Wednesday, October 03, 2012

S.D. Ohio Repudiates Conte


We're not keen on taking potshots at law review articles.  As we have mentioned more than once, we usually find the first part of law review articles, the analysis of the case law, to be useful.  But the part of the article proposing some new approach usually contains more twaddle  than logic.  Sometimes that twaddle becomes law somewhere.  When it does, it usually turns out badly.  (DES market-share liability, anyone?)  Still and overall, law reviews confer a benefit on the profession for which we are grateful.  We are particularly reluctant to gripe about student-authored law review notes.  Those notes are frequently helpful in collecting relevant authorities.  If nothing else, they help us make our string-cites stringier.   Those notes also signify something unique to the law – how students can make valuable intellectual contributions to a profession they will soon be joining.   Writing a law review article is hard work. It is also typically a thankless task. 

 

Maybe this makes us grinchy, but we are unlikely to extend thanks for a recent student law review note that blows kisses at our bĂȘte noire, the wretched Conte decision.  The article is called ""Picking Up the Tab for Your Competitors: Innovator Liability after Pliva v. Mensing." It is in the current issue of the George Mason Law Review.  We are disappointed that the article concludes that the Supreme Court's Mensing decision should prompt courts to embrace the Conte error.  Not to apply too broad a brush to any institution of higher learning, but we normally think of George Mason as a place full of right-thinking folks. To say the least, the article arrives as an unpleasant surprise.  Sure, the article takes a position that is bad for our clients.  But it is also bad policy and bad law.  The very title, by referring to picking up the tab for one's competitors, reveals that something is amiss.  Nevertheless, the article is an interesting read and we congratulate the student on the publication.   We offer greetings at the beginning of what we hope will be a splendid career. 

 

We were not intending to talk about the George Mason article at all today.  Tomorrow we will go through it and submit several respectful points of disagreement.  But today’s case, Hogue v. Pfizer, Inc., 2012 WL 4466609  (S.D. Ohio Sept. 27, 2012),  all by itself offers a pretty good a refutation of the article, so consider this report a preview of tomorrow’s more scholarly recitation. 

 

We will make no bones about it; we like the Hogue result.  Yet another case rejects the Conte theory of innovator liability.  Add it to our Pioneer Defendant scorecard.  Still, law is about more than results.  It is about how courts get to those results.  We cannot help but notice that the George Mason law review article seems even more result-oriented than usual.  The author is not the first to squirm over Mensing's consequence that generic consumers might lack remedies available to brand consumers.  Even if that seems an odd result, it is no reason to do violence to basic, well-settled principles of product liability law.   More to the point, we are not sure how bizarre the disparate treatment really is.  We bet most consumers would bargain away the right to pursue certain legal remedies in return for lower prices.  We know that is so because people do that every day when they purchase limited tort automobile insurance policies.  No, that explicit bargain has probably not taken place with generic drugs, and maybe some day we will write a law review article about how it could.  The point is that such a trade-off makes sense.  By contrast, sticking a brand manufacturer with potentially perpetual liability (even if it ceases selling the branded product) for injuries caused by competitors seems unfair.  Even the author of the article seems a little troubled by the incongruity of it all.  Ultimately, the article proposes a legislative fix that would permit generics to change their labels unilaterally.  But meanwhile, let's have some bad law. 

 

One other thing before we get to the Hogue case:  the central error in the George Mason article resides in the notion that Mensing has undermined the logic of those cases that had rejected Conte liability.   It is true that in some of those cases the court reasoned that generic consumers could pursue remedies against generic manufacturers, a possibility now foreclosed by Mensing.   But those cases also had to wrestle with a particular state's product liability law, and that law, unless it is Martian, will limit product liability to a defendant that actually made or sold the product in question.  Simply stating that limitation makes clear its reasonableness.  Any person blessed with common sense will see that someone who made a product different from the one that allegedly hurt the plaintiff has no business being sued.   But let's suppose that someone not so blessed, though blessed with a license to practice law, will be clever enough to point out that the law abounds with examples where people (or companies or partnerships) have been found liable to third parties. Notions of foreseeability drive the analysis.  For example, an accountant rendering a statement to a company might face a fraud or securities suit by an aggrieved investor.  True enough.  But the accountant did not merely foresee that the statement would be relied upon by third parties, he or she knew that to be the case. And now you will say that a brand manufacturer knows its label will be relied upon by doctors prescribing the generic medicine. That hardly constitutes a gotcha.  Much of the value of the accountant statement is that it will be relied upon by third parties.  That is part of what the company is paying for, right?   By contrast, even if a brand manufacturer knows that third-parties (prescribers of generics) will indirectly rely on its label, it derives no benefit from that reliance.   Indeed, brand manufacturers are damaged by the fact that generic manufacturers can free-ride on the science and on the label.  But there is another crucial difference.  Accountants do not get caught in the pincers of product liability theories, including strict liability.  It makes no sense to take products liability law, which is animated by particular facts and policy concerns about product distribution and cost-spreading, and then graft onto it doctrines from the general law of deceit that make no sense in such a context. That is especially so when the state's product liability regime makes clear that product liability shall attach only to the maker or seller of the specific product in question.  Foreseeability should not be a fig-leaf to cover up perversions of law, science, and marketplace realities. 

 

Now we are rambling. 

 

Let’s turn to last week’s case of Hogue v. Pfizer, Inc., 2012 WL 4466609  (S.D. Ohio Sept. 27, 2012), where the court refused to embrace Conte, even in the wake of Mensing.   The plaintiff alleged that she suffered from tardive dyskinesia as a result of ingesting generic metoclopramide.  The defendant that manufactured the brand name version (Reglan) filed a motion for summary judgment.  The court granted that motion because the Ohio Product Liability Act (OPLA) displaces common law and explicitly requires a plaintiff to prove that the defendant manufactured the specific product that caused the injury.  The OPLA provides that proof that a manufacturer designed or made “the type of product in question is not proof that the manufacturer designed, formulated, produced, constructed, created, assembled, or rebuilt the actual defective product in the product liability claim.  A manufacturer may not be held liable in a product liability action based on market share, enterprise, or industrywide liability.”  Ohio Rev. Code section 2703.73(C)  No matter whether you favor Justice Scalia or Judge Posner in their recent incendiary debate over textual analysis, that Ohio statute makes clear that only the manufacturer of the actual product used by the consumer may be haled into court.  The Hogue court goes on to hold that “the Mensing decision has no bearing whatsoever on the issue whether the Brand Defendants may be held liable under Ohio Product liability law for injuries arising from the ingestion of generic metoclopramide they did not manufacture.”  Hogue, 2012 WL 4466609 at *5.   The OPLA “precludes” the plaintiff’s argument that the brand manufacturers “are subject to liability as inventors or primary manufacturers of metoclopramide as neither theory is an exception to the rule that a plaintiff must prove  her injuries were caused by the actual product the defendant manufactured.”  Id.  The plain words of Ohio law render innovator liability impossible. Odds are that you can find similar language in the laws of most states in the union - you know, defining a seller as the one who sold the product the plaintiff says injured her or the manufacturer as the one who manufactured that product.  

 

Interestingly, the law review article criticizes Mensing for upsetting “the proper federalism balance between federal and state law.”  But as the Hogue decision shows, a proper respect for federalism inevitably compels rejection of the Conte doctrine.  If a state law clearly imposes product liability only on the actual maker-seller of the specific product at issue, a court has no business to rewrite or circumvent that state law.  The Hogue opinion is sound.  We doubt it will be overruled by the Sixth Circuit.  We know it cannot be overruled by a law review article.    

 

 

3 comments:

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Cat said...

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