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Feldman v. Lederle Labs.

Citation: 14 ELR 20855
No. No. A-70, 479 A.2d 374/97 N.J. 429, (N.J., 07/30/1984)

In a products liability failure-to-warn suit, the court limits a prescription drug manufacturer's duty to warn to hazards known or reasonably knowable, and limits its holding in Beshada v. Johns-Manville Products Corp., 13 ELR 20533, an asbestos case, to that cases facts. Plaintiff's father, a pharmacist and a medical odctor, administered the tetracycline drug Declomycin to her about seven times over a three year period beginning in late 1960, when the child was about eight months old. The child's babv teeth were discolored, as were her permanent teeth. By 1960 the scientific literature reported tooth staining caused by tetracycline, but the subjects were patients with cystic fibrosis who had received massive doses. In late 1962 a doctor employed by defendant wrote the Food and Drug Administration (FDA) proposing to include warnings with all defendant's tetracycline products that they could cause tooth discoloration if used during early infancy when teeth are forming. The FDA eventually responded that such warnings were necessary only on those forms of tetracycline actually linked to tooth staining, which then did not include Declomycin. In mid-1963 defendant began to receive complaints from doctors that Declomycin caused tooth discoloration, and by the end of the year, with FDA approval, included warnings with Declomycin.

Plaintiff sued for damages and the jury found for the defendant. The appellate division affirmed, but the New Jersey Supreme Court remanded for reconsideration in light of its decision in Beshada v. Johns-Manville Products Corp., 13 ELR 20533, which imposed strict liability for failure to warn of the health risks of asbestos, regardless of whether the risk was discovered, given the state-of-the art at the time of the transaction. The appellate division reaffirmed, holding that prescription drugs are a special category of products for which there is no strict liability for failure to warn of a side effect not known when the drug was sold.

The court first rules that prescription drug manufacturers are not immune to strict liability. The manufacturers do not qualify for the exemption from strict liability established for providers of vital services or nonprofit provides of products vital to public health. Drug makers are not rendering professional services, and unlike organizations such as county blood banks that have been exempted from strict liability, they place their products into the stream of commerce and earn a profit in return. Application of the seven factors in Dean Wade's risk-utility analysis, used by the court in other cases to determine whether imposition of strict liability is appropriate, does not preclude holding drug manufacturers to a strict liability standard. The record is inadequate to demonstrate that drug manufacturers are so different from other manufacturers as to warrant special treatment under this test.The court also rules that the record is inadequate to support an exemption based on FDA regulation of drug manufacturers.

The court rules that manufacturers of prescription drugs are not immune from strict liability under the "unavoidably unsafe products" standard established by Comment k to Restatement (Second) of Torts § 402A. Whether a drug is unavoidably unsafe should be decided on a case-by-case basis. Moreover, the court rules, even if prescription drugs fell into this category, Comment k would not eliminate strict liability for failure to provide a proper warning.

Having concluded that prescription drug manufacturers are not immune from strict liability, the court considers whether the facts warrant imposition of such liability in this case, examining whether the Declomycin was defective in design, manufacture, or adequacy of warning when it left defendant's control and whether plaintiff was a foreseeable user. The issue in this case, the court notes, is the adequacy of the warning, which is treated like a design defect question. In such cases knowledge of a defect is imputed, but the adequacy of the warning is judged on a negligence standard, considering the state of knowledge at the time the manufacturer distributed the product. The manufacturer has a duty to warn of dangers in a product that a consumer is unlikely to discover if the manufacturer knew, or, held to the standard of an expert in the field, should have known of the danger. Where the product affects public health, the manufacturer is expected to seek out information on the use of its product and to be aware of reliable and relevant information on the product generally available. Complaints by doctors of drugs' side effects are included in this category of information.

The court rules that this test does not require warnings about unknowable risks or impose liabilty for injuries from such risks. It states that those reading its decision in Beshada as imposing liability in such cases have misread that opinion, and limits Beshada to the circumstances giving rise to its holding. The court also rules that in strict-liability-warning cases defendant should bear the burden of proving that the information was not reasonably available or obtainable. Placing the burden on defendant serves public policy since it is defendant that placed the drug into the stream of commerce. The court adds that drug manufacturers discovering a danger in a previously marketed product have a duty to notify doctors and the public of the risk. The court remands for reconsideration of the adequacy of defendant's warning of the risk of tooth discoloration from Declomycin and directs the lower court to charge the jury that the manufacturer is held to know of reasonably obtainable and available information and has the burden of demonstrating lack of knowledge.

The court addresses several issues arising from federal regulation of the drug industry, though they are not properly before it because they are likely to be raised below on retrial. It discounts defendant's argument that FDA rules precluded it from warning of tooth discoloration prior to late 1963 as inconsistent with the testimony, FDA rules, and the purposes of the Food, Drug and Cosmetic Act. The court also rejects defendant's argument that imposition of strict liability is preempted by federal legislation. The court finds no evidence of congressional intent to eliminate common law remedies for distribution of defective drug products. Federally mandated labelling requirements that have been held to preempt inconsistent state labelling requirements do not preclude state common law rules imposing stricter warning requirements. Given the strong state interest in drug safety, the court finds no basis for defendant's preemption claim.

Finally, the court considers the adequacy of the instructions to the jury and the verdict below. The jury considered whether plaintiff took Declomycin and whether defendant had knowledge of the risk of tooth discoloration at a time when it could have warned plaintiff. While the general verdict below does not reveal the basis of the finding for defendant, the court assumes that it was on the basis of lack of knowledge. The court rules that the trial court should have ruled that the verdict was against the weight of evidence and ordered a new trial since the record demonstrates that at least by 1962 defendant actually knew of the danger of discoloration.

The full text of this opinion is available from ELR (20 pp. $3.00, ELR Order No. C-1331).

Counsel for Appellant
James I. Peck
47 High St., West Orange NJ 07052
(201) 325-1700

Counsel for Respondents
James L. Melhuish, Bernard A. Leroe, Kevin E. Wolff
Morgan, Melhuish, Monaghan, Arvidson, Abrutyn & Lisowski
651 W. Mt. Pleasant Ave., Livingston NJ 07039
(201) 994-2500

Counsel for Amici Curiae
Arthur Ian Miltz
Kronisch & Schkeeper
139 E. McClellan Ave., Livingston NJ 07039
(201) 994-1016

John L. McGoldrick
McCarter & English
550 Broad St., Newark NJ 07102
(201) 622-4444

Schreiber, J.