, or to fail to act, in conscious disregard of, or indifference to, that risk.”  The second is where the “actor has such knowledge, or reason to know, of the facts, but does not realize or appreciate the high degree of risk involved, although a reasonable man in his position would do so.”  Id. comment a.  The second of these is really just a glorified type of negligence.  “An objective standard is applied . . ., and [the actor] is held to the realization of the aggravated risk which a reasonable man . . . would have, although he does not himself have it.”  Id.

Rafferty chose the second, dumbed-down version of “reckless disregard,” using the Restatement’s weak alternative definition of recklessness:

[H]e does an act or intentionally fails to do an act which it is his duty to the other to do, knowing or having reason to know of facts which would lead a reasonable man to realize, not only that his conduct creates an unreasonable risk of physical harm to another, but also that such risk is substantially greater than that which is necessary to make his conduct negligent.

Rafferty, 2018 WL 1354064, at *10 (quoting a case that quotes from Restatement §500) (emphasis added).

Under this standard, a brand-name manufacturer that intentionally fails to update the label on its drug to warn of an unreasonable risk of death or grave bodily injury, where the manufacturer knows of this risk or knows of facts that would disclose this risk to any reasonable person, will be held responsible for the resulting harm.

Id. at *11 (emphasis added).  At least the “fails to update” language seems to limit liability to current NDA holders, which is some improvement on the even more malignant California style of innovator liability.

Is Rafferty’s “recklessness” standard really going to contain the evil genii of innovator liability that has been let out of the bottle?  We aren’t holding our breath.  Our brethren on the other side of the “v.” have proven time and time again to be willing and able to allege whatever is necessary to state whatever cause of action they have to, whether or not the facts support it.  Then they file hundreds or thousands of cases until the defendant settles rather than risks catastrophic liability – the legal “black hole” we mentioned at the outset of this post.  Thus, we are skeptical, to say the least, of Rafferty’s assurances that this novel form of liability “will not materially chill innovation or increase drug prices.”  Id. at *12.  While Congress “in enacting the Hatch-Waxman amendments . . . expected that its Federal regulatory scheme would be supplemented with traditional State law remedies,” id., innovator liability, is anything but “traditional,” as indeed Rafferty itself recognized in the course of reaching its admittedly “minority” result.

Back when we first encountered mass torts in the prescription medical product context we realized that, as plaintiffs created new theories of liability, it was up to us to create new defenses to counter them.  That’s how Buckman Co. v. Plaintiffs Legal Committee, 531 U.S. 341 (2001), came to be.  We’ll see what we can come up with this time.  After all, as Stephen Hawking himself said, “[i]ntelligence is the ability to adapt to change.”

We recently read a news story about a man who was imprisoned for 39 years for a crime he did not commit. The crime was grisly and resulted in the violent deaths of a 24-year-old woman and a small child, leaving a community outraged and law enforcement officials determined to hold someone responsible.  So, burdens of proof be damned, the defendant was convicted despite the fact that relevant DNA recovered from the victims was not his.  Eventually, a crusading retired policeman succeeded in winning exoneration and freedom for the prisoner.   Now, we went to law school.  We know all about the differences between criminal law and civil law.  And we know we should be circumspect about fragile visceral analogies when we are well aware of the relevant distinctions.  Nevertheless, when we read a bad “innovator liability” decision – a decision holding an innovator drug manufacturer liable for injuries caused by a generic version of the drug – a drug manufactured by someone else – there is a simplistic part of us that fails to see how this is so different from imprisoning someone for a crime he did not commit

Today’s case, Garner v. Johnson & Johnson, et al., 2017 WL 6945335 (C.D. Ill. Sept. 06, 2017) (just surfacing though several months old), is just such a bad decision.  In Garner, the plaintiff alleged that a generic fluoroquinolone antibiotic caused her to suffer serious injuries.  She sued the generic drug manufacturer that actually made her drug along with the innovator drug company that manufactured the name-brand version of the drug.  The defendants moved to dismiss for failure to state a claim.

The court first considered the plaintiff’s claims against the generic drug manufacturer, and correctly concluded that, under Mensing, the claims, all rooted in alleged inadequacies of the generic drug’s warning label, were preempted.  But the court wanted to hold someone responsible.  So, noting that the Seventh Circuit had not yet addressed innovator liability, it undertook to circumvent Illinois law.

As we discussed in our “Innovator Liability at 100” post, Illinois has long required product identification for all product liability matters, as evinced by the Illinois Supreme Court’s rejection of industry-wide liability under both market share liability and public nuisance rubrics. See Young v. Bryco Arms, 821 N.E.2d 1078, 1087-91 (2004) (public nuisance); Smith v. Eli Lilly & Co., 560 N.E.2d 324, 337-39, 344-45 (Ill. 1990) (market share liability); City of Chicago v. American Cyanamid Co., 823 N.E.2d 126, 134-35 (Ill. App. 2005) (market share liability in public nuisance); Lewis v. Lead Industries Ass’n. Inc., 793 N.E.2d 869, 874-76 (2003) (same) (all four cases finding no causation as a matter of law without product identification). See also Leng v. Celotex Corp., 554 N.E.2d 468, 470-471 (Ill. App. 1990) (rejecting market share liability pre-Smith in asbestos case); York v. Lunkes, 545 N.E.2d 478, 480 (Ill. App. 1989) (rejecting market share liability pre-Smith in battery case); Poole v. Alpha Therapeutic Corp., 696 F. Supp. 351, 353 (N.D. Ill. 1988) (rejecting market share liability pre-Smith in blood products case); Coerper v. Dayton-Walther, 1986 WL 4111, at *1 (N.D. Ill. March 27, 1986) (rejecting market share liability pre-Smith in tire rim case).

Moreover, Illinois does not recognize a duty to warn about the risks of a competing product:

[Defendant] is under no duty to provide information on other products in the marketplace. Such a duty would require drug manufacturers to rely upon the representations made by competitor drug companies.  This arrangement would only lead to greater liability on behalf of drug manufacturers that were required to vouch for the efficacy of a competitor’s product.

Pluto v. Searle Laboratories, 690 N.E.2d 619, 621 (Ill. App. 1997).  Recently, an Illinois appellate court recognized in dictum that an “overwhelming majority of courts have held that generic consumers may not sue the brand-name manufacturer.” Guvenoz v. Target Corp., 30 N.E.3d 404, 409 n.1 (Ill. App. 2015). See id. at 416 (plaintiffs “cannot obtain relief from brand-name drug manufacturers whose products they did not ingest”).

