Brown v. GlaxoSmithKline, LLC

214

Argued and submitted October 13, 2021, reversed and remanded

December 14, 2022

Thomas BROWN

and Maria Del Carmen Espindola Gomez,

individually and as parents and

natural guardians of M. B., a minor,

Plaintiffs-Appellants,

v.

GLAXOSMITHKLINE, LLC,

Defendant,

and

PROVIDENCE HEALTH SYSTEM - OREGON,

d/b/a Providence Newberg Medical Center,

f/k/a Providence Newberg Hospital,

Defendant-Respondent.

Multnomah County Circuit Court

15CV23066; A169544

523 P3d 132

Plaintiffs brought a strict product liability claim against defendant

Providence Health System - Oregon alleging that a pharmaceutical drug that

Providence emergency medical staff administered to plaintiff Gomez while she

was pregnant caused her child to be born with irreparable heart defects. The

trial court granted defendant’s motion for summary judgment, concluding that

Providence is not subject to strict product liability because it was not a “seller * * *

engaged in the business of selling” the drug under ORS 30.920. Plaintiffs appeal

from the resulting judgment, assigning error to that ruling. Held: Based on the

text, context, and legislative history of ORS 30.920, a “seller” of a product is one

who transfers ownership of the product to another in exchange for valuable con-

sideration and a seller is “engaged in the business of selling” a product when sell-

ing the product comprises some part of the seller’s ongoing commercial activity.

Plaintiffs presented sufficient evidence to create a genuine issue of material fact

as to whether Providence was a “seller * * * engaged in the business of selling” the

drug within the meaning of ORS 30.920.

Reversed and remanded.

Gregory F. Silver, Judge.

Travis Eiva argued the cause and filed the briefs for

appellants.

Michael T. Stone argued the cause and filed the brief for

respondent.

Cite as 323 Or App 214 (2022) 215

Before Ortega, Presiding Judge, and Shorr, Judge, and

Powers, Judge.

POWERS, J.

Reversed and remanded.

216 Brown v. GlaxoSmithKline, LLC

POWERS, J.

This case requires us to decide whether a hospi-

tal that charges for a pharmaceutical drug administered

to a patient in its emergency department is a “seller * * *

engaged in the business of selling” the drug subject to strict

product liability under ORS 30.920. Plaintiffs Thomas

Brown and Maria Del Carmen Espindola Gomez, individ-

ually and as guardians ad litem for their minor child, M,

brought a strict product liability claim against defendant

Providence Health System - Oregon alleging that the phar-

maceutical drug Zofran, which Providence emergency med-

ical staff prescribed and administered to Gomez while she

was pregnant, caused M to be born with irreparable heart

defects. The trial court granted defendant’s motion for sum-

mary judgment, concluding that Providence is not subject

to strict product liability under ORS 30.920 because it was

not a “seller * * * engaged in the business of selling” Zofran

within the meaning of that statute, and the trial court

entered a judgment dismissing plaintiffs’ claim. Plaintiffs

appeal, assigning error to that ruling.

Based on the text, context, and legislative history

of ORS 30.920, we conclude that a “seller” of a product is

one who transfers ownership of the product to another in

exchange for valuable consideration. We further conclude

that a seller is “engaged in the business of selling” a product

when selling the product comprises some part of the seller’s

ongoing commercial activity. As we will explain, one can be

a “seller * * * engaged in the business of selling” a product

subject to strict liability under ORS 30.920 even if the seller

also or primarily provides a service and the sale of the prod-

uct is incidental to that service. Finally, because we con-

clude that plaintiffs presented sufficient evidence to create

a genuine issue of material fact as to whether Providence

was a “seller * * * engaged in the business of selling” Zofran

within the meaning of ORS 30.920, the trial court erred in

granting summary judgment.

FACTS AND PROCEDURAL HISTORY

We review a trial court’s grant of summary judg-

ment to determine whether there is “no genuine issue as

to any material fact” and whether the moving party was

Cite as 323 Or App 214 (2022) 217

“entitled to prevail as a matter of law.” ORCP 47 C. We view

all facts, and all reasonable inferences that may be drawn

from those facts, in the light most favorable to the adverse

parties, here, plaintiffs. Id. We state the facts consistently

with that standard.

In 2006, when she was seven weeks pregnant

with M, Gomez went to a Providence hospital emergency

department complaining of nausea and vomiting, among

other symptoms. A physician in the emergency department

evaluated Gomez and prescribed 4 mg of injectable Zofran,

which a nurse administered. Gomez signed a “Conditions

of Service” agreement in which she agreed “to pay for the

services or products provided by Providence” within 30

days of invoice. Providence billed Gomez and her insurer for

the treatment that she received, which included a specific

charge for Zofran.

