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Generic Drug - Pioneer Liabilty

By James M. Beck and Mark Herrmann

We've just been informed of a California appellate decision, Conte v. Wyeth, that effectively stands product liability law on its head. It involves a suit over a generic drug, but the plaintiffs sued the pioneer manufacturer of the original product as well.

The prescribing doctor denied reading any of the generic manufacturer's warnings but was wishy-washy about whether he might have read the pioneer manufacturer's labeling at some point in the more distant past.

Well, since the dawn of product liability, we thought we knew the answer to that question. You can only sue the manufacturer of the product that injured you. Only the manufacturer made a profit from selling the product, and only the manufacturer controls the safety of the product it makes, so only the manufacturer can be liable.

Black letter law (and sound public policy), right?

Not in California.

Utilizing a "negligent misrepresentation" theory as an end run around decades of product liability precedent, the Conte court holds that, as long as it's "foreseeable" that somebody might rely on its negligently incorrect information, there can be liability - with no limitation as to time or "special relationship" or anything else - owed to essentially anybody in the world (or at least in California).

If it stands, the implications of the Conte decision could be worse than Sindell market share liabilty (another ill-considered California legal "innovation"), because there's no effective limitation on the scope of the theory, only "foreseeability," which amounts to no limitation at all. It's also a terrible place to put liability as a matter of jurisprudence, because it created a huge "free rider" problem in that pioneer manufacturers are stuck with liability for generic products that, not only do they not get any profit from, but whose sales are detrimentally affected by the generic product.

Look for misrepresentation claims to skyrocket in California. Look for contribution/indemnity claims brought by pioneer manufacturers against generics to proliferate as well.

It's the Hatfields versus the McCoys all over again.

What's really going on is the preemption argument which this rationale allowed the court to dodge. Whatever the merits of preemption in the context of generic drugs, we've thought for some time that, as a practical matter, if the generic manufacturers' preemption argument wins, that necessarily puts more pressure on the product identification requirement that protects pioneer manufacturers from liability in such cases. Judges, being human beings, don't like putting large numbers of plaintiffs entirely out of court.

Well that pressure just sprung a big leak in California.

Full post as published by Drug and Device Law on November 07, 2008 (boomark / email).