159 So. 3d 649 (Ala. 2014)
The opinion of January 11, 2013, is withdrawn, and the following is substituted therefor.
The United States District Court for the Middle District of Alabama, Southern Division ("the district court"), has certified to this Court the following question pursuant to Rule 18, Ala. R. App. P.:
"Under Alabama law, may a drug company be held liable for fraud or misrepresentation (by misstatement or omission), based on statements it made in connection with the manufacture or distribution of a brand-name drug, by a plaintiff claiming physical injury from a generic drug manufactured and distributed by a different company?"
In its certification to this Court, the district court provided the following background information:
"Plaintiffs Danny and Vicki Weeks filed this action against five current and former drug manufacturers for injuries that Mr. Weeks allegedly suffered as a result of his long-term use of the prescription drug product metoclopramide, which is the generic form of the brand-name drug Reglan.® The Weekses claim that two companies -- Teva Pharmaceuticals USA and Actavis Elizabeth, LLC -- manufactured and sold the generic metoclopramide that Mr. Weeks ingested.
"The Weekses concede that Mr. Weeks did not ingest any Reglan® manufactured by the three brand-name defendants, Wyeth LLC, Pfizer Inc., and Schwarz Pharma, Inc. The Weekses nonetheless assert that the brand-name defendants are liable for Mr. Weeks's harm on fraud, misrepresentation, and/or suppression theories because they at different times manufactured or sold brand-name Reglan® and purportedly either misrepresented or failed adequately to warn Mr. Weeks or his physician about the risks of using Reglan® long-term. The brand-name defendants moved to dismiss the claims against them, arguing, among other things, (1) that the Weekses' claims, however pled, are in fact product liability claims that are barred for failure of 'product identification' and (2) that they had no duty to warn about the risks associated with ingestion of their competitors' generic products. The Weekses responded to the brand-name defendants' motion, and the defendants replied. On March 31, 2011, this Court granted in part and denied in part the brand-name defendants' motion, holding that the Weekses might be able to state a claim for relief under Alabama law if they could prove that the brand-name manufacturers had a duty to warn Mr. Weeks's physician about the risks associated with long-term use of brand-name Reglan® and, further, that the Weekses, as third parties, had a right to enforce an alleged breach of that duty.
"Within the last year alone, federal district courts in this State have issued four decisions addressing the question whether brand-name Reglan® manufacturers can be held liable on fraud, misrepresentation, and/or suppression theories for physical injuries allegedly caused by plaintiffs' ingestion of generic metoclopramide. The first two courts answered no; however, this Court held otherwise, thereby creating an intrastate split. Compare Simpson v. Wyeth, Inc., No. 7:10-CV-01771-HGD, ... (N.D. Ala. Dec. 9, 2010)[not reported in F. Supp. 2d], report and recommendation adopted (N.D. Ala. Jan. 4, 2011)[not reported in F. Supp. 2d] (holding that a brand-name manufacturer has no duty under Alabama law to warn of the risks associated with a competitor's generic product); Mosley v. Wyeth, Inc., 719 F. Supp. 2d 1340 (S.D. Ala. 2010)(same), with Weeks v. Wyeth, Inc., No. 1:10-cv-602 (M.D. Ala. Mar. 31, 2011)[not reported in F. Supp. 2d](denying brand-name manufacturers' motion to dismiss on the ground that the plaintiffs there had pleaded a claim 'that defendants perpetrated a fraud on the physician'); see also Barnhill v. Teva Pharm. USA. Inc., No. Civ. 06-0282-CB-M (S.D. Ala. Apr. 24, 2007)[not reported in F. Supp. 2d](holding that a brand-name manufacturer of the drug Keflex® has no duty under Alabama law to warn of the risks associated with a competitor's generic product). Since this Court's decision, another district court in Alabama has followed the earlier decisions. See Overton v. Wyeth, Inc., No. CA 10-0491-KD-C (S.D. Ala. Mar. 15, 2011)[not reported in F. Supp. 2d], report and recommendation adopted (S.D. Ala. Apr. 7, 2011)[not reported in F. Supp. 2d].
"Certification is appropriate here to resolve the disagreement among the federal district courts within Alabama and to prevent both federal courts within the State and state courts around the country from having to 'mak[e] unnecessary Erie guesses' about unsettled questions of Alabama law. Tobin v. Michigan Mut. Ins. Co., 398 F.3d 1267, 1274 (11th Cir. 2005); see also, e.g., Lehman Bros. v. Schein, 416 U.S. 386, 391 (1974)(noting that certification often 'save[s] time, energy, and resources and helps build a cooperative judicial federalism'). 'Because the only authoritative voice on Alabama law is the Alabama Supreme Court, it is axiomatic that that court is the best one to decide issues of Alabama law.' Blue Cross & Blue Shield of Ala., Inc. v. Nielsen, 116 F.3d 1406, 1413 (11th Cir. 1997).
"The question framed ... satisfies the requirements of Ala. R. App. P. 18(a): first, it presents a pure question of Alabama law; second, it is 'determinative' of this case in the sense that a negative answer would require dismissal of the Weekses' claims against the brand-named defendants; and third, although two Alabama trial courts have addressed the question whether a brand-name manufacturer can ever be held liable for physical harm caused by a generic product and answered it in the negative,1 the Alabama Supreme Court has never considered or resolved either that question or the subsidiary question whether a plaintiff claiming physical injury can prevail on fraud, misrepresentation, and/or suppression theories under these facts.
"Considerations of judicial efficiency likewise counsel certification. During the last year, the number of Reglan®/metoclopramide cases nationwide ballooned from 250 to approximately 3500. Current estimates suggest that among the 3500 cases there are at least 250 Alabama-resident plaintiffs and that most (if not all) of these plaintiffs assert the fraud, misrepresentation, and/or suppression theories asserted here. The Alabama Supreme Court's definitive resolution of the question presented will therefore affect not only cases pending (or that might later arise) in this State, but also the scores of Alabama-resident cases pending in courts around the country -- particularly in large consolidated actions pending in California, New Jersey, and Pennsylvania. Moreover, the question's significance extends well beyond the Reglan® litigation -— and for that matter, even beyond pharmaceutical litigation. It is likely to recur any time a brand-name manufacturer (of any product) is sued on fraud, misrepresentation, and/or suppression theories by a plaintiff who claims to have been injured while using a generic-equivalent product.
"....
"1See Buchanan v. Wyeth Pharm., Inc., No. CV-2007-900065, Order at 1 (Ala. Cir. Ct. Oct. 20, 2008); Green v. Wyeth Pharm., Inc., No. CV-06-3917 ER (Ala. Cir. Ct. May 14, 2007)."
At the outset, we limit the question posed to manufacturers of prescription drugs and not to any distributors thereof.1 The Weekses' complaint alleges that three brand-name manufacturers, Wyeth, Pfizer, Inc., and Schwarz Pharma, Inc. (hereinafter collectively referred to as "Wyeth"), falsely and deceptively misrepresented or knowingly suppressed facts about Reglan or metoclopramide such that Danny Weeks's physician, when he prescribed the drug to Danny, was materially misinformed and misled about the likelihood that the drug would cause the movement disorder tardive dyskinesia and related movement disorders.2 The Weekses contend that Wyeth had a duty to warn Danny's physician about the risks associated with the long-term use of metoclopramide and that the Weekses, as third parties, have a right to hold Wyeth liable for the alleged breach of that duty.
A fraudulent-misrepresentation action is governed by § 6-5-101, Ala. Code 1975, which provides that "[m]isrepresentations of a material fact made willfully to deceive, or recklessly without knowledge, and acted on by the opposite party, or if made by mistake and innocently and acted on by the opposite party, constitute legal fraud." A claim of fraudulent misrepresentation comprises the following elements: "(1) a false representation (2) concerning a material fact (3) relied upon by the plaintiff (4) who was damaged as a proximate result." Fisher v. Comer Plantation, 772 So. 2d 455, 463 (Ala. 2000)(quoting Baker v. Bennett, 603 So. 2d 928, 935 (Ala. 1992)). "An essential element of fraudulent-misrepresentation and fraudulent-suppression claims is a duty to disclose." Nesbitt v. Frederick, 941 So. 2d 950, 955 (Ala. 2006).
We recognize that Wyeth argues that the Weekses' claims are, in essence, "products-liability" claims. In Atkins v. American Motors Corp., 335 So. 2d 134 (Ala. 1976), in conjunction with Casrell v. Altec Industries, Inc., 335 So. 2d 128 (Ala. 1976), this Court adopted the Alabama Extended Manufacturer's Liability Doctrine ("AEMLD"). The AEMLD is "a judicially created accommodation of Alabama law to the doctrine of strict liability for damage or injuries caused by allegedly defective products." Keck v. Dryvit Sys., Inc., 830 So. 2d 1, 5 (Ala. 2002). This Court has explained that the AEMLD did not subsume a common-law negligence or wantonness claim. Tillman v. R.J. Reynolds Tobacco Co., 871 So. 2d 28 (Ala. 2003); Vesta Fire Ins. Corp. v. Milam & Co. Constr., 901 So. 2d 84 (Ala. 2004).
"It must be remembered, ... that the AEMLD, as established in Casrell and Atkins, supra, is 'an example of judicial legislation,' not of legislative enactment. Keck v. Dryvit Sys., Inc., 830 So. 2d 1, 8 (Ala. 2002). This Court warned last year in Keck that '[j]udicial decision-making should not be seen as the opportunity to legislate.' 830 So. 2d at 8. Alabama remains a common-law state, and therefore common-law tort actions 'so far as [they are] not inconsistent with the Constitution, laws and institutions of this state ... shall continue in force, except as from time to time ... may be altered or repealed by the Legislature.' § 1-3-1, Ala. Code 1975. We will not presume to so define the boundaries of the judicially created AEMLD so that it subsumes the common-law tort actions of negligence and wantonness against the retailer defendants."
Tillman, 871 So. 2d at 34-35. We have also recognized that fraudulent suppression is a claim separate from an AEMLD claim. Keck, supra. Accordingly, for purposes of this certified question, we will not treat the Weekses' claims as AEMLD claims governed by the principles of the AEMLD.