But the Garner court disregarded all of this. The court acknowledged that, to state a claim for negligence, the plaintiff was required to establish that the defendants owed her a duty of care, and that the existence of such a duty turned on the reasonable foreseeability of the injury.  But it  held, “In the well-regulated pharmaceutical industry, . . . a brand-name manufacturer . . . is surely not blindsided to find out that the equivalent of its . . . [label] as imposed on generic versions of [its drug],” and that doctors and patients would rely on that label when prescribing and using the generic drug.   Garner, 2017 WL 6945335 at *7.  Further, the court held, it was “a common practice, and therefore foreseeable, for a doctor to prescribe a name brand drug and the pharmacy to fill it with the generic version.” Id. And so, though “other courts have expressed trepidation about the consequences of holding brand-name manufacturers liable for injury caused by generics,” id. (citations omitted), the court concluded that finding that the brand-name manufacturer had a duty of care to a plaintiff taking someone else’s drug “simply allows [the plaintiff] to attempt to recover from the one entity, under federal law, that has the unilateral ability to strengthen the label.” Id.  Even though that entity did not manufacture the product that allegedly injured her.

The court next addressed the issue of causation, acknowledging that “liability for negligence may not be imposed based merely on a breach of duty, without causation being established. Id. (citation omitted).  The plaintiff alleged that she would not have taken the generic drug if its label contained adequate warnings.  (Although the generic drug was a prescription drug, the court failed to analyze warnings causation from the perspective of the prescribing physician.) And the court held that “an extra link in the causal chain (here, the transfer of the identical label from the branded drug to the generic drug) does not break it.  It is possible for a plaintiff to show that injuries caused by mislabeling on a generic medication can be directly traced back to the brand name manufacturer’s creation of the label.” Id. (citations omitted).  As such, the court found that the plaintiff had “adequately alleged causation,” id., and, in derogation of its Erie duty to apply Illinois law, denied the innovator company’s motion to dismiss the plaintiff’s negligence claims.  Similar analysis allowed the plaintiff’s related claims to proceed.

We get the issue. We understand that the United States Supreme Court has limited the remedies of plaintiffs injured by generic drugs, even assuming they can prove a product defect, an injury, and causation in between.  But “someone’s gotta pay” cannot justify a decision that starts from a desired result and works backward, hurdling any doctrine or jurisprudence that gets in the way.  We defend innovator drug companies for a living, and we will continue to speak out against decisions like Garner. And we’ll keep you posted on what comes next.

Sometimes it happens.  For eleven years, we have published our annual “worst of” the year post on the Thursday before Christmas and our annual “best of” the year post on the Thursday before New Year’s.

Guess what?  In a development that we weren’t entirely surprised to see happen, the California Supreme Court recognized not only innovator liability, but innovator liability in perpetuity, later during the same day that our 2017 “worst of” post was published, which coincidentally was the first day of winter.  Winter is not just coming, it’s now here.  California’s tort climate just became much colder for our pharmaceutical clients.

So we’re publishing this addendum to this week’s “worst of” post.  This year there will be two number one worst of the worsts.  Given everything else that’s happened in 2017, we suppose that is appropriate.

  1. T.H. v. Novartis, 2017 WL 6521684, slip op. (Cal. Dec. 22, 2017).  Innovator liability, which effectively shifts 100% of potential liability for drug injuries to the 10% of the drug market that branded drugs represent, received the nod of all seven justices in this 4-3 decision. Y et, remarkably, the majority took the view that “the burden on brand-name drug manufacturers” to warn “those who are prescribed the generic version of the drug is zero.”  That attitude, an insouciance towards any policy supporting prescription drugs (Brown cited not at all by the majority, and only once, parenthetically, by the somewhat less restrained concurrence) was apparent throughout.  The result is pharmaceutical companies being disfavored, even compared to asbestos manufacturers. The same dismissively pro-plaintiff attitude that recently caused the same court to invite all mass tort plaintiffs to sue in California (2016-1) rears its ugly head again.  T.H. defined negligence “duty” broadly and vaguely – “each person has a duty to use ordinary care and is liable for injuries caused by his failure to exercise reasonable care in the circumstances” – so that it could characterize even this vast expansion of liability to non-manufacturers as some sort of “exception” to the a general rule that allegations of negligence make anyone liable to everyone for anything.  But then T.H. inconsistently discounted a mountain of contrary federal precedent because federal courts aren’t supposed to predict novel expansion of state-law liability.  At least Sindell, bad as it was, was honest about its unprecedented result.  T.H. is not the first time we’ve seen an opinion putting the “duty” rabbit in the hat like this to support a novel liability theory; Lance (2014-2) did the same to allow a stop-selling “negligence” theory.  Lance has preemption problems, and T.H. might, too, at least on the case-specific off-label use facts.  The majority appears to believe that off-label risk warnings can be added “unilaterally,” which they can’t.  Somewhere, Justice Traynor, who conceived of product liability as ensuring the liability followed profit from product sales and ability to control product quality, must be spinning in his grave.  Innovator liability violates both principles, and also lets off the hook the party that profited from the product and directly controlled its risk.  Almost as bad – and even more extreme – is the second holding that innovator liability is effectively perpetual.  Bookending California’s expansive “product line” form of successor liability, T.H. creates “product line” predecessor liability; so that even sale of all rights to the product before (here, six years before) the relevant product sale does not extinguish liability.  It must have been a clear day, since the majority was able to foresee forever.  On this issue T.H. was 4-3 (with the vote of a randomly selected “assigned” justice being the difference), with the dissenters rightly focusing on:  (1) lack of control over a successor’s warnings; (2) overwarning of scientifically questionable risks; (3) insufficient deterrence of the actual product manufacturers; (4) “destabilization” of the pharmaceutical industry by perpetual, unlimited liability; (5) liability spillover to other products; (6) an unrealistic attitude towards corporate transactions; (7) relative lack of moral blame; and (8) unavailability of insurance for risks of competing products and the resultant increase in the price of branded drugs.  Although T.H. is a bit less blunt in expressing the motivations for its novel liability holding than Weeks (2014-1), the California court’s underlying intent to use common-law liability to hold branded drugs hostage to federal action eliminating generic preemption is found in both in the majority’s footnote 2 and the first paragraph of the concurrence.  We trashed T.H. here, and will undoubtedly be doing that again.

We posted our 2017 “Worst 10 decisions” list a day too soon, because the California Supreme Court issued its anticipated decision in TH v. Novartis, No. S233898, slip op. (Cal. Dec. 22, 2017) today, and if it is not the worst drug and device decision of 2017, it is awfully close.  With an emphasis on awful.

This case presents two issues of duty: (1) Does an innovator prescription drug manufacturer owe a duty to patients who used a competitor’s generic product; and (2) does that manufacturer also owe a duty to patients who used a competitor’s product years after the innovator sold the NDA and stopped selling the drug altogether?  The California Supreme Court decided “yes” on both counts, and in doing so it has broken away from decades of precedent placing responsibility for defective products on the companies that made and sold the products.

