California Expands Tort Liability under the Novel Market Share Theory

The California Supreme Court, in the novel and unprecedented case of Sindell v. Abbott Laboratories, eliminated the plaintiffs burden of identification of a negligent party, and thus the causation requirement, in a multiple party tort action. In the course of this decision, the court adopted the “market share” theory of liability which dictated in Sindell that nonidenti iable defendant-manufacturers of the generic drug DES would be liable for the damages in proportion to their share of business in the market. The author thoroughly examines various theories of recovery, such as “alternative liability,” “concert of action” and “enterprise liability,” which the court employed in their formulation of the ‘market share” theory. While in agreement with this decision, the author analyzes the majority and dissenting opinions and notes the benefits and shortcomings of this most controversial development in California tort law.


Until recently, the vast majority of women who had developed cancer due to their mother’s ingestion of the drug diethystilbestrol (DES) during pregnancy were unable to recover damages because of their inability to identify the responsible manufacturer. However, the California Supreme Court, in Sindell v. Abbott Laboratories, has pioneered a new theory of recovery which permits a DES daughter to recover damages without naming a specific manufacturer-defendant. This four to three decision will likely have far-reaching consequences in the field of products liability by in effect removing causation in certain situations as a required element of proof.

California Expands Tort Liability under the Novel Market Share Theory: Sindell v. Abbott Laboratories, Pepperdine Law Review, Volume 8 | Issue 4 Article 4, 5-15-1981.

Before discussing the significance of Sindell with regard to the expansion of manufacturer’s liability, the special nature of DES cases will be noted. Next, both the history and the court’s treatment of each theory of applicable established tort law will also be discussed, in addition to a review of the market share theory, adopted by the Sindell court. Finally, both the advantages and drawbacks of the market share theory, and its potential impact on future cases in the field of products liability will be analyzed.



DES, a synthetic compound of the female hormone estrogen, was approved on an experimental basis in 1947 as a miscarriage preventative. DES was manufactured, promoted, and marketed from 1947 to 1971 by hundreds of drug companies,  including the respondents in Sindell. In 1971, as a result of statistical data showing a significant correlation between the use of DES and the subsequent development of cancer in the daughters of mothers who took the drug during pregnancy, the FDA “banned” the use of the drug for the purpose of preventing miscarriages, because of its danger and ineffectiveness.

Presently, several hundred young women whose mothers ingested DES during pregnancy are suffering from a DES-induced cancer known as clear cell adenocarcinoma. Heretofore a relatively rare form of cancer it is believed to strike after a minimum latent period of 10 to 12 years and generally appears in the vagina, cervix and uterus. The vast majority of DES daughters who have not developed cancer are suffering from other abnormalities, the most prevalent being adenoses.

B. The Facts in Sindell

The appellant, Judith Sindell, filed suit against several drug companies for personal injuries sustained as a result of prenatal exposure to DES. Sindell sued on her own behalf and as representative of a class of other women in California similarly situated. The Sindell case is just one of many actions that has been brought in recent years by DES daughters, most of whom have already developed clear cell adenocarcinoma. Sindell, as a result of DES exposure, developed a malignant bladder tumor which was surgically removed.  She also continues to suffer from adenoses, which requires that she be frequently monitered by biopsy or colposcopy to insure early warning of further malignancy.

Among Sindell’s allegations were that each defendant knew, or should have known, that DES was carcinogenic at the time of its manufacture and sale, and that the defendants acted in concert in the manufacture and promotion of DES for the prevention of miscarriage without adequate testing or warning, and without monitoring or reporting its effects.  Sindell further alleged that each defendant undertook a program to market DES on a “wide-open basis” for the prevention of miscarriage, notwithstanding the fact that it was only conditionally approved by the FDA and that each defendant continued to market DES after learning of its carcinogenic properties. However, in her complaint, and subsequdntly throughout her trial and appeals, Sindell was unable to name a specific manufacturer responsible for her injuries.

The trial court sustained the defendant’s demurrer to the complaint and dismissed the action, primarily because of Sindell’s inability to name the responsible manufacturer. On appeal, the court of appeal reversed the trial court, finding a cause of action under both the alternative liability and concert of action theories. The defendant’s subsequent appeal resulted in the California Supreme Court decision which is the subject of this case note.

C. The Issue Presented

Although many legal issues are involved in DES cases in general, the Sindell court restricted its discussion to the following issue: “May a plaintiff, injured as the result of a drug administered to her mother during pregnancy, who knows the type of drug involved but cannot identify the manufacturer of the precise product, hold liable for her injuries a maker of a drug produced from an identical formula? The California Supreme Court believed public policy required an extension of traditional products liability doctrine to provide for an adequate remedy in such situations. In order to accomplish this extension, the court adopted a novel theory of liability in tort law.

Before discussing the Sindell court’s analysis of this complex legal issue, a brief explanation of the various theories of liability which have permitted plaintiffs to recover despite the inability to name a specific defendant is necessary.


Although DES cases involve several legal problems, such as class action certification, statute of limitations, possible absence of a cause of action for fetal injury prior to viability, and possible absence of a cause of action because the danger of the drug was unknown at the time of manufacture, the Sindell court saw the identification of the manufacturer, or causation issue, as the major problem facing potential plaintiffs.

Because of the significant time lapse between the intake of the DES, the manifestation of the injury, and the time period which elapses before DES is discovered to be the causative agent, most plaintiffs are unable to positively identify the specific manufacturer of the drug ingested by their mothers.

The general rule in tort liability is that the plaintiff has the burden of proof on the issue of causation with the responsibility of showing that his or her injuries were caused by the act of the defendant or by an instrumentality under the defendant’s control. This rule applies whether the injury occurred as the result of an accidental event or from the use of a defective product.

There are several exceptions to this general rule, two of which may be applicable to the Sindell situation. These two exceptions are “concert of action” and “alternative liability. A third basis of liability, “industry-wide” or “enterprise liability, has also been considered in the resolution of DES cases. All of these theories, under certain circumstances, may support a plaintiff’s action even if the responsible defendant is not specifically named or identified, and all were considered as possible solutions by the Sindell court. Thus, each of these theories will be discussed in detail before the adopted “market share” approach is analyzed.

A. Alternative Liability
1. History

The unanimous decision of Summers v. Tice best exemplifies the theory that has been termed double fault and alternative liability. This theory states that, where all defendants behave tortiously, but the plaintiff is unable to identify the specific defendant that causes his or her injury, the burden of proof is shifted to each defendant to show that he is not the responsible party. Where the defendants are unable to meet this burden, joint and several liability results.

In Summers, the plaintiff was injured when two hunters simultaneously and negligently fired their guns in the plaintiff’s direction. The plaintiff could not ascertain which of the defendants actually caused the injury, but the court nevertheless held that both defendants were jointly and severally liable. The Summers court refused to apply the concert of action theory,  by stating that to do so would be straining that concept. The court developed instead the concept of alternative liability, based on the following policy consideration: if the plaintiff is forced to identify the responsible defendant, there is the possibility that the wrong defendant will be identified, conceivably leaving the injured plaintiff without a remedy. Because of this inequitable result, the burden of proof should shift to the defendants, “each to absolve himself if he can.

This rule of alternative liability developed by the Summers court has been adopted by the Second Restatement of Torts. The Restatement notes that the policy underlying the rule is the injustice of permitting proved wrongdoers, who among them have inflicted an injury upon the entirely innocent plaintiff, to escape liability merely because the nature of their conduct and the resulting harm has made it difficult or impossible to prove which of them has caused the harm.

In formulating the alternative liability theory, the Summers court relied upon the celebrated case of Ybarra v. Spangard. In Ybarra, the plaintiff sustained an injury while unconscious during the course of surgery. The court decided that it would be an unfair burden to require the plaintiff to identify the person or persons who caused his injury, because his inability to identify the specific causative factor was a direct result of actions of the defendants. Therefore, the court, by applying the doctrine of res ipsa loquitur found that an inference of negligence had arisen that required the defendants to explain their conduct.

2. Appellant’s Reliance on Alternative Liability

In Sindell, the appellant placed primary reliance on the Summers and Ybarra decisions to show joint or alternative liability on the part of the defendants. For example, the appellant maintained that the Ybarra decision went one step further than that required of the court in a DES case.

In Ybarra the court may have actually shifted the burden of proof to an entirely innocent non-negligent party. Here we are merely asking the court to follow the doctrine elaborated in Summers and shift the burden of proof to a group of defendants, each and every one of which is a negligent cause of the plaintiff’s inability to identify the specific wrongdoer causing inJury.

The appellant also attempted to compare the Summers fact situation to that of the DES-type of injury. For example, the appellant pointed to the fact that the fungible nature of the shotgun pellets in Summers was what made the identification of the responsible defendant virtually impossible. This was analogized to the situation in Sindell, where the fungible nature of the generic drug DES made it difficult to prove without records which respondent caused the harm to the appellant.

In Summers, the conduct which created the impossibility of identification was the simultaneous discharge of the two defendants’ shotguns. However, in Sindell, the appellant argued that the drug companies, by manufacturing the same drug under a variety of trade names, created a situation in which it was unlikely that any identification could be made. The appellant also contended that the tortious character of the respondent’s conduct in failing to warn of, or discover, the dangers of DES was the major reason why all parties failed to keep better records. Thus, the appellant maintained that the DES injury was an even more compelling situation in which to find liability than that found in Summers.

In developing this theory, the plaintiff relied on Haft v’ Lone Palm Hotel. In Haft, multiple defendants were held liable for the drowning of a young boy and his father in the hotel swimming pool despite the absence of proof of causation. The defendants were held to have been liable for negligence in failing to provide a lifeguard as required by law. Even though there were no witnesses to the accident, the Haft court held that the absence of evidence of causation was a direct and foreseeable result of the defendant’s negligence, and on this basis, shifted the burden of proof to the defendants. Similarly, the appellant in Sindell argued that her inability to identify the responsible manufacturer was a direct and foreseeable result of the defendant’s negligence in their failure to warn consumers of the dangers of DES.

3. Sindell Analysis of Alternative Liability

The Sindell court, in response to the respondent’s allegation that the appellant was in a superior position to identify the responsible manufacturer, stated that neither Sindell nor the drug manufacturers were in a better position to bear the burden of proof of identifying the responsible manufacturer.

The respondents argued that the Summers-Ybarra burden of proof rule was predicated on the defendant’s greater access to information, and since this was not the case in Sindell, alternative liability should not be applied. The court rejected this claim, noting that while “Summers states that defendants are ‘ordinarily … in a far better position to offer evidence to determine which one caused the injury’ than a plaintiff,” this is not necessarily a prerequisite to the shifting of the burden of proof. The court believed that the particular circumstances in Sindell, as in most DES cases, made it virtually impossible for either party to identify the specific wrongdoer.

The court then distinguished the appellant’s reliance on Haft. The court stated that the difficulty or impossibility of the identification of the specific responsible DES manufacturer was not, as argued by the appellant, the result of the respondent’s alleged negligent act of failing to provide adequate warning. Rather, in the view of the court, it was a result of the long passage of time between the act, the ingesting and prenatal exposure to DES, and the resulting subsequent development of cancer.

The Summers theory of alternative liability was rejected by the Sindell court for one major reason: the number of joined and unjoined defendants. In Summers, all parties who were or could have been responsible for the harm to the plaintiff were joined as defendants. However, in Sindell, there were approximately 200 drug companies  that might have produced the injury-producing drug that injured the appellant; of these, only five were ultimately joined as defendants.

The court concluded that an application of the Summers rule to Sindell would not be fair to the respondents. The possibility of any of the respondents causing the injury to the appellant was too remote to require each respondent to exonerate itself, especially with the substantial possibility that the actual offending manufacturer might escape liability altogether. Thus, the court refused to apply the Summers theory of alternative liability.

B. Concert of Action
1. History

Concert of action is another theory by which a plaintiff may obtain joint and several liability. A typical illustration is that of an illegal drag race in which a bystander is injured by one of the participants. Suppose A, B, and C enter into such a race, and P is injured by A’s car. Under the concert of action theory, P may sue A, B, C or any combination of the three.

Prosser defined the concert of action rule as follows:

All those who, in pursuance of a common plan or design to commit a tortious act, actively take part in it, or further it by cooperation or request, or who lend aid or encouragement to the wrongdoer, or ratify and adopt his acts done for their benefit, are equally liable with him.

Thus, in the above example, all P need do is show that “each defendant he has joined helped plan and facilitate the race, that the participation of each was tortious, and that his injury resulted from the race. It should be noted that the participants of the race may still be held under the concert of action theory even though they did not expressly agree to participate in it; “all that is required is that there be a tacit understanding. . . . It is also noteworthy that the definition of “joint tortfeasors” with relation to concerted action applies not only to those who act in concert to accomplish some common goal or plan and thereby cause injury, but also to “those who order, direct or permit others to do the act, and who give assistance or encouragement.  This theory of liability is accepted without dispute in California.

Orser v. George, relied on by the appellant in Sindell, explains the rationale for the use of the concert of action theory as a means to establish the element of causation. In Orser, three defendants were engaged in the tortious conduct of firing their guns in the direction of the decedent. Two of the three were alternately firing a pistol which was later determined to be the weapon that killed the decedent. The third defendant was shooting a rifle, which was not the fatal weapon. The trial court granted the third defendant summary judgment on the basis that he met the alternative liability burden of proof in showing that he was not the responsible defendant. The court of appeal reversed on the issue of whether the third defendant’s tortious conduct in firing the rifle in the direction of the decedent had provided the other defendants with the “substantial ‘assistance and encouragement’ necessary for concert of action liability.

Orser effectively demonstrates the distinction and the added element involved in concert of action as opposed to alternative liability. If a defendant can be shown to have joined with others to facilitate an injurious result, it is irrelevant whether or not he can subsequently meet the burden of proof by showing that he was not personally responsible. Under the concert of action theory, the act of joining in or encouraging tortious conduct is in itself tortious.

The close relationship between concert of action and enterprise liability is shown in Hall v. E. I. Du Pont De Nemours & Co., Inc. Hall involved injuries to thirteen children by dynamite blast caps. The evidence of individual manufacturers was destroyed by the explosions. Alleging that the defendants knew that blasting caps were dangerous and agreed among themselves not to put warnings on the labels, the plaintiffs sued the six major manufacturers of blasting caps and the industry’s trade association. Although Hall was not decided on concert of action, the language used by the court forms a basis for the enterprise theory of liability. Accordingly, Hall will be discussed more fully below.

2. The Sindell Analysis of Concert of Action

The court first addressed the appellant’s charge that the respondent’s parallel- or imitative conduct in their testing and promotion, methods was in itself tortious conduct. The court rejected this contention by pointing out that it is common for manufacturers to borrow testing and sales techniques from other manufacturers in the same industry. Thus, the court refused to set any precedent that might “render virtually any manufacturer liable for the defective products of an entire industry. This was the major reason for the court’s rejection of the concert of action theory, since, in the court’s view, its application in this context would have expanded liability much further than had ever been intended.

The court also distinguished the DES cases from prior concert of action cases cited by the appellant. In particular, the court sought to distinguish Orser. The decision in Orser was based on the encouragement and assistance given by one of the alleged tortfeasors to the other. However, there was no allegation made by the appellant in Sindell that each respondent knew of the other’s tortious conduct, or that they assisted and encouraged one another to inadequately test DES and to provide inadequate warnings in the same manner as in Orser. Thus, the theory of concerted action was rejected.

C. Enterprise Liability
1. History

The concept of enterprise liability was first introduced in Hall v. E. I. Du Pont de Nemours & Co., Inc.. Though Hall and its companion cases were decided on other grounds, the court suggested an expansion of the concert of action theory to include corporate entities, and referred to this expansion as “enterprise liability.” In Hall, the defendants had adhered to an industrywide standard with regard to safety design, labelling and manufacture of the blasting caps. Thus, it appeared that the defendants jointly controlled the risk of injury. If shown by the plaintiffs that the caps were manufactured by one of the defendants, the burden of proof would shift to the defendants.

This novel theory of liability was developed and refined by Naomi Sheiner, while a law student at Fordham University for use within the context of DES actions. In DES and a Proposed Theory of Enterprise Liability, Sheiner proposed that enterprise liability “combines the better features of concert of action and alternative liability into one coherent theory. The elements of the theory as outlined in the article are as follows:

  1. Plaintiff is not at fault for his inability to identify the causative agent and such liability is due to the nature of the defendant’s conduct.
  2. A generically similar defective product was manufactured by all the defendants.
  3. Plaintiff’s injury was caused by this product defect.
  4. The defendants owed a duty to the class of which plaintiff was a member.
  5. There is clear and convincing evidence that plaintiff’s injury was caused by the product of some one of the defendants. For example, the joined defendants accounted for a high percentage of such defective products on the market at the time of plaintiff’s injury.
  6. There existed an insufficient, industry-wide standard of safety as to the manufacture of this product.
  7. All defendants were tortfeasors satisfying the requirements of whichever cause of action is proposed: negligence, warranty, or strict liability.

Once the plaintiff proves these seven elements, the burden of proof as to causation shifts to the defendants, each of which can exonerate itself by showing … that its product could not have been the one which injured this particular plaintiff.

Enterprise liability is similar to alternative liability in that it presumes that one of the defendants caused the plaintiff’s injury, and because of the tortious acts of all defendants coupled with the plaintiffs inability to identify the one who caused the injury, the burden is shifted to the defendant to exculpate himself if he is able. Like concert of action, the plaintiff must prove an additional element in enterprise liability, . . . , one that is derived from the concerted activities of the defendants: the presence of an insufficient industry wide safety standard. In addition to the Restatement’s theory of concert of action and the Summers rule of alternative liability, Sheiner, in developing this proposed theory of liability, relied on both Hall and Ybarra for authority.

The primary rationale that Sheiner advances for enterprise liability is the familiar policy generally found in strict liability cases: “That as between the innocent plaintiff and the tortfeasors, the tortfeasors should bear the cost of the injury. Sheiner relies on the policy considerations of the doctrine of respondeat superior and strict liability, which involve a deliberate allocation of risk to those in the best position to take preventative measures and to absorb and distribute foreseeable costs to the public. In particular, reliance is placed on the landmark decision of Escola v. Coca Cola Bottling Co. , which developed the theory of strict liability in response to the scientific and industrial advances of the time. The Sheiner article suggests that it is now time to advance still another, more far-reaching form of liability.

2. Sindell Analysis of Enterprise Liability

The Sindell court rejected the theory of enterprise liability, at least in form. The court distinguished Sindell from Hall by pointing out that in the latter there were only six manufacturers which represented the blasting cap industry in the United States;  there are at least 200 manufacturers of DES, of which only five were named in Sindell. Moreover, in Hall, the defendants jointly controlled the risk of injury through a trade association; however, in Sindell, proof of control of risk would not be shown by such means.

The court also advanced the policy reason that the drug industry, because of its close affiliation with the Food and Drug Administration, should not be held completely responsible for its industry-wide standards, since those standards are dictated by the government. In its analysis, however, the court failed to consider the fact that although the FDA set the standards for the manufacture and distribution of DES, the manufacturers of the drug failed to follow these standards.