Wyeth argues, based on Pfizer, Inc. v. Farsian, 682 So. 2d 405 (Ala. 1996), that a plaintiff who in substance alleges physical injury caused by a product has a products-liability claim, no matter the label or labels he uses in his complaint, and that, in a products-liability claim, the plaintiff must prove that the defendant manufactured the product the plaintiff claims injured him or her. We recognize that in Farsian this Court contended that the plaintiff's claim was in substance a products-liability claim and not a fraud claim as he had asserted. In Farsian, a heart-valve recipient's valve had not malfunctioned, although the valves in some other patients who had received the valve made by the manufacturer had malfunctioned. The federal court where the action was filed certified the following question to this Court:
"'Does a heart valve implantee have a valid cause of action for fraud under Alabama law if he asserts that the valve's manufacturer fraudulently induced him to have the valve implanted when the damages he asserts do not include an injury-producing malfunction of the product because the valve has been and is working properly?'"
682 So. 2d at 406. The manufacturer argued that, although the plaintiff had alleged a risk of possible future malfunction of the valve, it was uncontroverted that his valve was and had been working properly. The manufacturer contended that the plaintiff was really asserting a products-liability claim and that, as such, the action did not accrue until there was an injury-producing malfunction. The manufacturer further argued that an allegation of fraud did not relieve the plaintiff from having to prove an injury-producing malfunction. The plaintiff argued that his fraud claim was not subsumed by products-liability law and that he could recover damages even if he could not prove that his valve was not yet malfunctioning.
In addressing the question, we stated:
"The question certified to this Court concerns whether [the plaintiff] may maintain a fraud claim under Alabama law. We conclude that he may not.
"Regardless of how [the plaintiff] pleads his claim, his claim is in substance a product liability/personal-injury claim -- [the plaintiff] seeks damages because of the risk that his heart valve may one day fail. Alabama courts have never allowed a recovery based on a product that, like [the plaintiff]'s valve, is and has been working properly. Each of our prior cases in which fraud or other intentional conduct was alleged has involved a failure, a malfunction, or an accident that involved the defendant's products and which injured the plaintiff. See Quality Homes Co. v. Sears, Roebuck & Co., 496 So. 2d 1 (Ala. 1986); Treadwell Ford, Inc. v. Campbell, 485 So. 2d 312, 313 (Ala. 1986), appeal dismissed, 486 U.S. 1028, 108 S.Ct. 2007, 100 L.Ed.2d 596 (1988)."
682 So. 2d at 407. Ultimately, we stated:
"[The plaintiff]'s heart valve has not failed. Instead, it has been working properly and as intended by its manufacturer .... Although the parties see different theories of this case -- [the plaintiff] relying upon Alabama fraud law, while [the manufacturer] argues in the context of product liability law -- we conclude that the answer to the certified question, whether it is couched in terms of fraud law or in terms of product liability law, must be that [the plaintiff] does not now have a cause of action for damages, because the valve has not failed."
682 So. 2d at 408. Farsian is distinguishable. This Court's holding there was that, under either a fraud theory or a products-liability theory, the plaintiff did not have a valid cause of action because fear that the valve could fail in the future was not, without more, a legal injury sufficient to support his claim. In the present case, the Weekses are arguing that Wyeth fraudulently misrepresented or suppressed facts to Danny's physician regarding the dangers of the long-term use of Reglan and that, as a result, Danny was injured. This is not a claim that the drug ingested by Danny was defective; instead, it is a claim that Wyeth fraudulently misrepresented or suppressed information about the manner in which (i.e., the duration) the drug was to be taken. In short, the Weekses' claim is based on what Wyeth said or did not say about Reglan and their assertion that those statements or omissions caused Danny's injuries. Farsian does not support a conclusion by this Court that the Weekses' claim is in substance a products-liability claim.
We note that Alabama's Pharmacy Act, § 34-23-1 et seq., Ala. Code 1975, permits a pharmacist to select in place of a brand-name drug a less expensive drug product that is the pharmaceutical and therapeutical equivalent of the brand-name drug and that contains the same active ingredient or ingredients and is the same dosage-form strength, unless the prescribing physician indicates otherwise on the prescription. § 34-23-8, Ala. Code 1975. In the present case, it appears that Danny's prescription did not prohibit the pharmacist from substituting a generic drug for the brand-name drug. "Currently all states have some form of generic substitution law." PLIVA, Inc. v. Mensing, 564 U.S. , , 131 S.Ct. 2567, 2583 (2011)(Sotomayor, J., dissenting). That a pharmacist acted under § 34-23-8 and gave Danny a generic drug does not preclude Danny's ability to assert a fraudulent-misrepresentation claim against the brand-name manufacturer of the drug. Additionally, many insurance plans are structured to promote the use of generic drugs. PLIVA, 564 U.S. at n.2, 131 S.Ct. at 2584 n.2. We now turn to the federal laws governing prescription drugs.
Prescription drugs are unique because of the extensive federal regulation of that product by the Food and Drug Administration ("the FDA"). "Congress has established a comprehensive regulatory scheme, administered by the FDA, to control the design and distribution of prescription drugs." Blackmon v. American Home Prods. Corp., 328 F. Supp. 2d 659, 665 (S.D. Tex. 2004)(citing 21 U.S.C. §§ 301-393). The FDA has the ultimate authority to determine whether a new prescription drug is safe and effective for use. 21 U.S.C. §§ 355(a) and (d)(prohibiting the distribution of a new drug without FDA approval of a new-drug application showing the drug to be safe and effective). The approval process begins with an investigational new-drug application ("IND") submitted to the FDA, which includes information about the chemistry, manufacturing, pharmacology, and toxicology of the drug. See 21 U.S.C. § 355(b); 21 C.F.R. § 312.21. The IND also includes pre-clinical data (animal pharmacology and toxicology), and protocols for human testing must be detailed.3
After clinical trials on humans have been completed, the manufacturer may submit a new-drug application ("NDA") to the FDA. The manufacturer must present "substantial evidence that the drug will have the effect it purports or is represented to have under the conditions of use prescribed, recommended, or suggested in the proposed labeling." 21 U.S.C. § 355(d)(5). The NDA shall include: (1) reports of the clinical trials and testing done to determine the safety and effectiveness of the drug; (2) the complete ingredients or components of the drug; (3) the composition of the drug; (4) a complete description of the manufacturing, processing, and packaging methods and controls; (5) samples of the drug and its components (if requested); and (6) samples of the proposed labeling. 21 U.S.C. § 355(b)(1). The NDA also must disclose all the investigators who worked in clinical trials of the drug, as well as their reports. Also, an NDA must include the patent number and expiration dates for any patents related to or impacted by the drug. 21 U.S.C. § 355(b)(1). The patent is generally good for 20 years, giving the manufacturer (drug developer) the exclusive right to make and sell the drug during that period. 35 U.S.C. § 154(a)(2). The manufacturer make seek a five-year extension of the patent under 35 U.S.C. § 156(g)(6)(A).
When the patent on a brand-name drug expires, generic manufacturers may seek to replicate a generic version. Generic versions of brand-name drugs contain the same active ingredient as the brand-name original. United States v. Generix Drug Corp., 460 U.S. 453 (1983). To expedite the approval process for generic drugs in order to bring prescription-drug costs down while at the same time preserving patent protections for brand-name drugs, Congress adopted the Drug Price Competition and Patent Term Restoration Act of 1984. 21 U.S.C. § 355. This Act, also known as the Hatch-Waxman Act, provides for an abbreviated new-drug-application ("ANDA") process for the approval of generic versions of brand-name drugs. The ANDA relies on the FDA's previous determination that the brand-name drug is safe and effective. See Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 675 (1990)("The ANDA applicant can substitute bioequivalence data for the extensive animal and human studies of safety and effectiveness that must accompany a full new drug application."). This allows an applicant for a generic version of a drug to avoid the costly and time-consuming process associated with an NDA,4 which allows the dissemination of low-cost generic drugs. See H.R. Rep. No. 98–857 (Part I) at 14 (June 21, 1984). A generic manufacturer is not entitled to all data in the master file controlled by the FDA because some data may constitute trade secrets belonging to the brand-name manufacturer. 21 C.F.R. § 314.430. At the same time, Congress sought to protect brand-name manufacturers whose patent rights could be threatened by the marketing of generic versions of their patented innovations. See American Bioscience, Inc. v. Thompson, 243 F.3d 579, 580 (D.C. Cir. 2001); Purepac Pharm. Co. v. Thompson, 238 F. Supp. 2d 191 (D. D.C. 2002).
Brand-name manufacturers have a duty to supply the FDA with "postmarketing reports," which include reports of any serious and unexpected adverse reactions suffered by a user of a drug. 21 C.F.R. § 314.80. The brand-name manufacturer must also submit annual reports to the FDA on significant information, including information that might affect the safety, effectiveness, or labeling of the product. 21 C.F.R. § 314.81. A generic manufacturer is likewise required to submit these reports to the FDA. 21 C.F.R. § 314.98. However, brand-name manufacturers and generic manufacturers have different federal drug-labeling responsibilities.
"A brand-name manufacturer seeking new drug approval is responsible for the accuracy and adequacy of its label. See, e.g., 21 U.S.C. §§ 355(b)(1), (d); Wyeth [v. Levine, 555 U.S. 555], 570-571 [(2009)]. A manufacturer seeking generic drug approval, on the other hand, is responsible for ensuring that its warning label is the same as the brand name's. See, e.g., § 355(j)(2)(A)(v); § 355(j)(4)(G); 21 CFR §§ 314.94(a)(8), 314.127(a)(7)."
PLIVA, 564 U.S. at , 131 S.Ct. at 2574. "Drug labels are subject to change. New risks may become apparent only after the drug has been used more widely and for longer periods." Mensing v. Wyeth, Inc., 588 F.3d 603, 606 (8th Cir. 2009), reversed on other grounds, PLIVA, supra. Under the "Changes Being Effected" or "CBE" rule, a brand-name manufacturer, upon discovering a clinically significant hazard, may modify its label to "add or strengthen a contraindication, warning, precaution, or adverse reaction" without FDA approval. 21 C.F.R. § 314.70(c)(6)(iii)(A). Ultimately, the FDA will review any CBE modification to a label. 21 C.F.R. § 314.70(c)(7). If the FDA rejects the change, it may order the manufacturer to cease distribution of the drug with the revised label. 21 C.F.R. § 314.70(c)(7).