We will have more to say on this opinion, but our first read reveals that the Supreme Court fundamentally misframed the issue as whether the Court should create an “exception” to the duty to warn that all branded drug manufacturers owe. That is exactly backwards, and the Court framed “duty” in absurdly broad fashion (everyone owing a duty to everyone else not to be negligent in giving warnings) in order to posit an “exception” rather than what is really happening, that being a huge expansion of liability.  The law in every jurisdiction, including California, is that one manufacturer generally does not owe duties to those who use other manufacturers’ products.

So how did the California Supreme Court justify its departure from this general rule? Let’s take innovator liability first.  The Court held unanimously that an innovator drug manufacturer can be liable for its competitors’ generic products, with a particular fixation on a listed manufacturer’s exclusive right to “unilaterally” update a label.  For one thing, the Court considerably overstates a listed manufacturer’s ability to “unilaterally” change a label under the CBE regulations, which require “newly acquired information” among other things.  On the case-specific facts – off-label use – the opinion is simply wrong.  Only the FDA, and not a company “unilaterally,” can require a warning about an off-label use – it’s right there in the regulations.

The main problem, however, is the Court’s overreliance on foreseeability to define a new tort duty. Although the Court discusses other factors, its core rationale is that a listed manufacturer can foresee that a generic manufacturer will use substantially the same label.  Fine, but why does the law not require more than that to deviate from decades of product liability law?  And why are other factors not as relevant?  The Court, for example, quantifies the burden on brand-name manufacturers’ as “zero,” which is astonishing as it is potentially shifting 100% of liability onto 10% (if that) of the prescription drug market.  The Court also assumes that insurance against this new liability would be readily available.  If any reader knows of such a policy actually existing, please tell us.  When expanding duties so fundamentally, we are not sure how the Court can purport to draw these conclusions.

The opinion on predecessor liability—or as we would call it, “perpetual liability”—deviates from prevailing law by equal measure, if not more. By a vote of 4 to 3 (with the margin provided by an “assigned” judge filling an open seat), the Court held that an innovator owes duties to users of a competitor’s product, even after the innovator has sold the NDA and stopped selling the drug.  Again, the focus is on foreseeability, because a listed drug manufacturer purportedly can foresee that another manufacturer will make a generic product using a similar label in the future.  Is such a manufacturer supposed to “foresee” off-label promotion (alleged in the complaint but not mentioned in the opinion) as well?  We will definitely have more to say on this, but to start, what exactly can the innovator foresee and for how long?  Who will sell the product?  For how long, to whom, and for what purposes?  What scientific developments will come down the pike, and what will the new owner of the product do with the label, into which the innovator now has no input?  The result goes far beyond any other version of innovator liability ever adopted, in particular leaving in the dust the time limited, learned intermediary rule-respecting version adopted in the briefly extant Weeks v. Wyeth decision in Alabama.

We also take issue with the majority framing the issue as whether selling a product line “automatically terminates” liability for its negligence. The defense never proposed such a thing—a product manufacturer will continue to owe duties to users of its own products, even after it has left the market.  We again think the Court has it backward:  The issue is not whether liability “terminates”; the issue is whether the law should create a new form of liability in the first place.

We cannot help but think that the Court was motivated to create a remedy for plaintiffs who otherwise may not have one. Footnote 2 suggests that the decision is, at least in part, intended to lobby the FDA (and federal authorities generally) to trade generic preemption for elimination of this radical new innovator liability theory.  In this regard, the opinion treats innovators like insurers of competing products, potentially forever, and seeks to hold them hostage in a larger, more political game.  More to come.

A lot of us attended the annual ACI Drug & Medical Device Litigation Conference in New York City last week.  One of the messages sent loud and clear from the initial client round table panel is that our clients don’t like surprises, and it is helpful to them to know information about potential litigation possibilities (read:  threats), even if they are not current targets.

So that’s what we’re doing here today – about a topic that wasn’t even the topic of a separate presentation at this year’s ACI Conference. That threat is innovator liability.  For those of you not familiar with litigation jargon, this is the term that litigators, particularly those on our side of the “v.,” use for plaintiff-side litigation theories seeking to hold manufacturers of branded drug products liable for injuries caused by competing generic products that our clients didn’t make.

Yes, innovator liability is an inherently absurd theory that contravenes the most foundational principle of strict liability – that the manufacturer of a defective product should be responsible for injuries caused by that product.  That’s why innovator liability is usually brought on a misrepresentation/fraud theory, rather than under “traditional” product liability theories.  Because branded manufacturers are required by federal law to allow generic products to take (for free) their labels and use them verbatim, innovator liability theories posit that it is “foreseeable” that “fraud” or “misrepresentation” purportedly occurring with respect to branded labels could lead physicians to prescribe generic drugs bearing the same labeling at some unknown future date.  It also lets the actual manufacturer of the allegedly “defective” product that actually caused harm off the hook, even though the manufacturer controls everything else about how the product is manufactured and promoted.

Since 90% or so of the current prescription drug market is generic, innovator liability is a very dangerous – indeed existential – threat to the branded drug industry.  Potentially 10% of the prescription drug market share would be forced to shoulder 100% of possible liability, not only with that additional liability bailing out current business competitors, but also being effectively uninsurable because it does not arise from a defendant’s own products and is potentially unlimited in both amount and time.

Plaintiffs pursue innovator liability currently for one reason only – the deterrent effect of preemption on claims brought against the manufacturers of generic products.  Such preemption is now likely to continue in full effect for the foreseeable future, with the FDA’s regulatory attempt to change the rules to eliminate generic preemption now effectively over, and with the threat of additional appointments of anti-preemption Supreme Court justices very likely minimal as well, for the time being.

Innovator liability was not even a separate topic at this year’s ACI conference.  With good reason.  As detailed in our innovator liability scorecard and in our 50 state survey, the defense side has been winning the overwhelming majority of the decisions that have addressed such theories.

Here’s the big however.

Most of this litigation so far has been decided in federal court, and in federal court, with jurisdiction based on diversity of citizenship, the Erie principle favoring conservative applications of state law over radical changes has worked strongly to the defense’s advantage in federal cases.  No federal circuit court has ever recognized innovator liability, and given the state of Illinois law (see our 50 state survey), we don’t see the Seventh Circuit becoming the first.

No, the problem is with state courts of last resort, which are not constrained by Erie.  So far there have been two high court decisions on innovator liability – and our side’s success rate there is only 50%.  We lost in Wyeth, Inc. v. Weeks, 159 So.3d 649, 656-76 (Ala. 2014).  Weeks was overturned by the legislature almost before the ink was dry, so it looks like a hiccup, but we have to wonder, if it could happen in Alabama, could it happen anywhere?  The answer was “no” in Iowa, the only other high court decision so far. See Huck v. Wyeth, Inc., 850 N.W.2d 353, 369-81 (Iowa 2014).  Huck, however, was actually a 4-4 split decision that operated as an affirmance only because the defendant had won below, and the Huck justices who saw things our way did so in part (how much a part is unclear) because of the pendency of the FDA’s now-dead rule on generic labeling.  Id. at 380-81 (“the FDA’s proposed rule . . . would abrogate the Mensing holding, permitting consumers of generic drugs to bring a claim against generic manufacturers”).