The hospital was licensed by the state of Oregon,

which required the hospital to provide emergency medi-

cal services to patients. The hospital’s licensed in-house

pharmacy maintained a stock of medications, including

injectable Zofran. A Providence physician could order, and

Providence staff would dispense, a specific medication for

administration to a patient at the hospital. For patients in

the emergency department, the attending physician would

order a specific medication and dose for the patient, and the

medication would be dispensed, either through a locked cab-

inet in the emergency department or through the in-house

pharmacy, and administered to the patient by licensed staff.

State and federal law prohibited the hospital’s in-house

pharmacy from selling medications to patients after dis-

charge. The hospital did not advertise Zofran injectable or

other medications for sale to patients or the general public.

A member of the general public could not purchase Zofran

injectable from the hospital.

In addition to claims brought against the manufac-

turer of Zofran, GlaxoSmithKline, LLC, who is not a party

to this appeal, plaintiffs’ operative complaint alleged claims

for strict product liability and negligent misrepresenta-

tion against Providence.1 As pertinent here, the amended

1

Plaintiffs later withdrew the negligent misrepresentation claim.

218 Brown v. GlaxoSmithKline, LLC

complaint’s strict product liability claim against Providence

alleged that it was a “seller * * * of Zofran, engaged in the

business of selling Zofran[.]”

Providence moved for summary judgment and

argued that there was no issue of material fact that it was

not a “seller * * * engaged in the business of selling” Zofran

for purposes of ORS 30.920, because “[c]ommon sense tells

us that hospitals are not sellers of products” but rather

“quintessential service providers,” and therefore are not sub-

ject to strict liability. Providence advanced four arguments

in support of its construction of ORS 30.920 and summary

judgment motion. First, Providence argued that its hospital

cannot be a “seller” of Zofran as a matter of law because

the hospital did not “market Zofran or other such medica-

tions for use or consumption.” Second, Providence argued

that Oregon law considers hospitals to be “engaged in the

business of providing health services,” including in-house

pharmacy services, not sellers of pharmaceuticals. Third,

Providence argued that federal price discrimination law rec-

ognizes that “a hospital purchases medications for its own

use as part of the provision of medical services, and does not

make a separate sale to a patient when it administers such

drugs.” Finally, Providence argued that Oregon should fol-

low “the majority of other jurisdictions” that have “routinely

concluded that hospitals are not appropriate defendants in

strict product liability actions because hospitals are not in

the business of selling products such as drugs or medical

devices.”

The trial court granted Providence’s motion for

summary judgment. The court concluded that, “under the

specific facts of this case,” Providence was not “engaged in

the business of selling Zofran.” The court reasoned that

the hospital’s in-house pharmacy was authorized under

Oregon law to store drugs to be administered to patients

in the course of treatment, but not to sell pharmaceutical

drugs to a consumer for use off site. Thus, the court rea-

soned, Providence was not engaged in the business of selling

any drug provided by its hospital’s in-house pharmacy that

could only be administered on site. Accordingly, the court

concluded that Providence was not “engaged in the business

of selling Zofran” because its hospital’s in-house pharmacy

Cite as 323 Or App 214 (2022) 219

dispensed injectable Zofran to Gomez to be administered in

the course of treatment at the hospital.

On appeal, plaintiffs raise a single assignment of

error challenging the trial court’s summary judgment rul-

ing. Plaintiffs contend that nothing in the text or context

of ORS 30.920 indicates that a hospital that sells pharma-

ceuticals from its in-house pharmacy is exempt from strict

product liability. Providence asks this court to affirm the

judgment dismissing plaintiffs’ strict liability claim and

reprises the arguments that it made before the trial court in

support of its summary judgment motion.

LEGAL BACKGROUND

Before we begin the task of construing the dis-

puted terms of ORS 30.920, we begin with a brief overview

of Oregon’s product liability statutory framework generally

and of strict product liability in particular.

ORS 30.900 defines a “product liability civil action”

as:

“[A] civil action brought against a manufacturer, distrib-

utor, seller or lessor of a product for damages for personal

injury, death or property damage arising out of:

“(1) Any design, inspection, testing, manufacturing or

other defect in a product;

“(2) Any failure to warn regarding a product; or

“(3) Any failure to properly instruct in the use of a

product.”

A “product liability civil action” defined in ORS 30.900

“embraces all theories a plaintiff can claim in an action

based on a product defect,” including negligence and strict

liability claims. Kambury v. DaimlerChrysler Corp., 185 Or

App 635, 639, 60 P3d 1103 (2003). The statutory frame-

work governing product liability civil actions consists of an

exception for certain products provided by physicians (ORS

30.902), general and specific limitations on the time to com-

mence an action (ORS 30.905, ORS 30.907, ORS 30.908,

and ORS 30.928), an evidentiary presumption (ORS 30.910),

defenses (ORS 30.915), a cause of action for strict product

220 Brown v. GlaxoSmithKline, LLC

liability (ORS 30.920), and recoverable punitive damages

(ORS 30.925 and ORS 30.927).