A "label" is defined as "a display of written, printed, or graphic matter upon the immediate container of any article ...." 21 U.S.C. § 321(k). "'[L]abeling' means all labels and other written, printed, or graphic matter (1) upon any article or any of its containers or wrappers, or (2) accompanying such article." 21 U.S.C. § 321(m). The FDA interprets "labeling" broadly, to include:
"Brochures, booklets, mailing pieces, file cards, bulletins, calendars, price lists, catalogs, house organs, letters, motion picture films, film strips, lantern slides, sound recordings, exhibits, literature, and reprints and similar pieces of printed, audio, or visual matter descriptive of a drug and references published (for example, the 'Physicians Desk Reference') for use by medical practitioners, pharmacists, or nurses, containing drug information supplied by the manufacturer, packer, or distributor of the drug ...."
21 C.F.R. § 202.1(l)(2). The FDA includes in its interpretation of labeling "Dear Doctor" letters, PLIVA, 564 U.S. at , 131 S.Ct. at 2576, which are letters drug manufacturers send to health-care providers informing them of critical newly discovered risks or side effects of a medication.
The FDA has determined that a generic manufacturer cannot unilaterally strengthen a warning label for a generic drug or send a "Dear Doctor" letter under the CBE rule because doing so would violate the statutes and regulations requiring the label of a generic drug to match the brand-name manufacturer's label. PLIVA, 564 U.S. at , 131 S.Ct. at 2575.
"Federal regulations applicable to generic drug manufacturers directly conflict with, and thus preempt, state laws that hold generic drug manufacturers liable for inadequate warning labels on their products. Mensing, 131 S.Ct. at 2578. Under the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq., a manufacturer seeking federal approval to market a new drug must prove that it is safe and effective and that the proposed label is accurate and adequate. 21 U.S.C. § 355(b)(1). By contrast, under the Drug Price Competition and Patent Term Restoration Act, known as the Hatch–Waxman Amendments, generic drug formulations can gain FDA approval by showing bioequivalence to a reference-listed drug that has already been approved by the FDA. 21 U.S.C. § 355(j)(2)(A). A generic drug application must also show that 'the labeling proposed for the new drug is the same as the labeling approved for the listed drug.' 21 U.S.C. § 355(j)(2)(A)(v). Therefore, rather than a duty to warn, 'generic manufacturers have an ongoing federal duty of sameness' regarding their warning labels. Mensing, 131 S.Ct. at 2574. Under the same rules, generic drug manufacturers may not issue additional warnings through Dear Doctor letters, nor may they imply in any way that there is a therapeutic difference between their product and the name-brand drug. Id. at 2576."
Phelps v. Wyeth, Inc., 857 F. Supp. 2d 1114, 1133 (D. Or. 2012)(emphasis added). According to the FDA, if a generic manufacturer believes that stronger warnings are needed, then the manufacturer is required to propose such changes to the FDA, and, if the FDA agrees that such changes are necessary, the FDA will work with the brand-name manufacturer to create a new label for both the brand-name and generic drug. PLIVA, 564 U.S. at , 131 S.Ct. at 2576.
The Supreme Court, in two cases, has addressed the extent to which manufacturers may change their labels after FDA approval. We note that, because of the extensive federal regulations, both the manufacturers of brand-name drugs and generic drugs in those cases argued that the federal regulations preempted state-law claims. In Wyeth v. Levine, 555 U.S. 555 (2009), the plaintiff developed gangrene and her forearm had to be amputated when a physician's assistant injected her artery with the anti-nausea drug Phenergan by using the "IV push" method of intravenous injection. She sued Wyeth, the manufacturer of Phenergan, for failing to provide an adequate warning about the different risks involved with the various methods of administering the drug. She relied on common-law negligence and strict-liability theories. A jury found that Wyeth had failed to provide an adequate warning about the risks involved when Phenergan is administered by the IV push method. On appeal, Wyeth argued that the plaintiff's failure-to-warn claims were preempted by federal regulations regarding drug labeling because it was impossible for a manufacturer to comply with both state laws and federal-labeling obligations. Wyeth also argued that recognition of state-law suits would undermine Congress's intent to entrust labeling to the expertise of the FDA. The Supreme Court rejected both contentions and held that there was no preemption. The Supreme Court concluded that Wyeth failed to demonstrate that it was impossible for it to comply with both federal and state requirements, and it noted that state-law claims are an important complement to the FDA's regulation of prescription drugs. The Supreme Court stated:
"In keeping with Congress' decision not to pre-empt common-law tort suits, it appears that the FDA traditionally regarded state law as a complementary form of drug regulation. The FDA has limited resources to monitor the 11,000 drugs on the market, and manufacturers have superior access to information about their drugs, especially in the postmarketing phase as new risks emerge. State tort suits uncover unknown drug hazards and provide incentives for drug manufacturers to disclose safety risks promptly. They also serve a distinct compensatory function that may motivate injured persons to come forward with information. Failure-to-warn actions, in particular, lend force to the [Federal Food, Drug, and Cosmetic Act]'s premise that manufacturers, not the FDA, bear primary responsibility for their drug labeling at all times. Thus, the FDA long maintained that state law offers an additional, and important, layer of consumer protection that complements FDA regulation."
555 U.S. at 578-79 (footnote omitted).
PLIVA, supra, also involved a preemption claim regarding labels, but the manufacturer there produced the generic version of a brand-name drug. "The question presented [was] whether federal drug regulations applicable to generic drug manufacturers directly conflict with, and thus pre-empt, these state-law claims." 564 U.S. at , 131 S.Ct. at 2572. The FDA had issued a labeling requirement regarding Reglan, the brand name of metoclopramide, the generic drug at issue in the present case. The plaintiffs in PLIVA were prescribed Reglan but received the generic form of the drug, which contained the same labeling information the FDA had approved for the brand-name drug. According to the FDA, 57 Fed. Reg. 17961 (1992) requires a generic-drug manufacturer's labeling to be the same as the brand-name-drug manufacturer's labeling because the brand-name drug is the basis for the FDA's approval of the generic drug. 564 U.S. at ___, 131 S.Ct. at 2575. By 2009, the FDA had ordered a "black box" warning for Reglan concerning the dangers associated with its long-term use. The plaintiffs had suffered severe neurological reactions from taking the generic form of the drug and had brought state-law tort claims against the manufacturers of the generic form of the drug for failing to warn them of such danger. The basis of the plaintiffs' claims was that the warning labels for the generic drug were inadequate and that the generic manufacturers had a duty to strengthen their warning labels under the FDA's CBE process. 564 U.S. at , 131 S.Ct. at 2575. The Supreme Court found that the FDA's federal-labeling requirement preempted the plaintiffs' state-law claims against the manufacturers of the generic drug because it would have been impossible for the generic manufacturers to change their warning labels without violating the federal requirement that the warning on a generic drug match the warning on its brand-name counterpart.
"[B]rand-name and generic drug manufacturers have different federal drug labeling duties. A brand-name manufacturer seeking new drug approval is responsible for the accuracy and adequacy of its label. See, e.g., 21 U.S.C. §§ 355(b)(1), (d); Wyeth [v. Levine], [555 U.S. 555] at 570-571, 129 S.Ct. 1187 [(2009)]. A manufacturer seeking generic drug approval, on the other hand, is responsible for ensuring that its warning label is the same as the brand name's. See, e.g., § 355(j)(2)(A)(v); § 355(j)(4)(G); 21 C.F.R. §§ 314.94(a)(8), 314.127(a)(7)."
564 U.S. at , 131 S.Ct. at 2574. The Supreme Court held that because the FDA prevented the generic manufacturers from independently changing the safety label on their generic drugs, "it was impossible for the Manufacturers to comply with both their state-law duty to change the label and their federal law duty to keep the label the same." 564 U.S. at ___, 131 S.Ct. at 2578.
The Supreme Court recognized in PLIVA the seeming contradiction in preempting claims against a generic manufacturer in PLIVA but allowing state-law tort claims in Wyeth:
"We recognize that from the perspective of [the plaintiffs], finding pre-emption here but not in Wyeth makes little sense. Had [the plaintiffs] taken Reglan, the brand-name drug prescribed by their doctors, Wyeth would control and their lawsuits would not be pre-empted. But because pharmacists, acting in full accord with state law, substituted generic metoclopramide instead, federal law pre-empts these lawsuits. See, e.g., Minn. Stat. § 151.21 (2010) (describing when pharmacists may substitute generic drugs); La. Rev. Stat. Ann. § 37:1241(A)(17) (West 2007) (same). We acknowledge the unfortunate hand that federal drug regulation has dealt [the plaintiffs] and others similarly situated.13
"But 'it is not this Court's task to decide whether the statutory scheme established by Congress is unusual or even bizarre.' Cuomo v. Clearing House Assn., L.L.C., 557 U.S. 519, 556 (2009) (Thomas, J., concurring in part and dissenting in part) (internal quotation marks and brackets omitted). It is beyond dispute that the federal statutes and regulations that apply to brand name manufacturers are meaningfully different than those that apply to generic drug manufacturers. Indeed, it is the special, and different, regulation of generic drugs that allowed the generic drug market to expand, bringing more drugs more quickly and cheaply to the public. But different federal statutes and regulations may, as here, lead to different pre-emption results. We will not distort the Supremacy Clause in order to create similar pre-emption across a dissimilar statutory scheme. As always, Congress and the FDA retain the authority to change the law and regulations if they so desire.
"15That said, the dissent overstates what it characterizes as the 'many absurd consequences' of our holding. Post, [131 S.Ct.] at 2592. First, the FDA informs us that '[a]s a practical matter, genuinely new information about drugs in long use (as generic drugs typically are) appears infrequently.' U.S. Brief 34–35. That is because patent protections ordinarily prevent generic drugs from arriving on the market for a number of years after the brand-name drug appears. Indeed, situations like the one alleged here are apparently so rare that the FDA has no 'formal regulation' establishing generic drug manufacturers' duty to initiate a label change, nor does it have any regulation setting out that label-change process. Id., at 20–21. Second, the dissent admits that, even under its approach, generic drug manufacturers could establish pre-emption in a number of scenarios. Post, [131 S.Ct.] at 2588–2589."