Thus, the court rejected, rather summarily, the third theory of liability offered by the appellant. However, as will be seen below, while the court rejected enterprise liability in form, the substance is strikingly similar to the theory of “market share” liability that the court developed sua sponte.


Although the court deemed the three theories of liability advanced by Sindell insufficient to warrant a cause of action, the court nevertheless held that the appellant should not be precluded from recovery. The court stated that the response of the courts can be either to adhere rigidly to prior doctrine, denying recovery to those injured by such products, or to fashion remedies to meet these changing needs. Therefore, based on major policy considerations, the court established a new theory of causation applicable to a limited number of cases.

Primary authority for “market share” liability was Justice Traynor’s landmark concurring opinion in Escola v. Coca Cola Bottling Co. , which over thirty years ago recognized the then traditional standard of negligence as insufficient to govern the obligations owed by the manufacturer to the consumer.  As in Escola, the policy argument that the manufacturer is better able to bear the cost of an injury resulting from a defective product was also stressed by the Sindell court. It was reasoned in Sindell that from a policy standpoint, holding a manufacturer liable for defects in their products and for the failure to warn of harmful effects, even in the absence of proof of causation, would provide an incentive for product safety, since the manufacturer would be in the best position to guard against such defects.

Although the Sindell court rejected the theories of alternative liability, concert of action, and enterprise liability, it nevertheless borrowed heavily from each of these theories in its formulation of “market share” liability. In its rejection of alternative liability and concert of action, the court apparently preferred not to expand either of these established tort doctrines to the extent that would be necessary in the Sindell factual setting. In contrast, enterprise liability, which is more of a proposed theory than an established doctrine, was relied on very heavily by the court in the adopted “market share” theory.

The major difference between the three theories of liability proposed by the appellant and the “market share” theory formulated by the court, is that “market share”, rather than imposing joint and several liability, imposes only several liability on the defendants. Accordingly, no manufacturer may be held liable for 100 percent of the judgment. Instead, “each defendant will be held liable for the proportion of the judgment represented by its share of that market unless it demonstrates that it could not have made the product which caused plaintiffs’ injuries.” Although the court uses the term “market share” to literally mean “the proportion of the judgment represented by [that defendant’s] share of that market, the court did not state exactly how a defendant’s share of the market would be determined.

The court recognized that some discrepancy between the “market share” apportioned to a defendant and the actual liability of that defendant is inevitable, primarily because of the passage of time involved. However, the court likened this problem to the inability of a jury to precisely determine the relation between fault and liability under the doctrines of comparative fault  or partial indemnity. In practice, it would seem that a defendant’s portion of the market would be more easily defined, because of company records of sales and profits, than a particular defendant’s comparative fault in, for example, a multiple-vehicle accident case, which would necessarily be a more subjective determination because of the lack of factual basis.

The other major problem with the “market share” theory, is that all the potential defendants may not be named. The Sindell court concluded, however, that this was not a major obstacle in this case, since the five named respondents represented approximately ninety percent of the entire market. Thus, there was only a ten percent likelihood that the offending producer would escape liability. The court, therefore, gave the appellant the initial burden of joining a “substantial percentage” of the manufacturers in bringing an action based on “market share” liability. However, the court did not determine what constituted a “substantial percentage,” except to state that in the instant case that the appellant met the burden.

Though the court readily acknowledged the above potential procedural and equitable problems with the theory, it viewed these as relatively minor, considering the alternative of leaving the appellant without a remedy. Thus, it appears that the Sindell court, without specifying it as such, facilitated a type of balancing test in its adoption of “market share” recovery; inconsistencies inherent in the determination of a “substantial percentage” or “market share” are outweighed by the necessity of providing innocent plaintiffs’ with an avenue of recovery.


A strong dissent, written by Justice Richardson, began by stating that the ramifications of the “market share” theory adopted by the court were virtually limitless, with the “elimination of the burden of proof as to the identification [of the manufacturer whose drug injured plaintiff imposing] … a liability that would exceed absolute liability. Justice Richardson cited briefly the prevailing authority on tort law, as well as other DES cases in support of this position.

The dissent painstakingly examined the majority’s decision, showing, one by one, the problems inherent in the “market share” theory. First, although the court stated that the requirement of proof is satisfied by joinder of those defendants who have together manufactured a “substantial share” of the market,  it failed to establish a guideline or method of determining what constitutes a “substantial share.  Although the dissent believed that this should have been specifically determined by the court, the dissent did not appear to consider this a major deficiency in the decision compared to the other problems with “market share” recovery.

More significantly, the dissent was concerned with the consequences of what it terms the “unprecedented extension of liability” advanced by the theory. For example, a particular defendant, having a very small share of the relevant market, could “be held proportionately liable even though mathematically it is much more likely than not that it played no role whatever in causing plaintiff’s injuries. This would allow the plaintiff to “pick and choose their targets, with the defendants, who are held to be liable, named according to whatever method the plaintiff chooses, rather than by the possibility or likelihood of liability. While this may be a legitimate concern, it seems more likely that a potential plaintiff unable to identify a responsible defendant would name those companies most readily identified as DES manufacturers, with a corresponding large share of the market, rather than those minor companies who participated in an extremely small portion of the market.

The dissent also pointed out the practical consideration of the disproportionate impact on those manufacturers who are amenable to suit in California, since it is possible that no other state will adopt the market share theory. In this situation, those manufacturers brought to trial in California would be, in effect, jointly responsible for 100 percent of plaintiffs’ injuries although those manufacturers ‘substantial’ aggregate market share may be considerably less.

Finally, the dissent criticized the theory as contrary to the social policy that encourages the development of new pharmaceutical drugs. Justice Richardson reasoned that the decision of liability based on market share would inevitably inhibit, if not the research or development, at least the dissemination of new pharmaceutical drugs. This, he stated, was totally inconsistent with the policy of traditional tort theory as advanced in the Restatement. While Justice Richardson’s view is shared by several authorities, it has been controverted by others.  This conflict of opinion will be discussed more fully below.

The dissent concluded by suggesting, in view of the sweeping possibilities of the market share theory as applied to other areas of business and commercial activity, that this extreme departure from traditional tort law should only be undertaken, if at all, by the legislature.


A. Problems with “Market Share” Liability

Authorities in the field of products liability disagree as to the long-term impact of the Sindell ruling; however, it is generally agreed that the decision, although limited, poses potential procedural problems.

The first apparent problem with the “market share” approach is that all potential defendants need not be named. Only a “substantial share” or percentage of the total possible defendants must be named. This not only raises the practical problem of determining what a “substantial share” of the market is, but also leaves the possibility that the actual tortious manufacturer would not be named. In this situation, the “substantial share” of manufacturers, rather than the responsible tortfeasor, would pay for the plaintiffs injuries.

Although the Sindell court did not believe that this would be a major problem, its failure to give a guideline for determining what is a “substantial share” of a market has created potential problems. The lack of foresight by the court in creating a novel theory of liability without following up on the practical application of the theory has, perhaps unnecessarily, exposed the decision to criticism. A related problem is the failure of the court to explain a method of determining the “market share” of a defendant.

One potential procedural problem not discussed by either the majority or the dissent is whether a finding of “market share” liability may collaterally estop an entire industry from denying liability. Collateral estoppel has recently been ruled a proper pleading vehicle in products liability cases. However, these decisions do not address the possibility of collaterally estopping manufacturers of a generic product who have not personally had their day in court. In view of the generic quality of DES, as well as the limited scope of “market share” applicability, it is doubtful that this issue presents a serious problem.

Apart from the aforementioned procedural problems in Sindell, there are equitable drawbacks inherent in the “market share” theory. One of the most serious of these appears to be the problem with the apportionment of damages. For example, in cases where the plaintiff cannot name the responsible defendant, such as was the situation in Sindell, “market share” liability will be evoked. However, in those cases where the plaintiff is able to name the responsible manufacturer that caused her injuries, it is assumed that the plaintiff will retain the burden of proof as to the single defendant, rather than naming several defendants and proceeding under a “market share” theory For example, in case 1, if the plaintiff is able to identify a specific responsible manufacturer, the plaintiff will retain the burden of proof, with the single defendant paying 100 percent of the judgment. However, in case 2, if the plaintiff is unable to name the responsible manufacturer, she will name several and proceed on the basis of “market share” liability. If one manufacturer is named in both case 1 and case 2, that manufacturer-defendant will be forced to pay 100 percent of one judgment and a market share percentage in another. Thus, this combined liability will force that one manufacturer-defendant to bear a much greater burden than its actual market share.

As pointed out by the dissent, the above example would particularly become a problem if jurisdictions other than California fail to adopt the “market share” theory as advanced by the Sindell court. In this situation, those manufacturers more amenable to suit in California would be held to a disproportionate share of damages.

The final major problem with the “market share” theory is the concern that the pharmaceutical industry may be undermined by, in effect, making it the insurer of all defective drugs of uncertain origin.  Critics of the Sindell decision believe, as was stated in the dissent, that the theory will inhibit the dissemination of drugs, which is contrary to the public policy considerations advanced in the Restatement. A close look at the wording of the Restatement cited by the dissent, however, will show that these policy considerations do not apply to the facts of the Sindell case.

The Restatement states that public policy justifies the use of new or experimental drugs, despite medically recognizable risks, and that the manufacturer of such a drug will not be held strictly liable for subsequent injuries caused by the drug. However, this applies to manufacturers who are held strictly liable, and only applies when the drug is properly prepared and marketed, and proper warning given.  In contrast, Sindell sued the various respondents for their negligence in failing to properly market, test, and warn of the inherent dangers in the use of DES.

Therefore, it appears that the Sindell court, rather than holding the drug industry liable for all injuries that occur as a result of a drug previously thought to be safe, has only suggested that those manufacturers who are shown to have been negligent in their marketing or testing of a drug should be held liable for the consequences of their negligent acts. Rather than discouraging the dissemination of modern drugs, this policy should serve to encourage their safe testing, marketing, and utilization.

B. Benefits of “Market Share” Liability

The major advantage of “market share” liability is the equitable policy repeated throughout the Sindell decision. It is “preferable to hold liable a negligent defendant who did not in fact cause the injury than to deny an innocent plaintiff a remedy when it cannot be determined which of the defendants is responsible for the harm but it appears that one of them was.” This same general policy is the basis for virtually all of the major advances in the field of products liability in recent years.

Sindell was innocent of any wrongdoing, yet suffered serious injury. Although she could not name the manufacturer that produced the DES that caused her specific injury, she named several manufacturers, and alleged that all of them negligently produced the carcinogenic drug. If the Sindell court had not allowed the appellant to maintain her action, the result would have been that the victims of DES would have borne the cost of their injuries while the tortious manufacturers would have avoided liability. As has been stated so often by the courts, the cost of these injuries is much better borne by the manufacturers, who have the potential to guard against such dangers, than by the innocent victims of their mistakes.

C. The Potential Application of “Market Share”

It is clear that California’s “market share” apportionment theory is affecting almost immediately other DES cases pending in other courts. For example, in May of 1980, only one month after the Sindell ruling, a Cleveland woman settled out of court with four separate DES manufacturers for a total of two million dollars. This immediate result is not unexpected. After the Sindell decision,  one defense attorney involved in DES litigation stated that “the Sindell case is a major victory for the plaintiffs’ bar. Especially since California traditionally is in the vanguard of tort litigation, Sindell might represent a watershed in terms of a trend for the future. This seems to be the general consensus among both plaintiff and defense attorneys,  especially since the United States Supreme Court has denied the writ of certiorari sought by the Sindell respondents.

If, as is expected, the Sindell decision sparks a rash of suits based on “market share” liability, it may be advantageous for the drug companies to unite, develop a proportional scheme based on the market, and begin to organize efficient and expeditious settlements with DES plaintiffs.  Although this type of organization would be enormously expensive and administratively complicated, it would be beneficial to all parties in the long run. A plaintiff would be compensated sooner, and although she would possibly receive a lesser amount of recovery, the legal entangelments of lengthy litigation would be avoided. The defendants, although forced to pay damages in all cases, would save tremendous litigation expenses. This will especially be true if other jurisdictions follow the lead of Sindell, since without the necessity of the plaintiff identifying a specific defendant, defense verdicts would be rare. Finally, the advantage of mass settlement and avoidance of unnecessary and protracted litigation would be beneficial in promoting judicial efficiency by helping to alleviate the existing court backlogs around the country.

In regard to the further application of Sindell to other areas of tort litigation, the repercussions will be necessarily minimal because of the relatively few types of products liability cases that involve serious problems of defendant identification. The Sindell court limited itself in its application of “market share” liability to only cases where a plaintiff has an identification problem due to the generic quality of the product causing the injury. The court further limited the theory by applying it, as an element of causation, only in those cases where the manufacturer is negligent. Thus, the far-reaching impact feared by the critics of Sindell is unlikely to occur.

However, in those few cases that involve the type of identification problems found in DES cases, the application of the “market share” theory will be almost immediate. The most obvious of these cases are the more than 6,000 asbestos cases that are pending around the country.  The asbestos cases involve the factually analogous problem of a construction worker attempting to prove not only the identity of each of his employers during the twenty to thirty years of asbestos exposure, but also which manufacturer produced the asbestos products that were purchased by or on behalf of those employers over such period of time. This identity problem, similar to the DES cases, would without a “market share” type of approach preclude any remedy.  Like DES cases, asbestos litigation is similarly causing court backlogs throughout the country. Therefore, the judicial system, faced with such a problem, may welcome expeditious approaches to the resolution of these cases as well.


It is clear that Sindell is a substantial expansion of products liability law. It is equally clear that this expansion is necessary to meet the changing needs of society. It has been said that the life of the law is a response to human needs. The Sindell court, in developing the “market share” theory of liability, has expanded the law to adapt to the expansion of technology and industry in today’s advancing society.

Far from stifling the drug industry, the “market share” theory should encourage more responsible testing and care in the development of modern drugs. The Sindell decision does not call for the pharmaceutical industry’s guarantee of fool-proof drugs, rather, it calls for a responsible attitude in their development.

This decision also avails the courts of an expeditious approach to relieve court backlogs in cases where the liability is clear but proof of causation as to a specific manufacturer is not. This decision should be a welcome answer to a practical problem felt by many members of the legal profession in eliminating expensive, time-consuming, and unnecessary litigation.

In conclusion, although some problems exist in the “market share” theory of liability the benefits to be gained from its adoption greatly outweigh any disadvantages. The inequities in the decision are limited to those manufacturers responsible of innocent plaintiffs.

N. Denise Taylor, 1981.

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More DES DiEthylStilbestrol Resources

The Relevancy of Drug Efficacy Evidence in Strict Liability Actions


Diethylstilbestrol (DES), a synthetic estrogen widely prescribed in the past for the prevention of miscarriage is currently the subject of much drug litigation. The association between clear-cell adenocarcinoma of the vagina in young females, a rare cancer which was virtually unknown before the use of DES, and prenatal exposure to DES is firmly established. It is estimated that in the female DES-exposed population, four in one thousand women will develop clear-cell adenocarcinoma. Almost fifty deaths have resulted from prenatal exposure to DES.

The Relevancy of Drug Efficacy Evidence in Strict Liability Actions: Needham v. White Laboratories,
Inc, The John Marshall Law Review, Volume 14 | Issue 3 Article 2, Summer 1981.

DES daughters, and DES sons as well, suffer from a variety of maladies which presently are considered benign, but are suspected to be precancerous. For example, it is estimated that adenosis, the abnormal presence of benign glandular tissue in the vagina, occurs in eighty to ninety percent of the female population exposed in utero to DES, yet adenosis is found histologically in over ninety-seven percent of DES daughters who have adenocarcinoma of the vagina.  DES daughters also may develop various abnormalities of the cervix. Recent research reveals that a number of DES sons also suffer from abnormalities which may result in sterility, and a preliminary study suggests the need for research on whether in utero DES exposure may be associated with a risk for testicular cancer.

DES mothers, also, are subject to an increased risk of endometrial cancer. In addition, a recent follow-up study of DES mothers shows that they have an increased risk of breast cancer. Researchers’ views differ as to the significance of this increase, however, animal studies demonstrate that estrogen increases the frequency of carcinomas of the breast, cervix, vagina, kidney, and liver.

DES daughters have instituted a number of legal actions against drug manufacturers. DES mothers who were unknowing participants in a 1953 study to determine the effectiveness of DES are litigating a class action suit against the University of Chicago Lying-in Hospital and Eli Lilly Company. At least one suit has been filed by a DES son who is suffering from testicular cancer.

DES litigation has fostered the articulation of new theory, as well as the creative application of established theory, in the area of tort law. The majority of the decisions favor DES defendants. The recent decision of the Seventh Circuit in Needham v. White Laboratories, Inc., reversing a jury’s determination of drug manufacturer liability, deals a drastic blow to drug injured plaintiffs seeking to hold drug manufacturers strictly liable in tort. The reversal is significant because Needham is the first appellate reversal of a DES plaintiff’s jury verdict and its impact on drug litigation is far reaching. This article will analyze the Needham decision within the context of strict liability principles appropriate to the drug industry.

Needham v. White Laboratories, Inc.

Plaintiff Needham’s mother ingested dienestrol, a synthetic estrogen similar to DES, while she was pregnant with the plain- tiff. At the age of twenty, plaintiff discovered she had the rare clear-cell adenocarcinoma of the vagina, which made surgical removal of all her reproductive organs necessary. Plaintiff sued White Laboratories, the manufacturer of dienestrol, on theories of negligence, strict liability in tort, and fraud and deceit. Plaintiff’s strict liability claim was based on two theories: failure to properly warn of the risk of cancer from exposure to dienestrol; and production of a drug which was defective in that it was useless and unreasonably dangerous in the treatment of threatened or habitual abortion. Plaintiff’s two theories of negligence were based on defendant’s failure to test dienestrol in accordance with 1952 medical research standards and to warn of its dangers.

Before instructions were given to the Needham jury, the Illinois Supreme Court held in Woodill v. Parke Davis Co , that a manufacturer is strictly liable for failure to warn of a risk of injury if the manufacturer knew or should have known of the product’s danger. The Woodill majority asserted that it was not imposing a negligence standard. Although a knowledge requirement injects an element of fault which, in theory, is absent in strict liability, in the court’s view, failure to warn based on strict liability remains separate and distinct from failure to warn based on negligence. The court did not clearly define this difference; however, given its extensive reliance on comment k to section 402A of the Restatement (Second) of Torts,  it seems reasonable to presume that the comment may provide an explanation.

Comment k and Evidence of Efficacy

The comment k exception to strict liability is created for unavoidably unsafe products, and it applies particularly to drugs, which in the present state of human knowledge, are quite incapable of being made safe for their intended and ordinary use. The sale of such products may be justified, provided a warning is given when necessary, because the benefit of using the product appears to outweigh the attendant risk.

