Innovator Liability Is the Least Scary Thing about Rafferty


Legal newsletters, blogs and client alerts have blown up over Rafferty v. Merck, the recent decision from the Supreme Court of Massachusetts that opens the door to innovator liability claims in that state. Plenty has been written about the court’s adoption of innovator liability, but there are other troubling aspects of that opinion; the vagueness of the court’s recklessness standard and the absence of the learned intermediary.

The central holding of Rafferty is that a brand drug manufacturer, the company that receives FDA approval to market a drug with a new drug application (NDA), can be liable for harm caused when a patient takes the generic version of the drug. The court reasoned that U.S. Food and Drug Administration regulations make the brand manufacturer responsible for the label for the drug, whether on its own product or on the generic version, and thus owes a duty to consumers of even the generic drug to not act in a reckless disregard of a risk of death or grave bodily injury.

This holding is different from Conte, the original innovator liability case out of California, for two reasons: 1) Rafferty requires recklessness, or a knowing disregard (not simply negligence), which it defined as knowledge of the risk of death or “grave bodily injury”; and 2) Rafferty specified that the duty was owed to the consumer (as opposed to the patient’s doctor).

By requiring recklessness or a knowing disregard of a the risk of death or grave bodily injury, Rafferty seems to elevate the threshold of proof required to establish that a brand manufacturer can be liable for a generic drug label. The court recognized that it was expanding a brand manufacturer’s exposure by imposing on it a duty for a generic manufacturer’s label. Concerned that a brand manufacturer could be subject to liability for any potential risk associated with the drug at issue, the court drew the line at death or grave bodily injury, but failed to define what it meant by “grave bodily injury.”

The court blurs its newly drawn line when it explains its new standard; “for instance, a brand-name manufacturer learns that its drug is repeatedly causing death or serious injury, or causes birth defect when used by pregnant mothers, and still fails to warn consumers of this danger. …” Here, the court introduces a new term — serious injury — and the idea that the number of adverse events may influence whether the manufacturer’s conduct was reckless.

The problem the court’s attempt at line-drawing presents is that future courts will struggle to define grave bodily injury. For example, courts will have to evaluate whether an undisclosed risk of dry mouth, severe nausea, erectile dysfunction, addiction, or alopecia (side effects we have seen identified as harm in litigation) constitute serious injury or grave bodily injury. Additionally, courts will need to determine whether five, 10, 50 or 200 adverse events meets the “repeatedly” standard required for recklessness.

In Rafferty, the court directed the trial court to allow plaintiff to amend his complaint to see if he could plead the requisite recklessness. Mr. Rafferty’s claim involved the drug finasteride (taken to slow or reverse hair loss) and an alleged injury of persistent erectile dysfunction, as opposed to temporary erectile dysfunction, which was warned about in the label. There are likely wide ranging views on whether persistent erectile dysfunction constitutes a “grave bodily injury.” So, while the court uses language that suggests a higher standard, it may not be so in a practical sense.

The potentially more troubling aspect of Rafferty is that the court buried the learned intermediary. The court made it explicitly clear that the plaintiff’s claim was not based in product liability, but on general negligence principles. The learned intermediary doctrine is a defense to a failure to warn claim arising in product liability, but the court constructed its adoption of innovator liability around common law negligence.

Massachusetts has adopted the learned intermediary in product liability cases, but it has no corollary under general negligence principals. Every time the court discusses this new innovator duty to warn, it says the duty is owed “to the consumer.” In the court’s 39-page opinion, it does not once mention the learned intermediary — the role of the prescribing physician. That is a huge problem.

This holding not only imposes innovator liability, but it also seems to eliminate the learned intermediary defense. Thus, subsequent courts could find irrelevant that the plaintiff’s prescribing physician knew of the risk or that the physician would have prescribed the drug in light of the supposedly stronger warning.

Whether defending a case in Massachusetts under Rafferty or in California under Conte (and the more recent Novartis), a brand manufacturer must be aware of these cases and whether the scope of plaintiffs’ claims encompass innovator liability.

But there is some hope.

A brand manufacturer defending itself in Massachusetts or California should consider, at the appropriate time, a motion to dismiss any potential claims related to innovator liability on lack of jurisdiction. If the brand manufacturer defendant is not “at home” in the jurisdiction where the case is pending, the court can only exercise specific jurisdiction over a foreign defendant for conduct that the defendant directed toward the jurisdiction and out of which the litigation arises.

If a plaintiff attempts to impose liability on a brand manufacturer for an inadequate label on a generic drug, conduct related to the label likely took place at the manufacturer’s headquarters, or at the FDA, not in Massachusetts or California. It would infringe upon the brand manufacturer’s due process rights to be hauled into court in either Massachusetts or California when it had nothing to do with the marketing, sale or delivery of the generic drug to the particular patient/plaintiff.

Any other holding would essentially expose the brand manufacturer to jurisdiction any time the generic versions of its drug are sold in Massachusetts or California, an extension of the theory of jurisdiction the Supreme Court struck down in BMS v. Superior Court of California.

“Innovator Liability Is the Least Scary Thing about Rafferty,” by Terry Henry was published in Law360 on April 3, 2018. To view the article online, please click here.