Petition — Rexall Drug Co. v. Sindell
Supreme Court brief1980
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| Supreme Court, U. S.
FILED
AUG 5 1980
MICHAEL 'f
80-170
IN THE
Supreme Court of the United States
October Term, 1980
No.
REXALL DRUG COMPANY and
ELI LILLY AND COMPANY,
Petitioners,
VS.
JUDITH SINDELL, et al.,
Respondents.
REXALL DRUG COMPANY,
Petitioner,
VS.
MAUREEN ROGERS, ef al.,
Respondents.
PETITION FOR A WRIT OF
CERTIORARI TO THE SUPREME
COURT OF THE STATE OF CALIFORNIA
ADAMS, DUQUE & HAZELTINE CROSBY, HEAFEY, ROACH & May
RICHARD C. FIELD Profession Corporation
DAvID L. BACON RICHARD J. HEAFEY
523 West Sixth Street PETER W. DAVIS
Los Angeles, California 90014 1939 Harrison Street
Oakland, California 94612
WINTHROP, STIMSON, PUTNAM
& ROBERTS Attorneys for Petitioner
A. EDWARD GRASHOF Eli Lilly and Company
THEODORE S. STEINGUT
40 Wall Street
New York, New York 10005
Attorneys for Petitioner
Rexall Drug Company
IN THE
Supreme Court of the United States
October Term, 1980
No.
REXALL DRUG COMPANY and
ELI LILLY AND COMPANY,
Petitioners,
VS.
JUDITH SINDELL, ¢ al.,
Respondents.
REXALL DRUG COMPANY,
Petitioner,
VS.
MAUREEN ROGERS, et al.,
Respondents.
PETITION FOR A WRIT OF
CERTIORARI TO THE SUPREME
COURT OF THE STATE OF CALIFORNIA
The petitioners Rexall Drug Company (“Rexall”) and
Eli Lilly and Company (“Lilly”) respectfully pray that a
Writ of Certiorari issue to review the judgment and opinion
of the Supreme Court of the State of California entered in
these proceedings on March 20, 1980.
QUESTIONS PRESENTED
1. Whether due process of law or equal protection of the
laws is violated where plaintiffs who cannot prove which
manufacturer’s product allegedly caused their injury are
permitted to recover from a random selection of all manu-
facturers making a similar product?
il
2. Whether due process of law and equal protection of
the laws are violated by a state court decision which pre-
cludes a class of defendants from the right to a fair hearing
on the question of whether any of the defendants manufac-
tured the alleged injury-causing product?
3. Whether the commerce or supremacy clauses are
violated by state action which frustrates, impedes and
erodes federal policies encouraging the manufacturing and
distribution of generic drugs?
PARTIES TO THE PROCEEDINGS BELOW
Defendants and respondents in Judith Sindell v. Abbott
Laboratories, et al. were Abbott Laboratories, Lilly, E. R.
Squibb & Sons, Inc., The Upjohn Company and Rexall. In
Matreen Rogers v. Rexall Drug Company, et al., defendants
and respondents were E. R. Squibb & Sons, Inc., The
Upjohn Company and Rexall.
ili
TABLE OF CONTENTS
Opinions Below ........sse ddnasdsnegonosebenbedebabhaohshanbibesess
IIIS. iceinssacsitcssaccisdcecestonsapsetsa soehuconmsetiapnnlasiatoagh itis
Constitutional Provisions Involved oc. .eeeeeeseeeeees
Statement of the Case ........... saisdadivavenesnaboeovensiinnea koubepnek
Bi BIRR OION 5osideecicisicaicitibicaccapuantenligthpispentossonie
b. © The DES Comtroverey. accocrsicesscorsnccosssesveeteess
ce. Prior Raising of Federal Issues .................
Reasons for Granting the Wit .........ccssssssssessseeeees
1. The Jurisdiction of This Court Is Properly
ROW. sijasonvecssitsesessrevethcinesacssulibtcepalabatinianins
2. The Judgment Below Violates Procedural
Due Process and Denies Equal Protection
of the Laws by Creating Irrational, Un-
workable and Unfair Procedural Devices to
Do Away With Proof of Causation Linking
A Defendant to the Product Allegedly
CONES TI. is cvicsscssivcanpantgessvesentnncsioauniniios
3. The Judgment Below Is Preempted by the
Supremacy Clause Because It Frustrates
Federal Policy Governing the Develop-
ment and Marketing of Prescription
Drugs, and In Particular the Marketing of
Drugs on a Generic Basis, and Creates an
Invalid Burden on Interstate Commerce
a ee GAGA RAT GTOET ROMP MRP OL Py MAN
PAGE
NI N on SO FF fF fH
21
iv
Appendix A. Opinion of the Supreme Court of the State
of California
Appendix B. Eli Lilly and Company’s Petition for Re-
hearing to the Supreme Court of the State
of California
Appendix C. Rexall Drug Company’s Joinder in Eli Lilly
and Company’s Petition for Rehearing to
the Supreme Court of the State of California
Appendix D. Order of the Supreme Court of the State of
California Denying Rehearing
Vv
TABLE OF CASES, STATUTES AND
OTHER AUTHORITIES
Cases
Abel v. Eli Lilly and Co., Action No. 74-030-070NP
Filed in the Wayne County Circuit Court, Detroit,
Michigan, appeal pending to the Supreme Court of
DESOTO | yicceseniniansesecsecesvnvenenciancenevisasiahtiegiemiataibaaadeinioah
American Motorcycle Ass’n v. Superior Court, 20 Cal. 3d
STG, GIS PBR GEO (RCTB). .cccinceineesticdiensnienntetsitins
American Railway Exp. Co. v. Kentucky, 273 U.S. 269
CAGIRT ) sccocssocescopescasscneasnsesnstisbincanutibaaapianasditeealpnianltmiatc
Armstrong v. Manzo, 380 U.S. 545, 552 (1965) ............
Baker v. Coca Cola Bottling Works of Gary, 132 Ind. App.
Y Bae & & Fe. | peemcmununcsmmn an
Bell v. Burson, 402 U.S. 535 (1971) w.ccccccsscecsseeeseeeeseees
Judy K. Benny v. Abbott Laboratories, et al., Alameda
Superior Court Case No. 525322-5 oc cssssseesseseeeees
Bibb v. Navajo Freight Lines, Inc., 359 U.S. 520 (1959)
Brinkerhoff-Farris Trust & Sav. Co. v. Hill, 281 U.S. 673,
CF CIID) csisesincsscsiinnstansbletasitiatatiisinitcnmmimindatiameiiiaa
Cindy Bocian v. Abbott Laboratories, et al., San Francisco
Superior Court Case No. 760532 ........cscssscsssssssseeeees
Carrington v. Rash, 380 U.S. 89 (1965) w..ccceceeseeecees
Connolly v. Union Service Pipe Co., 184 U.S. 540 (1902)
Cox Broadcasting Corp. v. Cohn, 420 U.S. 469 (1975)
Cleveland Board of Education v. LaFleur, 414 U.S. 632,
BOE (EDTA) crersecesrsessssscencercersncssssainaivsintettantmontsadenenstonsontal
Dawson Chem. Co. v. Rohm & Haas Co., 40 CCH S&S. Ct.
Bull. p. B3850, BS896 (1980) .....cccccsccsrcscseccessecsseseeees
Diamond v. Chakrabarty, 40 CCH 8S. Ct. Bull. p. B3122,
a A RARE EMS AMEN SNIOE NT
PAGE
13
12
8 8 8
vi
DiSanto v. Pennsylvania, 273 U.S. 34, 43-44 (1927)
IE, Ws) GIN epnecsrectnediesinvicstrinnecnstantdstesavitanaveds
Duke Power Co. v. Carolina Env. Study Group, 438 U.S.
PP IPD: ssiccuidibieusondciaphogansseithanhellicseos dhasatiebenelapebiisinesens
Dunn v. Blumstein, 405 U.S. 330, 349-352 (1971) .......
Farmers Union v. WDAY, Inc., 360 U.S. 525 (1959) ..
Ford Motor Co. v. United States, 405 U.S. 562 (1972)
Giaccio v. Pennsylvania, 382 U.S. 397, 403 (1966) .....
Goldberg v. Kelly, 397 U.S. 254 (1970) wvceccccscseeeseees
Great Atlantic & Pacific Tea Co., Inc. v. Cottrell, 424 U.S.
Ne Be IN sesisastcnnaacbecapssctinsisdaneselehinciioenencbcwedianabanneenadins
Great A. & P. Tea Co. v. Supermarkei Equip. Corp., 340
U.S. 147, 154 (1950) (Concurring Opinion) ........0
Herndon v. Georgia, 295 U.S. 441, 443-44 (1935) ........
Hettinger v. Glass Specialty Co., 59 F.R.D. 286, 294
Siete Ms NUN whic snc.asdccnaascceedioiseaaatndeeeibcrievoobiansitetsas
Jenkins v. McKeithen, 395 U.S. 411, 429 (1969) ...........
Lyons v. Premo Pharmaceutical Labs, Inc., 170 Nw.
Super. 183, cert. dented, 82 N.J. 267 (1969) .............
McCulloch v. Maryiand, 17 U.S. (4 Wheat.) 316 (1819)
McCreery v. Eli Lilly & Co., 87 Cal. App. 3d 77, 89, 150
Cal, HEpte, TOD CEOTS) cccccscsnnscsorsscsscsscsscccessssoceseboccsacsons
Mercantile National Bank v. Langdeau, 371 U.S. 555, 558
SREY “puitiGiiastteicseenibedavesidacaciac tas iekiieaaneniasiineestakedesbibies
Moore v. East Cleveland, 431 U.S. 494, 502 (1977) ......
NAACP v. Alabama, 377 U.S. 288, 380 (1964) ............
Perez v. Campbell, 402 U.S. 637, 652 (1971) 0.0.0.0...
Picker X-Ray Corp. v. Frerker, 405 F.2d 916 (8th Cir.
EPL Vacca TSR Ts NS
Pike v. Bruce Church, Inc., 397 U.S. 187 (1970) ..........
Prudential Ins. Co. v. Cheeck, 359 U.S. 530 (1922) .....
PAGE
Vii
Raymond Motor Transportation, Inc. v. Rice, 434 U.S. 429
CUNARD Neldsibcuy senbiiashesiisdlesctseapdsecbeseaptasvensbionvaySeupilainivediotiam
Reed v. Reed, 404 U.S. 71 (1971) weccececscsscssseseeeseessees
Rees v. Watertown, 86 U.S. (19 Wall.) 107, 122 (1873)
Reiter v. Sonotone Corp., 579 F.2d 1077, 1086 (8th Cir.
1978), rev’d, 442 U.S. 330 (1979) cecccccsssssssssseeseesseee
Rekasie v. Bucyrus-Erie Co., 262 F.2d 804 (3d Cir. 1959)
San Diego Bldg. Trades Council v. Garmon, 359 U.S. 236
CRUIIUED cocevsipnisnsochindinpnsobalicceaianidenlbachiondacaedditada taille is
Saunders v. Shaw, 244 U.S. 317 (1917) cece eeeseeees
Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225 (1964)
Shapiro v. Thompson, 394 U.S. 618 (1969) woe
Smith v. Cahoon, 283 U.S. 553 (1981) ween
Sola Elec. Co. v. Jefferson Elec. Co., 317 U.S. 173 (1943)
Stanley v. Illinois, 405 U.S. 645, 648, 656 (1972) .......
Thompson-Hayward Chemical Co. v. Childress, 277 Ala.
Ri UTI GD: CEOUOD snosccsesscciesckactdensineidinanndpatvessen
Carol Trevallee v. Abbott Laboratories, et al., San Francis-
co Superior Court Case No. 721204 ......cceseseseseseeees
Vlandis v. Kline, 412 U.S. 441, 446 (1973) oo... cesses
Weinberger V. Hynson, Wescott & Dunning, 412 U.S. 609,
612-614, 37 L.Ed2d 207 (1978) ........scscccsesscsrsesreeecees
Wetzel v. Eaton Corp., 62 F.R.D. 22, 28 (D. Minn. 1973)
Wolff v. McDonnell, 418 U.S. 539, 558 (1974)
Constitutional Provisions
Constitution of the United States, Article I, Section 89,
CARIES icnincedssycutnenvcintadeaadicdeeecpaadianiaaimaieans
Constitution of the United States, Article VI, Clause 2
Constitution of the United States, Fourteenth Amend-
I, TMI Fh sesecesccennssestecncassanutatnes BRINE SS OR
18,
viii
PAGE
Statutes
California Businesses and Professions Code, Section
CEE LD - vicicxitchinissnesvipteistnorivisnsssviersiteneivileataanisiaantbmniniii 21
California Welfare and Institutions Code, Sections
14000, et seg., and Sections 11152 and 11153.7 ......... 17
Ue ae ees OF OEE ac-.sanssentorstemanesdicngiealignaniiials 24
Be A Te OID ccicinsepicisisitipadelasmnchiinsadiMlncthaauiaiaiiiat 23
Ge eS lg 5 RS rer tence eae en 4
i: Ay a Bh SLD seinsnsiicnnsishaprtestieenacainidasheenaduagummeliaaials 5
Sa RAAB BUD pcksisrsasesocchinioniecbonsineinieicianadeininaeiat 5
Fk Sei Me IED cshcvcelsnnsiercanttsasabvavsseacniabusenataiemmaaiatal 4
SOD Pe BRUIT COD -cnctcserssnvasscittisseinersmiienbthantiinice Cala ee
Other Authorities
Brand Names and Generic Drugs, 1974, Hearings Before
Subcommittee on Labor and Public Weifare, 93d
Congress 2d Sess. (July 22, 1974) .o.ceeseseseesseeees 21
Coggins, Indusiry-Wide Liability, 13 Suffolk L. Rev.
Sh DD CODER D: sccncicecicesvetpetveeesicbabenscialil 15, 23
Commerce Department, /nteragency Task Force on Prod-
uct Liability: Final Report of the Insurance Study, Vol-
ume 1 at 2-4, 2-5 (January 1977) wccecceccseseeseeeees 15, 16
Grabowski, Drug Regulation and Innovation: Empirical -
Evidence and Policy Options (1976) ..cccccsccssssesseneencees 23
Hearings Before the Subcommittee on Health of the Com-
mittee on Labor and Public Welfare, 94th Congress, p.
ee gy 5 I ee ee 23
Herbst, Cole, Colton, Robboy and Scully, Age-Incidence
and Risk of Diethylstilbestrol-Related Clear Cell Adeno-
carcinoma of the Vagina and Cervix, 128 Am. J. Obst.
RIN, TR CNS F ails titenascenscasantsbnioieeiccecseciiemncecaienainas 5
ix
Herbst, Cole, Norusis, Welch and Scully, Epidemiolog-
ic Aspects and Factors Related to Survival in 384 Regis-
try Cases of Clear Cell Adenocarcinoma of the Vagina
and Cervix, 135 Am. J. Obstet. Gynecol. 876 (1979)
Herbst, Ulfedler and Poskanzer, Adenocarcinoma of the
Vagina, 284 N. Eng. J. Med. 878 (1971) ween
1 Hursh & Bailey, American Law of Products Liability
IE LOUIE, € ROTTED -chsnsseaisdinirslivabionssesennieniserinenpibooes
Kinsley, Fate and Lawsuits, 182 The New Republic, 20,
SN RNIN TU: RIED "ai. udcnssiptisnncnciingmminibinaibcsatmaghsiadisbonthdnenes
Maximum Allowable Costs for Drugs, Office of the Secre-
tary, Department of Heaith, Education and Welfare
RE EEE, RED civarpssshecsssvnsiehissioonipinecsonmnienttnenipiblanngen
Peltzman, Regulation of Pharmaceutical Innovation; The
1962 Amendments 1-3 (1974) w.ccccccccsccsssesssesseeeeeeseenes
Annotation, Products Liability: Necessity & Sufficiency of
Identification of Defendant as Manufacturer or Seller of
Product Alleged to Have Caused Injury, 51 A.L.R.3d
ESE SITE saris as acti beseiakenepeabimeadanevaimeiicnslioes
Prosser, Handbook of the Law of Torts, 661 (4th Ed.
rae ali crsnsensamtvaatenheovmuseessntanidiiajenietes
Prosser, Res Ipsa Loquitur, a Reply to Professor Carpen-
ter, 10 So. Calif. L. Rev. 459, 464 (1987) wo.
Prosser, The Law of Torts, § 41 at 236 (4th Ed. 1971)
Schwartzman, The Expected Return from Pharmaceutical
Ey EINE Merete So WSO Oe
George & Olive Smith, Prophylactic Hormone Therapy
Relation to Complications of Pregnacy, 4 Obst. & Gyn.
IIIT i iiinseia tdasnjaiabisiabacindpetonenenibienniin ibeauddhanniipeceiohistes
Olive Smith, Diethylstilbestrol in the Prevention and
Treatment of Complications of Pregnancy, 56 Am. J.
IS SER BIDE D - scniccnsrsvectecnanapiinddolabshaninsousssee
Source Book of Health Insurance Data, 1976-77, p. 21 ..
White, P., Pregnancy Complicating Diabetes, J.A.M.A.
EE IEE akc iietisk sh ds nlsiecthinsspiese posneiiebibdeiildpsabediethecsions
PAGE
22
23
PAGE
White, P., Pregnancy Complicating Diabetes, Amer. J.
EE, hs PE CITI. scenudessinnelanieetelaiissdnacniinnbhreetiauidesoss 4
White, P., Pregnancy Complicating Diabetes, The Treat-
ment of Diabetes Mellitus, 9th Edition, Philadelphia,
BI OE CRE) wiccsscctcovesccscncescannsonspbhedavicuyeatiioade 4
OPINIONS BELOW
The opinion of the Supreme Court of the State of Califor-
nia, 26 Cal. 3d 588, 607 P.2d 924 (1980), is set forth in
Appendix A hereto.
JURISDICTION
The judgment of the Supreme Court of the State of Cali-
fornia was entered on March 20, 1980. Timely petitions for
rehearing were denied on May 7, 1980, and this Petition for
Certiorari was filed within 90 days of that date. This
Court’s jurisdiction is invoked under 28 U.S.C. § 1257(3).
