Generic Product Risks: The Case Against Comment k and for Strict Tort Liability

Professor Page considers whether strict liability should be imposed for injuries caused by products that pose generic risks – risks that do not derive from flaws in the manufacturing process but from product design or from the very nature of the product. He reviews the ALL debate that preceded adoption of section 402A of the Restatement (Second) of Torts and finds the ambiguous meaning of comment k. which deals with “unavoidably unsafe” products, of little use in determining whether section 402A applies to generic product risks. After examining the policy justification for imposing strict liability in cases involving design defects and construction defects, Professor Page concludes that, at least in cases involving generic product risks that were unknown at the time of sale. strict liability should be imposed as a modest incentive to manufacturers, to improve product safety and as a means of satisfying justifiable consumer expectation.


Recent litigation involving asbestos and DES has attracted widespread interest, not only because of the staggering numbers of claimants alleging serious harm from these products and the filing of a bankruptcy petition by the nation’s largest asbestos manufacturer, but also because of the complexity of the issues that the cases involve For example, many DES claimants, daughters of women who took the drug during pregnancy, are unable to identify the maker of the particular pills consumed by their mothers. The courts have had to decide whether to depart from traditional causation rules that would require directed verdicts for defendants, and if so, what new rules to adopt. In the asbestos cases, courts have had to determine the obligations of successive insurers to indemnify asbestos manufacturers against claims made by persons who allegedly contracted respiratory diseases from continuous exposure to asbestos over many years.  In addition to these problems, an array of legal theories asserted against an array of defendants who do not manufacture asbestos or DES has emerged in these cases.

Generic Product Risks: The Case Against Comment k and for Strict Tort Liability, Georgetown University Law Center, 1983.

The few courts reaching the merits of claims made by asbestos and DES victims have, for the most part, refused to venture beyond the familiar confines of negligence law. Giving dispositive weight to section 402A of the Restatement (Second) of Torts, which imposes strict liability for “any product in a defective condition unreasonably dangerous to the user, and to comment k of section 402A, which recognizes an exception to strict liability for products deemed “unavoidably unsafe, these courts in effect have required plaintiffs to establish that defendants engaged in unreasonable conduct. Under this analysis, if the benefits of a product outweigh its known risks, and if the manufacturer has provided suitable warnings and directions for use, the defendant’s product will be deemed reasonably safe, and the plaintiff will not recover.  Similarly, if the manufacturer has placed  the product into the stream of commerce without knowledge of the dangers associated with its use or consumption, courts typically have refused to impose liability unless the exercise of reasonable care would have uncovered the hazards. 11 One notable exception to this trend is a recent decision by the New Jersey Supreme Court, holding that an asbestos producer might be strictly liable in tort for injuries caused by risks that were unknown despite reasonable investigation at the time of sale.

The reluctance of courts to impose strict liability in toxic-product cases corresponds to a trend, reflected in scholarly musings and adopted in recent congressional reform efforts, to limit strict liability to product defects attributable to the construction or manufacturing process. With respect to claims alleging inadequate product design, warnings, or instructions for use, the proponents of this limitation would apply a negligence test, either expressly or in a disguised form.

Although the desirability of imposing strict liability upon the pharmaceutical industry for adverse drug reactions has been debated,  the larger issue of whether all manufacturers should be held liable without fault for other types of toxic adverse effects of their products largely has escaped scrutiny. Since courts in a number of jurisdictions may soon be addressing the merits of asbestos and DES cases, a fresh look at the subject seems in order.

The central focus of this Article is whether all “generic product risks” should be treated alike. The Article first will discuss the various types of generic risks-avoidable and unavoidable, known and unknown-including those risks associated with toxic products like asbestos and DES. It will then argue that section 402A of the Restatement and its comments provide little guidance in deciding cases that involve generic risks, and should not be accorded dispositive weight in product liability suits. The Article will then examine and evaluate the policy justifications for adopting a rule of strict tort liability in cases involving generic risks. Ultimately, the Article will conclude that a persuasive case can be made for imposing strict liability on manufacturers whose products contain unknown generic risks.


Risks attributable to flaws or impurities caused by the manufacturing process usually are present only in a small percentage of the units of a particular product and do not endanger every consumer of the product. Such product risks are nongeneric in nature. The presence of a foreign substance in a jar of mayonnaise and a malfunction in a television set due to poor workmanship exemplify this category of hazards. In contrast, asbestos and DES share a common characteristic: the capacity to create risks that endanger, but do not necessarily harm, every user or consumer of the product. Such product risks are generic in nature.

This Article will focus on generic product risks, of which there are two main types. One includes design risks, or risks that can be eliminated or at least reduced by changing the design of the product. For instance, the interior of an automobile can be made more crashworthy so that the occupant is more likely to survive a collision. Some design risks, however, may be impossible to eliminate or to reduce without frustrating the purpose for which the product is marketed. The sharpness of a knife, the heat of a stove, and the physical force generated by an automobile are examples of this type of risk. These hazards enable the products to do what they were meant to do; they are essential to the function of the product and cannot be designed away.

The hazards associated with toxic products like asbestos and DES represent the second main type of generic risk. The manufacturers of asbestos products and DES have no desire to create the hazards associated with their products because these hazards serve no useful purpose. Unlike the capacity of a knife to cut, which is essential to its intended use, the capacity of DES to cause cancer in the daughters of mothers who used the drug is irrelevant to the effectiveness of the drug; while the cutler consciously designs the cutting edge of a knife, the pharmaceutical company does not intentionally create the risk of cervical cancer. Toxic product risks are inherent in the nature of the product, regardless of its design, and cannot be eliminated, at least given the current state of scientific knowledge, by any means short of withdrawing the product from the market.

Other examples of generic, non design risks abound: adverse reactions to drugs and exposure to harmful chemicals; the risk of cancer from smoking cigarettes;  the risk of “toxic shock” from using tampons; and the possibly deleterious effects of consuming food and beverages containing saccharin and caffeine,  if these substances were someday linked conclusively to diseases in humans.