ORS 30.920 sets out the elements of a strict product

liability claim:

“(1) One who sells or leases any product in a defective

condition unreasonably dangerous to the user or consumer

or to the property of the user or consumer is subject to lia-

bility for physical harm or damage to property caused by

that condition, if:

“(a) The seller or lessor is engaged in the business of

selling or leasing such a product; and

“(b) The product is expected to and does reach the user

or consumer without substantial change in the condition in

which it is sold or leased.

“(2) The rule stated in subsection (1) of this section

shall apply, even though:

“(a) The seller or lessor has exercised all possible care

in the preparation and sale or lease of the product; and

“(b) The user, consumer or injured party has not pur-

chased or leased the product from or entered into any con-

tractual relations with the seller or lessor.

“(3) It is the intent of the Legislative Assembly that the

rule stated in subsections (1) and (2) of this section shall be

construed in accordance with the Restatement (Second) of

Torts sec. 402A, Comments a to m (1965). All references in

these comments to sale, sell, selling or seller shall be con-

strued to include lease, leases, leasing and lessor.

“(4) Nothing in this section shall be construed to limit

the rights and liabilities of sellers and lessors under prin-

ciples of common law negligence or under ORS chapter 72

[(Uniform Commercial Code-Sales)].”

Before the legislature enacted ORS 30.920, strict pro-

duct liability was governed by the common law. McCathern

v. Toyota Motor Corp., 332 Or 59, 72, 23 P3d 320 (2001). In

1967, the Oregon Supreme Court adopted section 402A of

the Restatement (Second) of Torts (1965) as the common law

standard for strict product liability claims.2 Id. (citing Heaton

2

All references to section 402A in this opinion are to the Restatement

(Second) of Torts (1965).

Cite as 323 Or App 214 (2022) 221

v. Ford Motor Co., 248 Or 467, 470, 435 P2d 806 (1967)). At

that time, strict liability in tort was still “at the infant stage”

and liability “for injuries caused by defective products was

based on concepts relating to contractual warranties.” Royer

v. Miles Laboratory, Inc., 107 Or App 112, 115, 811 P2d 644

(1991). In Heaton, the court noted that the definition of strict

product liability in section 402A was “conceptually related

to the traditional warranty of merchantable quality in the

law of sales.” Heaton, 248 Or at 471. Practitioners did not

immediately recognize strict liability as a distinct theory

and could plead a strict liability claim by alleging a breach

of an implied warranty as late as 1971. Royer, 107 Or App at

115-16 (citing Markle v. Mulholland’s, Inc., 265 Or 259, 509

P2d 529 (1973)).

As the common law developed, the Supreme Court

indicated that it could exercise considerable discretion in

applying section 402A because it did not have the force of

statute. McCathern, 332 Or at 74 (citing Allen v. The Heil

Company, 285 Or 109, 119 n 5, 589 P2d 1120 (1979)). The

impetus for codifying product liability arose from concerns

about rising costs of liability insurance, which business

groups attributed to “the unpredictability of potential expo-

sure in what was then a rapidly evolving branch of the law.”

Ewen v. McLean Trucking Co., 300 Or 24, 28, 706 P2d 929

(1985) (citing Dominick Vetri, Legislative Codification of

Strict Products Liability Law in Oregon, 59 Or L Rev 363

(1981)). Specifically, the “sense of uncertainty concerned

cases decided in other states which [the Oregon Supreme

Court] might or might not follow.” Ewen, 300 Or at 28.

The 1979 legislature sought to address the concerns

of business groups and their insurers, who wanted to “stabi-

lize the rules of liability,” but at the same time “not reduce

the financial protections under existing Oregon law for per-

sons injured by dangerous products.” Id. The legislature

ultimately enacted ORS 30.920, which codified section 402A

with some important modifications—all of which broadened

the scope of liability beyond the text of section 402A. Ewen,

300 Or at 28-29. First, ORS 30.920 applies strict liability

to product leasing transactions, even though section 402A

does not. Second, ORS 30.920 protects “the user, consumer,

or injured party,” whereas section 402A protects the user

222 Brown v. GlaxoSmithKline, LLC

or consumer only and “expresses no opinion as to whether

the rule in this Section may not apply to harm to persons

other than users or consumers.” Third, ORS 30.920 omits

the three caveats in section 402A (i.e., taking no position

on liability to bystanders, liability of component part man-

ufacturers, or liability of original manufacturers where the

product will be processed or substantially changed before it

reaches the user or consumer) and comment n (concerning

contributory negligence and assumption of risk).