CONSTITUTIONAL PROVISIONS INVOLVED
Constitution of the United States, Article I, Section 8,
Clause 3:
“(The Congress shall have Power] To regulate
Commerce with foreign Nations, and among the sev-
eral States, and with the [ndian Tribes;”
Constitution of the United States, Article VI, Clause 2:
“This Constitution, and the Laws of the United
States which shall be made in Pursuance Thereof;
and all Treaties made, or which shall be made,
under the Authority of the United States, shall be
the supreme Law of the Land; and the Judges in
every State shall be bound thereby, any Thing in
the Constitution or Laws of any state to the Con-
trary notwithstanding.”
Constitution of the United States, Fourteenth Amend-
ment, Section 1:
“All persons born or naturalized in the United
States, and subject to the jurisdiction thereof, are
citizens of the United States and of the State
wherein they reside. No State shall make or
enforce any law which shall abridge the privileges
or immunities of citizens of the United States; nor
shall any State deprive any person of life, liberty, or
property, without due process of law; nor deny to
any person within its jurisdiction the equal protec-
tion of the laws.”
2
STATEMENT OF THE CASE
a. Introduction
The California Supreme Court has imposed liability
upon manufacturers of products who caused plaintiffs no
injury. That Court has adopted what it itself concedes to
be a novel and revolutionary theory of common law product
liability in tort not raised by any party in any pleading,
brief or argument at any stage of the litigation.
The Court acknowledges that its new theory of liability
finds no basis in, and indeed is contrary to, precedent from
its own jurisdiction or any other common law jurisdiction.
The Court holds that, in product liability actions involving
thousands of claimants who bring suit against only a few of
the more than 200 manufacturers making an identical and
fungible product, those claimants need not establish the
identity of the specific manufacturer whose product alleg-
edly caused the injury. Indeed, the Court rules that a
plaintiff need only join a sufficient, albeit quantitatively
insignificant, number of such manufacturers so that in the
aggregate they comprise a “substantial share” of the mar-
ket for the product. Then plaintiff may recover, says the
Court, against the group of defendants singled out for suit
even though the injury may have been, and probably was,
caused by a product they did not make and even though the
group selected may represent less than 50% of the market.
Thus, the judgment exposes each manufacturer offering
identical and fungible products in a multi-source market to
a random and potentially devastating liability for injuries
it did not cause and over which it has absolutely no control.
The judgment will erect major barriers to generic product
marketing, to product research and development and to the
freedom of market entry, and it will diminish the availabil-
ity and increase the price of essential products flowing in
interstate commerce — all in violation of federal policies
designed to encourage such results.
Sindell and Rogers are both products liability suits by
women alleging injuries to their genital tracts as a result of
in utero exposure over 20 years ago to diethylstilbestre:
(“DES”), a synthetic estrogen prescribed to their mothers
to prevent miscarriage or spontaneous abortion. Sinde!l
alleges that she is unable to identify which manufacturer
of DES produced the drug taken by her mother; Rogers
3
alleges that Lilly manufacturered the drug taken by her
mother. Plaintiffs seek to impose strict liability in tort
against a total of five defendants, including Rexall and
Lilly, out of over 200 pharmaceutical companies which
manufactured DES for sale in the United States. (App. A,
p. 21).
b. The DES Controversy’
Estrogen is a hormone produced naturally by the female
human body. It is vital for sexual development and fertil-
ity, plays a significant role during pregnancy, and has
other functions, some of which are still not fully under-
stood by medical science. After estrogens were isolated in
the 1920s, numerous investigations were conducted to dis-
cover their effects and functions. One of the most promi-
nent series of studies was conducted by Dr. George Smith,
who taught gynecology at the Harvard Medical School and
later became head of that department.
Dr. Smith’s early hormone research in the 1930s indi-
cated that premature pregnancy terminations were asso-
ciated with low progesterone levels, a condition which
could be improved by the administration of estrogen. His
research was hampered, however, because natural estrogen
was difficult to administer and prohibitively expensive.
Thus, when the synthetic estrogen called Diethylstilbestrol
(DES) was created in 1938 by the English doctor E. C.
Dodds, scientists who were conducting research with estro-
gens believed a significant medical advance had been made.
DES could be administered orally, was inexpensive and
duplicated the action of natural estrogen.
DES was not, however, immediately sold for use in treat-
ing accidents of pregnancy. FDA approval for that use
* The Sindell opinion quotes extensively from the unproven and
disputed allegations of the complaint. See, for example, the factual dis-
cussions in the dissenting opinion of the Court below and in Lyons v.
Premo Pharmaceutical Labs, Inc., 170 N.J. Super. 183, cert. denied, 82 N.J.
267 (1969), McCreery v. Eli Lilly & Co., 87 Cal. App. 3d 77, 89, 150 Cal.
Rptr. 730 (1978).
4
would not come until 1947, following nine years of further
research and testing.*
Dr. Smith’s clinical trials with DES in high risk
pregnancies included 117 doctors in 48 cities. He con-
cluded that untreated high-risk pregnancies ran twice the
risk of mishap as those treated with DES.** This
research was entirely independent of any pharmaceutical
manufacturer.
By 1952, DES was considered to be so safe that the FDA
declared that it was no longer a “new drug” within the
meaning of 21 U.S.C. Section 355(a). (CT 205)*** This
classification allowed any manufacturer to market that
drug without performing additional testing or submitting
additional data to the FDA on the drug’s safety, thus avoid-
ing all research and development costs. (CT 205) There-
after, at least 191 companies produced DES. (CT 206)
In 1971, following 30 years of use of DES for various
purposes, medical studies suggested for the first time that
there might be a statistical correlation between the use of
* Indeed, DES was not sold for any purpose in this country until
1941, after the FDA had independently conducted an exhaustive inves-
tigation of the drug’s safety. (CT 204-205) The designation “CT”
refers to the Clarks transcript of the record in Sindell in the court below.
** For a recapitulation of Dr. Smith’s work, see George and Olive
Smith, Prophylactic Hormone Therapy Relation to Complications of Preg-
nancy, 4 Obst. & Gyn. 129 (1954), and Olive Smith, Diethylstilbestrol In
The Prevention and Treatment of Complications of Pregnancy, 56 Am. J.
Obst. & Gyn. 821 (1948). Dr. Smith’s results were duplicated by Dr.
Priscilla White between 1938 and 1952. She found that high risk
pregnancies treated with DES resulted in almost double the number of
live babies as in the untreated group. Dr. White was also able to
examine the offspring of many of these DES-treated women. She
found no abnormalities like those the drug is accused of causing today.
(White, P., Pregnancy Complicating Diabetes, J.A.M.A., 128, 181, 1945;
White, P., Pregnancy Complicating Diabetes, Amer. J. Med. 7, 609, 1949;
White, P., Pregnancy Complicating Diabetes, The Treatment of Diabetes
Mellitus, 9th Edition, Philadelphia, Lea & Febiger, 1952.)
*** The term “NOT A NEW DRUG” means that the composition
of the drug is such that it is generally recognized among experts
qualified by scientific training and experience to evaluate the safety of
drugs to be safe for use under the conditions prescribed. 21 U.S.C. §
321 (p)(1). See, Weinberger v. Hynson, Wescott & Dunning, 412 U.S. 609,
612-614, 37 L. Ed. 2d 207 (1973).
5
the drug and a rare form of cancer (clear cell adenocarci-
noma) in the daughters of women who had taken synthetic
estrogen during pregnancy.* (CT 207) The correlation
has been estimated to range between 0.14 to 1.4 per thou-
sand daughters exposed to the product.**The cancer also
occurs spontaneously in nature; its cause or causes are
unknown.*** Consequently, it is not possible to attribute a
specific person’s injury to DES exposure. Because of these
medical reports, the FDA deterr-‘ined in 1971 that DES
should no longer be indicated for use during pregnancy
although it is still used today foy other purposes.
The formula for DES is a scientific constant. All manu-
facturers producing the drug are required to employ the
same formula for DES set forth in the United States
Pharmacopoeia, a standard compendium to establish the
_ chemical identity of such products. (21 U.S.C. § 351(b)).
Manufacturers are also required to employ the same
description of the drug on labels or bottles containing it.
(21 U.S.C. § 352(e)). DES was therefore distributed as a
classie generic drug.
The delay between the time of ingestion of the drug and
the time litigation is instituted has led to the threshold
issue in this litigation-whether manufacturer identifica-
tion should be zequired. Separated from consumers by at
least two levels of distribution, the defendants have no
mean: of ascertaining the identity of the manufacturer
whose product was ingested by a particular person; facts
pertaining to manufacturer identification rest within plain-
tiffs’ control if available at all. The plaintiffs’ mothers
selected and consulted with the prescribing doctors,
* Herbst, Ulfelder and Poskanzer, Adenocarcinoma of the Vagina, 284
N. Eng. J. Med. 878 (1971).
** Herbst, Cole, Norusis, Welch and Scully, Epidemiologic Aspects
and Factors Related to Survival in 384 Registry Cases of Clear Cell Adenocar-
cinoma of the Vagina and Cervix, 135 Am. J. Obstet. Gynecol. 876 (1979).
*** Herbst, Cole, Colton, Robboy and Scully, Age-Incidence and Risk of
Diethylstilbestrol-Related Clear Cell Adenocarcinoma of the Vagina and Cer-
viz, 128 Am. J. Obst. Gyn. 43 (1977).
6
selected the pharmacies or hospitals from which they
obtained the drug, had the opportunity to observe the
drug’s color, size, coating, markings and other characteris-
tics, and may have discarded the best practical evidence of
identity such as pharmacy records, the container, package
inserts and the drug itself.
The California Supreme Court granted petitions for hear-
ing by Rexall, Lilly and other defendants, thereby vacat-
ing the the prior California Court of Appeal decision
overruling trial court decisions that had sustained demurs
to the complaints. The resulting four to three decision
acknowledged that the Sindell complaint failed to state a
cause of action based on any existing legal theory, but went
on to create a new cause of action based on “market share”
which obviated the need for manufacturer identification.
melt commented that its holding would be applicable in Rogers
only if plaintiff failed to establish her claim that the drug
taken by her mother was manufacturered by Lilly. (App.
A, p. 6)
The court expressly based its decision on the belief it is
more appropriate that the pharmaceutical industry, with
(presumed) financial resources, should pay damages
despite the lack of proof of causation than that the plain-
tiffs should remain without a remedy against the industry.
(App. A, p. 23) Borrowing from and modifying an idea
first proposed in a student comment in the Fordham Law
Review,* the court held that a plaintiff who cannot iden-
tify the manufacturer of a fungible product which has
caused her injury may recover the entire amount of her
damages if suit is brought against manufacturers which in
the aggregate produced a “substantial share” of the market.
It did not define the concept of a substantial share. The
court held that a defendant may overcome the artificial
presumption that it caused the injury only by proving that
it did not manufacture the specific product received by the
* Comment, DES and a Proposed Theory of Enterprise Liability, 46
Fordham L. Rev. 963 (1978) (hereinafter “Student comment”),
7
plaintiff’s mother. A defendant lacking direct proof is
barred, however, from the use of relevant statistical and
market share evidence to overcome the presumption. The
court permitted the defendants to attempt to file third-
party complaints against other manufacturers which may
be subject to the court’s jurisdiction, and to apportion liabil-
ity among the defendants and cross-defendants based on
respective market shares. (App. A, p. 25)
c. Prior Raising of Federal Issues
Because the theory of liability reached by the Court
below was so revolutionary and completely unanticipated
and was not raised or argued by any of the parties before
the Court, the petitioners timely raised the constitutional
objections pressed here in their petition for rehearing.* See
Appendices B and C hereto.
REASONS FOR GRANTING THE WRIT
1. THE JURISDICTION OF THIS COURT IS PROPERLY
INVOKED.
The California Supreme Court judgment has finally dis-
posed of the federal issues involved for purposes of the state
litigation and is a final judgment for purposes of 28 U.S.C. §
1257.
In Cox Broadcasting Corp. v. Cohn, 420 U.S. 469 (1975),
this Court reviewed four categories of cases in which it has
treated state decisions on federal issues as final judgments
for purposes of 28 U.S.C. § 1257 notwithstanding the pen-
dency of further state proceedings. The fourth category
includes those cases in which the state decision might seri-
ously erode Federal policies, has finally disposed of the
federal issues, and when reversal on the federal issues
would preclude further litigation on the relevant cause of
action. Jd. at 482-83.
* Brinkerhoff-Faris Trust & Sav. Co. v. Hill, 281 U.S. 673, 678 (1929);
Herndon v. Georgia, 295 U.S. 441, 443-44 (1935).
8
There can be no greater erosion of Federal policies than
to compel petitioners to face long, protracted complex and
expensive litigation premised on an unconstitutional the-
ory of liability. Moreover, the decision below will inhibit
generic distribution of pharmaceutical products in direct
contravention of strong federal policies mandating and
encouraging such generic distribution. In addition, the
decision will erect anti-competitive barriers to entry in the
pharmaceutical industry and otherwise impede socially
desirable research and development efforts to invent new,
life-saving products. Because of these effects, petitioners
demonstrate, infra page 21 et seg., that California’s state
action is preempted by the Supremacy and Commerce
clauses.
As this Court noted in Mercantile National Bank v. Lang-
deau, 371 U.S. 555, 558 (1963), immediate review is fre-
quently desirable
“,. to determine now [ whether] appellants may
be tried rather than to subject them ... to long and
complex litigation which may all be for naught if
consideration of the {federal issue] is postponed
until the conclusion of the proceedings.”
This Court’s immediate review of the judgment in Sindell
and Rogers is essential in order to assure the fair, orderly
and efficient administration of justice. Over 55 cases are
pending in the federal and state courts of California where
the revolutionary Sindell decision will in all likelihood be
applied prior to resolution of the constitutional issues it
involves. Those actions will all be for “naught” if, as
Rexall and Lilly contend, the Constitution bars prosecution
of the claims under the “market share” liability theory.
9
2. THE JUDGMENT BELOW VIOLATES PROCEDURAL
DUE PROCESS BY CREATING IRRATIONAL,
UNWORKABLE AND UNFAIR) PROCEDURAL
DEVICES TO DO AWAY WITH PROOF OF CAUSA-
TION LINKING A DEFENDANT TO THE PRODUCT
CAUSING INJURY.
The California Supreme Court judgment, by adopting a
“market share” liability theory, strikes at the defendants’
fundamental right to be free from a wholly arbitrary and
irrational rule of liability, and their right to fair and
rational rules of procedure and evidence. The judgment
violates the Fourteenth Amendment’s guarantee of due
process* by substituting an unworkable and unreasonable
quasi-legislative damage apportionment scheme for evi-
dence of cause.
The California Supreme Court decision is best under-
stood in its historical context.
* Although the arguments herein are devoted to showing how the
decision below runs afoul of procedural due process, there is substantial
reason to believe it violates substantive due process as well. Not only
did the Court below create novel and untested rules governing liability
for future conduct (cf. Duke Power Co. v. Carolina Env. Study Group, 438
U.S. 59 (1978)), but, in doing so, it abrogated fundamental common
law safeguards developed to protect persons against randomized, specu-
lative and conjectural liability on account of past conduct. This case
thus fails within the category of cases where abrogation of common law
rights is subject to constitutional substantive due process scrutiny. To
pass muster, such action must “provide a reasonably just substitute for
the common law or state tort law remedies protection it replaces” (Jd. at
88). Because the concepts of reasonableness and fairness permeate any
analysis of due process invasions, petitioners demonstrate in their dis-
cussions throughout this petition that the rules California has adopted
to render an appearance of fairness are unreasonable and inequitable in
the extreme and thereby violate procedural due process guarantees.
But, because the predicates of those rules are also arbitrary and irra-
tional in the extreme, they violate substantive due process guarantees
as well. Wolff v. McDonnell, 418 U.S. 539, 558 (1974); Giaccio v. Penn-
sylvania, 382 U.S. 399, 403 (1966). As this Court stated in Rees v.
Watertown, 86 U.S. (19 Wall.) 107, 122 (1873), relying upon the Magna
Carta and the due process clause: “A court of equity cannot, by avow-
ing that there is a right but no remedy known to the law, create a
remedy in violation of law, or even without the authority of law.”
10
Pursuant to the law of all jurisdictions in the United
States, a factual chain linking the defendant with the
allegedly defective product (1.¢., causation) is an essential
element of every products liability action. See, eg., Picker
X-Ray Corp. v. Frerker, 405 F.2d 916 (8th Cir. 1969); Rekasie
v. Bucyrus-Erie Co., 262 F.2d 804 (3d Cir. 1959); Thompson-
Hayward Chemical Co. v. Childress, 277 Ala. 285, 169 So. 2d
305 (1964); Baker v. Coca-Cola Bottling Works of Gary, 132 .
Ind. App. 390, 177 N.E.2d 759 (1961); Wetzel v. Eaton Corp.,
62 F.R.D. 22, 28 (D. Minn. 1973); 1 Hursh & Bailey, Ameri-
can Law of Products Liability 2d, Section 1:41 (1974); Anno-
tation, Products Liability: Necessity and Sufficiency of
Identification of Defendant as Manufacturer or Seller of Product
Alleged to Have Caused Injury, 51 A.L.R.3d 1344, 1349
(1973); Prosser, The Law of Torts, § 41 at 236 (4th ed. 1971).
The common law safeguards afforded by the requirement
of proof of causation insure fairness because they protect
defendants from the imposition of liability premised upon
mere speculation and conjecture:
“An essential element of the plaintiff’s cause of
action for negligence, or for that matter for any
‘other tort, is that there be some reasonable connection
between the act or omission of the defendant and the
damage which the plaintiff has suffered.” Prosser,
supra, § 41 at 236. (Emphasis added)
“!The plaintiff | must introduce evidence which
affords a reasonable basis for the conclusion that it is
more likely than not that the conduct of the defen-
dant was a substantial factor in bringing about the
result. A mere possibility of such causation is not
enough; and when the matter remains one of pure
speculation or conjecture, or the probabilities are at
best evenly balanced, it becomes the duty of the
court to direct a verdict for the defendant.” Jd. at
241. (Footnotes omitted. )
The California Supreme Court has chosen to forsake
these policy considerations and safeguards on the notion
that it is “reasonable” to establish causation by the joinder
¢
11
of a substantial share of a given market where identifica-
tion of the responsible party is not now possible.* In actu-
ality, however, this does not represent an appropriate
substitute for causation, and falls far short of satisfying the
requirements of due process.
