[Drug and Device Law] Risks Don't Make Drugs Un-Merchantable in Alabama
Way back in 2007 we said this: “We really don’t see the purpose in a separate cause of action for breach of implied warranty in a case involving a prescription medical product. Warranty claims are for ham sandwiches and lawn chairs, where the term “merchantable” has some coherent meaning. . . . Except in unusual situations, where there’s physical contamination or a counterfeit product, an implied warranty of merchantability makes no sense and adds nothing except a different statute of limitations.” We still feel the same way. Fortunately, so do a lot of courts.
In some states breach of implied warranty claims have been merged with other warning-based theories of liability (like in New Jersey where all products claims other than breach of express warranty have been subsumed under the Products Liability Act). In states where a breach of implied warranty claim remains as an independent cause of action, some courts have ruled that such claims are not allowed in the context of prescription drugs and devices. The reasons vary but most often include application of the learned intermediary doctrine (see post here) or the unavoidably unsafe product doctrine.
And while at a quick glance, Alabama appears to be one of the states that generally doesn’t recognize a cause of action for breach of implied warranty of merchantability for inherently dangerous products – the law on the issue has become muddled over time. So, in Collins v. Novartis Pharma. Corp., slip op., No. 2:08-cv-438-MHT-PWG (M.D. Ala. Jan. 14, 2015), the court tried to sort it all out.
Collins is an Aredia case. As in other Aredia cases, plaintiff was prescribed Aredia as part of his treatment for myeloma. When defendant moved for summary judgment, the undisputed facts included that Aredia is effective in preventing some of the serious side effects of myeloma such as fractures, spinal cord compression and pain; that some patients treated with Aredia, such as plaintiff Collins, have developed osteonecrosis of the jaw; that Plaintiff Collins had not suffered any new fractures or spinal compressions while taking Aredia; that Aredia was the standard of care when prescribed to plaintiff; and that plaintiff’s prescriber continues to use Aredia after learning about the risks of osteonecrosis and believes the benefits outweigh the risks. Slip op. at 4-6.
While the facts are straightforward, Alabama law is anything but. The question of whether Alabama recognizes breach of implied warranty of merchantability for drugs was first answered by the Alabama Supreme Court in the context of an over-the-counter medication and an idiosyncratic reaction. The answer was: “a product must adversely affect at least some significant number of persons before a question of merchantability arises.” Griggs v. Combe, Inc., 456 So.2d 790, 793 (Ala. 1984). So, Griggs created the “significant number of persons” exception. Significantly, no Alabama state court has ever allowed a breach of implied warranty claim under the Griggs exception. Collins, slip op. at 15.
Two years later, the Alabama Supreme Court seemingly rejected all breach of implied warranty of merchantability claims in cases involving “inherently dangerous” products when it made the “blanket statement that the contention that a product was unreasonably dangerous would not be viable as a breach of warranty of merchantability.” Id. at 9 (referencing Shell v. Union Oil Co., 489 So.2d 569 (Ala. 1986). Based on this decision, most courts interpreting Alabama law held that Alabama had merged breach of implied warranty with liability under the Alabama Extended Manufacturers’ Liability Doctrine (“AEMLD”), essentially doing away with the former.
But the Alabama Supreme Court again took up the question in 2003 in Spain v. Brown & Williamson Tobacco, Corp., 872 So.2d 101 (Ala. 2003) in which the court acknowledged its previous combining of UCC and tort concepts which sometimes go “hand in hand” but ultimately held that “the determination [of] whether there was a breach [of implied merchantability] requires a fact-intensive analysis.” Collins, slip op. at 10 (quoting Spain).
So, with the door to breach of implied warranty of merchantability re-opened, even if slightly, plaintiffs ever since have been trying to use the Griggs exception and the Spain case-by-case determination requirement to maintain merchantability claims in prescription medical product cases. For some courts, the decision turns on whether there is evidence that the product was fit for its intended purpose even though it might also be inherently dangerous. See Bodie v. Purdue Pharma Co., 236 F. App’x 511 (11th Cir. 2007) (no breach of implied warranty where OxyContin, while dangerous, is fit for intended purpose of treatment for chronic pain). For others, the focus is on the purpose of the product. For instance, if a product’s only purpose is consumption, like food, plaintiff may have a viable breach of warranty claim “because it is the act of consumption not use that makes the product dangerous.” Collins, slip op. at 13 n.11. Conversely,
[i]f . . . there is some other purpose such as treating the symptoms of disease, the implied warranty applies only to that purpose and any unreasonable danger of the product must be addressed by the AEMLD.
Id. (quoting Houston v. Bayer Healthcare Pharma., Inc., 16 F.Supp.3d 1341 (N.D. Ala. 2014).
Taking in all the varied analyses, the Collins court reached the conclusion that
in almost every case, a claim for alleged breach of implied warranty of merchantability under the UCC is subsumed by AEMLD except for a theoretical possibility which has only been applied on summary judgment to the consumption of food products and never to prescription drugs.
Id. at 14. Applying this interpretation of Alabama law to the facts of the case, the court found that at the most, plaintiff showed “there are potential adverse consequences associated with the use of the drug.” Id. at 17. That is not enough:
The question of proof in this context is not merely whether there is sufficient evidence for a jury to decide the question but the more fundamental one of whether [plaintiff] can establish as a matter of law this his claim is shrouded in the ethereal mist of a Griggs UCC cause of action. The Alabama courts have never permitted such a claim to advance. . . . A drug product is fit for the purpose intended even when there is a serious health consequence for some users when the product is shown to achieve its commercial purpose. This presumption of merchantability cannot be overcome merely by demonstrating that there are risks associated with the use by a particular patient or group of patients. . . . [T]his legal standard does not mean that manufacturers are free to produce products that cause harm and remain unaccountable. Alabama law provides a complete remedy for such occurrences under the AEMLD.
Id. at 17-18. Unless something unfavorable happens to this case in the appellate courts (and given that it is Alabama nothing is a certainty), Collins is a very strong statement about the lack of viability of breach of implied warranty claims in prescription drug and device cases in Alabama.
Usually breach of implied warranty claims are bit players in prescription medical product cases; upstaged and out shined by the stars of the tort world – failure to warn and design defect. But as we alluded at the top of this post, sometimes plaintiffs are relying on the longer UCC statute of limitations. That seems to be the case in Collins where the lawsuit was filed a little more than four years after plaintiff’s injury first manifested. So, if plaintiff had a statute of limitations problem with even his breach of warranty claim, he was certainly out of time for a tort claim. The rest of the Collins decision finds the breach of warranty claim time-barred. Another good result, but not one we are going to elaborate on today. The opinion is here if you want to read more.
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Posted By Michelle Yeary to Drug and Device Law at 1/20/2015 02:46:00 PM --
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