Since 1979, product liability claims in Oregon have

been governed exclusively by the statutory framework, not

the common law. Griffith v. Blatt, 334 Or 456, 466, 51 P3d

1256 (2002) (declining to adopt the learned intermediary

doctrine into Oregon strict liability law because “Oregon

statutes, not the common law, govern” strict liability claims

and defenses, and explaining that the analysis “begins and

ends with our construction of the pertinent product liability

statutes”). Thus, the text of ORS 30.920, read in accordance

with section 402A, comments a to m, has been the lodestar

for determining who constitutes a “seller” “engaged in the

business of selling.” See, e.g., Lancaster v. Hartzell, 54 Or

App 886, 891 n 3, 637 P2d 150 (1981), rev den, 292 Or 722

(1982) (relying on section 402A and comment f while noting

that the case was tried before section 402A was codified in

ORS 30.920).

ANALYSIS

With that legal background in mind, we turn to the

specific question presented in this case, which is ultimately

one of statutory interpretation. In construing a statute, we

examine the text of the statute in context, considering any

relevant legislative history, and, if necessary, applying max-

ims of statutory construction. State v. Gaines, 346 Or 160,

171-72, 206 P3d 1042 (2009); PGE v. Bureau of Labor and

Industries, 317 Or 606, 610-12, 859 P2d 1143 (1993). Our

duty when interpreting a statute is “simply to ascertain and

declare what is, in terms or in substance, contained therein,”

ORS 174.010, and to “pursue the intention of the legislature

if possible,” ORS 174.020.

We begin with the statutory text and its context,

which are the “best indications of the legislature’s intent.”

Cite as 323 Or App 214 (2022) 223

State v. Walker, 356 Or 4, 13, 333 P3d 322 (2014). ORS 30.920

applies strict liability to “one who sells * * * a product” if they

are a “seller * * * engaged in the business of selling * * * such

a product.”

We typically give “words of common usage” their

“plain, natural, and ordinary meaning.” PGE, 317 Or at 611;

cf. Mason v. Mt. St. Joseph, Inc., 226 Or App 392, 399-400,

203 P3d 329, rev dismissed, 347 Or 349 (2009) (construing

“distributor” and “manufacturer” in ORS 30.900 as words

of common usage). “Sell”—the root to “sells,” “seller,” and

“selling”—means “to give up (property) to another for money

or other valuable consideration : hand over or transfer title

to (as goods or real estate) for a price” and “to offer for sale

: deal in as an article of sale.” Webster’s Third New Int’l

Dictionary 2061 (unabridged ed 2002); see also id. at 2062

(defining “seller” as “one that offers for sale”); id. at 2003

(defining “sale” as “the act of selling : a contract transfer-

ring the absolute or general ownership of property from one

person or corporate body to another for a price (as a sum

of money or any other consideration)); id. at 2062 (defining

“selling” as “the act or occupation of one who sells” and “the

act, process, or art of offering goods for sale”). Thus, under

the ordinary meaning of those terms, one “sells” a product

when one transfers ownership of the product to another in

exchange for valuable consideration; a “seller” is one who

carries out such a transfer; and “selling” is the act or pro-

cess of such a transfer.

“Engaged” as an intransitive verb means “to begin

and carry on an enterprise, esp. a business or profession,”

“to employ or involve oneself,” and “to take part : partici-

pate.” Webster’s at 751. “Business” means “a usu. commercial

or mercantile activity customarily engaged in as a means

of livelihood and typically involving some independence of

judgment and power of decision.” Id. at 302. And the prep-

osition “of” is used in the sense “as a function word to indi-

cate the material, parts, or elements composing something

or the contents held by something.” Id. at 1565. Thus, under

the ordinary meaning of those terms, a seller is “engaged

in the business of selling” a product if the seller carries on

commercial activity composed in part of the act of selling

the product, viz., transferring ownership of the product to

224 Brown v. GlaxoSmithKline, LLC

another in exchange for valuable consideration.3 Contrary to

defendant’s argument before the trial court and on appeal,

nothing in the text of ORS 30.920 indicates that the seller

must be solely or primarily in the business of selling the

product.4

ORS 30.920(3) expresses a “legislative mandate” to

“construe the substantive formulas codified in subsections

(1) and (2) ‘in accordance with the Restatement (Second) of

Torts sec. 402A, Comments a to m (1965).’ ” McCathern, 332

Or at 75. Comment f specifically addresses the “business of

selling,” and it is consistent with the ordinary meaning of

that phrase that we have identified. Specifically, comment f

explains that the rule “applies to any person engaged in the

business of selling products for use or consumption” and

that “[i]t is not necessary that the seller be engaged solely in

the business of selling such products.” Id. In explaining that

the rule does not apply to the occasional seller “who is not

engaged in that activity as part of [the seller’s] business,”

comment f provides:

“f. Business of selling. The rule stated in this Section

applies to any person engaged in the business of selling

products for use or consumption. It therefore applies to any

manufacturer of such a product, to any wholesale or retail

dealer or distributor, and to the operator of a restaurant.

