The Alabama legislature must respond to tort liability expansion
August 21, 2014
By Richard Garrett
Last Friday, the Alabama Supreme Court denied a rehearing in the case of Wyeth v. Weeks. This let stand a holding that name-brand drug manufacturers can be held liable for alleged misrepresentations or failures to warn in regard to generic drugs that they did not manufacture or distribute. The Court’s reasoning is shared by a very small minority of courts, both federal and state. To quote Justice Murdock in his dissent:
This court continues to stand alone as the only appellate court in the country to hold that a brand-name manufacturer may be responsible for injuries caused to a party who ingests a generic drug that the name-brand manufacturer did not manufacture or sell. According to Wyeth, over 90 cases (a figure that includes trial courts) have been decided in 25 states, including every state that borders Alabama, the federal circuit court that encompasses Alabama, and all six federal courts of appeals to have considered the issue. With the exception of two or three federal district court decisions…all of them disagree with the position taken by this court.
As Justice Murdock points out, being in a tiny minority does not necessarily mean you are wrong, but it should certainly cause you to question your position.
Although the majority does not agree, this opinion is a radical change in Alabama tort law. Historically, Alabama and most states have required a relationship (buyer and seller, for example) in order for a duty to attach, whether for products liability or claims of misrepresentation/failure to warn.
This holding says that a manufacturer can be liable to a plaintiff, with whom it has had no relationship, for a competitor’s products for ten, twenty, thirty years or more after it may have quit manufacturing or selling the drug itself. Common sense tells you that there is no conceivable way that manufacturers can project, provide for and (most likely) insure against such open-ended risk. The Legislature needs to study this issue and consider correcting the problem through legislation clarifying that Alabama tort law does not provide for this type of expansive liability.
There are numerous reasons why a court is not the proper forum to address such complex policy issues. An appellate court makes a decision based on the facts of one case and in Wyeth, the facts before the Court were very limited. A federal court certified the case to the Alabama Supreme Court before any discovery had been done. Legislatures, unlike courts, are uniquely positioned to analyze the myriad complexities and consequences-many of them unintended-of such a change in the law.
Why should Alabama citizens be concerned about a complex, convoluted and esoteric area of Alabama tort law? There are two simple reasons. One, if decisions like this one are allowed to stand, drug manufacturers will probably have to divert resources from research and development to protect against future liability. This will mean fewer life-saving and life-improving drugs in the future. Two, to help defray liability, all brand-name drugs will become more expensive. This is directly counter to past policy decisions of the Alabama Legislature to help with the rising cost of pharmaceuticals by passing laws that require pharmacists to dispense generic equivalent drugs in certain cases.
The Mercatus Center ranks Alabama’s “lawsuit climate” as 47th worst in the country. Decisions like the one in Wyeth will only further that notion and may give pause to businesses that wish to relocate here. Now that the Legislature knows that the Court won’t do its own damage control, it’s time to act.
Richard Garrett is a senior fellow with the Alabama Policy Institute (API). API is an independent non-partisan, non-profit research and education organization dedicated to the preservation of free markets, limited government and strong families.