California and Idaho share some similarities, but also many differences. Both are sprawling Western states. Both are year-round meccas for outdoor activities of all types, whether it be hiking, skiing, rafting, mountain biking, or just gazing idly at some of the most stunning scenery you will ever hope to see. Both California and Idaho have areas in their far northern reaches that are sparsely populated and where some people go just to be left alone. Idaho is one of the largest producers of potatoes; California is one of the largest producers of tomatoes. (As the old song goes, let’s call the whole thing off.)
But oh, the differences. Idaho is landlocked, while California has endless miles of beautiful coastline. California’s population dwarfs Idaho’s—its largest city (Boise) would barely break the Golden State’s top fifteen. Idaho’s state slogan Esto perpetua (which means “let it go on forever”) denotes a certain slow and steady mood, while California’s “Eureka!” is unmistakably sudden, even manic. And let’s not forget politics—California reigns blue, and Idaho is currently the farthest western outpost for those who go red.
There are significant legal differences too, and we at the DDL Blog give Idaho props for breaking the right way on one of our favorite issues—innovator liability. Presented with facts very similar to the California Supreme Court’s wrongly decided opinion in T.H. v. Novartis, a trial court in Idaho declined to hold an innovator drug manufacturer to answer for injuries allegedly caused by a generic version of a drug that the innovator no longer made or sold.
Here is what happened. The innovator defendant in Stirling v. Novartis Pharmaceuticals Corp., No. CV01-18-4880 (Idaho Dist. Ct. Sept. 25, 2019), owned the New Drug Application for an asthma drug called Brethine until December 2001, when it sold the NDA to another manufacturer. Slip op. at 2. A pregnant woman was later given a generic version of the drug to treat premature labor contractions, allegedly resulting in harm to her child. Id. at 2-3. In her lawsuit claiming damages, the mother sued the innovator drug manufacturer, even though the manufacturer had sold its rights to the drug years before she used it and even though the mother neither claimed nor alleged that she used the innovator’s product. Id. at 2. The reason, of course, is that federal law preempted tort claims against the generic manufacturer, assuming that it could be identified.
Does this sound familiar? It should, because this is what happened in T.H. v. Novartis—a plaintiff suing an innovator manufacturer over the same product, which the plaintiff did not use and which the innovator had neither owned nor sold for a very long time. Yet, the outcome in Stirling was both different and correct. The Idaho court dismissed the complaint. The plaintiffs admitted that Idaho had not recognized innovator liability, but argued that “the theory is consistent with Idaho law, does not impose a burden upon brand-name manufacturers and promotes critical public policies.” Id. at 6.
The court disagreed, and it framed the issue as one of duty, i.e., “does Idaho law require the manufacturer of a product, in this case a drug, to warn the consumer of a similar product manufactured by another.” This is exactly the correct question, and it is where the California Supreme Court got it wrong in T.H., when it created a new duty to warn and deviated from bedrock legal principles.
As the Idaho court ruled, “It has long been the general law in Idaho that a company is not liable for the injuries caused by another company’s products.” Id. at 8 (citing Idaho authorities). The Idaho court further declined to deviate from this rule and quoted the reasoning from a similar Iowa case. The quote is kind of long, but definitely worthwhile:
We are unwilling to make brand manufacturers the de facto insurers for competing generic manufacturers. (Deep pocket jurisprudence is law without principle.) It may well be foreseeable that competitors will mimic a product design or label. But we decline [the plaintiff’s] invitation to step onto the slippery slope of imposing a form of innovator liability on manufacturers from harm caused by a competitor’s product. Where would such liability stop?
. . . .
We will continue to apply the same long-standing causation rule . . . which required [the plaintiff] to prove the defendant manufactured or supplied the product that caused her injury, and we decline to extend the duty of product manufacturers to those injury by use of a competitor’s product.
Id. at 8 (quoting Huck v. Wyeth, Inc., 850 N.W.2d 353 (Iowa 2014)). This quote states the majority position that “product liability” means a “product” made or sold by the defendant, which should carry the day in most every case. We would add that, contrary to the plaintiffs’ argument that innovator liability “does not impose a burden,” the burden on innovator manufacturers is actually quite significant. In Stirling, the innovator did not sell the product that the plaintiff used, and it sold its rights under the NDA several years earlier, i.e., it had not sold the product for anyone’s use for some time. Liability under this scenario is not only unfair, it potentially goes on forever, leaving the manufacturer unable to take any further action to limit, spread, or cutoff its exposure.
From there, it was a downhill run for the court to dismiss the plaintiffs’ other claims. The plaintiffs did not allege the elements of fraud with any particularity, and the other product liability claims (negligence per se, implied warranty, and emotional distress) fell under “traditional product liability law” holding that a manufacturer cannot be responsible for a product that it neither made nor sold. Id. at 8-10. Ultimately, the court followed “the traditional notion that a manufacturer of a product cannot be held liable where its product did not cause harm.” Id. at 11. You can quote that.