564 U.S. at , 131 S.Ct. at 2581-82.
As noted in the facts set out in the certified question, other federal courts applying Alabama law have held that Alabama law does not allow a person who consumed a generic version of a brand-name drug to sue the brand-name manufacturer based on fraudulent misrepresentation. In Mosley v. Wyeth, Inc., 719 F. Supp. 2d 1340 (S.D. Ala. 2010), the plaintiffs did not ingest Reglan but took a generic equivalent manufactured by a generic manufacturer. They sued the brand-name manufacturers of Reglan alleging, among other things, negligent and fraudulent misrepresentation regarding the warnings contained in the labels the plaintiffs argued the brand-name manufacturers knew would be relied upon by generic manufacturers in generating the warning labels for the generic version of the drug. The federal court held that the plaintiffs could not rely on any allegedly negligent misrepresentations made by the brand-name manufacturers to support their claim of negligent misrepresentation because the brand-name manufacturers did not owe a duty to the plaintiffs, who had ingested a generic version. The court also stated that the plaintiffs' claim of negligent misrepresentation should fail because the brand-name manufacturers did not engage in any business transaction with the plaintiffs. With regard to fraudulent misrepresentation, the court held that the plaintiffs failed to present any binding authority for the assertion that a brand-name manufacturer owed a duty to the consumer of a generic version of its product and failed to cite any binding authority for the contention that an injury resulting from consuming a generic drug could be considered to be proximately caused by a brand-name manufacturer's alleged misrepresentation regarding the brand-name version of the generic drug. The court also noted that the fact that federal law allowed a generic manufacturer to streamline the approval process by relying on the initial warning labels provided by the brand-name manufacturers did not create a duty between the brand-name manufacturers and the consumer of the generic version because, after the ANDA process, generic manufacturers become responsible for their own warning labels and any necessary revisions to those labels.
Mosley is distinguishable from the present case. The Weekses are not arguing that Wyeth owed them a duty. Instead, they are arguing that Wyeth owed Danny Weeks's physician a duty and that, under the learned-intermediary doctrine, the Weekses are entitled to rely on the representations made to Danny's physician. Also, we note that Mosley was issued before the United States Supreme Court in PLIVA, supra, expressly found that because it was impossible for the generic manufacturers to comply with both their state-law duty to change the drug label to a safer label adequately warning of the dangers inherent in long-term use and their federal-law duty to keep the label the same as the brand-name manufacturer's label, any state-law claims against a generic manufacturer were preempted. Reliance upon the reasoning in Mosley that a generic manufacturer is responsible for its own warning labels and revisions of those labels is unsound.
In Overton v. Wyeth, Inc. (No. CA 10-0491-KD-C, March 15, 2011) (S.D. Ala. 2011)(not reported in F. Supp. 2d), the brand-name manufacturers filed a motion to dismiss the plaintiffs' state-law claims of breach of warranty, fraudulent misrepresentation, and negligent misrepresentation where the plaintiffs had ingested the generic versions of the brand-name drug. The plaintiffs argued that the brand-name manufacturers placed false and misleading information in their labels, when they knew the labels would be relied upon by the generic manufacturers in generating their own labels, and that their doing so was a direct and proximate cause of the plaintiffs' injuries. The federal court stated that the dispositive issue on the plaintiffs' misrepresentation claims was whether the brand-name manufacturers owed any duty to plaintiffs who ingested the generic version of their brand-name drug. The federal court held that the plaintiffs presented no evidence indicating that the brand-name manufacturers owed a duty to consumers of the generic version of the drug so that the plaintiffs' injuries could be considered to have been a proximate consequence of a brand-name manufacturers' alleged misrepresentation regarding the brand-name drug. The court noted that FDA regulations could not provide the requisite duty element because federal law allows a generic manufacturer to streamline the approval process by relying on the initial warning labels provided by the brand-name manufacturer, but that the generic manufacturer still had the burden of showing that its warning label adequately described the risk associated with the drug. "In other words, after the initial approval (ANDA approval), the generic manufacturers become responsible for their own warning labels and any necessary revisions." Note 9. Overton was issued before the Supreme Court decided PLIVA. Accordingly, the federal court's conclusion in Overton that a generic manufacturer becomes responsible for its own warning label after the ANDA process is incorrect.
In Simpson v. Wyeth, Inc. (No. 7:10-cv-01771-HGD, December 9, 2010)(N.D. Ala. 2010)(not reported in F. Supp. 2d), the federal court held that the plaintiffs, who had ingested only the generic version of Reglan, could not recover for the alleged fraudulent misrepresentations made to the plaintiffs' doctor by the manufacturers of Reglan. The brand-name manufacturers argued that, because they did not manufacture the product the plaintiffs had ingested and that allegedly had caused their injuries, the brand-name manufacturers could not be held liable. The plaintiffs alleged that their claim against the brand-name manufacturers was based on the damage caused by the product as a result of the brand-name manufacturers' misinformation to the prescribing doctors, and the plaintiffs argued that they could recover from the brand-name manufacturers even though they were third parties to the alleged deceit or concealment because, they argued, the deceit and concealment perpetrated against the plaintiffs' prescribing doctors proximately caused their damage. In support of their argument, the Simpson plaintiffs relied on Delta Health Group, Inc. v. Stafford, 887 So. 2d 887 (Ala. 2004), which held that in certain circumstances a plaintiff may properly state a fraud claim even though the defendant's false representation is made to a third party, rather than to the plaintiff. In discussing Delta Health, the federal court noted that Delta Health went on to hold that a plaintiff must establish that he or she relied on the misrepresentation.
The federal court in Simpson stated that the problem with the plaintiffs' reliance argument was that Alabama courts have repeatedly rejected a theory of liability when the plaintiffs have attempted to hold a brand-name manufacturer responsible for damage caused by a generic brand of its drug, citing Mosley, supra. The federal court also relied on the fact that the FDA regulation did not require a brand-name manufacturer to ensure that the label of the generic version is accurate, citing Swicegood v. PLIVA, Inc., 543 F. Supp. 2d 1351 (N.D. Ga. 2008). "Thus, it is the duty of the generic drug manufacturer to correctly advise a physician using its product of any associated risks, not the brand name manufacturer." Simpson.
The federal court in Simpson went on to address the learned-intermediary doctrine:
"Likewise, '[u]nder the learned intermediary doctrine, a manufacturer's duty to warn is limited to an obligation to advise a prescribing physician of any potential dangers that may result from the use of its product.' Walls v. [Alpharma] USPD, [Inc.], 887 So. 2d [881,] 883 [(Ala. 2004)]. Thus, the duty to warn of risks related to the use of a drug is owed to the prescribing physician by the drug manufacturer, not some other manufacturer of the same or a similar product. As a matter of law, the manufacturers of Reglan have no duty to communicate any information regarding the risks of taking this product to anyone other than their own customers."
Like Mosley and Overton, Simpson was issued before PLIVA was decided, and the federal court's conclusion in Simpson -- that generic manufacturers have their own duty to correctly advise a physician of risks associated with the generic drug regardless of the fact that a generic label is required to be the same as the brand-name label -- is questionable. Also, the plaintiffs in Simpson argued that they should be allowed to recover from the brand-name manufacturers even though they were third parties to the alleged fraud perpetrated by those manufacturers upon the plaintiffs' prescribing physicians. The Simpson court stated that, even if the plaintiffs, under the learned-intermediary doctrine, could prove that their physicians had relied upon the brand-name manufacturer's warning, the plaintiffs still had to demonstrate that the brand-name manufacturer owed the plaintiffs a duty before the brand-name manufacturer could be liable.
We recognize that other jurisdictions,5 primarily relying on Foster v. American Home Products Corp., 29 F.3d 165 (4th Cir. 1994), have concluded that a brand-name manufacturer does not owe a duty to users of the generic version of the prescription drug to warn those users of the dangers associated with the drug.6 In Foster, the plaintiffs' daughter died as a result of taking the generic form of Phenergan, a brand-name drug. They sued the brand-name manufacturer of Phenergan, alleging negligent misrepresentation and strict liability. The federal district court dismissed the strict-liability claim because the brand-name manufacturer had not manufactured the generic version taken by the daughter. However, the court allowed the negligent-misrepresentation claim to proceed. The brand-name manufacturer appealed. The federal appeals court noted that, under Maryland law, a plaintiff had to prove that the product in question was defective, attribute that defect to the seller of the product, and prove that there was a causal relationship between the defect and the plaintiff's injury. The federal appeals court stated that the plaintiffs were attempting to hold the brand-name manufacturer liable for injuries caused by another manufacturer's product and that Maryland courts would reject an effort to circumvent the necessity that a defendant be shown to have manufactured the product that caused the injury before the defendant could be held liable for such injury. The court held that the brand-name manufacturer did not owe a duty of care to the plaintiffs, even though the plaintiffs alleged that it was foreseeable to the brand-name manufacturer of Phenergan that statements contained in its label for the drug could result in injury to a user of a generic version of the drug. The court stated:
"We do not accept the assertion that a generic manufacturer is not responsible for negligent misrepresentations on its product labels if it did not initially formulate the warnings and representations itself. When a generic manufacturer adopts a name brand manufacturer's warnings and representations without independent investigation, it does so at the risk that such warnings and representations may be flawed. In cases involving products alleged to be defective due to inadequate warnings, 'the manufacturer is held to the knowledge and skill of an expert.... The manufacturer's status as expert means that at a minimum he must keep abreast of scientific knowledge, discoveries, and advances and is presumed to know what is imparted thereby.' Owens-Illinois v. Zenobia, 325 Md. 420, 601 A.2d 633, 639 (Md. 1992)(quoting Borel v. Fibreboard Paper Prods. Corp., 493 F.2d 1076, 1098 (5th Cir. 1973), cert. denied, 419 U.S. 869, 95 S.Ct. 127, 42 L.Ed.2d 107 (1974)). The same principle applies in the instant case; as an expert, a manufacturer of generic products is responsible for the accuracy of labels placed on its products. Although generic manufacturers must include the same labeling information as the equivalent name brand drug, they are also permitted to add or strengthen warnings and delete misleading statements on labels, even without prior FDA approval. 21 C.F.R. § 314.70 (1993). The statutory scheme governing premarketing approval for drugs simply does not evidence Congressional intent to insulate generic drug manufacturers from liability for misrepresentations made regarding their products, or to otherwise alter state products liability law. Manufacturers of generic drugs, like all other manufacturers, are responsible for the representations they make regarding their products.
