T.H. v. Novartis Pharmaceuticals Corp. (Dec. 21, 2017, No. S233898) ___ Cal.5th ___ [2017 WL 6521684]
Plaintiffs’ mother was prescribed terbutaline, the generic bioequivalent of the brand-name drug Brethine, to suppress premature labor during her pregnancy. Plaintiffs were later diagnosed with developmental delays and autism. Alleging they were injured in utero by terbutaline, plaintiffs sued Novartis, the manufacturer of Brethine, for failing to warn of the risk to fetal brain development. According to plaintiffs, the generic manufacturer was legally required to follow brand-name warnings, so Novartis had continuing liability for failing to warn about Brethine’s hazards. Novartis argued it owed plaintiffs no duty to warn because it had stopped manufacturing Brethine and sold its rights to the product before plaintiffs’ mother received terbutaline. The trial court sustained Novartis’s demurrer, but the Court of Appeal reversed and allowed plaintiffs leave to amend. The Supreme Court then granted review.
In a 4-3 decision, the Supreme Court affirmed the Court of Appeal’s decision. The Supreme Court majority explained that, under federal law, the manufacturer of Brethine (brand-name) controlled both the form and content of the terbutaline (generic) warning label. The Court therefore concluded that plaintiffs could allege a cause of action against Novartis for failing to warn. Because the same warning label must appear on the brand-name drug and its generic bioequivalent, a brand-name drug manufacturer owes a duty of reasonable care in ensuring that the label includes appropriate warnings, regardless of whether the end user has been dispensed the brand-name drug or its generic bioequivalent. The majority also endorsed plaintiffs’ predecessor liability theory. The majority explained that, if the person exposed to the generic drug can reasonably allege that the brand-name drug manufacturer’s failure to update its warning label foreseeably and proximately caused physical injury, then the brand-name manufacturer’s liability for its own negligence does not automatically terminate merely because the brand-name manufacturer transferred its rights in the drug to a successor.
Three justices dissented in part, disagreeing with the Court’s holding that predecessor manufacturers have a duty to warn their successors’ customers about risks of a product they no longer make or sell. According to the dissenters, this “theory of ‘predecessor liability’ represents a substantial and unprecedented expansion of tort duties. The majority cites no case holding a predecessor manufacturer liable for failing to warn about injuries caused by its successor’s product.”
Peder K. Batalden
pbatalden@horvitzlevy.com
Horvitz & Levy LLP
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