Drilling Down: The Analytical Framework for Warnings

By Brian A. Comer

I have a five-year-old daughter who is my "spirited child." She would make an excellent lawyer because she is an absolute bulldog when it comes to negotiating, and she hates to lose. However, I find that we frequently run into some variation of the following scenario when it comes to matters of discipline.

Me: "Honey, if you are not going to do what I say, then you are going to have to go to bed early."
Daughter: [Does exactly the opposite of what I told her to do].
Me: "Okay, then time for you to go to bed."
Daughter: "But what about family movie night?"
Me: "You will not be watching family movie night, because you will be in bed."
Daughter: "BUT I DIDN'T REALIZE THAT IS WHAT YOU MEANT!!!" (followed by uncontrollable sobbing).

In her own way, my daughter tries to convince me that I did not provide her with an adequate warning...one that sufficiently conveys the risks of performing or not performing certain actions. She does not succeed very often (as I know that she is very smart and that she understood exactly what I said), but this does not stop her from trying.

Similarly, in the realm of products liability litigation, a central focus is frequently whether a manufacturer or seller had a duty to warn the user of a product about potential dangers, and if so, whether the warning was adequate to convey the risks. So I want to write a bit about South Carolina warnings law.

South Carolina law recognizes that many products cannot be made completely safe for use. Claytor v. General Motors Corp., 277 S.C. 259, 264, 286 S.E.2d 129, 132 (1982). However, these products may still be useful, desirable, and serve a purpose. Id. In such cases, if the product is properly designed, manufactured, and packaged with accompanying adequate warnings and instructions, then they are not defective. Id. Otherwise, manufacturers and sellers may be discouraged from marketing many products solely because some danger accompanies the use of the product. Id.

Therefore, “[i]n order to prevent a product from being unreasonably dangerous, the seller may be required to give a warning on the product concerning its use.” Anderson v. Green Bull, Inc., 322 S.C. 268, 270, 471 S.E.2d 708, 710 (1996); see also Claytor v. General Motors Corp., 277 S.C. 259, 264, 286 S.E.2d 129, 132 (1982). If a product includes a warning that – if followed – makes it safe for use, then the product is not defective or unreasonably dangerous. Anderson, 322 S.C. at 270, 471 S.E.2d at 710; Allen v. Long Mfg. NC, Inc., 332 S.C. 422, 427, 404 S.E.2d 354, 357 (Ct. App. 1998). This foundation of South Carolina warnings law is discussed at length in comment j. to section 402A of the Restatement (Second) of Torts, and South Carolina has incorporated this comment by reference into its strict liability statute as the legislative intent of the chapter. See S.C. Code § 15-73-30 (“Comments to § 402A of the Restatement of Torts, Second, are incorporated herein by reference thereto as the legislative intent of this chapter.”).

A review of comment j. and the case law interpreting it reveals that the warnings analysis is based on a twofold inquiry: (1) whether there is a duty to warn to begin with, and (2) whether the warning provided is “adequate” so that (if followed) the product is safe for use. See, e.g., Allen v. Long Mfg. NC, Inc., 332 S.C. 422, 427-28, 505 S.E.2d 354, 357 (Ct. App. 1998) (separating the warnings analysis into a determination of duty to warn and adequacy of the warning).

Check back for more on warnings. I hope to make this a new series.

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Case Brief: State v. Astra Zeneca

By Brian A. Comer

This case brief involves an action brought by South Carolina Attorney General Henry McMaster against a pharmaceutical company, captioned State v. Astra Zeneca Pharmaceuticals, LP, 2009 WL 1227848 (D.S.C. May 5, 2009). It is significant because it discusses off-label promotion and preemption, and the extent to which they can serve as a basis for federal question jurisdiction.

FACTUAL BACKGROUND: Defendants manufactured an anti-psychotic drug known as Seroquel. The State sued Defendants to recover funds expended by South Carolina to provide medical treatment to certain Medicaid and state employee participants who experienced Seroquel-related illnesses, as well as to recover funds spent in purchasing Seroquel for off-label uses not covered by certain state programs. The State alleged causes of action for submission of false and fraudulent claims under the Medicaid program, violations of the South Carolina Unfair Trade Practices Act, negligence, breach of warranty, fraud and misrepresentation, and unjust enrichment in connection with Defendants' marketing of Seroquel.

PROCEDURE: The State filed its case in state court on January 9, 2009. Defendants removed the case to federal court (D.S.C., Spartanburg Division) based on federal question jurisdiction. Defendants also moved to stay the case pending transfer by the Judicial Panel on Multi-District Litigation. The State moved to remand on February 18, 2009, and it filed a motion to transfer the case to Judge Henry Herlong on February 23, 2009. The MDL Panel issued a conditional transfer order on February 26, 2009 transfering the action to the Middle District of Florida as part of the Seroquel MDL. On March 12, 2009, the Court granted in part Defendants' motion to stay the case, staying all issues except the pending motions to remand and transfer.

ISSUES: Pending before the court was the State's motion to remand the case to state court and its motion to transfer the case to Judge Herlong.

DISPOSITION: The court granted the State's remand motion, which rendered moot its motion to transfer.

RULES AND OPINION: Although the State did not assert a federal cause of action in its Complaint, Defendants maintained that the Court should exercise federal question jurisdiction because the case raises substantial questions of federal law, e.g. an examination of the Food, Drug and Cosmetic Act and other federal statutes. Defendants relied on the rule in the United States Supreme Court decision of Grable & Sons Metal Prod. v. Darue Eng'g & Mfg., 545 U.S. 308, 312 (2005) as the applicable law, as follows:

[D]oes a state law claim necessarily raise a stated federal issue, actually disputed and substantial, which a federal forum may entertain without disturbing any congressionally approved balance of federal and state judicial
responsibilities."