The position of the California Supreme Court is that its
new rule of liability may be imposed because of the pre-
sumed fact that defendants are better able to bear the cost
of injury than plaintiffs and that it has developed procedu-
ral devices and standards to accomplish this goal in a just
and fair fashion. (App. A, p. 26)
Once the plaintiff has brought before the court manufac-
turers which in the aggregate produced a “substantial”
share of DES, the court indulges in the presumption that
each and every defendant manufactured the drug ingested
by plaintiff’s mother. (App. A, p. 25). A major error
surrounding the presumption is patent - the presence of
other manufacturers in the action does not :nake it more
likely that a defendant produced the drug taken by a par-
ticular mother. As pointed out by Justice Richardson in
dissent, the use of market share evidence “does not impli-
cate any particular defendant.” (App. A, p. 32).
* The Court admitted, as defendants contended, that under tradi-
tional product liability theories, there was no rational basis to connect
the plaintiff’s injury to any one named defendant.
“'Sjinee any one of 200 companies which manufactured DES
might have made the product which harmed plaintiff, there is
no rational basis upon which to infer that any defendant in this
action caused plaintiff’s injuries, nor even a reasonable possibil-
ity that they were responsible.
“These arguments are persuasive if we measure the chance
that any one of the defendants supplied the injury-causing drug
by the number of possible tortfeasors. In such a context, the
possibility that any of the five defendants supplied the DES to
plaintiff’s mother is so remote that it would be unfair to require
each defendant to exonerate itself. There may be a substantial
likelihood that none of the five defendants joined in the action
made the DES which caused the injury, and that the offending
producer not named would escape liability altogether.” App. A,
p. 13.
12
Defendants before the court might consist of Manufac-
turer A with 40% of the market, Manufacturer B with 4%
of the market, and Manufacturer C with 0.4% of the mar-
ket. Since even plaintiffs would not dispute that the statis-
tical correlation between DES exposure and clear cell
adenocarcinoma does not exceed 1.4 per 1,000, there is no
way to determine whether sales by the 4% or 0.4% market
share defendants might have resulted in any injuries what-
soever. A’s presence does not in any way increase the
likelihood that either B or C was the responsible
manufacturer.
The court asserted that the “equity” of the presumption
in which it indulges results from the assumption that once
all of the cases are finally adjudicated “each manufac-
turer’s liability would approximate its responsibility for
the injuries caused by its own products.” (App. A, p. 26)*
To the contrary, exactly the opposite is true and the court’s
goal cannot be accomplished. Moreover, the court com-
pletely ignored other factors which make the “market
share” theory unreasonable and unfair.
(a) In the first place, the theory uses the “market
share” concept to impose a lower rather than an upper limit
on liability. The theory assesses joint and several liability
against defendants in the entire amount of damages sus-
tained, including damages attributable to market shares of
absent manufacturers.** Consequently, a defendant’s lia-
bility will almost always exceed its market share. As
explained by Justice Richardson in dissent:
* This case is far different, however, from other modern product
liability cases which assign the risk of loss to a solvent product manu-
facturer because it can spread that risk in advance through higher
prices or increased insurance coverage. In such a case, unlike here,
since that manufacturer is called upon to pay damages only for injuries
its own products caused, it is not unfair to impose that financial-ability
based economic consequence on him. There, at least, the manufac-
turer’s exposure is limited to production and distribution over which it
has some control. Here, in contrast, no such primary justification
exists for the classification created.
** See, e.g., American Motorcycle Assn. v. Superior Court, 20 Cal. 3d 578,
578 P.2d 899 (1978).
13
“ ,, those defendants who are brought to trial in this
state will bear effective joint responsibility for 100
percent of plaintiffs’ injuries despite the fact that
their ‘substantial’ aggregate market share may be
considerably less... .” (App. A, p. 33).
Applying the majority’s theory to the hypothetical above,
it is clear that A, B and C will all be liable for more than
twice their market shares.
(b) The court’s assertion that “equity” will be accom-
plished would be correct only if no plaintiff will be able to
make product identification and no defendant will be able
to exculpate itself. Yet that is clearly not the case, as the
court itself acknowledged by providing for precisely those
two contingencies.
Some plaintiffs do make product identification and some
manufacturers exculpate themselves. The Court below
noted that Rogers can identify and, even prior to the
appeal, one defendant had exculpated itself.* The court
noted that Rogers can identify the manufacturer and, even
prior to the appeal, one defendant had exculpated itself.
Once identification or exculpation occurs, the defendants
will bear disproportionate measures of liability. This point
* In Abel v. Eli Lilly and Co., Action No. 74-030-070NP filed in the
Wayne County Circuit Court, Detroit, Michigan, appeal pending to the
Supreme Court of Michigan, 90 out of 144 plaintiffs, according to a brief
filed by their counsel on appeal, identified the manufacturer of the DES
at issue. The fact that such identification was not made in that case
until after the trial court had determined that identification was
required to state a cause of action highlights another unfair result
which the California court overlooked and which necessarily flows
from the theory which it has espoused. Under the “market share”
theory, the plaintiff has a definite incentive to suppress identification
evidence or at least to be conveniently ignorant of its existence. Why
should she forego the right to sue 100 companies, any of whom might
satisfy a judgment, for the right to sue one company, the company
which actually made the product which allegedly injured her, when
that company may no longer exist or be subject to suit where she wants
to sue? Prosser addressed just this situation when he pointed out that
“sheer ignorence might be, the most powerful weapon of the law.”
Prosser, Res Ipsa Loquitur, a Reply to Professor Carpenter, 10 So. Calif. L.
Rev. 459, 464 (1937).
14
is illustrated by Sindell and Rogers. If Rogers proves her
mother took Lilly’s product and satisfies the other elements
of her case, Lilly will be required to pay 100% of her
damages. If Sindell prevails at trial, Lilly will be required
to pay its market share and its proportion of the shares of
the several hundred absent manufacturers. For the two
cases together, Lilly’s exposure will greatly exceed its mar-
ket share, and the exposure of other manufacturers may be
more or less than their market shares depending on the
shares represented by non-party manufacturers. As the
number of plaintiffs who succeed in identifying the manu-
facturer increases, the “equity” is increasingly out of
balance.
(c) The court also assumes that to achieve equity the
appropriate market can now be reconstructed and will
remain the same in all cases. Once again, there is no
rational basis for this conclusion, The defendants’ market
Shares will vary from case to case and the supposed
“equity” arising from an averaging of results over all cases
will be impossible. The initial definition of the product
market will be arbitrary since DES was manufactured in at
least 13 different dosages, ranging from .1 mg. to 250 mg.,
and was indicated and sold for many purposes other than
prevention of accidents of pregnancy. (CT p. 204, 206-07).
Equally arbitrary will be the definition of the geographic
market. A national market would greatly distort regional
sales; a California market would present distortions of its
own. In Rogers, for example, the drug was obtained and
taken in Illinois, while suit was filed in California.
Finally, the court had no reason to assume, as it did, that
sufficient records exist to rationally determine market
shares of over 200 manufacturers, many of whom may be
out of business or not otherwise subject to suit in California,
based on production and sales 20 to 30 years ago. (App. A,
p. 26)
15
(d) The Court disregarded transaction costs in its con-
sideration of how to achieve “equity” under its theory.
Prior to Sindell, when identification was required, a manu-
facturer having 10% of the market would theoretically be a
defendant in at most 10% of the cases and responsible for
the costs of defending only those suits. Under Sindell, in
contrast, that same 10% manufacturer would have to
defend somewhat less than 100% of the suits and absorb
defense costs in all of them. The court was blind to these
costs of defense and to the special burden its theory places
on defendants with small market shares.
If it is assumed that defense costs in a given action range
between $50,000 to $100,000, the costs of defending 100
actions would be $5,000,000 to $10,000,000. Since defend-
ants with the smallest market shares may incur the same
litigation costs as the largest, their costs of defense may
dwarf their liability exposure. The repetition of such costs
will progressively cripple the smaller companies producing
multi-source drugs, thereby reducing competition, and will
continually drain the resources available to the larger com-
panies for research and development of new drugs.
(e) The theory’s supposed “equity” further depends on
the assumption that the defendant manufacturers are in a
better position than plaintiffs to bear the cost of injury and
to insure against it. (App. A, p.23) It is highly question-
able, however, whether the pharmaceutical industry, and
particularly its smaller firms, can withstand the extraordi-
nary random liability imposed by the new theory. See,
Coggins, Industry-Wide Liability, 13 Suffolk L. Rev. 980,
1003-06 (1979). Even before this decision, the pharmaceu-
tical industry was virtually uninsurable. Commerce
Department, Interagency Task Force on Product Liability:
Final Repori of the Insurance Study, Volume 1 at 2-4, 2-5
(January 1977). The “market share” theory is likely to
render manufacturers of generic drugs totally uninsurable,
16
since the insurer cannot determine the scope of the expo-
sure if it may be liable for damages and litigation costs
resulting from products manufactured by companies other
than its insured.
(f) The “market share” theory further assumes that
litigation is an effective mechanism for compensating per-
sons for drug-induced injuries. The opposite is true.
Apart from the excessive transaction costs exacted by the
Sindell formula, drug litigation remains a slow, costly, inef-
ficient process for compensation. Not only do substantial
delays occur between injury and payment; but plaintiffs
also face uncertainties of proof, the necessity of proving
defect and high litigation expenses. It has been estimated
that it currently costs 77 cents to deliver 65 cents to a
plaintiff in normal products liability suits. Kinsley, Fate
and Lawsuits, 182 The New Republic, 20, 21 (June 14,
1980). See also, Commerce Department, /nteragency Task
Force Report on Product Liability, Final Report of the Insur-
ance Study, Volume 1 at 2-4, 2-5 (January 1977). The Court
below has arbitrarily legislated a remedy which almost
certainly will increase the delivery costs per case to as
much as $3 per dollar of potential recovery.* Kinsley, supra,
at p.21. In contrast, alternate means for assisting persons
injured by drugs, including private health insurance and
public health care programs,** appear vastly preferable to
a radical, extraordinarily expensive restructuring of tort
law. The California legislature itself has enacted a far-
* For example, with 100 defendant and cross-defendant manufac-
turers, 300 trial days will be added if each takes only three days to try
the market share issues. At a time when the publie is becoming
increasingly dissatisfied with our courts, it is unwise from any perspec-
tive to create new mass litigation concepts which entail crippling costs
to the litigants—and ultimately to the public-and huge delays to others
who wish to utilize the limited resources of the courts.
** Source Book of Health Insurance Data, 1976-77, p. 21. The Source
Book reports that at the end of 1975, private health insurance protected
more than 80% of the civilian noninstitutionalized population, and
that of persons under age 65, nearly 9 out of 10 were covered. I/d.
17
reaching and exemplary health care services program cov-
ering both the indigent and many individuals with means
of support.* Moreover, as the dissent below points out, the
problem here “invites a legislative rather than an
attempted judicial solution.” (App. A, p. 38)
(g) The type of evidentiary hearing which the theory
will permit in allowing defendants to rebut the presump-
tion violates procedural due process. The theory seem-
ingly preserves a degree of fairness to defendants in one
respect — it allows them to offer certain types of exculpatory
evidence. The appearance of procedural fairness disap-
pears, however, upon review of other types of exculpatory
evidence which the theory necessarily excludes.
As to defendants which can offer direct proof they did
not manufacture the specific drug taken by plaintiff’s
mother, the presumption of causation may be overcome.
(App. A, p. 25) If evidence establishes that a white tablet
was taken, a defendant may exculpate itself by proof it
manufactured only green tablets. Other direct evidence
includes proof that plaintiff’s mother obtained the drug ata
pharmacy which did not sell a particular defendant’s prod-
ucts. Those defendants with direct proof should be able to
secure Summary judgment.
All defendants remaining at trial, however, will be man-
ufacturers lacking direct proof. As to those defendants,
the “market share” theory necessarily bars the use of rele-
vant and admissible statistical and market share evidence
to overcome the presumption.** (Student comment, p. 995. )
The supposed “equity” of the apportionment scheme falls
* See, California Welfare and Institutions Code, Sections 14000, et
seq., and Sections 11152 and 11153.7 (benefits payable for qualified
persons with residential realty without value limitation up to $25,000
in income-producing realty). The California legislature also has been
considering major reforms in products liability law and enacted, on
July 31, 1980, special legislation to assist in identification and screen-
ing of persons exposed to DES. (See App. A, p. 38)
** Equal protection of the laws has also been violated in that some
defendants may use relevant exculpatory evidence while others are
barred from using equally relevant, albeit circumstantial, exculpatory
18
of its own weight when such evidence is excluded. For
example, a manufacturer which believes it has less than
1% of a given market would ordinarily present evidence of
its market share as proof of exculpation. The Student
comment acknowledges that failure to bar such evidence
could result in one manufacturer with a sufficient market
share being held liable for 100% of the liability in all cases.
(Student comment, p. 995.) As to defendants without
direct proof, the presumption cannot be overcome and con-
sequently the theory bars a fair hearing on the issue of
causation. —
The unfairness of the Court’s procedure is exacerbated by
the fact that it permits a plaintiff to use market share data
in showing that she has sued manufacturers comprising a
“Substantial share” of the relevant market, but precludes
defendants from using that same data to exculpate
themselves.
The “market share” theory does not offer a principled
basis for barring any defendants from use of statistical and
market share evidence to overcome the presumption of cau-
sation. The theory bars defendants from the right to a fair
hearing and fair rules of procedure and evidence in viola-
tion of procedural due process. Due process protects a
defendant’s fundamental right to rational rules of proce-
dure and evidence. Jenkins v. McKeithen, 395 U.S. 411, 429
(1969). In Jenkins, the Court stressed that due process
evidence. Moreover, on the issue of causation, defendants in this case
are treated differentiy from defendants in all other tort cases.
Equal protection prohibits the states from treating similarly situated
persons or business enterprises in different ways. Reed v. Reed, 404 U.S.
71 (1971); Smith v. Cahoon, 283 U.S. 553 (1931); Connolly v. Union Sewer
Pipe Co., 184 U.S. 540 (1902). The singling out of a particular class of
individuals and barring it from the right to a fair hearing violates
equal protection notwithstanding a state’s interest in increasing the
speed and efficiency of adjudication. Stanley v. Illinois, 405 U.S. 645,
648, 656 (1972). Seealso, Carrington v. Rash, 380 U.S. 89 (1965); Dunn v.
Blumstein, 405 U.S. 330, 349-352 (1971); Shapiro v. Thompson, 394 U.S.
618 (1969).
19
protects the right to present evidence: “{T |he right to pre-
sent evidence is, of course, essential to the fair hearing
required by the Due Process Clause.”
(h) The “equity” of the California court’s “market
share” theory is not achieved by the supposed relief it
proposes of according defendants the right to bring in
through third-party actions unnamed manufacturers. By
making the named defendants liable for 100% of the plain-
tiff’s damages, those defendants, in attempting to equate
liability with market share, must seek to bring in every
other manufacturer. This will necessarily result in a trial
which is not only an unmanageable spectacle, but which,
because it will involve over 100 or possibly over 200 defend-
ants, will deprive those defendants of any possibility of a
fair hearing.* Surely, due process cannot countenance a
trial where the courtroom (or, more likely, an amphithea-
ter) is bursting with counsel for 200 corporate defendants,
their clients, a plaintiff with serious injuries, her counsel,
witnesses, a judge, court personnel and spectators. The
chances of a jury being able to render a fair and impartial
verdict when confronted with such a spectacle are so
remote as to be nonexistent.
* Literally hundreds of suits (some of them, like Sindell and
Rogers, purporting to be class actions) involving DES claims are pend-
ing. Several suits in California contain well over 150 pharmaceutical
manufacturers as defendants in an effort by plaintiffs themselves to
hurdle the manufacturer identification issue. (Carol Trevallee v. Abbott
Laboratories, et al., San Francisco Superior Court Case No. 721204; Judy
K. Benny v. Abbott Laboratories, et al., Alameda Superior Court Case No.
525322-5; Cindy Bocian v. Abbott Laboratories, et al., San Francisco Supe-
rior Court Case No. 760532.) This sideshow aspect has been addressed
in separate context:
“As a practical matter the capacities of even the best judges and
jurors to absorb the factual situation presented are finite and the
capacity of a courthouse does not begin to reach that of a coli-
seum. A class action in the instant case would stretch the
facilities and abilities of this Court beyond their elastic limit.”
aga v. Glass Specialty Co., 59 F.R.D. 286, 294 (N.D. II.
1973).
20
The Fourteenth Amendment’s guarantee of due process
extends to state action, both legislative and judicial. Amer-
ican Railway Exp. Co. v. Kentucky, 273 U.S. 269 (1927);
Prudential Ins. Co. v. Cheek, 259 U.S. 580 (1922); Vlandis v.
Kline, 412 U.S. 441 (1973). See also, Moore v. East Cleveland,
431 U.S. 494, 502 (1977); NAACP v. Alabama, 377 U.S. 288,
308 (1964).
Although states have certain leeway in creating pre-
sumptions through proper legislative classifications, con-
clusive presumptions as to an essential element of a cause of
action or defense, unless universally true, deprive persons
of the opportunity to be heard on an individual basis and
thus violate procedural due process.
See, e.g., Bell v. Burson, 402 U.S. 5385 (1971); Cleveland
Board of Education v. LaFleur, 414 U.S. 632, 644 (1974);
Vlandis v. Kline, 412 U.S. 441, 446 (1973); Stanley v. Illinois,
405 U.S. 645 (1972).
Due process requires a meaningful opportunity to pre-
sent evidence and to be heard. Armstrong v. Manzo, 380
U.S. 545, 552 (1965); Sawnders v. Shaw, 244 U.S. 317 (1917).
Substance, not form, is examined to determine whether
constitutional minimums have been honored. Bell v. Bur-
son, supra, 402 U.S. at 541; Goldberg v. Kelly, 397 U.S. 254
(1970).
Petitioners have demonstrated by example that the Cali-
fornia decision is, first, not reasonably calculated to achieve
its stated goals, second, inequitable in the extreme, and
third, will deprive defendants of any opportunity for a fair
trial. Procedural due process requires that these criteria be
met. The decision below falls far short of satisfying them
and is, therefore, constitutionally invalid.
21
3. THE JUDGMENT BELOW IS PREEMPTED BY THE
SUPREMACY CLAUSE BECAUSE IT FRUSTRATES
FEDERAL POLICIES GOVERNING THE DEVELOP.