As the saccharin and caffeine examples suggest, different types of generic risks, whether designed into a product or inherent in its nature, may also be distinguished by the degree of existing knowledge about them. Some generic risks, such as the risk of cancer from smoking cigarettes, are well known to manufacturers and consumers alike. Other generic risks, such as the carcinogenic effects of DES, were unknown when the consumer was exposed to them. Still others, such as the possible side effects of caffeine, remain unknown today.

This Article discusses whether or not these various generic product risks-designed-in and inherent, known and unknown-should be treated alike for purposes of applying strict liability. Should the rights of a plaintiff whose hand is burned by a hot stove or whose eye is injured because a machine tool lacks a safety device be determined by the same theory of liability that determines the rights of a plaintiff disabled by exposure to toxic asbestos fibres or DES? Should the claim of a patient harmed by an adverse side effect known to be associated with a drug be governed by the same theory of liability as is the claim of a patient injured by an adverse side effect that was unknown at the time the drug was administered? The light shed on these questions by the Restatement (Second) of Torts, which has greatly influenced the development of product liability doctrine, is an appropriate starting point.


Section 402A of the Restatement (Second) of Torts gave impetus to a profound and far-reaching change in the law of product liability. It subjected sellers, including manufacturers, of all products to strict liability and grounded the cause of action in tort rather than warranty. This change was important because a warranty cause of action was contractual in nature and was being preempted by the Uniform Commercial Code. More importantly, this change relieved plaintiffs of the need to establish a privity-of-contract relationship with defendants. This so-called “citadel of privity,” preventing plaintiffs from asserting breach of warranty against defendants with whom they were not in privity, already had almost totally collapsed in warranty cases involving products for internal human consumption, and was crumbling under the onslaught of plaintiffs injured by manufactured goods. The widespread judicial adoption of section 402A completed the demolition  and seemed at the time to be the most dramatic aspect of the new rule.

This doctrinal revolution was remarkably swift. What began in 1958 as a modest proposal for strict tort liability for the sale of food “in a condition dangerous to the consumer,” was extended three years later to cover “other products for intimate bodily use” in a “defective condition unreasonably dangerous to the consumer.”  By 1964, the final form of section 402A applied to “any product.”  This expansion of the strict liability rule, however, was not accompanied by a thorough analysis of the implications of bringing new classes of products within the sweep of section 402A. As a result, the Restatement does not adequately address the issues raised by generic risks.

A. The Restatement Generally

When the drafters of the Restatement broadened the scope of section 402A to cover all manufactured goods, they apparently assumed that the doctrine and explanatory comments, which had been developed for food and other products “for intimate bodily use,” would apply equally well to all manufactured goods. The final version of the section and its comments, therefore, remained virtually intact.

In retrospect, the most significant impact of this rush to strict liability was the confusion and uncertainty that subsequently plagued product-design litigation. Although the concept of design defectiveness was not unknown in 1964, the proponents of section 402A saw no need to adjust the rules to determine explicitly when the new doctrine would impose strict liability for design defects. They retained the terms “defective” and “unreasonably dangerous” and added the requirement that the product “must be dangerous to an extent beyond that which would be contemplated by the ordinary consumer.” In subsequent years, courts and commentators alike have found this formulation inadequate and have struggled in vain to fashion an acceptable test for strict liability in product-design cases.

Although the issue of design defectiveness was not recognized as a problem during the evolutionary stages of section 402A, certain other generic risks did occupy the attention of Dean William E. Prosser (the Reporter of the Restatement (Second) of Torts), his advisers (the American Law Institute Council), and the American Law Institute (“ALI”) membership. In working out the new rule of strict liability, they were cognizant of the controversy over the causal relationship between cigarette smoking and cancer, as well as of the incidence of serious harm attributed to certain drugs and vaccines,  and considered whether the tobacco and pharmaceutical industries should be subject to strict liability. In their floor debates, Dean Prosser and members of the ALI also considered how whiskey would fit into their scheme of liability.

With respect to cigarette-cancer litigation, the Restatement came out unequivocally on the side of the tobacco companies. During a 1961 floor debate on section 402A, a motion was made to delete the word “defective” on the ground that the “unreasonably dangerous” requirement was an adequate test for determining when strict liability should apply and that therefore the term “defective condition” constituted excess baggage.  In response to this motion, Dean Prosser pointed out that the ALI Council wanted to retain the element of defectiveness in order to insulate from liability the sellers of dangerous products, such as whiskey, cigarettes, and certain drugs, which are inherently dangerous even though there is nothing “wrong” with them.  The specter of alcoholics bringing a barrage of suits against distillers apparently haunted the drafters of section 402A. After a very brief discussion, the motion was defeated by a voice vote, and the “defective condition” standard remained a part of section 402A.

The notion that section 402A would apply only to defective products-products that have something wrong with them other than their inherent danger-would seem to exclude most generic risks. It is not clear, however, that this interpretation is what the majority of the ALI had in mind. During the 1961 debate, Dean Prosser agreed with other members that the “unreasonably dangerous” standard was sufficient to protect sellers of products such as cigarettes and whiskey.  In drafting comment i to section 402A, he pointed out that many products, including food and drugs, involve “some risk of harm, if only from over-consumption,” but this risk did not render such products “unreasonably dangerous.” Dean Prosser concluded that the proper test was whether the product was “dangerous to an extent beyond that which would be contemplated by the ordinary consumer who purchases it, with the ordinary knowledge common to the community as to its characteristics.” Thus defined, the requirement of unreasonable danger would not be met in cases involving whiskey, the hazards of which are known universally, but might be met in cigarette cases, depending upon the court’s determination of what the ordinary consumer knew about the risks of smoking at the time of marketing. Toxic risks are not necessarily excluded, therefore, from section 402A.

Another way to approach the scope of section 402A is to ask whether a product with any kind of generic risk, which was found to be unreasonably dangerous, would meet the separate requirement of defectiveness. The comments to section 402A do not answer this question. Comment i presents examples that shed little light upon the problem. The examples contrast generic risks that are not considered unreasonable (“good” whiskey that makes some people drunk, “good” tobacco that causes harm, “good” butter that deposits cholesterol in the blood and leads eventually to heart attacks) with those that do present unreasonable dangers attributable to defects in the same products (whiskey contaminated with a dangerous amount of fuse oil, tobacco with marijuana, butter with poisonous fish oil). The former pose dangers widely known to the ordinary consumer;  the latter present clear instances of something “wrong” with the product. Neither group of examples presents a product, not otherwise defective, with such unreasonable risks that strict liability ought to apply.