Plaintiffs are aware of this.  We’re not giving anything away here.  They have thus been trying to move the innovator liability theater of litigation operations to state-court appeals for years.  And they have finally been able to do so.  Right now, the issue is pending in three high courts:  California, T.H. v. Novartis Pharmaceuticals Corp., 199 Cal. Rptr.3d 768, 774-82 (Cal. App. 2016), review granted & depublished, 371 P.3d 241 (Cal. June 8, 2016) (discussed here); Massachusetts, Rafferty v. Merck & Co., 33 Mass. L. Rptr. 464, 2016 WL 3064255, at *5-7 (Mass. Super. May 23, 2016) (discussed here), appeal granted, No. SJC-12347 (Mass. 2017); and West Virginia, McNair v. Johnson & Johnson, 694 Fed. Appx. 115, 120 (4th Cir. 2017) (discussed here), certified question accepted, No. 17-0519 (W. Va. Sept. 1, 2017).

The California and Massachusetts appeals have been argued, and we wish we had better news to report.  As we discussed, the California argument was mostly about the “perpetual liability” aspects of the case (that the defendant branded company had left the market years before the plaintiff was exposed to a generic product), so there is a distinct possibility that the California Supreme Court will either bypass the basic innovator liability question or worse allow it.  In Massachusetts – another notoriously liberal tort jurisdiction – too many members of the Supreme Judicial Court for our liking were asking questions about under what conditions (such as scienter) innovator liability could be permitted.  The West Virginia Supreme Court of Appeals is not as radically pro-plaintiff as it was back when it rejected the learned intermediary rule, see Johnson & Johnson v. Karl, 647 S.E.2d 899 (W. Va. 2007).  However, one judge remains from the Karl majority, and the situation of generic drug using plaintiffs without anyone they can sue is certainly present.  After all, if it could happen in Alabama, it could happen anywhere.

So what happens if the tide starts to turn in 2018 on innovator liability?  It certainly could, and because of the magnitude of the potential threat, we can’t ignore it.  As stated at ACI, our clients don’t like surprises, particularly surprise threats, so we’re letting you know that from our perspective, the threat is real.  Moreover, particularly in California and Massachusetts, we can’t expect a legislative fix of the sort that came through in Alabama.

And if state high courts start what the other side could argue to be a “trend,” what does that do to the current monolith of federal court decisions?

So what’s Plan B?

Congress appears right well paralyzed on any issue like this.  Aside from cutting their donors’ taxes, we don’t expect much there.

That leaves the FDA.  Could it be persuaded to issue a regulation preempting innovator liability?  There is that 1962 uncodified “direct conflict” preemption clause, and a lot of FDA statements about how its regulatory scheme is not supposed to change the standards of common-law liability.  That is one plausible outcome, but plaintiffs would be active, too, demanding an end to preemption of generic products.  Does a regulatory fix for innovator liability thus degenerate into a three-way fight between branded, generic, and plaintiffs?  That’s a recipe for paralysis, as well.

How does one litigate an innovator liability case?  Unlike a product liability case, the defendant isn’t a manufacturer, so it doesn’t have access to design, manufacturing, warning, and adverse report information about the product that actually caused (allegedly) the plaintiff’s harm.  At minimum that’s a serious discovery problem.  Will the solution be joining generic drug manufacturers as third-party defendants?  That would be a fine finger-pointing mess, and what would the consequences be for preemption?  Even the DDLaw Blog might be forced to take sides, which for eleven years we have been able to avoid doing.  Who knows, depending on where a plaintiff chose to sue, it might be difficult under BMS to obtain personal jurisdiction over the generic manufacturer.  These are just a few of the questions that broader adoption of innovator liability would pose.

We don’t like being the ones to point out the dark clouds on the horizon.  We’d much rather celebrate defense wins – and we hope we do in T.H., Rafferty, and McNair.  But our clients don’t like surprises, and given the size of the threat posed by innovator liability, we’d be remiss not to point out what we know/fear is out there.  After all, innovator liability is not even on the ACI’s own agenda (although it was mentioned) this year.  So a word to the wise.  Don’t be caught napping.  Think about Plan B.

The California Supreme Court heard oral argument in T.H. v. Novartis on Monday.  That is the case where the California Court of Appeal held that a prescription drug manufacturer could be held liable for injuries allegedly caused by a product that it did not make and did not sell.  This situation usually presents itself when plaintiffs sue an innovator drug manufacturer for injuries allegedly caused by generic products. T.H. v. Novartis has an added twist—the innovator manufacturer that the plaintiff sued had not made or sold the product for six years.  It sold the product line to another manufacturer, who made and sold the product that the plaintiff allegedly used.

How then can the innovator manufacturer owe a duty to this plaintiff, when it did not sell the product that allegedly harmed her and had not sold the product for anyone’s use for six years?  We set forth our views on this question here and here, where we listed the Court of Appeal’s opinion in T.H. v. Novartis the fifth worst decision of 2016.

The argument before the California Supreme Court lasted well more than the one hour allotted, and it featured questions from all seven justices. We’re not going to give you a blow-by-blow account.  Our stenographic skills are not up to that task, and it would take too long anyway.  We will start, however, the same way counsel for the defendant did:  The case presents not one, but two issues of duty.  For the plaintiff’s case to proceed, the California Supreme Court would have to recognize two unique legal duties:  (1) the duty of an innovator drug manufacturer to users of its competitors’ generic products, widely called “innovator liability”, and (2) the duty of a product’s former manufacturer to users of products made and sold by subsequent manufacturers, which we will call “perpetual liability.”

Perhaps the Court already knows what it wants to do with innovator liability, because nearly all the questioning was on perpetual liability, and the answers did not completely satisfy all the justices. To start, both sides attempted to seize the status quo—the defendant argued that no court anywhere has ever held a former manufacturer liable for a injuries allegedly caused by a subsequent manufacturer’s product, and the plaintiff argued that everyone owes a duty to everyone else to refrain from negligence.

The argument, however, dwelled on the limits of duty and how/where the Court should draw the line. Only one thing was clear:  The Court was troubled by the prospect of liability in perpetuity for a manufacturer that no longer sells a product.  The plaintiff tried to minimize the issue, arguing more than once that the prospect of perpetual liability was overblown and that perpetual liability cases would be rare.  Counsel even suggested once that the Court’s questions were “stacking a rare hypothetical upon a rare hypothetical.”  Despite these efforts, the Court directly confronted the issue, with a couple of justices noting that the situation would not necessarily be rare.

