We’ve seen stories lately that an increasing trend towards online sales of prescription drugs could become as much of a threat to retail drugstores as online shopping generally has become to department stores.  For non-prescription drugs, that future is already here – just Google “OTC Drugs Online” and check out the results.  Or you can go to your favorite general online marketplace and search for the name of a commonly used OTC drug.

When we see something like this, we immediately wonder, “what are the product liability implications?”  We thought we’d take a look.

For this thought experiment, assume that plaintiff X purchased a generic drug online through a large internet marketplace, and now claims to have suffered injury. We’re using generic drugs as an example because preemption would preclude product liability claims against the manufacturer – but if it’s a foreign manufacturer, as is often the case online, well….  But put that aside for the moment, too.

What happens when a plaintiff sues the operator of an online marketplace for injuries caused by a product purchased through that market place?

The plaintiff almost always loses.

Why?  Two reasons.  First, unless the operator actually buys the product and resells it (which happens sometimes, but not a lot), the marketplace isn’t considered a product “seller.”  It’s more like the shopping mall than like any individual store.  Second, a federal statute, the Communications Decency Act, precludes a website operator from being liable for content on its site that is created and uploaded by others.

Both prongs of this defense were recently on display in Oberdorf v. Amazon.com, Inc., 295 F. Supp.3d 496 (M.D. Pa. 2017), which dismissed a non-drug/device product-related personal injury claim brought by plaintiffs who were allegedly injured by a product allegedly bought on the “Amazon Marketplace.”  This “marketplace” is described as:

a vehicle through which third parties may independently offer products for sale.  This service . . . is currently utilized by more than one million third-party vendors.  These third-party vendors decide which products they wish to sell, obtain their stock from manufacturers or upstream distributors, and set their own sales price.  They provide a description (including, perhaps, a photograph) of the product to [the marketplace], which [it] uses to create a listing on its website.

Id. at 497-98 (footnote omitted).  Notably, this is one of the sites where one can currently purchase OTC drugs.

According to Oberdorf, marketplace users “are informed that they are purchasing from an identified third party, and not from [the marketplace] itself.”  Id. at 498.  Except is special cases, the marketplace itself “has no interaction with the third-party vendor’s product at any time.”  Id.  The site’s supervision over its third-party marketers is limited to:  (1) collecting payments, from which it deducts its fee; (2) its platform being the exclusive means of communicating with customers; (3) editorial rights over the contents and appearance of product listings; and (4) imposing rule governing shipping and returns.  Id.

Plaintiffs purchased the product in Oberdorf from a third-party vendor that, once suit was brought, they were “unable to make contact” or serve with process.  Id.  They sued the marketplace  instead

Plaintiffs lost, on the two above-mentioned grounds.  Under Pennsylvania common law, an online retailer was not a “seller” of such products, as that term was used in Restatement (Second) of Torts §402A (1965).  It did not design, manufacture, or sell the product.  Instead of being a store, the online marketplace acted more like “a sort of newspaper classified ad section.”  295 F. Supp.3d  at 501.  Oberdorf compared the marketplace to a product auctioneer that, in Musser v. Vilsmeier Auction Co., 562 A.2d 279 (Pa. 1989), was held not to have attributes of a “seller” that could be subject to §402A strict liability:

Like an auctioneer, [the marketplace] is merely a third-party vendor’s “means of marketing,” since third-party vendors − not [the marketplace] − “cho[o]se the products and expose[ ] them for sale by means of” the Marketplace.  Because of the enormous number of third-party vendors (and, presumably, the correspondingly enormous number of goods sold by those vendors) [the marketplace] is similarly “not equipped to pass upon the quality of the myriad of products” available on its Marketplace.  And because [the marketplace] has “no role in the selection of the goods to be sold,” it also cannot have any “direct impact upon the manufacture of the products” sold by the third-party vendors.

Oberdorf, 295 F. Supp.3d 501 (quoting Musser).

In holding online websites displaying goods sold by others not to be product “sellers” subject to strict liability, Oberdorf appears squarely in the legal mainstream.  In the only state court decision we’ve seen that’s on point, an Ohio trial court held:

[The internet platform] did not in any way modify the [product] purchased by [plaintiff’s decedent].  Nor did [it] distribute the product as the packaging, handling and shipping were performed by [another defendant] and shipped directly to [still another defendant].  {the platform’s] services − allowing the product to be uploaded to its marketplace − were not connected to any aspect of the product which ultimately resulted in the decedent’s death.  Any issues with labeling, concentration, instructions, warnings, etc., were aspects of the product are unconnected to the services [the platform] performed.

