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

The present consolidated appeal arises out of a pharmaceutical product liability action brought by plaintiff against various drug companies seeking recovery for injuries allegedly caused by her mother’s ingestion of diethylstilbestrol (DES). The trial court granted the drug companies’ joint motion for summary judgment as to counts I through IX of plaintiff’s second-amended complaint, but denied the motion as to count X alleging a strict liability cause of action based upon the market share theory. Other companies were granted summary judgment on all counts of the complaint as they were determined not to be part of the relevant DES market. For the reasons set forth below, we affirm in part and reverse in part and remand the cause for further proceedings.

SMITH v. ELI LILLY & CO., Leagle, 1988174173IllApp3d1_1174, May 25, 1988.

In 1952, Elizabeth Smith became pregnant with Sandra Smith, the plaintiff in this case. Having had a history of difficulty with pregnancy, Mrs. Smith consulted with her physician, Dr. Jack E. Davis of the Field Clinic in Chicago, Illinois. In March 1953, he prescribed DES, which Mrs. Smith took throughout the remainder of her pregnancy.

At her deposition, Mrs. Smith described the medication as a “white tablet,” “smaller than an aspirin” to be taken three times a day. On July 13, 1953, plaintiff was delivered by cesarean section.

Twenty-five years later, in September 1978, after undergoing a dilation and curettage, cervical biopsy, and excisional biopsy of the vaginal wall, plaintiff was diagnosed as having a form of cancer medically referred to as clear cell adenocarcinoma of the vagina, and shortly thereafter, underwent radical surgery. Plaintiff allegedly developed this cancer as a result of her in utero exposure to DES.

Mrs. Smith obtained her DES prescription from the Field Clinic pharmacy. While the pharmacy’s records indicate that she was administered “Tab 98,” 25-milligram tablets of DES, the identity of the specific manufacturer of the product was not disclosed. Moreover, Dr. Davis and the purchaser of the products stocked by the pharmacy are deceased.

In August or September 1980, plaintiff filed her initial complaint against more than 100 drug companies which allegedly distributed DES to the Field Clinic, 70 of which filed appearances. In November 1982, plaintiff filed a second-amended complaint consisting of 11 counts Counts I through VI sound in, respectively, negligence, strict liability, breach of express warranty, fraud, breach of implied warranty, violation of the Federal Food, Drug and Cosmetic Act, and counts VII and VIII, in conspiracy. These counts pray for assessment of damages on various bases of “concerted action,” “joint and several” liability and “joint enterprise” liability. Counts IX and X allege theories of negligence and strict liability, respectively, and invoke “market share” as the means of determining damages. The thrust of plaintiff’s causes of action is the drug companies’ alleged failure to properly test DES and to adequately warn of its dangers.” …

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

More DES DiEthylStilbestrol Resources

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

Plaintiffs are seven of the many so-called “DES daughters” who have sued various drug companies, alleging that they suffer from malformations of their reproductive tracts because they were exposed, in utero, to DES, which was prescribed for their mothers in order to prevent miscarriages.

Appellee is Eli Lilly and Co., the only one of nine original defendants that plaintiffs did not voluntarily dismiss.

Plaintiffs, who are residents of Maryland and of the District of Columbia, invoked the diversity jurisdiction of the District Court.

TIDLER v. ELI LILLY AND CO., Leagle, 19881269851F2d418_11186, July 12, 1988.

That court granted Lilly’s motion for summary judgment because it determined that the plaintiffs had no competent evidence that the defendant manufactured the DES ingested by their mothers, and under the laws of both the District of Columbia and of Maryland, plaintiffs cannot recover without proof that the defendant proximately caused their injuries.

Plaintiffs brought this appeal and thereafter also moved this court to refer controlling questions of law to the highest court in each of those jurisdictions.” …

… continue reading the full paper TIDLER v. ELI LILLY AND CO., on Leagle.

More DES DiEthylStilbestrol Resources

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

Seven drug manufacturers appeal from a well-reasoned determination which denied exculpation based on their claim that they were not the manufacturer of the drug known as diethylstilbestrol (DES), allegedly ingested by the mothers of the plaintiffs. The history of DES is well documented in a previous opinion of this court, Bichler v Lilly & Co.

TIGUE v. E. R. SQUIBB & SONS, INC., Leagle, 1988570139AD2d431_1490, April 14, 1988.

The underlying problem presented is which of the many manufacturers of this unpatented drug should be held culpable, where it cannot be definitively determined which company manufactured the pills ingested by the plaintiffs’ mothers.

In the 1987 Cumulative Supplement to his treatise, 1 New York Products Liability § 8:07, Michael Weinberger succinctly analyzes the present state of the law under the heading Enterprise Liability:

In Bichler v. Eli Lilly & Co., the Court of Appeals affirmed a plaintiff’s verdict, which was based on a concerted action theory. However, the Court did not decide the validity of a cause of action based on concerted action in DES cases. The court stated that because defendant did not object to the trial court’s instructions on concerted action, this theory became the law of the case, and was not preserved for appellate review. Hence, the court took no position on the question of whether New York recognizes a cause of action based on concerted action.

In a later related DES case, the Court of Appeals again took no position on whether the theory of concerted action (or other related theories) should be adopted in DES cases. The court held only that the Bichler jury finding of concerted action was not entitled to collateral estoppel effect, because the issue of concerted action was not actually contested in the trial judge’s jury charge in the earlier case.Therefore, New York still has no position on whether a cause of action in DES cases can be based on concerted action.

As noted … ” … continue reading the full paper TIGUE v. E. R. SQUIBB & SONS, INC., on Leagle.

More DES DiEthylStilbestrol Resources

1987 DES Case: George v. Parke-Davis


The Federal District Court in Spokane certified seven questions to this court regarding a tort claim filed by Kathleen George against the defendant DES manufacturers and distributors. These questions focus on how liability should be apportioned among the defendants, and ask for explanation and clarification of this court’s decision in Martin v. Abbott Labs.

GEORGE v. PARKE-DAVIS, Leagle, 1987691107Wn2d584_1650, January 22, 1987.

In Martin, we developed the theory of market share alternate liability. Under this theory, a plaintiff can state a cause of action for injuries associated with her mother’s ingestion of DES by suing one or more DES manufacturers and alleging the following:

  1. her mother took DES,
  2. the DES caused her subsequent injuries,
  3. the defendant or defendants produced or marketed the type of DES taken by her mother,
  4. and this production or marketing of DES constituted the breach of a recognized legal duty to the plaintiff.

Individual defendants can exculpate themselves if they can establish that for whatever reason they did not market the DES which could have caused the plaintiff’s injuries. If the defendants cannot exculpate themselves from liability then they are presumed to have equal market shares unless they can establish their actual market share in the relevant geographic market. Martin, at 605-06. If any defendant can establish its actual market share, then this figure, rather than the presumptive share, controls.

George contends she was injured because of DES ingested by her mother. The federal court has certified seven questions to discuss liability apportionment among defendants in light of Martin. “…

… continue reading the full paper GREENE v. ABBOTT LABS, on Leagle.

More DES DiEthylStilbestrol Resources

The DES Manufacturer Identification Problem: A Florida Public Policy Approach


Terri Lynn Conley suffered from cervical adenosis. She underwent surgery for removal of most of her cervix, as well as removal of other precancerous and cancerous tumors. Conley’s mother ingested the drug diethylstilbestrol (DES) twenty years before while Conley was present in utero. Doctors commonly prescribed DES as a miscarriage preventative around the time period that Conley’s mother was pregnant, but subsequent research linked in utero exposure to DES to the kind of cancer that Conley developed.

The DES Manufacturer Identification Problem: A Florida Public Policy Approach, University of Miami Law School Institutional Repository, University of Miami Law Review, 3-1-1986

Conley brought an action against eleven manufacturers who had produced DES both before and during her mother’s pregnancy. She alleged that the DES her mother ingested during pregnancy caused her own medical complications. She was unable to identify the specific manufacturer of the DES that her mother ingested, but she suggested four alternative theories of recovery in lieu of the traditional tort requirement that the plaintiff identify specific tortfeasors

The trial court granted motions to dismiss and judgments on the pleadings for the defendants because of Conley’s inability to identify the specific manufacturer. On appeal, the Fourth District Court of Appeal affirmed, held: failure to allege legal causation by identifying the specific tortfeasors precludes recovery. The district court recognized, however, the compelling argument in favor of relaxing the identification requirement in DES-like situations, and considered various theories fashioned by courts of other jurisdictions. The court proposed its own theory of liability for adoption in Florida, and urged its serious consideration by the supreme court. The court concluded, however, that it lacked authority to approve a new theory of liability before the Supreme Court of Florida had done so. It certified the following question to the supreme court as an issue of great public concern: “Does Florida recognize a cause of action against a defendant for marketing defective DES when the plaintiff admittedly cannot establish that a particular defendant was responsible for the injury?Conley v. Boyle Drug Co.


American courts have approved various theories of recovery when confronted with cases where the plaintiff was unable to identify the specific tortfeasor responsible for causing his or her injury. Certain policy considerations justify these courts looking beyond the boundaries of accepted tort law to fashion new remedies. The policies identified and discussed in this note are separated into two major categories:

  1. general tort law policy considerations that blend and complement one another,
  2. and two major policies for the imposition of liability on manufacturers of defective products in products liability cases.

These policy considerations will have a major effect on a DES case. Various courts have recognized them as appropriate guideposts when trying to accommodate the “competing demands for change and stability. The Supreme Court of Florida must consider these policy considerations in the DES context because it presents the court with a factual circumstance that strains the current boundaries of accepted tort doctrine. Because these general tort law and products liability policies are the reasons behind the doctrines that courts accept now, it necessarily follows that the court must use them to guide its analysis of this DES products liability case. Application of these policies may lead to recovery for a DES plaintiff.

A. General Tort Law Policies

Unfortunately, courts often face factual circumstances where justice and equity compel the resolution of a dispute in favor of one party, but established tort law doctrines are inadequate to effect such a resolution. These situations are products of an ever-changing society; therefore, the court must use policy considerations when deciding whether or not to create a new doctrine of liability, or to modify an existing one, in order to meet the needs of a changing society.

The Supreme Court of California confronted such a situation in Sindell v. Abbott Laboratories. In Sindell, the plaintiff had a malignant bladder tumor surgically removed. The cancer was a result of the DES which her mother ingested during pregnancy. The plaintif could not identify the specific manufacturer of the DES, and suggested three theories of recovery for the court to consider. The court rejected all three theories for various reasons, but fashioned its own theory of recovery in response to her situation. Justice Mosk, writing for the court, recognized the need for the law to adapt to new situations created by a changing society:

In our contemporary complex industrialized society, advances in science and technology create fungible goods which may harm consumers and which cannot be traced to any specific producer. 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. Just as Justice Traynor… in Escola v. Coca Cola Bottling Co …. recognized that in an era of mass production and complex marketing methods the traditional standard of negligence was insufficient to govern the obligations of manufacturer to consumer, so should we acknowledge that some adaptation of the rules of causation and liability may be appropriate in these recurring circumstances.

