ATRA Disappointed Again by Alabama High Court's Unprecedented ‘Innovator Liability’ Decision

FOR IMMEDIATE RELEASE                CONTACT: Darren McKinney 202.682.0084

 WASHINGTON, D.C., August 18, 2014 – As the Supreme Court of Alabama on Friday reaffirmed its earlier, first-and-only-in-the-nation state high court embrace of an expansive theory of civil liability known as “innovator liability,” the American Tort Reform Association (ATRA) condemned the 6-3 decision,  saying “the court majority denies the broader and dangerous implications of this decision, but it’s as disappointing as the first.”

The Yellowhammer State’s high court first decided Wyeth v. Weeks in January 2013, holding that a brand-name drugmaker can be held liable for damages caused by a plaintiff’s use of a generic drug manufactured by a competitor.

“More broadly conceived, the always creative and bootstrapping personal injury bar’s theory of ‘innovator liability’ is a means to turn centuries of settled tort law on its head, subjecting original product designers or manufacturers to liability not only for harm allegedly caused by the products they made or sold, but also for harm from similar products made or sold by their competitors,” explained ATRA president Tiger Joyce.

“If allowed to flourish in practice, this theory could impose billions of dollars of unwarranted liability on companies that invest significant time and expense to develop new products that are later copied and sold by others,” he added.  “This ruling would effectively force innovator companies to act as an insurer for their generic competitors’ products which will have the likely impact of diverting millions of dollars from research and development.”

“In its original Weeks decision, Alabama’s high court held that it was ‘foreseeable’ to the brand name manufacturer that statements it made about its drug Reglan could later result in a patient being prescribed and injured by a generic formulation.  But the court seemed to willfully overlook a longstanding tenet of tort law, namely that a company is liable only for injuries caused by products that it makes or sells.  Foreseeability alone does not create a duty.  It is just one of many factors courts may consider when determining liability.”

The plaintiff, Danny Weeks, sustained injuries from the long-term use of the generic form of Reglan, but sued Wyeth LLC, Pfizer Inc., and Schwarz Pharma, the brand-name drug makers.  Weeks accused the brand-name manufacturers of misrepresentation and fraud, claiming his physician was not adequately warned about the potential consequences of long-term use when its drug was originally marketed and sold. 

Unlike Alabama’s high court, the Supreme Court of Iowa firmly rejected innovator liability just last month in Huck v. Wyeth, pointing out that “[a]n overwhelming majority of courts adjudicating this issue” has found for “brand[-name] defendants when the plaintiff used only the generic formulation.”  The Iowa high court added that it found no “persuasive case that public health and safety would be advanced through imposing tort liability on brand defendants for injuries caused by generic products sold by competitors.”

“Although their reconsideration of Weeks gave Alabama’s justices a chance to realign with the national norm, they chose instead to double down, leaving their state distinct as a dangerous outlier that threatens both lifesaving and health-improving innovations, as well as the affordability of generic drugs,” Joyce concluded.  

-ATRA-

 The American Tort Reform Association, based in Washington, D.C., is the only national organization dedicated exclusively to tort and liability reform through public education and the enactment of legislation.  Its members include nonprofit organizations and small and large companies, as well as trade, business and professional associations from the state and national levels.