Stiner v. Amazon.com, Inc., 2017 WL 9751163, at *6, slip op. (Ohio C.P. Sept. 20, 2017).  That the actual sellers were “a Chinese company . . . not subject to process” or “insolvent” did not justify imposing liability on someone who was not a seller at all.  Id. at *5. See id. at *7-9 (not a seller under state Little FDCA Act or Uniform Commercial Code either).

Similar federal decisions include:  Milo & Gabby LLC v. Amazon.com, Inc., 693 F. Appx. 879, 885 (Fed. Cir. 2017) (online marketer not a product “seller” for purposes of copyright infringement); Fox v. Amazon.com, Inc., 2018 WL 2431628, at *2, 7 (M.D. Tenn. May 30, 2018) (online “information service and system designed so multiple users across the world can access its servers and browse its marketplace at the same time” not a “seller” as defined by Tennessee product liability statute); Erie Insurance Co. v. Amazon.com, Inc., 2018 WL 3046243, at *2 (D. Md. Jan. 22, 2018) (website operator not a “seller” under Uniform Commercial Code”) (fire subrogation case); McDonald v. LG Electronics., USA, Inc., 219 F. Supp.3d 533, 542 (D. Md. 2016), reconsideration denied, 2017 WL 4163348, at *1-2 (D. Md. May 8, 2017) (online marketer not a product “seller” under strict liability or the UCC); Inman v. Technicolor USA, Inc., 2011 WL 5829024, at *6 (W.D. Pa. Nov. 18, 2011) (online auctioneer not a “seller” for §402A purposes); Stoner v. eBay, Inc., 2000 WL 1705637, at *2 (Cal. Super. Nov. 1, 2000) (online auctioneer not “an active participant in the sale of the auctioned goods and services” so as to be liable for copyright infringement).

The second basis for immunity of an Internet website from liability for online sales made by those advertising on the site was federal preemption.  Oberdorf held that all the plaintiff’s tort claims were barred by 47 U.S.C. §230 (the “Communications Decency Act” or “CDA”), which provides that “[n]o provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.”

[I]t is clear from [plaintiffs’] papers that they are, in fact, attempting to hold [defendant] liable for its role in publishing an advertisement for [the seller’s] product.  In other words, [plaintiffs] are attempting to “treat[ defendant] as the publisher or speaker of … information provided by” the seller.  Therefore, these claims are barred by §230 of the CDA.

Oberdorf, 295 F. Supp. at 502-03 (footnote omitted) (quoting statute).  See also Id. at 503 n.52 (CDA would bar product liability claims had they not already been dismissed).

Once again, Oberdorf appears to be in the strong majority of courts holding that product liability actions brought against non-seller online entities are barred by the CDA.  In general, the CDA “provides immunity to [any] publisher or speaker of information originating from another information content provider.”  Green v. America Online, 318 F.3d 465, 471 (3d Cir. 2003).  The CDA has repeatedly been held to preempt product liability claims against website owners.  See Erie Insurance, 2018 WL 3046243, at *3 (“even if I am incorrect with respect to my conclusion that [defendant] is not a seller . . ., I conclude that the CDA would preclude the claims in any event”); McDonald, 219 F. Supp.3d at 538 (CDA immunized online retailer from warning-based claims); Hinton v. Amazon.com.DEDC, LLC, 72 F. Supp.3d 685, 691-92 (S.D. Miss. 2014) (CDA immunized online retailer from product liability suit over product obtained from third-party through interactive internet site); Inman, 2011 WL 5829024, at *6-7 (CDA precluded all claims against internet retailers for injury from allegedly toxic products purchased online); Doe v. MySpace, Inc., 629 F. Supp.2d 663, 665-66 (E.D. Tex. 2009) (CDA barred strict liability claim); Reyes v. LA VaporWorks, 2017 WL 1717406, at *1-2 (Cal. Super. Feb. 16, 2017) (CDA prevents “plaintiffs in product liability cases [from] seeking to hold interactive computer service providers liable for the failure to prevent or screen” “defective product[s] from allegedly being sold” online); Stoner, 2000 WL 1705637, at *3 (in enacting the CDA “Congress intended to remove any legal obligation of interactive computer service providers to attempt to identify or monitor the sale of such products”); Stiner, 2017 WL 9751163, at *11-14 (“to the extent that §230 is applicable to the instant case, the immunity provided thereunder would further support the finding already made by the court that [defendant] is not a supplier or seller of the [product] and that it cannot be held liable under the specific facts of this case”); cf. Gentry v. eBay, Inc., 121 Cal. Rptr.2d 703, 712-16 (Cal. App. 2002) (CDA precludes action against online auctioneer for allegedly counterfeit products); Gibson v. Craigslist, Inc., 2009 WL 1704355, at *4 (S.D.N.Y. June 15, 2009) (CDA immunizes online website from liability for facilitating sales of “inherently hazardous objects, such as handguns”).