The court’s willingness to adapt the law to new circumstances is indicative of a judicial philosophy that sees the law as a servant of society, not as its master. Law remains useful only so long as it undergoes a metamorphosis that parallels that of society. “Any legal system, to remain viable over a span of time, must have the flexibility to admit change.” The Sindell court used policy considerations to reach its result. Although many may disagree with the method chosen by the Sindell court to resolve the defendant-identification issue, the importance of Sindell is that a court, to responsibly fulfill its obligations, must see the scope of its role in society as encompassing the power to modify existing legal doctrines to meet the needs of the society it serves.


When fashioning a new remedy, or modifying an existing one to meet the needs of society, a court will look to general policies to guide it in its task. One such policy courts recognize is that the purpose of tort law is to compensate an injured plaintiff for wrongs others commit.

Abel v. Eli Lilly & Co. presented the Supreme Court of Michigan with a DES case which had a manufacturer identification problem.  The court considered the applicability of two theories of recovery:

  1. alternative liability,
  2. and concert of action.

It found that their application would be appropriate in the DES context because Michigan courts already had adopted the policies underlying these theories. One of the underlying policy reasons the court identified was that the purpose of tort law is to compensate injured persons.

In its analysis, the Abel court referred to Holloway v. General Motors Corp. , in which the question arose whether the plaintiff had the burden of proving the specific cause of a defect when alternative causes were possible. In Holloway, a woman was injured and her father killed when the vehicle in which they were riding left the road and struck a utility pole. The plaintiffs alleged that a defective ball joint assembly broke, causing the driver to lose control of the car. This all occurred while the plaintiffs drove the car across chuckholes in the road. The court, in response to a policy argument advanced by General Motors, stated that “it is the injury inflicted on the plaintiff that entitles him to a remedy, not his skill in discovering precisely where defendant’s manufacturing process went wrong.” The court held that as long as the plaintiffs presented evidence from which a jury could reasonably infer that some defect in the manufacturing process caused the accident, their burden of proof had been met even though they were unable to isolate the specific cause. The court also noted that an alternative liability situation presented a “somewhat analogous situation” in which the “rule is that a plaintiff need not prove which person among alternative negligent tortfeasors caused his injury.” The implication of this discussion by the court is that in order to give meaning to the policy that tort law should compensate injured plaintiffs, it is reasonable to shift burdens of proof in unusual factual circumstances where failure to do so would preclude recovery. If there is a proof problem that is difficult to resolve, the law should stand ready to compensate the injured plaintiff unless the defendant can exonerate himself.

The Holloway decision was an easy one because the question on rehearing was premised on the fact that some defect in the defendant’s product caused the accident. The only issue in that case was whether the plaintiff must prove which one. The Abel case presented a more difficult question because the problem involved proving which defendant manufactured the DES that harmed the plaintiffs. The Abel court recognized that the proof problem in this DES case was “substantially and significantly distinguishable” from the classic alternative liability case. The court also recognized that the same policy consideration which compels it to use this theory in the classic case also compels it to adapt the theory to variations of the original fact pattern, such as the DES cases, which present similar, but not identical, problems of proof.


The law should show a preference for an innocent plaintiff over a possibly culpable defendant. The policy presented by this statement is a corollary of the policy that tort law should compensate the injured plaintiff. These two policies are entirely intertwined. If the purpose of tort law is to compensate the injured plaintiff, then the effect is a legal preference for an innocent plaintiff over a possibly culpable defendant in an appropriate circumstance. Likewise, if the law shows a preference for innocent plaintiffs, then the end result will be a judicial tendency to compensate injured plaintiffs rather than to deny recovery. Each policy seems to be the natural consequence of the other.

In the landmark case of Summers v. Tice, the Supreme Court of California recognized the policy of preferring the injured plaintiff over a possibly culpable defendant. In Summers, the plaintiff and defendants were hunting quail. The plaintiff was standing seventy-five yards from the defendants when one of them flushed a bird into flight between themselves and the plaintiff. Both defendants shot at the quail with shotguns at the same time, and two shots hit the plaintiff. It was impossible to determine whether the shots that hit the plaintiff were from one gun or the other, or one from each. The trial court found that both defendants were negligent toward the plaintiff, and that the negligence of both defendants was the legal cause of the plaintiff’s injuries. The defendants appealed, arguing “that there [was] not sufficient evidence to show which defendant was guilty of the negligence which caused the injuries. The court upheld the lower court judgment, and reasoned that:

When we consider the relative position of the parties and the results that would flow if the plaintiff was required to pin the injury on one of the defendants only, a requirement that the burden of proof on that subject be shifted to defendants becomes manifest. They are both wrongdoers-both negligent toward plaintiff. They brought about a situation where the negligence of one of them injured the plaintiff, hence it should rest with them each to absolve himself if he can. The injured party has been placed by defendants in the unfair position of pointing to which defendant caused the harm. If one can escape the other may also and plaintiff is remediless.

In the Sindell case, the same court adapted the Summers alternative liability framework to fashion what is popularly known as the market share liability theory. The court stated that “[t]he most persuasive reason for finding plaintiff states a cause of action is that advanced in Summers: as between an innocent plaintiff and negligent defendants, the latter should bear the cost of the injury. The court added that failure to provide evidence of causation was not the fault of either the plaintiff or defendants, but that the defendants’ conduct in marketing a drug the effects of which are delayed for many years played a significant role in creating the unavailability of proof.

In Collins v. Eli Lilly Co., the Supreme Court of Wisconsin confronted the DES causation problem. The Collins court recognized that available tort doctrines would be inadequate to allow recovery for the plaintiff because of the insurmountable problem of manufacturer identification. The court noted that the Wisconsin Constitution provides that every person is entitled to a certain remedy for all injuries, or wrongs which he may receive in his person, property or character, and that this provision authorized the courts to fashion a new remedy when an adequate remedy does not exist. In making the decision whether to fashion a new remedy, the court stated:

We are faced with a choice of either fashioning a method of recovery for the DES case which will deviate from traditional notions of tort law, or permitting possibly negligent defendants to escape liability to an innocent, injured plaintiff. In the interests of justice and fundamental fairness, we choose to follow the former alternative.

The court considered the various theories submitted by the plaintiff, and then rejected all of them. The court found the defendants liable on its own theory which it based on the notion that each defendant contributed to the risk of injury to the public and, consequently, the risk of injury to individual plaintiffs.

These cases embody the important concept that the policy considerations of meeting the changing needs of society, plaintiff compensation, and plaintiff preference, compelled the courts first to make the decision as to whether the plaintiff was entitled to a remedy. The courts did not consider the difficulty of constructing a remedy. If the plaintiff was entitled to recover, then the courts, guided by these policy considerations, were obligated to find a theory which would afford an appropriate remedy. If one did not exist among traditional tort theories, then the courts fashioned a new theory. The fact that this task was difficult was no excuse for not fulfilling this duty.

Courts must not restrain themselves within the confines of existing tort doctrines, thereby sacrificing legitimate claims to stare decisis. The driving force behind any decision should be applicable public policy, not simply fitting a set of facts to the template of an existing doctrine.

B. Underlying Products Liability Policies

The law of products liability has changed dramatically over the last century. The changes are the result of a major philosophical upheaval in the courts in response to the industrialization of America. The strict rules, which courts designed to protect industry from destruction by numerous lawsuits, have given way to strict liability, which courts designed to protect the consumer from the excesses of industry. There are several policy reasons behind this shift. One major consideration is that imposing liability on a manufacturer for injuries caused by defects in its products will be an incentive to adequately test its products to ensure they are safe before marketing them. Several courts considered this policy in their deliberations in DES and DES-like cases.

The Supreme Court of California, in Sindell v. Abbott Laboratories, based its decision to fashion a new remedy for the plaintiff, in part, on the safety incentive aspect of modem products liability law. The Sindell court concluded that:

The manufacturer is in the best position to discover and guard against defects in its products and to warn of harmful effects; thus, holding it liable for defects and failure to warn of harmful effects will provide an incentive to product safety …. These considerations are particularly significant where medication is involved, for the consumer is virtually helpless to protect himself from serious, sometimes permanent, sometimes fatal, injuries caused by deleterious drugs.

A New York federal district court, in Hall v. E. . Du Pont De Nemours & Co. , faced a manufacturer identification problem similar to that of DES cases. In Hall, exploding blasting caps, in unrelated incidents, injured several children. Each child found an unlabeled blasting cap, which they were able to detonate with ease. The plaintiffs could not identify the particular manufacturers of the caps that injured them individually; therefore, their complaint alleged that each cap in question was designed and manufactured jointly or severally by the six corporate defendants or by other unnamed manufacturers, and by their trade association. They further alleged that the manufacturers knew that blasting caps frequently caused injury to children, and that they had jointly considered and rejected the option of labeling the caps. Because the plaintiffs could not identify the specific manufacturer responsible for their injuries, the defendants moved to dismiss the claims on the grounds that the plaintiffs did not state claims upon which relief could be granted. The court denied the defendants’ motion and shifted the burden of proof on the issue of causation to the manufacturers. Before reaching its conclusion, the Hall court noted the reasons for imposing strict liability on manufacturers:

A manufacturer is in the best position to discover defects or dangers in his product and to guard against them through appropriate design, manufacturing and distribution safeguards, inspection and warnings…. A rigorous rule of liability with enhanced possibilities of large recoveries is an “incentive” to maximize safe design or a “deterrence” to dangerous design, manufacture, and distribution.

By imposing joint liability on each member of the blasting cap industry, the court shifted the burden of proof to each manufacturer-each manufacturer had to exonerate itself to escape liability. This burden acts as an incentive for manufacturers to take necessary precautions to ensure the safety of persons who might foreseeably come into contact with their products.

The Collins v. Eli Lilly Co. court expressed the same reasoning that the Sindell and Hall courts did to justify imposing liability on the DES manufacturers:

The cost of damages [sic] awards will act as an incentive for drug companies to test adequately the drugs they place on the market for general medical use. This incentive is especially important in the case of mass-marketed drugs because the consumers and their physicians in most instances rely upon advice given by the supplier and the scientific community and, consequently, are virtually helpless to protect themselves from serious injuries caused by deleterious drugs.

All of these courts found that imposing liability on manufacturers was a legitimate vehicle for giving them incentive to ensure the safety of the consuming public. These courts also recognized that consumers have an inherent difficulty in protecting themselves from defective products. In light of these factors, all of these courts have reasoned that it was appropriate to impose liability in these cases because the manufacturers were in a better position than the consumer to take necessary safety precautions.


Another major consideration in products liability law when a court must decide whether or not to impose liability on manufacturers is that the manufacturers are better able to spread the risk of loss by passing on the cost to consumers. This consideration is often accompanied by the safety incentive consideration, and the courts have used them together to justify a relaxation of the traditional element of defendant identification.

Another DES case substantially similar in its facts to Sindell and Collins is Martin v. Abbott Laboratories. The Supreme Court of Washington, in deciding Martin, expressed the risk spreading policy in this way:

As between the injured plaintiff and the possibly responsible drug company, the drug company is in a better position to absorb the cost of the injury. The drug company can either insure itself against liability, absorb the damage award, or pass the cost along to the consuming public as a cost of doing business. We conclude that it is better to have drug companies or consumers share the cost of the injury than to place the burden solely on the innocent plaintiff.