Relying on both Woodill and the comment k strict liability exception for unavoidably unsafe products, the district court in Needham allowed plaintiff to present evidence of dienestrol’s ineffectiveness to counter defendant’s reliance on the comment k exception to strict liability. The district court reasoned that if comment k did not apply because the sale of dienestrol was not justifled–i.e., it had no apparent usefulness to outweigh any risk of harm-then the defendant could be liable for marketing the drug even if the plaintiff could not prove the defendant knew it was dangerous and yet failed to give a warning. The relevant issue would be whether defendant knew or should have known that the drug was ineffective or not apparently useful, not whether defendant knew it was dangerous. The district court also noted that evidence of dienestrol’s ineffectiveness was relevant to plaintiff’s alternate theory of strict liability that dienestrol was defective and unreasonably dangerous because it was ineffective and caused cancer.  The essence of this alternate theory is that dienestrol was not fit for its intended use.

The Seventh Circuit’s View

The jury returned a general verdict against the defendant and assessed damages of $800,000.  On appeal, the Seventh Circuit reversed and remanded for a new trial, holding that evidence of dienestrol’s effectiveness or ineffectiveness was irrelevant and prejudicial. The court’s decision was premised on the notion that Illinois recognizes two types of strict liability drug actions involving warnings which are set forth in comments j and k to section 402A: complete failure to give a warning; and failure to give an adequate warning. In the Seventh Circuit’s view, comment k contemplates only the latter instance in which some warning is given but is inadequate. Here, a manufacturer is entitled to comment k protection only if the product’s benefits outweigh its risks. If no warning at all is given, comment j governs the action. The court reasoned that efficacy evidence is relevant only in a comment k case because, in that instance, the drug’s benefits must be balanced against its risks. In a comment j case, where no warning is given, efficacy evidence is irrelevant, according to the court, because the manufacturer’s liability turns on whether it had knowledge of the risk about which it failed to warn. Concluding that the defendant in Needham failed to give a warning of the risk of cancer from ingesting its product, the circuit court held that comment j governed, and evidence of dienestrol’s ineffectiveness was therefore irrelevant and prejudicial to the defendant. The court also asserted that Illinois law did not support plaintiff’s alternate theory of strict liability, and accordingly efficacy evidence was not relevant to this theory.

The court’s decision rests on an erroneous interpretation of Woodill. The court characterized Woodill as a comment j case and announced flatly that Illinois had not yet decided a comment k case. In fact, comments j and k may be read together for the purpose of determining whether any given case should be governed by a strict liability standard. Thus, in actions against the manufacturers of concededly beneficial drugs, liability must be premised on defendant’s knowledge of the risk of injury. These cases, unlike Needham, have not involved a challenge to the claimed benefits of the drug. In the absence of such a challenge, an initial presumption that benefits outweigh risks is made. Once this presumption is made, the manufacturer’s liability for failure to warn, under comment k, turns on whether the drug is properly prepared and accompanied by warnings of known dangers. If the drug is accompanied by a warning of known risks of injury and is properly prepared, the manufacturer is not liable for harm caused by its dangerous product. If, on the other hand, the manufacturer knows or should know of the drug’s risks, and fails either to warn or to properly prepare the drug, the drug is considered to be unreasonably dangerous and the manufacturer is liable for harm caused.

Where the assumption that a drug is beneficial is challenged, as in Needham, the court must initially determine whether or not the drug’s usefulness is outweighed by its risks. Efficacy evidence is crucial to this determination. If the drug’s risks outweigh its usefulness, the manufacturer will be liable for its unreasonably dangerous product irrespective of its ignorance of the risk of injury.

The Seventh Circuit failed to note that Illinois courts had never been confronted with a strict liability, failure to warn action involving a challenge to the drug’s usefulness. Whether comment k protection from strict liability should be extended to such a case had never been called into question. Comment k imposes a knowledge of risk requirement for failure to warn cases which involve beneficial drugs. Thus, comment k expresses a policy of not imposing strict-where knowledge is irrelevant-liability where a manufacturer has undertaken to supply the public with a useful drug. Where, however, the drug manufacturer has not marketed a useful drug, the rationale for protecting the manufacturer from strict liability is absent. Public policy negates the argument that comment k protection may be invoked before it is established that defendant marketed a relatively beneficial drug. But for the principal case, no Illinois precedent would support such an expansive interpretation of comment k.


High Profits; Few Losses

An understanding of the nature of the drug industry is essential to understanding the legal, factual, and policy issues that the Needham cases raises. The drug industry has been described as one of both high profits and high returns. During congressional hearings in 1972, the drug industry was characterized as practically unique in that 1osses or even low profits, are virtually unheard of among larger companies. Although drug companies attempt to justify high profits by pointing to the extreme risks inherent in the development of new drugs, critics note that if extreme risks justify high profits, one would expect to see “occasional losses” by some firms instead of “consistently high industrywide profits.

The fear that imposing strict liability on the sellers of drugs would result in depriving consumers of essential drugs, has little basis in reality. One commentator has argued that this fear should not shape the development of strict liability law in the absence of substantial empirical supporting data showing that the profit margin in the drug industry is so low that the industry could not bear the cost of compensation for the injuries it produces. This argument is especially persuasive when the industry produces, promotes, and obtains large profits from a drug like DES, whose efficacy and concommitant benefits are questionable, and which is also capable of causing serious injury. Such products are particularly appropriate subjects for strict liability.

“Me Too” Practices

Another unusual feature of the drug industry is the “me too” practice of developing new drugs. “Me too” drugs are typically made by slightly deviating from the molecular make-up of an already marketed drug. Molecular manipulation is of no significant therapeutic value. The practice does, however, enable a manufacturer to market a theoretically “new” drug without violating a patent or obtaining a licensing agreement from the manufacturer who invented the original product. Thus, drug companies expend considerable research money to develop drugs which vary only slightly from the original product.

The result is a proliferation of company trade names for essentially one product. The Health, Education and Welfare (HEW) task force on prescription drugs determined that important new chemical entities represent only a fraction, perhaps 10-20%, of all new products introduced each year, while the remainder consist merely of minor modifications of combination products. The task force concluded that many of the drug industry’s research and development activities would appear to provide only minor contributions to medical progress. A more important concern, especially in the case of DES-related products, is that a single defect in the original drug may be common to all similar products subsequently manufactured.

DES, dienestrol, and related DES products are poignant examples of drug industry “me too” practices. DES was unpatented by its original inventor. In 1941, twelve drug companies submitted a joint clinical file to the Food and Drug Administration (FDA) as part of their New Drug Application (NDA) request for permission to market DES. These companies also agreed on common chemical standards, uniform labeling, and product literature for the drug to be manufactured by each of them. The companies did not request permission to market DES to prevent threatened or habitual abortion until 1947.

In 1946, White Laboratories obtained permission to market dienestrol for the same use as DES.64 DES and dienestrol are virtually identical in action and toxicity; dienestrol, specifically marketed to be competitive with DES, was described by the former medical director of White Laboratories as a “me too” drug.

In 1948, a year after other companies received permission to market DES for use in the treatment of threatened abortion, White Laboratories submitted a supplemental NDA requesting permission to market dienestrol for the same use in pregnancy. Its intent in marketing dienestrol was to compete with DES; dienestrol had no advantages over DES for use in pregnant women. Moreover, when White Laboratories requested permission to market dienestrol, it did no independent testing of dienestrol’s safety in pregnant women or their offspring. The supplemental NDA contained only two summaries of case reports by two different doctors to show that dienestrol would do what White Laboratories claimed it could do-prevent habitual or threatened abortion. These case reports were characterized by two eminent researchers as grossly inadequate demonstrations of these claims.

The FDA Then and Now

White Laboratories argued that FDA approval of dienestrol absolved the company of responsibility for failure to test dienestrol adequately before marketing it. While some authority exists for this proposition, most courts have held that FDA approval does not discharge the obligation of the drug manufacturer to test adequately for and warn of its product’s risks of danger.

The premise underlying the argument that FDA regulations define only minimal standards, may well be an accurate assessment of the FDA’s role in the 1950s and today. Prior to 1962, a drug manufacturer’s NDA was automatically approved if the FDA did not object to the marketing of the drug. While the FDA must now act positively to approve a drug for marketing, it still only reviews a report of data provided by the drug manufacturer. The FDA does not test the drug independently, and the drug manufacturer, consequently, has complete control over what data is submitted. While the FDA may refuse to approve of a drug until a manufacturer performs additional tests, the ultimate responsibility for providing the clinical data upon which the agency will make its final determination rests with the party who has the greatest interest in a favorable response.

Data submitted by drug manufacturers has often been criticized by the FDA as scientifically inadequate; some has even been shown to be fraudulently concealed or rigged. Clinical investigators hired by drug companies to investigate their drugs have also been criticized as tending to skew data in favor of their employers. Many articles extolling a drug’s virtues or minimizing its harmful effects, which are published in respectable medical journals, have been sponsored by the drug company that manufactured the drug. A substantial number of these articles have been written within the confines of the pharmaceutical houses concerned. Moreover, medical journals rely on drug advertising as a major source of financing. Some medical journals which, by virtue of their ownership, are captives of certain drug houses, have printed inaccurate articles on the miraculous effects of new drugs. Once a drug has been authenticated by publication, the drug manufacturer cites the article as authority for its advertising claims.

Promotional Practices

Not only is the FDA dependent upon drug manufacturers for information about their drugs, but the prescribing physician also relies on the drug manufacturer for information about a drug’s safety and instructions for use. Medical practitioners simply cannot keep abreast of numerous medical articles, scattered in hundreds of journals, on each new drug which appears on the market. Consequently, doctors rely on product information supplied by the drug companies through advertising in drug brochures and medical journals, and detail men who personally visit a doctor to promote a specific drug.


The proliferation of “me too” drugs, each with its own brand name, makes advertising the important variable in the fight for increased sales. Drug companies spend enormous amounts of money to influence a doctor’s choice of a brand name drug. A brand name often is easier to remember than the more complex generic name. Drug manufacturers inundate doctors daily with a “torrent of new drug advertising” which is “confusing” and “misleading.” Frequently, warnings appearing in a brochure about drug side effects are tucked neatly away behind a “stream of literature which extols the claimed virtues of the drug so glowingly that it takes attention away from the hazards of the drug. The physician simply is “bombarded with seductive advertising which fails to tell the truth;” which often misleads him or her to prescribe a new drug without adequate information about possible side effects and without any “solid clinical evidence that the drug is effective or even as safe as the advertisers claim.”

The advertising practices of DES manufacturers are subject to these criticisms. Claims of DES’s safety and effectiveness in the treatment of threatened and habitual abortion abounded in advertisements within reputable medical journals. Some advertisements recommended DES as a routine prophylaxis in all pregnancies.

Detail Men

Since drug manufacturers daily send physicians more drug information than they can possibly read or remember, physicians rely on detail men for drug information.  Detail men frequently minimize their product’s dangers while emphasizing its effectiveness and wide acceptance.  This practice has resulted in drug manufacturer liability despite a printed warning.

White Laboratories utilized detail men to distribute a brochure to doctors about dienestrol’s indicated use. The brochure was a promotional effort which White Laboratories knew would be relied upon by doctors. The distribution was a form of salesmanship,  and the dienestrol brochure was the product information provided to doctors. This brochure only contained references to studies and a personal communication which reported estrogen to be an effective method of preventing accidents of pregnancy. Although the medical director and management of White Laboratories were aware of studies which indicated that DES had no value in preventing threatened abortion and studies which demonstrated that estrogens caused cancer and fetal abnormalities, these studies were not included in the dienestrol brochure. Although a statement that use of estrogen was considered investigational was included, any reference to risk was omitted.


DES As a Carcinogen

At trial, plaintiff presented “extensive evidence describing studies prior to 1952” which suggested a causal relationship between synthetic estrogen and cancer in animals. Dr. Michael Shimkin, “one of the earliest and still among the most eminent researchers in the field,” testified that by 1940 the scientific community viewed the eventual demonstration of synthetic estrogen’s carcinogenic effects in humans to be a “lead pipe cinch.” In his view, any drug manufacturer should have been aware of this. Dr. Shimkin also described in extensive detail several pre-1952 studies which demonstrated that the introduction of estrogen into the system of a pregnant animal could affect her offspring, and that the introduction of other carcinogens into the system of a pregnant animal could cause cancer in the offspring. Dr. Shimkin concluded that, in 1952, any drug firm planning to market a drug like dienestrol for use in pregnant women should have viewed animal testing for intergenerational effects as essential. The drug company also should have warned of the risk of cancer in 1952.

Dr. Neary, White Laboratories’ medical director at the time dienestrol was marketed, testified that it was “standard practice” when dealing with a new drug to consider publications on both clinical use of the drug and animal experimentation with the drug.110 At the time dienestrol was marketed, Dr. Neary was familiar with a 1940 study which revealed abnormalities in male and female offspring of female rats injected with estrogen. He acknowledged that estrogens had been shown to induce tumor formation in animals. He also knew, at that time, of a warning issued by the editors of the Canadian Medical Journal that since synthetic estrogens were chemically related to some carcinogenic substances, notably coal tar, a warning was justified on purely theoretical grounds.

In 1948, a doctor who was later employed by White Laboratories had written that endometrial hyperplasia in humans could be considered a precancerous lesion. Dr. Neary acknowledged that endometrial hyperplasia was an expected pharmacological effect of estrogen use. He also admitted that he knew the tissue of the developing fetus was more susceptible than adult tissue to carcinogenic transformation. Yet, prior to marketing dienestrol for use in pregnant women, Dr. Neary did not commission any research to determine whether estrogens caused cancer in the mother or the child.

At trial, and on appeal, White Laboratories disputed the importance and applicability of animal studies to the human experience and argued that these studies could not provide notice of the need for human testing. Dr. Shimkin, however, was “unequivocal” in his assertions that the animal studies were known at that time to indicate potential danger to humans. Although Dr. Neary recognized the relevance of animal research to certain aspects of new drug development, he believed that the application of animal studies to human beings was controversial. 121 Consequently, prior to marketing dienestrol for use in pregnant women, the management of White Laboratories consciously decided not to do any testing to determine whether dienestrol was safe for use in human beings.

The district court’s ruling in Needham which upheld the evidentiary use of animal studies to show knowledge of a risk of injury in humans was correct. In other drug cases, courts have considered the results of animal tests which revealed injuries similar to but not the same as the injuries sustained by a plaintiff to be evidence of knowledge or notice of the risk of injury which required a warning about that risk. A manufacturer is deemed to constructively know the results which testing and inspection of its product could have revealed.  Courts accordingly have based liability on inadequate testing, together with failure to warn.  It hardly seems fair to the consuming public to allow a drug manufacturer which has failed to test its product to escape liability for failure to warn about dangers which could have been discovered by adequate testing. “The claim that a hazard was not foreseen is not available” to a drug manufacturer who does not “use foresight appropriate to his enterprise.”

Risks versus Benefits: Dienestrol as an Ineffective Therapeutic Agent
Standards for Testing Drugs

Dr. Shimkin testified that recognized testing methods existed in 1948 to determine drug safety and efficacy.  He identified the principle method of scientific testing as the controlled experiment, which scientists viewed as an important means to eliminate bias. Controlled experiments were considered essential to evaluate the ability of estrogen to prevent threatened abortion because pregnancy is affected by many factors, such as diet and psychological state. Consequently, it would be imperative to design a study which would control for these factors by treating all research subjects in the same manner. Use of a placebo in the nonmedicated group compared to use of the experimental drug in the medicated group is an example of such a control. The paradigm of controlled experiments, and the most favored testing method in 1952, is the double blind study in which neither the researcher nor the research subject knows whether the drug given is a placebo or a real drug-in all respects both groups being compared are treated and evaluated in the same manner.

Claims of Effectiveness from Poorly Controlled Studies

Articles published by Drs. Olive and George Smith in the late 1940s were primarily responsible for the belief that DES would reduce the incidence of threatened abortion. The Smiths theorized that a lack of the hormone progesterone caused early termination of pregnancy, and that DES could stimulate production of progesterone, thereby preventing abortion. Other scientists severely criticized both the theory that reduced progesterone caused abortion, and the method that the Smiths used to measure the efficacy of DES and its alleged progesterone stimulating qualities. As early as 1949, the Smiths were severely criticized for lack of adequate controls, and controlled studies performed in the early 1950s refuted the Smiths’ claims of DES effectiveness in preventing threatened abortion.

White Laboratories’ Decision to Market Dienestrol to Treat Threatened Abortion

The medical director of White Laboratories, Dr. Neary, relied on the Smiths’ articles to establish DES effectiveness in the treatment of threatened abortion.  Before submitting the supplemental NDA to the FDA, Dr. Neary reviewed the published material concerning the use of estrogen in experimental animals and humans. He knew that the usefulness of DES in treating threatened abortion was controversial, and he informed the management of White Laboratories of this controversy.  The supplemental NDA, however, did not list any publication which indicated that the use of DES was controversial.

In a letter to White Laboratories, the American Medical Association questioned the effectiveness of dienestrol and criticized the NDA data as “completely uncontrolled,” resulting in “obscure” criteria for the use of estrogen in treating threatened abortion. Nevertheless, Dr. Neary failed to conduct further tests to determine the effectiveness of dienestrol. He did inform management of two studies indicating that DES was of no value and a “dismal failure” in preventing threatened abortion, and also told management that pregnant animals treated with estrogen had aborted. These facts, however, were not included in the supplemental NDA or the product information brochure, although White Laboratories and Dr. Neary knew that doctors would rely on the brochure to determine dosage and instructions for use.

Dr. Albert Schmitt, an obstetrician who has done extensive work with DES-related problems, described these reports as “inadequate testing,” and also characterized as irresponsible the Smiths’ suggested hundredfold increase in dosage for pregnant women. Both Dr. Schmitt and Dr. Shimkin criticized White Laboratories’ reliance on the Smiths’ articles to determine dienestrol’s safety and efficacy in the treatment of threatened abortion: a review of articles which favored estrogen use in pregnant women and which were of questionable authority because of poor testing methodology was unacceptable premarketing practice. In Dr. Shimkin’s view, more premarket testing of dienestrol was required because estrogens were well known to be carcinogenic.


The District Court’s Ruling in Needham
Comment k

Before determining when the comment k exception to strict liability applies, it is necessary to examine the products to which it applies. By its terms, comment k covers “unavoidably unsafe products;” those products which, “in the present state of human knowledge,” are incapable of being made safe for their ordinary and intended use. Unavoidably unsafe products are especially common in the field of drugs.

Comment k separates drugs into three categories.

  1. An example of the first category is the rabies vaccine. Because it prevents death, marketing and use of the vaccine are “fullyustified” despite the high degree of risk which the vaccine itself presents.
  2. In the second category are drugs which cannot legally be sold except to a physician or under prescription of a physician.
  3. The third category consists of new or experimental drugs in which, because of “insufficient time and opportunity for medical experience,” there can be no assurance of safety.

The seller of these three types of products is not to be held strictly liable in tort simply because the seller has undertaken to supply the public with an apparently useful and desirable product, as long as the product is accompanied by proper directions and warnings and is properly prepared.