It is not necessary that the seller be engaged solely in the

3

The ordinary meaning of “seller * * * engaged in the business of selling”

that we have identified is consistent with our case law construing those terms in

other factual contexts. See, e.g., Mason, 226 Or App at 400 (holding that “occa-

sional and noncommercial actions” are not sales in the usual course of business

subject to strict product liability); Watts v. Rubber Tree, Inc., 118 Or App 557,

562-63, 848 P2d 1210, opinion adh’d to as modified on recons, 121 Or App 21, 853

P2d 1365, rev den, 317 Or 272 (1993) (holding that the installation of a defective

product is not a sale of a product subject to strict liability); Two Two v. Fujitec

Am., Inc., 256 Or App 784, 797, 305 P3d 132 (2013), aff’d in part and rev’d in part,

355 Or 319, 325 P3d 707 (2014) (explaining that “ORS 30.920 does not apply to

simple service transactions” that do not involve the sale of a product).

4

The ordinary meaning of “engaged in the business of selling” that we have

identified is also consistent with Vierra v. Clackamas County, 309 Or 243, 785

P2d 757 (1990). In that case, which was decided before PGE and Gaines, the

Oregon Supreme Court construed the phrase “business engaged in the applica-

tion of pesticides upon property of another” in ORS 634.006 to mean that com-

mercial pesticide application “must at least be a part, no matter how small, of the

business in which the defendant is ‘engaged.’ ” 309 Or at 247. The court explained

that “[o]ne engages in the business of applying pesticides to the land or property

of another if part of the earnings of one’s business comes from that source.” Id.

Cite as 323 Or App 214 (2022) 225

business of selling such products. Thus the rule applies to

the owner of a motion picture theatre who sells popcorn

or ice cream, either for consumption on the premises or in

packages to be taken home.

“The rule does not, however, apply to the occasional

seller of food or other such products who is not engaged

in that activity as a part of his business. Thus it does not

apply to the [homemaker] who, on one occasion, sells to her

neighbor a jar of jam or a pound of sugar. Nor does it apply

to the owner of an automobile who, on one occasion, sells it

to his neighbor, or even sells it to a dealer in used cars, and

this even though he is fully aware that the dealer plans to

resell it. The basis for the rule is the ancient one of the spe-

cial responsibility for the safety of the public undertaken

by one who enters into the business of supplying human

beings with products which may endanger the safety of

their persons and property, and the forced reliance upon

that undertaking on the part of those who purchase such

goods. This basis is lacking in the case of the ordinary indi-

vidual who makes the isolated sale, and he is not liable to

a third person, or even to his buyer, in the absence of his

negligence. An analogy may be found in the provision of the

Uniform Sales Act, § 15, which limits the implied warranty

of merchantable quality to sellers who deal in such goods;

and in the similar limitation of the Uniform Commercial

Code, § 2-314, to a seller who is a merchant. This Section is

also not intended to apply to sales of the stock of merchants

out of the usual course of business, such as execution sales,

bankruptcy sales, bulk sales, and the like.”

Restatement § 402A comment f.

The first paragraph of comment f explains who falls

within the scope of a seller “engaged in the business of sell-

ing” a product, while the second paragraph explains who

does not. Consistent with the ordinary meaning of “engaged

in the business of selling,” the first paragraph of comment f

expressly provides that a seller need not be “engaged solely”

in the business of selling a product to be held strictly liable.

And the example of the movie theater owner selling conces-

sions indicates that the rule applies to the sale of a prod-

uct that is incidental to providing a service and that is con-

sumed on the premises. The second paragraph of comment f

explains the limits to the rule: The seller must sell the prod-

uct in the usual course of business, and the particular sale

226 Brown v. GlaxoSmithKline, LLC

at issue must be in the usual course of business. Comment f

explains the rule’s rationale as the “special responsibility”

for public safety that a seller undertakes by engaging in the

business of supplying products to the general public and the

general public’s corresponding “forced reliance” on such sup-

pliers in contemporary consumer society. That rationale is

present only for a seller who sells a product in the usual

course of a commercial enterprise.

Providence first argues that comments c and f, as

we interpreted and applied them in Mason, place two addi-

tional limits on who is a “seller * * * engaged in the business

of selling”: that the seller must (1) “advertise, promote, or

package the product” for use and consumption and (2) be

either a “wholesaler or retail dealer.”

We reject that argument. Mason held that the “sol-

itary and noncommercial reuse” of products that allegedly

caused harm did not render the defendant in that case a

type of “seller” of those products under ORS 30.920 and clar-

ified that the defendant was not a “seller” simply because

it sold similar products to others. Id. at 400-02. In reach-

ing that conclusion, Mason cited comment c, which restates

the rationale underlying strict liability—that “by marketing

[the] product for use and consumption,” the seller has under-

taken the aforementioned “special responsibility”—and

comment f, which explains that strict liability applies “to

any wholesale or retail dealer or distributor.” 226 Or App at

400-01. We read comment c, as we did in Mason, to use the

word “market” simply as a synonym for “sell.” See Webster’s

at 1383 (defining the transitive verb “market” as “to expose

for sale in a market : traffic in : sell in a market” and “sell”).