The Sindell court stated the policy in much the same way, and pointed out that the cost of an injury and the loss of time or health may be an overwhelming misfortune to the person injured, and a needless one, for the risk of injury can be insured by the manufacturer and distributed among the public as a cost of doing business. The Hall court pointed out that loss distribution is a reasonable policy because accidents and injuries are seen as an inevitable, and therefore foreseeable, cost of consumers using a product.

Manufacturers are aware that injuries to consumers caused by their products are an inevitable consequence of placing products into the stream of commerce. For this reason, they take into account their foreseeable liability for injuries when they price their products for sale. They pass the cost of insuring themselves against this liability on to their consumers-the cost is reflected in the prices consumers pay. This is a legitimate cost of putting a product on the market. Consumers, on the other hand, are not in a position to insure themselves against the potential catastrophic consequences of using presumably safe products. Their insurance is often inadequate to compensate them for the total amount of their loss. Because manufacturers are in a better position to insure themselves for these losses, it is appropriate that they bear this burden.


The Supreme Court of Florida has not yet passed on the issue of whether a plaintiff must identify the specific manufacturer in a DES-like case to maintain a cause of action. The policy considerations previously discussed, however, have been expressed in Florida case law. The Florida courts, in particular the supreme court, have relied on these considerations to justify fashioning new remedies or to reconsider the usefulness of accepted doctrines.

The supreme court faces a major policy decision in the Conley v. Boyle Drug Co. case. Existing tort doctrines will not afford Terri Lynn Conley a remedy. If the court, however, applies the policy considerations identified in the DES and DES-like decisions, which are part of Florida common law, then the court can and should find that she is entitled to a remedy. This section will discuss Florida’s application of the identified policies in various settings, and show how their application to a DES case may permit recovery for DES plaintiffs.

A. General Tort Law Policies

To meet the changing needs or perceptions of society, Florida courts have fashioned new remedies or modified existing ones. Courts form and shape legal doctrines in the context of their contemporaneous society. This is necessary for the law to continue to respond to society, which it serves. Justice Holmes explained it this way:

The rational study of law is still to a large extent the study of history. History must be a part of the study, because without it we cannot know the precise scope of rules which it is our business to know. It is a part of the rational study, because it is the first step toward an enlightened scepticism [sic], that is, towards a deliberate reconsideration of the worth of those rules…. For the rational study of the law the black-letter man may be the man of the present, but the man of the future is the man of statistics and the master of economics. It is revolting to have no better reason for a rule of law than that so it was laid down in the time of Henry IV. It is still more revolting if the grounds upon which it was laid down have vanished long since, and the rule simply persists from blind imitation of the past.

Florida courts have expressed a similar philosophy. The plaintiff filed suit against the administrator of the estate of a man who had blown up the plaintiff’s house in Waller v. First Savings & Trust Co. ; he sought compensation for the damage to his house. The circuit judge sustained the defendant’s demurrer, and held that a cause of action “sounding in tort” could not survive the death of the tortfeasor. Before ruling on the issue, the supreme court discussed its role in reexamining common law doctrines:

It does not necessarily follow that when this court has before it a case on writ of error from a judgment, the affirmance of which will crystallize into a precedent for the future an unrighteous rule of decision which is shocking to every conception of justice and fairness, that this court is thereby precluded from re-examining the law which may be applicable to this case, even to the extent of re-examining the correctness of the conclusions announced in previous cases, for the purpose of determining whether or not the rule previously announced is sound, or if sound as a general principle, whether its application to a case like the one before the court is not subject to modification in the light of demonstrably unequitable consequences which have never before been considered or taken into account.

Ultimately, the court, guided by this principle, held that a right of action in tort for compensatory damages does not die with the tortfeasor

The Supreme Court of Florida receded from prior decisions recognizing tort immunity for municipal corporations for the wrongful acts of their police officers in Hargrove v. Town of Cocoa Beach. The Hargrove court realized that blind loyalty to stare decisis was improvident. The court declared that “we must recognize that the law is not static. The great body of our laws is the product of progressive thinking which attunes traditional concepts to the needs and demands of changing times. . . . Judicial consistency loses its virtue when it is degraded by the vice of injustice.”

The Supreme Court of Florida abrogated the common law rule that contributory negligence is a complete bar to recovery for a plaintiff in favor of comparative negligence in Hoffman v. Jones. The court cited numerous instances from the past when it had receded from common law doctrines in response to the changing times. It further explained its obligation to reconsider these doctrines:

All rules of the common law are designed for application to new conditions and circumstances as they may be developed by enlightened commercial and business intercourse and are intended to be vitalized by practical application in advanced society…

The contemporary conditions must be met with contemporary standards which are realistic and better calculated to obtain justice among all of the parties involved, based upon the circumstances applying between them at the time in question…

We are, therefore, of the opinion that we do have the power and authority to reexamine the position we have taken in regard to contributory negligence and to the rule we have adopted previously in light of current “social and economic customs” and modem “conceptions of right and justice.”

DES manufacturer identification presents the kind of problem that the flexibility of the common law was designed to meet. If the supreme court accepts review of the Conley case, it would have to modify the traditional tort law requirement of specific tortfeasor identification in “light of the demonstrably unequitable consequences which have never before been considered or taken into account.” Widespread use of generic drugs creates numerous identification problems, and these problems are examples of those contemporary conditions that must be met with contemporary standards which are better calculated to obtain justice among all of the parties involved, based upon the circumstances applying between them at the time in question.


One force behind modifying existing law is a court’s recognition that it should focus on finding a way to compensate the injured plaintiff in a fashion which is equitable to all parties. This represents a shift from the early common law when courts focused on punishing the tortfeasor. Using the “compensation” model rather than the “punishment” model, the Waller court abrogated the common law rule that tort actions did not survive the death of the tortfeasor. The court recognized that the only reason for disallowing such an action at common law was that the punishment effect had been lost because of the tortfeasor’s death. If the court was no longer motivated by punishing the tortfeasor and was, in fact, motivated by compensating the injured plaintiff, then the reason for the rule no longer existed.

In the recent case of Champion v. Gray, the supreme court considered whether to modify or abrogate the “impact rule”  with regard to negligent infliction of emotional distress. Joyce Champion heard the impact of a drunken driver’s car hitting her daughter and rushed to the accident scene. She collapsed and died after becoming overcome with shock and grief at the sight of her daughter’s dead body. The trial court, relying on precedent, dismissed the complaint, and the Fifth District Court of Appeal affirmed. Guided by the perception that “the public policy of this state is to compensate physical injuries …and physical and mental suffering which flow from the consequences of the physical injuries,” the Supreme Court of Florida modified the “impact rule” to recognize a cause of action for emotional distress when discernible physical injuries had resulted from it. These Florida cases illustrate the influence which the policy to compensate injured plaintiffs has on the shaping of the law. The Conley DES case presents another situation where this policy should exert its influence. If the court’s focus is on punishing the appropriate defendant, then it will deny recovery because the punishment purpose would not be served if the truly culpable defendant escaped liability. This possibility is the essence of the difficulty in the DES cases. If the court’s focus is on providing compensation to an injured plaintiff, however, then relaxation of the identification requirement is appropriate. It would allow compensation to a plaintiff with a legitimate claim from defendants who were definitely responsible for creating the harmful risk and possibly responsible for the plaintiff’s specific injury.


The courts often do not expressly state their policy of preferring an innocent plaintiff over possibly culpable defendants. Some court decisions imply the existence of just such a preference. Florida case law presents several examples of this policy.

An injury occurred in Groves v. Florida Coca-Cola Bottling Co. when a bottle exploded while in the plaintiff’s hand. The trial court granted a motion for a directed verdict for the defendant because the plaintiff failed to submit any direct evidence of negligence on the part of the defendant. The supreme court reversed and remanded. It reasoned that the doctrine of res ipsa loquitur did not require the plaintiff to eliminate every remote possibility of injury to the bottle after it left the defendant’s control and up to the time of the explosion. The court said that it was enough for the plaintiff to produce evidence that would permit a reasonable inference that the bottle was not subjected to “extraneous harmful influences” before it reached her. This reasonable inference created a prima facie case of negligence, and shifted the burden of proof to the defendant. By shifting this burden of proof to the defendant, the court implicitly showed a preference for the injured plaintiff over the possibly culpable defendant. By enhancing the possibility of recovery for the plaintiff, the court gave meaning to this policy consideration.

The First District Court of Appeal of Florida confronted the plaintiff preference issue in Skroh v. Newby,  a classic “concert of action” case. The defendants were racing each other, and one of them struck and killed a man on a motorcycle. In this wrongful death case, the court held that even the defendant who did not actually collide with the motorcycle could be liable for the man’s death because his actions in racing constituted negligence proximately causing the accident. The effect of this decision was to assure compensation for the plaintiff in the event the “colliding” defendant was insolvent. By implication, the court was expressing its policy determination that it is better to prefer the innocent plaintiff over the negligent defendants.

Another example of the relaxation of a plaintiff’s burden of proof is Davis v. Sobik’s Sandwich Shops, Inc. In Davis, the plaintiff was injured in a three-vehicle rear-end collision. She “was an innocent passenger, free of any contributory negligence. She joined in the action everyone who could have caused the accident. The supreme court held that the plaintiff did not have to identify specifically the individual responsible for her injuries because the evidence showed that at least one of them must have been responsible. This decision relieved the plaintiff of the burden of proving which particular defendant (or defendants) caused her injuries. If the court had ruled otherwise, it would have left open the possibility that she would be uncompensated in a situation where she was entitled to a remedy. By ruling this way, the court implicitly recognized a policy of preferring innocent plaintiffs over possibly culpable defendants, thus extinguishing the possibility of nonrecovery for the plaintiff. The Conley case presents problems for both the plaintiff and the defendants. Neither can overcome the problem with more fact-finding. In this situation, guided by the policy of preferring innocent plaintiffs over possibly culpable defendants, the court should authorize recovery by relaxing the traditional requirement of specific tortfeasor identification so that the plaintiff can maintain a cause of action.

B. Underlying Products Liability Policies

The Supreme Court of Florida, in West v. Caterpillar Tractor Co.,recognized that imposing strict liability on manufacturers would encourage them to produce safe products. A caterpillar grader, while backing up on a street under construction, ran over Gwendolyn West. She died several days later. Her husband brought a products liability action against the manufacturer for design flaws in its tractor. The United States Court of Appeals for the Fifth Circuit certified to the supreme court the question of whether strict liability was applicable to products liability cases in Florida. The court responded by formally adopting the doctrine, noting that the Florida courts had imposed “absolute or strict liability” before. In its analysis, the court concluded that:

Strict liability should be imposed only when a product the manufacturer places on the market, knowing that it is to be used without inspection for defects, proves to have a defect that causes injury to a human being. The user should be protected from unreasonably dangerous products or from a product fraught with unexpected dangers.