MENT AND MARKETING OF PRESCRIPTION DRUGS,
AND IN PARTICULAR THE MARKETING OF DRUGS
ON A GENERIC BASIS, AND CREATES AN INVALID
BURDEN ON INTERSTATE COMMERCE.
The California Supreme Court’s “market share” liability
theory will impose random, destructive liability and
extraordinary litigation costs on manufacturers of drugs
for the marketing of pharmaceuticals which are alleged to
be defective 20 years after they were ingested, and after
they passed the rigorous tests and standards established by
the FDA. The immediate and unavoidable effect will be to
drastically impede the development and marketing of new
prescription drugs (in particular the marketing of drugs on
a generic basis), and erect artificial barriers to entry in
such markets with potential anticompetitive consequences.
The federal government strongly encourages the devel-
opment and marketing of new prescription drugs and the
increased price competition which results from the market-
ing of drugs on a generic basis.* See Brand Names and
Generic Drugs, 1974, Hearings Before Subcommittee on
Labor and Public Welfare, 93d Congress 2d Sess. (July 22,
California likewise encourages the marketing of drugs on a
generic basis. California Businesses and Professions Code, Section
4047.6. Moreover, there is a strong social interest in having more than
one manufacturer of an unpatented product in any field. Society has
repeatedly looked with favor upon the public policy of having multiple-
manufacturers of identical products in other industries. For example,
this Court in Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225 (1964),
reversed an unfair competition order of a state court which enjoined
defendant from producing a lamp identical to a lamp provided by
plaintiffs. The Court recently acknowledged the public interest in
having more than one manufacturer of a product, even at the expense
of one company’s goodwill, in the following terms:
“ ‘Sharing in the good will of an article unprotected by patent or
trade-mark is the exercise of a right possessed by all-and in the
free exercise of which the consuming public is deeply inter-
ested.’ ” 376 U.S. at 231.
22
1974). 21 U.S.C. § 301, et seg. Since more diseases can be
treated by drugs than by surgery or radiology, and since
drugs are a relatively inexpensive mode of therapy, drug
therapy is of great benefit in reducing morbidity and mor-
tality rates as well as the costs of medical treatment.
Schwartzman, The Expected Return from Pharmaceutical
Research, 1-3 (1975). This past term, the Court reiterated
the strong public policy in favor of encouraging rather
than, as here, discouraging research and development in
pharmaceuticals and related fields: “Mr. Justice Douglas
reminded that the inventions most benefiting mankind are
those that ‘push back the frontiers of chemistry, physics,
and the like.’ Great A. & P. Tea Co. v. Supermarket Equip.
Corp., 340 U.S. 147, 154 (1950) (coneurring opinion).”
Diamond v. Chakrabarty, 40 CCH 8. Ct. Bull. p. B3122,
B3135 (1980).
The Department of Health, Education and Welfare has
commented regarding generic drugs and “branded
generics”:
“About three-quarters of the drugs commonly pre-
scribed in the United States are available only from
asingle source. The remaining fourth are available
from multiple sources, often at widely differing
prices. Historically, the lower-cost versions of mul-
tiple source drugs have been marketed by relatively
small manufacturers. In recent years, however, the
growing trend toward generic prescribing has
encouraged major manufacturers to enter the mar-
ket with so-called ‘branded generics’ with prices still
greatly below those of the original brands. The
MAC [maximum allowable cost} regulation is
designed to adopt departmental policy to this
increased price competition in the multiple-source
market.” (Maximum Allowable Costs for Drugs, Office
of the Secretary, Department of Health, Education
and Welfare (July 25, 1976)).
Any consideration of increased regulation or imposition
of liability on the pharmaceutical industry must be
23
approached with extreme caution. Prosser, Handbook of the
Law of Torts, 661 (4th ed. 1971); Hearings Before the Subcom-
mittee on Health of the Committee on Labor and Public Welfare,
94th Congress, p. 119 (September 23, 1977). Indeed, com-
mentators have argued that amendments to the Food,
Drug, and Cosmetic Act inhibiting the introduction of new
drugs have cost the American public over 300 million dol-
lars and thousands of lives due to decreased availability of
pharmaceuticais. Peltzman, Regulation of Pharmaceutical
Innovation; The 1962 Amendments 1-3 (1974); Grabowski,
Drug Regulation and Innovation: Empirical Evidence and
Policy Options (1976). The identical concern was
addressed by the Court last term in a different context.
Dawson Chem. Co. v. Rohm & Haas Co., 40 CCH S. Ct. Bull. p.
B3850, B38895 (1980).
The “market share” theory raises a significant risk that
smaller companies may be driven from the business of
producing generic prescription drugs. See, Coggins, 13 Suf-
folk L. Rev. 980, 1003-1006 (1979). If a company cannot
obtain insurance, investment capital is almost impossible to
attract. If the company does obtain the necessary capital,
gambling that it would not be the arbitrary target in litiga-
tion for injuries allegedly caused by a widely-used drug,
the loss of the gamble could result in ruin. See Reiter v.
Sonotone Corp., 579 F.2d 1077, 1086 (8th Cir. 1978), rev’d,
442 U.S. 330 (1979). A further anticompetitive effect is
the development of barriers to entry by new firms. The
existence of a high fixed cost (such as provision for “market
share” liability and litigation expense) will bar a new firm
from entering the industry unless it has sufficient capital or
sales revenue to absorb the cost. A limitation on new entry
is an important precondition for the emergence and mainte-
nance of monopoly power. Under the antitrust laws, merg-
ers have been forbidden where, among other matters, they
would contribute to the development of such entry barriers.
See, e.g., Ford Motor Co. v. United States, 405 U.S. 562 (1972).
24
The court’s decision impermissibly interferes with fed-
eral objectives relating to the development and marketing
of prescription drugs and avoidance of anticompetitive
effects on interstate commerce in such markets. The
Supremacy Clause voids a state’s statutory or decisional
law if it would retard, impede, burden or otherwise frus-
trate the full effectiveness of federal law. McCulloch v.
Maryland, 17 U.S. (4 Wheat.) 316 (1819); Sola Elec. Co. v.
Jefferson Elec. Co., 317 U.S. 173 (1942). Regardless of the
court’s purpose in adopting the “market share” liability
theory, its decision stands as a major obstacle to the accom-
plishment of Congressional objectives in regulating the
drug industry and encouraging the unfettered marketing
of drugs on a generic basis. The decision is therefore inva-
lid under the Supremacy Clause. Perez v. Campbell, 402
U.S. 637, 652 (1971); San Diego Bldg. Trades Council v. Gar-
mon, 359 U.S. 236 (1959); Farmers Union v. WDAY, Inc.,
360 U.S. 525 (1959).
The court’s decision is also preempted because it creates
an invalid burden on interestate commerce, and burdens
commerce without resort to less burdensome alternatives.
The purpose of the Commerce Clause was, of course, to
“prevent discrimination and the erection of barriers or
obstacles to the free flow of commerce, interstate or for-
eign.” Di Santo v. Pennsylvania, 273 U.S. 34, 43-44 (1927)
(Stone, J., dissenting).
At the very least, the “market share” liability theory
will significantly raise the cost of generic drugs,* if not
destroy the market. Under a balancing test, cost increases
are an important factor, especially where economic justifi-
cation for the challenged rule is slight. See, Bibb v. Navajo
Freight Lines, Inc., 359 U.S. 520 (1959); Raymond Motor
* Nor will cost increases be limited to California. The Robinson-
Patman Act would bar pharmaceutical companies from engaging in
price discrimination between the states. 15 U.S.C. § 13, et seq.
25
Transportation, Inc. v. Rice, 484 U.S. 429 (1978). In addi-
tion, the theory will cause manufacturers to avoid eco-
nomic risks by emphasizing the distribution of older,
established pharmaceuticals. The effect of such policy will
be to decrease the variety of pharmaceuticals available,
particularly those more recently developed, and the impact
of the policy will be felt nationally.
Even when a state can justify the establishment of rules
which burden interstate commerce, the rules still are inva-
lid if less burdensome alternatives exist. Great Atlantic &
Pacific Tea Co., Inc. v. Cottrell, 424 U.S. 366 (1976); Pike v.
Bruce Church, Inc., 397 U.S. 187 (1970). In adopting the
“market share” liability theory, the court failed to consider
less burdensome alternatives; instead it selected the most
punitive solution of all.
26
CONCLUSION
For the foregoing resaons, a Writ of Certiorari should
issue, and the judgment of the California Supreme Court
should be reversed.
Respectfully submitted,
ADAMS, DUQUE & HAZELTINE
RICHARD C. FIELD
DAVID L. BACON
523 West Sixth Street
Los Angeles, California 90014
WINTHROP, STIMSON, PUTNAM
& ROBERTS
A. EDWARD GRASHOF
THEODORE 8S. STEINGUT
40 Wall Street
New York, New York 10005
Attorneys for Petitioner
Rexall Drug Company
CROSBY, HEAFEY, ROACH & MAY
Professional Corporation
RICHARD J. HEAFEY
PETER W. DAVIS
1939 Harrison Street
Oakland, California 94612
Attorneys for Petitioner
Eli Lilly and Company
APPENDIX A
A-1l
IN THE
SUPREME COURT OF THE STATE OF
CALIFORNIA
L.A. 31063
JUDITH SINDELL,
Plaintiff and Appellant,
Vv.
ABBOTT LABORATORIES et al.,
Defendants and Respondents.
MAUREEN ROGERS,
Plaintiff and Appellant,
vi.
REXALL DRUG COMPANY et al.,
Defendants and Respondents.
This case involves a complex problem both timely and
significant: may a plaintiff, injured as the result of a drug
administered to her mother during pregnancy, who knows
the type of drug involved but cannot identify the manufac-
turer of the precise product, hold liable for her injuries a
maker of a drug produced from an identical formula?
A-2
Plaintiff Judith Sindell brought an action against eleven
drug companies and Does 1 through 100, on behalf of her-
self and other women similarly situated. The complaint
alleges as follows:
SEE DISSENTING OPINION
Between 1941 and 1971, defendants were engaged in the
business of manufacturing, promoting, and marketing
diethylstilbesterol (DES), a drug which is a synthetic com-
pound of the female hormone estrogen. The drug was
administered to plaintiff’s mother and the mothers of the
class she represents,’ for the purpose of preventing miscar-
riage. In 1947, the Food and Drug Administration autho-
rized the marketing of DES as a miscarriage preventative,
but only on an experimental basis, with a requirement that
the drug contain a warning label to that effect.
DES may cause cancerous vaginal and cervical growths
in the daughters exposed to it before birth, because their
mothers took the drug during pregnancy. The form of
cancer from which these daughters suffer is known as ade-
nocarcinoma, and it manifests itself after a minimum
latent period of 10 or 12 years. It is a fast-spreading and
deadly disease, and radical surgery is required to prevent it
from spreading. DES also causes adenosis, precancerous
vaginal and cervical growths which may spread to other
areas of the body. The treatment for adenosis is cauteriza-
tion, surgery, or cryosurgery. Women who suffer from this
condition must be monitored by biopsy or colposcopic exam-
ination twice a year, a painful and expensive procedure.
Thousands of women whose mothers received DES during
pregnancy are unaware of the effects of the drug.
1. The plaintiff class alleged consists of “girls and woman who are
residents of California and who have been exposed to DES before birth
and who may or may not know that fact or the dangers” to which they
were exposed. Defendants are also sued as representatives of a class of
drug manufacturers which sold DES after 1941.
A-3
In 1971, the Food and Drug Administration ordered
defendants to cease marketing and promoting DES for the
purpose of preventing miscarriages, and to warn physi-
cians and the public that the drug should not be used by
pregnant women because of the danger to their unborn
children.
During the period defendants marketed DES, thty knew
or should have known that it was a carcinogenic substance,
that there was a grave danger after varying periods of
latency it would cause cancerous and precancerous growths
in the daughters of the mothers who took it, and that it was
ineffective to prevent miscarriage. Nevertheless, defend-
ants continued to advertise and market the drug as a mis-
carriage preventative. They failed to test DES for efficacy
and safety; the tests performed by others, upon which they
relied, indicated that it was not safe or effective. In viola-
tion of the authorization of the Food and Drug Administra-
tion, defendants marketed DES on an unlimited basis
rather than as an experimental drug, and they failed to
warn of its potential danger.’
Because of defendants’ advertised assurances that DES
was safe and effective to prevent miscarriage, plaintiff was
exposed to the drug prior to her birth. She became aware
of the danger from such exposure within one year of the
time she filed her complaint. As a result of the DES
ingested by her mother, plaintiff developed a malignant
bladder tumor which was removed by surgery. She suffers
from adenosis and must constantly be monitored by biopsy
or colposcopy to insure early warning of further
malignancy.
The first cause of action alleges that defendants were
jointly and individually negligent in that they manufac-
tured, marketed and promoted DES as a safe and efficacious
2. It is alleged also that defendants failed to determine if there was
any means to avoid or treat the effects of DES upon the daughters of
women exposed to it during pregnancy, and failed to monitor the carcino-
genic effects of the drug.
A-4
drug to prevent miscarriage, without adequate testing or
warning, and without monitoring or reporting its effects.
A separate cause of action alleges that defendants are
jointly liable regardless of which particular brand of DES
was ingested by plaintiff’s mother because defendants col-
laborated in marketing, promoting and testing the drug,
relied upon each other’s tests, and adhered to an industry-
wide safety standard. DES was produced from a common
and mutually agreed upon formula as a fungible drug
interchangeable with other brands of the same product;
defendants knew or should have known that it was custom-
ary for doctors to prescribe the drug by its generic rather
than its brand name and that pharmacists filled prescrip-
tions from whatever brand of the drug happened to be in
stock.
Other causes of action are based upon theories of strict
liability, violation of express and implied warranties, false
and fraudulent representations, misbranding of drugs in
violation of federal law, conspiracy and “lack of consent.”
Each cause of action alleges that defendants are jointly
liable because they acted in concert, on the basis of express
and implied agreements, and in reliance upon and ratifica-
tion and exploitation of each other’s testing and marketing
methods.
Plaintiff seeks compensatory damages of $1 million and
punitive damages of $10 million for herself. For the mem-
bers of her class, she prays for equitable relief in the form
of an order that defendants warn physicians and others of
the danger of DES and the necessity of performing certain
tests to determine the presence of disease caused by the
drug, and that they establish free clinics in California to
perform such tests.
Defendants demurred to the complaint. While the com-
plaint did not expressly allege that plaintiff could not iden-
tify the manufacturer of the precise drug ingested by her
A-5
mother, she stated in her points and authorities in opposi-
tion to the demurrers filed by some of the defendants that
she was unable to make the identification, and the trial
court sustained the demurrers of these defendants without
leave to amend on the ground that plaintiff did not and
stated she could not identify which defendant had manu-
factured the drug responsible for her injuries. Thereupon,
the court dismissed the action.’ This appeal involves only
five of ten defendants named in the complaint.‘
Plaintiff Maureen Rogers filed a complaint containing
allegations generally similar to those made by Sindell.
She seeks compensatory and punitive damages on her own
3. There are minor variations in the procedures employed as to the
various defendants. Thus, for example, Eli Lilly and Company filed a
motion for summary judgment, or alternatively judgment on the plead-
ings, rather than a demurrer; the court treated the motion as a demurrer.
The Demurrer of Abbot Laboratories, the first defendant to file a
demurrer and the first to secure a dismissal, was sustained with leave to
amend on the ground that plaintiff had failed to allege that a product
manufactured by Abbott had caused her injuries (as opposed to the
reason given by the trial court for sustaining the demurrers of the other
defendants that plaintiff expressly stated that she could not identify a
particular manufacturer). Upon plaintiff’s failure to amend the com-
plaint, the action was dismissed as to Abbott. A few days after the
dismissal, plaintiff stated in a brief in opposition to the demurrers filed by
defendants other than Abbott that she could not make the identification.
Abbott asserts that as to it the issue we consider on appeal is not
properly raised because plaintiff's statement that she could not identify
the manufacturer was not made until after the action had been dismissed
as to Abbott. This contention is without merit. Plaintiff's failure to
amend her complaint after Abbott’s demurrer was sustained with leave to
amend was based upon her inability to identify a specific manufacturer.
Clearly, Abbott interpreted the complaint in this fashion, for it moved for
dismissal on the ground that the complaint alleges that plaintiff “does not
know the identity of the drug ... ingested” by her mother. Thus, Abbott
may not now claim that the complaint is insufficient to raise the issue
involved in this appeal.
The trial court did not determine other issues raised by the complaint,
such as whether the case was properly brought as a class action.
4. Abbott Laboratories, Eli Lilly and Company, E. R. Squibb and
Sons, The Upjohn Company, and Rexall Drug Company are respondents.
The action was dismissed or the appeal abandoned on various grounds as
to other defendants named in the complaint; e.g., one defendant demon-
strated it had not manufactured DES during the period plaintiff's mother
took the drug.
A-6
behalf, and on behalf of a class described in substantially
the same terms as in Sindell’s complaint, as well as equita-
_ble relief comparable to that sought by Sindell. The trial
court sustained demurrers of E. R. Squibb & Sons, The
Upjohn Company, and Rexall Drug Company.’ Subse-
quent to the dismissal of her action against these defend-
ants, Rogers amended the complaint to allege that Eli Lilly
and Company, one of the defendants named in her com-
plaint, had manufactured the drug used by their mother.
Although Sindell’s action and the present case have been
consolidated on appeal, much of the discussion which fol-
lows will apply to Rogers only if she does not succeed in
establishing that Eli Lilly and Company manufactured the
DES taken by her mother. “Plaintiff” as used in this opin-
ion refers to Sindell, and we discuss only the allegations of
Sindell’s complaint.
This case is but one of a number filed throughout the
country seeking to hold drug manufacturers liable for inju-
ries allegedly resulting from DES prescribed to the plain-
tiffs’ mothers 1947. According to a note in the Fordham
Law Review, estimates of the number of women who took
the drug during pregnancy range from 114 million to 3
million. Hundreds, perhaps thousands, of the daughters
of these women suffer from adenocarcinoma, and the inci-
dence of vaginal adenosis among them is 30 to 90 percent.
(Comment, DES and a Proposed Theory of Enterprise Liability
(1978) 46 Fordham L.Rev. 963, 964-967 [hereafter Ford-
ham Comment].) Most of the cases are still pending.
