Some Case-by-Case Comment K Mixed with Some Insufficient Pleading of Fraud
Eric Alexander
In Hawaii, from whence today’s case comes, tourists are encouraged to try poi, mashed up taro root, which looks like purple wallpaper paste and tastes like, well, purple wallpaper paste. The term is also used as a friendly descriptor of ethnically ambiguous looking people, whose roots have been mashed together to form something not readily identifiable by traditional visual stereotypes. (At least it seemed friendly when we heard it applied to our own offspring.) Personally, we think it is a nice concept and the less that categorizing people to determine their rights, opportunities, and expectations happens, the better. For a number of aspects of product liability law, however, the decision on whether to proceed categorically or case-by-case is still hotly contested. This is particularly true for comment k to the Restatement (Second) of Torts, § 402A, which forms the meat of the decision in Segovia v. Bristol-Myers Squibb Co., CV. No. 15-00519 DKW-RLP, 2016 U.S. Dist. LEXIS 52405 (D. Haw. Apr. 19, 2016).
Segovia involves a fatal hemorrhagic stroke with an anticoagulant prescribed and used for atrial fibrillation. We are not sure what was different from the first complaint, but the second try made vague allegations about misrepresentations to FDA and others that it was “tested and found to be safe and effective for its indicated uses” and that FDA and others had not been told of the drug’s “defects” in support of allegations of strict liability and negligent failure to warn and design defect theories. While it seems like this complaint asserted claims based on non-existent duties and clearly preempted claims, the only issues addressed by the court on the motion to dismiss were whether Hawaii law took comment k to preclude design defect claims for all prescription drugs categorically and whether any fraud-based claims had been pleaded with sufficient particularity.
As to the first question, the court did not look to our relatively recent discussions on this issue, but generally looked to older cases to find the public policy rationale for taking a case-by-case approach for prescription drugs—which was essentially determinative on a motion to dismiss. But we are getting ahead of ourselves. The first step was determining what Hawaii case law already said about comment k and only two cases were discussed. Larsen v. Pacesetter Sys., Inc., 837 P.2d 1273, 1286 (Haw. 1992), involved a pacemaker—not a drug—and concluded that summary judgment based on comment k was inappropriate where there was evidence that the “pacemaker was demonstrably capable of being made safe for its intended use.” Forsyth v. Eli Lilly & Co., 1998 WL 35152135, **3-4 (D. Haw. Jan. 5, 1998), involved a prescription drug, but did not decide the issue of categorical or case-by-case because a genuine issue as to the adequacy of warnings was sufficient to preclude summary judgment. Rather than view these cases are leaving the issue open, the Segovia court found “neither Larsen nor Forsythe create a blanket rule of design defect immunity for pharmaceutical manufacturers, and the Court declines to extend comment k in a fashion that the Hawaii courts themselves have thus far declined to do.” 2016 U.S. Dist. LEXIS 52405, *11. We think this misconstrues comment k, which does not provide “immunity,” and what it means to conclude that all prescription drugs are “unavoidably unsafe.”
Comment k is a comment to the formulation of what a plaintiff needs to prove to establish design defect liability for a claim of injury with a product because it explains how those requirements would work for certain types of products. It is not set up as an immunity. It is not really set up as an affirmative defense, although Segovia and some of the cases it cites take it as such. Take Segovia’s description of the general Hawaii strict liability law and its only mention of burden:
Under Hawaii law, a plaintiff's burden with respect to a claim of strict product liability “is to prove (1) a defect in the product which rendered it unreasonably dangerous for its intended or reasonably foreseeable use; and (2) a causal connection between the defect and the plaintiff's injuries.” A product may be defective because it was defectively designed or carried an insufficient warning.