Comment g, elaborating upon the concept of “defective condition,” is similarly unhelpful. It limits strict liability to situations where ••the product is, at the time it leaves the seller’s hands, in a condition not contemplated by the ultimate consumer, which will be unreasonably dangerous to him.” The word ··condition,” like the contaminated product examples, seems to suggest that there must be something “wrong” with the product beyond any inherent capacity to cause harm.

Yet Dean Prosser and the ALI did not intend to exclude from section 402A all products creating generic risks. Comment j states that warnings may be required for “poisonous drugs or those unduly dangerous for other reasons” (categories broad enough to embrace medicines triggering deleterious reactions), a proposition compelling the conclusion that the failure to include such warnings might subject the manufacturer to strict liability. While the comment specifies that the absence of directions or warnings may render the product unreasonably dangerous, it does not explain whether unreasonably dangerous also means that the drug is in a “defective condition.” Does comment k shed any light on the meaning of “defective”?

B. The Meaning of Comment k

Comment k, dealing with so-called “unavoidably unsafe products,” is more expansive than these other comments. It declares that a drug with proper directions and warnings would be neither defective nor unreasonably dangerous, thus suggesting that the same characteristic (mislabeling) that made the drug unreasonably dangerous might also make it defective. This wording blurs the distinction between the two elements, and the requirement of a defect thus becomes superfluous.

The genesis of comment k may help explain this blurring and comment k’s other mysteries. Dean Prosser drafted the comment in response to a proposal at the 1961 ALI meeting that prescription drugs be specifically excluded from section 402A. The arguments and the discussion that followed were notably unfocused. The motion under consideration failed to distinguish between harm from adverse reactions and other kinds of drug-induced harm, such as that caused by improper formulation or toxic ingredients. Since no one could argue seriously that the latter risks should escape strict liability, the failure to separate the two categories muddled the debate. Moreover, neither Dean Prosser nor the ALI member who made the proposal indicated how he thought section 402A would apply to prescription drugs in the absence of an explicit exemption. A solution was being offered for a problem that never had been clearly defined. Nor were adverse reactions about which warnings had been issued at the time of marketing distinguished from other harmful effects not discovered until later.

There was also disagreement over the scope of the proposed exemption. The motion proposed to insulate all prescription drugs from strict tort liability. Dean Prosser suggested that a better case could be made for excluding “relatively new, experimental, and uncertain drugs, of which there are a great many on the market, and justifiably so.” He defined the term “experimental drug” to include virtually all prescription drugs and even some over-the-counter medicines. Dean Prosser’s use of the adjective “experimental” went far beyond clinical testing, an initial stage of the Food and Drug Administration (“FDA”) approval process, and covered drugs that had completed the entire approval process and had been marketed to consumers. Thus, he was suggesting an exemption even broader than that proposed by the motion.  The motion to include an exemption for prescription drugs in section 402A ultimately was defeated, as was a subsequent motion to insert such an exception in the comments. On its face, this defeat did not seem to reflect a desire by the membership to exclude more than prescription drugs from section 402A, but Dean Prosser apparently saw things differently.

Reflecting the murkiness of its origins, the version of comment k that emerged from the Reporter’s hand failed to delineate in any meaningful way either the breadth of its coverage or its purpose. The comment first addresses “unavoidably unsafe products, .. which it defines as “products which, in the present state of human knowledge, are quite incapable of being made safe for their intended and ordinary use.” The comment then appears to focus on “the field of drugs,” where such products are “especially common,,. and presents three overlapping categories of unavoidably unsafe products: high-benefit, high-risk drugs, such as the vaccine used for the treatment of rabies; “many other drugs, vaccines, and the like, many of which [because of high risks involved] cannot legally be sold except to physicians, or under the prescription of a physician;” and “many new or experimental drugs.”

The comment furnishes no criteria for determining how risky and how beneficial a drug must be in order to qualify under the first category as “unavoidably unsafe.” In any event, such a determination would appear to be unnecessary for drugs. The second category may reasonably be read to include all prescription drugs, since federal law mandates that any medicine with toxic effects that render it unsafe as self-medication be sold under prescription -and a high-risk, high benefit drug surely would be limited to sale by prescription. The sweeping requirement of prescription status also makes the third category superfluous, a fortunate occurrence since the term “new or experimental drugs” is highly ambiguous.

Thus, if its examples are taken seriously, comment k reasonably could be read as excluding from section 402A only unavoidably unsafe prescription drugs. The comment, however, fails to explain what might render an unavoidably unsafe product “defective” and thus subject to section 402A in the first instance. Instead, it states that if the known benefits of one of these products outweigh its known risks, it would not be considered “unreasonably dangerous, .. provided that it was prepared properly and bore adequate warnings and directions for use.  The negative implication of this statement radically expands the scope of the exemption. Since injury caused by any product whose risks outweigh its benefits presumably would be actionable under traditional negligence principles, comment k may be read to remove from the reach of section 402A any product that is unavoidably unsafe as long as the manufacturer will not be subject to liability under a negligence rule for injury caused by the product. Such an exemption includes but is not limited to prescription drugs, an ironic turn in light of the ALI vote rejecting the proposed exemption for prescription drugs alone.

To appreciate the effect of this interpretation of comment k, it is necessary to consider how sellers of unavoidably unsafe products might be held strictly liable in the absence of comment k. The consumer-contemplation test of comment F seems to preclude liability in cases where the risks generally were known and therefore within the contemplation of the ordinary consumer. Under this test, if a patient suffers harm from a high-risk, high-benefit drug and the harm falls within the scope of the contemplated risk, the drug would not be unreasonably dangerous. Similarly, a warning about an adverse reaction listed on the label of a prescription drug would be considered part of the contemplated risk, as would be true of known risks posed by experimental drugs. Given the broad sweep of comment i, one can salvage independent meaning for comment k only by surmising that, without comment k, harm from unknown risks, or harm from known risks which turns out to be much graver than expected, generally would be actionable under theories of strict tort liability. With comment k, therefore, one must surmise that a manufacturer of a product posing such risks would escape liability under section 402A if the product were “unavoidably unsafe.”