With two exceptions,’ those that have been decided resulted
5. While the trial court did not specify the ground upon which the
demurrers were sustained, the points and authorities filed by the parties
emphasized the failure of Rogers to identify a particular manufacturer as
the source of her injuries, and we may assume for the purpose of this
appeal that this was the basis of the court's order.
6. DES was marketed under many different trade names.
7. Ina recent New York case a jury found in the plaintiff's favor in
spite of her inability to identify a specific manufacturer of DES. An
appeal is pending. ( Bichler v. Eli Lilly and Co. (Sup.Ct.N.Y. 1979).)
A Michigan appellate court recently held that plaintiffs had stated a
A-7
in judgments in favor of the drug company defendants
because of the failure of the plaintiffs to identify the manu-
facturer of the DES prescribed to their mothers.* The
same result was reached in a recent California case.
(McCreery Vv. Eli Lilly & Co. (1978) 87 Cal.App.3d 77, 84-93. )
The present action is another attempt to overcome this
obstacle to recovery.
We begin with the proposition that, as a general rule, the
imposition of liability depends upon a showing by the
plaintiff that his or her injuries were caused by the act of
the defendant or by an instrumentality under the defen-
dant’s control. The rule applies whether the injury
resulted from an accidental event (e.g., Shunk v. Bosworth
(6th Cir. 1964) 334 F.2d 309) or from the use of a defective
product. (E.g., Wetzel v. Eaton Corporation (D.Minn. 19730
62 F.R.D. 22, 29-30; Garcia v. Joseph Vince Co. (1978) 84
Cal.App.3d 868, 873-875; and see annot. collection of cases
in 51 A.L.R.3d 1344, 1351; 1 Hursh and Bailey, American
Law of Products Liability 2d (1974) p. 125)
There are, however, exceptions to this rule. Plaintiff’s
complaint suggests several bases upon which defendants
may be held liable for her injuries even though she cannot
demonstrate the name of the manufacturer which pro-
duced the DES actually taken by her mother. The first of
these theories, classically illustrated by Summers v. Tice
(1948) 33 Cal.2d 80, places the burden of proof of causation
upon tortious defendants in certain circumstances. The
second basis of liability emerging from the complaint is
that defendants acted in concert to cause injury to plaintiff.
There is a third and novel approach to the problem, some-
times called the theory of “enterprise liability,” but which
cause of action against several manufacturers of DES even though identi-
fication could not be made. (Abel v. Eli Lilly and Co. (decided Dec. 5,
1979) Docket No. 60497.) That decision is on appeal to the Supreme
Court of Michigan.
8. E.g., Gray v. United States (s. D, Texas 1978) 445 F.Supp. 337.
In their briefs, defendants refer to a number of other cases in which trial
courts have dismissed actions in DES cases on the ground stated above.
A-8
we prefer to designate by the more accurate term of “indus-
try-wide” liability,” which might obviate the necessity for
identifying the manufacturer of the injury-causing drug.
We shall conclude that these doctrines, as previously inter-
preted, may not be applied to hold defendants liable under
the allegations of this complaint. However, we shall pro-
pose and adopt a fourth basis for permitting the action,to be
tried, grounded upon an extension of the Summers doctrine.
Plaintiff places primary reliance upon cases which hold
that if a party cannot identify which of two or more
defendants caused an injury, the burden of proof may shift
to the defendants to show that they were not responsible for
the harm. This principle is sometimes referred to as the
“alternative liability” theory.
The celebrated case of Summers v. Tice, supra, 33 Cal.2d
80, a unanimous opinion of this court, best exemplifies the
rule. In Summers, the plaintiff was injured when two
hunters negligently shot in his direction. It could not be
determined which of them had fired the shot which actu-
ally caused the injury to the plaintiff’s eye, but both defend-
ants were nevertheless held jointly and severally liable for
the whole of the damages. We reasoned that both were
wrongdoers, both were negligent toward the plaintiff, and
that it would be unfair to require plaintiff to isolate the
defendant responsible, because if the one pointed out were
to escape liability, the other might also, and the plaintiff-
victim would be shorn of any remedy. In these circum-
stances, we held, the burden of proof shifted to the defend-
ants, “each to absolve himself if he can.” (/d., p. 86.) We
stated that under these or similar circumstances a defen-
dant is ordinarily in a “far better position” to offer evidence
9. The term “enterprise liability” is sometimes used broadly to mean
that losses caused by an enterprise should be borne by it. (Klemme
Enterprise Liability (1976) 47 Colo. L.Rev. 153, 158.)
A-9
to determine whether he or another defendant caused the
injury.
In Summers, we relied upon Ybarra v. Spangard (1944)
25 Cal.2d 486. There, the plaintiff was injured while he
was unconscious during the course of surgery. He sought
damages against several doctors and a nurse who attended
him while he was unconscious. We held that it would be
unreasonable to require him to identify the particular
defendant who had performed the alleged negligent act
because he was unconscious at the time of the injury and
the defendants exercised control over the instrumentalities
which caused the harm. Therefore, under the doctrine of
res ipsa loquitur, an inference of negligence arose that
defendants were required to meet by explaining their
eonduct."°
The rule developed in Summers has been embodied in the
Restatement of Torts. (Rest.2d Torts, § 433B, subsec.
(3).)'' Indeed, the Summers facts are used as an illustra-
tion (p. 447).
10. Other cases cited by plaintiff for the proposition stated in Sum-
mers are only peripherally relevant. For example, in Ray v. Alad Corpo-
ration (1977) 19 Cal.3d 22, the plaintiff brought an action in strict
liability for personal injuries sustained when he fell from a defective
ladder manufactured by the defendant’s predecessor corporation, We
held that, although under the general rule governing corporate succession
the defendant could not be held responsible, nevertheless a “special depar-
ture” from that rule was justified in the particular circumstances. The
defendant had succeeded to the good will of the manufacturer of the
ladder, and it could obtain insurance against the risk of liability, whereas
the plaintiff would be left without redress if he could not hold the defen-
dant liable. The question whether one corporation should, for policy
reasons, be answerable for the products manufactured by its predecessor
is a different issue than that we describe above.
11. Section 433B, subsection (3) of the Restatement provides:
“Where the conduct of two or more actors is tortious, and it is proved that
harm has been caused to the plaintiff by only one of them, but there is
uncertainty as to which one has caused it, the burden is upon each such
actor to prove that he has not caused harm.” The reason underlying the
rule is “the injustice of permitting proved wrongdoers, who among them
have inflicted an injury upon the entirely innocent plaintiff, to escape
liability merely because the nature of their conduct and the resulting
harm has made it difficult or impossible to prove which of them has caused
the harm.” (Rest.2d Torts, §433B, com. f, p. 446.)
A-10
Defendants assert that these principles are inapplicable
here. First, they insist that a predicate to shifting the
burden of proof under Summers-Ybarra is that the defend-
ants must have greater access to information regarding the
cause of the injuries than the plaintiff, whereas in the
present case the reverse appears.
Plaintiff does not claim that defendants are in a better
position than she to identify the manufacturer of the drug
taken by her mother or, indeed, that they have the ability
to do so at all, but argues, rather, that Summers does not
impose such a requirement as a condition to the shifting of
the burden of proof. In this respect we believe plaintiff is
correct.
In Summers, the circumstances of the accident them-
selves precluded an explanation of its cause. To be sure,
Summers states that defendants are “{o|rdinarily...ina
far better position to offer evidence to determine which one
caused the injury” than a plaintiff (33 Cal.2d 80, at p. 86),
but the decision does not determine that this “ordinary”
Situation was present. Neither the facts nor the language
of the opinion indicate that the two defendants, simultane-
ously shooting in the same direction, were in a better posi-
tion than the plaintiff to ascertain Whose shot caused the
injury. As the opinion acknowledges, it was impossible for
the trial court to determine whether the shot which entered
the plaintiff’s eye came from the gun of one defendant or
the other. Nevertheless, burden of proof was shifted to the
defendants.
Here, as in Summers, the circumstances of the injury
appear to render identification of the manufacturer of the
drug ingested by plaintiff’s mother impossible by either
plaintiff or defendants, and it cannot reasonably be said
that one is in a better position than the other to make the
identification. Because many years elapsed between the
A-11
time the drug was taken and the manifestation of plain-
tiff’s injuries she, and many other daughters of mothers
who took DES, are unable to make such identification.”
Certainly there can be no implication that plaintiff is at
fault in failing to do so-—the event occurred while plaintiff
was in utero, a generation ago.”
On the other hand, it cannot be said with assurance that
defendants have the means to make the identification. In
this connection, they point out that drug manufacturers
ordinarily have no direct contact with the patients who
take a drug prescribed by their doctors. Defendants sell to
wholesalers, who in turn supply the product to physicians
and pharmacies. Manufacturers do not maintain records
of the persons who take the drugs they produce, and the
selection of the medication is made by the physician rather
than the manufacturer. Nor do we conclude that the
absence of evidence on this subject is due to the fault of
defendants. While it is alleged that they produced a defec-
tive product with delayed effects and without adequate
warnings, the difficulty or impossibility of identification
results primarily from the passage of time rather than
from their allegedly negligent acts of failing to provide
adequate warnings. Thus Haft v. Lone Palm Hotel
(1970) 3 Cal.38d 756, upon which plaintiff relies, is
distinguishable.
12. The trial court was not required to determine whether plaintiff
had made sufficient efforts to establish identification since it concluded
that her failure to do so was fatal toher claim. The court accepted at face
value plaintiff's assertion that she could not make the identification, and
for purposes of this appeal we make the same assumption.
13. Defendants maintain that plaintiff is in a better position than
they are to identify the manufacturer because her mother might recall the
name of the prescribing physician or the hospital or pharmacy where the
drug originated, and might know the brand and strength of dosage, the
appearance of the medication, or other details from which the manufac-
turer might be identified, whereas they possess none of this information.
As we point out in footnote 12, we assume for purposes of this appeal that
plaintiff cannot point to any particular manufacturer as the producer of
the DES taken by her mother.
14. In Haft, a father and his young son drowned in defendants’ swim-
ming pool. There were no witnesses to the accident. Defendants were
A-12
It is important to observe, however, that while defend-
ants do not have means superior to plaintiff to identify the
maker of the precise drug taken by her mother, they may in
some instances be able to prove that they did not manufac-
ture the injury-causing substance. In the present case, for
example, one of the original defendants was dismissed from
the action upon proof that it did not manufacture DES
until after plaintiff was born.
Thus we conclude that the fact defendants dc not have
greater access to information which might establish the
identity of the manufacturer of the DES which injured
plaintiff does not per se prevent application of the Swmmers
rule.
Nevertheless, plaintiff may not prevail in her claim that
the Summers rationale should be employed to fix the whole
liability for her injuries upon defendants, at least as those
principles have previously been applied.’® There is an
negligent in failing to provide a lifeguard, as required by law. We held
that the absence of evidence of causation was a direct and foreseeable
result of the defendants’ negligence, and that, therefore, the burden of
proof on the issue of causation was upon defendants. Plaintiff attempts
to bring herself within this holding. She asserts that defendants’ failure
to discover or warn of the dangers of DES and to label the drug as
experimental caused her mother to fail to keep records or remember the
brand name of the drug prescribed to her “since she was unaware of any
reason to do so for a period of 10 to 20 years.” There is no proper analogy
to Haft here. While in Haft the presence of a lifeguard on the scene would
have provided a witness to the accident and probably prevented it, plain-
tiff asks us to speculate that if the DES taken by her mother had been
labelled as an experimental drug, she would have recalled or recorded the
name of the manufacturer and passed this information on to her daughter.
It cannot be said here that the absence of evidence of causation was a
Ke og and foreseeable result” of defendants’ failure to provide a warning
abel.
15. Plaintiff relies upon three older cases for the proposition that the
burden of proof may be shifted to defendants to explain the cause of an
accident even if less than all of them are before the court. (Benson v.
Ross (Mich. 1906) 106 N.W. 1120; Moore v. Foster (Miss. 1938) 180 So.
73; Oliver v. Miles (Miss. 1927) 110 So. 666.) These cases do not relate
to the shifting of the burden of proof; rather, they imposed liability upon
one of two or more joint tort-feasors on the ground that they acted in
concert in committing a negligent act. This theory of concerted action as
a basis for defendants’ liability will be discussed infra. In Summers, we
stated that these cases were “straining” the concept of concerted action
A-13
important difference between the situation involved in
Summers and the present case. There, all the parties who
were or could have been responsible for the harm to the
plaintiff were joined as defendants. Here, by contrast,
there are approximately 200 drug companies which made
DES, any of which might have manufactured the injury-
producing drug.”
Defendants maintain that, while in Summers there was a
50 percent chance that one of the two defendants was
responsible for the plaintiff’s injuries, here since any one of
200 companies which manufactured DES might have made
the product which harmed plaintiff, there is no rational
basis upon which to infer that any defendant in this action
caused plaintiff’s injuries, nor even a reasonable possibility
that they were responsible.”
These arguments are persuasive if we measure the
chance that any one of the defendants supplied the injury-
causing drug by the number of possible tortfeasors. In
such a context, the possibility that any of the five defend-
ants supplied the DES to plaintiff’s mother is so remote that
it would be unfair to require each defendant to exonerate
itself. There may be a substantial likelihood that none of
and that the “more reasonable” basis for holding defendants jointly liable
when more than one of them had committed a tort and plaintiff could not
establish the identity of the party who had caused the damage was the
danger that otherwise two negligent parties might be exonerated. (Sum-
mers, 33 Cal.2d 80, at pp. 84-85.)
16. According to the Restatement, the burden of proof shifts to the
defendants only if the plaintiff can demonstrate that all defendants acted
tortiously and that the harm resulted form the conduct of one of them.
(Rest.2d Torts, § 433B, com. g, p. 446.) It goes on to state that the rule
thus far has been applied only where all the actors involved are joined as
defendants and where the conduct of all is simultaneous in time, but cases
might arise in which some modification of the rule would be necessary if
one of the actors is or cannot be joined, or because of the effects of lapse of
time, or other circumstances. (J/d., com. h, p. 446.)
17. Defendants claim further that the effect of shifting the burden of
proof to them to demonstrate that they did not manufacture the DES
which caused the injury would create a rebuttable presumption that one
of them made the drug taken by plaintiffs’ mother, and that this presump-
tion would deny them due process because there is no rational basis for the
inference.
A-14
the five defendants joined in the action made the DES
which caused the injury, and that the offending producer
not named would escape liability altogether. While we
propose, infra, an adaptation of the rule in Summers which
will substantially overcome these difficulties, defendants
appear to be correct that the rule, as previously applied,
cannot relieve plaintiff of the burden of proving the iden-
tity of the manufacturer which made the drug causing her
injuries."®
The second principle upon which plaintiff relies is the so-
called “concert of action” theory. Preliminarily, we briefly
describe the procedure a drug manufacturer must follow
before placing a drug on the market. Under federal law as
it read prior to 1962, a new drug was defined as one “not
generally recognized as...safe.” (§ 102, 76 Stat. 781 (Oct.
10, 1962).) Such a substance could be marketed only if a
new drug application had been filed with the Food and
Drug Administration and had become “effective.” If the
18. Garcia v. Joseph Vince Co., supra, 84 Cal.App.3d 868, relied upon
by defendants, presents a distinguishable factual situation. The plaintiff
in Garcia was injured by a defective saber. He was unable to identify
which of two manufacturers had produced the weapon because it was
commingled with other sabers after the accident. In a suit against both
manufacturers, the court refused to apply the Summers rationale on the
ground that the plaintiff had not shown that either defendant had vio-
lated a duty tohim. Thus in Garcia, only one of the two defendants was
alleged to have manufactured a defective product, and the plaintiff's
inability to identify which of the two was negligent resulted in a judgment
for both defendants. (See also Wetzel v. Eaton, supra, 62 F.R.D. 22.)
Here, by contrast, the DES manufactured by all defendants is alleged to
be defective, but plaintiff is unable to demonstrate which of the defen-
dant’s supplied the precise DES which caused her injuries.
19. A new drug application became “effective” automatically if the
Secretary of Health, Education and Welfare failed within a certain period
of time to disapprove the application. If the agency had insufficient
information to decide whether the drug was safe or had information that
it was unsafe, the application was denied. (§ 505,52 Stat. 1052 (June 25,
1938).) Since 1962, affirmative approval of an application has been
required before a new drug may be marketed. (21 U.S.C.A. § 355,subd.
(c).)
A-15
agency determined that a product was no longer a “new
drug,” i.e., that it was “gengrally recognized as... safe,” (21
U.S.C.A. § 321, subd. (p) (1) ) it could be manufactured by
any drug company without submitting an application to
the agency. According to defendants, 123 new drug appli-
cations for DES had been approved by 1952, and in that
year DES was declared not to be a “new drug,” thus
allowing any manufacturer to produce it without prior
testing and without submitting a new drug application to
the Food and Drug Administration.
With this background we consider whether the com-
plaint states a claim based upon “concert of action” among
defendants. The elements of this doctrine are prescribed in
section 876 of the Restatement of Torts. The section pro-
vides, “For harm resulting to a third person from the tor-
tious conduct of another, one is subject to liability if he (a)
does a tortious act in concert with the other or pursuant to a
common design with him, or (b) knows that the other’s
conduct constitutes a breach of duty and gives substantial
assistance or encouragement to the other so to conduct him-
self, or (c) gives substantial assistance to the other in
accomplishing a tortious result and his own conduct, sepa-
rately considered, constitutes a breach of duty to the third
person.” With respect to this doctrine, Prosser states that
“those who, in pursuance of a common plan or design to
commit a tortious act, actively take part in it, or further it
by cooperation or request, or who lend aid or encourage-
ment to the wrongdoer, or ratify and adopt his acts done for
their benefit, are equally liable with him. [{] Express
agreement is not necessary, and all that is required is that
there be a tacit understanding....” (Prosser, Law of Torts
(4th ed. 1971), sec. 46, p. 292.)
Plaintiff contends that her complaint states a cause of
action under these principles. She alleges that defendants’
wrongful conduct “is the result of planned and concerted
action, express and implied agreements, collaboration in,
A-16
reliance upon, acquiescence in and ratification, exploitation
and adoption of each other’s testing, marketing methods,
lack of warnings ... and other acts or omissions. . .” and
that “acting individually and in concert, { defendants ] pro-
moted, approved, authorized, acquiesced in, and reaped
profits from sales” of DES. These allegations, plaintiff
claims, state a “tacit understanding” among defendants to
commit a tortious act against her.