Now, whether the Court will recognize a new duty for former manufacturers and, if so, how the Court will limit such a duty is anyone’s guess. Of course, the best and obvious solution is to adopt the bright-line rule urged by the defense, that a former manufacturer owes no duty at all to users of a subsequent manufacturer’s products.  This is what every court to consider perpetual liability has decided, and it follows California Supreme Court precedent holding that a manufacturer owes no duty to warn regarding hazards in another manufacturer’s product, most recently in O’Neil v. Crane Co., 53 Cal. 4th 335, 360 (2012) (“An interpretation of [the law] that would require a manufacturer to warn about all potentially hazardous conditions surrounding the use of a product, even when those hazards arise entirely from the product of another manufacturer, reaches too far.”).  It is likewise faithful to decades of product liability law in California and elsewhere, which places the duty to warn on a product’s manufacturers and sellers.

The Court questioned counsel on other potential limits, for example by asking repeatedly how long a former manufacturer’s duty should persist. One justice noted that the lapse of time was the most difficult question.  In this case, six years passed between the defendant’s sale of the product line and the plaintiff’s use of the product manufactured by another company, so how long is too long?  Plaintiff had no answer to these concerns, and counsel finally acknowledged after nearly an hour of argument that there was no way to “scrub” perpetual liability from the case.

The Court also asked whether concepts of breach of duty and causation would adequately protect the defendant. In other words, if the Court created the duties, could the defendant move for summary judgment or defend itself at trial on the basis that it neither breached a duty nor caused any injury?  At least one justice was relatively open in supporting this idea.  Others preferred to focus on the threshold question presented—whether the defendant owed a duty in the first place.  In this regard, the expense of litigation and the ability (or inability) of a defendant to spread the cost when it no longer sells the product are particularly relevant considerations.

There were other suggested limits. The plaintiff argued that a former manufacturer could protect itself by updating its label before transferring a product line.  But as the defendant pointed out in response, that solution offers false assurance because plaintiffs would just claim the updated label was inadequate, too.  One plaintiff’s attorney suggested that the Court set a time limit for suing the former defendant, but another retracted that suggestion, noting that statutes of repose were the business of the legislature.

The plaintiff also suggested that a former manufacturer could protect itself by bargaining for indemnity, which led to questions about the whether the identity and reputability of the purchaser of the product line would make a difference. At least one justice thought that it might.  One plaintiff’s attorney argued that a former manufacturer’s duty should depend on how much a more robust warning would have affected the sale price of the product line.  We did not follow counsel’s reasoning, and we would be surprised if the Court did either.

In rebuttal, the defendant reiterated that the issue is duty, that it is the role of the Court to define duties and set limits, and that the plaintiff had offered no viable protection against perpetual liability. We agree.  These are not jury questions.  In the end, it will be a split decision, but we know how we would vote.  The law cannot justify creating an unprecedented duty of care for a company that did not sell the product that allegedly harmed the plaintiff and no longer sells the subject product at all.  The plaintiff’s remedy is against the manufacturer and seller of the product that she allegedly used and that allegedly resulting in an injury, just as it always has been under California product liability law.  We understand that this will not always give the plaintiff a complete remedy.  The manufacturer could be bankrupt or outside the jurisdiction of the court, and in some cases federal regulation of prescription drugs will preemption state-law claims.  But California has guidelines on when duties exist and when they do not.  We call them the Rowland factors, and they do not predict that a plaintiff will have the right to full recovery in every case.  So it should be here.  The opinion should be out in about 90 days.

As we discussed at the time, the MDL-wide innovator liability appeals in In re Darvocet, Darvon, & Propoxyphene Products Liability Litigation, 756 F.3d 917 (6th Cir. 2014), resulted in rulings under more than 20 states’ laws that branded drug manufacturers could not be liable for injuries suffered by plaintiffs who never used their products, but only took competing generic drugs.  Twenty-something states in one opinion.  If that had ever happened before, we remain unaware of it.

Well, it recently happened again, albeit on a smaller scale. See In re Zofran (Ondansetron) Products Liability Litigation, ___ F. Supp.3d ___, 2017 WL 3448548 (D. Mass. Aug. 4, 2017).  The Zofran MDL is like Darvon in that it involves a relatively old drug, approved back in 1991, for prevention of nausea and vomiting in cancer patients undergoing difficult treatments such as chemotherapy. Id. at *1.  Since Bendectin was driven off the market by bogus birth defect litigation, drug companies have been loathe to pursue anything for treating morning sickness (we know of only one), which leaves off-label use.  Id. at *2.  Thus, Zofran and its generic equivalents are frequently used off-label by women (and their physicians) seeking some kind of relief from pregnancy-related morning sickness.

The Zofran litigation is a consequence of this off-label use – anything used during pregnancy becomes the target of birth defect lawsuits.  Plaintiffs make a rather extreme claim, that defendants should be liable for not researching the risks of off-label uses for which they never sought FDA labeling approval.  Id. at *3 (“The crux of all of the claims is that defendants failed to perform an adequate study of the safety of ingesting Zofran during pregnancy”).

When generic drugs get involved, things get even worse. Plaintiffs using generic drugs are barred by preemption from suing those manufacturers (absent unusual situations like failure to update warnings with FDA-ordered changes), id. at *4, but they still want money, so they try to sue the branded manufacturers – innovator liability, in these cases for off-label uses.  Such claims seek to hold manufacturers liable for the risks of someone else’s product used in a manner for which that product was never labeled.

In Zofran, the court was having none of it.  It ordered all generic plaintiffs – 35 plaintiffs from 19 states − alleging innovator liability to justify those allegations.  Id.  Challenged to put up or shut up, most of the generic plaintiffs dropped out, leaving six plaintiffs suing under the laws of six states, those being Georgia, Indiana, Kentucky, Massachusetts, New York, and Oklahoma. Id.

Examining the laws of those six states, the court in Zofran, like the court in Darvocet, concluded that none of them would take the radical step of holding branded drug manufacturers liable for injuries caused by competing generic drugs.  Such liability ran contrary to “the long-settled principle that a manufacturer of a product cannot be held liable for injuries caused by another company’s product.”  Id. at *4.  Instead, plaintiffs alleged that:

As the holders of the New Drug Application (NDA) for Zofran and the patents for Zofran, [innovator] Defendants knew that any generic drug manufacturer would be required by law to use the same labeling as Zofran’s, and that any inadequacies in the labeling of generic ondansetron could be corrected by Defendants only.

Id. at *5.  Thus, the innovator defendants were being held liable not for what they chose to do, but rather for what was “required by law” – how Congress, in amending the FDCA, had chosen to structure the generic drug market.  While plaintiffs claimed this was not “novel,” id., to paraphrase Yogi Berra, “half the lies they tell about [the law] aren’t true.”

The overwhelming majority of courts—including all seven federal circuits to have addressed the issue—have held that the manufacturer of a brand-name drug may not be held liable for injuries caused by ingestion its generic equivalent, regardless of the theory of liability.