This analysis suggests that the function served by comment k is to exempt unknown risks created by unavoidably unsafe products, since comment i already excludes known risks. Yet this interpretation presents difficulties. The text of comment k is not at all specific on the point, and a matter as important as the treatment of unknown hazards merits direct mention. Moreover, the comment focuses on known risks. Two of the three categories listed in the comment involve products unavoidably unsafe because of known risks, such as a rabies vaccine. According to the comment, the manufacturers of these drugs should not be strictly liable for harm from the known risk, a proposition seemingly rendered superfluous by comment i. The third category, “new or experimental drugs,” however, does cover products that are unavoidably unsafe because of unknown risks. Indeed, one important purpose of the clinical testing of experimental drugs is to learn more about adverse reactions they might cause. On the other hand, since a patient participating in clinical trials must give an informed consent, which includes an understanding that the harmful effects of the drug are not yet fully known,  any adverse reaction the patient suffers may be said to fall within the range of consumer contemplation.

Comment j, unlike comment k, speaks specifically to product risks unknown at the time of marketing; but comment j raises more questions than it answers and sheds little light on the meaning of comment k. In discussing the duty to give warnings and directions for use, Dean Prosser indicated that the sellers of food need not provide warnings about common allergic reactions to their products, since they might reasonably assume that consumers who suffer from the allergy are aware of it.  This conclusion is consistent with the consumer-contemplation of unreasonable danger test in comment i: to the ordinary consumer with a common allergy, an allergic reaction would be an expected hazard, and hence not unreasonable. The Reporter went on to state, however, that

where . . . the product contains an ingredient to which a substantial number of the population are allergic, and the ingredient is one whose danger is not generally known, or if known is one which the consumer would reasonably not expect to find in the product, the seller is required to give a warning against it, if he has knowledge, or by the application of reasonable, developed human skill and foresight should have knowledge, of the presence of the ingredient and the danger. Likewise in the case of poisonous drugs, or those unduly dangerous for other reasons, warnings as to use may be required.

This language is unclear on a number of points. Why should the duty to warn unwary allergy victims be limited to cases in which a “substantial” segment of the populace is affected? Under ordinary negligence principles, one might find the risk of serious harm or death to a miniscule percentage of individuals, or even a single individual, to be sufficient justification for requiring a warning. Also, if the risk is undiscoverable in the exercise of due care and hence need not be mentioned in the warnings or instructions for use, does it follow that the manufacturer will not be strictly liable for harm resulting from the risk? This seems to be a fair reading of the text. If so, strict liability will not attach even though the product was dangerous beyond the contemplation of the ordinary consumer.

But what are the reasons for this departure from the comment i test? Does the last sentence of the paragraph indicate merely that drugs fall within the scope of the general duty to give warnings or directions in every case? Or does it mean that allergic reactions to drugs should be governed by the same principles applicable to reactions to food, i.e., that users need not be warned about common risks that are known by both the manufacturer and the consumer? Should it be read even more expansively to preclude liability for harm from all unknowable adverse drug reactions, and, by extension, from all unknowable generic risks? If this gloss on the language of comment j is correct, comment k again would serve no purpose.

Another noteworthy aspect of comment k is its suggestion that strict liability not be imposed on the manufacturers of “new or experimental” drugs containing harmful or impure ingredients that could not be eliminated “because of lack of time and opportunity for sufficient medical experience.” The scope of the “unavoidable product danger” exception would be extended beyond generic risks and would apply to garden variety defects, where something is actually “wrong” with some units of the product. Such a view reads into comment k an “‘impure ingredient” exception.

If the risk of an impure or otherwise deleterious ingredient is known when a drug is marketed, but the manufacturer could not discover Which doses contained the substance (as is the case of blood contaminated with serum hepatitis), an adequate warning on the label of the drug would place the defect within the scope of consumer expectations. The product thus would not be unreasonably dangerous under the comment i test. Impure ingredients whose presence is not known when the drug is sold (such as the offending agents in the polio vaccine case) pose a more difficult problem because of their similarity to impurities in food and manufacturing defects in mass-produced goods. The seller may be unaware of these defects and may be unable to discover them by economically feasible methods. But these instances are plainly covered by the strict liability rule of section 402A.

The comment k “impure ingredient” exemption should not apply to either of these cases. The exception should be narrowly limited to emergencies in which the usual precautions for assuring the purity of ingredients have not been taken, yet there is medical justification for using the drug.  The appropriate scope of the exception is thus so narrow that the exception would make more sense as an interpretation of the consumer contemplation test of comment i than as an exception to the strict liability rule of section 402A: in this particular context, assuming an adequate warning has been given, the risk of harmful ingredients is within the ambit of consumer contemplation.

In conclusion, the Restatement’s treatment of generic risks falls short on several counts. The requirement of a “defect” as a distinct element of strict liability was inserted to serve a function already adequately addressed by the “unreasonably dangerous” test. The Restatement fails to make a clear distinction between known and unknown hazards, and never takes a forthright position on which of these two types of hazards strict liability should cover: either, neither, or both. This omission is surprising given the evident concern, reflected both in the ALI floor debates and the comments, over the effect of section 402A upon the manufacturers of drugs, vaccines, and cigarettes. Comment k also is vague in that it fails to make clear what kind of special rule it puts in place, what purposes it meets, and to what classes of products it applies. Finally, the ALI’s position on generic product risks, uncertain though it may be, reflects policy judgments. While the ALI is a distinguished body, it is a private, nongovernmental entity. The courts have ultimate responsibility for translating policy into common-law rules, and the matter of liability for generic risks, and for toxic products in particular, requires more comprehensive scrutiny than has been afforded by the Restatement.


When the Restatement’s commentary on adverse reactions to drugs, food, and tobacco was drafted, the proposed rule of strict liability did not cover all products placed in the stream of commerce. Thus, there was no need to consider how the full range of generic risks should be integrated into the framework of a strict liability system. Even had the drafters reflected on this issue, their efforts may not have produced an internally consistent doctrine to cover harm from the ill effects of products for human consumption and intimate bodily use, and harm from the designed-in dangers of massproduced goods, for the problem is not an easy one.