In our view, this litany of charges is insufficient to allege
a cause of action under the rules stated above. The grava-
men of the charge of concert is that defendants failed to
adequately test the drug or to give sufficient warning of its
dangers and that they relied upon the tests performed by
one another and took advantage of each others’ promotional
and marketing techniques. These allegations do not
amount to a charge that there was a tacit understanding or
a common plan among defendants to fail to conduct ade-
quate tests or give sufficient warnings, and that they sub-
stantially aided and encouraged one another in these
omissions.
The complaint charges also that defendants produce
DES from a “common and mutually agreed upon formula,”
allowing pharmacists to treat the drug as a “fungible com-
modity” and to fill prescriptions from whatever brand of
DES they had on hand at the time. It is difficult to under-
stand how these allegations can form the basis of a cause of
action for wrongful conduct by defendants, acting in con-
cert. The formula for DES is a scientific constant. It is set
forth in the United States Pharmacopoeia, and any manu-
facturer producing that drug must, with exceptions not
relevant here, utilize the formula set forth in that compen-
dium. (21 U.S.C.A. § 351, subd. (b).)
What the complaint appears to charge is defendants’
parallel or imitative conduct in that they relied upon each
others’ testing and promotion methods. But such conduct
describes a common practice in industry: a producer avails
A-17
himself of the experience and methods of others making
the same or similar products. Application of the concept of
concert of action to this situation would expand the doc-
trine far beyond its intended scope and would render virtu-
ally any manufacturer liable for the defective products of
an entire industry, even if it could be demonstrated that the
product which caused the injury was not made by the
defendant.
None of the cases cited by plaintiff supports a conclusion
that defendants may be held liable for concerted tortious
acts. They involve conduct by a small number of individu-
als whose actions resulted in a tort against a single plain-
tiff, usually over a short span of time, and the defendant
held liable was either a direct participant in the acts which
caused damage,” or encouraged and assisted the person
who directly caused the injuries by participating in a joint
activity.”
Orser v. George (1967) 252 Cal.App.2d 660, upon which
plaintiff primarily relies, is also distinguishable. There,
three hunters negligently shot at a mudhen in decedent’
direction. Two of them shot alternately with the gun
which released the bullet resulting in the fatal wound, and
the third, using a different gun, fired alternately at the
same target, shooting in the same line of fire, perhaps act-
ing tortiously. It was held that there was a possibility the
third hunter knew the conduct of the others was tortious
20. Weinberg Co. v. Bixby (1921) 185 Cal. 87, 103, involved a hus-
band who was held liable with his wife for wrongful diversion of flood
waters although he had given his wife title to the land upon which the
outlet causing the diversion was constructed. He not only owned land
affected by the flood waters, but he was his wife’s agent for the purpose of
reopening the outlet which caused the damage. In Meyer v. Thomas
(1936) 18 Cal.App.2d 299, 305-306, both defendants participated in the
conversion of a note and deed of trust.
21. In Agovino v. Kunze (1960) 181 Cal.App.2d 591, 599, a partici-
pant in a drag race was held liable for injuries to a plaintiff who collided
with the car of another racer. In Loeb v. Kimmerle (1932) 215 Cal. 143,
151, a defendant who encouraged another defendant to commit an assult
was held jointly liable for the plaintiff's injuries. Also see Weirum v. RKO
General, Inc. (1975) 15 Cal.3d 40.
A-18
toward the decedent and gave them substantial assistance
and encouragement, and that it was also possible his con-
duct, separately considered, was a breach of duty toward
decedent. Thus, the granting of summary judgment was
reversed as to the third hunter.
The situation in Orser is similar to Agovino v. Kunze,
supra, 181 Cal.App.2d 591, in which liability was imposed
upon a participant in a drag race, rather than to the facts
alleged in the present case. There is no allegation here that
each defendant knew the other defendants’ conduct was
tortious toward plaintiff, and that they assisted and
encouraged one another to inadequately test DES and to
provide inadequate warnings. Indeed, it seems dubious
whether liability on the concert of action theory can be
predicated upon substantial assistance and encouragement
given by one aileged tortfeasor to another pursuant to a
tacit understanding to fail to perform an act. Thus there
was no concert of action among defendants within the
meaning of that doctrine.
III
A third theory upon which plaintiff relies is the concept
of industry-wide liability, or according to the terminology
of the parties, “enterprise liability.” This theory was sug-
gested in Hall v. E. I. Du Pont de Nemours & Co., Ince.
(E.D.N.Y. 1972) 345 F.Supp. 353. In that case, plaintiffs
were 13 children injured by the explosion of blasting caps
in 12 separate incidents which occurred in 10 different
states between 1955 and 1959. The defendants were six
blasting cap manufacturers, comprising virtually the
entire blasting cap industry in the United States, and their
trade association. There were, however, a number of Cana-
dian blasting cap manufacturers which could have sup-
plied the caps. The gravamen of the complaint was that
the practice of the industry of omitting a warning on indi-
vidual blasting caps and of failing to take other safety
A-19
measures created an unreasonable risk of harm, resulting
in the plaintiffs’ injuries. The complaint did not identify a
particular manufacturer of a cap which caused a particular
injury.”
The court reasoned as follows: there was evidence that
defendants, acting independently, had adhered to an indus-
try-wide standard with regard to the safety features of
blasting caps, that they had in effect delegated some func-
tions of safety investigation and design, such as labelling,
to their trade association, and that there was industry-wide
cooperation in the manufacture and design of blasting caps.
In these circumstances, the evidence supported a conclu-
sion that all the defendants jointly controlled the risk.
Thus, if plaintiffs could establish by a preponderance of the
evidence that the caps were manufactured by one of the
defendants, the burden of proof as to causation would shift
to all the defendants. The court noted that this theory of
liability applied to industries composed of a small number
of units, and that what would be fair and reasonable with
22. We deliberately employ the term “suggested” to describe the effect
of the Hall opinion because of the uncertain posture of the decision as
authority. The defendants moved to dismiss the action on the ground
that the plaintiffs had not stated a claim, and they also sought to sever the
claims of the various plaintiffs and transfer them to the district court in
the place where each accident occurred. The opinion discusses various
possible bases of liability, including industry-wide liability, upon the
assumption that there existed a national body of state tort law. (345
F.Supp. at p. 360.) At the conclusion of its opinion, the court called for
briefs on the choice-of-law issues involved in the case. In a subsequent
opinion, the same court decided, after briefs had been filed on the choice-
of-law question, that the plaintiffs’ claims should be severed, and it trans-
ferred each one to the federal court sitting in the district where the
accident occurred. (Chance v. E. I. Du Pont de Nemours & Co., Inc.
(E.D.N.Y. 1974) 371 F.Supp. 439.) Thereafter, the transferred cases
resulted in judgments for defendants upon various grounds unrelated to
the theory of industry-wide liability. (Lehtonen v. E. I. Du Pont de
Nemours & Co., Inc. (D. Mont. 1975) 389 F.Supp. 633 [failure to amend
complaint within 30 days]; Davis v. E. I. Du Pont de Nemours & Co., Inc.
(W.D.N.C. 1974) 400 F.Supp. 1347 [statute of limitations]; Ball v. E. I.
Du Pont de Nemours & Co., Inc. (6th Cir. 1975) 519 F.2d 715 [jury
verdict in favor of defendant after plaintiff identified the manufacturer of
the blasting cap which caused his injuries].) The parties have not
indicated the status of the remaining cases transferred.
A-20
regard to an industry of five or ten producers might be
manifestly unreasonable if applied to a decentralized
industry composed of countless small producers.”
Plaintiff attempts to state a cause of action under the
rationale of Hall. She alleges joint enterprise and collabo-
ration among defendants in the production, marketing, pro-
motion and testing of DES, and “concerted promulgation
and adherence to industry-wide testing, safety, warning
and efficacy standards” for the drug. We have concluded
above that allegations that defendants relied upon one
another’s testing and promotion methods do not state a
cause of action for concerted conduct to commit a tortious
act. Under the theory of industry-wide liability, however,
each manufacturer could be liable for all injuries caused by
DES by virtue of adherence to an industry-wide standard
of safety.
In the Fordham Comment, the industry-wide theory of
liability is discussed and refined in the context of its appli-
eability to actions alleging injuries resulting from DES.
The author explains causation under that theory as follows,
“... {T]he industrywide standard becomes itself the cause
of plaintiff’s injury, just as defendants’ joint plan is the
cause of injury in the traditional concert of action plea.
Each defendant’s adherence perpetuates this standard,
which results in the manufacture of the particular, uniden-
tifiable injury-producing product. Therefore, each indus-
try member has contributed to plaintiff’s injury.”
(Fordham Comment, supra, at p. 997.)
The Comment proposes seven requirements for a cause of
action based upon industry-wide liability,“ and suggests
23. In discussing strict liability, the Hal/ court mentioned the drug
industry, stating, “In cases where manufacturers have more experience,
more information, and more control over the risky properties of their
products than do drug manufacuturers, courts have applied a broader
concept of forseeability which approaches the enterprise liability ratio-
nale.” (345 F.Supp. 353 at p. 370.)
24. The suggested requirements are as follows:
1. There existed an insufficient, industry-wide standard of
safety as to the manufacture of the product.
A-21
that if a plaintiff proves these elements, the burden of proof
of causation should be shifted to the defendants, who may
exonerate themselves only by fnomtag that their product
could not have caused the injury.”
We decline to apply this theory in the present case. At
least 200 manufacturers produced DES; Hall, which
invoived 6 manufacturers representing the entire blasting
cap industry in the United States, cautioned against appli-
cation of the doctrine espoused therein to a large number of
producers. (345 F.Supp. at p. 378.) Moreover, in Hall, the
conclusion that the defendants jointly controlled the risk
was based upon allegations that they had delegated some
functions relating to safely to a trade association. There
are no such allegations here, and we have concluded above
that plaintiff has failed to allege liability on a concert of
action theory.
Equally important, the drug industry is closely regu-
lated by the Food and Drug Administration, which
2. Plaintiff is not at fault for the absence of evidence identify-
ing the causative agent but, rather, this absence of proof is due to
defendant's conduct.
3. A generically similar defective product was manufactured
by all the defendants.
4. Plaintiff's injury was caused by this defect.
5. Defendants owed a duty to the class of which plaintiff was a
member.
6. There is clear and convincing evidence that plaintiff's
injury was caused by a product made by one of the defendants.
For example, the joined defendants accounted for a high percent-
age of such defective products on the market at the time of plain-
tiff’s injury.
7. All defendants were tortfeasors.
25. The Fordham Comment takes exception to one aspect of the
theory of industry-wide liability as set forth in Hall, i.e., the conclusion
that a plaintiff is only required to show by a preponderance of the evi-
dence that one of the defendants manufactured the product which caused
her injury. The Comment suggests that a plaintiff be required to prove
by clear and convincing evidence that one of the defendants before the
court was responsible and that this standard of proof would require that
the plaintiff join in the action the producers of 75 or 80 percent of the DES
prescribed for prevention of miscarriage. It is also suggested that the
damages be apportioned among the defendants according to their share of
the market for DES. (Fordham Comment, supra, 999-1000. )
A-22
actively controls the testing and manufacture of drugs and
the method by which they are marketed, including the
contents of warning labels.” To a considerable degree,
therefore, the standards followed by drug manufacturers
are suggested or compelled by the government. Adherence
to those standards cannot, of course, absolve a manufac-
turer of liability to which it would otherwise be subject.
(Stevens v. Parke, Davis & Co. (1973) 9 Cal.3d 51, 65.)
But since the government plays such a pervasive role in
formulating the criteria for the testing and marketing of
drugs, it would be unfair to impose upon a manufacturer
liability for injuries resulting from the use of a drug which
it did not supply simply because it followed the standards
of the industry.”
IV
If we were confined to the theories of Summers and Hall,
we would be constrained to hold that the judgment must be
sustained. Should we require that plaintiff identify the
manufacturer which supplied the DES used by her mother
or that all DES manufacturers be joined in the action, she
would effectively be precluded from any recovery. As
defendants candidly admit, there is little likelihood that all
the manufacturers who made DES at the time in question
are still in business or that they are subject to the jurisdic-
tion of the California courts. There are, however, forceful
arguments in favor of holding that plaintiff has a cause of
action.
26. Federal regulations may specify the type of tests a manufacturer
must perform for certain drugs (21 C.F.R. § 436.206 et seq.), the type of
packaging used (§ 429.10), the warnings which appear on_ labels
a 369.20), and the standards to be followed in the manufacture of a drug
(§ 211.22 et seq.).
27. Abel v. Eli Lilly & Company, the Michigan case referred to above
which held that the plaintiffs had stated a cause of action against several
manufacturers of DES even though they could not identify a particular
manufacturer as the source of a particular injury (see fn. 7, ante), relied
upon the theories of concerted action and alternative liability.
A-23
In our contemporary complex industrialized society,
advances in science and technology create fungible goods
which may harm consumers and which cannot be traced to
any specific producer. The response of the courts can be
either to adhere rigidly to prior doctrine, denying recovery
to those injured by such products, or to fashion remedies to
meet these changing needs. Just as Justice Traynor in his
landmark concurring opinion in Escola v. Coca Cola Bot-
tling Company (1944) 24 Cal.2d 453, 467-468, recognized
that in an era of mass production and complex marketing
methods the traditional standard of negligence was insuffi-
cient to govern the obligations of manufacturer to con-
sumer, so Should we acknowledge that some adaptation of
the rules of causation and liability may be appropriate in
these recurring circumstances. The Restatement com-
ments that modification of the Summers rule may be neces-
sary in a situation like that before us. (See fn. 16, ante.)
The most persuasive reason for finding plaintiff states a
cause of action is that advanced in Summers: as between an
innocent plaintiff and negligent defendants, the latter
Should bear the cost of the injury. Here, as in Summers,
plaintiff is not at fault in failing to provide evidence of
causation, and although the absence of such evidence is not
attributable to the defendants either, their conduct in mar-
keting a drug the effects of which are delayed for may
years played a significant role in creating the unavailabil-
ity of proof.
From a broader policy standpoint, defendants are better
able to bear the cost of injury resulting from the manufac-
ture of a defective product. As was said by Justice Tray-
nor in Escola, “| t |he cost of an injury and the loss of time or
health may be an overwhelming misfortune to the person
injured, and a needless one, for the risk of injury can be
insured by the manufacturer and distributed among the
public as a cost of doing business.” (24 Cal.2d p. 462; see
A-24
also Rest.2d Torts, § 402A, com. c, pp. 349-350.) The manu-
facturer is in the best position to discover and guard against
defects in its products and to warn of harmful effects; thus,
holding it liable for defects and failure to warn of harmful
effects will provide an incentive to product safety.
(Cronin v. J.B.E. Olson Corp. (1972) 8 Cal.3d 121, 129;
Beech Aircraft Corp. v. Superior Court (1976) 61
Cal.App.3d 501, 522-523.) These considerations are partic-
ularly significant where medication is involved, for the
consumer is virtually helpless to protect himself from seri-
ous, Sometimes permanent, sometimes fatal, injuries caused
by deleterious drugs.
Where, as here, all defendants produced a drug from an
identical formula and the manufacturer of the DES which
caused plaintiff’s injuries cannot be identified through no
fault of plaintiff, a modification of the rule of Summers is
warranted. As we have seen, an undiluted Swmmers ratio-
nale is inappropriate to shift the burden of proof of causa-
tion to defendants because if we measure the chance that
any particular manufacturer supplied the injury-causing
product by the number of producers of DES, there is a
possibility that none of the five defendants in this case
produced the offending substance and that the responsible
manufacturer, not named in the action, will escape
liability.
But we approach the issue of causation from a different
perspective: we hold it to be reasonable in the present con-
text to measure the likelihood that any of the defendants
supplied the product which allegedly injured plaintiff by
the percentage which the DES sold by each of them for the
purpose of preventing miscarriage bears to the entire pro-
duction of the drug sold by all for that purpose. Plaintiff
asserts in her briefs that Eli Lilly and Company and 5 or 6
other companies produced 90 percent of the DES marketed.
If at trial this is established to be the fact, then there is a
corresponding likelihood that this comparative handful of
A-25
producers manufactured the DES which caused plaintiff’s
injuries, and only a 10 percent likelihood that the offending
producer would escape liability.”
If plaintiff joins in the action the manufacturers of a
substantial share of the DES which her mother might have
taken, the injustice of shifting the burden of proof to
defendants to demonstrate that they could not have made
the substance which injured plaintiff is significantly
diminished. While 75 to 80 percent of the market is sug-
gested as the requirement by the Fordham Comment (at p.
996), we hold only that a substantial percentage is
required.
The presence in the action of a substantial share of the
appropriate market also provides a ready means to appor-
tion damages among the defendants. Each defendant will
be held liable for the proportion of the judgment repre-
sented by its share of that market unless it demonstrates
that it could not have made the product which caused
plaintiff’s injuries. In the present case, as we have seen,
one DES manufacturer was dismissed from the action upon
filing a declaration that it had not manufactured DES until
after plaintiff was born. Once plaintiff has met her burden
of joining the required defendants, they in turn may cross-
complain against other DES manufacturers, not joined in
the action, which they can allege might have supplied the
injury-causing product.
Under this approach, each manufacturer’s liability
would approximate its responsibility for the injuries caused
28. The Fordham Comment explains the connection between percent-
age of market share and liability as follows: “[I]f X Manufacturer sold
one-fifth of all the DES prescribed for pregnancy and identification could
be made in all cases, X would be the sole defendant in approximately one- |
fifth of all cases and liable for all the damages in those cases. Under
alternative liability, X would be joined in all cases in which identification
could not be made, but liable for one-fifth of the total damages in these
cases. X would pay the same amount either way. Although the correla-
tion is not, in practice, perfect [footnote omitted], it is close enough so
that defendants’ objections on the ground of fairness lose their value.”
(Fordham Comment, supra, at p. 94.)
A-26
by its own products. Some minor discrepancy in the corre-
lation between market share and liability is inevitable;
therefore, a defendant may be held liable for a somewhat
different percentage of the damage than its share of the
appropriate market would justify. It is probably impossi-
ble, with the passage of time, to determine market share
with mathematical exactitude. Butjust as a jury cannot be
expected to determine the precise relationship between
fault and liability in applying the doctrine of comparative
fault (Li v. Yellow Cab Co. (1975) 13 Cal.3d 804) or partial
indemnity (American Motorcycle Assn. v. Superior Court
(1978) 20 Cal.3d 578), the difficulty of apportioning dam-
ages among the defendant producers in exact relation to
their market share does not seriously militate against the
rule we adopt. As we said in Summers with regard to the
liability of independent tortfeasors, where a correct divi-
sion of liability cannot be made “the trier of fact may make
it the best it can.” (33 Cal.2d at p. 88.)