By relieving the plaintiff of having to prove negligence on the part of the manufacturer, thus making the prosecution of a products liability case easier, the court gave manufacturers a greater incentive to ensure the safety of their products. The court noted that many products in the hands of the consumer are sophisticated and even mysterious articles …. In today’s world it is often only a manufacturer who can fairly be said to know and understand when an article is suitably designed and safely made for its intended purpose.

The same policy consideration led the court to abrogate the “patent danger” doctrine in Auburn Machine Works Co., Inc. v. Jones. In that case, the plaintiff lost his balance when the side of a trench caved in and his foot became entangled in an exposed chain of a trench digging machine. The trencher possessed no shield and was obviously dangerous. The court reasoned that “the patent danger doctrine encourages manufacturers to be outrageous in their design, to eliminate safety devices, and to make hazards obvious.” By abrogating the “patent danger” doctrine, the court implicitly recognized its policy determination that manufacturers should make their products as safe as possible before putting them on the market.

Insurance Co. of North America v. Pasakarnis presents an interesting variation on the safety incentive theme. In Pasakarnis, the supreme court approved the seat belt defense as a means of mitigating damages in automobile accident cases. Although not a products liability case, this opinion illustrates how the safety incentive policy runs throughout all of tort law. The court noted that the “common thread running through [its] decisions has been that the law will step in to protect people against risks which they cannot adequately guard against themselves.” The law will step in to protect people, however, only to the extent that they cannot protect themselves.  By making the seat belt defense available to defendants, the court has placed the burden of safety on those who are in the most reasonable position to take effective safety precautions. This is entirely consistent with the policy of imposing liability on manufacturers as an incentive for placing safe products on the market.

The manufacturers of DES were the only parties who could have taken precautions against its defectiveness. Neither the women who took the DES, nor their daughters were in a position to do so. If the court allows manufacturers to escape liability because of the identification problem, it will undercut the entire safety incentive policy. Such a result would encourage manufacturers to market their products in an untraceable generic form to avoid liability in the future, ultimately causing more DES-like situations where injured persons would be without a remedy. By imposing liability, the court will not only give manufacturers more incentive to produce safer products, but will also encourage them to devise methods of assuring that their products are traceable back to themselves. Traceability will help them avoid liability for the defects in some other manufacturer’s products.


The concept that courts should impose liability on manufacturers for injuries which their defective products cause due to the fact that they are able to spread the cost of the risk to consumers has found expression in Florida opinions. The Supreme Court of Florida held a blood bank liable on a breach of implied warranty theory when a patient contracted hepatitis from the use of its blood product. Justice Roberts, in a concurring opinion, concluded that it was right to hold the blood bank strictly liable for the defects of its product “so that the burden of the losses resulting therefrom may be spread among all who benefit from the operation of the blood bank, rather than require such losses to be borne by the innocent victims alone.”

Another breach of implied warranty case was before the supreme court in the form of a certified question from the Fifth Circuit Court of Appeals in Green v. American Tobacco Co. The plaintiff developed lung cancer after smoking the defendant’s cigarettes for years. The question presented was limited to the status of Florida law on whether the manufacturer could be liable for breach of implied warranty when the manufacturer ‘could not, by reasonable application of human skill and foresight, have known of the danger‘ associated with its product that ultimately caused injuries to consumers. The court answered the question in the affirmative, stating that the manufacturer’s knowledge was wholly irrelevant to his liability. The court went on to say:

To hold that prevailing industry standards supplant the ordinary standard of objective truth and proof, and should be conclusive on the issue of a product’s reasonable fitness for human use or consumption, would be to shift to the purchaser the risk of whatever latent defectiveness may ultimately be proven by experience and advancement of human knowledge, a risk we are convinced was from the inception of the implied warranty doctrine intended to be attached to the mercantile function.

Implicit in this statement is the understanding that the manufacturer should provide for the risk of defectiveness as part of the cost of doing business. The West court expressed similar thoughts:

The obligation of the manufacturer must become what in justice it ought to be-an enterprise liability …. The cost of injuries or damages, either to persons or property, resulting from defective products, should be borne by the makers of the products who put them into the channels of trade, rather than by the injured or damaged persons who are ordinarily powerless to protect themselves.

Theoretically, the DES manufacturers have prepared themselves, through insurance or other means, for the possibility of injuries arising from the use of DES when they placed it on the market. Therefore, if the court does not fashion some sort of recovery scheme for Terri Lynn Conley to take advantage of this preparation, the manufacturers will reap a windfall because they have already passed the cost of this preparation on to the consumers of DES. There can be no justice in denying Terri Lynn Conley and other DES plaintiffs recovery for their injuries when their mothers have already paid prices which included the cost of this insurance.


Confrontation with any traditional legal doctrine requires a thorough examination of the public policy considerations which are the substance of the law.  The court must recognize the changes that have occurred in society, and if the scope of those changes is great enough, it must rework tort doctrine so that tort law can continue to serve its original purpose-that of making the public policies of society a reality in the everyday lives of individuals. This exercise is one of the essential roles courts play in the society they serve.

The Conley v. Boyle Drug Co. case will be a difficult decision for the Supreme Court of Florida. Only if the court relaxes the defendant identification requirement will Terri Lynn Conley have a remedy. Relaxation of the defendant identification requirement is consistent with the court’s policy of compensating injured plaintiffs for injuries caused by wrongs committed by others. It is also consistent with the policy of preferring innocent plaintiffs over possibly culpable defendants. Because the Conley case is a products liability action, the relaxation of the defendant identification requirement promotes the court’s policy of giving manufacturers the incentive to produce safe products. It is also consistent with the court’s recognition that manufacturers are better able than consumers to spread the risk of loss caused by defects in their products. The court must also recognize that the expanding use of generic drugs will inevitably cause the problem to occur again. The court must take some action that will encourage manufacturers to assure that their products are traceable back to themselves. To do otherwise will leave open a loophole through which manufacturers can escape liability for injuries sustained by their consumers. This result would be inconsistent with the court’s declared policy that “the law will step in to protect people against risks which they cannot adequately guard against themselves.” By recognizing that Terri Lynn Conley is entitled to a remedy at law, the court will protect Florida citizens from similar incidents in the future.

John J. Grundhauser, 1980.

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Katz v. Eli Lilly & Co.: Limitation of Collateral Estoppel in Products Liability Litigation

A discernible trend in the law of collateral estoppel in recent decades has been expansion.  What began as a narrow rule of issue preclusion between the original parties to an action that predated the related doctrine of res judicata, has grown into an aggressive doctrine in both scope and effect. The benefits of its use no longer confined to an original party, collateral estoppel may now be invoked by any litigant to prevent relitigation of previously determined issues.

Katz v. Eli Lilly & (and) Co.: Limitation of Collateral Estoppel in Products Liability Litigation, 14 J. Marshall L. Rev. 201 (1980), The John Marshall Law Review, Volume 14 | Issue 1 Article 8, Fall 1980.

The single greatest factor responsible for the frequency of the modern application of collateral estoppel is Justice Traynor’s opinion in Bernhard v. Bank of America National Trust & Savings Association, which laid to rest the exception riddled requirement of mutuality of estoppel. Freed from the strictures of mutuality, and encouraged in part by crowded court dockets,  collateral estoppel acquired a broad scope. Supreme Court approval of the demise of mutuality followed in Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, in which the Court permitted the defensive assertion of collateral estoppel by a defendant. The next step followed in Parklane Hosiery Co. v. Shore, in which offensive use of collateral estoppel was sanctioned by the Supreme Court as long as there was shown to have been a full and fair opportunity to litigate the issue in the prior action.

The possibility that such a potentially aggressive doctrine could have a major impact on litigation was foreseen early.  Speculation soon gave way to substance upon the extension of offensive collateral estoppel to products. liability, where it was, welcomed as a valuable tool by plaintiffs in multiple-plaintiff actions involving the same product and similar injuries.  The welcome may prove to have been premature in light of the recent federal district court decision in Katz v. Eli Lilly & Co.

In Katz, the court was faced with the question whether jurors might be deposed to determine the presence of a compromise verdict necessary to limit the collateral estoppel effect of a judgment. The resolution of this issue in Katz has effected a possible reversal of the expansive trend of collateral estoppel – at least insofar as it relates to products liability. 18 In doing so, the court may also have provided those defending product liability claims with a defense to collateral estoppel capable of farreaching abuse at the expense of the jury system.

The purpose of this paper is to examine in detail the holding of the district court in Katz and the authorities cited in support of that holding. Attention will also be given to the probable consequences of the court’s decision, both as it extends to the facts of the immediate case as well as future litigation in general. A final consideration will involve scrutiny of the other alternatives available to the court in rendering its judgment, and the relative merits of each.


Prior to her daughter Benna’s birth in 1953, Esta Katz took the drug diethylstilbestrol (DES) which was prescribed by her physician to decrease the likelihood of miscarriage. Approximately eighteen years later it was discovered that Benna Katz suffered from adenocarcinoma of the vagina. Benna thereafter brought an action for damages in 1975 against Eli Lilly & Company (Lilly) as manufacturer of DES, alleging breach of warranty and negligence in the testing and distribution of the drug to her mother. Following the death of her daughter in 1977, Esta Katz brought a diversity action for wrongful death against Lilly.

During pretrial discovery, counsel for Lilly learned that a prior state court judgment against Lilly in a DES action, Bichler v. Eli Lilly & Co., was possibly the result of a compromise verdict. A juror allegedly stated that her vote for liability was conditioned upon the reduction of damages.  To forestall the potentially disastrous collateral estoppel effect of the prior judgment, Lilly sought to depose two of the former jurors. Plaintif Katz then moved to quash the discovery subpoenas and vacate the notices of deposition.

In considering the motion, the district court noted that both federal and New York law generally bar the use of a juror’s statement to impeach or collaterally attack a verdict, but distinguished the present case as having a more narrow purpose. The court specified that the depositions were not sought to undercut the finality of the prior verdict, but rather to limit the preclusive effect of that judgment. It was thus held that where permissible investigation demonstrates a factual basis for a belief that a judgment used for collateral estoppel purposes was based on a compromise verdict, deposition of jurors known to have relevant information is warranted under the Federal Rules of Civil Procedure.


The Mansfield Rule

In deciding whether collateral estoppel should apply, the initial dilemma of the court, in Katz, was to establish a means of ascertaining whether the earlier verdict was in fact a compromise verdict, while at the same time placating the long-established Mansfield rule which prohibits a juror from impeaching his verdict.30 In support of her motion to quash, Mrs. Katz argued that jurors were incompetent to impeach their verdict and thus the depositions sought would violate the sanctity of the jury system. In addition, she asserted that the information sought would not be competent evidence, and therefore was not discoverable under the Federal Rules of Civil Procedure.

The court’s rationale in holding that the depositions were not sought for purposes of impeachment or collateral attack can be summarized in four basic steps. First, it relied on the representation of Lilly’s counsel that Lilly would not use the depositions in the New York state court to attack the Bichler verdict.  Second, the court noted that both federal and state law barred the use of federal deposition in the New York state court should Lilly attempt to do so.  Third, it was emphasized that the depositions sought would normally be within the scope of the federal discovery rules were it not for the Mansfield rule. Fourth, the court accentuated that there was no express prohibition against taking depositions aimed solely at cutting off the collateral estoppel effect of a judgment.