And comment f provides that strict liability applies “to any

wholesale or retail dealer or distributor” as part of a nonex-

clusive list of types of “sellers.” In any event, we understand

the reference to a “retail dealer” in comment f as simply one

who sells in small quantities to the consumer, as opposed to

the colloquial sense of a brick-and-mortar shop that offers

goods for sale to the general public. See Webster’s at 1938

(defining the adjective “retail” as “of, relating to, or engaged

in the sale of commodities at retail,” and the noun “retail”

as “the sale of commodities or goods in small quantities to

Cite as 323 Or App 214 (2022) 227

ultimate consumers—opposed to wholesale”). Accordingly,

we conclude that Mason and its discussion of comments c

and f do not support defendant’s argument.

The ordinary meaning of a “seller * * * engaged in

the business of selling” a product, in accordance with section

402A, comment f, is one who carries on commercial activ-

ity composed in some part of transferring ownership of the

product to another in exchange for valuable consideration.

Although the seller must sell the product in the usual course

of business, the seller need not solely or primarily engage in

the business of selling the product. And comment f strongly

suggests that strict liability applies to the sale of products

that are incidental to a service transaction and to products

that are consumed on site.

Providence next argues that it cannot be a “seller”

for purposes of ORS 30.920 because Oregon and federal law

recognize that hospitals are service providers that do not

sell pharmaceuticals to patients but rather “use,” “dispense,”

and “administer” them in the course of treatment. In sup-

port of that argument, Providence points to various Oregon

statutes regulating hospitals and the professional practice

of pharmacy, as well as a case decided by the Supreme Court

of the United States interpreting a federal price discrimina-

tion statute.

We do not find those authorities persuasive for

interpreting the text of ORS 30.920 because they are not

sufficiently related to the subject matter of product liabil-

ity. See State v. Delaurent, 320 Or App 191, 196, 514 P3d

113, rev den, 370 Or 303 (2022) (noting that the context

of the statute “includes other provisions of the same stat-

ute as well as other related statutes”). That ORS 442.015

(15)(a)(D) defines a “hospital” for purposes of ORS chapter

442 as a facility that provides pharmacy “health services”

does not preclude as a matter of law or fact that a hospi-

tal may also “sell” pharmaceutical drugs or be a “seller”

“engaged in the business of selling” a drug within the mean-

ing of ORS 30.920. The same is true for a hospital that “dis-

penses” or “administers” pharmaceutical drugs out of its

“institutional drug outlet” licensed for purposes of the pro-

fessional practice of pharmacy, see ORS 689.005(1), (9), and

228 Brown v. GlaxoSmithKline, LLC

(15), and for a nonprofit hospital that purchases supplies for

its “own use” for purposes of an exemption to a federal price

discrimination statute, see Abbott Laboratories v. Portland

Retail Druggists Ass’n, Inc., 425 US 1, 8-11, 96 S Ct 1305, 47

L Ed 2d 537 (1976). Those statutes define terms of art that

apply to their respective statutory contexts, and there is no

indication that they have any bearing on the meaning of

ORS 30.920.

That conclusion is further bolstered by the exis-

tence of Oregon statutes that expressly exclude certain

products and sellers from strict liability. For instance, one

statute excludes products provided by physicians in certain

circumstances:

“A physician licensed pursuant to ORS chapter 677 is

not a manufacturer, distributor, seller or lessor of a product

for the purposes of ORS 30.900 to 30.920 if the product is

provided by the physician to a patient as part of a medical

procedure and the physician was not involved in the design

or manufacture of the product.”

ORS 30.902. Another statute excludes health care facilities

that provide breast implants under certain circumstances:

“A health care facility licensed under ORS chapter

441 is not a manufacturer, distributor, seller or lessor of a

breast implant for the purposes of ORS 30.900 to 30.920 if

the implant is provided by the facility to a patient as part

of a medical implant procedure.”

ORS 30.908(5).

Although both ORS 30.902 and ORS 30.908 were

enacted much later than ORS 30.920 and are, therefore,

not indicative of the legislature’s intent on the meaning of

the terms used in ORS 30.920, construing ORS 30.920 to

exclude those who sell products in the provision of services

would render both ORS 30.902 and ORS 30.908(5) super-

fluous. See ORS 174.010 (specifying that, “where there are

several provisions or particulars such construction is, if

possible, to be adopted as will give effect to all”); State v.

