Recently, an Idaho state court declined to adopt the novel, plaintiff-friendly theory of “innovator liability.” This theory, where adopted, imposes tort liability on brand-name drug manufacturers for injuries caused by generic versions of their drug. In Stirling v. Novartis Pharmaceuticals Corp., et al., No. CV01-18-4880 (Idaho Dist. Ct. Sept. 25, 2019), the court ruled that the plaintiffs could not sue Novartis for injuries caused by a generic drug. Faced with an issue of first impression in Idaho, Judge Greenwood declined to follow outlier decisions from state courts in California and Massachusetts. If upheld on appeal, Stirling will remove Idaho from plaintiffs’ lawyers’ litigation-tourism itinerary, at least for the purpose of some pharmaceutical litigation.
The Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq., prohibits the marketing of a new drug unless the manufacturer has submitted a New Drug Application (NDA) and the Food and Drug Administration (FDA) has approved the drug as safe and effective for its intended use. Under the Hatch-Waxman Amendments, enacted in 1984, “generic drugs” “can gain FDA approval simply by showing equivalence to a drug that has already been approved by the FDA.” PLIVA, Inc. v. Mensing, 564 U.S. 604, 612-13 (2011) (citing 21 U.S.C. § 255(j)(2)(A)). And under the current regulatory scheme, only brand-name manufacturers can make changes to a drug’s approved labeling (FDA can also require labeling changes to update warnings, describe adverse reactions, etc.). Generic manufacturers are only responsible for ensuring its label is identical to the brand-name drug’s label.
In Stirling, plaintiff Michelle Stirling alleged that a drug she took to suppress premature labor in women caused her and her child harm. Stirling and her husband brought six causes of action against Novartis including negligent failure to warn and negligence per se. Novartis moved to dismiss for lack of personal jurisdiction and for failure to state a claim.
Novartis owned the NDA for the brand-name drug Brethine. As the owner of this NDA, Novartis developed, manufactured, packaged, labeled, marketed, and distributed Brethine until around December 2001 when it sold the NDA rights. The plaintiffs alleged that the generic equivalent to Brethine, terbutaline sulfate, caused the injury, though the complaint does not mention who manufactured that specific product.
The court first addressed the concept of innovator liability. The plaintiffs’ memorandum defined innovator liability as “a theory under which a brand-name drug manufacturer may be held liable for injuries caused by an individual’s ingestion of the generic version of its drug” because the generic manufacturer has no control over the contents of the label. Stirling, No. CV01-18-4880, slip op. at 6. The court analyzed each count in the complaint to determine whether Idaho would recognize innovator liability. But even before beginning its legal analysis, the court made clear that one “crucial fact” prevailed throughout the complaint: “Novartis did not manufacture the drug that caused the injuries.” Id. at 7.
In dismissing the negligent failure-to-warn claim, the court discussed general negligence principles as well as the theory of innovator liability. The court noted that Novartis essentially challenged whether a manufacturer has a legal duty to warn the consumer of a similar product on the market. The court found that Idaho law generally holds that a company is not liable for injuries caused by other companies. Id.at 8 (citing Garrett v. Nobles, 102 Idaho 369, 372 (1981)).
It then turned to the Iowa Supreme Court for guidance in the generic-drug context. In Huck v. Wyeth, Inc., 850 N.W.2d 353, 380-81 (Iowa 2014), the Iowa court bluntly called out this theory of liability for what it is—“deep-pocket jurisprudence [which] is law without principle.” Plaintiffs in such cases conflate the “foreseeability” of an injury with the existence of a legal duty in the first place. Id. But in order for foreseeability to play a role, a legal duty of care must first exist. Anything can conceivably be foreseeable, but without a legal duty, there is no tort liability. The Stirling court found Iowa’s reasoning persuasive and held that it would not expand tort liability to cover brand manufacturers for injuries caused by generic equivalents.
Similarly, the court dismissed the negligence per se claim by following the “traditional notion that the manufacturer of a product cannot be held liable where its product did not cause the alleged harm.” Stirling, No. CV01-18-4880, slip op. at 9. The other causes of action failed for the same reason.
Stirling echoes recent decisions in West Virginia and the U.S. Court of Appeals for the Seventh Circuit that rejected innovator liability. In McNair v. Johnson & Johnson, 241 W. Va. 26 (2018), the West Virginia Supreme Court held that a plaintiff may not recover damages in a strict-liability action unless it can show “that the defendant either manufactured or sold the product that allegedly injured the plaintiff.” Id. at 34. In reaching this holding, the court stated that the defendant is only liable if it breaks its duty of care to the plaintiff, and foreseeability of risk, while important, does not go so far as to create such a duty. Id. at 35-37. WLF filed an amicus curiae brief in McNair, criticizing plaintiffs’ lawyers’ attempts to conflate foreseeability with a duty of care and arguing that adopting innovator liability would mark a sharp and unwarranted break from longstanding principles of tort law.
In another case involving the theory of innovator liability, the Seventh Circuit held that federal law preempted state-law claims demanding that GSK add a different warning to its label. Dolin v. GlaxoSmithKline, LLC, 901 F.3d 803 (7th Cir. 2018). WLF also filed an amicus curiae brief in Dolin.
While those courts have properly limited the scope of tort liability to a company that actually owes a legal duty, other courts have usurped the federal government’s authority to regulate drug labeling. The California Supreme Court decided that brand-name drug manufacturers have a duty “to warn of the risks about which it knew or reasonably should have known, regardless of whether the consumer is prescribed the brand-name drug or its generic ‘bioequivalent.’” T.H. v. Novartis Pharm. Corp., 4 Cal. 5th 145, 165 (2017). In reaching its decision, the court focused primarily on the foreseeability of harm, and held that duty stems from foreseeability. Id. at 166-68. Then, looking at public-policy concerns, it held that the brand-name manufacturer was in the best position to bear the costs. Id. at 168-74. This decision is a clear example of the type of “deep-pocket jurisprudence” that Stirling, McNair, and Dolin avoided.
Massachusetts also adopted a form of innovator liability, but to a lesser extent than California. See Rafferty v. Merck & Co., Inc., 479 Mass. 141 (2018). There, the court held that manufacturers could be found “reckless” but not “negligent” in failing to update labels resulting in “an unreasonable risk of death or grave bodily injury.” Id. at 157.
In order for a brand-name manufacturer to be liable for a plaintiff’s harms, the manufacturer must owe a duty of care to that plaintiff. Foreseeability of harm determines the scope of a duty; it does not determine whether one actually exists. The majority of courts around the country recognize this, and the Idaho trial court should be lauded for doing so in Stirling. As the plaintiffs’ bar works its way across America testing out this legal theory, courts will be asked to embrace the radical notion that manufacturers should be liable for products they did not make.
Decisions such as Stirling remind those courts to stay in their lane, and leave the expansion of drug-labeling requirements to federal legislators and, where appropriate, federal regulators. They should also bear in mind that any departure from longstanding principles of tort law will be the proverbial inch that plaintiffs’ lawyers will take and use to expand the law a mile or more.
Also published by Forbes.com on WLF’s contributor page.