While it was probably correct in assuming that Lilly would be estopped from using the depositions in state court after asserting it would not do so,  the Katz court nevertheless failed to address the question raised by the plaintiff’s argument. The contention of Mrs. Katz, as clearly exemplified by her cited authority, was that “public policy opposes such probing of motivations which inhere in a jury’s verdict. In the absence of good cause, jurors should be protected against post-trial efforts to ‘browse among their thoughts’ in an effort to invalidate their verdict.

The import of her argument was further clarified by her reliance on the express language of Rule 606(b) of the Federal Rules of Evidence which provides that a juror is not a competent witness in an inquiry into the validity of a verdict.  The issue therefore was not whether Lilly would be able to use the Katz depositions in the New York system, but rather whether the taking of the depositions for use in the Katz litigation would, in itself, violate the impeachment rule.

The same criticism follows for the court’s citation of Bacharach v. General Investment Corp. , Empire Liquor Corp. v. Gibson Distilling Co., and Moore’s Federal Practice as support for the proposition that federal discovery depositions cannot be used in state litigation. The focus of both the cited cases and Professor Moore’s discussion is a procedural aspect of the federal rules of discovery. The cited authorities therefore provide scant protection against jury impeachment, which is hardly unexpected since it is a function they were never intended to perform. Although still good law, these authorities are nonetheless irrelevant to a determination as to whether permitting the deposition of the Bichler jurors was an attack on that verdict. The reliance of the Katz court upon them as authority for such a proposition is unjustified.

The court’s determination that the information sought would normally be discoverable but for the Mansfield rule is a further example of specious reasoning. The scope of federal discovery extends to any matter, not privileged, which is relevant to the subject matter of the pending action, and would certainly seem to include the alleged evidence of the compromise verdict. Yet this still fails to establish that the depositions in question are not an attack on the prior Bichler verdict within the meaning of the Mansfield rule. Plaintiff Katz was clearly arguing that the specific prohibitions of the Mansfield rule superseded the general discovery provisions.  The court’s reasoning that discovery of the desired information might be permissible in this instance because it would be permissible generally is unpersuasive. The policy behind the broad scope of the federal discovery rules does not automatically obviate the policy behind the rule that a juror may not impeach his own verdict.

The final justification given by the court, that no absolute rule prohibited such deposition of jurors in order to curtail the collateral estoppel effect of a prior judgment, emerges as especially suspect when standing alone. The absence of an absolute prohibition that is violated by deposing jurors is slight authority for allowing such depositions. However, the Katz court held that such a result was dictated from a reading of New York case law, as exemplified by People v. DeLucia, Schrader v. Joseph H. Gertner, Inc.,4 8 and People ex rel Nunns v. County Court. The inherent weakness in such a broad reading is that none of these cases dealt with an investigation into the means by which a jury reaches its verdict, and are thus distinguishable from the Katz situation. Both the DeLucia and Schrader cases involved the testimony of jurors as to extraneous influence exerted on their deliberations, while Nunns concerned jurors testifying in a contempt proceeding against a juror who lied during voir dire.

The federal cases relied on by the Katz court, as illustrated by Clark v. United States, are distinguishable for the same reasons. Although the Supreme Court in Clark found jurors to be competent witnesses, the holding was limited to separate contempt proceedings against another juror. There was thus little or no effect on the jury deliberations or verdict by admitting such testimony.

While the cited cases may arguably advance the Katz court’s ultimate position in that they admitted testimony of jurors, each did so only upon a showing of some overt act independent of the jury deliberations. However, in Katz the alleged compromise occurred in the jury’s deliberation itself These cases therefore yield little support for the broad holding that deposing jurors would not constitute an impeachment of their verdict.

Thus, while the Katz court was technically correct in holding that the jury depositions could not be used for impeachment purposes in state court, it was not entirely accurate. The rule against a juror impeaching his verdict serves to protect more than the finality of the verdict itself. It extends also to the protection of jurors from harassment and embarrassment for their verdict, and thereby promotes free discussion in jury deliberations. Such protection is further designed to maintain stability, and foster public respect and confidence in the jury system. Little imagination is needed to realize that the potentially abusive tool of discovery could wreak havoc with jury deliberations in general. Since this would clearly violate the policies the Mansfield rule was intended to enforce, the Katz court improperly ignored contrary precedent.

Under New York law a juror may not be questioned about his verdict in a later proceeding. The only real exception is statements made by a juror as to outside influences upon the jury, since such acts are more susceptible to adequate proof and therefore less a danger to the privacy of the jury system. Otherwise, affidavits from jurors as to their deliberations are strictly disapproved.

The federal rule is much the same in effect. A juror only may testify as to some overt act known to all jurors, or as to some extraneous influence exerted upon the jury deliberations.  Neither exception has been construed to include a compromise verdict. On the contrary, a juror’s affidavit regarding the existence of a compromise verdict has been explicitly excluded as incompetent evidence, because the alleged compromise is too akin to the absolutely protected mental processes of the jury.

Upon a consideration of the foregoing, the Katz court’s treatment of the plaintiff’s argument is troubling. Allowing the deposition of jurors from the prior Bichler judgment is arguably an impeachment of that verdict irrespective of the fact that the depositions are inadmissible in state court. Should any argument exist for distinguishing Katz from the contrary precedent, it at the very least merited full development and consideration by the district court in the text of its opinion.  The fact that the court summarily dismissed Mrs. Katz’s argument with a minimum of discussion – much of it in a footnote – manifests a distinct intent to avoid the issue.

Offensive Collateral Estoppel

The district court’s ultimate decision to grant or deny defendant Lilly’s motion to depose the Bichler jurors necessitated a preliminary determination whether plaintiff Katz would be procedurally able to assert offensive collateral estoppel and whether it would be appropriate to do so where the prior judgment might have been based on a compromise verdict. In response to plaintiff’s motion to quash the discovery subpeonas, defendant Lilly conceded that state court judgments can have preclusive effect in federal court, and that in the instant case collateral estoppel would be procedurally permitted.  Lilly asserted however, that under controlling New York law, the fact that the prior judgment resulted from a compromise verdict was grounds for denying it collateral estoppel effect in a later action.

The reasoning behind the district court’s holding can be summed up in five steps. First, it held that plaintiff Katz would be procedurally able to utilize offensive collateral estoppel under New York law. Second, the court noted that the equitable nature of collateral estoppel required exploration as to whether defendant Lilly had a full and fair opportunity to litigate in the prior Bichler action. Third, the district court emphasized that allowing an erroneous judgment to have preclusive effect would violate fundamental fairness. Fourth, it was held that permitting offensive collateral estoppel in the instant case would not advance the policies the doctrine was designed to promote. Finally, the court asserted that the fact Lilly did not physically have its day in court against Mrs. Katz was at least grounds for allowing Lilly to investigate a possible defense to collateral estoppel where the prior judgment was allegedly based on an erroneous verdict.

The Katz court initially recognized that there is no longer any requirement of mutuality of estoppel under the law of New York. All that need be shown for a plaintiff to utilize the judgment of a prior litigant against a defendant, is that the defendant had a full and fair opportunity to contest the same issue in the prior action. According to the New York Court of Appeals in Schwartz v. Public Administrator of the County of Bronx, the establishment of a full and fair opportunity “requires an exploration of the various elements which make up the realities of litigation.  Furthermore, in listing those elements, Schwartz specifically included “indications of a compromise verdict. Thus, should Lilly be able to establish the presence of a compromise verdict in Bichler, plaintiff Katz would be precluded from the benefit of its collateral estoppel effect. Accordingly, the judge in Katz held that fundamental fairness required that Lilly be given “every reasonable opportunity to explore the factual basis for a claim that the judgment asserted as binding … should not be accorded such an effect because [that judgment was] based on a compromise verdict.

It is undoubtedly true that the equitable nature of collateral estoppel requires an inquiry into whether there was a full and fair opportunity to litigate. As noted by Professor Currie,  no legal principle, perhaps least of all the principle of collateral estoppel, should ever be applied to work injustice.  However, in attempting to avoid injustice to Lilly, the Katz court should not have neglected competing interests. The harm to the plaintiff might be outweighed by the harm that would result from the alternative. There is a very real possibility that an order granting “every opportunity to explore” could be used as a broad mandate to harass the Bichler jurors for indications of a compromise verdict that may not even exist. A better rule would specifically limit the extent of the investigation to avoid prejudice to the individual jurors themselves, and the jury system in general.

According to Professor Moore, once a final judgment is entered it is entitled to collateral estoppel effect whether based on a compromise verdict or not. Yet the Katz court held that the blind application of this proposition to a situation where a stranger asserts the judgment offensively violates basic notions of fairness. In support of its contention, the court noted that the purpose of collateral estoppel was to protect a party from the burden of relitigating an issue previously decided, and to advance the public interest in minimizing litigation.

Since Mrs. Katz was a stranger to the original Bichler action the court emphasized that she could not claim the need to be free of the burden of repeated litigation. The court further held that:

whether or not the public interest … would be served by broad application of non-mutuality of estoppel, it is clear that while Lilly has had its day in court against Joyce Bichler in New York Supreme court, strictly speaking it has not had an opportunity to meet plaintiff here who was a stranger to the State court action.

The court went on to assert that while non-mutuality was not determinative as to whether collateral estoppel should apply, “it does suggest at a minimum that where the original judgment is questioned on the ground. . . of a compromise verdict, a court must in fairness provide a litigant every opportunity to explore the basis for a defense to offensive use of the judgment as collateral estoppel against it.  The court then granted the defendant’s motion to depose the Bichler jurors.

A careful scrutiny of the court’s reasoning reveals some logical inconsistencies. While it is true that Mrs. Katz cannot claim the need to be free of relitigation, such need is no longer necessary since the demise of mutuality.  At most it is a possible mitigating factor in the consideration whether collateral estoppel applies. Also, though the court admits that the prior physical meeting is not determinative as to whether collateral estoppel should apply, it nevertheless seems to use this factor for such a determination. In short, the Katz court appears to be effecting a limited return to mutuality where other factors militate against the application of offensive collateral estoppel.

Despite the partial return to mutuality, the Katz court’s decision to allow the depositions seems to conform to the letter and spirit of the New York law.  New York precedent provides that collateral estoppel should be based on principles of fairness,  and that “each case must be examined to determine whether, under all the circumstances, the party said to be estopped was not unfairly or prejudicially treated in the litigation in which the judgment sought to be enforced was rendered.

Moreover, the determination whether judgment was rendered pursuant to a full and fair opportunity to litigate includes an examination into whether there were indications of a compromise verdict. The question remains, however, whether the court’s holding that discovery depositions were in order was too broad a solution to a narrow problem.