Comment k, accordingly, has been referred to as an “exception” to strict liability which applies to the sellers of “established” but unavoidably unsafe, and new or experimental drugs. The obvious intent of comment k is to preclude drugs and other inherently dangerous products from being characterized as defective merely because of their inherently dangerous features. Consequently, when a plaintiff sues a drug manufacturer for strict liability in tort for failure to warn of a risk of injury from a drug, the courts and commentators assume that a drug is an unavoidably unsafe product which must be analyzed according to the provisions of comment k. This assumption accurately perceives that all drugs involve some risk of danger, and hence are unavoidably unsafe.

The district court in Needham, therefore, was correct in assuming that dienestrol was an unavoidably unsafe product which should be analyzed within the comment k framework. White Laboratories’ defense throughout the trial was that dienestrol was a new or investigational drug, the dangers of which were unknown in 1952 when plaintiff was exposed to it. If this were true, and if dienestrol were an apparently useful and desirable drug, White Laboratories could escape liability for failure to warn of the danger since it did warn that dienestrol was an investigational drug. If the defendant did know of the risk of harm, the jury could determine that this warning was inadequate.

The district court also properly construed comment k as interpreted by the Illinois Supreme Court in Woodill v. Parke Davis. In that case the court held that when a plaintiff sues a drug manufacturer based on strict liability in tort for failure to warn of a danger the plaintiff must, in accordance with comments j  and k, plead and prove that the manufacturer knew or should have known of the risk inherent in the drug. Thus, a drug manufacturer in Illinois cannot be held strictly liable for failure to warn of a risk unless liability can also be based on negligent failure to warn, that is, unless the evidence would support a finding that the seller should have foreseen the danger.

The Woodill decision, however, did not involve a challenge to the drug’s usefulness and the manufacturer’s decision to market it was tacitly assumed to be reasonable despite the attendant risk. Consequently, the comment k knowledge standard was properly applied. Comment k does not, however, limit drug manufacturer liability under all conditions. The protection from strict liability afforded by comment k might be lost if a drug that offered no substantial benefit caused an injury, even if the injury were not foreseeable.  Such a drug would be considered unreasonably dangerous as marketed or unreasonably dangerous per se.

To determine whether a drug provides a substantial benefit, and therefore comes within the comment k exception to strict liability, the drug’s benefits or apparent usefulness and desirability must be weighed against its risks. If the “risk/benefit” analysis under comment k renders a product unreasonably dangerous, sale of the drug results in strict liability regardless of the manufacturer’s ignorance of the dangers.  Where a seller has marketed an apparently useless drug, the reason for the comment k exception-to give sellers of drugs an incentive to continue producing useful and beneficial drugs-is not present. The seller of such a product should not be entitled to greater protection than the seller of a product which has a manufacturing defect. Society’s interests are not served if an unavoidably unsafe product has a high degree of risk and an occasional or nonexistent benefit, yet enjoys insulation from strict liability in tort despite its predominantly detrimental effects. This is the reason the comment k exception to strict liability requires a predominant character of usefulness-and beneficiality.

Strict liability in tort is particularly appropriate where this beneficial character is lacking in a drug. The drug industry is highly competitive; new drugs must be produced to ensure a drug company’s continued existence.  The potential profits from a commercially successful new drug are enormous. In an economic sense then, strict liability is justified by the manufacturer’s superior ability to absorb the costs of minimizing risks and ensuring drug efficacy. Although production of safe and useful drugs can only be accomplished through more extensive testing, which would increase the price of drugs, consumers directly benefit from the availability of a drug whose benefits far outweigh its risks, and from escaping exposure to drugs which are ineffective and dangerous. The possibility of strict liability may provide drug manufacturers with an incentive to market drugs which are effective and beneficial as well as profitable. It may also encourage drug companies to divert a portion of their huge advertising and promotion budgets to researching and testing of their products.

It is readily apparent that the risk/benefit analysis required under comment k to determine whether a product’s marketing was justified, necessitates evidence of the product’s efficacy or lack of efficacy. When the efficacy of a drug is manifestly outweighed by its risks, or is nonexistent, proof of fault-knowledge of a risk of injury and failure to warn-is unnecessary to a finding of liability.

In Needham, the district court ruled that evidence of dienestrol’s lack of efficacy was relevant. A pretrial ruling noted that drugs are commonly considered unavoidably unsafe products under comment k. Citing the language of comment k, the district court noted that such products are not unreasonably dangerous, and therefore do not come within the purview of strict liability, if they are properly prepared and accompanied by directions and warnings:

The seller of unavoidably unsafe products, again with the qualification that they are properly prepared and marketed and a proper warning is given, where the situation calls for it, is not to be held to strict liability for the unfortunate consequences attending their use, merely because he has undertaken to supply the public with an apparently useful and desirable product, attended with a known but apparently reasonable risk.

The district court interpreted this language to mean conversely that strict liability may be imposed upon a manufacturer, irrespective of warnings, if the product at the time of marketing was not apparently useful. Accordingly, evidence of efficacy was relevant to determine whether or not dienestrol was apparently useful when marketed. The precise question to be addressed, in the court’s view, was whether there were sufficient technological experience and testing standards in 1952 to justify the marketing and use of dienestrol. The issue to be resolved was not whether dienestrol was actually useful, but whether dienestrol was apparently useful.

In later opinions, the district court affirmed its ruling that evidence of dienestrol’s ineffectiveness was relevant to foreclose reliance on the lack of knowledge defense provided by comment k. If there was no reason to believe in 1952 that dienestrol was useful in preventing threatened or habitual abortion, the court reasoned, the marketing of dienestrol was not justified. Consequently, the comment k curtailment of the normal strict liability standard could not be applied. The absence of any apparent utility would render the drug unreasonably dangerous, and irrespective of its knowledge of dienestrol’s danger, White Laboratories could be held strictly liable in tort. Evidence of efficacy was deemed crucial to the case and its omission, in the court’s view, could require reversal.

Strict Liability Based on a Drug Defect

To recover under section 402A of the Restatement (Second) of Torts, a plaintiff must prove that the proximate cause of his or her injury was a defect in the product which rendered the product unreasonably dangerous. The rationale for imposing strict liability is set forth in comment c:

The seller, by marketing his product for use and consumption, has undertaken and assumed a special responsibility toward any member of the consuming public who may be injured by it; that the public has the right to and does expect, in the case of products which it needs and for which it is forced to rely upon the seller, that reputable sellers will stand behind their goods.

Public policy demands that the burden of accidental injuries caused by products intended for consumption be placed upon those who market them, and be treated as a cost of production against which liability insurance can be obtained.

Certainly, drugs are necessary products for which the consumer must rely upon the seller who markets them for consumption. Thus it would seem that a drug manufacturer has a special responsibility under section 402A to a member of the consuming public who is injured by its drug. The design and manufacturing process must yield a product which reflects the proper balance of efficiency and safety. The Restatement test to determine whether particular risks posed by a product make it defective and unreasonably dangerous is whether the article is more dangerous than would be contemplated by the reasonably informed consumer.  Under this test, drugs which are ineffective and unsafe would be defective and unreasonably dangerous.

Design Defects

The defect asserted by the plaintiff in Needham was that dienestrol was ineffective and unreasonably dangerous as marketed for its intended use. This description comes within the Restatement’s consumer-expectation definition of a defective and unreasonably dangerous product. The difficulty with using the Restatement test in a prescription drug case is that the consumer does not purchase the drug directly from the seller, but through a learned intermediary, the prescribing physician. Substituting the word “physician” for “consumer” would resolve this difficulty. If the risks of a drug manifestly outweigh its benefits, the drug is dangerous beyond the extent contemplated by either the consumer or the prescribing physician.

The drug was in the condition the manufacturer intended, hence the injury resulting from its use can be analogized to an injury caused by a defect in design. In a design defect case, the product conforms to the manufacturer’s plan or design, but certain intended characteristics render the product not reasonably safe. In the case of drugs, something in the formula makes the product dangerous.  In a strict liability sense, the product defect in drugs is, in most instances, due to a laggard approach to research design formulation. Design defect claims protect the consumer’s interest in avoiding exposure to a product posing risks which so far outweigh its benefits that it should not continue to be marketed.

Although the definition of defect in a drug may differ from the definition of defect in a machine, the theory of strict liability is the same in both cases. 190 As Justice Traynor cogently noted:

If we scrutinize deviations from a norm of safety as a basis for imposing liability, should we not scrutinize all the more the product whose norm is danger? Such scrutiny is especially sensible for drugs for which a reasonably safe substitute exists. Thalidomide sleeping pills afford a recent dramatic example of such a dangerous product. Other drugs, which must be used despite the danger, perhaps should be treated differently.

Despite a lack of negligence, public policy demands that responsibility be fixed wherever it will most effectively reduce the hazards to life and health inherent in defective drug products. The responsibility is appropriately fixed on the drug manufacturer because “the manufacturer can anticipate some hazards and guard against the occurrence of others as the public cannot. In addition to being in a superior position to reduce the injury, the manufacturer is in the best position to spread the cost of the injury; the consumer can least afford the devastating impact of disability.

Where a product is inherently unsafe, strict liability requires that the marketer face the test of usefulness and reasonable purpose for the product in the marketplace. ‘To the degree a product is unsafe, a similar degree of justification will have to be found for offering it for use or consumption.” Marketing a drug which lacks therapeutic potential is unreasonable when that drug also presents a risk of harm. ‘The less effective a drug is, the more its risks become unreasonable.” This formulation is reflected in the design defect theory articulated by the California courts. Other courts have held that proof of the manufacturer’s fault is unnecessary where the efficacy of the drug is manifestly outweighed by its risks’ -the drug is defective and unreasonably dangerous in a strict liability sense.

Illinois courts have defined defective products to be those products which are dangerous because they fail to perform in the manner reasonably to be expected in light of their nature and intended function. Proof that, in the absence of abnormal use or reasonable secondary causes, the product failed so to perform establishes a prima facie case that the product was defective. Whether a product has failed to perform in the manner that would reasonably have been expected, and whether this failure caused plaintiff’s injury, are questions for the jury. Although the Illinois cases that produced this definition involved hammers, ladders, and brakes, the strict liability principles articulated in these design defect cases apply as well to defects in the design of drugs. The policy reasons for imposing strict liability are the same in each instance.

The strict liability rationale was set forth in Suvada v. White Motor Co. before Illinois adopted the Restatement view of strict liability. In Suvada the supreme court discussed the rationale in terms of the consumption of food, but the reasoning is especially applicable to drugs. First, the public interest in human life and health demands all the protection the law can give against unwholesome food. This policy applies equally to unwholesome drugs–drugs which are of questionable efficacy and a high risk of harm. Second, the manufacturer solicits and invites the use of its product by packaging, advertising, or otherwise representing to the public that it is safe and suitable for use. With respect to drugs, the inducement is aimed at the prescribing physician, who then orders the drug for the consumer.

Third, the losses caused by unwholesome food should be borne by those who have created the risk and reaped the profit by placing the product in the stream of commerce. In the case of drugs, the manufacturer’s high profits and few losses render this reason particularly forceful, especially since the profits are justified by asserting that a risk exists in developing new drugs. Moreover, where a drug manufacturer has placed a drug on the market which has been inadequately tested for efficacy and safety, the manufacturer has certainly created the risk. Consequently, the manufacturer should bear the losses caused by the drug. To quote Suvada:

It seems obvious that public interest in human life and health, the invitations and solicitations to the doctors to prescribe the product for a consumer] and the justice of imposing the loss on the one creating the risk and reaping the profit are present and as compelling in cases involving motor vehicles, food, and other products, where the defective condition makes them unreasonably dangerous to the user, as they are in drug cases.

The strict liability principles were later affirmed by the Illinois Supreme Court in Liberty Mutual Insurance Co. v. Williams Machine and Tool Co . The court asserted that the major purpose of strict liability is to place the loss caused by defective products on those who create the risk and reap the profit from placing defective products on the market. This rationale should apply to drug actions which assert strict liability based on a defect.

Efficacy Evidence

It is readily apparent that to determine whether a product is defective, evidence of efficacy or lack of efficacy together with evidence of danger is necessary. For example, in one product defect case, evidence of both brake failure and brake effectiveness was introduced to determine whether the product failed to perform in the manner reasonably to be expected in light of its nature and intended function. Similarly, evidence of efficacy must be presented in addition to evidence of dangers in a drug defect case to determine whether a drug performed in a manner reasonably to be expected. Accordingly, the district court correctly ruled that evidence of efficacy was relevant to plaintiff’s claim for strict liability based on a defect. The plaintiff claimed that the drug was defective because it was not safe for its intended use and was ineffective. Consequently, dienestrol failed to perform in the manner reasonably to be expected in light of its nature and intended function.

The district court relied on the Illinois Supreme Court’s refusal in Woodill v. Parke Davis & Co. to impose a requirement that defendant have knowledge of the potential danger in design defect cases. The district court also referred to the Woodill court’s reliance on the comment k balancing of benefits against risks and, citing Cunningham v. MacNeal Memorial Hospital, noted that if the product was not “one of those useful but unavoidably dangerous” products described in comment k, then liability could be imposed “even in the absence of the knowledge of the dangers involved.” The district court concluded that the principles of strict liability based on a defect remained substantively unchanged by the Woodill decision.  Unfortunately, the court expressed no opinion on whether the evidence would have supported a verdict for plaintiff on the defect theory. The district court merely reaffirmed its ruling that efficacy evidence was admissible under this theory.

Authority for the District Court’s Ruling

Cunningham v. MacNeal Memorial Hospital involved a transfusion of blood contaminated by hepatitis virus. The Illinois Supreme Court held the hospital supplier of the blood strictly liable and refused to apply the comment k exception for unavoidably unsafe products. The court held that blood containing hepatitis virus is impure and therefore in an unreasonably dangerous defective condition. Comment k was construed to apply only to products which are not impure and which, even if properly prepared, involve substantial inherent risk of injury to the user.

Later, in Woodill v. Parke Davis & CO., the Illinois Supreme Court referred to the distinction between strict liability based on a defect in a product “such as was involved in [Cunningham]” and an unavoidably unsafe product such as the one involved in Woodill.  Woodill made it clear that the knowledge of risk requirement was not a “weakening” of the Cunningham rule that proof of a defect suffices for strict liability ; comment k applies only to unavoidably unsafe products. The court also refused to extend the knowledge requirement to design defect cases.

The district court interpreted the Woodill court’s reaffirmation of Cunningham as authority for premising strict liability for a drug injury on a defect in the drug. The defect in dienestrol was not an impurity, as in Cunningham, but rather a design defect. The court therefore inferred that Cunningham’s applicability to strict liability actions for other types of defects such as design defects should be broadly construed. There is language in Woodil1 and in another drug case, Lawson v. G.D. Searle, which supports this inference. Interpreting this language together with the strict liability principles articulated in design defect cases involving products other than drugs, it is reasonable to conclude that the Illinois courts would uphold a claim based on a design defect in a drug such as that alleged in Needham. Consequently, the admission of efficacy evidence on this basis was correct.

Reversal by the Court of Appeals
Comment k Risk/Benefit Analysis

On appeal, the Seventh Circuit criticized the district court’s ruling on the admissibility of efficacy evidence as an erroneous interpretation of Illinois law. In the Seventh Circuit’s view, only three possible kinds of defective products could result in strict liability in Illinois, and none of these include the design defect:

  1. a product contaminated by an impurity;228
  2. a product unaccompanied by a warning of the product’s dangerous propensities, also called a comment j case;229
  3. and a product which is accompanied by a warning but in which the risk of danger outweighs the benefit of use, also described as a comment k case.

The court further explained that a comment k case exists only where the manufacturer warns of the danger, and yet the product remains dangerous even if the warning is followed. Evidence of efficacy is relevant, in the Seventh Circuit’s opinion, only to this third kind of defect, a comment k case. Only here is it necessary to weigh the drug’s apparent usefulness against its risk to determine whether the drug is unreasonably dangerous. The court found it necessary to adopt another jurisdiction’s analysis of comment k since the Illinois Supreme Court had not “yet decided a comment k case” but had only “commented” on the applicability of comment k to products which are not impure and involve substantial inherent risk of injury even if properly prepared.

Citing Woodill, the Seventh Circuit determined that comment j, rather than comment k, governed the Needham action because no warning accompanied dienestrol. Efficacy evidence was therfore held to be irrelevant to the “dispositive issue,” in the case: Wihether White should be held liable for its failure to warn of the risk of cancer to offspring of pregnant women who ingested Dienestrol.

The Court of Appeals reasoning is faulty for several reasons. First, it ignores the existence of liability for a design defect in Illinois. Second, the court incorrectly interpreted Illinois case law to distinguish between comment k and comment j cases. Third, the court erroneously asserted that the Illinois Supreme Court had not yet decided a comment k case. Fourth, the court ignored the new-drug provisions of comment k which apply to dienestrol.

Comment k and Comment j

Illinois drug cases based on strict liability for failure to warn do not support the Seventh Circuit’s distinction between comments j and k. The Illinois courts have not dichotomized the comments to apply comment j only in cases where a warning of a risk is lacking, and comment k only in cases where a warning is given. Rather, the Illinois courts have construed comments j and k together to determine that a manufacturer of a beneficial drug must have actual or constructive knowledge of a risk of danger before it can be held strictly liable for failure to warn of that risk.

Furthermore, it is simply incorrect to say that Illinois has not yet decided a comment k case. Several Illinois drug cases based on strict liability for failure to warn have expressly relied on comment k to resolve the issues. In Woodill v. Parke Davis & Co , the Illinois Supreme Court placed great reliance on comment k for resolution of the strict liability failure to warn issue. Despite the absence of a warning accompanying the drug, the court, adopting comment k language, described the product as an unavoidably unsafe product.  Other drug cases reveal a tacit assumption by Illinois courts that prescription drugs, by their nature, are unavoidably unsafe products which must be analyzed according to the provisions of comment k. A discussion of Woodill will exemplify these issues.

In Woodill, the plaintiff sued the drug manufacturer, alleging strict liability for failure to warn physicians and consumers of the danger in using the drug pitocin to induce labor in pregnant women when the fetus is in a certain position. As in Needham, there was no warning given about this danger. The court, nevertheless, characterized pitocin as an unavoidably unsafe product.  In so doing, it did not distinguish between comnients j and k, but did distinguish between the nonapplicability of comment k in strict liability defective product cases. Citing Cunningham, the Woodill court stated:

Later in Cunningham we distinguished between strict liability based on a defect in a product, such as was involved therein, and where, as here, warning may be required because a product is unavoidably unsafe. We referred to the “exception” created by comment k to Section 402A of the Restatement (Second) of Torts: k. Unavoidably Unsafe Products.