Id. at *5 (citations omitted). If the dangers of a product cannot be avoided by adjusting its design—“incapable of being made safe for their intended and ordinary use,” per comment k—then the design cannot be said to make the product “unreasonably dangerous for its intended or reasonably foreseeable use.” The only way the manufacturer can make the product less dangerous is by providing warnings. In this way, it makes sense to say the plaintiff must prove that the warnings were inadequate as to the danger that allegedly befell that her to establish liability (absent a manufacturing defect). It does not make sense to impose liability for injuries that result from adequately warned of risks that the “present state of human knowledge” cannot avoid by altering the design of the product. For prescription drugs, we have said many times, like here, that liability for prescription drug manufacturers should turn on the adequacy of the warnings, or the plaintiff’s proof that they were inadequate. Viewing comment k as a route to “blanket immunity” loses sight of what the plaintiff has to prove.
Segovia reinforced its view that it was best to take a case-by-case approach with prescription drugs based on its interpretation of the word “many” in comment k’s language after the example of why a rabies vaccine is unavoidably unsafe:
The same is true of many other drugs, vaccines, and the like, many of which for this very reason cannot legally be sold except to physicians, or under the prescription of a physician. 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.
Id. at **6-7 (emphasis added). By using “many other drugs” and “many new and experimental drugs” instead of “all prescription drugs,” “the clear language of the comment indicates that it is to apply to only some products.” Id. at *11. Drawing on the generally older cases endorsing a case-by-case approach rather than the generally newer cases endorsing a categorical application of comment k to prescription drugs, the court found “[t]he better reasoned view is that courts should determine on a case-by-case basis whether a product is within the scope of comment k -- that is, examining cost, risk, safety and policy considerations, among others, to determine whether it is an ‘unavoidably unsafe’ product.” Id. at *12.
At this point, the decision should have looked to see whether plaintiffs’ second complaint included sufficient factual allegations to satisfy the standards for design defect under Hawaii law. Instead, it merely determined that it could not determine on the pleadings whether the anticoagulant was an “unavoidably unsafe” product, hinting that this would be more appropriate for summary judgment. Id. at *13. Not having read the complaint or examined the merits of the claims, we can still engage in some speculation about whether the design defect claim surviving a motion to dismiss should have been a foregone conclusion. After all, this was a “blood thinner” with the intended use of inhibiting clotting—that is, “thinning the blood”—to reduce the risk of ischemic strokes in patients with atrial fibrillation. The plaintiffs claim the decedent had a hemorrhagic stroke, which is a well-known risk of every blood thinner. The risk of ischemic stroke with untreated atrial fibrillation so greatly exceeds the risk of hemorrhagic stroke on a blood thinner that anticoagulation has been the standard of care non-surgical option in such patients for decades. We wonder what factual allegations could have bene made to make plausible that the drug’s risk of hemorrhagic stroke was unreasonable and due to an aspect of its design that could have been changed without compromising efficacy. Whatever they were, they surely walk straight into a wall of preemption, but that will be for another day. See, e.g., Mut. Pharm. Co. v. Bartlett, 133 S. Ct. 2466, 2475 (2013) (“[T]he altered chemical would be a new drug that would require its own NDA to be marketed in interstate commerce.”)
By contrast, the court stood firm in applying the heightened pleading requirements for fraud under Fed. R. Civ. P 9(b). It is not clear how any of these allegations fit into the plaintiffs’ failure to warn claims or if they were just thrown in as a way of getting to punitive damages, but plaintiffs included a typically liberally sprinkling of allegations of fraud by representation or omission on the decedent, the public, physicians, FDA, and unspecified others. “Plaintiffs do not sufficiently plead the date(s) or location(s) of each instance of the alleged fraudulent conduct, or the person(s) making the alleged misrepresentation.” Id. at *15. Although the court gave plaintiffs a chance at a third strike on these allegations, it did give warning that they had to specify “which statements are alleged to have been made fraudulently, and which negligently,” without being allowed to make these assertions in the alternative. Id. Until they complied, their claim for punitive damages, which was predicated on allegations of fraud, would be out—categorically.