The practical reason why we’re seeing a proliferation of attempts to sue internet platforms was alluded to in both Oberdorf and Stiner – online sales platforms are allowing a plethora of products to be sold by a myriad of manufacturers who, before such technologies, had no way of selling worldwide.  The proliferation of online product retailing is leading to more and more situations where product liability plaintiffs are left with nobody, as a practical matter, for them to sue.  It will be very interesting to see what happens when some plaintiff claims SJS-TENS from some drug purchased online.

Particularly after Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017) (“BMS”), and Daimler AG v. Bauman, 134 S. Ct. 746 (2014), how many of the “more than one million third-party vendors,” Oberdorf, 295 F. Supp.3d at 498, on that particular website, and uncounted others utilizing similar websites worldwide, are likely even to be subject to personal jurisdiction anywhere in the United States?  Moreover, as we have discussed before, the expansive “stream of commerce” jurisdiction theory, which purports to allow suit anywhere that a product happened to injure someone has never commanded a majority on the Supreme Court, and is falling further out of favor after BMS.  With traditional defendants disappearing, it is not surprising to see plaintiffs attempt to sue non-traditional entities, but for now the law is not letting them get away with it.

As our loyal readers know, the Reed Smith side of the blog has been very interested in 3D printing, and particularly in its product liability implications. We recently shared with you the most comprehensive law review article to date on this subject (here) – authored by Bexis and Reed Smith associate (and sometimes guest blogger) Matt Jacobson – and we have posted about 3D printing here, here, here and here.

If you’ve found yourself equally fascinated by this new technology – and its potential impact on life sciences product liability – we’re pleased to announce that Bexis and Matt will be presenting a free 60-minute webinar on “3D Printing: What Could Happen to Products Liability When Users (and Everyone Else in Between) Become Manufacturers” on May 8 at 12 p.m. ET.

This webinar is presumptively approved for 1.0 general CLE credit in California, Illinois, New Jersey, Pennsylvania, Texas and West Virginia. For lawyers licensed in New York, this course is eligible for 1.0 credit under New York’s Approved Jurisdiction Policy.

The program is free and open to anyone interested in tuning in, but you do have to sign up, which you can do here.

 

This post is from the Reed Smith side of the blog only.

For well over a year, now Reed Smith has been engaged in an “initiative” concerning the innovative technology, “3D printing,” also known as “additive manufacturing.”  We’ve tried to stay on the forefront of the legal implications of 3D printing, particularly the product liability implications, as we have posted about it here, here, here and here.

Blogging is a quick way to disseminate information, but it’s not the only way.  That’s why Bexis, sometimes guest poster Matt Jacobson, and a number of their Reed Smith colleagues have explored the legal ramifications of 3D printing in a more in-depth and traditional fashion.

Most recently, Bexis and Matt have authored the most comprehensive law review article to date on the product liability implications of 3D printing.  The article is called, “3D Printing:  What Could Happen to Products Liability When Users (and Everyone Else in Between) Become Manufacturers,” and it will appear in the Minnesota Journal of Law, Science & Technology at 18 Minn. J.L. Sci. & Tech. 143 (2017).  If there is anything better out there on this subject, we have not seen it.  It’s now on the law review’s site, and you can download directly a PDF of the article for free at this link.

The first part of this comprehensive article covers the nature of 3D printing and how this new technology works.  There follows an overview of traditional tort liability concepts, and of the gray area that occurs when a potentially revolutionary new technology that allows anyone to become a manufacturer meets legal doctrines, like strict liability and warranty, that turn on concepts like “manufacturer” and “seller” from a prior era.  The second part of the article focuses specifically on 3D printing’s impact on medical devices and health care and the product liability considerations that are specific to these highly technical and potentially life-saving products.