Id. at *6 (citations omitted).  The omitted citations, of just the federal appellate decisions, take up half a page of the opinion.  But don’t fret about that.  Our “Innovator Liability at 100” post, which discusses all these decisions, is closing in on 14,000 words.  The precedent rejecting innovator liability is truly “overwhelming.”

The “minority view,” on the other hand, consists of exactly four cases, one of which was “superseded by statute” “within a year” of being decided.  Id. at *8-9 & n. 6.  As for the relevant states in Zofran:

Georgia:  An intermediate state appellate court, the Sixth Circuit in Darvocet, and a federal district court, have all rejected innovator liability.  See PLIVA, Inc. v. Dement, 780 S.E.2d 735, 743 (Ga. App. 2015); Darvocet, 756 F.3d at 943; Swicegood v. Pliva, Inc., 543 F. Supp. 2d 1351, 1353-54 (N.D. Ga. 2008). Zofran, 2017 WL 3448548, at *8-9.  On the other side – zilch.  Actually, Georgia precedent rejecting innovator liability is more extensive than what was mentioned in Zofran.  See our “at 100” post for details.

Indiana:  The Sixth Circuit Darvocet case also rejected innovator liability under Indiana law.  756 F.3d at 845. Zofran, 2017 WL 3448548, at *10-11.  Again, there are several more Indiana law cases also rejecting innovator liability that aren’t mentioned in Zofran – but are in our post.

Kentucky:  Not only is Darvocet again on point, but the Sixth Circuit likewise rejected innovator liability in another Kentucky law case.  Darvocet, 756 F.3d at 945-46; Smith v. Wyeth, Inc., 657 F.3d. 420, 423-24 (6th Cir. 2011).  Zofran, 2017 WL 3448548, at *11.  As our post adds, a couple of Kentucky litigation tourists also got kicked out of court in Missouri on innovator liability grounds.

Massachusetts:  Two Massachusetts trial courts have rejected innovator liability. Rafferty v. Merck & Co., 2016 WL 3064255, at *4-5 (Mass. Super. May 23, 2016); Kelly v. Wyeth-Ayerst Laboratories Co., 2005 WL 4056740, at *2-5 (Mass. Super. May 6, 2005).  Zofran, 2017 WL 3448548, at *12-13.  We provide some more on-point Massachusetts precedent in our post, which never has to cite to a non-Westlaw slip opinion, because Bexis gets all the good ones added.

New York:  Darvocet, again, plus federal and state trial court decisions, all rejecting innovator liability under New York law.  Darvocet, 756 F.3d at 949; Goldych v. Eli Lilly & Co., 2006 WL 2038436, at *3-8 (N.D.N.Y. July 19, 2006); Weese v. Pfizer, Inc., 2013 WL 5691993, at *2 (N.Y. Sup. Oct. 8, 2013).  Zofran, 2017 WL 3448548, at *13-14.  Actually, there’s another recent federal district court decision that agrees, as our post discusses.

Oklahoma:  Not only Darvocet, but another federal appellate decision both reject innovator liability under Oklahoma law. Darvocet, 756 F.3d at 950-51; Schrock v. Wyeth, Inc., 727 F.3d 1273, 1281-84 (10th Cir. 2013).  Zofran, 2017 WL 3448548, at *14.  Our post adds another state trial court opinion applying Oklahoma law in a similar manner (a toughie, but we found it).

Thus, the Zofran decision concludes, as to the merits of innovator liability, that there aren’t any merits, and that contorting state law to impose liability for liability’s sake, without any basis in precedent or policy, isn’t a good idea:

In summary, none of the state supreme courts in any of the six relevant states have ruled on precisely the issues presented here.  Nonetheless, for each of the jurisdictions, there is case law suggesting, often strongly so, that dismissal is appropriate. . . .

It is true that dismissal would appear to leave consumers injured by generic drugs without any form of remedy.  But it is by no means obvious that the minority viewpoint is correct or fair, or even that it is the outcome that best protects consumers.  Just as it may be unfair to leave some injured consumers without a remedy, so too it may be unfair or unwise to require brand-name manufacturers to bear 100% of the liability, when they may have only 10%, or less, of the relevant market.

Id., 2017 WL 3448548, at *14 (citations omitted).

Finally, Zofran rejects what appears to be the new overall strategy of generic plaintiffs peddling innovator liability theories – try to shift the battle from federal to state courts.  Zofran refused to certify the issue to the high courts of the six states in question.  Id. at *15-17.  New York doesn’t even allow certification (an “oops” for plaintiffs).  Id. at *16.  “Clear and recent” appellate authority in every state but Massachusetts, leaves little doubt what the relevant law is.  Id.  As for Massachusetts (and indeed all the states), the question proposed to be certified “involve[d] alleged misrepresentations, none of which are identified by the plaintiff,” leaving the basis for those claims “unclear.”  Id. at *17.  Certification of such a “hypothetical” question would thus be “inadvisable”:

It is therefore entirely possible that the Court could wind up certifying a purely hypothetical question that has no actual relationship to the evidence.  It would be an enormous waste of judicial resources to certify a fact-bound question to the [state high court], only to find that the facts as ultimately proved are different. . . .  Any answer . . . to the proposed question might therefore prove to be entirely advisory.

Id. (footnote omitted).  Courts faced with innovator-liability-related certification requests in the future are likely to be facing similar situations, given how loosely our opponents throw around misrepresentation allegations.  Kudos to Zofran for not taking the easy way out, and declining to kick the decisional can down the road.

We have two posts on innovator liability that we update on a consistent basis: our innovator liability scorecard, and our “Innovator Liability at 100” state-by-state collection of materials that we originally compiled when the one-hundredth judicial opinion on this topic was decided.  Well, not too long ago the Fourth Circuit, in McNair v. Johnson & Johnson, ___ F. Appx. ___, 2017 WL 2333843 (4th Cir. May 30, 2017), did what no court of appeals had done since the innovator liability first reared its ugly head in 1994 – it certified the question to the relevant state high court – in this case, the West Virginia Supreme Court of Appeals:

Whether West Virginia law permits a claim of failure to warn and negligent misrepresentation against a branded drug manufacturer when the drug ingested was produced by a generic manufacturer.

2017 WL 2333843, at *1.

At least a dozen federal court of appeals decisions have rejected innovator liability under the laws of some two dozen states. Ironically, the first to do so was the Fourth Circuit itself, in Foster v. American Home Products Corp., 29 F.3d 165, 168, 171 (4th Cir. 1994), under Maryland law.  Plaintiffs did not begin resorting to the delaying tactic of requesting state court certification until relatively late in the game.  Courts of appeals were not accommodating, refusing to certify what they saw as an outlier issue in Johnson v. Teva Pharmaceuticals USA, Inc., 758 F.3d 605, 614-15 (5th Cir. 2014); Strayhorn v. Wyeth Pharmaceuticals, 737 F.3d 387, 406-07 (6th Cir. Dec. 2, 2013). See also In re Darvocet, Darvon & Propoxyphene Products Liability Litigation, 2012 WL 3610237, at *3 (E.D. Ky. Aug. 21, 2012), aff’d, 756 F.3d 917 (6th Cir. 2014); Mosley v. Wyeth, Inc., 719 F. Supp. 2d 1340, 1351 n.9 (S.D. Ala. 2010) (district courts refusing certification motions).  But plaintiffs got lucky (for a few months) in Wyeth, Inc. v. Weeks, 159 So. 3d 649, 653 (Ala. 2014), with a certified question, and with nothing left to lose they’ve been trying it ever since.