The Court rejected Defendants' argument that the State's off-label promotion allegations implicated significant federal questions. First, the Court pointed out that this same argument was rejected by Judge Henry Herlong in State v. Eli Lilly & Co., Inc., 2007 WL 2261693 (D.S.C. Aug. 3, 2007) and State v. Janssen Pharmaceutica Inc., 2007 WL 2022173 (D.S.C. July 10, 2007). Second, the Court did not believe that the the State's claims had anything to do with "off-label" uses, as that term is defined in federal law. Finally, the Court did not believe that -- in applying the Grable test -- any references to "off-label" uses in the case were "substantial enough" to justify the exercise of federal question jurisdiction. "As alleged, the State could establish a prima facie case of Medicaid fraud under state law without having to establish that Defendants' communications were 'off-label' in violation of federal law."

The Court also rejected Defendants' arguments that the case raised substantial federal questions under federal Medicaid law. These arguments were also rejected by Judge Herlong in the above-referenced cases, and the Court quoted extensively from Judge Herlong's Janssen opinion as support for its decision. Judge Herlong's decision on this issue focused on the fact that (i) Defendants' liability depended on their breach of duties defined by state law, and (ii) the Federal Medicaid Act does not provide a private right of action, which further supports that there is no federal question jurisdiction.

Finally, the Court rejected Defendants' argument that the federal preemption issues implicated by Plaintiff's failure to warn claims raised a federal question. "Defendants concede that a failure to warn preemption defense has never been held sufficient to convey federal jurisdiction."

Based on its decision to grant Plaintiff's remand motion, it determined that the Plaintiff's motion to transfer the case to Judge Herlong was rendered moot.

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Upcoming DRI Products Liability Conference

I am happy to post information about legal conferences pertaining to products liability issues. As I stated at the beginning of this blog, I am trying to provide products liability information that is useful to the defense bar, plaintiff's bar, manufacturers, and individuals. Therefore, if anyone has a seminar or conference (regardless of whether it is defense or plaintiff-oriented), please pass it along and I will be happy to post the pertinent information.

The Defense Research Institute is holding their Products Liability Conference in Las Vegas, Nevada this year, and a colleague provided me with some information about it, which I have pasted below. I will be attending this conference and look forward to meeting anyone there.
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Don’t gamble when it comes to Product Liability! This year’s DRI Product Liability Conference - The Masters of Products: The Stars Come Out to Shine is a sure bet. The conference will take place April 7-9, 2010 at The Venetian in beautiful Las Vegas, Nevada.

In addition to all that Vegas has to offer, the seminar promises 18.5 hours of outstanding CLE, including 2 hours of ethics credit. The main program features presentations by Inez Moore Tenenbaum, Chair of the U.S. Consumer Product Safety Commission; Steven Gensler, Professor at the University of Oklahoma College of Law; Honorable Lee H. Rosenthal, United States District Court, Southern District of Texas; outside and in-house counsel experienced in managing global product liability litigation, trial of difficult cases including wrongful death and class actions, the use of demonstrative evidence and other trial tactics in product liability litigation, the new CPSIA and the reporting database, and the art of storytelling as a trial lawyer.

The 18 Specialized Litigation Groups (SLGs) will conduct workshops where you can hone your skills in specific areas. And of course, the program will be attended by in-house and outside counsel from around the country, with ample opportunities to meet, greet and network.

Register for this seminar NOW on line, by logging on to www.dri.org or by printing the registration form on the back of the brochure and either fax or mail it in. You can also call DRI Customer Service at 312.795.1101 for more information.

We’ll see you in Las Vegas.

The Basics: Breach of Warranty Overview

By: Brian A. Comer and Andrew DeHoll

I have not posted much on the breach of warranty theory for a products liability action, so I am hoping to do another "series" of sorts that covers various aspects of this theory. A summer associate with whom I worked last year, Andrew DeHoll, did a great deal of work on researching warranty law for me, so I want to give him recognition for all his help. Thanks very much Andrew!

If this turns into a series, it makes sense to start out with a general overview. South Carolina law allows people injured by defective products to recover damages under three contract theories: breach of an express warranty, breach of an implied warranty of merchantability; and breach of an implied warranty of fitness for a particular purpose. See Herring v. Home Depot, Inc., 350 S.C. 373, 379–80, 565 S.E.2d 773, 776 (Ct. App. 2002) ("Breach of warranty is an action affirming the contract."). These theories are codified at S.C. Code sections 36-2-313 (express warranty), 36-2-314 (implied warranty of merchantability), and 36-2-315 (implied warranty of fitness for particular purpose). Unlike other products liability theories (which have a statute of limitations of three years), a claim brought pursuant to a warranty theory has a statute of limitations of six years, as set forth in S.C. Code section 36-2-725.

(As discussed in prior blogs, any products liability theory in South Carolina requires proof of three foundational elements, and breach of warranty is no exception. A plaintiff must prove: (1) the plaintiff or his or her property was injured by the product; (2) the injury occurred because the product was in a defective condition, unreasonably dangerous to the user; and (3) at the time of the accident, the product was in essentially the same condition as when it left the hands of the defendant. For a full explanation of the case law behind these three elements, see this post.)

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