There are some products which, in the present state of human knowledge, are quite incapable of being made safe for their intended and ordinary use. These are especially common in the field of drugs. An outstanding example is the vaccine for the Pasteur treatment of rabies, which not uncommonly leads to very serious and damaging consequences when it is injected. Since the disease itself invariably leads to a dreadful death, both the marketing and the use of the vaccine are fully justified …. Such a product, properly prepared, and accompanied by proper directions and warning, is not defective, nor is it unreasonably dangerous …. We believe it clear that the exception set forth in the quoted comment relates only to products which are not impure and which, even if properly prepared, inherently involve substantial risk of injury to the user.

The Woodill court went on to hold:

Therefore, the pleading requirement that a manufacturer know or should know of the dangerous propensity of the product is limited to complaints which allege a breach of the duty to warn adequately. Whether it is necessary to allege knowledge where liability is predicated on the defective design of the product is not before us.

The Woodill discussion of the knowledge requirement is replete with references to the language of comment k. For example, to describe the pleading and proof requirements of a strict liability failure to warn action, the court stated that “the inquiry becomes whether the manufacturer, because of the ‘present state of human knowledge, . . . knew or should have known of the danger presented by the use or consumption of the product. Again using the language of comment k, the court expressed one of the reasons for imposing the knowledge limitation: If a manufacturer is held liable for failure to warn of a danger which it would be impossible to know about “based on the present state of human knowledge,” then the manufacturer would become “an insurer of its product. Finally, in language which parallels the rationale of comment k, the court set forth the policy reasons for imposition of a knowledge requirement in strict liability failure to warn cases:

This court is acutely aware of the social desirability of encouraging the research and development of beneficial drugs. We are equally aware that risks, often grave, may accompany the introduction of these drugs into the market place. We simply think, however, in accordance with comments j and k of Section 402A… that where liability is framed by the manufacturer’s duty to warn adequately of dangers which may arise from the use of a drug that liability should be based on there being some manner in which to know of the danger.

The Illinois appellate court also has relied “particularly” on comment k to conclude that “without doubt, Section 402A… comment k, discloses that a prescription drug may be deemed unreasonably dangerous if it is manufactured and distributed without adequate warnings … .- Implicit in this formulation is the assumption that comment k applies to all prescription drugs because these products are inherently dangerous by nature and therefore unavoidably unsafe products. The presence or absence of warnings determines whether the useful product is unreasonably dangerous, not whether it is unavoidably unsafe. Before a warning is required under Woodill, however, the manufacturer of a beneficial drug must have known or have been able to discover the risk of danger. If knowledge of a risk exists and a warning is provided, the product is not unreasonably dangerous; if such knowledge exists but a warning is not given, the product is unreasonably dangerous.

Woodill’s reliance on comment k belies the notion that it can be characterized as a comment j, as opposed to a comment k case. Woodill also demonstrates that a warning is not a prerequisite to comment k applicability. The Seventh Circuit’s conclusions concerning comment k directly oppose those of the Illinois Supreme Court. Although the Seventh Circuit recognized its responsibility to apply the substantive law of Illinois, it evaded this obligation.

To justify the application of another jurisdiction’s substantive law, the Seventh Circuit simply asserted that the Illinois Supreme Court had not decided a comment k case. Perhaps what the court meant was that the fllinois courts had not been confronted with a case like Needham, that is, a strict liability failure to warn action in which the plaintiff claimed that the drug involved was not beneficial-not an apparently useful product-in addition to asserting that it posed a risk of harm about which there was no warning. Consequently, Illinois courts have not been asked to balance a drug’s risk of harm against its benefits to determine whether the manufacturer’s decision to market the drug was justified. In the Illinois drug cases decided thus far, the drug has been presumed to be beneficial. Thus the comment k rationale for imposing a knowledge requirement applies to those cases, and the courts accordingly have imposed liability in these circumstances in accordance with the comment k exception to strict liability: The manufacturer of a beneficial drug is liable for failure to warn only of known dangers.

It seems likely, however, that if the Illinois Supreme Court were faced with a challenge to a drug’s benefits, it would resolve the issue using efficacy evidence, in the same manner as other courts have resolved it.  If, as in Needham, the drug’s risks manifestly outweigh its benefits, then under the comment k analysis, the knowledge requirement, which protects or excepts the manufacturer from strict liability, would not be applied. In relaxing the strict liability rule in failure to warn cases, the Woodill court clearly indicated that the underlying policy of this rule was to favor the development of beneficial drugs. Conversely, then, if a drug’s benefits were manifestly outweighed by its risk, that is, if the drug were ineffective and caused serious harm, the policy favoring the development of beneficial drugs would not be furthered by allowing comment k protection to the manufaturer. The manufacturer would be held strictly liable for failure to warn, irrespective of its knowledge of dangers.

The Seventh Circuit’s Comment k Analysis

Instead of applying Illinois law, the Seventh Circuit adopted the comment k analysis articulated in Reyes v. Wyeth Laboratories, which it mistakenly interpreted as a case in which a warning of risks is given and yet the product remains dangerous even if the warning is followed. The manufacturer is exempt from liability only if the product’s benefits outweigh its risks. In Reyes, however, no warning was provided, although the risk of danger was known. Nevertheless, the court found that the vaccine was an unavoidably unsafe product and thus that comment k applied. Because no warning as to the vaccine’s dangers was provided, the Reyes court held Wyeth Laboratories strictly liable under a comment k analysis. The Seventh Circuit was therefore mistaken in indicating that a warning must have been given for comment k to be applicable.

In analyzing the issue within the comment k framework, the Reyes court first determined whether the vaccine was unreasonably dangerous per se by determining whether marketing it was justified despite the danger involved in its use. After concluding that marketing the vaccine was justified, the court went on to decide whether the drug was unreasonably dangerous as marketed, which in a drug case translates to “a duty to provide proper warnings.

According to the Reyes comment k analysis, the first, rather than last, step is to determine whether the drug’s apparent usefulness outweighs its known risk. If it does, then the marketing of the drug is justified; if it does not, the drug is unreasonably dangerous per se. At this juncture, the question of warnings, whether given or not, need not be addressed. To determine whether a product is unreasonably dangerous per se, it is apparent that evidence of efficacy or lack of efficacy must be adduced. Without this evidence, it is impossible to determine whether the drug’s apparent usefulness outweighs its known risks. Thus, under Reyes, the evidence of dienestrol’s ineffectiveness clearly was not irrelevant or prejudicial. Rather, this evidence was a crucial aspect of the case. The Reyes analysis supports the district court’s ruling that evidence of dienestrol’s efficacy or lack of efficacy is relevant to the Needham action.

If the Seventh Circuit had correctly applied the Reyes court’s analysis to the facts adduced during the Needham trial, it would be hard pressed to escape the conclusion that dienestrol was unreasonably dangerous per se. As of 1952, the efficacy of dienestrol in preventing threatened abortion was admittedly “controversial” according to White Laboratories’ medical director, and White Laboratories was aware that other scientists had concluded that dienestrol was a dismal failure. Thus, White Laboratories knew or should have known that dienestrol was not apparently useful. The additional knowledge that DES-related estrogens such as dienestrol caused tumor formation and abnormal anatomical changes in the offspring of pregnant animals, as well as cancer, leads to the conclusion that the known risks far outweighed its benefits. Even if the Seventh Circuit viewed animal studies as inconclusive proof of actual danger to humans, the jury was entitled to believe the testimony of plaintiff’s experts that animal studies were viewed as reliable indicators of risks to humans. Although the Needham district court did not make a finding as to the sufficiency of the efficacy evidence, it did find that the evidence supported a jury verdict for plaintiff on the basis of White Laboratories’ knowledge of the risk of cancer to female offspring exposed in utero to dienestrol. The Seventh Circuit did not refute this finding. Under the Reyes analysis, the evidence presented at the Needham trial established that White Laboratories’ decision to market dienestrol was not justified. Given the gravity of the potential harm, the controversial and questionable efficacy of dienestrol could not possibly be found to outweigh its known risk. Dienestrol is unreasonably dangerous per se within the meaning of Reyes.

Another Seventh Circuit View of Comment k: Singer v. Sterling Drug

The requirement that comment k be applied only when the manufacturer has warned of the risk and the product remains dangerous even if the warning is followed is supported by the Seventh Circuit’s earlier decision in Singer v. Sterling Drug, which established two classifications of drugs which fall within the comment k exception to strict liability. First, comment k applies to drugs in which there is a known but apparently reasonable risk of injury and the user has been warned of the risk. An example of this drug is the Pastuer vaccine for rabies. The second class to which comment k applies is the new or experimental drug for which there is no knowledge of risk and the user has been warned that the drug is new or experimental. An example of this type of drug is dienestrol.

The Seventh Circuit’s decision in Needham addresses only the first category of comment k drugs; the second category is notably missing from the court’s discussion of comment k. This omission is significant because White Laboratories relied on the second category as a defense. Throughout the trial, White Laboratories maintained that knowledge of dienestrol’s risks had not and could not be discovered in 1952, and that White Laboratories had warned that the use of dienestrol in the treatment of threatened abortion was investigational. The Seventh Circuit simply ignored this evidence and did not address the second comment k category formulated in Singer. In categorizing comment k drugs in two classes, Singer itself made a notable omission. The text of comment k refers to prescription drugs, which Singer ignored, apparently because the court viewed with disfavor the applicability of the comment k knowledge requirement in all prescription drug cases based on strict liability for failure to warn. The Woodill court imposes this requirement on all failure to warn cases which involve beneficial drugs. Thus, Singer rejects the underlying premise of Woodill, and therefore is questionable authority for Illinois strict liability law.

Strict Liability Based on a Defect

In Needham, the plaintiff’s second theory of strict liability was that dienestrol was defective because it was useless and unreasonably dangerous. The Seventh Circuit held that the district court’s alternative ruling, which allowed evidence of lack of efficacy to prove dienestrol defective, was not supported by Cunningham v. MacNeal Memorial Hospital. The district court relied on Woodill to support its view that the knowledge of risk requirement applied in strict liability failure to warn cases, and that the usual rule in other strict liability cases, that proof of a defect suffices, remained undisturbed. Cunningham was cited as authority for the usual strict liability rule that proof of a defect is sufficient. The district court’s interpretation was correct. The Woodill court clearly stated that it was not imposing a knowledge requirement in either a product defect or design defect case. In reaching this decision, the Woodill court cited the Cunningham distinction between strict liability based on a defect and strict liability based on the manufacturer’s failure to warn, and noted that comment k only applied to the failure to warn action.

Despite the Woodill references to defect cases such as Cunningham, and to design defect cases, the Seventh Circuit essentially held that an impurity such as that in Cunningham was the only kind of product defect on which strict liability could be based. Since the plaintiff in Needham did not claim that dienestrol contained any impurity as did the plaintiff in Cunningham, the Cunningham case did not “govern.” The Seventh Circuit interpreted the district court’s citation to Cunningham as a ruling that an ineffective product is a defective product. Citing section 402A, the Seventh Circuit held that ineffectiveness of a product is not actionable under strict liability theory.

The district court, however, had not ruled that plaintiff’s case was governed by Cunningham. Rather, the district court extrapolated from Cunningham the principle that proof of a defect, without proof of knowledge of the defect, is sufficient to establish strict liability based on that defect. Likewise, the district court did not hold that an ineffective product is necessarily a defective product. The plaintiff’s alternate theory of strict liability was premised on the claim that dienestrol was defective because it was ineffective and unreasonably dangerous. If the drug was both ineffective and the cause of plaintiff’s cancer, as the jury was instructed, then the drug was defective. The theory is supported by Illinois case law. To distinguish between an ineffective drug and an ineffective brake, both of which subsequently cause injury, is not legally justified for purposes of strict liability.

The real difference between these products is in their nature; the brake is only dangerous if it is ineffective, while the drug is always potentially dangerous. A drug is ingested despite its danger because it is an effective therapeutic agent against some other harm. Such a drug is not unreasonably dangerous. If, however, the drug does not prevent some other harm, that is, if it is useless, then the danger it poses is unreasonable. In the first situation there is reason for exposing oneself to potential danger-the drug is taken to avoid some other harm. If the drug does not prevent this other harm, then it follows that it is not reasonable to expose oneself to the drug’s potential dangers. Such a drug is unreasonably dangerous.

These differences in the kinds of product defects are not of sufficient import to deny strict liability for drug defects. The response of the courts can be either to adhere rigidly to prior doctrines, denying recovery to those injured by such products, or to fashion remedies to meet these changes. From a strict liability policy standpoint, the manufacturer of drugs is better able to bear the cost of injuries resulting from defective products. The manufacturer is in the best position to test for and discover, as well as guard against, defects in its products. The threat of strict liability will provide an incentive to produce safer drugs. The drug-consuming public needs protection from defective drug products. The Seventh Circuit’s holding creates a blanket protection from strict liability for drug manufacturers who develop, promote, and profit from an ineffective and dangerous drug. This decision is contrary to Illinois strict liability consumer protection goals.


The protection afforded by comment k to drug manufacturers applies only if the drug’s benefits outweigh its risks. Where a plaintiff challenges the manufacturer’s decision to market the drug as unjustified by asserting that the drug is not beneficial, evidence of efficacy or inefficacy is relevant to decide the claim. If the decision to market the drug was not justified because its apparent usefulness was outweighed by its risks the manufacturer loses the protection of comment k and may be held strictly liable. Comment k protection was intended for manufacturers of beneficial drugs only.

On the other hand, if a drug had no apparent usefulness and it caused injury, the manufacturers may be held strictly liable for manufacturing a defective product in an unreasonably dangerous condition. The result under either theory, the loss of comment k protection, is the same, and evidence of efficacy or lack of efficacy is relevant to both theories. These theories are supported by Illinois case law and by decisions in other jurisdictions.

Moreover, the imposition of strict liability on the drug manufacturer who develops, promotes, and profits from an apparently useless and dangerous drug is a just result. It would be manifestly unfair to thrust upon the consumer the burden of paying for the treatment of injuries caused by such drugs. The high profits and few losses in the drug industry reveal that a drug company is in a better position than the injured consumer to absorb and spread the cost of compensating for drug injuries. It is time to make the justification for these high drug profits a reality; manufacturers who develop, for profit, apparently useless and dangerous drugs must also accept the risk in such developments. The district court’s ruling promotes this goal; the Seventh Circuit’s decision defeats it. The Needham reversal signified another victory for the drug companies, and yet another disaster for the consumer.

The Seventh Circuit’s opinion in effect allows drug companies to develop and sell useless drugs with no concern about whether or not these drugs are dangerous, since the manufacturers will not be strictly liable in tort for injuried caused by such drugs. And as long as neither the drug manufacturer nor anyone else tests for the drug’s dangers, the manufacturer will not be liable for failure to warn because it will not know of the danger until some time after the drug has been on the marketin the case of cancer, perhaps twenty years. During this time the manufacturer will have made an enormous profit. Of course, one would assume that after the manufacturer learns of injury caused by its product, it would warn consumers of the danger. But if the birth control pill experience is any indication, this assumption is grossly naive. The risk of cancer from estrogen consumption has only recently surfaced in the warnings accompanying the pill. Time may well prove that the development and promotion of estrogen products has been the greatest fraud ever perpetrated by drug companies. The courts should allow the victims of DES injuries to bring strict liability actions based either on a theory of defect or of failure to warn. Evidence of efficacy or usefulness should be deemed pivotal in such actions. Strict liability for drug injuries should exist in fact, not just in theory.

Mary E. Kelly, 1981.

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1989 DES Case: Hymowitz v. Eli Lilly & Co.


Plaintiffs in these appeals allege that they were injured by the drug diethylstilbestrol (DES) ingested by their mothers during pregnancy. They seek relief against defendant DES manufacturers. While not class actions, these cases are representative of nearly 500 similar actions pending in the courts in this State; the rules articulated by the court here, therefore, must do justice and be administratively feasible in the context of this mass litigation. With this in mind, we now resolve the issue twice expressly left open by this court, and adopt a market share theory, using a national market, for determining liability and apportioning damages in DES cases in which identification of the manufacturer of the drug that injured the plaintiff is impossible (see, Kaufman v Lilly & Co.,  Bichler v Lilly & Co.,. We also hold that the Legislature’s revival for one year of actions for injuries caused by DES that were previously barred by the Statute of Limitations is constitutional under the State and Federal Constitutions.

HYMOWITZ v. ELI LILLY & CO., Leagle, 198956073NY2d487_1518, April 4, 1989.

The history of the development of DES and its marketing in this country has been repeatedly chronicled. Briefly, DES is a synthetic substance that mimics the effect of estrogen, the naturally formed female hormone. It was invented in 1937 by British researchers, but never patented.

Hymowitz v. Eli Lilly and Company case brief, lawschoolcasebriefs, January 31, 2013.

In 1941, the Food and Drug Administration (FDA) approved the new drug applications (NDA) of 12 manufacturers to market DES for the treatment of various maladies, not directly involving pregnancy. In 1947, the FDA began approving the NDAs of manufacturers to market DES for the purpose of preventing human miscarriages; by 1951, the FDA had concluded that DES was generally safe for pregnancy use, and stopped requiring the filing of NDAs when new manufacturers sought to produce the drug for this purpose. In 1971, however, the FDA contraindicated the use of DES as a miscarriage preventative, when studies established the harmful latent effects of DES upon the offspring of mothers who took the drug. Specifically, tests indicated that DES caused vaginal adenocarcinoma, a form of cancer, and adenosis, a precancerous vaginal or cervical growth.

Although strong evidence links prenatal DES exposure to later development of serious medical problems, plaintiffs seeking relief in court for their injuries faced two formidable and fundamental barriers to recovery in this State;

  1. not only is identification of the manufacturer of the DES ingested in a particular case generally impossible,
  2. but, due to the latent nature of DES injuries, many claims were barred by the Statute of Limitations before the injury was discovered.

The identification problem has many causes. All DES was of identical chemical composition. Druggists usually filled prescriptions from whatever was on hand. Approximately 300 manufacturers produced the drug, with companies entering and leaving the market continuously during the 24 years that DES was sold for pregnancy use. The long latency period of a DES injury compounds the identification problem; memories fade, records are lost or destroyed, and witnesses die. Thus the pregnant women who took DES generally never knew who produced the drug they took, and there was no reason to attempt to discover this fact until many years after ingestion, at which time the information is not available.

We recognized this predicament in Bichler v Lilly & Co., where the court stated that in DES cases it is a “practical impossibility for most victims to pinpoint * * * the manufacturer directly responsible for their particular injury”. We allowed plaintiff’s recovery in that case, however, notwithstanding the failure of the plaintiff to identify the manufacturer of the injurious DES, on the limited basis that “the evidence was legally sufficient to support the jury verdict for the plaintiff” on the law as charged to the jury, and unobjected to by the defendant (see, Kaufman v Lilly & Co.,). The question, therefore, of whether nonidentification of the manufacturer precludes plaintiffs from recovering for DES caused injuries, remained unresolved after Bichler v Lilly & Co. (supra).