We are not unmindful of the practical problems involved
in defining the market and determining market share,” but
these are largely matters of proof which properly cannot be
determined at the pleading stage of these proceedings.
Defendants urge that it would be both unfair and contrary
to public policy to hold them liable for plaintiff’s injuries in
the absence of proof that one of them supplied the drug
responsible for the damage. Most of their arguments, how-
ever, are based upon the assumption that one manufacturer
would be held responsible for the products of another or for
those of all other manufacturers if plaintiff ultimately
prevails. But under the rule we adopt, each manufac-
turer’s liability for an injury would be approximately
‘29. Defendants assert that there are no figures available to determine
market share, that DES was provided for a number of uses other than to
prevent miscarriage and it would be difficult to ascertain what proportion
of the drug was used as a miscarriage preventative, and that the establish-
ment of a time frame and area for market share would pose problems.
A-27
equivalent to the damages caused by the DES it
manufactured.”
The judgments are reversed.
Mosk, J.
We Concur:
BIRD, C. J.
NEWMAN, J.
*WHITE, J.
30. The dissent concludes by implying the problem will disappear if
the Legislature appropriates funds “for the education, identification, and
screening of persons exposed to DES.” While such a measure may argua-
bly be helpful in the abstract, it does not address the issue involved here:
damages for injuries which have been or will be suffered. Nor, as a
principle, do we see any justification for shifting the financial burden for
such damages from drug manufacturers to the taxpayers of California.
*Assigned by the Chairman of the Judicial Council.
A-28
SINDELL Vv. ABBOTT LABORATORIES
ROGERS Vv. REXALL DRUG Co.
L.A. 31063
DISSENTING OPINION BY RICHARDSON, J.
I respectfully dissent. In these consolidated cases the
majority adopts a wholly new theory which contains these
ingredients: The plaintiffs were not alive at the time of the
commission of the tortious acts, They sue a generation
later. They are permitted to receive substantial damages
from multiple defendants without any proof that any
defendant caused or even probably caused plaintiffs’
injuries.
Although the majority purports to change only the
required burden of proof by shifting it from plaintiffs to
defendants, the effect of its holding is to guarantee that
plaintiffs will prevail on the causation issue because
defendants are no more capable of disproving factual causa-
tion than plaintiffs are of proving it. “Market share” liabil-
ity thus represents a new high water mark in tortlaw. The
ramifications seem almost limitless, a fact which prompted
one recent commentator, in criticizing a substantially iden-
tical theory, to conclude that “Elimination of the burden of
proof as to identification [of the manufacturer whose drug
injured plaintiff] would impose a liability which would
exceed absolute liability.” (Coggins, /ndustry- Wide Liabil-
ity (1979) 13 Suffolk L.Rev. 980, 998, fn. omitted; see also,
pp. 1000-1001.) In my view, the majority’s departure from
traditional tort doctrine is unwise.
The applicable principles of causation are very well
established. A leading torts scholar, Dean Prosser, has
authoritatively put it this way: “An essential element of the
plaintiff’s cause of action for negligence, of for that matter for
any other tort, is that there be some reasonable connection
A-29
between the act or omission of the defendant and the dam-
age which the plaintiff has suffered.” (Prosser, Torts (4th
ed. 1971), § 41, p. 236, italics added.) With particular
reference to the matter before us, and in the context of
products liability, the requirement of a causation element
has been recognized as equally fundamental. “It is clear
that any holding that a producer, manufacturer, seller, or a
person in a Similar position, is liable for injury caused by a
particular product, must necessarily be predicated upon
proof that the product in question was one for whose condi-
tion the defendant was in some way responsible. Thus, for
example, if recovery is sought from a manufacturer, it must
be shown that he actually was the manufacturer of the product
which caused the injury; ...” (1 Hursh & Bailey, American
Law of Products Liability (2d ed. 1974) § 1:41, p. 125,
italics added; accord, Prosser, supra, § 103, at pp. 671-672; 2
Dooley, Modern Tort Law (1977) § 32.03, p. 243.) Indeed,
an inability to prove this causal link between defendant’s
conduct and plaintiff’s injury has proven fatal in prior
cases brought against manufacturers of DES by persons
who were Situated in positions identical to those of plain-
tiffs herein. (See McCreery v. Eli Lilly & Co. (1978) 87
Cal.App.3d 77, 82; Gray v. United States (D. Tex. 1978) 445
F.Supp. 337, 338.)
The majority now expressly abandons the foregoing
traditional requirement of some causal connection between
defendants’ act and plaintiffs’ injury in the creation of its
new modified industry-wide tort. Conceptually, the doc-
trine of absolute liability which heretofore in negligence,
law has substituted only for the requirement of a breach ef
defendant’s duty of care, under the majority’s hand now
subsumes the additional necessity of a causal relationship.
According to the majority, in the present case plaintiffs
have openly conceded that they are unable to identify the
particular entity which manufactured the drug consumed
by their mothers. In fact, plaintiffs have joined only five of
A-30
the approximately two hundered drug companies which
manufactured DES. Thus, the case constitutes far more
than a mere factual variant upon the theme composed in
Summers v. Tice (1948) 33 Cal.2d 80, wherein plaintiff
joined as codefendants the only two persons who could have
injured him. As the majority must acknowledge, our Sum-
mers rule applies only to cases in which “... it is proved that
harm has been caused to the plaintiff by ... one of [the
named defendants |, but there is uncertainty as to which
one has caused it,...” (Rest.2d Torts, § 433B, subd. (3).)
In the present case, in stark contrast, it remains wholly
speculative and conjectural whether any of the five named
defendants actually caused plaintiffs’ injuries.
The fact that plaintiffs cannot tie defendants to the
injury-producing drug does not trouble the majority for it
declares that the Summers requirement of proof of actual
causation by a named defendant is satisfied by a joincer of
those defendants who have together manufactured “a sub-
stantial percentage” of the DES which has been marketed.
Notably lacking from the majority’s expression of its new
rule, unfortunately, is any definition or guidance as to
what should constitute a “substantial” share of the relevant
market. The issue is entirely open-ended and the answer,
presumably, is anyone’s guess.
Much more significant, however, is the consequence of
this unprecedented extension of liability. Recovery is per-
mitted from a handful of defendants each of whom individ-
ually may account for a comparatively small share of the
relevant market, so long as the aggregate business of those
who have been sued is deemed “substantial.” In other
words, a particular defendant may be held proportionately
liable even though mathematically it 1s much more likely than
not that it played no role whatever in causing plaintiffs’ injuries.
Plaintiffs have strikingly capsulated their reasoning by
insisting “... that while one manufacturer’s product may
not have injured a particular plaintiff, we can assume that
A-31
it injured a different plaintiff and all we are talking about is
a mere matching of plaintiffs and defendants.” (Counsel’s
letter (Oct. 16, 1979) p. 3.) In adopting the foregoing
rationale the majority rejects over 100 years of tort law
which required that before tort liability was imposed a
“matching” of defendant’s conduct and plaintiff’s injury
was absolutely essential. Furthermore, in bestowing on
plaintiffs this new largess the majority sprinkles the rain of
liability upon all the joined defendants alike—those whom
may be tortfeasors and those who may have had nothing at
all to do with plaintiffs’ injury—and an added bonus is
conferred. Plaintiffs are free to pick and choose their
targets.
The “market share” thesis may be paraphrased. Plain-
tiffs have been hurt by someone who made DES. Because of
the lapse of time no one can prove who made it. Perhaps it
was not the named defendants who made it, but they did
make some. Although DES was apparently safe at the
time it was used, it was subsequently proven unsafe as to
some daughters of some users. Plaintiffs have suffered
injury and defendants are wealthy. There should be a
remedy. Strict products liability is unavailable because
the element of causation is lacking. Strike that require-
ment and label what remains “alternative” liability,
“industry-wide” liability, or “market share” liability, prov-
ing thereby that if you hit the square peg hard and often
enough the round holes will really become square, although
you may splinter the board in the process.
The foregoing result is directly contrary to long estab-
lished tort principles. Once again, in the words of Dean
Prosser, the applicable rule is: “{ Plaintiff] must introduce
evidence which affords a reasonable basis for the conclusion
that it is more likely than not that the conduct of the
defendant was a substantial factor in bringing about the
result. A mere possibility of such causation is not enough; and
A-32
when the matter remains one of pure speculation or conjec-
ture, or the probabilities are at best evenly balanced, it
becomes the duty of the court to direct a verdict for the
defendant.” (Prosser, supra, § 41, at p. 241, italics added,
fns. omitted.) Under the majority’s new reasoning, how-
ever, a defendant is fair game if ii happens to be engaged in
a similar business and causation is possible, even though
remote.
In passing, I note the majority’s dubious use of market
share data. It is perfectly proper to use such information
to assist in proving, circumstantially, that a particuar
defendant probably caused plaintiffs’ injuries. Circum-
stantial evidence may be used as a basis for proving the
requisite probable causation. (/d., at p. 242.) The major-
ity, however, authorizes the use of such evidence for an
entirely different purpose, namely, to impose and allocate
liability among multiple defendants only one of whom may
have produced the drug which injured plaintiffs. Because
this use of market share evidence does not implicate any
particular defendant, I believe such data are entirely irrele-
vant and inadmissible, and that the majority errs in such
use. In the absence of some statutory authority there is no
legal basis for such use.
Although seeming to acknowledge that imposition of
liability upon defendants who probably did not cause plain-
tiffs’ injuries is unfair the majority justifies this inequity on.
the ground that “each manufacturer’s liability for an
injury would be approximately equivalent to the damages
caused by the DES it manufactured.” (Ante, p. [A-26]
[maj. opn., at p. 35].) In other words, because each defen-
dant’s liability is proportionate to its market share, suppos-
edly “each manufacturer’s liability would approximate its
responsibility for the injuries caused by his own products.”
(Ante, p. [ A-25] [ maj. opn., at p. 33].) The majority dodg-
es the “practical problems” thereby presented, choosing to
A-33
describe them as “matters of proof.” However, the difficul-
ties, in my view, are not so easily ducked, for they relate not
to evidentiary matters but to the fundamental question of
liability itself.
Additionally, it is readily apparent that “market share”
liability will fall unevenly and disproportionately upon
those manufacturers who are amenable to suit in Califor-
nia. On the assumption that no other state will adopt so
radical a departure from traditional tort prinicples, it may
be concluded that under the majority’s reasoning those
defendants who are brought to trial in this state will bear
effective joint responsibility for 100 percent of plaintiffs’
injuries despite the fact that their “substantial” aggregate
market share may be considerably less. This undeniable
fact forces the majority to concede that, “a defendant may
be held liable for a somewhat different percentage of the
damage than its share of the appropriate market would
justify.” (Ante, p. [ A-26] [ maj. opn. at p. 33].) With due
deference, I suggest that the complete unfairness of such a
result in a case involving only five of two hundred manu-
facturers is readily manifest.
Furthermore, several other important policy considera-
tions persuade me that the majority holding is both inequi-
table and improper. The injustice inherent in the
majority’s new theory of liability is compounded by the
fact that plaintiffs who use it are treated far more favora-
bly than are the plaintiffs in routine tort actions. In most
tort cases plaintiff knows the identity of the person who has
caused his injuries. In such a case, plaintiff, of course, has
no option to seek recovery from an entire industry or a
“substantial” segment thereof, but in the usual instance can
recover, if at all, only from the particular defendant caus-
ing injury. Such a defendant may or may not be either
solvent or amenable to process. Plaintiff in the ordinary
tort case must take a chance that defendant can be reached
and can respond financially. On what principle should
A-34
those plaintiffs who wholly fail to prove any causation, an
essential element of the traditional tort cause of action, be
rewarded by being offered both a wider selection of poten-
tial defendants and a greater opportunity for recovery?
The majority attempts to justify its new liability on the
ground that defendants herein are “better able to bear the
cost of injury resulting from the manufacture of a defective
product.” (Ante, p. {[A-23] [maj. opn., at p. 30].) This
“deep pocket” theory of liability, fastening liability on
defendants presumably because they are rich, has under-
standable popular appeal and might be tolerable in a case
disclosing substantially stronger evidence of causation
than herein appears. But as a general proposition, a defen-
dant’s weaith is an unreliable indicator of fault, and should
play no part, at least consciously, in the legal analysis of
the problem. In the absence of proof that a particular
defendant caused or at least probably caused plaintiff’s
injuries, a defendant’s ability to bear the cost thereof is no
more pertinent to the underlying issue of liability than its
“substantial” share of the relevant market. A system prid-
ing itself on “equal justice under law” does not flower when
the liability as well as the damage aspect of a tort action is
determined by a defendant’s wealth. The inevitable conse-
quence of such a result is to create and perpetuate two rules
of law—one applicable to wealthy defendants, and another
standard pertaining to defendants who are poor or who
have modest means. Moreover, considerable doubts have
been expressed regarding the ability of the drug industry,
and especially its smaller members, to bear the substantial
economic costs (from both damage awards and high insur-
ance premiums) inherent in imposing an industry-wide
liability. (see Coggins, supra, 13 Suffolk L.Rev. at pp.
1003-1006, 1010-1011.)
An important and substantial countervailing public pol-
icy in defendants’ favor was very recently expressed in a
similar DES case, McCreery v. Eli Lilly & Co., supra, 87
A-35
Cal.App.3d 77, 86-87. Although the majority herein
impliedly rejects the appellate court’s holding, in my opin-
ion pertinent language of the McCreery court, based upon
the Restatement of Torts and bearing on the majority’s
“market share” theory, is well worth repeating: “Applica-
tion of the comments to the Restatement Second of Torts,
section 402A, to this situation compels a rejection of the
imposition of liability. As the comment states, ‘... It is
also true in particular of many new or experimental drugs
as to which, because of lack of time and opportunity for
sufficient medical experience, there can be no assurance of
safety, or perhaps even of purity of ingredients, but such
experience as there is justifies the marketing and use of the
drug notwithstanding a medically recognizable risk. The
seller of such products, again, with the qualification that
they are properly prepared and marketed, and proper warn-
ing is given, where the situation calls for it, is not to be held
to strict liability for unfortunate consequences attending
their use, merely because he has undertaken to supply the
public with an apparently useful and desirable product,
attended with a known but apparently reasonable risk.’
(Rest.2d Torts, § 402A, com. k.) This section implicitly rec-
ognizes the social policy behind the development of new pharma-
ceutical preparations. As one commentator states, ‘[t]he
social and economic benefits from mobilizing the industry’s
resources in the war against disease and in reducing the
costs of medical care are potentially enormous. The devel-
opment of new drugs in the last three decades has already
resulted in great social benefits. The potential gains from
further advances remain large. To risk such gains is
unwise. Our major objective should be to encourage a con-
tinued high level of industry investment in pharmaceuti-
cal R&D [research and development].’ (Schwartzman,
The Expected Return from Pharmaceutical Research:
Sources of New Drugs and the Profitability of R&D Invest-
ment (1975) P. 54.)”, (McCreery v. Eli Lilly & Co., supra,
A-36
87 Cal.App.3d 77, 86-87, italics added; see also Coggins,
supra, 13 Suffolk L.Rev. at p. 1004.)
In the present case the majority imposes liability more
than 20 years after ingestion of drugs which at the time
they were used, after careful testing, had the full approval
of the United States Food and Drug Administration. It
seems to me that liability in the manner created by the
majority must inevitably inhibit, if not the research or
development, at least the dissemination of new pharmaceu-
tical drugs. Such a result, as explained by the Restate-
ment, is wholly inconsistent with traditional tort theory.
I also suggest that imposition of so sweeping a liability
may well prove to be extremely shortsighted from the
standpoint of broad social policy. Who is to say whether,
and at what time and in what form, the drug industry upon
which the majority now fastens this blanket liability, may
develop a miracle drug critical to the diagnosis, treatment,
or, indeed, cure of the very disease in question? It is
counterproductive to inflict civil damages upon all manu-
facturers for the side effects and medical complications
which surface in the children of the users a generation
after ingestion of the drugs, particularly when, at the time
of their use, the drugs met every fair test and medical
standard then available and applicable. Such a result
requires of the pharmaceutical industry a foresight, presci-
ence and anticipation far beyond the most exacting stan-
dards of the relevant scientific disciplines. In effect, the
majority requires the pharmaceutical research laboratory
to install a piece of new equipment-the psychic’s crystal
ball.
I am not unmindful of the serious medical consequences
of plaintiffs’ injuries, and the equally serious implication to
the class which she purports to represent. In balancing the
various policy considerations, however, I also observe that
the incidence of vaginal cancer among “DES daughters”
has been variously estimated at one-tenth of 1 percent to
A-37
four-tenths of 1 percent. (13 Suffolk L.Rev., Supra, p. 999,
fn. 92.) These facts raise some penetrating questions.
Ninety-nine plus percent of “DES daughters’ have never
developed cancer. Must a drug manufacturer to escape
this blanket liability wait for a generation of testing before
it may disseminate drugs? If a drug has beneficial pur-
poses for the majority of users but harmful side-effects are
later revealed for a small fraction of consumers, will the
manufacturer be absolutely liable? If adverse medical con-
sequences, wholly unknown to the most careful and meticu-
lous of present scientists, surface in two or three generations,
will similar liability be imposed? In my opinon, common
sense and reality combine to warn that a “market share”
theory goes too far. Legally, it expects too much.
I believe that the scales of justice tip against imposition
of this new liability because of the foregoing elements of
unfairness to some defendants who may have had nothing
whatever to do with causing any injury, the unwarranted
preference created for this particular class of plaintiffs, the
violence done to traditional tort principles by the drastic
expansion of liability proposed, the injury threatened to the
public interest in continued unrestricted basic medical
research as stressed by the Restatement, and the other
reasons heretofore expressed.
The majority’s decision effectively makes the entire drug
industry (or at least its California members) an insurer of
all injuries attributable to defective drugs of uncertain or
unprovable origin, including those injuries manifesting
themselves a generation later, and regardless of whether
particular defendants had any part whatever in causing
the claimed injury. Respectfully, I think this is unreason-
able overreaction for the purpose of achieving what is per-
ceived to be a socially satisfying result.