Rusen, 369 Or 677, 699, 509 P3d 628 (2022) (explaining that

“when multiple statutory provisions potentially conflict, if

the court can give full effect to both statutes, it will do so”

(internal quotation marks and citation omitted)). Moreover,

Cite as 323 Or App 214 (2022) 229

ORS 30.902 and ORS 30.908(5) demonstrate that the legis-

lature knows how to expressly exclude certain sellers and

products from strict liability. The legislature could have—

but did not—expressly exclude a hospital licensed under

ORS chapter 442 or pharmaceutical drugs dispensed or

administered under ORS chapter 677 from strict liability.5

A third statute, former ORS 97.300 (1991), renum-

bered as ORS 97.968 (1995) and renumbered as ORS 97.985

(2007), precludes strict liability under ORS 30.920 by declar-

ing that transactions in certain products do not constitute

sales. Royer, 107 Or App at 117.6 The plaintiff in Royer was

a hemophiliac who alleged that he had been infected with

hepatitis and AIDS by a blood product. Id. at 114. The trial

5

Indeed, the 2009 legislature declined to expressly exclude hospitals from

strict liability. The exception that now exists in ORS 30.902 was originally

enacted in 1993 and was limited to physicians that provided breast implants to

patients as part of a medical implant procedure. Or Laws 1993, ch 259, § 5 (codi-

fied as ORS 30.908(5) (1993)). The same bill created the nearly identical exception

for health care facilities that now exists in ORS 30.908(5). Or Laws 1993, ch 259,

§ 5 (codified as ORS 30.908(6) (1993)).

In 2009, the legislature amended ORS 30.908 by removing the exception for

physicians in subsection (5) and renumbering the health care facilities exception

as subsection (5). Or Laws 2009, ch 485, § 10. In the same bill, the legislature

reformulated and broadened the exception for physicians and made it part of the

product liability statutory framework. Or Laws 2009, ch 485, §§ 8, 9 (codified as

ORS 30.902). The legislature did not adopt a proposed amendment to that bill

that would have added hospitals to the reformulated exception for physicians now

codified as ORS 30.902. See Exhibit 1 (Proposed Amendments to B-Engrossed

Senate Bill 284), House Rules Committee, SB 284, June 2, 2009 (“SECTION 9.

A physician licensed pursuant to ORS chapter 677, or a hospital as defined by

ORS 442.015, is not a manufacturer, distributor, seller or lessor of a product for

the purposes of ORS 30.900 to 30.920 if the product is provided by the physician

or hospital to a patient as part of a medical procedure and the physician or hos-

pital was not involved in the design or manufacture of the product.” (Emphases

added.)). Thus, although it is true that legislative inaction is not a good indicator

to discern legislative intent—especially when considering a potential amend-

ment that the legislature took up long after ORS 30.920 was enacted—it is at

least noteworthy that the legislature had an opportunity to enact the interpre-

tation defendant’s argument advances and declined to do so. Compare State v.

Rainoldi, 351 Or 486, 492, 268 P3d 568 (2011) (explaining that, because of the

possibility of competing inferences, “statutory silence alone is not a sufficiently

clear indication of legislative intent”) with State v. Partain, 349 Or 10, 20, 239

P3d 232 (2010) (concluding that the “history of the amendment confirms that

general sense of the legislature’s intentions,” even though there was nothing in

the legislative history that established a legislative intent).

6

Former ORS 97.300 (1991), which was first enacted in 1969, see Or Laws

1969, ch 271, § 1, was not amended until 1995, when it was also renumbered, see

Or Laws 1995, ch 717, § 11. Accordingly, we omit the year in all remaining refer-

ences to former ORS 97.300 in this opinion.

230 Brown v. GlaxoSmithKline, LLC

court dismissed the plaintiff’s strict liability claims against

the product’s manufacturer and the seller,7 after concluding

that former ORS 97.300 precluded liability under the cir-

cumstances. Former ORS 97.300 provided:

“(1) The procuring, processing, furnishing, distribut-

ing, administering or using of any part of a human body for

the purpose of injecting, transfusing or transplanting that

part into a human body is not a sales transaction covered

by an implied warranty under the Uniform Commercial

Code or otherwise.

“(2) As used in this section, ‘part’ means organs, tis-

sues, eyes, bones, arteries, blood, other fluids and any other

portions of a human body.”

We first examined the context of former ORS 97.300

and noted that it was enacted when strict product liability

was still emerging as a conceptually related but not com-

pletely distinct theory to traditional contractual warran-

ties. Royer, 107 Or App at 115-16. We then examined the

legislative history of former ORS 97.300 and explained that

the legislature enacted it in response to a Florida case that

had held that blood suppliers could be held liable without

fault. Id. at 116. In the Florida case, the plaintiff sued a

blood bank claiming breach of implied warranties after she

contracted hepatitis from a blood transfusion. Id. (citing

Russell v. Community Blood Bank, Inc., 185 So 2d 749, 750

(Fla App 1966), aff’d in part, 196 So 2d 115 (Fla 1967)). We

explained:

“The [Russell] court recognized that courts in other

states that had considered the issue had declared the fur-

nishing of blood to be a service, not a sale. However, the

court noted:

“ ‘It seems to us a distortion to take what is, at least

arguably, a sale, twist it into the shape of a service, and

then employ this transformed material in erecting the

framework of a major policy decision.’