The second barrier to recovery, involving the Statute of Limitations, arose from the long-standing rule in this State that the limitations period accrued upon exposure in actions alleging personal injury caused by toxic substances (Fleishman v Lilly & Co. In Fleishman v Lilly & Co. (supra) it became clear that this exposure rule led to many DES cases being barred by the Statute of Limitations before the discovery of injury; we held, however, that any change in the accrual date from exposure to discovery was more properly the prerogative of the Legislature. Two years after Fleishman v Lilly & Co. the Legislature addressed the Statute of Limitations problem, and instituted a discovery rule for “the latent effects of exposure to any substance” . The Legislature also, for one year, revived causes of action for exposure to DES that had been time barred.

It is estimated that eventually 800 DES cases will be brought under the revival portion of this recent statute. Moreover, as indicated in Bichler v Lilly & Co. (supra), and as apparent from the record now before the court, in the vast majority of these cases identification of the manufacturer of the DES that injured the plaintiff will be impossible. The Legislature, however, while reviving these time-barred actions, did not resolve the identification problem.

The present appeals are before the court in the context of summary judgment motions. In all of the appeals defendants moved for summary judgment dismissing the complaints because plaintiffs could not identify the manufacturer of the drug that allegedly injured them. In three of the appeals defendants also moved on Statute of Limitations grounds, arguing that the revival of the actions was unconstitutional under the State and Federal Constitutions, and that the complaints, therefore, are time barred and should be dismissed. The trial court denied all of these motions. On the Statute of Limitations issue, the trial court also granted plaintiffs’ cross motions, dismissing defendants’ affirmative defenses that the actions were time barred. The Appellate Division affirmed in all respects and certified to this court the questions of whether the orders of the trial court were properly made. We answer these questions in the affirmative.” …

…continue reading the full paper HYMOWITZ v. ELI LILLY & CO., on Leagle.

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DES Manufacturers’ Liability based on a Market Share Theory


When California addressed the issue of strict products liability in 1963, it was an established principle of products liability that except in rare cases, the plaintiff had to identify the defendant-manufacturer of the product which caused his injuries to assert a cause of action. This rule was followed in California as recently as 1978, when the court of appeals in McCreery v. Eli Lilly & Co. affirmed the California Superior Court’s grant of a summary judgment to a defendant-manufacturer because the plaintiff could not identify the defendant as the specific manufacturer of the drug which caused her injuries.

Manufacturers’ Liability Based on a Market Share Theory: Sindell v. Abbott Laboratories, Tulsa Law Review, Volume 16 | Issue 2 Article 6, 1980.

In March 1980, however, the California Supreme Court radically departed from this requirement in Sindell v. Abbott Laboratories. The court held that a valid cause of action was stated against five drug manufacturers even though the particular manufacturer of the product which caused injury could not be identified. In Sindell, the court pronounced a new theory upon which non-identifiable manufacturer liability could be predicated. Under the court’s new market share theory, plaintiffs injured by fungible products could bring suit against several manufacturers, who together, produced a substantial portion of that product. Each defendant would then be liable for the portion of the judgment corresponding to their share of the market.

This note will examine the effect and the practicality of the market share liability theory proposed by the court. The various policies underlying traditional products liability law and the market share solution to the identity problem are also examined. Finally, the court’s decision will be analyzed and available alternatives to the market share theory will be suggested.


A. Facts

The plaintiff, Judith Sindell, brought suit on her own behalf and others similarly situated, against eleven drug companies and others for injuries allegedly resulting from the ingestion of diethylstilbestrol (DES) by their mothers while the plaintiffs were in utero. The defendants were manufacturers who promoted, marketed, and distributed DES between 1941 and 1971. In 1947, the Food and Drug Administration (FDA) authorized the marketing of DES as a miscarriage preventative on an experimental basis and required that it carry a warning label to that effect. The drug was subsequently administered to the plaintiffs’ mothers. The drug was later found to be a possible cause of adenocarcinoma, a rare uterine cancer, and adenosis, a precancerous vaginal and cervical growth. These conditions appeared in daughters who were exposed to DES while in utero. In 1971, the FDA ordered the defendants to cease marketing and promoting DES as a miscarriage preventive. The FDA also ordered the defendants to warn physicians and the public of the potential danger to unborn children if the drug was used during pregnancy.

The plaintiffs predicated their cause of action on various theories of negligence, concert action, alternative liability, and strict products liability. The defendants demurred on the ground that the plaintiffs could not identify the manufacturer responsible for the product which caused their injuries. The trial court sustained the demurrer based on the plaintiffs’ admission that they were unable to make the identification. Consequently, the case was dismissed.

The California Supreme Court reversed the lower court ruling on the appeal involving only five of the original eleven named defendants. The court held that a valid cause of action was stated by proving that the defendants produced a substantial percentage of DES. The manufacturers were liable for a portion of the judgment equal to their share of the market for that drug unless they could prove that they could not have made the product which caused the plaintiffs’ injuries.

B. Issue Presented to the California Supreme Court

The issue, as stated by the court, was whether a plaintiff, injured as the result of a drug administered to her mother during pregnancy, who knows the type of drug involved but cannot identify the manufacturer of the precise product, may hold liable for her injuries a maker of a drug produced from an identical formula?


Strict products liability evolved as a device designed to aid the consumer-plaintiff in surmounting obstacles of proof imposed by negligence recovery theories when dealing with injuries caused by a defective product. Strict products liability was justified on the grounds that rapid technological progress had placed distance and complex technology between the consumer and the manufacturer. The consumer was perceived as inadequately prepared to protect himself from defective and injurious products. Conversely, the manufacturer was in better position to prevent defective products from entering the marketplace. Therefore, imposing liability on manufacturers for injuries caused by defective products was deemed an incentive to product safety. The manufacturer could also afford to bear the burden of the loss compared to the injured consumer. The effect of the cost would be minimal because the manufacturer could pass it on to all his consumers as a cost of doing business or he could insure against it.

Increased complexities in the marketplace spawned another problem. Technological improvements and more efficient production practices allowed manufacturers to create and market fungible goods; products which, though made by different manufacturers, could be interchanged with one another. As a result, the injured consumer might not be able to identify the particular manufacturer of the product which caused his injuries. As the number of such cases increased, the problem became more apparent. New theories emerged in an attempt to accord the consumer some remedy when the manufacturer whose product caused injury was not identifiable. Theories such as enterprise liability and non-legal systems such as latent technological injury compensation were proposed. In addition, several established multiple tortfeasor theories such as alternative liability, concert action, and industry-wide liability were used to attack the problem. These theories represent exceptions to the prevailing rule that the plaintiff must identify the manufacturer whose product caused the injuries in question.

A. Alternative Liability

Where two or more tortfeasors are negligent toward the plaintiff and it is not known which defendant caused the harm, all tortfeasors will be held jointly and severally liable under the theory of alternative liability. This theory was introduced in Summers v. Tice in which a plaintiff was injured when two of the hunters he was with negligently fired their guns. The court held that once the plaintiff proved that the defendants were negligent and that the negligence caused the plaintiffs injury, the burden of proof as to causation shifted to the defendants. It then became incumbent upon the defendants to absolve themselves of liability. Under Summers, each defendant was liable for the whole amount of the damages with apportionment to be decided among them. Alternative liability was developed to avoid the unfairness of allowing the defendants to escape liability because the plaintiff was not able to prove which defendant caused his injury when it was certain that one person was responsible. It was especially justified in situations in which the defendants were more capable of producing evidence as to the cause of the injury than the plaintiff.

As the Restatement (Second) of Torts notes, this rule is usually applied when all possible defendants have been joined. In a products liability action involving a number of manufacturers it might not be possible to join all the defendants. One case similar to Sindell in which the court used alternative liability to reverse the lower court’s granting of the defendants’ motion for summary judgment was Abel v. Eli Lilly and Co. The plaintiffs in Abel were also daughters whose mothers used DES during pregnancy. The plaintiffs brought a products liability action against defendants who allegedly comprised a group of all the manufacturers of DES whose products were sold in Michigan during the relevant time period. The court held that a cause of action was stated under several theories, including alternative liability.

The defendants’ main argument was that the plaintiffs could not identify the manufacturer of the product which caused their injuries. The majority and the dissent both agreed that identification of the manufacturer was usually a requirement in a products liability case. The majority, however, did not view the action as an issue of identification, but as a question of the apportionment of damages. Therefore, once the plaintiff proved that the defendants had caused them to suffer a certain amount of damage, the burden of proof as to the apportionment of the damages shifted to the defendants. The court, however did not address the fact that though the defendants, through affidavits, were able to show that of more than 300 companies manufacturing DES at the relevant time, the plaintiffs had joined only those who had sold DES in Michigan.

The court’s holding could produce unfair results for both prospective defendants and prospective plaintiffs. On one hand, with fewer than the total number of possible defendants present, manufacturers whose product may not have caused the injury may be held liable. Conversely, if it is assumed that all the plaintiffs’ mothers ingested the DES while in Michigan, the plaintiffs could argue that joinder of all manufacturers selling DES within the state at the time minimizes the chance that a manufacturer outside the defendants group would have supplied the drug. The defendant’s predicament becomes more apparent, though, if the plaintiffs are not able to satisfy their burden of proof as to some of the defendants. In that event, the risk of an innocent manufacturer being held liable is greater. From the plaintiffs’ perspective though, all DES manufacturers were tortfeasors because they all marketed a defective product. The question remains one of causation and there are strong policy considerations which would dictate that as between a manufacturer who may have caused the injury, and a completely innocent plaintiff, the manufacturer should bear the loss.

Regarding causation, the plaintiffs bear what the court recognized as an extreme heavy burden of proof. The plaintiffs must prove that one or more of the defendants manufactured the DES ingested by the mothers involved. If the plaintiffs fail to prove that it was more probable than not that any one particular defendant manufactured the injury causing DES, they would lose as to that defendant. The plaintiffs would lose as to all defendants, if they could not sustain this burden toward any of them. It is very possible that the plaintiffs would be denied a remedy.

As evidenced, alternative liability as a possible solution to the identification issue in products liability cases involving multiple defendants is not without its problems. The inherent risk of unfairness to the defendants must be carefully balanced against the risk of leaving the plaintiffs without a remedy. There appears to be a general agreement that, without modification, alternative liability is inapplicable to cases such as Sindell.

B. Concert Action

The theory of concert action has also been used to shift the burden of proof on the causation issue from the plaintiff to the defendant. The plaintiff must show that the defendants acted pursuant to a common design, gave substantial encouragement or assistance to another’s wrongful conduct, or, acted wrongfully themselves in giving aid to another’s wrongful conduct. In this regard, agreement may be tacit or express. The purpose behind the theory is to deter harmful group activity.

The application of the theory to a products liability situation was examined in Hall v. EZ Du Pont De Nemours & Co. , under the concept ofjoint control of risk. The plaintiff could prove joint control by the following methods:

  1. by showing that there existed an explicit agreement among the defendants with regard to warnings and other safety features;
  2. by showing covert joint action through evidence of parallel behavior sufficient to support an inference of tacit agreement;
  3. and, by showing that the defendants adhered to an industry-wide safety standard.

The court labeled the first method classic concert of action. Noting that the theory was not limited to any particular mode of cooperation or negligence, the court found that the plaintiff’s allegations concerning the defendants’ knowledge of the blasting caps risk, the feasibility of safety measures, and the cooperation among the defendants, stated a valid cause of action under this theory. The critical factor would be proof that the knowledge of the risks and the safety measures used were shared by the members of the industry and used as a basis for joint decisions.

Concert action was examined in relation to the DES situation in Abel v. Eli Lily and Co . The plaintiffs alleged that the defendants acted in concert to produce and market a defective product without adequate testing or warning. This case, unlike Hall, did not involve a trade association. Nevertheless, the court found that these allegations stated a valid cause of action. Even if it was shown that one defendant did not act wrongfully toward the plaintiff, the rest may be held jointly and severally liable. Proof that one of the defendants was the manufacturer of the defective product would not absolve the others because the basis of the theory is that all defendants, by their cooperative acts, contributed to the harm suffered by the plaintiff.

The main problem with the application of concert action to DES cases is the difficulty of proving cooperative action without evidence of an express agreement. Arguably, courts should infer the existence of a tacit agreement when there is evidence of intentionally synchronized behavior which is part of an overall industry plan which benefits the participants. Such parallel behavior though, may be attributable to factors other than tacit agreement. The role of regulations, especially in the drug industry, may explain the cooperation among industry members. To impose liability based on compelled behavior would penalize the industry for complying with regulations designed to protect the public. This would hardly serve the safety incentive rationale underlying products liability law.

As in alternative liability, the imposition of joint liability under concert action may lead to arbitrary selection of defendants and unfair standards of liability when all possible defendants are not joined. This possibility can be mitigated a number of ways. First, the defendants may implead other manufacturers who they feel are responsible. Second, unlike alternative liability, concert action does not require the joinder of all possible defendants because each defendant has contributed to the harm and therefore is jointly and severally liable. Finally, if the plaintiff joins those defendants who contributed to the major portion of the market, it is not only likely that one of them would be the party responsible for the injuries, but it is likely that as a group, those defendants greatly influenced the entire industry. Therefore, imposition of liability would encourage them to direct the industry towards insuring greater product safety.

Concert action is one possible way to approach the causation issue in DES and similar actions. The primary difficulty lies in proving the existence of a tacit agreement among the members of the industry. This task is complicated by the infusion of government regulations restricting industry activity.

C. Industry- Wide Liability

A third theory, industry-wide liability, has been proposed as a method for dealing with the problem in multiple defendant lawsuits by eliminating the identification requirement. This theory was clearly pronounced in Hall v. EL Du Pont De Nemours & Co.

In Hall the plaintiffs were children who were injured when blasting caps exploded. The incidents took place over a four year period and involved twelve separate accidents in ten different states. The plaintiffs were unable to identify the manufacturer because the explosions destroyed any identifying marks on the blasting caps. The defendants, six blasting cap companies and their trade association, constituted the entire blasting cap industry in the United States.

In deciding whether the defendants’ parallel safety practices could provide a basis for joint liability, the court noted that joint liability was concerned with three problems. The first was the need to deter hazardous group activity. The second was the task of imposing foreseeable losses to those parties in the best position to guard against them. The third problem concerned allocating the burden of proof so as to avoid denying the injured plaintiff a remedy merely because proof of causation was either within the defendants’ control, or totally unavailable.

To deal with these problems, the court proposed a theory of industry-wide liability based primarily on concert action. Under this theory, the plaintiffs can shift the burden of proof on causation to the defendants if they can show:

  1. that all the manufacturers of a product adhered to an insufficient uniform safety standard;
  2. that they cooperated in the design and manufacture of the product;
  3. that the product was defective and caused plaintiff’s injury;
  4. and that one of the defendants manufactured the product in question.

The plaintiffs’ ability to shift the burden of proof would not be affected by the fact that the blasting caps may have come from outside the United States.

This theory incorporated the concert action principle, recognizing that although the actual harm to the plaintiff was caused in fact by one defendant, it was the conduct of the group as a whole, in devising insufficient safety standards, that caused the harm. Since the defendants were responsible for the inadequate safety practices, holding the group jointly and severally liable was perceived to be the most practical remedy and placed the burden of what the court deemed the inevitable costs of business on those in the best position to take precautions against further injuries.

To benefit from the shift of evidentiary burdens, the plaintiff had to initially prove that the defendants had breached a duty of care toward them and that there was a causal connection between the group created risk and their injuries. The plaintiffs’ burden was satisfied if they proved that it was more probable than not that the injury causing caps were the product of one of the named defendants. Though the shift of evidentiary burdens was a product of alternative rather than concert liability, the court found that the justification of avoiding an unjust result served both theories.

This theory has been criticized for the court’s apparent failure to recognize the problem created by allowing cause-in-fact to be gauged on a standard of probability. Arguably though, the court implicitly recognized this problem by placing the emphasis on the group’s activities rather than the activity of each individual member. Under the concert action theory, the fact that one defendant’s conduct can be proved to be the cause-in-fact of the plaintiffs injuries does not relieve the others of liability. In Hall, the harm was not caused by the failure of the individual members to place adequate warnings on their blasting caps, or by the failure to make the caps more difficult to detonate, but by the manufacturers mutual agreement as to the relevant safety standards. The court in Hall was careful to distinguish its holding, which is predicated on industry safety standard agreements reached in a small concentrated industry, from the case of similar agreements reached in larger decentralized industries. In the latter instance, proving that the entire industry agreed and adhered to uniform safety standards would be much more difficult. Accordingly, the basis on which liabilty would rest would be insufficient.

D. Enterprise Liability

The theory of enterprise liability was proposed to deal with the particular problems of a DES suit. The plaintiff must prove that the defendants all manufactured a generically similar defective product and that the product’s defect caused the plaintiffs injury. The plaintif must also prove that there was an insufficient, industry-wide safety standard as to the manufacture of this product and there must be clear and convincing evidence that one of the defendant’s products caused the plaintiff’s injuries. In addition, the plaintiff must show that the defendants owed a duty to a class of which the plaintiff is a member. Finally, the plaintiffs inability to identify the manufacturer can not be due to his fault. Once these elements are established, the burden of proof shifts to the defendants. To avoid liability it is incumbent on the defendants to prove that they could not have manufactured the product which caused the plaintiffs injuries.

The enterprise liability theory combines principles of alternative and concert liability. It is similar to alternative liability in that it requires the product of one defendant to be the cause-in-fact of the plaintiff’s injuries. Accordingly, a defendant who adhered to the insufficient industry-wide safety standard may escape liability if it can prove that its product did not cause the injuries. Furthermore, both theories cure the plaintiffs inability to identify the manufacturer by shifting the burden of proof on causation to the defendants. Enterprise liability differs from alternative liability in that all possible defendants do not have to be joined in order for causation to be established. The plaintiff need only show by clear and convincing evidence, that one of the manufacturers, all of whom are tortfeasors, manufactured the product which caused his injury. The clear and convincing standard can be met by joining manufacturers whose combined production equals seventyfive percent to eighty percent of the total market. Though alternative liability places responsibility for the total amount of damages on each defendant, under enterprise liability the defendants would be liable only for the amount equivalent to their market share.

Enterprise liability incorporates the concert liability principles by requiring proof of an industry-wide safety standard and the manufacture of a generically similar defective product, both which must contribute to the plaintiff’s injuries. It differs from concert liability in that it does not require any type of express or implicit agreement. Parallel behavior is sufficient in and of itself.

Under enterprise liability, traditional tort policies would be served by placing the loss on the tortfeasor rather than the injured plaintiff. More importantly, however, it aligns legal principles with changes in technology and society by placing the loss on the manufacturer who is best able to absorb and distribute the cost and take preventive measures.

Although the enterprise liability theory attempts to base liability on two recognized theories of joint liability, it has been criticized as deviating too greatly from traditional tort principles and policies because it eliminates the identification requirement. Although it was proposed to meet the needs of DES cases in particular, enterprise liability would have application to other situations as well. Ultimately, its potential effect on manufacturing in general would be significant. The effect of extended products liability has already been felt in increased premiums. Under the enterprise liability theory, increased potential for liability might place the cost of premiums outside the reach of small manufacturers. While the increased liability may provide an incentive for greater product safety, it might also decrease it because no matter how safe one manufacturer tries to make its product, it may be found liable for another’s error. In addition, research and marketing of new products may be inhibited, contrary to the societal interest in encouraging production of new, beneficial products. Finally, because the theory concentrates on large manufacturers, they may be encouraged to organize the industry and effectively shut down smaller manufacturers in violation of anti-trust laws.