"We also reject the contention that a name brand manufacturer's statements regarding its drug can serve as the basis for liability for injuries caused by another manufacturer's drug. Name brand manufacturers undertake the expense of developing pioneer drugs, performing the studies necessary to obtain premarketing approval, and formulating labeling information. Generic manufacturers avoid these expenses by duplicating successful pioneer drugs and their labels. Name brand advertising benefits generic competitors because generics are generally sold as substitutes for name brand drugs, so the more a name brand drug is prescribed, the more potential sales exist for its generic equivalents. There is no legal precedent for using a name brand manufacturer's statements about its own product as a basis for liability for injuries caused by other manufacturers' products, over whose production the name brand manufacturer had no control. This would be especially unfair when, as here, the generic manufacturer reaps the benefits of the name brand manufacturer's statements by copying its labels and riding on the coattails of its advertising. The premarketing approval scheme Congress established for generic equivalents of previously approved drugs cannot be construed to create liability of a name brand manufacturer when another manufacturer's drug has been consumed."
Foster, 29 F.3d at 169-70.
The plaintiffs in Foster argued that the brand-name manufacturers owed a duty because it was foreseeable that misrepresentations regarding Phenergan could result in personal injury to the users of the generic equivalents of Phenergan. The Foster court concluded that to impose duty in that case would be to stretch the concept of foreseeability too far. "The duty required for the tort of negligent misrepresentation arises when there is 'such a relation that one party has the right to rely for information upon the other, and the other giving information owes a duty to give it with care,'" and the court concluded that no such relationship existed between the plaintiff who was injured by a product that was not manufactured by the brand-name manufacturer. 29 F.3d at 171 (quoting Weisman v. Connors, 312 Md. 428, 443-44, 540 A.2d 783, 790 (1988)).
A few courts have held otherwise. In Conte v. Wyeth, Inc., 168 Cal. App. 4th 89, 85 Cal. Rptr. 3d 299 (2008), the California Court of Appeals, applying state negligence law, held as a matter of first impression that a manufacturer of a brand-name drug may be held liable for injuries suffered by a consumer who purchased a generic form of the drug if the consumer's injuries were foreseeably caused by the negligence of or an intentional misrepresentation by the brand-name manufacturer that developed the drug. Conte, the plaintiff in that case, sued the brand-name manufacturer and three generic manufacturers of Reglan and its generic version, metoclopramide, alleging that her use of metoclopramide over a four-year period caused her to develop tardive dyskinesia. Conte had ingested only the generic drug. "The crux of Conte's claims against all of the drug company defendants [was] that she was injuriously overexposed to metoclopramide due to their dissemination of false, misleading and/or incomplete warnings about the drug's side effect." 168 Cal. App. 4th at 95, 85 Cal. Rptr. 3d at 305. The trial court entered a summary judgment for all the defendant drug manufacturers, and Conte appealed. The California appellate court reversed the summary judgment in favor of the brand-name manufacturer after concluding that Conte had presented a material factual dispute as to whether her doctor had in fact relied on information disseminated by the brand-name manufacturer of Reglan. Specifically, the appellate court held that the brand-name manufacturer knew or should have known "that a significant number of patients whose doctors rely on its product information for Reglan are likely to have generic metoclopramide prescribed or dispensed to them" and that the brand-name manufacturer's "duty of care in disseminating product information extends to those patients who are injured by generic metoclopramide as a result of prescriptions written in reliance on [the brand-name manufacturer's] product information for Reglan." 168 Cal. App. 4th at 107, 85 Cal. Rptr. 3d at 315. The appellate court affirmed the summary judgment in favor of each of the three generic manufacturers on the ground that Conte had conceded on appeal that there was no evidence indicating that the generic manufacturers had disseminated any information concerning their generic product.
In Kellogg v. Wyeth, 762 F. Supp. 2d 694 (D. Vt. 2010), the Vermont federal district court held that a brand-name manufacturer of a drug has a duty to use reasonable care to avoid causing injury to consumers who have been prescribed the generic bioequivalent of its drug. Kellogg, the plaintiff in that case, sued the brand-name manufacturer and generic manufacturers of metoclopramide, alleging that her long-term ingestion of metoclopramide caused her to develop tardive dyskinesia; Kellogg had ingested only the generic drug. The crux of Kellogg's argument was that all the defendant manufacturers were liable because, she argued, they failed to adequately warn her doctors about the risks associated with the long-term use of metoclopramide. Both the brand-name manufacturer and each of the generic manufacturers filed a motion for a summary judgment on Kellogg's failure-to-warn claim; the federal district court denied the motions. The court held that, because all the parties agreed that the defendant drug manufacturers owed a duty to provide adequate warning to Kellogg's prescribing physicians, a jury question existed as to whether the defendant drug manufacturers had provided accurate and adequate warnings. The federal district court further held that the defendant drug manufacturers were not entitled to summary judgments for lack of a triable issue on proximate cause. Specifically, the court stated that "[a] reasonable jury could conclude that inadequate, misleading and inaccurate information provided by the [defendant drug manufacturers] was a proximate cause of [Kellogg's] injury." 762 F. Supp. 2d at 702. The federal district court finally denied the summary-judgment motion filed by the brand-name manufacturer on Kellogg's negligent-misrepresentation, fraud, and fraud-by-concealment claims in which Kellogg alleged that the brand-name manufacturer of Reglan was liable for failing to use due care in disseminating information about the drug to physicians, thereby causing the physicians to over-prescribe metoclopramide to her. The brand-name manufacturer agreed that it had a duty to provide adequate warnings about Reglan to physicians. However, it contended that it owed no duty to a doctor who prescribes Reglan if the pharmacy fills the doctor's prescription with a generic brand of the drug. Applying Vermont's negligence law, the federal district court noted that "a brand-name manufacturer owes a duty to use reasonable care to avoid causing injury to consumers of the generic bioequivalents of its drugs," 762 F. Supp. 2d at 706, because "it is reasonably foreseeable that a physician will rely upon a brand name manufacturer's representations -- or the absence of representations -- about the risk of side effects of its drug, when deciding to prescribe the drug for a patient, regardless of whether the pharmacist fills the prescription with a generic form of the drug." 762 F. Supp. 2d at 709. The federal district court therefore held that Kellogg had presented triable issues of fact regarding whether "her doctors relied on inaccurate and misleading information -- or the absence of accurate information -- from [the brand-name manufacturer] concerning the risks and effects of long-term use of [metoclopramide]." 762 F. Supp. 2d at 710.
In looking at the reasoning in Foster and Conte, we note that the Foster court relied on the finding that a generic manufacturer of a prescription drug is responsible for the accuracy of labels placed on its product. Foster was issued before the Supreme Court decided PLIVA, in which it held that a generic manufacturer's label must be identical to the brand-name label and that a generic manufacturer cannot unilaterally change its label to update a warning. The Foster court's finding that manufacturers of generic drugs are responsible for the representations they make in their labeling regarding their products is flawed based on the "sameness" requirement subsequently discussed in PLIVA.
Moreover, the analysis in Foster confuses strict liability and tort law. The Foster court stated that there is "[n]o legal precedent for using a name brand manufacturer's statements about its own product as a basis for liability for injuries caused by other manufacturers' products, over whose production the name brand manufacturer had no control." 29 F.3d at 170. If a plaintiff brought a strict-liability claim and the issue was one of a defect in production of the product, then the Foster court's reasoning would be sound. Certainly, a manufacturer will not be held liable for another manufacturer's production, design, or manufacturing defect. However, the Foster court's reasoning that a brand-name manufacturer does not owe a duty to persons taking the generic version of their drug because the brand-name manufacturer did not manufacture that drug is flawed when the cause of action relates to the warnings contained in the labeling relating to the drug and sound in tort. In Foster, the plaintiffs alleged that it was the inadequate warning that caused their daughter's death, not how the drug itself was produced. Because a warning label is not a part of the manufacturing process, we do not agree that the fact that a brand-name manufacturer did not produce the version of the drug ingested by the plaintiff bars the plaintiff's tort action when the plaintiff is arguing that he or she was injured by a failure to warn.
We recognize that the holding in PLIVA did not address foreseeability as the Foster court did. However, the Supreme Court concluded in PLIVA that the labeling for a generic drug is required by federal regulations to be the same as the labeling for the brand-name drug. Therefore, an omission or defect in the labeling for the brand-name drug would necessarily be repeated in the generic labeling, foreseeably causing harm to a patient who ingested the generic product. A brand-name manufacturer is well aware of the expiration of its patent and well aware that a generic version of the drug will be made when that patent expires. It is recognized that generic substitutions are allowed in all 50 states. A brand-name manufacturer could reasonably foresee that a physician prescribing a brand-name drug (or a generic drug) to a patient would rely on the warning drafted by the brand-name manufacturer even if the patient ultimately consumed the generic version of the drug.
We now turn to the issue whether Wyeth owed a duty to the Weekses as third parties to the alleged fraud in failing to adequately warn of the risks of Reglan in its labeling. The Weekses rely on Delta Health Group, Inc. v. Stafford, supra, which involved an alleged misrepresentation made to a third party. Tim Stafford and Lana Stafford alleged that Delta Health Group and its insurer, Lumbermens Mutual Casualty Company, had falsely accused Tim Stafford of pilfering from a nursing home owned by Delta Health building material for use on the Staffords' personal residence. After Delta Health filed a claim with Lumbermens for its alleged loss and assigned its rights to Lumbermens, Lumbermens sued Tim Stafford, alleging conversion. The Staffords then sued Delta Health and Lumbermens, alleging, among other things, fraudulent misrepresentation. This Court held that under limited circumstances a plaintiff may properly state a fraud claim based on a false representation to a third party rather than to the plaintiff. This Court stated:
"We agree with Stafford that in certain limited circumstances not relevant here a plaintiff may properly state a fraud claim even though the defendant makes a false representation to a third party rather than to the plaintiff. However, we do not read Thomas [v. Halstead, 605 So. 2d 1181 (Ala. 1992),] as excusing a plaintiff from the requirement of establishing his reliance upon that misrepresentation. Thomas appears to contemplate that the plaintiff, in fact, has relied on the defendant's misrepresentation, even though the misrepresentation was made to another party. Neither have we located any other authority that purports to excuse a plaintiff in a fraud action from establishing the element of reliance.
"In this case, the record is devoid of any evidence tending to establish that Stafford relied to his detriment on any of the alleged misrepresentations made by Delta Health to Lumbermens. For this reason, we conclude that Stafford failed to produce sufficient evidence to create a jury question on each of the elements necessary for his fraud claim. Therefore, the trial court erred in denying Delta Health's motion for a judgment as a matter of law regarding Stafford's fraud claim; that claim should not have been submitted to the jury."