McNair is not only an outlier procedurally, but is troubling substantively.  First, the Fourth Circuit’s certification opinion seems more concerned with preemption rather than state law – addressing preemption before even bothering with state-law causation principles, and finishing that section with the observation, “while a state law failure-to-warn claim against a generic manufacturer is preempted, such claims are not preempted as to the warnings on a brand-name drug distributed by a brand-name manufacturer.”  2017 WL 2333843, at *3 (emphasis original).  Ordinarily, the existence of a recognized state law claim precedes any decision on whether that claim is preempted.  We always find it troubling when a federal court views principles of state law more through the lens of a preemption dodge than on their merits.

Although pointing out (as could hardly be denied) that even in the current preemption environment, “overwhelming” precedent rejects innovator liability, McNair, 2017 WL 2333843, at *4, the certification order makes it appear as if there is no prior West Virginia law on this subject.  That is simply not so.  As we state in our Innovator Liability at 100 post:

In In re Darvocet, Darvon, & Propoxyphene Products Liability Litigation, 756 F.3d 917 (6th Cir. 2014), the Sixth Circuit concluded that West Virginia “has rejected claims attempting to impose liability on brand manufacturers where plaintiffs ingested only generic drugs.”  Id. at 953.  Darvocet relied upon Meade v. Parsley, 2009 WL 3806716 (S.D.W. Va. Nov. 13, 2009).

[Innovator defendants] are not responsible for the damage resulting from a product that they did not manufacture, distribute or sell. . . .  Product liability law in West Virginia allows for recovery when the plaintiff can prove that “a product was defective when it left the manufacturer and the defective product was the proximate cause of the plaintiff’s injuries.”  Because neither [innovator defendant] manufactured the product that injured plaintiffs, there is no proximate cause.

Id. at *2-3 (quoting Dunn v. Kanawha County Board of Education, 459 S.E.2d 151, 157 (W. Va. 1995)).

That the Fourth Circuit would decide to omit all of the most directly on-point West Virginia law-based precedent – including a published court of appeals decision − from its certification order is simply inexplicable.  Certainly, ignorance cannot be claimed, as both the Darvocet and Meade decisions were relied upon by the district court in McNair itself.  McNair v. Johnson & Johnson, 2015 WL 3935787, at *6 (S.D.W. Va. June 26, 2015).  We can only hope that the West Virginia high court (docket available here) will not be misled by these omissions.


May 10 is an important day in the history of the law.  On this date, way back in 1893, the Supreme Court ruled that the tomato is a vegetable, not a fruit.  The case was called Nix v. Hedden, 149 U.S. 304 (1893).  The issue concerned application of the Tariff Act of 1883, which imposed a tax on vegetables, but not fruits.  The appellant was one of New York City’s biggest produce sellers.  He imported lots of tomatoes, and was looking to dodge the tax.  He cited dictionaries defining tomatoes, in a technical/botanical sense, as the “’fruit’ as the seed of plants, or that part of plants which contains the seed, and especially the juicy, pulpy products of certain plants, covering and containing the seed.”  But, alas, the High Court ruled that “[t]hese definitions have no tendency to show that tomatoes are ‘fruit,’ as distinguished from ‘vegetables,’ in common speech, or within the meaning of the tariff act.”  Science be damned, people eat tomatoes in their salads, not desserts, so they are vegetables, not fruits.  Because common parlance prevailed, the taxpayer did not.


*                    *                    *                    *                    *


We’ll exploit this historical legal oddity and its exaltation of common understanding as a semi-ironic preface to a case where a pro se plaintiff went down in flames in a product liability case.  In Coleson v. Janssen Pharmaceutical, Inc., et al., , 2017 U.S. Dist. LEXIS 68072 (S.D.N.Y. May 3, 2017), the plaintiff filed a pro se complaint against the defendants in New York state court (the Bronx, to be specific) , which alleged that he developed gynecomastia as a result of taking Risperdal and generic risperidone. The defendants removed the suit to federal court.  Things were already heading in the right direction for the defense.  After discovery, during which the plaintiff apparently never found an expert on causation, the defendants moved for summary judgment.  The defendants won.  The plaintiff lost.  Common sense also won: the court rejected innovator liability for an alleged failure to warn by a generic competitor.  Finally, we are reminded of that most common of courts, The People’s Court, where Judge Wapner routinely blasted plaintiffs for not having the requisite paperwork to back up their claims. 


After the plaintiff in Coleson had been diagnosed with bipolar schizophrenia around 2009 or 2010, physicians prescribed Risperdal and risperidone. Risperdal is the brand name product and was manufactured/sold by the defendants.  Since at least 1996, Risperdal’s FDA-approved disclosures stated that Risperdal is associated with endocrine-related side-effects, including gynecomastia.   Risperidone is the generic version.  It had been available since 2008.  Medicaid paid for all of the plaintiff’s prescriptions. New York’s Medicaid program excludes coverage of brand-name drugs when there is an FDA-approved generic equivalent on the market unless one’s healthcare provider specifically requests an exemption for the patient.  So it looks as if the plaintiff was probably taking risperidone.  That is, he took risperidone until sometime in 2013-14, when he switched to an entirely different atypical antipsychotic, which was also associated with gynecomastia.  The plaintiff was diagnosed with gynecomastia in 2015. 


Despite his usage of generic risperidone and a different antipsychotic, the plaintiff sued only the Risperdal brand manufacturer.  As with most pro se complaints, the theories of the case were less than pellucid.  The defendants and the court construed the causes of action as failure to warn and design defect against the brand manufacturers.  The plaintiff alleged that the side-effect information in the generic risperidone was different from the FDA-approved Risperdal label.  The defendants’ summary judgment motion argued that the plaintiff’s claims failed for lack of any evidence that the plaintiff ingested name-brand Risperdal, as opposed to generic risperdone. The defendants argued that they could not be held liable for either failure to warn or design defect for an injury resulting from a product that they did not manufacture, distribute, or sell. The defendants also argued that the plaintiff could not show medical causation between Risperdal and his gynecomastia.