Policy Considerations

While the partial return to mutuality of estoppel implied by the Katz court may not seem initially desirable, it fits comfortably within the broad discretion granted by the Supreme Court in Parklane where offensive collateral estoppel is concerned. Recognizing that strict application of collateral estoppel offensively could often serve to work an injustice, and yet not wanting to abandon the doctrine for its obvious benefits, the Supreme Court held that the test should be whether the trial judge considered it fair to apply offensive collateral estoppel.  Under this nebulous standard, mutuality might often be the factor to tip the scales in preventing issue preclusion.

Given the fact that Lilly is defending in excess of 500 DES actions, with more still likely to be filed, the possible repercussions of collateral estoppel could be disastrous. A judgment finding Lilly liable in one action could be conclusive of the liability issue in all later actions by precluding Lilly from relitigating the issue. In such circumstances a court would be hesitant to give preclusive effect to a genuinely valid verdict, let alone a suspect one. Therefore the Katz court’s attempt to give Lilly an opportunity to escape the preclusive effect of the Bichler verdict seems entirely justified. Yet the problem arises in the fact that the court fails to come to grips with the realization that deposition of the jurors will violate public policies favoring finality and protection from harassment. The brief treatment accorded this argument in the text of the opinion reflects both the likelihood of a violation of the Mansfield rule and the court’s hesitancy to deal with it.

The Katz holding can perhaps best be seen as a policy decision. The court’s first major alternative was to deny the deposition to avoid conflict with the impeachment rule, but this would result in Lilly being bound in a successive number of actions by a possibly invalid prior judgment. The second major alternative was to permit the depositions and thereby give Lilly a chance to avoid the preclusive effect of a defective judgment, but this would impinge on the Mansfield rule. Given such an unattractive choice between two conflicting considerations, the court understandably attempted to create a third alternative. The result was a holding which risks the intrusive effect of the depositions on the jurors to forestall the possible prejudicial effect of collateral estoppel, while at the same time it attempts to distinguish the contrary impeachment precedent.

The court could have obtained the same result, however, through a more thorough analysis. Rather than summarily ex- • plaining the Mansfield rule away, the court instead should have attempted to strike a balance that would protect the function of the jury and yet prevent the preclusive effect of the compromise verdict. Such a result could have been achieved by distinguishing a compromise verdict from the absolutely protected mental processes of the jury. Whereas the mental processes need protection because they are known only to each individual juror and therefore generally unprovable, a compromise verdict needs no such protection because it is an objective occurrence known to all jurors. It thus could be identified, exposed, and proven without disturbing the remainder of the jury’s deliberation. Moreover, the exposure of an impermissible compromise would not impede honest deliberations of a jury, but rather would have the beneficial effect of deterring jurors from compromising their verdict.

Alternatively, the Katz court could have prevented the collateral estoppel effect of the Bichler judgment and not reached the impeachment issue at all. To do so it would have been necessary to deny the preclusive effect of the Bichler judgment when the plaintiff asserted it. This result would be in accord with the holding in Schwartz v. Public Administrator of the County of Bronx, which suggested that indications of a compromise verdict denoted a lack of a full and fair opportunity to litigate. Further support could be derived from Zdanok v. Glidden Co., in which the court held that offensive collateral estoppel might not be appropriate to the situation where a defendant faces a series of similar actions forcing him to risk losing all in each successive trial although unable to win more than one at a time. Authority could also be found in other jurisdictions where offensive collateral estoppel has been denied due to other overriding considerations, or on grounds of basic fairness. If nothing else, the Katz court could have at least temporarily denied the preclusive effect of the Bichler judgment pending its appeal in state court. This would be a reasonable alternative. Giving collateral estoppel effect to a judgment later found to be erroneous on appeal would only lead to inconsistent judgments and repeated injustice.

Whichever means was used to ascertain whether collateral estoppel should apply, the court should nevertheless have avoided the potentially intrusive discovery depositions. While the liberal discovery provisions are possibly the most notable advance of the federal rules,  they are also the most capable of being abused. Further, the impact of such abuse would be particularly acute on jury deliberations which depend heavily on an element of secrecy for their survival.

Therefore, even though discovery may be especially crucial in a products liability action, it still should not be extended to jury deliberations without some form of limitation. A possibility would be for the trial judge in Katz to hold an evidentiary hearing and conduct a court-controlled investigation into the alleged compromise verdict. Should this not be feasible owing to a crowded docket, the court should at least provide a protective order which strictly limits the time, place, and scope of the depositions sought by Lilly. In this way the need for exploration could be satisfied without any undue intrusion into the privacy of the individual jurors.


A careful reading of the Katz holding suggests alternatives. Although a court cannot be expected to appease all conflicting interests in rendering a judgment, the Katz court nevertheless could have achieved a more just result through a better analysis. Part of every court’s analysis should include a look beyond the immediate case to the future impact of its holding.

Much of the impact of Katz remains questionable because it was a district court opinion rendered under unique circumstances. Further, any opportunity for appellate interpretation of the holding has been precluded by an intervening settlement between the parties. Nevertheless, the Katz holding remains significant for what it portends.

Katz illustrates the dangers of strict application of offensive collateral estoppel. No longer restrained by mutuality, offensive collateral estoppel remains virtually unchecked in its potential for injustice. While a return to the absolute rule of mutuality of estoppel is not desirable, Katz reveals the need for standards to guide a trial court in its consideration of whether offensive collateral estoppel should apply.

The Katz decision also indicates the need for a re-examination of the Mansfield rule. Although protection of the thought processes of jurors is indispensable to the jury system, it is questionable whether such protection need extend to an impermissible compromise. An individual’s right to a fair trial should mandate disclosure of overt acts of compromise.

Finally, Katz could be a dangerous holding if used as authority for further discovery of jury deliberations. Though discovery was arguably necessary to prevent injustice in Katz, the need for limitations on such discovery was even more essential. By providing specific guidelines for the discovery procedure, the Katz court could have insured protection of the jury system and resolved this sensitive issue for later courts should it ever recur. By failing to do so, the court’s holding exacerbated the issue so as to assure its recurrence in future litigation.

Steven Polick, 1980.

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1987 DES Case: Greene v. Abbott Labs


Defendants (E. R. Squibb & Sons, Abbott Laboratories, Merck & Co., The Upjohn Company and Eli Lilly & Company) move pursuant to CPLR 3211 (a) (5) and/or 3212 for partial summary judgment dismissing plaintiff’s wrongful death claims as barred by the Statute of Limitations.

Plaintiff, as administrator of the estate of his deceased daughter, Susan Greene, relies on the revival statute to commence this products liability action to recover for injuries allegedly related to decedent’s exposure to diethylstilbestrol (DES) in 1950 to 1951 while decedent’s mother was pregnant. Susan Greene was born on February 9, 1951 and died at the age of 18 on March 9, 1969 of clear cell adenocarinoma of the vagina. The two-year Statute of Limitations for wrongful death claims contained in EPTL 5-4.1 commenced at the date of death. No wrongful death or personal injury action was instituted prior to the commencement of this action on June 3, 1987.

GREENE v. ABBOTT LABS, Leagle, 1987561137Misc2d424_1481, November 6, 1987.

The revival provision which did not become part of the CPLR revived for one year certain otherwise time-barred personal injury claims relating to the exposure to or ingestion of five substances, including DES. Also revived were certain wrongful death claims which had previously been barred on Statute of Limitations grounds. The statute specifically excluded from revival “any action for a wrongful act, neglect or default causing a decedent’s death which was not barred as of the date of decedent’s death and could have been brought pursuant to section 5-4.1 of the estates, powers and trust [sic] law”.

This dispute involves the breadth of the language excluding certain wrongful death claims from revival. Although decedent’s claim was not barred at the time of her death because of the toll for infancy plaintiff contends that the wrongful death claims are still not excluded from revival as claims that “could have been brought” because while decedent’s representatives were aware of her injuries at the time of death and that her death was due to cancer, the causal connection between DES and that cancer was not well established in 1969.” …

… continue reading the full paper GREENE v. ABBOTT LABS, on Leagle.

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1987 DES Case: Rubel v. Eli Lilly & Co.


Plaintiffs Denise Rubel and Ivan Rubel, a married couple, are residents of New York. Denise Rubel was born to Julia and George Horowitz on January 23, 1953. Defendant, Eli Lilly and Company [“Lilly”], is a corporation organized and existing under the laws of Indiana, and does not have a principal place of business in New York. Lilly is a major American pharmaceutical manufacturer which manufactured and supplied Diethylstilbestrol (DES).

RUBEL v. ELI LILLY AND CO., Leagle, 1987832681FSupp151_1811, October 9, 1987.

Allegedly, Julia Horowitz, while pregnant with Denise in 1952, daily ingested one 25 mg. pill of DES purportedly manufactured by Lilly. Plaintiffs claim that the DES ingested by Julia Horowitz injured Denise Rubel in utero, ultimately causing gross tissue and organ abnormality of the cervix and vagina, infertility and consequential physical and emotional distress. Plaintiff does not claim to suffer from cancer or a cancerous condition, nor does she claim that her ailments will become cancerous.

DES is a synthetic estrogen drug that was routinely prescribed between 1947 and 1971 to prevent accidents, such as miscarriages, in pregnancies. Although DES was approved for use in the United States as early as 1941, it was not until 1947 that the Food and Drug Administration (FDA) approved DES for use by pregnant women. In 1971, it was first reported that ingestion of DES by pregnant women could cause vaginal cancer and other abnormalities in the reproductive tracts of their daughters. FDA approval of the drug for treating problem pregnancies was withdrawn. It is estimated that several million women were treated with DES between 1947 and 1971.

Plaintiffs move for partial summary judgment on its claim that Lilly was negligent in marketing DES without adequate testing. Their motion is based on the doctrine of collateral estoppel. Defendant opposes the motion.” 

… continue reading the full paper RUBEL v. ELI LILLY AND CO., on Leagle.

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1987 DES Case: Tigue v. Squibb & Sons


” Defendants Rexall Drug Company (Rexall), the Upjohn Company (Upjohn) and Abbott Laboratories (Abbott) move pursuant to CPLR 3212 for summary judgment dismissing the complaint based upon the conceded inability of plaintiffs to identify the particular manufacturer of the drug, diethylstilbestrol (DES) to which they were allegedly exposed. Defendants contend that the right to recover on collective, nonidentification or concerted action theories of liability has not been established in New York and urge the court to reject adoption of such theories. Defendants further contend that if concerted action is a viable basis of liability, it should not be applicable in a DES case. The motions are consolidated for disposition.

TIGUE v. SQUIBB & SONS, Leagle, 1987603136Misc2d467_1521, July 16, 1987.