887 So. 2d at 899.
Delta Health is not the first time this Court has addressed a fraud claim based on misrepresentations made not to a plaintiff but to a third party. In Thomas v. Halstead, 605 So. 2d 1181 (Ala. 1992), a patient sued his dentist alleging fraud, specifically alleging that the dentist had obtained payment from the patient's insurer for services that were never rendered. The patient had gone to see the dentist, who took several X-rays of his mouth and told him he needed additional dental work. The patient claimed that the dentist was to submit a form to the patient's insurer to determine the insurance coverage. Instead, the dentist submitted a claim for the additional work on the patient's teeth, which had never been done. The patient argued that, even if the misrepresentation was not made directly to him, "a misrepresentation, made to his insurance carrier, which is legally obligated to pay valid claims submitted to it for dental expenses incurred by him, is sufficient to satisfy the misrepresentation element of fraud." 605 So. 2d at 1184. "While generally '[a] stranger to a transaction ... has no right of action [for fraud],' there is an exception to this general rule: 'If a third person is injured by the deceit, he may recover against the one who made possible the damages to him by practicing the deceit in the first place.' 37 C.J.S. Fraud § 60, p. 344 (1943), see Sims v. Tigrett, 229 Ala. 486, 158 So. 326 (1934)." 605 So. 2d at 1184.
Sims v. Tigrett, 229 Ala. 486, 158 So. 326 (1934), involved deceit in the selling of bonds. This Court stated:
The court then expressly rejects the same foreseeability argument urged upon us by the plaintiffs in this case, explaining that foreseeability alone is not enough to create a duty and that a relationship between the parties is necessary:
"The Fosters contend that a duty exists in this case because it was foreseeable to Wyeth that misrepresentations regarding Phenergan could result in personal injury to users of Phenergan's generic equivalents. They point to Jacques v. First National Bank, a negligence action, which noted:
"'Where the failure to exercise due care creates a risk of economic loss only, courts have generally required an intimate nexus between the parties as a condition to the imposition of tort liability. This intimate nexus is satisfied by contractual privity or its equivalent. By contrast, where the risk created is one of personal injury, no such direct relationship need be shown, and the principal determinant of duty becomes foreseeability.'
"307 Md. 527, [534-35,] 515 A.2d 756, 759-60 (1986). We think to impose a duty in the circumstances of this case would be to stretch the concept of foreseeability too far. The duty required for the tort of negligent misrepresentation arises when there is 'such a relation that one party has the right to rely for information upon the other, and the other giving the information owes a duty to give it with care.' Weisman v. Connors, 312 Md. 428, 540 A.2d [783] at 790 [(1988)] (quoting Holt v. Kolker, 189 Md. 636, [640,] 57 A.2d 287, 288 (1948)). There is no such relationship between the parties to this case, as Brandy Foster was injured by a product that Wyeth did not manufacture. As Wyeth has no duty to the users of other manufacturers' products, a negligent misrepresentation action cannot be maintained against it on the facts of this case."
29 F.3d at 171 (emphasis added).
By my count,27 from the time Foster was decided until the issuance of the Supreme Court's decision in PLIVA, 43 reported cases applying the law of 18 states were decided in accordance with the Foster decision.28 Aside from the decision of the court certifying the question in this case, only two courts held to the contrary -- an intermediate state appeals court in California and a district court in Vermont.29
In addition to Foster, the other pre-PLIVA cases holding that a manufacturer of a brand-name drug has no duty or liability to the consumer of a generic drug manufactured and sold by another company include Barnhill v. Teva Pharmaceuticals USA, Inc., No. 06-0282-CB-M (S.D. Ala. Apr. 24, 2007) (not reported in F. Supp. 2d); Leblanc v. Wyeth, Inc., No. CIV A 04-0611 (W.D. La. Oct. 5, 2006) (not reported in F. Supp. 2d); Goldych v. Eli Lilly & Co., No. 5:04-CV-1477 (GLS/GJD) (N.D. N.Y. July 19, 2006) (not reported in F. Supp. 2d); Colacicco v. Apotex, Inc., 432 F. Supp. 2d 514, 540-41 (E.D. Pa. 2006), rev'd on other grounds, 521 F.3d 253 (3d Cir. 2008), vacated and remanded, 129 S. Ct. 1578 (2009); Possa v. Eli Lilly & Co., No. 05-1307-JJB-SCR (M.D. La. May 10, 2006) (not reported in F. Supp. 2d); Stanley v. Wyeth, Inc., 991 So. 2d 31, 34-35 (La. Ct. App. 2008); and Flynn v. American Home Products Corp., 627 N.W.2d 342, 350 (Minn. Ct. App. 2001).
In addition, according to briefs filed in this case, two Alabama circuit courts also have addressed the issue of liability for injuries allegedly caused by generic metoclopramide, both concluding that the brand-name manufacturer was not liable for injury caused by the generic drug manufactured and sold by another company. See Buchanan v. Wyeth Pharm., Inc., No. CV-2007-900065, Oct. 20 2008; Green v. Wyeth, Inc., No. CV-2006-3917, May 14, 2007.
The United States Court of Appeals for the Eighth Circuit is the court from which the PLIVA case came and to which it was returned on remand by the United States Supreme Court. See Mensing v. Wyeth, Inc., 588 F.3d 603, 612-14 (8th Cir. 2009), rev'd in part on other grounds sub nom., PLIVA, Inc. v. Mensing, 564 U.S. ___, 131 S. Ct. 2567 (2011). Before the Supreme Court weighed in, the Eighth Circuit Court of Appeals held that state-law claims against generic-drug manufacturers were not preempted by federal law. 588 F.3d at 611. In the same opinion, however, that court was called upon to decide whether a brand-name manufacturer could be held liable for injuries caused by generic metoclopramide manufactured and sold by another party. In a soundly reasoned opinion, that court answered in the negative:
"[R]egardless of whether her doctor relied upon the Reglan label, Mensing must show that the name brand manufacturers owed her a duty of care. Duty is a threshold requirement for all of the tort claims Mensing asserts. See, e.g., Noble Systems Corp. v. Alorica Central, LLC, 543 F.3d 978, 985 (8th Cir. 2008) (finding that under Minnesota law negligent misrepresentation requires the plaintiff to 'prove some relationship that is sufficient to create a duty owed by the defendant to the plaintiff').
"Such a duty of care does not extend to all potential Reglan consumers. 'Minnesota common law ... requires a stronger relationship and a direct communication.' Flynn [v. American Home Prods. Corp.], 627 N.W.2d [342,] 350 [(Minn. Ct. App. 2001)]. Since Mensing 'did not purchase or use [the name brand defendants'] product, ... there was no direct relationship between them, let alone a fiduciary relationship that gave rise to a duty.' Id. at 350. Mensing focuses on the foreseeability of harm from the defendants' action. Like the Fourth Circuit, we conclude that holding name brand manufacturers liable for harm caused by generic manufacturers 'stretch[es] the concept of foreseeability too far.' Foster, 29 F.3d at 171."
588 F.3d at 613-14 (some emphasis added; footnote omitted).
In a footnote, the Eighth Circuit also provided this instructive insight:
"Mensing's attempt to characterize her fraud claim as a type requiring no proof of a duty of care is unavailing. A plaintiff claiming fraud in Minnesota must show that the defendant intended to induce another to act in reliance on its fraudulent statement. Specialized Tours, Inc. v. Hagen, 392 N.W.2d 520, 532 (Minn. 1986). Mensing's relationship with the Reglan manufacturers is too attenuated, and she has cited no Minnesota case in which the court imposed liability for fraud on a defendant who did not intend to communicate with the plaintiff. The Reglan manufacturers intended to communicate with their customers, not the customers of their competitors."
588 F.3d at 613 n. 9 (emphasis added).
Among the other pre-PLIVA decisions are four decisions from federal district courts in Alabama applying Alabama law: Mosley v. Wyeth, Inc., 719 F. Supp. 2d 1340 (S.D. Ala. 2010); Simpson v. Wyeth, Inc., No. 7:10-CV-01771-HGD (N.D. Ala. Dec. 9, 2010) (not reported in F. Supp. 2d); Overton v. Wyeth, Inc., No. CA 10-0491-KD-C (S.D. Ala. Mar. 15, 2011) (not reported in F. Supp. 2d); and Barnhill v. Teva Pharm. USA, Inc., No. 06-0282-CB-M (S.D. Ala. 2007) (not reported in F. Supp. 2d). In all four of these cases, the court held that claims could not be maintained under Alabama law against the manufacturer of a brand-name drug for injuries resulting from a consumer's use of a generic version of that drug manufactured and sold by another company. The first of these, Mosley, is representative of the other Alabama federal district court decisions, as well as the other district court decisions identified above. As the federal district court in Mosley explained regarding precisely the same drug, the same defendants, and the same legal issue as are presented in the case at hand:
"The argument is not that Defendants' product caused Plaintiff harm, but rather that their dissemination of false and misleading information, which they knew would be relied upon by the generic manufacturers in generating their own labels, was the direct and proximate cause of Plaintiff's injuries."
719 F. Supp. 2d at 1344-45. The court rejected this argument because, under Alabama law, no "relationship" existed between the manufacturer of the brand-name drug and the consumer of the generic drug, and thus no "duty" was owed. 719 F. Supp. 2d at 1346-47.
Contrary to the main opinion, but consistent with all the foregoing authority, Wyeth's argument does not "ignore[] the nature of prescription medication." ___ So. 3d at ___. Obviously, a duty must be understood to run from a drug manufacturer to a consumer if that consumer is to be able to state a claim against the manufacturer. (If the duty ran only to an intermediary or other third party, such as a physician or pharmacist, then only the intermediary or third party would have a cause of action and be a proper plaintiff.) The controlled nature of prescription drugs, see 21 U.S.C. § 353(b)(1), simply means that the drug manufacturer fulfills its duty of disclosure to the consumer by making disclosures to the consumer's physician and/or pharmacist, who receives the disclosures and acts upon them on behalf of the consumer. In essence, the consumer's physician serves as the agent of the consumer for purposes of receipt of and reliance upon the disclosures, or omissions, of the manufacturer. See, e.g., Stone v. Smith, Kline & French Labs., 447 So. 2d 1301, 1305 (Ala. 1984)(quoting Reyes v. Wyeth Labs., 498 F.2d 1264, 1276 (5th Cir. 1974)):
"'As a medical expert, the prescribing physician can take into account the propensities of the drug as well as the susceptibilities of his patient. His is the task of weighing the benefits of any medication against its potential dangers. The choice he makes is an informed one, an individualized medical judgment bottomed on a knowledge of both patient and palliative. Pharmaceutical companies then, who must warn ultimate purchasers of dangers inherent in patent drugs sold over the counter, in selling prescription drugs are required to warn only the prescribing physician, who acts as a "learned intermediary" between manufacturer and consumer.'"