There are two basic approaches to the issue of liability for the deleterious effects of generic risks. One approach is to focus on strict liability as it has evolved in design-defect and warning cases, and to ask whether the manufacturer’s duty to eliminate or warn of product dangers extends to the particular generic hazard in question. The other approach is to ask whether the policy justifications for imposing strict tort liability in cases involving nongeneric risks, i.e., construction defects, where there is general agreement that it should be imposed, support the extension of strict liability to cases involving generic risks. Each of these approaches will be considered in the remainder of this section.

A. Justifying Strict Liability for Generic Risks: Is the Duty in Design-Deject and Warning Cases Adequate?

Under well settled principles of negligence law, a manufacturer has a duty to use reasonable care in the design of a product. This obligation requires the manufacturer to use precautionary measures which are economically and technologically feasible, and which will eliminate unreasonable risks of harm. The duty extends to risks of which the manufacturer is aware and, in the exercise of due care, should be aware.  If a hazard may be reduced by providing information to the user of a product, the duty of reasonable care may be discharged by providing instructions and warnings.

To have meaning in design cases, the concept of strict liability must make the manufacturer answerable for product-related harm for which negligence theories would provide no remedy. Strict liability potentially might extend to all generic risks, to risks that are designed into a product as well as to those naturally and unavoidably present. The failure to design out or to warn against these risks would render the manufacturer liable, even though the design change or warning might be economically or technologically infeasible, and even though the risk may have been unknown or unknowable at the time of production.

A theory of “ultra-strict” liability for harm from all generic hazards has found neither judicial nor scholarly acceptance. As Professor Gary Schwartz has argued in a similar context, if loss spreading is our goal, we ought not to adopt a rule that discriminates against the victims of nonproduct-related accidents.  Courts adopting “ultrastrict” product liability would find themselves on the fabled slippery slope and would be unable to offer any logical reason for not extending the doctrine to other contexts in which the public is routinely exposed to the risk of injury, such as the operation of premises held open for business or public purposes or leased to tenants. Such radical changes in the common law surely and properly would encounter judicial hesitation, grounded upon the conviction that it would be more appropriate to leave the difficult policy judgments involved in adopting such an expansive rule to the legislature.

The rejection of “ultra-strict” liability leaves open, however, the theoretical possibility of imposing strict liability for some harm caused by generic risks. For example, suppose an automobile manufacturer is deemed not liable for all harm to occupants who collide with the interior of a vehicle. Is there any way to assign responsibility for some but not all injuries attributable to the generic risks of the so-called “second collision” -to assign responsibility in fewer than all cases. as would be done under a rule of ultra-strict liability, yet in more cases than would be done under a rule of negligence? In other words, are there second collisions that the manufacturer could not have avoided by exercising reasonable care but for which the manufacturer should be held liable? This question has provoked considerable academic debate, much of it sharply critical of courts that have answered “yes” and imposed liability for injuries that were not reasonably avoidable without articulating a clear, workable standard for deciding when an alleged design flaw is defective or unreasonably dangerous.  The emerging consensus seems to be that design defects are best dealt with under a balancing test, which is indistinguishable from the negligence standard. Thus, the failure to develop judicially administrable criteria for strict liability has led to the conclusion that product manufacturers, absent negligence, should not be liable for failing to design out functional dangers. Commentators have concluded, in short, that there is no middle ground between negligence and “ultra-strict” liability, at least in cases involving design defects.

The one exception to this proposition, originally articulated by Deans Page Keeton and John Wade, and since adopted in several jurisdictions,  is that knowledge of risks should be imputed to the manufacturer as of the time of production or sale. Thus, in determining whether to impose liability for failure to design out or warn of a danger, a jury might take into account hazards that were unknown, or even unknowable, to the manufacturer when the product was marketed. That the manufacturer could not have discovered these risks in the exercise of reasonable care would be irrelevant; if a hypothetical reasonable manufacturer, aware of these risks, would not have marketed the product or would have warned of the dangers, an injured plaintiff may recover.

This exception uses hindsight to achieve a genuine strict liability in certain cases of generic risks, such as adverse reactions to drugs, dusts, and chemicals. This hindsight approach, however, has not received much policy-oriented justification either by courts or commentators. The mere fact that it created a well-delineated area of strict liability in design and warning cases seemed to suffice. It was inevitable that a need for a firmer rationale would arise.

The recent decision of the New Jersey Supreme Court in Beshada v. ]ohm-Manville Products Corp. attempted to provide such a rationale. The court held that asbestos manufacturers might be liable for lung diseases caused by exposure to asbestos dust at a time when the risks were unknown and undiscoverable, offering three reasons to support this extension of strict tort liability: the allocation of the costs of injuries to the parties best able to bear them; the reduction of risks by increasing incentives for safety research; and the elimination of the need for plaintiffs to prove scientific knowability, a factual determination that is too complex and speculative for jury resolution. The potential problems with each of these reasons will be considered in turn.

The first rationale offered, the notion that manufacturers of defective or unreasonably dangerous products are in a superior position to allocate the costs of product-related injuries, does not really help to answer the question of what makes a product defective or unreasonably dangerous. Nor does it answer the question of which costs should be shifted. Compared with plaintiffs who are injured by products, manufacturers are almost always better able to bear risks by spreading losses through price adjustments and insurance. This rationale would therefore justify imposing liability for harm from risks known as well as unknown, reasonable as well as unreasonable, and ultimately would lead to “ultra-strict” liability. Because it proves too much, this rationale provides only weak justification for a narrower rule of strict liability.

Professor James Henderson has also criticized the risk-spreading rationale on the ground that a hindsight approach would misallocate the costs of liability from products creating risks that were unknown and unknowable at the time of sale. Manufacturers would add this cost to the prices of different, reasonably safe products or to the same products put to different, safe uses. Since the offending products would already have been priced and sold, their liability costs could not be assigned to them. Moreover, once manufacturers discover the danger, the product is removed from the market or redesigned, or appropriate warnings are given, and thus there is no longer any need to assign costs of liability.

