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April 30th, 2015

Alabama Lawmakers Slap Down State’s High Court on ‘Innovator Liability’

Among many others, the Wall Street Journal today heralded Alabama lawmakers’ slap-down earlier this week of recent state supreme court decisions that embraced the both ridiculous and dangerous legal theory peddled by the plaintiffs’ bar as “innovator liability.”

“Kudos to Alabama, which this week shot down . . . ‘innovator liability’ that would have let companies be sued over products they didn’t make. On Tuesday the state House voted 86-14 to prevent this latest threat to the American economy,” the Journal’s editorial began.

Two years ago, Alabama’s high court decided to let a plaintiff who had taken a generic medicine sue the original brand-name drugmaker (Wyeth v. Weeks) over alleged side effects.  The brand-name maker had sold the rights to the drug long before the plaintiff began using the generic.

“Product liability claims typically require evidence that the company being sued designed, made or sold the product alleged to have done harm,” the editorial continued.  “In this case the [plaintiff’s] lawyers tried an end-run by arguing it as a fraud case. On rehearing in August 2014, the Alabama court again bought the snake oil, 6-3, finding liability because the brand-name manufacturer controlled the warning label that doctors and patients say they rely on. That decision broke with more than 100 courts in 30 states and seven federal courts of appeal that have rejected theories of innovator liability.”

With concerns about other manufacturers someday being sued for products they didn’t make, either, a number of states’ courts had been closely watching the innovator liability issue develop on Alabama.  Because grownups in the legislature soberly acted “to fix a threat to fairness under the law,” ATRA hopes those other courts will be dissuaded from similarly embracing innovator liability.

In any case, Alabama Gov. Robert Bentley has pledged to sign the bill, and that’s good news for every manufacturer whose products could be copied and sold by others.

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