(Emphasis added.)30
Wyeth's position fully accommodates the notion that a prescription drug is consumed only if it is prescribed by a physician and dispensed by a pharmacist, and that the physician and pharmacist act as agents of the consumer of a generic drug for purposes of receiving and acting upon whatever warnings and representations the drug's manufacturer intends for that consumer. The fact that there is such a "learned intermediary" acting in this manner on behalf of the ultimate consumer does not in itself create a relationship between the brand-name manufacturer and the consumer. Regardless of the fact of, or content of, a given prescription, if a person consumes a generic drug, the nexus created is with the manufacturer of the generic drug. The physician's involvement does nothing to create some sort of relationship between the consumer and some different entity. The consumer has no more relationship with the brand-name manufacturer in such a scenario than he or she would have if the learned intermediaries were not involved and the consumer purchased the generic drug directly from the generic manufacturer.
As the Eighth Circuit Court of Appeals indicated in Mensing, perhaps there is confusion resulting from the fact that, in prescribing or dispensing a generic drug, physicians or pharmacists might in fact rely upon labeling that previously was published by a brand-name manufacturer in conjunction with the marketing by it of its own brand-name drug. As that court also pointed out, however, the labeling of the brand-name manufacturer is not intended for that purpose; it is published by the brand-name manufacturer solely for the purpose of fulfilling the brand-name manufacturer's own duty to provide adequate labeling to the consumers of its product. To say that a physician's or pharmacist's reliance upon a brand-name manufacturer's labeling in prescribing or dispensing a generic drug makes the brand-name manufacturer liable for injuries suffered by the generic-drug consumer is to "bootstrap" into existence a duty on the part of the brand-name manufacturer to that consumer; the first inquiry must be whether the brand-name manufacturer had a duty to one who did not consume its product to publish adequate labeling. Apart from such bootstrapping, there is no basis to declare the existence of such a duty. See, e.g., Mensing, 588 F.3d at 613 ("Regardless of whether her doctor relied upon the Reglan label, Mensing must show that the name brand manufacturers owed her a duty of care.").31
The present case is not distinguishable from the above-discussed cases on the ground that the present case involves common-law claims of fraud in relation to deficient labeling. Foster, the Eighth Circuit Court of Appeals' Mensing case, Alabama federal district court decisions such as Mosley, and dozens of other well considered decisions cited above involve alleged defects in labeling. Indeed, many, if not most, of them involve common-law claims of misrepresentation of some sort. They consider, and often explain, the necessity of a duty arising from a relationship as no less applicable to claims of defects in the warnings that accompany a product than to defects in the pharmacology of the product.32
On June 23, 2011, the United States Supreme Court decided PLIVA. The Court held that state tort-law claims against manufacturers of generic drugs were preempted by the statutory and regulatory scheme that had been adopted by Congress and the FDA. 564 U.S. at ___, 131 S. Ct. at 2581-82. It is clear from the text of the PLIVA opinion itself that PLIVA did not undermine the rationale of the dozens of pre-PLIVA decisions discussed and cited above.
Foremost in this regard is the simple fact that the issue discussed in PLIVA was the effect of the federal law of preemption on the liability of generic manufacturers for their own drugs. Nothing in the Court's reasoning as to this issue has any bearing on the unrelated question under state law of relationship and duty of brand-name manufacturers with respect to drugs they do not manufacture.
Second, the PLIVA Court includes statements in the opinion that contemplate that its ruling as to generic manufacturers does not mean that consumers injured by generic drugs will now be able to turn to manufacturers of brand-name drugs for compensation. The Supreme Court expressly recognizes the "unfortunate hand" that has been dealt to consumers of generic drugs given its decision:
"We acknowledge the unfortunate hand that federal drug regulation has dealt Mensing, Demahy, and others similarly situated.
"But 'it is not this Court's task to decide whether the statutory scheme established by Congress is unusual or even bizarre.' Cuomo v. Clearing House Assn., L.L.C., 557 U.S. 519, 556 (2009) (THOMAS, J., concurring in part and dissenting in part) (internal quotation marks and brackets omitted)."
564 U.S. at ___, 131 S. Ct. at 2581-82. As Justice Sotomayor subsequently explained, under the majority decision, a consumer of a generic drug "now has no right to sue." 564 U.S. at ___, 131 S. Ct. at 2592 (Sotomayor, J., dissenting).
Moreover, the Supreme Court expressed its understanding that the consumption of the brand-name manufacturer's drug remained a prerequisite to holding that manufacturer liable for a labeling deficiency: "Had Mensing and Demahy taken Reglan, the brand-name drug ..., Wyeth [v. Levine, 555 U.S. 555 (2009),33] would control and their lawsuits would not be pre-empted." 564 U.S. at ___, 131 S. Ct. at 2581.
In the year and a half after PLIVA was decided, but before this Court issued its opinion on original submission in this case, 11 decisions applying the law of 10 states were reported. Every one of those decisions held that manufacturers of brand-name drugs had no duty or liability to the consumer of a generic drug manufactured and sold by another company.34 Accordingly, there was (and, as will be seen, still is) unanimity among the courts that addressed the question in the wake of PLIVA that the holding of PLIVA as to the preemption of state-law claims against generic manufacturers does not undermine the rationale of the pre-PLIVA decisions discussed above or justify making brand-name manufacturers liable for a product they have not manufactured or sold. This includes each of the three United States Courts of Appeals to address the issue in the first year and a half following PLIVA -- the Courts of Appeals for the Fifth, Sixth, and Eighth Circuits.
Perhaps the most noteworthy of the aforesaid three Court of Appeals' decisions was the short order issued on remand by the Eighth Circuit Court of Appeals in the PLIVA case itself. The same court whose judgment had just been reversed by the United States Supreme Court on the issue of preemption as to the liability of generic manufacturers evidently felt no compunction in deciding expressly to "reinstate Section III of [its original] opinion," the same section quoted at length above in which it had held that brand-name manufacturers were not liable for defects or deficiencies in the labeling of products manufactured and sold by others. Mensing v. Wyeth, Inc., 658 F.3d 867 (8th Cir. 2011).
In Smith v. Wyeth, Inc., 657 F.3d 420 (6th Cir. 2011), the United States Court of Appeals for the Sixth Circuit also acknowledged, but was unaffected by, the holding in PLIVA. The court began by noting the applicability of the Kentucky Products Liability Act, which, it explained, was merely a codification of preexisting common-law principles, including common-law principles regarding the misrepresentation and "failure-to-warn" claims asserted against the manufacturers of brand-name drugs in that case.35 The court then proceeded, undeterred in any way by the PLIVA holding as to manufacturers of generic drugs, to explain its rejection of the misrepresentation claims against the brand-name manufacturer, Wyeth, as to the same drug that is at issue here:
"A threshold requirement of any products-liability claim is that the plaintiff assert that the defendant's product caused the plaintiff's injury. See Holbrook v. Rose, 458 S.W.2d 155, 157 (Ky. 1970). The plaintiffs in this case concede that they had consumed only generic versions of metoclopramide and not Reglan. As the district court observed, adopting their theory of liability would require the court to attribute any deficiency in a name-brand manufacturer's labeling and marketing of its products to products manufactured by its generic competitors. Such a theory, however, fails to satisfy the threshold requirement of a products-liability action -- that the defendant's product have injured the plaintiff. As the district court stated, 'Just because a company is in the same business as a tortfeasor, the company is not automatically liable for the harm caused by the tortfeasor's product.'
"The plaintiffs' argument -- that the name-brand defendants' liability stems from the fact that the regulatory structure governing name-brand and generic drugs makes it foreseeable that patients and their physicians will rely on the name-brand labels to use and prescribe generic drugs -- has been rejected by all but one of the courts that have considered it. The leading case is Foster v. American Home Products Corp., 29 F.3d 165 (4th Cir. 1994), in which the court held that the manufacturer of a name-brand drug has no duty to patients who ingested only a generic version of the drug manufactured by the name-brand drug company's competitors. ... As have the majority of courts to address this question, we reject the argument that a name-brand drug manufacturer owes a duty of care to individuals who have never taken the drug actually manufactured by that company."
657 F.3d at 423-24 (some emphasis added).
In the last of the aforesaid decisions by federal courts of appeals, the United States Court of Appeals for the Fifth Circuit explicitly held in Demahy v. Schwarz Pharma, Inc., 702 F.3d 177, 184 (5th Cir. 2012), that PLIVA changed nothing as to brand-name manufacturers:
"We do not view [PLIVA] as overruling Foster [v. American Home Products Corp., 29 F.3d 165 (4th Cir. 1994),] because the court in Foster did not reach its holding by relying on the ability of a plaintiff to sue generic manufacturers. Instead, the court's holding was based on its interpretation of Maryland law and the conclusion that a name-brand manufacturer has no duty of care to consumers that are not using the manufacturer's product. Foster, 29 F.3d at 171–72; see also Smith v. Wyeth, 657 F.3d 420, 423–24 (6th Cir. 2011) (following Foster's conclusion that name-brand manufacturers have no duty to generic-brand consumers). The Foster court's opinion in dicta on the viability of suits against generic manufacturers was proved wrong, but this fact does not impose on name-brand manufacturers a duty of care to customers using generic products."
In Phelps v. Wyeth, Inc., 857 F. Supp. 2d 1114 (D. Or. 2012), the federal district court for Oregon also explicitly rejected the notion that PLIVA changed anything as to brand-name manufacturers. In an opinion reflective of the other post-PLIVA decisions by federal district courts, it explained:
"[W]hile [PLIVA] overrules Foster [v. American Home Products Corp., 29 F.3d 165 (4th Cir. 1994),] with respect to a generic manufacturer's ability to alter labels, it does not overrule Foster's holding regarding the liability of name-brand manufacturers. Indeed, the Foster court's reluctance to hold name-brand defendants liable for generic drugs did not depend on a generic manufacturer's ability to alter the label, but rather on concepts of foreseeability and duty. Consequently, [PLIVA] does not overturn the central holding in Foster."