Such a result-product prices reflecting costs other than those caused by the product itself-would lead to market distortions and destroy the optimality properties that flow from cost-based pricing in a perfectly competitive market.  In a perfectly competitive market, cost minimization and profit maximization for a particular product, and not costs from earlier versions of a particular product, or different products altogether, will determine the price of the product. A manufacturer who tries to pass on these costs will be driven from the market by manufacturers who do not. Professor Henderson’s argument thus squarely poses a paradox: the market distorting effects of misallocation can occur only in a noncompetitive market, where the effects of misallocation are ambiguous. Because of competitive market pressures, unanticipated liability costs are more likely to be paid out of profits, loans, or sources other than price increases.

It is important to distinguish between the allocation that would result from the retroactive application of a hindsight rule and that from the prospective application. The court in Beshada pointed out that application of the rule of strict liability for unknowable risks “will force the price of any particular product to reflect the cost of insuring against the possibility that the product will turn out to be defective.” Thus, the threat of prospective liability would force a proper allocation of product prices. When a court initially adopts a hindsight rule and imposes it retroactively, however, the prices of products marketed years, or, in the case of asbestos, decades, earlier will not bear their own liability costs. In the case of asbestos, this “first shot” problem is enormous. The New Jersey Supreme Court did not ask whether considerations of fairness deriving from justifiable reliance by asbestos manufacturers, or the enormous potential liability to which the industry might be e:…:posed, supported the recognition of a hindsight rule that would operate prospectively only.

For all of these reasons-because it proves too much, because it may or may not apply depending on market conditions, and because its effectiveness depends on whether the application is prospective or retroactive-the risk-spreading rationale raises more questions than it answers and provides only weak support for a rule of strict liability.

The second policy justification offered in Beshada was that a rule of strict liability would spur safety research that might reveal hidden dangers. Put another way, a contrary rule would benefit producers who were unaware of risks and thus would tend to perpetuate ignorance, especially if plaintiffs could not easily establish that a hazard might have been detected in the exercise of due care. Admittedly, if the existence of a hazard were completely unknown at the time of marketing, a manufacturer would be unable to determine how much to spend in order to make the discovery, and there may be no increase in safety research. On the other hand, if a hazard were suspected or were known to exist but its full extent were not known, the incentive for additional investigation could produce some incremental level of safety. In either instance, though, this incentive for safety research would justify a rule of strict liability because the manufacturer can always uncover the known risks better and more cheaply than the potential victim.

It is worth noting that Beshada involved asbestos rather than a drug. Federal regulation prescribes the nature and amount of safety testing that must be done before the marketing of a new medication. In using stimulation of safety research as a rationale for a rule of strict liability for unknown risks, a court would be explicitly or implicitly recognizing a general need for more extensive premarket investigation than presently required by the FDA. This recognition, however, goes far beyond judicial determinations in individual cases that FDA approval of a particular new drug does not preclude a finding of negligence or strict liability. While the safety-incentive rationale is not indefensible,  some courts might give it less weight than they would otherwise because of its far-reaching implications.

Another problem with the accident-avoidance rationale is that it leaves open the following question: why should courts impose strict liability upon manufacturers for harm from hazards of unknown scope as an incentive to discover the true scope of the risks, but not apply strict liability as a spur to technological development where at the time of production it was technologically infeasible to eliminate or to reduce risks? There is widespread agreement that in the latter cases, involving the so-called “state of the art” issue,  manufacturers will not be liable, absent negligence, for having failed to use today’s safety technology yesterday . It is difficult to distinguish between technology that can detect the gravity of risk and technology that can eliminate or reduce risk, or to conclude that strict liability would act as a spur to the advancement of the former but not of the latter.

The third justification for strict liability offered by the Beshada court is that the litigation process cannot adequately determine scientific knowability.  But although the same might be said of the need to decide whether a manufacturer failed to exercise reasonable care in designing a product,  courts have not stopped resolving these is sues. The scientific speculation inherent in deciding whether a particular hazard was knowable may produce more uncertainty than a dispute about whether designing out a known danger was feasible; this greater degree of uncertainty might tip the balance in favor of giving at least some weight to this particular rationale for strict liability. The elimination of the need to establish knowability would certainly reduce trial costs, but so would dispensing with the burden of proving lack of due care in design cases.

Since design and warning cases generally are decided by balancing factors that are virtually identical to those used to determine negligence, it is difficult to justify treating unknown or unknowable generic risks as falling within the duty to design or warn but outside the balancing approach. Ultimately, however, a de facto negligence test for all generic risks is unsatisfactory because this standard does not take into account the compelling policy reasons for adopting a strict liability theory. I now turn to those policy reasons, which have been recognized in the context of non generic risks.

B. Justifying Strict Liability for Generic Risks: Are the Policies Underlying Strict Liability in Construction Deject Cases Adequate?

The conceptual treatment of liability for harm from unknowable generic risks as deriving from the manufacturer’s duty to design or to warn creates a discomforting impression: that liability is being imposed for a failure to do the impossible. An alternative approach is to view generic risk through the same lens that, when focused upon the risk of harm from construction defects, has produced a rule of strict liability even when it might have been economically infeasible or technologically impossible to eliminate the hazard. Here the theory does not rest so much on any real or presumed inadequacy in the manufacturing process as on a policy decision to impose liability without fault. Thus, it may be appropriate to inquire whether the bases of strict liability for construction defects support a similar rule for generic risks.

Manufacturers are strictly liable for harm from construction defects even if they could not have eliminated, or discovered, such defects by exercising reasonable care.  Held to the standard of their own plans and specifications, manufacturers must answer for imperfections that arise from their production processes.  Of the various reasons that have been advanced to justify this rule of strict liability in construction defect cases,  three seem worthy of discussion in the context of generic risks: accident avoidance, loss spreading, and the satisfaction of justifiable consumer expectations.

Whether strict liability will actually foster accident avoidance has been seriously questioned. It has been argued that producers will avoid only those accidents worth avoiding-if it is cheaper to let an accident happen and to pay the resulting liability costs, the profit maximizing manufacturer will follow that course. Thus, if testing and quality-control procedures would cost more than projected liability costs, a rule of strict liability would not encourage manufacturers to adopt procedures to prevent accidents.