As 3D printing appears to be the next great chapter in the industrial revolution, with the technology often moving more rapidly than the law, this article is significant in that it comprehensively analyzes the current state of products liability law and the legal issues that arise from this body of law when 3D printing is involved.

Second, Reed Smith, again with Bexis and Matt co-authoring the tort liability chapter, has now released a second edition of its “white paper” on 3D printing legal issues:  “3D Printing of Manufactured Goods: An Updated Analysis.”  The paper includes chapters on the following topics:  (1) Constitutional Issues (regarding 3D printed guns); (2) Commercial Litigation; (3) Product Liability, (4) 3D Printing/Component Parts/Raw Materials, (5) Insurance Issues, (6) Intellectual Property Issues, (7) Data Privacy, and (8) Environmental Safety.

The second edition of the Reed Smith 3D printing white paper is available here. And for those who missed the first edition, it can be found here.

We on the Reed Smith side are committed to exploring this novel technology and the legal issues that come with it, especially when those issues involve products liability.  We will continue to post any new updates as products liability law changes (or does not change) as 3D printed products become more and more commonplace.

The FDA released its final Guidance on Postmarket Management of Cybersecurity in Medical Devices during the week between Christmas and New Year. You can link to a full copy here, and we gave you our detailed take on the draft Guidance here. You can also click here to see what our data privacy and security colleagues wrote about the final Guidance on Reed Smith’s Technology Law Dispatch, as they beat us to the presses.

The final Guidance resembles the draft, with a few refinements. We see two guiding principles in the final Guidance.  First, the final Guidance continues to follow a risk-based approach.  As we observed before, the FDA could not have taken a different tack.  Medical devices always present both benefits and risks, and the goal of regulators when it comes to cybersecurity is to assess and mitigate risks without overly compromising a device’s benefits.  Second, the FDA recognizes that managing medical device cybersecurity takes a village.  Or, in the Agency’s words, “FDA recognizes that medical device cybersecurity is a shared responsibility among stakeholders including health care facilities, patients, providers, and manufacturers of medical devices.”  Guidance, at 12.

The final Guidance therefore recommends the implementation of cybersecurity risk management programs.  Such  programs would include monitoring reported adverse events under current regulations.  The FDA also recommends incorporating elements consistent with the National Institute for Standards and Technology’s Framework for Improving Critical Infrastructure Cybersecurity.  Guidance, at 14.  We commented in our prior post that the FDA was combining familiar medical device elements with others borrowed from the cybersecurity world.  The citation to NIST’s Framework is a perfect example of the wedding between those two worlds.

More specifically, a cybersecurity risk management program would include:

  • Monitoring cybersecurity information sources for identification and detection of cybersecurity vulnerabilities and risk;
  • Maintaining robust software lifecycle processes;
  • Understanding, assessing and detecting presence and impact of a vulnerability;
  • Establishing and communicating processes for vulnerability intake and handling;
  • Using threat modeling to define clearly how to maintain safety and essential performance of a device by developing mitigations that protect, respond and recover from the cybersecurity risk;
  • Adopting a coordinated vulnerability disclosure policy and practice; and
  • Deploying mitigations that address cybersecurity risk early and prior to exploitation.

Continue Reading What You Need To Know About the FDA’s Guidance on Postmarket Cybersecurity

Bexis recently attended the “Emerging Issues in Mass-Tort MDLs Conference” sponsored by Duke Law School (those of us from Philly remember Duke as part of “Black Saturday” back in 1979).  Several panels discussed various issues relating to MDLs including using early, issue-specific fact sheets, which Bexis advocated be considered amended pleadings subject to Rule 8 and TwIqbal, as a winnowing tool against the hordes of meritless plaintiffs that persist for years in MDLs involving prescription medical products.  Another discussion, about Lone Pine orders, produced (among other things) a great deal of disagreement as to what exactly a “Lone Pine order” actually requires.

By the end of it all, Bexis was moved to make a modest proposal. A lot of the problem – both with the use of plaintiff questionnaires/fact sheets and with Lone Pine orders – is definitional.  There is no set standard for either of these supplemental discovery procedures.  What’s really needed is the type of clarity that can only be brought about by an actual rule of civil procedure.  Thus, Bexis proposed (and proposes here) creation of a new Federal Rule of Civil Procedure governing “optional discovery methods” that allow judges to use defined procedures for party questionnaires/fact sheets (not necessarily plaintiffs in all cases) and Lone Pine orders would set standards, as well as several other discovery techniques that we think should be defined and allowed by a formal rule.

