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DES RULING IN CALIFORNIA SUPREME COURT DENIES STRICT LIABILITY FOR Rx DRUG INJURIES; UPHOLDS APPELLATE COURT DECISION BASING DEFENDANT LIABILITY ON DES MARKET SHARE

Executive Summary

All prescription drugs, not just those meeting the definition of unavoidably dangerous, should be exempt from the doctrine of strict liability, the California Supreme Court concluded in a March 31 ruling in a DES case. In a footnote to the ruling, the court said that "we are of the view that [exemption from strict liability] should apply to all prescription drugs." The footnote adds: "Almost all jurisdictions that have adopted the rule . . . view its provisions as granting immunity from strict liability to all such drugs. In addition . . . the benefit of the negligence standard . . . [developed by the American Law Institute] would be greatly diminished if all drugs were required to run the gauntlet of a risk/benefit analysis in order to qualify for application of the standard." The ruling upholds both trial and appeal court decisions in favor of defendants in a case involving Abbott and a group of other companies who once supplied DES. All three courts ruled that the doctrine of strict liability should not be applied to cases involving prescription drugs. Application of the doctrine of strict liability to drugs would be counter to the public interest by increasing the cost of drugs and by discouraging drug industry research and development, the court said. "If drug manufacturers were subject to strict liability, they might be reluctant to undertake research programs to develop some pharmaceuticals that would prove beneficial or to distribute others that are available to be marketed, because of the fear of large adverse monetary judgments. Further, the additional expense of insuring against such liability -- assuming insurance would be available -- and of research programs to reveal possible dangers not detectable by available scientific methods could place the cost of medication beyond the reach of those who need it most." The court states in a unanimous decision: "In accord with almost all our sister states that have considered the issue, we hold that a manufacturer is not strictly liable for injuries caused by a prescription drug so long as the drug was properly prepared and accompanied by warnings of its dangerous propensities that were either known or reasonably scientifically knowable at the time of distribution." Regarding its position on comment k (a judicial interpretation of the doctrine of strict liability developed by the American Law Institute), the court explains: "The principle it states is based on negligence . . . That is, comment k would impose liability on a drug manufacturer only if it failed to warn of a defect of which it either knew or should have known." On the other hand, under strict liability, "the manufacturer is liable even if it neither knew nor could have known of the defect," the decision points out. In the ruling, the court also reaffirmed its stance on allocation of liability among multiple defendants in strict liability cases. The court stated: "Each defendant would be held liable for the proportion of the judgment represented by its market share, and its overall liability for injuries caused by DES would approximate the injuries caused by the DES it manufactured." The court acknowledges that "only an approximation of a manufacturer's liability could be achieved by this procedure, but underlying our holding was a recognition that such a result was preferable to denying recovery altogether to plaintiffs injured by DES." The court said that an alternate proposal by the plaintiff, to "inflate" each defendant's liability in proportion to market share, was an "ingenious approach" that "would not be as unjust to defendants as joint liability." However, the court rejected the idea because it would "retreat" from the legal principal of assigning liability in proportion to individual responsibility for injury.

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