Cannabis Industry News Alert
Electronic cigarettes and vaping have been heralded by many as a safer alternative to smoking traditional cigarettes. A recent outbreak of illnesses allegedly related to vaping, however, has ignited public hysteria and will almost certainly lead to substantial mass tort litigation aimed at manufacturers of e-cigarette devices and vaping liquids. Similarly, because many e-cigarette and vape manufacturers have placed the blame on THC-containing products, the cannabis industry can expect a rash of lawsuits as well. Manufacturers of these products need to be well prepared to defend against a potential wave of complex products liability litigation.
According to the CDC, as of October 1, 2019, more than 1,080 cases of unidentified lung illness and 18 deaths have been linked to vaping. Many news reports speculate that the use of THC oil is at least partly to blame, and early last month the U.S. Food and Drug Administration issued a MedWatch Safety Alert to consumers warning against the continued used of THC-containing vaping products. According to the FDA, many samples tested by both states and the Administration contained THC and Vitamin E acetate, a substance used in topical consumer products but on which there is limited data on its effects after inhalation. Although the FDA pointed out that more information is needed to understand the relationship between specific products and the reported illnesses, the FDA urged consumers to “avoid buying vaping products on the street” and “to refrain from using THC oil or modifying/adding any substances to product purchased in stores.” In its October 4 consumer update, the FDA further explained that, “No one substance has been identified in all of the samples tested. Importantly, identifying any compounds that are present in the samples will be one piece of the puzzle but will not necessarily answer questions about what is causing these illnesses.”
Despite the FDA’s acknowledgement that more information is still needed, the potential consequences for manufacturers are only worsened by a rise in vaping among teenagers. Last year, then-FDA commissioner Scott Gottlieb voiced his commitment to getting vaping products out of teens’ hands, and the FDA imposed regulations restricting the availability of flavored vape products at certain stores. Then, on September 11, 2019, President Trump announced a plan to ban the sale of e-cigarettes in flavors other than tobacco in a more aggressive effort to curtail the rise in vaping by teenagers. Sens. Jeff Markley (D-Ore.) and Mitt Romney (R-Utah) responded to the president’s announcement by introducing legislation to the same effect this week. Additionally, the bill would also require design standards for the manufacture of e-cigarettes and would impose existing tobacco taxes on e-cigarettes.
In many ways, these circumstances have produced a perfect storm that has captured the attention of mainstream media. The recent illnesses involve a “new” product that the public does not fully understand and marijuana, a topic that is politically and socially divisive. A number of implicated manufacturers are based in foreign countries – China in particular. And, moreover, the science is likely not sufficiently developed to prove or disprove either side of any allegations. These conditions are ideal for the development of widespread litigation with all types of claims ranging from the credible to the baseless.
The crossroad of vaping and THC-containing products makes this case particularly appealing for critics and troublesome for manufacturers. Quite simply, because vaping and state-legal marijuana use are relatively recent developments, the medical community does not have sufficient reliable data regarding the long-term effects of vaping and THC ingestion on the body. Just as it took decades for medicine to fully understand the detrimental effects of traditional smoking, it will likely take years before medical science can sufficiently evaluate allegations of injuries caused by vaping.
Unfortunately, this lag in supporting science has seldom, if ever, stopped the pursuit of mass tort litigation, which can be very effective on public opinion alone if not properly managed by experienced defense litigators. One need look no further than the explosion of thousands of plaintiffs claiming that the use of talc-containing products lead to their cancer. While talc-containing products are still used daily by thousands of consumers worldwide and have been recognized as safe and effective by the scientific community, that has not prevented plaintiffs and their attorneys from naming manufacturers in widespread litigation across the country.
We anticipate an increase in cases involving a variety of products liability claims against manufacturers throughout the supply chain. Plaintiffs will allege that manufacturers at multiple tiers failed to adequately warn consumers about the risks associated with the use of e-cigarettes, vaping liquids, and other after-market or homemade products. It is also likely that plaintiffs will assert claims alleging that defendants’ manufacturing processes are flawed, or that their products are designed in a way that caused the plaintiffs’ injuries. Moreover, as would be expected in all mass tort litigation, credentialed experts will not be in short supply to opine on various manufacturing and design defects related to either the e-cigarette devices or the liquid formulations that are turned into an inhalable substance.
While couched as traditional product liability causes of action, potential cases likely to arise from these illnesses are unique because of the intersection of the relatively modern e-cigarette technology and the use of THC-containing products. To minimize the significant exposure presented by these cases, manufacturers of e-cigarettes, THC oils, and other vaping products should act soon to evaluate potential exposure to claims from vaping-related illnesses. To start, these companies should engage skilled mass tort litigators with knowledge of cannabis products and experience in the fast-developing cannabis industry. All parties along the supply chain need to think carefully and critically (and with advice of counsel) about methods of shifting risk exposure. These companies should consider liability-shifting provisions such as indemnities and appropriate disclaimers related to alterations of a product. In doing so, the companies should be mindful that plaintiffs are nearly certain to allege any alteration of the products was not only a foreseeable use of the product, but, perhaps, an intended use.
The extent of these vaping-related injuries continues to develop on a seemingly daily basis, and there is a lot of uncertainty about where government investigations are likely to lead. What we do know is that individuals and families who have been affected by these illnesses and deaths likely will seek compensation regardless of the outcomes of those inquiries. We will continue to monitor the status of these illnesses, the government’s response, and forthcoming litigation to provide insights that may be helpful in evaluating your company’s business practices and risk exposure.