Policy considerations also militate against acceptance of enterprise liability. The reason behind the shift of the burden of proof on causation is to achieve a more equitable result. But equity extends considerations to both the plaintiff and the defendant. The mere possibility that a particular defendant might be responsible should not be a fair basis for liability. No doubt the possibility equally exists that the defendant’s product was not responsible for the plaintiff’s injury. The theory may also be unfair to plaintiffs who identify the manufacturer but must accept the consequences of a defendant’s insolvency or unavailability. In this instance, the plaintiff who cannot identify the manufacturer but can pick solvent and available defendants is in a better position.

The policy of loss spreading which supports this theory has been criticized as undermining the whole body of tort law. Fault in some form is still the basis of liability. Enterprise liability, however, would, in effect, eliminate that basis and result in making manufacturers insurers. In addition, the deterrent aspects of products liability law would be defeated by holding a manufacturer liable for a defect that could not have been discovered at the time the product was marketed. Without fault as a basis, liability would be imposed based on injury alone. The denial of compensation should not raise a presumption of injustice because the question is not only one of compensation but of legitimacy.

E. Latent Technological Injury Compensation

The arguments against enterprise liability generally lead to the conclusion that the problem of non-identifiable manufacturers exceeds the court’s ability to fashion a practical remedy. Since any solution to this problem will have effects not only on the substantive legal issues, but on industrial and the economic, concerns it is an appropriate question for legislation. One alternative proposed would be a system for “latent technological injury compensation.” This system would be a governmental branch which would get the necessary operational funds through a tax on manufacturers’ gross sales. The fund would be available to both plaintiffs who could identify the manufacturer and those who could not. Under this system, the statute of limitations would start to run from the date of purchase. Once the statute has run, tort litigation would no longer be an option. The plaintiff would have to apply to an administrative agency to get relief. Recovery would be based on the plaintiffs ability to show that he was injured, that the injury could be traced to a type of product, and that the injury could not have been discovered prior to the running of the statute. The plaintiff could recover damages for bodily injury and lost earnings according to a fixed scale. Pain and suffering would not be compensable. The government agency though would be allowed to seek indemnity from the manufacturer on the basis of fault.

This alternative would more readily satisfy the current societal concern for compensating victims without doing violence to traditional tort law. It also provides a solution to a problem which will occur with increasing frequency as increased technology leads to injuries which require, and, deserve compensation. In addition, the goal of loss spreading is served, especially since the loss is spread among those whose activity generated the harm.

This solution though, requires legislative action which is often tedious and compromising. Also required is the creation of an administrative agency. With the prevailing public opinion and political climate against government expansion, this may not be easily accomplished. Furthermore, the system requires a tax on the gross sales of manufacturers. Unless the economic benefit to the manufacturers in terms of lower damage awards and legal fees is clearly demonstrable, manufacturers would no doubt lobby strongly against such a plan. Finally, the limitations on damages might make the plan unappealing to plaintiffs who, under tort law, might be able to recover not only actual and special damages, but punitive damages as well. Though the system is appealing in its simplicity and rationale, it would have to overcome major obstacles before it would be realized.

As evidenced, the problem posed by fungible products and the problem of a plaintiffs inability to identify the manufacturer has been considered from many angles. Traditional tort theories such as alternative liability, concert action, and industry-wide liability have limitations which render them inapplicable in this situation. New theories based on modifications of these traditional ones, appear to stretch legal principles beyond their limits in order to meet policy justifications. Other theories necessitate legislative action which, though possibly more appropriate, require recognition of the problem by the legislature and a well-reasoned, acceptable and workable solution. What solution will ultimately be adopted is an open issue. Recently though, the California Supreme Court decided to provide its own answer.


A. Rejection of Prior Non-Identifable Manufacturers Theories

Before introducing its new theory, the Sindell court rejected the relevance of alternative liability, concert action, and industry-wide liability theories to the situation. Alternative liability was rejected first because all DES manufacturers were not joined as defendants, and, second, because the defendants were in no better position to prove causation the plaintiffs than were. Concert action was not appropriate because the formula for DES is a scientific constant and therefore could not be a basis for a common plan. In addition, the defendants’ reliance on each other’s marketing and promotional techniques was a common practice in the industry. To apply concert action to this situation would be extending the doctrine beyond its limits. Finally, industry-wide liability was rejected for several reasons. First, the blasting cap industry in Hall was much smaller than the drug industry. The Hall court itself noted that this theory, readily applicable to a small centralized industry, might be manifestly unreasonable when applied to a large decentralized industry. Second, in Hall, some of the responsibility for the industry’s safety standards was delegated to a trade association. Such allegations were not made in the present case. Finally, the drug industry safety standards were set to a large degree by the FDA. Therefore, it would be unfair to hold a manufacturer liable for injuries resulting from a drug supplied by another manufacturer simply because it followed standards set by government regulation. Thus, the Hall theory of liability was not applicable to the situation.

B. Policy Considerations

There were policy considerations, however, which justified finding a valid cause of action. To begin, modem industry has developed fungible goods which may injure consumers, but specific manufacturers may not be identifiable. Consequently, a modification of the traditional products liability action was required. The court also noted that the Restatement (Second) of Torts recognized a modification of the Summers rule might be necessary because of the lapse of time and because of other complications resulting from the failure to join all possible defendants. An additional policy argument advanced by the court was that the manufacturers were in the best position to absorb the cost of the injury. Relatedly, it was asserted that manufacturers were better able to guard against the infusion if defective products into the market and that to impose liability would provide incentive for greater product safety. The court finally noted that the most compelling reason for finding a cause of action was that the negligent defendant rather than the innocent plaintiff should bear the loss. These goals could be accomplished under the new theory of market share liability.

C. Market Share Liability

The Sindell court found that although the rule of Summers was inapplicable as traditionally applied, a modification of that theory would be appropriate. The plaintiff was required to allege the existence of a defect and an injury caused by that defect. Causation though, was not measured by the number of defendant manufacturers joined in relation to the total number of manufacturers of that product. The court stated that the appropriate measurement of the possibility that any of the named defendants supplied the injury-causing product was the percentage which the DES sold by each of them for the purpose of preventing miscarriage bore to the entire production of the drug sold by all for that purpose. Therefore, once the plaintiff has shown that the defendants joined in the action were manufacturers who together produced a substantial portion of the DES mothers may have taken, the burden of proof shifted to the defendants to prove that they did not manufacture the product which caused the injuries. The defendants also had the option of cross-complaining against other manufacturers who may have supplied the product which caused the injury. Apportionment of damages was based on the share of the market for which each defendant was responsible.

The court recognized that each defendant’s share of the damages may differ somewhat from its actual share of the market since all manufacturers of the product might not be included and that determining the market share of each defendant might be difficult in itself. This would not invalidate the theory according to the court. Similar problems were encountered and handled adequately with comparative fault. In addition, difficulties in determining market share were problems of proof not pleading. Rejecting the defendants’ argument that it would be unfair to hold them liable for damages caused by another’s product, the court pointed out that with market share liability, each defendant would only be liable for the amount equivalent to the damages caused by the DES it manufactured.


Technological advances in industry have created societal problems. In addition to benefits, the development of new products carries commensurate risks. Discoverable or patent risks are usually dealt with by redesign or additional safety features. Products with known or suspected latent risks carry warning labels. Some latent risks, however, may only surface after a long period of time. In this situation, when the product is put into the marketplace, there is no way to warn the consumer of the hidden danger, or any reason to warrant re-design or to prevent the marketing of the product. Nevertheless, someone is injured. The allocation of responsibility for those injuries and how the injured parties are to be compensated are issues that need to be addressed.

The DES situation is a perfect example of the problem. The plaintiffs were injured by a drug taken by their mothers while the plaintiffs were in utero. Though the drug had passed scrutiny under the available testing standards and procedures required at the initial marketing point, it contained a defect which did not surface until twenty years later and in the next generation of offspring. Because of the passage of time, neither the plaintiffs nor the defendants could prove who manufactured the particular drug that caused the injuries. The California Supreme Court in Sindell v. Abbott Laboratories decided that the courts were the appropriate body to determine the placement of responsibility and its allocation. The court treated the problem as an adversarial one-the consumer against the manufacturer. In reality, because the problem is a societal one, the interests of society would best be served by a solution amenable to both parties, one which a legislature would appear more fit to tailor than a court.

There are certain factors which should dictate that legislative concern be focused on this problem. The first factor is that the solution to the problem will have a profound effect on the current economic structure. The Sindell decision basically establishes a no-fault system of compensation. The manufacturers are not being held liable because they were negligent, either as individuals or in concert toward the plaintiffs. Nor are they liable because the inability to prove identification was their fault, or their particular product caused the plaintifis injuries. These facts cannot be proven. The manufacturers are held liable because they happen to manufacture the same product. The court rejects this as a basis for finding concert action liability, but nevertheless uses it as a foundation for its market share theory. This, in effect, makes each manufacturer of a fungible product an insurer of not only injuries caused by the particular product it produced, but also those caused by similar products of other manufacturers. As a result, insurance premiums for manufacturing are likely to increase or manufacturers will “capture” an insurance company to meet the demands of the increased scope of liability. Larger companies will probably be able to cope with these results. The smaller ones, however, might find the cost of premiums outside their reach. This would leave them vulnerable to potentially devastating lawsuits. In addition, since one of the theoretical foundations of Sindell is that the manufacturer can best distribute the loss among many, it is logical that this will result in higher prices to the consumer. In a competitive market, the large manufacturers will be able to place prices at a more competitively advantageous level. Smaller manufacturers whose operational costs do not have the benefit of high volume, will not. As a result, the smaller manufacturer may be forced out of business. Judicial imposition of liability, with attendantly high awards, may discourage the production of new products and affect marketing practices of the drug industry. Finally, other areas as well as product safety might decrease instead of increase since no matter how safely a manufacturer produces a product it may still be held liable for unpreventable injuries or other manufacturers’ careless manufacturing techniques.

Another indication that a judicial solution such as market share liability is not as feasible as a legislative remedy is the degree of extrapolation the Sindell court had to engage in to justify its decision. The court found no prior legal basis for its new theory. Therefore, a policy justification was the only alternative. The court first noted that the advances in technology created the problem caused by fungible goods and that the court had a choice-to maintain the current doctrine and deny the plaintiff a remedy, or fashion a new remedy to meet the situation. Justice Traynor’s famous concurring opinion in Escola v. Coca Cola Bottling Co. was cited as support. The court noted that, while Justice Traynor was referring to duty, the court’s present problem was causation and liability. Though in some state of confusion, the principle of foreseeability still plays a role in California products liability law. The adaptation the court was trying to justify was the complete elimination of foreseeability as a relevant factor. The drug had passed all available tests. The defect surfaced a generation later. No manufacturer could have discerned that. Therefore, it can hardly be said that the injury was foreseeable.

The court also advanced the Restatement (Second) of Torts as support. Specifically, it pointed to section 433B, Comment h, which states that the rule in Summers may need modification if all defendants cannot be joined or due to the effect of lapse of time. Although the comment declines to forecast the type of cases in which modification would be necessary, it is conceivable that this situation was not one of them. In Summers all possible defendants were joined. It was entirely certain that one of the defendants was responsible. By joining less than the total number of defendants, the basis for liability under the Summers rule is weakened considerably. This weakness was recognized under the enterprise liability theory which also used the market share concept. Enterprise liability minimized the defect by requiring that the plaintiff also prove adherence to an insufficient industry-wide safety standard.

The court’s next and “most persuasive” reason for allowing the cause of action was that as between an innocent plaintiff and a negligent defendant, the tortfeasor should bear the loss. Nevertheless, this is unpersuasive when it is remembered that the court found that neither the plaintiff nor the defendants were at fault for lack of proof as to identification. The court tried to rationalize their decision by noting that the defendants contributed to the problem by marketing a drug with delayed effects. This argument is untenable when it is considered that the defect was not discoverable under the contemporary testing methods. To use this justification as a basis of finding some fault is to require manufacturers to be clairvoyant.

Realizing that these reasons were not sufficient, the court proceeded to broader policy arguments. The first justification advanced was the “deep pocket” theory-the defendants were best able to bear the loss and distribute it among society. Though this is probably true, as the dissent notes wealth should not be a basis for liability. Furthermore, the loss spreading rationale has its own dangers. The second justification for devising a new cause of action was that it would encourage product safety, deter placement of defective products in the marketplace, and, as a result, protect the helpless consumer. This rationale is based, however, if not on fault, then at least on the ground that the defects were discoverable and could be prevented.  If the consumer is helpless to protect himself from injuries caused by the delayed effects of a drug with a latent defect, then the manufacturer is also helpless in the sense that it cannot warn or take preventive measures against such a defect.

On these policy bases the court held that a plaintiff states a valid cause of action when the injury is caused by a fungible product and the plaintiff has joined defendants who have together contributed a substantial portion of the market for that product. Causation is to be measured by market share. But this crucial element is left undefined. The court noted that joining defendants who have a combined market share of seventy-five percent to eighty percent has been recommended, but expressly declines to designate any percentage parameters. Since there is no basis for liability except the defendants’ market share of a fungible product, the court’s failure to define this element is a critical error. It is not merely a matter of proof as the majority suggests, but, as the dissent points out, a question of liability. Moreover, the court uses this uncertain element to justify shifting the burden of proof from the plaintiff to the defendants on the issue of causation. The court noted that any unfairness inherent in shifting the burden of proof is minimized by holding each defendant liable only for its share of the product. This logic is hard to accept. The court has recognized that the defendants are in no better position to disprove causation than the plaintiffs are of proving it. A defendant who produced only thirty percent of the total product marketed should not be held liable merely because he cannot prove that he did not market the specific product that injured the plaintiff. Because most defendant’s market share is relatively small, it is more likely than not that a given defendant did not market the product in question. To hold the defendant liable in such circumstances is manifestly inequitable.

Finally, the uncertainty of the market share element is carried through to the apportionment of damages. Rather than making the defendants jointly and severally liable as in alternative liability, the court apportioned the damages each defendant will be liable for on the basis of its market share. The court dismissed the problems caused by this element’s vagueness by pointing out that difficulty in apportionment has been handled adequately in other situations.

With liability based, not on fault, but on production of similar products, the end result of the court’s decision is not a theory derived from established legal principles, but a theory of no-fault compensation founded on a basis of loss spreading and redistribution. As one commentator noted, if redistribution is the major goal, then there is no reason why the court should retain the principles of causation and defect. Redistribution would be frustrated to the extent that the defendant could use those elements to defeat the plaintifis cause of action. If the needs of the plaintiff are decisive, then the most appropriate response is a comprehensive system of first party insurance that compensates each person in accordance with the severity of their injury.

It is possible that a uniform system of compensation is the solution to the problem. Courts resolve individual cases and cannot solve the problems inherent in setting up a major compensation system. That responsibility belongs to a legislature which has the time and the resources to make a proper evaluation of the problem and the possible solutions. Unlike courts, which have been traditionally limited to dealing with a problem on a case-by-case basis, the legislature is empowered, through enactments, to make broader, more uniform changes. Legislative decisions do not rest on the arguments of a limited number of parties concerning a particular fact situation. Considering the potential breadth of the fungible products problem, such a decisional basis is too narrow. By shifting the problem to the legislature, consumer groups as well as manufacturers will have a role in the final plan. The legislature might react more slowly than courts in reaching its decision, and during the decisional process persons will probably suffer from injuries caused by fungible products. In the long run, however, a legislative decision will be more equitable and will reflect the needs of many interest groups. It will also avoid the undermining of judicial principles which have served well in other situations.


Advanced technology has created not only new products, but also new problems. One of these problems is the inability of a plaintiff injured by a fungible product containing a latent defect to identify the manufacturer of the product which caused his injury as required by traditional tort law. The problem is not only one of lack of identification, but also lack of fault because the manufacturer could not have discovered the defect under the current methods of testing. The court in Sindell attempted to solve the problem by judicially devising a basis of no-fault compensation. However, considering the scope of the problem and the role of the courts, the solution to the situation rests more appropriately with the legislature. This body, by providing a forum in which the concerns of all interested parties can be voiced, can devise an equitable and uniform solution without doing violence to valuable legal principles. Though it is recommended that the Sindell theory not be accepted as a viable cause of action, it is hoped that the legislatures will see it as a warning that the problem has reached maturity and requires immediate attention.

Barbara Banker Redemann, 1980.

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Theories of recovery for DES damage


An estimated 1000 individual or class action products liability lawsuits have been filed against the pharmaceutical manufacturers of diethylstilbestrol (DES). The field of potential plaintiffs is estimated at 500,000-6,000,000 and there are 150-300 potential defendant manufacturers. This article addresses the question of whether the current system of tort liability dispenses fair, timely, and uniform justice both to DES claimants and manufacturers and presents a historical perspective on the basis for liability.

Theories of recovery for DES damage. Is tort liability the answer?, NCBI pubmed/6604118, The Journal of Legal Medicine, Volume 4, Issue 2, 1983.

Traditional theories of tort recovery are based on negligence, breach of warranty, and strict liability. They place the burden of proof on the claimant to specifically identify the product manufacturer and establish proximate causation. Novel theories of recovery have had to be applied in DES lawsuits, including concert of action and alternative liability. Most of these theories have been unaccepted by trial and appellate courts because of the inability to identify the manufacturer. Even if DES manufacturers were to be held liable under a theory of industry-wide or market share liability, defendants would be called upon to allocate liability among themselves.

Many believe that any departure from traditional tort principles should be accomplished by the legislature, not the judiciary. There is not currently a bill before the US Congress dealing specifically with compensation for damages to DES victims. Any model toxic tort legislation should aim to eliminate the benefit inequities as between claimants and the cost inequities in delivering benefits to qualified recipients by the responsible parties. The claimant’s burden of establishing fault should be eliminated in exchange for a claimant’s surrender of a right to sue a third party, and a standardization of compensatory damages. The requirements of specific product identification, duration of exposure, and degree of fault would be eliminated. Jurisdictional requirements and statues of limitation must be drafted to permit recovery for previously unknown injuries. Finally, there should be an overall goal of promptness in recovery. The most equitable solution to problems with the tort system is legislation which deals with the toxic tort problem as a whole and not just on a case-by-case basis.

Arthur H. Downey LL.B. and Kenneth G. Gulley J.D.