This argument, however, is not entirely persuasive. A manufacturer bound by negligence principles might foresee escaping some liability costs that should attach when it does not exercise due care. The difficulties of proving fault might be too great for injured plaintiffs in certain kinds of cases,  or economic constraints might force plaintiffs to accept unfavorable settlements. Anticipating these lower liability costs, manufacturers might spend less on accident prevention. By reducing plaintiffs’ burdens, a strict liability rule might well encourage manufacturers to increase safety expenditures to the level they might reach under a negligence system that functioned optimally.

The adoption of a rule of strict liability in cases where a manufacturer knew a risk existed but did not know its full extent also might increase safety by providing an incentive to perform additional investigations. Indeed, assuming that manufacturers foresee that, under negligence principles, not every injured plaintiff will recover full damages for harm from a particular design feature or warning, the application of strict liability to all generic hazards, known and unknown, will increase the prospect of full recovery, encouraging safety expenditures and accident avoidance. This increase in safety enhancement standing alone, however, is probably insufficient to justify liability without fault in these cases.

The “loss-spreading” rationale rests on the manufacturers’ ability to use insurance to spread the costs  of harm caused by construction defects more efficiently and more easily than product victims can. Construction defects are easily insurable for two reasons: the number of claims likely to arise from such defects is fairly predictable, and this number is likely to be relatively small in comparison with the total number of products placed into the market. Insurance against these risks, therefore, is readily available because the costs are predictable and the harm to be insured against normally will remain within modest bounds. The number of known generic risks likely to occur-ranging from adverse drug reactions for which warnings have been given to automobile accidents -can also be predicted with some certainty. Rough estimates can even be made about risks whose presence is known but whose extent cannot be calculated. The only type of hazard that would not permit even a guess would be the unknown and undiscoverable danger.

In the case of generic risks, however, the other aspect of insurability-a comparatively small number of risks-is absent. Unlike construction defects that affect only a small percentage of users, every generic risk will endanger every user of the product. Thus, the amount of damage attributable to generic product risks could be enormous, even if recoveries are reduced to take into account the comparative responsibilities of plaintiffs, third persons, and other enterprises that might appropriately share the losses. One might argue, then, that loss spreading makes sense only in the context of construction defects, where the relatively modest costs can be more easily absorbed by the manufacturer.

An intermediate position might hold manufacturers strictly liable for unavoidable hazards, such as adverse reactions to toxic products. but not for designed-in, functional dangers, such as the speed of an automobile. This compromise position, however, has several problems. As a practical matter, it is difficult to base a rule of strict liability on degrees of potential damage: the notion that the more harm a defendant may cause the less likely it is that liability will attach strikes a somewhat perverse chord. Moreover, the focus on the quantity of loss may well be misguided. If the purpose of loss spreading is to deflect the economic impact of product-related harm away from those who may not be able to absorb it, perhaps the focus should be on the victims’ capacity to pay for their own injuries, and not on the aggregate cost of all such injuries.

Consumers’ ability to foresee product risks is relevant to a determination of their ability to insure themselves against those risks, and thus to a determination of their capacity to absorb the cost of their own injuries. The policy of satisfying justifiable consumer expectations  may shed light on this issue of cost absorption in particular and on the appropriateness of strict liability for generic product risks in general.

The notion that manufacturers should be strictly liable for harm from product frustration is rooted in the doctrine of implied warranty of merchantability, which holds goods to the standard of reasonable fitness for their intended use. Products placed into the stream of commerce carry with them a representation of safety, the scope of which is determined by what the ordinary consumer would expect of those products.  This representation of safety underlies the consumer contemplation test set out in comment i of the Restatement.

It is important to distinguish between two uses of consumer expectations: the goal of meeting justifiable consumer expectations as a policy behind strict tort liability, and the use of consumer expectations as a criterion for deciding whether strict liability should apply in a particular instance. The former derives from the conviction that, as a matter of fairness, consumers should be entitled to rely on the representation of safety made by the seller of a product and by any information accompanying the product. Consumers depend on the manufacturer to provide goods that will meet these implied representations so that they can make rational judgments affecting their own well-being. The imposition of strict liability will encourage producers to satisfy these consumer expectations, will permit consumers to act on the assumption that expectations will be met, and will enable consumers to survive the economic hardship of unexpected losses.

When using consumer expectations as a criterion for applying strict liability, the critical task is to determine which consumer expectations are justifiable. The rule in construction defect cases suggests that courts have found such defects to lie outside the ambit of consumer contemplation; consumers, therefore, may justifiably expect products to be free of construction flaws, and manufacturers will be held strictly liable for all such flaws: known, unknown, and unknowable. In design defect cases, however, courts apply what amounts to a negligence test and say in effect that consumers justifiably may expect only that due care, measured as of the time of manufacture, will be exercised with regard to design and warning decisions.

Is this distinction tenable? Given what the average person undoubtedly knows about product quality (especially in light of the publicity given to recalls of automobiles and other household products), all types of risk-creating flaws, both in construction and design, are arguably within the contemplation of ordinary consumers.  In some cases, awareness of a vague possibility that some defect might lurk somewhere within a product ought not to establish the risk as within the consumers’ contemplation. The wide range of potential flaws, especially in complex items such as automobiles and workplace machinery, and the varying degrees of potential risk associated with such flaws, renders a general awareness practically useless to the consumer. Moreover, the marketing image of a product may dim an already faint awareness of the risk. A rule of strict liability for construction defects, then, reflects a justifiable judicial determination that consumers merit protection under a standard requiring goods to be completely free of such defects.

A practical reason for limiting justifiable consumer expectations to the exercise of reasonable care in the design of products is that there is no other workable standard by which courts may determine whether a product is unreasonably dangerous. Consumers usually are unable to form an expectation about the extent to which design defects will be eliminated: it is not a matter of expecting one unit of a particular product to be as good as the next. Therefore, the best that consumers can justifiably expect in the design defect context is that manufacturers will use technologically and economically feasible methods to reduce or eliminate foreseeable risks.