“The [Russell] court held that a sale had occurred, thus

making the blood bank susceptible to liability without

fault.”

7

The State of Oregon, through Oregon Health Sciences Hemophilia Center,

did not dispute that it had sold the blood product to the plaintiff. Id.

Cite as 323 Or App 214 (2022) 231

Royer, 107 Or App at 116 (internal citation omitted). We then

pointed to several statements by legislators that the intent

of former ORS 97.300 was to create an exemption to strict

liability by excluding such products from sales transactions

as a matter of law. Id. at 116-17. We concluded that “[t]he

main focus of [former] ORS 97.300 is on declaring that the

transactions do not constitute sales. Because strict liability

cannot arise without there having been a sale, defendants

could not be strictly liable.” Id. at 117.

Thus, in addition to the express exceptions that

exist within the product liability statutory framework, the

legislature may also express the intent to exclude certain

products or sellers from strict liability by declaring that

transactions in such products do not constitute sales, as it

did in former ORS 97.300. None of the statutes Providence

cites affirmatively exclude hospitals or pharmacies from

sales transactions, and Providence has cited no legislative

history that evinces an intent to so exclude them.

Providence’s final argument urges this court to

follow the “vast majority of courts who have construed the

same or similar language as that contained in ORS 30.920

[and] held that hospitals are not ‘sellers’ who are ‘in the busi-

ness of selling’ products.” Providence cites two cases that

had been decided by the time the legislature enacted ORS

30.920 and could arguably be relevant context. See Lindell

v. Kalugin, 353 Or 338, 349, 297 P3d 1266 (2013) (“Case law

existing at the time of the adoption” of the rule or statute

“forms a part of the context.”). The first, Perlmutter v. Beth

David Hospital, 308 NY 100, 108, 123 NE2d 792 (1954), held

that a blood transfusion supplied by a hospital for a price did

not constitute a “sale” and therefore could not give rise to a

strict product liability claim on a theory of breach of implied

warranty. The other, Magrine v. Krasnica, 94 NJ Super

228, 242, 227 A2d 539 (Co 1967), aff’d sub nom Magrine v.

Spector, 53 NJ 259, 250 A2d 129 (1969), declined to extend

strict liability to a dentist for personal injuries caused by a

hypodermic needle that broke in the plaintiff patient’s jaw

during an injection procedure.

We do not find those cases to be persuasive context

for interpreting ORS 30.920. Both cases were decided under

232 Brown v. GlaxoSmithKline, LLC

the common law of their respective states and predate sec-

tion 402A. Moreover, even assuming that the legislature was

aware of those cases when it enacted ORS 30.920, there is

no indication that the legislature incorporated the holdings

into the statute’s text. Indeed, if the legislature responded

to the holding in Perlmutter at all, it was to exclude certain

products from liability in former ORS 97.300, not to exclude

all sale-service hybrid transactions. And the holding of

Magrine, if not its reasoning, is consistent with the ordinary

meaning of “seller * * * engaged in the business of selling”

and with comment f.

To summarize, the ordinary meaning of a “seller

* * * engaged in the business of selling” a product, in accor-

dance with section 402A, comment f, is one who transfers

ownership of the product to another in exchange for valu-

able consideration and whose ongoing commercial activity

consists in some part of selling the product. One can be a

“seller * * * engaged in the business of selling” a product sub-

ject to strict liability under ORS 30.920 even if the seller

also or primarily provides a service, the sale of the product

is incidental to that service, and the product is immediately

consumed on site. The relevant context and legislative his-

tory confirm that interpretation.

APPLICATION

With the proper construction of ORS 30.920, we

return to the facts of this case. Here, we conclude that plain-

tiffs presented sufficient evidence to create a genuine issue

of material fact as to whether Providence was a “seller * * *

engaged in the business of selling” Zofran within the mean-

ing of ORS 30.920. Viewed in the light most favorable to

plaintiffs as the adverse parties, the summary judgment

record shows that Providence transferred Zofran to Gomez

for valuable consideration when Providence administered

the drug to her in its emergency department and later

charged her for the drug as part of the services rendered. The

summary judgment record further shows that Providence’s

ongoing commercial activity consisted in some part of selling

Zofran because it maintained a stock of injectable Zofran to

administer to patients in the hospital, and it is reasonable

to infer that Providence would charge patients for the drug

Cite as 323 Or App 214 (2022) 233

as part of medical services it provided. Accordingly, the trial

court erred in granting summary judgment for defendant.

Reversed and remanded.