The other techniques Bexis would include in a new rule are: (1) authorizations for release and production of medical and other relevant records in the hands of third-parties; (2) informal interviews with treating physicians; (3) predictive coding in ediscovery; and (4) provision of blood or tissue sampling for genetic testing.  The first two are traditional discovery techniques that suffer (like Lone Pine and questionnaires) from wildly divergent standards and could benefit from the uniformity imposed by a rule – as well as a leveling of the plaintiff/defendant playing field.  The latter two are innovative discovery techniques that are driven by technological advances.  Predictive coding (as we discussed in the links above) could both cheapen and sharpen electronic discovery.  Genetic testing, reliant on DNA and other molecular sequencing techniques that have become dramatically cheaper and more accurate over the past decade, will become more and more necessary in toxic exposure cases of all kinds as causation of more and more medical conditions, such as mesothelioma and other cancers, is determined to vary by individualized genetic differences (also discussed in our prior link).

As illustrious as the attendees of the (invitation only) Duke Conference are, that is not the forum for actually amending the Federal Rules of Civil Procedure. That honor goes to Discovery Subcommittee of the Federal Judicial Conference’s Standing Committee on Rules of Practice and Procedure.  Having successfully completed its project on scope and sanctions that resulted in the amendments that became final in December, 2015, that Subcommittee might be looking for something else to do.  Maybe it could see fit to take up some or all of Bexis’ modest proposal.

If you represented a large corporation or a wealthy individual, wouldn’t you want to know if your prospective jurors were campaigning for Bernie Sanders on Facebook? Or how about criminal prosecutors who might want to know if members of their jury panel had posted strong feelings on police conduct?  If you were adverse to a drug or medical device company, maybe you would want to know if a prospective juror wrote for the Drug and Device Law Blog (although we can guarantee that you will find no more thoughtful and impartial jurors than the seven individuals who make up the collective “we”).

Millions of potential jurors make information like this (and much more) publicly available on the Internet through social media or otherwise, and what trial advocate would not want to uncover it? We got to thinking about this topic a few months ago when we read a unique order that came out of the Northern District of California in Oracle America, Inc. v. Google Inc., ___ F. Supp.3d ___, 2016 WL 1252794 (N.D. Cal. Mar. 25, 2016).  The district judge in Oracle v. Google asked the parties in a high-stakes copyright action to abstain voluntarily from searching the jury panel’s social media.  If the parties would not agree to a complete ban, then the court would impose specific limitations.

We’ll get to the details in a minute. But first, we set out to see if there are any rules that govern searching jurors’ social media (with research assistance from Reed Smith attorney David Chang).  It turns out there are, mainly within the rules of ethics and professional conduct.  The first rules obviously are our duties of competence and diligence.  They are among the first duties listed under the ABA’s Model Rules and probably the rules governing lawyers in most every state. See Model Rules of Professional Conduct, Rules 1.1, 1.3.  If there is publicly available information that would help us identify jurors with potential biases, a competent and diligent trial advocate needs to consider gaining access to it.

There are, however, countervailing considerations. On April 14, 2014, the ABA’s Standing Committee on Ethics and Professional Responsibility published “Formal Opinion 466, Lawyer Reviewing Jurors’ Internet Presence.”  The ABA committee’s opinion came on the heels of an opinion from the Association of the Bar of the City of New York—“Formal Opinion 2012-2, Jury Research and Social Media.”  These are not the only publications on the topic, but they were at the cutting edge, and they cover the major considerations.

Continue Reading Did You Search Your Jurors’ Social Media? There Are Rules

This is one of those stories you simply cannot make up.

We were using technology to get some ideas about technology. That is, we were surfing around the internet to find descriptions of the successful use of technology in litigation. Our eyes grew weary as we scrolled from screen to screen. There was a lot of same-old-same-old. Then we found an article in the Legal Times from 2005 entitled, “Jurors, Watch the Screen.” You can see the article here. Even as far back as 2005 it was becoming clear that one could use snazzy technology without suffering from the Goliath effect – the perception that your client must have deep pockets. After all, both sides at trials and depositions were using PowerPoints, videos, and arresting graphics. Jurors had come to understand that anyone with a laptop could put on a multi-media show. (Lawyers used to talk about a trial-in-a-box. But by 2005, we went up against a plaintiff lawyer who had a trial-in-a-laptop. He was smooth. He was impressive. He lost.)

Continue Reading Seen on the Screen