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1989 DES Case: Phillips v. Cooper Laboratories


This case involves questions of corporate successor liability. Appellant Cooper Laboratories, Inc. (Cooper) appeals from an order of the San Francisco Superior Court holding it potentially responsible, as successor in interest, for all damages allegedly incurred by Sandra and Michael Phillips (Phillipses) as the result of Sandra’s exposure to diethylstilbestrol (DES) in utero. The Phillips cross-appeal from the court’s order holding that another corporation, the Nestle-LeMur Company, Inc. (Nestle), was not responsible, as successor in interest, for the damages they allegedly sustained. We reverse the trial court’s order holding Cooper potentially liable for the Phillipses’ injuries. We affirm the trial court’s order exonerating Nestle..

PHILLIPS v. COOPER LABORATORIES, Leagle, 19891863215CalApp3d1648_11856, November 29, 1989.

The Phillipses’ complaint filed November 1982 named over 150 defendants, apparently based upon the market share theory of liability enunciated in Sindell v. Abbott Laboratories. The complaint’s alleged causes of action were for negligence, “products liability,” “negligent manufacture,” breach of express warranty, fraud, “conscious disregard of others’ safety,” and loss of consortium.

By order of November 1984 on motion for summary adjudication of issues, the trial court found, inter alia, that Sandra was born May 23, 1959; and that her mother, during her pregnancy with Sandra, had received by prescription of her physician a drug trade-named Milestrol, which was DES manufactured by E.S. Miller Laboratories, Inc. (Miller). Miller did not exist as a corporate entity at the date of said order.

Following this order, Nestle and Cooper remained potentially liable as successors in interest to the liabilities of Miller; and in June 1986, Cooper successfully moved to bifurcate trial of the separate issue of successor liability from the remaining issues of the case. In November 1986, the successor liability issue was tried before the San Francisco Superior Court. At trial, the following facts were established.

Miller was incorporated in California in 1926. It manufactured and sold ethical pharmaceuticals, i.e., drugs for which a doctor’s prescription is required. Between 1942 and 1958, Miller marketed Milestrol.

In 1958, Nestle acquired three corporations which were involved in the manufacture and distribution of pharmaceuticals: the Carroll Dunham Smith Pharmacal Company (Smith), Miller, and the E.L. Patch Company (Patch). Each of these corporations was obtained through Nestle’s acquisition of all or substantially all of the stock of the acquired corporation.

Shortly after these acquisitions in 1958, Nestle formed a fourth corporation in the State of New York, Smith, Miller & Patch, Inc. (SMP-NY). The purpose of SMP-NY was to market the pharmaceutical products of the three newly acquired corporations.

Nestle, in 1958, began reorganization and consolidation of the functions of the various corporations which it had acquired. The raw materials and components in Miller’s laboratories and its product manufacturing functions were transferred to Smith; Smith thereafter produced Milestrol under another trade name. Miller’s product manufacture was, thus, transferred to Smith; Miller’s marketing and sales assets, including its good will, name, trademark “Milestrol,” sales force, retail lists for marketing purposes and old inventories of Milestrol were transferred to SMP-NY for an adequate consideration. By January 1959, Miller had ceased all production of Milestrol. From this point until its corporate existence ceased, Miller became solely a warehouse operation for the products developed and marketed by Smith, Patch, SMP-NY and Nestle. During this period, Miller was more profitable as a warehouse than it had been as a pharmaceutical operation.

In 1964, Patch was dissolved as a corporation. In 1968, Miller was also dissolved pursuant to a vote of its sole shareholder Nestle.

In 1970, Nestle created a second corporation called Smith, Miller & Patch in the State of New Jersey (SMP-NJ). Immediately after its creation, SMP-NJ acquired SMP-NY and Smith by exchanging all of its stock for all of the stock of those corporations which had been owned previously by Nestle. As part of this transaction, SMP-NJ expressly assumed all debts and liabilities of SMP-NY. Immediately after this transaction, SMP-NY dissolved. In March 1972, SMP-NJ merged into Cooper.

Based upon these facts, the court order held that Cooper was potentially liable to the Phillipses for their injuries as successor in interest to Miller. The court exonerated Nestle from any potential liability to the Phillipses. Cooper now appeals from the trial court’s order holding it potentially liable for the Phillipses’ injuries; the Phillipses cross-appeal from that portion of the trial court’s order exonerating Nestle.” …

…continue reading the full paper PHILLIPS v. COOPER LABORATORIES, on Leagle.

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1989 DES Case: Wood v. Eli Lilly & Co.


Plaintiffs, BETTIE W. WOOD, SUSAN F. WOOD, and JONATHAN H. WOOD, JR., initiated the above-styled cause in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida. It was subsequently removed to federal court on the basis of diversity of citizenship.

Plaintiffs instituted this cause against Defendants, ELI LILLY CO., etc., et al., 11 pharmaceutical companies, for injuries caused by their mother’s alleged ingestion of the drug diethylstilbestrol (hereinafter referred to as “DES”) to prevent a miscarriage during her pregnancies with Plaintiffs. Defendants allegedly comprise a substantial share of the drug companies which, at any time between 1941 and 1971, manufactured, marketed, promoted, or sold DES in the United States.

WOOD v. ELI LILLY & CO., Leagle, 19892179723FSupp1456_11981, September 20, 1989.

Plaintiffs have allegedly sustained the following injuries: BETTIE W. WOOD has been diagnosed with reoccurrence of clear adenocarcinoma; SUSAN F. WOOD has sustained chronic vaginal adenosis, a pre-cancerous condition; and JONATHAN H. WOOD, JR. has undergone treatment for testicular embryonal carcinoma.

Plaintiffs seek compensatory damages against all Defendants in all twelve counts of their Complaint, asserting claims for

  1. “enterprise and/or industry-wide liability” (Count I),
  2. concerted action” (Count II),
  3. market share liability” (Count III),
  4. alternative liability” (Count IV),
  5. “negligence” (Count V),
  6. “strict liability in tort” (Count VI),
  7. “lack of consent” (Count VII),
  8. “breach of express warrantability” (Count VIII),
  9. “breach of implied warranty” (Count IX),
  10. “fraud” (Count X),
  11. “violation of federal law—negligence per se” (Count XI),
  12. and “conspiracy” (Count XII).

Defendants have premised their motions to dismiss on both procedural and substantive grounds. As to the substantive grounds for dismissal, Plaintiffs seek a stay of these proceedings pending the decision of the Supreme Court of Florida in the matter styled Conley v. Boyle Drug Co. Of the procedural and substantive grounds for dismissal, this Court shall limit its discussion to the following questions:

  1. Whether Plaintiffs’ claims are barred by the Florida statute of repose;
  2. and whether Plaintiffs state a cause of action against Defendants for marketing defective DES where Plaintiffs admittedly cannot establish that a particular defendant was responsible for their injuries.” …

…continue reading the full paper WOOD v. ELI LILLY & CO., on Leagle.

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1988 DES Case: Brown v. Eli Lilly & Co.


The defendant has moved for summary judgment on the ground that Nebraska’s ten-year statute of repose for products liability cases bars this action by Julie Brown against Eli Lilly and Company (Lilly) arising out of injuries allegedly caused by the drug diethylstilbestrol (DES). The undisputed facts are that Brown’s mother purchased and ingested DES in 1960, that the injuries she allegedly suffered as a result were discovered in 1983, and that she filed the present suit in 1987. Brown argues that the statute of repose is unconstitutional

BROWN v. ELI LILLY & CO., Leagle, 19881547690FSupp857_11394, August 5, 1988.

Lilly moved for permission to submit a reply brief, a copy of which it delivered to the court. The motion shall be granted, as Lilly must have an opportunity to respond to Brown’s defense that the statute of repose is unconstitutional. Brown opposed the motion, and requested that she be permitted to submit another brief if Lilly received permission to submit its reply brief. There presently is no motion to that effect, and I think it unnecessary for another brief to be submitted:

The challenged statute provides, in relevant part:

  • All product liability actions, except one governed by subsection (5) of this section, shall be commenced within four years next after the date on which the death, injury, or damage complained of occurs.
  • Notwithstanding subsection (1) of this section or any other statutory provision to the contrary, any product liability action, except one governed by section 2-725, Uniform Commercial Code or by subsection (5) of this section, shall be commenced within ten years after the date when the product which allegedly caused the personal injury, death, or damage was first sold or leased for use or consumption.
  • Any action to recover damages based on injury allegedly resulting from exposure to asbestos composed of chrysotile, amosite, crocidolite, tremolite, anthrophyllite, actinolite, or any combination thereof, shall be commenced within four years after the injured person has been informed of discovery of the injury by competent medical authority and that such injury was caused by exposure to asbestos as described herein, or within four years after the discovery of facts which would reasonably lead to such discovery, whichever is earlier. No action commenced under this subsection based on the doctrine of strict liability in tort shall be commenced or maintained against any seller of a product which is alleged to contain or possess a defective condition unreasonably dangerous to the buyer, user, or consumer unless such seller is also the manufacturer of such product or the manufacturer of the part thereof claimed to be defective. Nothing in this subsection shall be construed to permit an action to be brought based on an injury described in this subsection discovered more than two years prior to August 30, 1981.

Brown contends that the statute of repose violates the open courts provision of the Nebraska Constitution. …

… Brown also argues, however, that § 25-224 violates the equal protection clause of the United States Constitution because it creates an exception for victims of injuries allegedly caused by exposure to asbestos who, she contends, are similarly situated with DES victims. …

…continue reading the full paper BROWN v. ELI LILLY & CO., on Leagle.

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1988 DES Case: Castrignano v. E.R. Squibb & Sons, Inc.


” This case was initiated in the United States District Court for the District of Rhode Island. The plaintiff, Marilyn Castrignano (Marilyn), sought to recover damages for injuries that she allegedly incurred in utero when her mother ingested diethylstilbestrol (DES), which the plaintiff claimed was manufactured by the defendant, E.R. Squibb & Sons, Inc. (Squibb).

CASTRIGNANO v. E.R. SQUIBB & SONS, INC, Leagle, 19881321546A2d775_11316, August 3, 1988.

The Federal District Court conducted a jury trial that held Squibb strictly liable in tort and liable for breach of implied warranty of merchantability. After the verdict the trial judge, Chief Judge Francis J. Boyle, acting pursuant to Rhode Island Supreme Court Rule 6, sua sponte certified three questions to this court concerning liability for injuries caused by prescription drugs. The certified questions are as follows:

  1. Does the State of Rhode Island recognize an action for damages for personal injuries in the circumstances presented in this action based on theories of strict liability in tort and breach of warranty of merchantability?
  2. Does comment (k) to § 402A, Restatement of Torts apply in Rhode Island to an action for damages for personal injuries in the circumstances presented in this action in an action based upon theory of strict liability in tort?
  3. If comment (k) applies to this type of action, is its application to the prescription drug DES a matter of law or a question of fact, and, if a question of fact, which party has the burden of proof?

Since Judge Boyle asked our court to consider the specific facts of this case when answering the certified questions, a discussion of the facts is necessary.

Marilyn’s complaint alleges she has suffered physical abnormalities of her reproductive system that have caused her to suffer miscarriages, infections, and other complications because of her exposure to DES in utero. The jury trial against Squibb began in 1986.

The facts elicited at trial are as follows. Susan Silvestri, Marilyn’s mother, conceived Marilyn on August 15, 1953. Doctor Thomas Fogarty was Mrs. Silvestri’s physician. In November 1953 Mrs. Silvestri experienced some cramping. The medical records that Dr. Fogarty kept indicated that on November 5 he prescribed progesterone for Mrs. Silvestri.

Another notation in the medical records indicated that Dr. Fogarty prescribed Stilbetin for Mrs. Silvestri. Stilbetin is Squibb’s trade name for DES. The date of the medical-record notation was somewhat illegible and seemed to indicate that Stilbetin was prescribed on either the 1st or the 10th of December. Considering both of these dates, calculations established that Mrs. Silvestri began taking DES between the sixteenth and eighteenth weeks of gestation. She continued to take DES each day throughout her pregnancy. Mrs. Silvestri testified that Dr. Fogarty told her that he prescribed DES to prevent her from having a spontaneous abortion or, in layman’s terms, a miscarriage.

Several of plaintiff’s doctors testified that Marilyn’s various physical problems were related to DES. They reached this conclusion because of the particular constellation of her symptoms. Although each symptom could occur in the general female population, when they occur in the same person they signal DES exposure. These doctors also testified that at the time Dr. Fogarty prescribed DES to Mrs. Silvestri, several studies were published that should have put Squibb on notice that DES injured the reproductive systems of fetuses exposed to the drug. Furthermore they noted that in 1971 the FDA banned the use of DES for the prevention of spontaneous abortions.

Squibb’s witnesses, on the other hand, testified that all the problems that Marilyn alleges were caused by DES can be found in women who were never exposed to DES. They also stated that Mrs. Silvestri took DES after the time when it could have adversely affected the development of Marilyn’s reproductive system. No damage could occur from DES exposure during the eighteenth and nineteenth weeks of gestation but rather only during the third through the fourteenth weeks of gestation. Squibb’s experts also insinuated that Mrs. Silvestri’s ingestion of the prescribed progesterone could have caused the abnormalities in Marilyn’s reproductive system.

Alternatively Squibb’s experts testified that regardless of whether Mrs. Silvestri ingested DES, Squibb cannot be held liable because in 1953 it had no reason to know of the drug’s alleged adverse effects. They noted that in 1947 the Federal Drug Administration (FDA) approved the use of DES for the prevention of miscarriages. Contradicting the publications cited by plaintiff, Squibb’s experts argued that none of the research available in 1953 reasonably established that a human female’s exposure to DES in utero could damage her reproductive system. Without any reason to know of any side effects, they argue, they cannot be held liable.

After plaintiff presented her case, the trial judge dismissed the claims based on res ipsa loquitur, breach of express warranty, and misrepresentation. Opting to let the case proceed to the jury before ruling on the motion for a directed verdict, the trial judge reserved ruling on the remaining counts of negligence, strict liability, implied warranty of merchantability, and implied warranty of fitness for a particular purpose.

The jury returned a verdict against Squibb on the strict-liability and implied-warranty-of-merchantability counts but ruled in Squibb’s favor on the remaining counts. Squibb immediately filed a motion for a new trial notwithstanding the verdict. Squibb argued that in the charge to the jury, the trial judge failed to exclude prescription drugs from strict-tort liability pursuant to the Restatement (Second) Torts, § 402A, comment k (1965). In the instructions the trial judge did not recognize a comment-k exception for prescription drugs but instead instructed the jury that Squibb would be strictly liable if the drug was defective and unreasonably dangerous according to an ordinary consumer’s expectations. He further instructed that in order to make this determination, the jury must employ a risk-benefit analysis in light of the information available at the time the drug was taken because drugs are by nature dangerous substances. Upon considering Squibb’s motion, the trial judge noted that the application of comment k to prescription-drug liability had not yet been addressed in Rhode Island. He therefore certified these questions to our court.

To summarize briefly this court’s answers to the certified questions, we rule:

  1. Based on the facts of this case Rhode Island law recognizes actions for damages for personal injury based on the theories of strict liability in tort and breach of the implied warranty of merchantability.
  2. In a tort action comment k is a defense to an allegation of design defect. Comment k, however, is not a defense to an allegation of failure to warn. Comment k also is a defense for liability under the contract theory of breach of implied warranty of merchantability.
  3. The application of comment k is a mixed question of law and fact. The defendant who uses comment k as a defense bears the burden of proving that the comment applies. If reasonable minds could only reach one conclusion, the judge may rule on comment k’s application. Otherwise, the question should be submitted to the jury.

The defendant correctly contends that Rule 6 of the Supreme Court Rules imposes no absolute duty on this court to answer the certified questions. Jefferson v. Moran. We, however, shall respond to the questions to clarify the law of Rhode Island on these issues. To analyze the issues at hand logically, we shall bifurcate the first question and address the strict-liability-in-tort issue in full. Second we shall address the issue of whether the breach of the implied warranty of merchantability is an appropriate theory of recovery for prescription-drug cases.” …

…continue reading the full paper CASTRIGNANO v. E.R. SQUIBB & SONS, INC, on Leagle.

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1988 DES Case: Brown v. Superior Court


In current litigation several significant issues have arisen relating to the liability of manufacturers of prescription drugs for injuries caused by their products. Our first and broadest inquiry is whether such a manufacturer may be held strictly liable for a product that is defective in design. The remaining questions relate to the scope of liability of producers of diethylstilbestrol (DES) under the market share theory enunciated in Sindell v. Abbett Laboratories (1980). Specifically, we shall determine whether a plaintiff who proceeds under that theory may base her action on fraud or breach of warranty, and whether the manufacturers joined in the action are jointly and severally liable for any damages that may be awarded, or whether their liability is confined to their share of the relevant market for DES.

BROWN v. SUPERIOR COURT, Leagle, 1988109344Cal3d1049_11053, March 31, 1988.

A number of plaintiffs filed actions in the San Francisco Superior Court against numerous drug manufacturers which allegedly produced DES, a substance plaintiffs claimed was used by their mothers to prevent miscarriage. They alleged that the drug was defective and they were injured in utero when their mothers ingested it. The cases raised several common issues and, in order to facilitate their resolution and conserve judicial resources, the presiding judge, pursuant to a procedure recommended by the Judicial Council, designated the actions as “complex litigation.”

Each case was assigned its own number and had an independent existence, but the court’s pretrial rulings on the law were made in a separate case with a separate number (830-109), and were to be binding on the other actions. At least 69 cases are involved. Under the court’s order, additional cases may be governed by its rulings if actions subsequently filed present the same issues. The proceeding before us involves a series of pretrial rulings in case 830-109.

A typical complaint in the complex litigation names 170 or more drug companies as defendants. It is alleged that they manufactured DES from the same formula, and that the drug was unsafe for use in preventing miscarriage and resulted in severe injury to plaintiff. Defendants knew that the drug contained a cancer-causing substance, yet they failed to warn users or their physicians of these dangerous characteristics. Plaintiff seeks to hold defendants liable on theories of strict liability, breach of express and implied warranty, fraud, and negligence. In the event plaintiff is unable to identify the manufacturer of the specific brand of DES that caused her injuries, she seeks to hold liable “those defendant manufacturers who manufactured a substantial share of the appropriate market for said drug.”

The trial court made pretrial rulings in favor of defendants on the issues stated above. That is, it determined that defendants could not be held strictly liable for the alleged defect in DES but only for their failure to warn of known or knowable side effects of the drug. It held further that neither breach of warranty nor fraud will lie in an action based on the market share theory of Sindell.Finally, the court ruled that defendants could not be held jointly and severally liable for the entire amount of the judgment if plaintiff prevails in the action, but that each defendant would be liable only for the proportion of the amount awarded that represented its share of the appropriate DES market.

Plaintiff sought a writ of mandate or prohibition in the Court of Appeal to review the foregoing rulings. That court issued an alternative writ and, after considering the issues, upheld the trial court’s determination and denied a peremptory writ. We granted review to examine the conclusions of the Court of Appeal and its potential conflict with Kearl v. Lederle Laboratories (1985), on the issue of strict liability of a drug manufacturer for a defect in the design of a prescription drug.” …

…continue reading the full paper BROWN v. SUPERIOR COURT, on Leagle.

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