Plaintiffs seek to recover for injuries allegedly sustained by Elizabeth Tigue and Myrna Margolies (now deceased) as a result of the ingestion of DES by their mothers. Sayre Margolies proceeds on behalf of her daughter Myrna who died in 1977 at age 23, from clear cell adenocarcinoma of the cervix and vagina, a rare form of cancer in young women, associated with prenatal exposure to DES. Plaintiff Elizabeth Tigue was diagnosed as having vaginal adenosis, a precancerous condition associated with DES exposure, in which glandular tissue normally found in the cervix is found in the vagina. Plaintiffs’ complaints allege breach of warranty, negligence, strict liability, res ipsa loquitur, concerted action and aiding and abetting strict liability.” …

… “Since plaintiffs, at least in this department, may proceed on a collective or concerted action liability theory, the inability to identify the actual manufacturer of the DES taken by Mrs. Tigue and Mrs. Margolies is not fatal. Plaintiffs’ factual allegations to support a finding of concerted action are substantially the same as those pleaded in Bichler (supra) and clearly state a viable cause of action for concert by agreement or substantial assistance. ” …

… ” This court declines to rule at this time on the applicability to DES cases of each of the various theories of liability (in addition to concerted action), which are not specifically pleaded but are raised in response to defendants’ motions. The only question raised on the motions before this court is whether defendants may be held liable absent product identification and the answer is yes. ” …

… read the full paper TIGUE v. SQUIBB & SONS, on Leagle.

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The Nature of the DES Problem and Approaches to Joint Liability

Market share liability is the most recent product liability development in the area of intra-industry joint liability, in which all members ofan industry are sued. The various intra-industry approaches by which a consumer can recoverfor injuries are reviewed in this article, and their implications for marketing are examined.

Intra-Industry Joint Liability: Implications for Marketing, University of San Francisco, USF Scholarship Repository, Economics, Law, and International Business, School of Management, Karl Boedecker & Fred W. Morgan, 1986.

Current litigation of claims against an entire industry, or its dominant members, has resulted in important developments in product liability law that, in turn, raise substantial implications for marketing. The most highly publicized and critically analyzed cases involve diethylstilbestrol (DES), a synthetic estrogen frequently prescribed between 1945 and 1971 for women to prevent miscarriages and other accidents of pregnancy [Sindell v. Abbott Labs 1980, Payton v. Abbott Labs 1979, Reed and Davison 1982]. Similar litigation has occurred or is pending with regard to asbestos [Insurance v. Forty-Eight 1980, Newsweek 1982, Wall Street Journal 1983], insulation [Davis v. Yearwood 1980], aluminum wiring [Beverley Hills 1979], leaded paint [U.S. News & World Report 1982], herbicides and pesticides [Business Week 1984, Newsweek 1984, Time 1984], and food additives such as nitrates and nitrites.

The common factor in all of these cases is the exceptionally long lapse of time between product use and resultant injuries, making it very difficult for the plaintiff to prove which manufacturer(s) made the defective product. Given this problem of proof, the California Supreme Court developed a theory of recovery, called market share liability, in which DES manufacturers were held liable for damages according to their relative market shares [Sindell v. Abbott Labs 1980]. Market share liability is the most recent development in the area of intra-industry joint liability in which several firms in an industry are sued simultaneously.

The adoption of a market share liability approach may, however, lead to serious problems as it is applied to current cases. In addition, the rekindling of interest in intra-industry joint liability because of Sindell has resulted in the reexamination of earlier theories of joint liability by legal scholars [Leibman 1983, 1984, LaMarca 1982, Dworkin 1981a, HLR 1980, Sheiner 1978]. In spite of having been developed several years ago [Steffen 1965, Harper and James 1956], these other theories of recovery from multiple defendants have not been adequately studied from a marketing perspective.

Hence, this article first considers the nature of the DES situation to present the important elements of an intra-industry joint liability claim. Next, all of the approaches to joint liability are reviewed in the context of DES and other related cases. Finally, the implications of market share liability for marketing are discussed.

The Nature of the DES Problem

An estimated one-half to two million women took DES between 1947, when the Food and Drug Administration (FDA) approved its use for prevention of accidents related to pregnancy, and 1971, when the FDA withdrew approval for use by pregnant women. As many as four million female offspring were exposed to DES [Henderson 1980, p. 143]. The FDA categorized DES as experimental and required it to be so labeled when distributed [Dworkin 1981b, p. 77].

Although DES was considered both safe and effective at the time of its introduction, medical researchers subsequently discovered that daughters of DES users had an unusually high incidence of precancerous condition and rare forms of cancer. Nor was DES shown to be effective for the prevention of miscarriages.

Somewhere between 94 and 300 companies produced DES during the 20 years prior to the discovery of the drug’s adverse consequences [Sheiner 1978, p. 964]. No firm held a patent on DES because it was a generically marketed product, and pharmacists could fill prescriptions with the product of any manufacturer [Payton v. Abbott Labs 1979]. Many of these firms sold DES for uses other than, or in addition to, accidents of pregnancy. DES continues to be prescribed for a number of health-related problems.

The above factors combine to create unique problems for DES plaintiffs who seek recovery in product liability litigation. When more than 100 firms have marketed a product which may have caused injuries which become apparent only after 10 to 20 years following plaintiffs’ prenatal exposure, there are difficult problems regarding proof of facts. More specifically, a plaintiff will encounter difficulty in attempting to identify, perhaps 25 years after her mother had consumed the product, which pharmaceutical firm manufactured the drug that caused her injuries.

All of these considerations relate to the issue of intra-industry joint liability: under what conditions may a plaintiff sue an entire industry, or the major members thereof, to assess liability for a defective product whose exact origin is unknown [Kroll 1979, p. 193]? Industry-wide liability was conceived initially as a technique for apportioning damages among several defendants, but only after a plaintiff had proven them all to be liable. However, recent decisions have begun to use industry-wide liability as a means of assisting the plaintiff to demonstrate liability [Abel v. Eli Lilly 1980, p. 31, Sindell v. Abbott Labs 1980, pp. 614-22]. The resultant blurring of the damage apportionment and liability assessment functions can create considerable confusion.

Such problems and disorder have led DES plaintiffs to attempt novel applications of traditional approaches to tort recovery and to propose new arguments upon which to base claims of joint liability [Mink v. University 1978, Morrissy v. Eli Lilly 1979, Katz v. Eli Lilly 1979]. Some courts have responded by stretching the doctrines of alternative liability and concert of action in order to help plaintiffs overcome their problems of proof [Abel v. Eli Lilly 1980, Ferrigno v. Eli Lilly 1980]. Others have heard a variety of arguments on behalf of an enterprise liability approach [Sindell v. Abbott Labs 1980, Abel v. Eli Lilly 1980]. And California has opted for a market share basis for recovery [Sindell v. Abbott Labs 1980]. These four intraindustry theories of recovery are now described in detail.

Approaches to Joint Liability

Traditional approaches to joint tort liability include alternative liability and concert of action. At least one court has held that DES plaintiffs can bring actions under either of these theories [Abel v. Eli Lilly 1980].

Alternative Liability

A plaintiff seeking to establish joint liability under alternative liability must show that all defendants behaved wrongfully, even though only one caused the injury [Restatement 1965, 433B, comment f]. If the plaintiff proves this, then to escape liability any one defendant must show that he did not cause the injury [Ybarra v. Spangard 1944]. The classic case in this area is Summers v. Tice [1948], in which two hunters negligently shot in the direction of a third man, thereby injuring him. Each defendant was forced to try to show that his weapon had not caused the plaintiff’s wound.

A court will not find joint liability under alternative liability where not all defendants have been proven negligent [Wetzel v. Eaton 1973]. So when a fencer suffered an eye injury as the result of a defective sabre manufactured by one of two defendants, his action failed when he could not prove that both had acted negligently [Garcia v. Joseph 1978]. Likewise, the court rejected the plaintiff’s argument for an outright application of alternative liability in Sindell because the plaintiff had named only 11 of the approximately 200 firms which might have produced the injury-causing DES [Sindellv. Abbott Labs 1980, p. 602].

Concert of Action

Concert of action offers a second possible approach to establish intraindustry joint liability. Under this theory, all those pursuing a common plan or design to commit a harmful act who

  • actively take part in it,
  • further it by cooperation or request,
  • lend aid or encouragement to the wrongdoer,
  • or ratify and adopt the wrongdoer’s acts done for their benefit are equally liable [Prosser 1971, p. 592].

Although drag races are the most frequently mentioned examples of concerted action [Bierczynski v. Rogers 1968], it could apply to product liability suits where the plaintiff can cite parallel actions by defendants in order to make inferences of a plan or tacit agreement [Orser v. George 1967]. Such actions might include manufacturing a product to common designs and specification, industry-wide activities with regard to product safety and warnings, and other common efforts, perhaps through a trade association, such as lobbying. At least one court has maintained, however, that a plaintiff must demonstrate some “joint control of the risk” by defendants to prove joint control [Hall v. DuPont 1972, p. 37]. Although the plaintiff need not establish a formal joint venture on the part of the defendants to prove joint control [Connor v. Great Western 1968], evidence of shared research, joint testing of products, and joint legislative lobbying or trade association should be provided at the very least.

As with an assertion of alternative liability, concerted action on the part of the defendants shifts the burden of proof to them. In order to evade liability, any defendant must prove that its actions were not connected to the plaintiff’s injury.

In Sindell the defendants were charged with having

  • failed to test DES adequately,
  • not provided sufficient warnings,
  • relied upon the tests performed by one another,
  • and taken advantage of one another’s promotion and marketing techniques.

The court maintained that these allegations did not amount to a charge of tacit understanding or a common plan. Further, it could not be established either that each defendant knew the other’s conduct was harmful to the plaintiff or that defendants had helped or encouraged one another with regard to inadequate testing and warning.

Enterprise Liability

Experts who disagree with the extension of traditional theories of joint tort liability to allow for industry-wide liability have proposed that courts adopt the enterprise liability doctrine [Sheiner 1978; Podgers 1980, Klemme 1976]. This approach would modify alternative liability in that a plaintiff would have to prove a “high probability” that the injury resulted from unjust behavior by one of the defendants. As described in one often-cited source, the specific elements of enterprise liability would be [Sheiner 1978, p. 995]:

  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 defendant 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 the 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: strict liability, negligence, or warranty.

Defendants unable to prove that their products could not have caused the injury would pay damages according to their market shares [Sheiner 1978, p. 994]. The justification for this enterprise liability basis for industry-wide liability rests upon the following policy argument [Sheiner 1978, pp. 1002-4]:

Where an entire industry, engaged in a predictably dangerous enterprise and following similar safety practices, places an identically defective product in the stream of commerce, the industry rather than the individual manufacturer should be the focal point for liability because it can best allocate risks, distribute costs, and take preventive measures.

In Hall v. DuPont [1972], six explosives manufacturers and their trade association were held liable for injuries resulting from blasting cap accidents. The court said that where individual manufacturers could not be identified, the existence of industry-wide standards or practices could support a finding of joint control of the risk, thereby shifting to each defendant the burden of proving its product could not have injured the plaintiffs. The question of whose blasting caps caused the harm became secondary to the court’s finding that defendants engaged in joint control of the risk. So in situations where a plaintiff cannot identify which defendant manufactured the harmful product and each defendant is equally unable to prove that its product did not cause the injury, liability will follow.

The Hall court took care, however, to place some limits on the possible scope of its opinion [Hall v. DuPont 1972, p. 378]:

By noting these requirements, we wish to emphasize their special applicability to industries composed of a small number of units. What would be fair and feasible with regard to an industry of five to ten producers might be manifestly unreasonable if applied to a decentralized industry composed of thousands of small producers.

