Product Liability Update - July 2012

First Circuit Affirms Judgment Against Generic Drug Manufacturer on Plaintiff's Design Defect Claim, Holding: (i) Product May Be Found "Defective" on Proof It Is "Unreasonably Dangerous"; (ii) Design Defect Claim Not Preempted by Federal Food, Drug, and Cosmetic Act; and (iii) Expert Testimony Based on Adverse Event Reports to FDA Admissible

In Bartlett v. Mutual Pharmaceutical Company, Inc., 678 F.3d 30 (1st Cir. May 2, 2012), plaintiff suffered toxic epidermal necrolysis ("TEN") after taking sulindac, a generic version of the non-steroidal anti-inflammatory drug Clinoril®. Plaintiff sued the drug's manufacturer in New Hampshire state court for breach of warranty, negligence and fraud based on the drug's allegedly defective manufacture and design and the manufacturer's alleged failure to warn of the drug's dangers. After defendant removed the case to the United States District Court for the District of New Hampshire, the federal district court dismissed all but the design defect claim, which proceeded to trial. At trial, plaintiff argued that sulindac's risks outweighed its benefits, thus making it unreasonably dangerous to consumers, notwithstanding the United States Food and Drug Administration ("FDA")'s having approved the brand-name drug to which sulindac was identical as "safe and effective" and never having withdrawn that approval. The jury found for plaintiff, awarding over $21 million, and the district court denied defendant's motion for judgment as a matter of law.

On appeal to the United States Court of Appeals for the First Circuit, defendant contended that plaintiff's claim failed as a matter of law because plaintiff was required to prove a specific "defect" in addition to the drug's unreasonable dangerousness, and no proof of any identifiable defect in sulindac was shown. Defendant also argued the claim was preempted by the federal Food, Drug, and Cosmetic Act ("FDCA") because sulindac's design was required by the act to be the "same" as the branded drug's, and that the testimony of plaintiff's experts based on "adverse event reports" ("AERs") to the FDA should have been excluded under Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579 (1993), which requires the proponent of expert testimony to demonstrate that it is reliable based on such factors as objective testing, peer-reviewed publication and the like.

With respect to the requirements for a design defect claim, the First Circuit characterized defendant as arguing that New Hampshire law required proof of a feasible alternative design to establish such a claim, and held that New Hampshire precedent had already rejected that argument. Defendant's actual argument, however, had been that New Hampshire law, which follows the Restatement (Second) of Torts § 402A (1965), requires that a design defect plaintiff prove that the product was in a "defective condition" as well as being "unreasonably dangerous." Ignoring these conjunctive requirements, the First Circuit held that the district court properly allowed plaintiff to show that sulindac was in a "defective condition" solely by virtue of its being "unreasonably dangerous" due to its propensity to cause TEN.

On preemption, the court recognized that the Hatch-Waxman amendments to the FDCA--which permit the marketing of generic drugs that are chemically identical to a previously approved branded drug and carry the same labeling--were intended to make safe and effective drugs available more cheaply and thus lower health care costs. The court also recognized the Supreme Court's holding in PLIVA v. Mensing, 131 S. Ct. 2567 (2011) (see July 2011 Foley Hoag Product Liability Update), that a failure-to-warn claim against a generic manufacturer was impliedly preempted...