Finally, I am disturbed by the broad and ominous ramifi-
cations of the majority’s holding. The law review com-
ment, which is the wellspring of the majority’s new theory,
A-38
conceding the widespread consequences of industry-wide
liability, openly acknowledges that “The DES cases are
only the tip of an iceberg.” (Comment, DES and a Proposed
Theory of Enterpise Liability (1978) 46 Fordham L.Rev. 963,
1007.) Although the pharmaceutical drug industry may
be the first target of this new sanction, the majority’s rea-
soning has equally threatening application to many other
areas of business and commercial activities.
Given the grave and sweeping economic, social, and med-
ical effects of “market share” liability, the policy decision to
introduce and define it should rest not with us, but with the
Legislature which is currently considering not only major
statutory reform of California product liability law in gen-
eral, but the DES problem in partienlar. (See Sen. Bill No.
1392 (1979-1980 Reg. Sess.), which would establish and
appropriate funds for the education, identification, and
screening of persons exposed to DES, and would prohibit
health care and hospital service plans from excluding or
limiting coverage to persons exposed to DES.) An alterna-
tive proposal for administrative compensation, deseripea as
“a limited version of no-fault products liability” has been
suggested by one commentator. (Coggins, supra, 13 Suffolk
L.Rev. at pp. 1019-1021.) Compensation under such a plan
would be awarded by an administrative tribunal from
funds collected “via a tax paid by all manufacturers.” (P.
1020. fn. omitted.) In any event, the problem invites a
legislative rather than an attempted judicial solution.
I would affirm the judgments of dismissal.
RICHARDSON, J.
We Concur:
CLARK, J.
MANUEL, J.
y ce
a hide
4
IN THE
SUPREME COURT OF THE STATE OF
CALIFORNIA
L.A. 31063
JUDITH SINDELL,
Plaintiff, Appellant and Respondent,
VS.
ABBOTT LABORATORIES et al.,
Defendants, Respondents and Petitioners.
MAUREEN ROGERS,
Plaintiff, Appellant and Respondent,
VS.
REXALL DRUG COMPANY et al.,
Defendants, Respondents and Petitioners.
PETITION FOR REHEARING OF ELI LILLY AND COMPANY
After Decision by the Supreme Court of the State of
California
FROM THE JUDGMENT OF THE SUPERIOR COURT OF THE
STATE OF CALIFORNIA, IN AND FOR THE COUNTY OF LOS
ANGELES
Honorable Jerry Pacht, Judge
RICHARD J. HEAFEY
PETER W. DAVIS
CROSBY, HEAFEY, ROACH &
MAY
Professional Corporation
1939 Harrison Street
Oakland, CA 94612
(415) 834-4820
Attorneys for Defendant,
Respondent and Petitioner
ELI LILLY AND COMPANY
TABLE OF CONTENTS
TABLE OF AUTHORITIES CITED ..........ccsesccceesesceeeesess
I
II
III
IV
ENP RODIV IOI. sicisctincconcescctetiscscetinnimvettidaiites
THE COURT’S MARKET SHARE APPROACH
WILL Not EQUATE DAMAGES WITH THE
INJURY ALLEGEDLY CAUSED By EACH
MANUFACTURER’S PRODUCT. .......ccccsseseeeeeees
THE RULE OF LAW ESTABLISHED BY THE
CourT Is VIOLATIVE OF LILLY’s SUBSTAN-
TIVE DUE PROCESS RIGHTS UNDER THE
CALIFORNIA AND FEDERAL CONSTITU-
THOM, iccccicsvitincscinseinateaieeanvnitecuasaaiamaanias
A. Due Process Protects Lilly Against Ar-
bitrary And Capricious Actions Of The
TREE. ssrsvesrssonssbeckinipssencsssnieboeednaiiaide
B. The Element Of Causation Is Indispen-
sable To Due Process of Law. ...........0000
C. The Decision Fails To Satisfy The Mini-
mum Due Process Requirement That
Actions Taken By The State Bear A
Real And Substantial Relationship To A
Constitutionally Permissible Objective
THE DECISION VIOLATES PROCEDURAL
DUE PROCESS BECAUSE IT CREATES A
FALSE AND IRREBUTTABLE PRESUMPTION
OF CAC ATINN sihiivchincidisscsitervicaseaticdanain
A. An Irrebuttable Presumption of Causa-
tion Is Created ..........scssssrsserssecsesessoreees
B. The Presumption Of Causation Is False,
Unreasonable And Arbitrary And
Hence Unconstitutional 0... ceseeeeeees
B-3
B-8
B-8
*D-11
B-13
B-13
Vi
VII
Vill
(X
il
THE DECISION OF THE COURT FRUSTRATES
FEDERAL LAWS AND POLICIES Gov-
ERNING THE MARKETING OF GENERIC
Druas, AND THEREFORE IS VIOLATIVE OF
THE SUPREMACY CLAUSE OF THE UNITED
STATES CONSTITUTION cccccssscoccssssssssvescscvveeeees
THE OPINION VIOLATES DEFENDANT'S
RIGHTS To EQUAL PROTECTION UNDER
WHEE IE aici ccnsasadlcssamaninahaokieacudmesensrabitesanediaas
THE MARKET SHARE THEORY CREATES
NUMEROUS OTHER PROBLEMGB. ...........00eeeeeee
A. The Holding Of This Court Must Be
Confined To Plaintiff’s Causes Of Action
BOE THCIAOD » vis cccessscecscensatCrsesinssdiceinasen
B. The Court’s Proposal That All Manufac-
turers Of DES Cross-Complain Against
Each Other’ Presents Enormous
PP ROEUIIN cinves\nighetinsssessstuctssvcchiobbussnciacninal
RISK SPREADING WILL Not BE ACHIEVED,
AND THE DISASTROUS PUBLIC POLICY
Costs OF LIABILITY WILL Not BE AVOID-
ED BY THE MARKET SHARE THEORY .......
CHAINED cxcoce dics sdantescbeschssanmearshoadelinncndinaus
PAGE
B-17
B-19
B-21
B-21
B-23
iii
TABLE OF AUTHORITIES CITED
Federal Cases
PAGE
American Railway Exp. Co. v. Kentucky, 273 U.S. 269,
FE Ra es I ID. ssekssdeeebbbireccdancdoksics tepnestvedsepineiobes B-9
Andrews v. Drew Municipal Separate School District,
ST Wie GEE COGa GAL. SOTO) senses scescarpnvedvenvecssanenes B-15
Armstrong v. Manzo, 380 U.S. 545, 14 L.Ed. 62 (1965) B-14
Bailey v. Alabama, 219 U.S. 219, 55 L.Ed. 191 (1910) B-13
Bell v. Burson, 402 U.S. 535, 29 L.Ed.2d 90
ERUEE 2’ siessisisiveitcicaraeiericulasenninnsiaia sneaked B-14, B-15
Bibb v. Navajo Freight Lines, 359 U.S. 520, 3 L.Ed.2d
REE RIED Nintesiriinsehedcehictocsvenqtinvdisakassosieuesebaanialiamnnaas B-19
Boddie v. Connecticut, 401 U.S. 371, 28 L.Ed.2d 113
DIPTR Rs icusiiiccalovalcaeceigvcobiursoincbivknivkaenseteacenadtbennaccaeanias B-14
Cleveland Board of Education v. La Fleur, 414 US.
Gow, GO La OW CEGIE) « csssesisecicccvcvesvassensnsens B-14, B-15
Ex Parte, Commonwealth of Virginia, 100 U.S. 318, 25
cB, HET. TEER ais phvsmiabeasib ideeseenshachedndcceeabveladelvancive B-9
Giaccio v. Pennsylvania, 382 U.S. 399, 15 L.Ed.2d 447
| ERIS SADE SESSA UD SOR 7 oases Prob, B-8
Goldberg v. Kelly, 397 U.S. 254, 25 L.Ed.2d 287
EUMTTTEE Sicissecohivdln sehransubiobedensesus'iatssa can uaveenuabsineromemaninibicks B-14
Hawes v. Georgia, 258 U.S. 1, 66 L.Ed. 431 (1922) B-15
Haymes v. Regan, 525 F.2d 540 (2d Cir. 1975) ....... B-9
Hollenbaugh v. Carnegie Free Library, 436 F.Supp.
1328 (W.D. Pa. 1977), aff'd, 578 F.2d 1374, cert.
TE, BE FG, FRE tts ierntecnicreyrressvesentesonenerennpiivcennes B15
Leary v. United States, 395 U.S. 6, 23 L.Ed.2d 57
CRU ITEE. snuchidetrettsstsanstehhasnssensdtvtesssdzesipaninauaecbtiappniiiins B-16
Lynch v. Household Finance Corp., 405 U.S. 538, 31
SEINE GE SMEID | Sivestnbscssisvsssivvesssdleniannevacstbesisensias B-11
iv
PAGE
Martin v. Harrah Independent Sch. Dist., 579 F.2d 1192
(10th Cir. 1978), reversed on other grounds,
US. » 59 L.Bd.2d 248 (1979) ....crcccsccssssssrreres B-9
McCulloch v. Maryland, 4 Wheat 316 (1819) ........... B-18
McFarland v. American Sugar Ref. Co., 241 U.S. 79, 60
EA) UE LRTI T. : éniincesisatuacmatsiadivushoghvcticasemaciias B-15, B-16
Moore v. East Cleveland, 431 U.S. 494, 52 L.Ed.2d 531
CINE T © snesupiciecisAatatectasdeshiesieidivodendngeteetaciemaabnbnemes B-12
NAACP v. Alabama, 377 U.S. 288, 12 L.Ed.2d 325
CRED calksintustacineicibioniidienbiaibaees sesvenorevevoosenseons B-9
New York Times Co. v. Sullivan, 376 U.S. 254, 11
SATE CABO). seitcbipbocesvanvabstducnovesistechavibesuputbaes B-9
Perez v. Campbell, 402 U.S. 687, 29 L.Ed.2d 233
CI <asic eX siscdihiav iii ienaiescibiche'saddesiesaiebinceencttondapndesdunonioadine B-18
Prudential Ins. Co. v. Cheek, 259 U.S. 530, 66 L.Ed.
i RE | beaiielalssalaieosinsiaionkniesssuaboliammnpeded ebabsesures B-9
San Diego Bldg. Trades Council v. Garmon, 359 US.
Dy SB RAMEE: BT GRO). cicvcotsssinibcessonadiphaveepannnen B-18
Shelley v. Kraemer, 334 U.S. 1, 92 L.Ed. 1161 (1948) B-9
Sola Elec. Co. v. Jefferson Elec. Co., 317 U.S. 173, 87
BAM: SOD CRO Y. sericiiennerisisntnereansstepsncuenatins B-18, B-19
Solesbee v. Balkcom, 339 U.S. 9, 94 L.Ed. 604 (1950) B-16
Speiser v. Randall, 357 U.S. 513, 2 L.Ed.2d 1460
CRO Py icosnnsschcsiitehzcesansesnnbenhaciesarpndinniken-th tecsaelgiaiaan B-10, B-13
Stanley v. Illinois, 405 U.S. 645, 31 L.Ed.2d 551
CRIT sicicasncusctisdciasicdabasnanniasscnmanciestanctubaiabamiaetainmenats B-14
State v. A/S Nye Kristianborg, 84 F.Supp. 775 (D.C.
EETIES RIPIIIE:- edseerticsuciveivineves beasiinvisbeaiesouns awedienbiecione B-11, B-12
U.S. Dept. of Agriculture v. Murry, 413 U.S. 508, 37
Ei a OUT CRED . visicirteresiciolsaiicdareennenaecapanitanies B-15
Vlandis v. Kline, 412 U.S. 441, 37 L.Ed.2d 63 (1973) B-14
Western & A. R. Co. v. Henderson, 279 U.S. 639, 73 |
Li Bx GOP ERIE D> sdvssicrinetsidvenecinadsebnelociarvesthatiababiiceens B-14
Wolff v. McDonnell, 418 U.S. 539, 41 L.Ed.2d 935
EIU PID . vinrrnionsicvevsvienevtavbntevodantae ditty avabecaleticabanmlednieaee B-9
Vv
California Cases
PAGE
Department of Mental Hygiene v. Kirchner, 60 Cal.2d
716, 36 Cal.Rptr. 488 (1964), cert. granted and va-
eated, 380 U.S. 194 (1964), on remand, 62 Cal.2d
586, 43 Cal. Rptr. 329 (1965) .........cscscsssssscssseees B-20
Durham v. City of Los Angeles, 91 Cal.App.3d 567, 154
SO. MP GURIV IED acscivtctesciesttbonicsscinccsensvitininsenioes B-19
Fogo v. Cutter Laboratories, Inc., 68 Cal.App.3d 744,
Se, MEG, EEE CUNT P .vicccserdensednapssenndabssnocsocsenbete B-22
Hall v. Department of Adoptions, 47 Cal.App.3d 898,
Be RN PC RUIED sinccrtesveseriroccnicense: veiipamneioebe B-22
Hauter v. Zogarts, 14 Cal.38d 104, 120 Cal.Rptr. 681
EETPIININY dutesalisobisincansclscsjunepiniinindiiedividsinaphontitaianstininsansiibihionrs B-21
Hills Trans. Co. v. Southwest Forest Industries, Inc., 266
Cal.App.2d 702, 72 Cal.Rptr. 441 (1968) ......0.... B-22
Holmes Packaging Mach. Corp. v. Bingham, 252
Cal.App.2d 862, 60 Cal.Rptr. 769 (1967) ........... B-22
Johnson v. Goodyear Mining Co., 127 Cal. 4 (1889) B-8
People v. Collins, 68 Cal.2d 319, 66 Cal.Rptr. 497
ITD - Sore ucslldesan inidiebalqsotanantaatiinessniibadaiidicadteaiineinbiadesenas B-10
Peter W. v. San Francisco Unified Sch. Dist., 60
Cal.App.3d 814, 131 Cal.Rptr. 854 (1976) .......... B-22
Sail’er Inn, Inc. v. Kirby, 5 Cal.3d 1, 95 Cal. Rptr. 329
ES TTTAD tos iicvebed iaeotirasneniipsitihdiiceainegininausindtliiiadinewndaiannial B-18
Scafidi v. Western Loan & Bldg. Co., 72 Cal.App.2d 550
INI, Adilnstinasisnecsiistecaonisaniiadchaauekanecssiansedineniapsetiials B-22
Constitutions
California Constitution
SIL Tc IED T * scneceitusintbevinncnssennapenigicbetnecsdne’ B-8, B-13
I Ts RIED. UD kccscossceconnsccncastvciiessonneasiebeatiighl B-19
pg Oe RR ee a Ae B-18
United States Constitution
Fourteenth Amendment ...........cccccsseeeeseeeeeeeeees B-8, B-13
vi
Statutes
PAGE
es Te Se I RO aden dccissscnainniecioneeaas B-21
Sees GN SMD Wh MRED do vets nccbiniccsitivascnnssnnsonsenticaonss B-22
a Pe NE I ic aise caccssusatndinavonsctipiall B-18
Texts
SE NEY AEE HOI). BORE F Deca teodccnichvevercncssguspatieiannninbien B-21
PRI ME CURIS OU, ROE ED ncccesipstsnvovnsssosspcsnaebibpnecesmnecss B-22
BAJI 12.31 (6th ed. 1977) .............000scee00e scans tesheidions B-22
Prosser, The Law of Torts, § 41 (4th ed. 1971) ........ B-10
Tribe, American Constitutional Law, § 10-15 (1978) B-18
3 Witkin, California Procedure Pleading, §§ 573-574
(BOE. LITLY vsnssvosvevonioonsenvscnsonnscvsssnevosssovsonberesenssongese B-22
B-1
IN THE
SUPREME COURT OF
THE STATE OF CALIFORNIA
L.A. No. 31063
JUDITH SINDELL,
Plaintiff, Appellant and Respondent,
vs.
ABBOTT LABORATORIES, et al.,
Defendants, Respondents and Petitioners.
MAUREEN ROGERS,
Plaintiff, Appellant and Respondent,
vs.
REXALL DRUG COMPANY, et al.,
Defendants, Respondents and Petitioners.
PETITION FOR REHEARING OF ELI LILLY AND
COMPANY
To CHIEF JUSTICE BIRD, AND TO THE ASSOCIATE JUS-
TICES OF THE SUPREME COURT OF THE STATE OF
CALIFORNIA
Respondent Eli Lilly and Company petitions for a
rehearing to reconsider the decision filed in this Court on
March 20, 1980, on the following grounds:
B-2
INTRODUCTION
The Court’s March 20, 1980 opinion in this case carefully
and thoughtfully analyzes existing theories of liability
asserted by Plaintiff and concludes that none will suffice.
Desiring, however, to supply some remedy, the Court pro-
ceeds to create a new doctrine where proof of causation is
replaced by proof of market share.
The justification for the new rule is explained at page 32
of the opinion. Acknowledging that it would be unfair to
hold pharmaceutical manufacturers liable for injuries their
products did not cause, the Court accepts the “rough justice”
proposal advocated in the Fordham Law Review Comment
that the market share approach avoids that vice. It is
asserted that if a manufacturer is held liable for the per-
centage of damages in each case that represents its market
share percentage, the net result will roughly equal the
amount of injury actually caused by that manufacturer’s
product.
In fact, however, this conclusion is premised on a series
of assumptions which, upon close analysis, prove to be
untrue. Moreover, Defendants will never be given an
opportunity to disprove many of these assumptions in the
underlying case, as they are not elements of Plaintiff’s
cause of action, or of any defense.
Together with other aspects of the opinion, serious consti-
tutional questions are accordingly raised.
We therefore urge the Court to reexamine part IV of its
opinion, and after consideration of the objections posed
herein, to reject the proposed rough justice market share
approach and affirm the judgment of the court below.
>
B-3
II
THE COURT’S MARKET SHARE APPROACH WILL NOT
EQUATE DAMAGES WITH THE INJURY ALLEGEDLY
CAUSED BY EACH MANUFACTURER’S PRODUCT
The Court holds that if Plaintiff joins the manufacturers
of a “substantial share of the DES which her mother might
have taken,” she need not prove that her injuries were
caused by the product of any particular defendant. The
Court, however, declines to define, or even provide any
guidance, on what would qualify as a substantial share.
The Court further declines to address the problem of defin-
ing “the market” and determining market share. The
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