The Sindell court, using Hall for guidance, declined to apply enterprise liability to the DES situation for three reasons. First, at least 200 firms had marketed DES during the period in question while the six companies in Hall comprised virtually the entire blasting cap industry in the U.S. Second, DES manufacturers had not jointly controlled the risk via trade associations. Last of all, the pervasive role of the FDA in setting criteria for testing and marketing drugs made it unfair to impose liability without proof regarding who supplied the offending DES.

Market Share Liability

The California Supreme Court, under the new doctrine it designated as market share liability, sustained the Sindell plaintiff’s cause of action by adapting the alternative liability rule described earlier [GLR 1981, Land and Melham 1981, Kroll 1980]. The market share approach to intra-industry joint liability includes at least the following elements [Sindellv. Abbott Labs 1980]:

  1. Plaintiffs suffered injury because of a defectively designed product marketed by some unknown manufacturer.
  2. Plaintiff’s inability to identify the specific manufacturer arose through no fault of his/her own.
  3. All manufacturers in the industry produced and marketed the same product with an identical design defect.
  4. Plaintiff joined as defendants those firms which accounted for “a substantial share of the market.”

If a plaintiff can establish the above elements, each defendant must then try to show that it could not have been the source of the harmful product. Since shifting this burden to defendants is tantamount to determining whether plaintiffs or defendants will most probably prevail, the court has apparently decided that the costs of DES injuries should be shared by those surviving DES producers whom plaintiffs can bring before a California court. The court relied on the Summers rationale that, as between an innocent plaintiff and negligent defendants, the latter should bear the cost of injury [Brahn 1980].

Additional policy-based reasons offered for the Sindell decision included the belief that defendants are better able to bear the cost of injury and that manufacturers are in the best position to guard against defects and to provide warnings; therefore, holding them liable for not adequately performing those tasks provides an incentive for product safety [Burch 1982, p. 789]. The court also noted the desirability of fashioning new remedies to meet the changing needs of a complex industrial society and corresponding necessity of adapting the rule of causation and liability [Sindell v. Abbott Labs 1980, pp. 601-11]. The court seemingly based its decision on policy grounds rather than having deduced it as the inevitable outcome of applying and extending existing legal doctrines to the DES problem.

Implications of Joint Liability Litigation

The court’s general statement of the market share liability rule for the apportionment of damages in DES cases creates several serious difficulties for companies involved in such litigation. Moreover, implications for the marketing system arise from the potential explosive growth in the area of intra-industry joint liability.

Difficulties in Applying Market Share Liability

As articulated by the court, the market share rule provides that [Sindell v. Abbott Labs 1980, p. 612]:

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 plaintiff’s injuries….

Under this approach, each manufacturer’s liability would approximate its responsibility for the injuries caused by its own products.

At the outset, this statement raises several questions about the appropriate definition of “market share.” Because manufacturers’ market shares probably varied between 1947 and 1971, will different market shares apply for different plaintiffs according to when their mothers used DES? Or should an average market share be calculated for the entire period? If so, what about the fact that many firms produced DES for only part of the 1947-to-1971 period?

Market share issues also arise with respect to geographic area. Which market figures apply if a firm with a large share of the national market had a much smaller share within the state where the plaintiff’s mother consumed the drug, or vice versa? This difficulty is compounded if some companies have gone out of business or operate beyond the reach of the courts within the state trying the lawsuit.

The fact that several manufacturers marketed DES for uses other than the prevention of accidents of pregnancy further complicates the issue. Measuring market shares according to the total volume produced or sold could overstate the liability of firms whose product was used for other purposes.

Additional market share computation problems may occur if the plaintiffs bring pharmacists and drug wholesalers as defendants in DES actions along with manufacturers. The Sindell decision addresses only the division of liability on a horizontal basis, i.e., among manufacturers. Vertical allocations, i.e., among manufacturers, wholesalers, distributors, and retailers, lead to more complex problems. For example, a plaintiff might join as defendants four manufacturers with 60 percent of industry output, three wholesalers handling 35 percent of the product within the state having jurisdiction, and a chain store retailer that accounted for 15 percent of DES sales throughout the state. While the nonadditive nature of market shares on a vertical basis explains the 110 percent “total” market share figure, it still leaves the court without a market share rule in such cases.

In a similar vein, the lack of specificity as to what constitutes a “substantial share of the market” on the part of DES codefendants may lead to other questionable consequences. Recovery is permitted from several defendants, each of whom may account for a relatively small market share, as long as their combined shares are deemed “substantial.” The dissenting opinion in Sindell expresses serious reservations about the equity of this situation [Sindell v. Abbott Labs 1980, pp. 615-16].

Implications for Marketing

The market share liability rule, to the extent that it applies to domestic drug manufacturers, makes the pharmaceutical industry an insurer of DEScaused injuries. The resulting exposure is potentially staggering. One New York court entered a $500,000 jury verdict for a DES victim in an intraindustry joint liability suit [Bichler v. Eli Lilly 1981]. While not all DES cases may be worth one-half million dollars, about four million women were exposed to DES [Henderson 1980, p. 143]. The implications of such outcomes, or even the prospect of such outcomes, for marketing are considerable and diverse.

New Product Development

The extension of liability for injuries which surface a generation after product use and for which causation need not be proven greatly increases the financial risk of introducing new products. One likely response to this situation will be more elaborate and expensive testing procedures prior to marketing such products. Further, duplicate testing of new products by pharmaceutical manufacturers is likely to occur to avoid the possibility of “jointly controlling the risk.

An additional implication is the inevitable rise in product liability insurance rates. Indeed, given the uncertainties involved in predicting risks and expected losses for this sort of liability, the risk may become unratable. The relatively underdeveloped state-of-the-art of generational testing of food and drug products further exacerbates the insurance problem.

The net effect of these cost-raising factors will be the tendency of the pharmaceutical industry to slow product development, perhaps even abandoning controversial products because of the risks involved. But the potential impact of market share liability extends well beyond the pharmaceutical industry. Consider the possibility of applying this doctrine to other widely-used chemicals, such as asbestos. Asbestosis and similar respiratory diseases including lung cancer become apparent ten or more years after the initial exposure to the substance [Insurance v. Forty-Eight 1980]. Just as with DES, the injured person will probably be unable to identify the particular manufacturer who produced the offending product. Or, as is more likely to occur, the worker may have been exposed to asbestos supplied by several companies.

Should the market share approach be extended to these asbestos-related injuries, substantial exposure on the part of the asbestos manufacturers would result. Over 3,000 different products contain asbestos, ranging from consumer items such as toothbrushes and hair dryers to industrial goods such as asphalt and concrete water pipes. An estimated eight to eleven million workers have been exposed to asbestos since World War II began [Mansfield 1980, pp. 860-66]. The industry faces at least 5,000 bodily injury product liability suits in which defendants include manufacturers, distributors, and other suppliers [Mansfield 1980, p. 865].

Lawsuits arising out of use of herbicides and pesticides manufactured to identical formulas, leaded paint, aluminum wiring [Beverley Hills 1979], insulation [Davis v. Yearwood 1980] offer situations in which the market share liability doctrine seems to fit. Delayed reactions to any of these products are likely to leave plaintiffs in a position where, through no fault of their own, they cannot connectheir injuries with one specific producer.

Generic labeling of nondurable products provides many other situations in which an injured person may not be able to identify the faulty product’s manufacturer, especially if he/she purchased several unbranded versions of the product. Companies which feel confident that their products pose fewer risks to buyers, perhaps because of more thorough testing, may discard unbranded versions of their products in an attempt to lessen their product liability exposure via the market share approach [Land and Melham 1981, pp. 45-46].

Overall, then, new product development may decline in many industries where products are similar, especially if distinctive brand identities have not been established.

Channel Integration

The growth of market share liability litigation could lead to greater cooperation within the channel as well as attempts by the most vulnerable channel members to control channel operations. Thus, the tendency toward vertical marketing systems [Kotler 1980, p. 425] is likely to be stimulated. Fewer, larger manufacturer-distributor combinations will be better able to withstand the financial impact of intra-industry joint liability lawsuits. The economies of such large-scale operations may even allow the participating firms to self-insure should intra-industry risks become unratable. Smaller firms unable to withstand the financial impact of such a suit will be either forced out of business or compelled to become members of substantially larger distribution channels.

Current problems experienced by a channel member in seeking indemnification from other members will also lead to increased channel integration. Eaton, the manufacturer in Wetzel v. Eaton [1973], an alternative liability case, experiencedifficulty in identifying which of two component parts suppliers had manufactured the part which had failed, causing Wetzel’s injuries. Intra-industry joint liability theories of recovery are usually invoked when plaintiffs have no way of identifying the specific defendant whose product caused the injuries. But the court in Wetzel noted that Eaton clearly should have maintained records regarding which component supplier made the faulty part [ Wetzel v. Eaton 1973, p. 30]. Thus, even if they do not have records, manufacturers may be held to have such knowledge, preventing them from using joint liability theories to recover from their suppliers [Summers v. Tice 1948]. As a result, manufacturers may begin to monitor the actions of their suppliers more closely, perhaps demanding assurances about the quality of the supplied component or assuming some of the testing and inspecting functions.

Marketing-Law Research

Both marketing theorists and practitioners should begin to study a basic question relating to intra-industry joint liability: How will the definition of a fungible product change as courts begin to consider consumer behavior research?

This question is actually one of perspective. Intra-industry theories of recovery are relevant when the injury-causing product cannot be traced to a particular company. Thus, the product is indistinguishable as to its source. If several firms use the same chemical formula or production process, the resulting products are said to be fungible [Nolan 1982]. But the viewpoint is that of the manufacturer.

If courts begin to consider what products consumers regard as substitutes (a market-related definition of fungible), more products could come under the scope of intra-industry liability [Dworkin 1981a, p. 80]. If products’ brand identities are not established and if a particular product is destroyed, preventing the manufacturer from being named, while harming a user, what will the courts do? Perhaps opinion polls will show that this product belongs to a class of goods that consumers regard as being undifferentiated. As consumer behavior research gains acceptance in product liability litigation [Morgan and Avrunin 1981], the term “fungible” could take on expanded meaning, thereby broadening the scope of intraindustry liability.


The major implications for marketing of the evolving trends in intraindustry joint liability have been highlighted. The legal implications and problems have necessarily been simplified because of their technical complexity and lack of direct relevance.

All of the issues mentioned seem to point to the need to balance the injured parties’ rights to recover damages against the defendants’ concerns about maintaining the extent of liability within reasonable bounds. Modern technology has brought about the production and marketing of increasingly sophisticated products which can cause injuries via complex, unprecedented processes that may leave the injured party unable to identify the specific cause of the harm. As a matter of social policy, the law can allow those injuries to be borne by the parties which incur them or it can allow for some form of compensation by fashioning contemporary rules for recovery [Dworkin and Zollers 1982]. Since “the market is the ultimate laboratory, and the consumer is the ultimate test subject” [Wilson 1980, p. 757], the latter option seems much more acceptabl

Karl Boedecker and Fred W. Morgan, 1986.

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