Yes, we are confronted yet again with the issue of innovator liability.  Under Erie, the federal court needed to determine the substantive law of the forum, New York.  The New York Court of Appeals has not yet addressed whether a manufacturer of a name-brand prescription drug can be held liable for injuries resulting from another company’s generic equivalent. But there is at least one federal case, Goldych v. Eli Lilly & Co., No. 04 Civ. 1477 (GLS)(GJD), 2006 WL 2038436 (N.D.N.Y. July 19, 2006), and one New York state case, Weese v. Pfizer, Inc., 2013 N.Y. Misc. LEXIS 4761, 2013 N.Y. Slip Op. 32563 (Sup. Ct., N.Y. Cty. Oct. 8, 2013), rejecting innovator liability.  Those two New York decisions are in accord with the majority of courts to consider the topic: fifty-five other state courts across twenty-one states, in addition to all six circuit courts of appeal, have ruled that innovator liability makes no sense.  See our general innovator liability posts here and here. The Conte decision in California, which applied such innovator liability, stands as an egregious, eccentric exception.   The Coleson court acknowledged that there are a couple of cases clumsily following Conte, but the Coleson court declined to join the heresy.


Supporting its decision, the Coleson court discussed a recent asbestos case that, at first blush (but only first blush) seemed to offer some hope for the plaintiff.   Last year, in In re N.Y. City Asbestos Litig., 27 N.Y.3d 765, 59 N.E.3d 458 (2016), the New York Court of Appeals held that manufacturers had a duty to warn of potential dangers resulting from their products’ use in conjunction with third party products. To support this interpretation, the asbestos court observed that the manufacturers had “knowledge and ability to warn of the dangers” when consumers used the product with a third party’s product. As we discussed at the time, here, that is quite a bit different from being required to warn about use of a competitor’s product, when the defendant’s own product was not being used at all.  The Coleson court reasoned that the asbestos ruling was unlikely to make “the cost of liability and litigation . . . unreasonable”  and, moreover, the manufacturers “derive[d] a benefit from the sale of the [other party’s] product.” This rationale weighed in the opposite direction in Coleson. The brand defendants “had no oversight in the manufacturing of the generic drugs. They earned no profit from the sale of the generic drugs. Given the length of time generic drugs can sell following a patent’s expiration, to find a new duty would unforeseeably expand the cost of liability on brand-name drug manufacturers.”  Coleson, 2017 U.S. Dist. LEXIS 68072 at *10.  


Goodbye failure to warn claim.  The plaintiff’s failure to warn claim was dismissed because he alleged a warning defect as to only risperdone, over which the defendants had no duty of care.


The Coleson plaintiff’s design defect claim also failed.  He could not show by a preponderance of the evidence that he ever ingested name-brand Risperdal. The plaintiff’s declaration and deposition stated that he was prescribed, amongst other drugs, “Risperdal (risperidone)” and that a hospital in 2009 or 2010 dispensed “Risperdal and/or risperidone.” The plaintiff also claimed that hospital records proving he actually received Risperdal in the hospital were likely destroyed by a fire in January 2015. [We know some especially nettlesome plaintiff lawyers who would turn this misfortune into a spoliation claim, but the pro se plaintiff lacked either the expertise or chutzpah to pursue that vexatious path.] It was true that the plaintiff’s medical records at times recorded his prescription as only for Risperdal.  But generic risperidone is regularly written as “Risperdal (risperidone),” a nomenclature even the plaintiff repeatedly adopted in his papers.  That a drug is prescribed under its brand-name does not mean that a patient receives that name-brand drug, and it is hardly justifiable to infer that it does. In the absence of real evidence, the Coleson court was unimpressed by the plaintiff’s “mere speculation or conjecture” as to Risperdal usage.  Coleson, 2017 U.S. LEXIS 68072 at *11.


But let’s for the moment speculate that a “fair-minded jury” could speculate that the plaintiff was prescribed brand name Risperdal somewhere in the relevant time-frame. And yet it was undisputed that by 2009, when the plaintiff was first prescribed the medicine, risperidone was a widely available generic to Risperdal. It was also undisputed that all of the plaintiff’s prescriptions were paid by Medicaid.  Aside from exceptional circumstances the plaintiff never showed, the plaintiff’s prescriptions under Medicaid needed to be filled with generic drug equivalents. Thus, from the evidence presented, no jury could draw the “justifiable inference” that the plaintiff received name-brand Risperdal for his prescriptions. There might well have been an inference of injury from ingestion of risperdone, but the Coleson plaintiff had not sued the generic manufacturer.  Id. at *12.


Even assuming that the plaintiff had ingested Risperdal, his design defect claim against the defendants would still fail because he could not establish that Risperdal caused his gynecomastia. The Coleson court embraced the requirement in products liability cases that, to establish causation, plaintiffs must offer admissible expert testimony regarding both general and specific causation. The requirement is particularly pertinent where a causal link is beyond the knowledge or expertise of a lay jury.  In the Coleson case, there was no such expert in sight. Id. at *13.   


The plaintiff suggested he did not need an expert on causation when he had something even better:  the Risperdal label.  That label contains a warning regarding gynecomastia.  The plaintiff also pointed to a  July 2015 medical report, which concluded that the plaintiff’s gynecomastia “is related to phychiatric [sic] medical ingestion.”  The court did not buy either of these arguments.  First, Risperdal’s warning label cannot establish general causation: “Product warning labels can have over-inclusive information on them, often out of ‘an abundance of causation or the avoidance of lawsuits.’  Coleson, 2017 U.S. Dist. LEXIS 68072 at *14 (quoting In re Mirena IUD Prods. Liab. Litig., , 202 F. Supp. 3d  304, 323 (S.D.N.Y. 2016)).  Unless a warning label specifically says that an alleged injury can be caused by a drug, courts have held that a drug’s product warning label alone cannot “raise a genuine issue of material fact with respect to general causation.”  Id. Risperdal’s label states merely that it “elevates prolactin levels” and that “gynecomastia . . . ha[s] been reported in patients receiving prolactin elevating compounds.” This information is not the same as an admission of “a genuine phenomenon” creating a “material fact with respect to general causation.”


Nor did the Coleson plaintiff’s July 2015 medical report establish proximate cause. The plaintiff claimed to have taken Risperdal around only 2009-10. Throughout 2010 to 2014, the plaintiff took risperidone. In early 2014, the plaintiff switched to a different antipsychotic, which is also associated with cases of gynecomastia. The plaintiff was diagnosed with gynecomastia only in early 2015, and the medical report to which the plaintiff points indicates the plaintiff had taken both risperidone and the other antipsychotic. This report does not state which, if any, of these drugs was responsible for the plaintiff’s injury. Without competent medical expert testimony on the issue of causation, a jury would be left only to “theorize” as to how the plaintiff came to suffer from gynecomastia. Id. Accordingly, the defendants’ motion for summary judgment was granted.


So what we have here is a good result from a smart court.  That decision was made a bit easier because a pro se plaintiff sued the wrong party, hired no expert who would render some frail opinion on ‘substantial causative factor,’’ and failed to assemble decent evidence of usage.  What’s that saying about someone who acts as his own lawyer?



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.