DES Manufacturers’ Liability based on a Market Share Theory


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

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

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

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


A. Facts

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

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

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

B. Issue Presented to the California Supreme Court

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


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

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

A. Alternative Liability

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

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

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

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

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

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

B. Concert Action

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

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

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

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

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

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

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

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

C. Industry- Wide Liability

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

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

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

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

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

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

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

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

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

D. Enterprise Liability

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

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

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

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

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

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

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

E. Latent Technological Injury Compensation

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

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

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

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


A. Rejection of Prior Non-Identifable Manufacturers Theories

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

B. Policy Considerations

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

C. Market Share Liability

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

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


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

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

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

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

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

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

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

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

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

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

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


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

Barbara Banker Redemann, 1980.

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