The policy of satisfying justifiable consumer expectations also dictates the refusal to impose strict liability for harm from known generic risks. The ordinary consumer appreciates the dangers posed by a speeding automobile or a sharp knife, and would therefore have no cause to believe that a manufacturer would do more than use due care to reduce these hazards. Contemporary smokers know of the risk of cancer from cigarettes. The presence of warnings on the label of prescription drugs makes physicians, acting on their patients’ behalves, aware of the relevant risks. In each of these cases, consumers can make a rational judgment about the scope of the hazard and act accordingly.

But if the danger or its full dimensions do not become evident until after the plaintiff has been exposed to the product, the consumer-contemplation policy supports the imposition of strict liability. The product has inflicted an unpleasant surprise. Although the manufacturer could not have discovered the danger or its extent, the marketing of the product misled the consumer with an implied representation of safety that was not met and thus deprived the consumer of the opportunity to evaluate the risk and to decide whether to accept it. Under this new view of consumer e1:pectations, a product posing an unknown or unknowable generic hazard would stand on the same footing as a product with a construction flaw: each product would be considered unreasonably dangerous for purposes of strict liability because it frustrated justifiable consumer e1:pectations recognized by the law.

The need to integrate liability for product-related harm to nonconsumers into a scheme structured around consumer expectations raises a conceptual problem. Professor Gary Schwartz has noted that a third-party beneficiary theory can preserve the viability of the consumer-expectations test in instances where the consumer could reasonably be deemed to have contemplated the conferral of accident-avoidance benefits upon others.  The extension of the implied warranty of merchantability, which under the Uniform Commercial Code protects anyone “who may reasonably be expected to use, consume or be affected by the goods,”  lends support to this argument by analogy. But it would be stretching things beyond the breaking point to assume that a consumer intends to protect bystanders, especially those who are total strangers. As a practical matter, this problem will be limited to construction defect cases: the de facto negligence test used to determine liability in design defect cases applies equally well to consumers and bystanders;  and unknown generic risks will rarely endanger anyone other than a product user. These limitations, however, do not eliminate the theoretical hurdle.

One answer is simply to recognize that the policy of satisfying justifiable expectations supports the imposition of strict liability only on behalf of consumers and their intended beneficiaries. To hold manufacturers liable without fault for harm to bystanders would then require a separate, independent rationale. A second, and perhaps preferable, solution lies in a reassessment of the consumer-contemplation policy. Its roots, as has been noted, go back to the doctrine of implied warranty of merchantability, the primary concern of which was the adjustment of the rights of parties to commercial transactions. Although courts fashioning tort doctrine may legitimately borrow from sales law, they need not feel fettered by sales law constraints. Where the same policy goals would be applicable to nonconsumers, it might be logical to extend strict liability protection beyond the purchaser. Thus, the user of a product personally relies upon the implied representations of safety inherent in the product. Certain bystanders may also entertain similar expectations that a product will not injure them. This approach would require courts to differentiate between two classes of bystanders: the first is exemplified by a pedestrian injured when an automobile goes out of control because of a construction defect; the second by the person harmed while asleep at home by an airplane that crashed because of a flaw in its assembly. In the latter case, the victim had no expectation generated or frustrated by the product. The falling airplane was like a falling meteorite-completely unexpected-an event for which there is no tort remedy. Hence the consumer-contemplation rationale, expanded to take into account the actual expectations of users and bystanders, would not support recovery by such victims under strict liability.


This Article has proposed a conceptual framework for determining when to apply strict liability to generic product risks. On the twentieth anniversary of the first decision to hold product manufacturers strictly liable in tort,  the parameters of the doctrine remain in flux. Federal legislation threatens to restrict the doctrine to harm from non generic risks.  Conflicts and uncertainties in the common law of product liability as it has evolved in the states have been cited as a major justification for federal action.

The case for salvaging some remnant of strict liability within the area of generic product risks is not an easy one. The use of a policy based analysis, however, makes it possible to link the accepted view that the rule should apply to construction defects to the admittedly controversial proposition that harm from unknown or unknowable generic risks should be compensated in the same fashion. The advantage of this approach is that it provides a coherent, principled basis for excluding other kinds of generic product risks from a rule of strict tort liability. Both the satisfaction of justifiable expectations on the part of product victims and the achievement of modest advances in safety justify the application of strict liability to harm from unknowable generic hazards.

Neither section 402A and comment k, interpreted as denying strict liability for unknowable generic risks, nor Beshada, forthrightly permitting recovery in such cases, presents a satisfactory resolution to the problem. The proposed federal Product Liability Act uncritically accepts comment k, while Beshada has provoked an outpouring of criticism. The tide at the moment apparently is running against strict liability in generic-risk cases. But the last words have not yet been spoken.

Joseph A. Page, 1983.

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More DES DiEthylStilbestrol Resources

The Relevancy of Drug Efficacy Evidence in Strict Liability Actions


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

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

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

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

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

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

Needham v. White Laboratories, Inc.

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

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

Comment k and Evidence of Efficacy

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

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

The Seventh Circuit’s View

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

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

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

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


High Profits; Few Losses

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

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

“Me Too” Practices

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

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

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

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

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

The FDA Then and Now

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

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

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

Promotional Practices

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


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

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

Detail Men

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

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


DES As a Carcinogen

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

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

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

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

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

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

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

Claims of Effectiveness from Poorly Controlled Studies

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

White Laboratories’ Decision to Market Dienestrol to Treat Threatened Abortion

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

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

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


The District Court’s Ruling in Needham
Comment k

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

Comment k separates drugs into three categories.

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

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

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

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

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

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

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

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

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

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

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

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

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

Strict Liability Based on a Drug Defect

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

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

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

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

Design Defects

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

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

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

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

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

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

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

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

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

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

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

Efficacy Evidence

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

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

Authority for the District Court’s Ruling

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

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

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

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

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

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

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

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

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

Comment k and Comment j

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

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

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

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

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

The Woodill court went on to hold:

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

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

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

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

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

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

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

The Seventh Circuit’s Comment k Analysis

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

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

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

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

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

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

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

Strict Liability Based on a Defect

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

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

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

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

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


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

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

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

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

Mary E. Kelly, 1981.

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