857 F. Supp. 2d at 1119 (emphasis added).
The Oregon court provided an instructive analysis as to the necessity of a relationship in order for there to exist a duty for purposes of a common-law claim based on deficient labeling of drugs:
"It is undisputed that Mrs. Phelps never ingested metoclopramide manufactured by any of the name-brand defendants. ... Under Oregon's product liability law, the name-brand defendants cannot be found liable for plaintiffs' injuries because plaintiffs cannot show that their injuries resulted from the use of the name-brand manufacturers' product. See McEwen v. Ortho Pharma. Corp., 270 Or. 375, 407, 528 P.2d 522 (1974). Nonetheless, plaintiffs request that the court apply common law principles of negligence, fraud, and misrepresentation to extend liability to the name-brand defendants. They argue that regardless of whether Mrs. Phelps ingested the name-brand defendants' product, the name-brand defendants owed her a duty of care.
"....
"Plaintiffs cite neither Oregon nor federal law to support this proposition. Instead, plaintiffs argue that manufacturers owe a general duty to use care in connection with their conduct to all who may [be] injured by it, if such conduct is carried out in a negligent manner and results in foreseeable injuries. ... (citing Palsgraf v. Long Island R.R. Co., 248 N.Y. 339, 162 N.E. 99 (1928)). Plaintiffs assert that, based on federal regulations, name-brand defendants should have known that all generic manufacturers were required to duplicate the information on name-brand labels for generic drugs, and that generic manufacturers were prevented from including additional warnings or independently warning doctors of metoclopramide's risks. Additionally, plaintiffs argue that name-brand defendants knew or should have known that their label did not adequately warn of the risks associated with metoclopramide. Consequently, plaintiffs assert that the generics defendants' reliance on name-brand defendants' labels was a foreseeable cause of their injuries.
"... [In Foster v. American Home Products Corp., 29 F.3d 165 (4th Cir. 1994),] [t]he plaintiffs brought suit against the name-brand manufacturer for negligent misrepresentation, but the Fourth Circuit ruled that Maryland law did not allow a manufacturer to be liable for an injury caused by a competitor's product. Id. at 171. While Foster recognized that reliance on the label was foreseeable, the court explained that foreseeability alone does not create a duty of care, and the court specifically rejected the plaintiffs' negligence claim. Id. ... The Foster court found that there is '(n)o legal precedent for using a name brand manufacturer's statements about its own product as a basis for liability [for] injuries caused by other manufacturers' products, over whose production the name brand manufacturer had no control.' Id. at 170. Name-brand defendants cite a plethora of courts which have followed Foster and concluded that name-brand defendants cannot be held liable for injuries caused by products produced by a generic manufacturer. See e.g. Smith v. Wyeth, Inc., 657 F.3d 420, 424 (6th Cir. 2011); Metz v. Wyeth LLC, 830 F. Supp. 2d 1291 (M.D. Fla. 2011)."
857 F. Supp. 2d at 1120-21 (emphasis added).
Finally, the Oregon court expressed the same understanding of the text of the PLIVA decision that is offered above:
"In fact, the Supreme Court [in PLIVA] acknowledged that the dual holdings of Foster and [PLIVA] left the plaintiff there with no remedy, as she could not successfully bring a claim against name-brand manufacturers under Foster and was barred on other grounds from suing the generic manufacturers. [PLIVA], [564 U.S. at ___,] 131 S. Ct. at 2581 (acknowledging 'the unfortunate hand that federal drug regulation has dealt' plaintiff). The majority further stated that Congress or the FDA could change the law ...."
857 F. Supp. 2d at 1119-20 (emphasis added).
In an opinion issued not long after PLIVA, a federal district court applied the law of our neighboring state of Florida:
"The vast majority of courts, in Florida and elsewhere, that have addressed the issue now before the Court have consistently held that consumers may not bring claims for negligence, fraud, strict liability, misrepresentation, or breach of warranty against a brand name pharmaceutical manufacturer when the consumers only ingested generic versions of the drug manufactured by third parties. [Numerous citations omitted.]
"Plaintiffs attempt to overcome the nearly unanimous adverse precedent by arguing that the Supreme Court's decision in PLIVA, Inc. v. Mensing, 564 U.S. ___, 131 S. Ct. 2567, 180 L.Ed.2d 580 (2011), warrants a change in how Florida law is applied to producers of brand name pharmaceuticals. The thrust of Plaintiffs' argument is that the Fourth Circuit's holding in the seminal case of Foster v. American Home Products Corp., 29 F.3d 165 (4th Cir. 1994), was based on the proposition (discussed in dicta) that consumers could recover from generic manufacturers for misrepresentations relating to their products. Id. at 170. While it is true that this proposition was rejected by the Supreme Court in [PLIVA], this proposition was by no means central to the ultimate holding in Foster. The Fourth Circuit's holding in Foster was based on its interpretation of Maryland law and the general rule that one manufacturer cannot be held liable on a negligent misrepresentation theory for injuries caused by another manufacturer. Id. In fact, the Foster court held that, irrespective of whether consumers could recover from generic drug manufacturers, a brand name manufacturer simply had no duty of care to individual consumers that did not use the named brand manufacturer's product. Id. at 171."
Metz v. Wyeth LLC, 830 F. Supp. 2d 1291, 1293-94 (M.D. Fla. 2011) (emphasis added).36
In addition to dozens upon dozens of cases from other jurisdictions directly addressing the issue before us, Wyeth cites four Alabama cases for the proposition that a duty arising from a relationship or nexus between the parties is necessary: Keck v. Dryvit Systems, Inc., 830 So. 2d 1 (Ala. 2002); State Farm v. Owen, 729 So. 2d 834 (Ala. 1998); DiBiasi v. Joe Wheeler Electric Membership Corp., 988 So. 2d 454 (Ala. 2008); and Thompson-Hayward Chemical Co. v. Childress, 169 So. 2d 305 (Ala. 1964). The main opinion responds to these four cases by stating: "These cases are easily distinguishable from this case. Here, Wyeth authored the label with its warnings, and the generic manufacturers, as required by FDA regulations, copied that label verbatim." ___ So. 3d at ___. The fact that the generic manufacturer's label must contain the same information as the label published by Wyeth, the name-brand manufacturer, is true, but that fact does not make the present case distinguishable from the four cases cited.
In each of those four cases, it was foreseeable that the plaintiff would be injured by the tortious conduct of the defendant. Despite this foreseeability, each of those cases was decided based on the fact that the alleged tortfeasor had no relationship or nexus with the plaintiff giving rise to a duty to the plaintiff.
Likewise, and admittedly without question given the federal regulatory scheme for generic drugs, it was foreseeable that a generic drug might one day be produced and that, if it was, it would replicate any deficiency in Wyeth's brand-name drug, including its labeling, that might have been approved by the FDA. As was true in each of those other cases, however, such foreseeability, no matter how clear, simply is not all that is required. There was no liability in those four cases because the defendant did not have the requisite relationship or nexus with the injured party. Because the same is true here, those cases are not distinguishable, but instead support Wyeth's position.37
The main opinion concludes its analysis by quoting a passage from a 1998 opinion of the Court of Civil Appeals in Carter v. Chrysler Corp., 743 So. 2d 456 (Ala. Civ. App. 1998), which, in turn, quotes a 1994 decision of the Alabama Supreme Court, Hines v. Riverside Chevrolet-Olds, Inc., 655 So. 2d 909, 919-20 (Ala. 1994). As a threshold matter, I find the premise of the analysis quoted from Hines circular and confusing: "'"The extent of a legal duty not to make a false representation or to suppress a material fact informs our analysis of whether two parties have a sufficient relationship on which to base a duty to disclose."'" ___ So. 3d at ___ (emphasis added). This passage essentially says that "the extent of a legal duty" will determine whether there is enough of a relationship on which "to base a duty."
Leaving aside the circularity of its premise, Hines does state that "the fact that two parties have had no contractual relationship or other dealings does not preclude the finding of a legal duty not to make a material misrepresentation or to suppress a material fact." 655 So. 2d at 920. It adds, however, that "whether a duty to disclose exists must be determined by examining the particular facts of each case." Id.
Hines did not involve an attempt to hold a manufacturer liable for injuries where the plaintiff has not used a product manufactured or sold by the defendant. Instead, Hines is a classic "privity" case. The question presented and addressed in Hines is whether the lack of a contract or other direct dealing between the plaintiff and the defendant -- lack of privity -- prevents the plaintiff from suing the defendant to recover for personal, or bodily, injuries. It is critical to a proper prospective of the Hines decision to note that the injury litigated in that case resulted from the plaintiff's use of the defendant's product.
Carter v. Chrysler and the cases cited in Hines address the same question as did Hines.38 In accordance with the movement of American jurisprudence in the last century away from a privity-based model for recovery for personal injuries, Hines and those other cases found privity to be unnecessary for a claim based on personal injuries. The lack of privity in those cases does not mean, however, that there was not a "relationship," or nexus, between the plaintiff and the defendant arising out of the fact that the plaintiff was injured by the defendant's product; there was. There is not here.
Ultimately, the main opinion is inextricably grounded on a single notion: The foreseeability of a deficiency in a brand-name drug, including its labeling, being replicated in a generic drug, including its labeling, is so great that we must recognize a duty owing from the brand-name manufacturer to whomever might be hurt by the deficiency in the generic drug. But the clear foreseeability upon which this notion is based has either been explicitly acknowledged or clearly understood by each of the scores of other federal and state courts that have addressed the issue we now address. Yet, essentially all of them reach a different conclusion than do we. They do so on the same ground that Professor Prosser implores us to remember: Foreseeability alone is not enough. See discussion, infra, citing W. Prosser, Law of Torts, 708 (4th ed. 1971). In the words of the main opinion, therefore, I can reach no conclusion other than that the "ground" we plow today is "new." And we are the only court in the nation plowing it.39
Aside from the discussion of the four cases and Hines reviewed above, the discussion and rationale offered by the main opinion today on application for rehearing are essentially unchanged from those offered in the opinion on original submission. Therefore, it is noteworthy that, since that original decision, there have been another dozen or more decisions on this issue by federal and state courts around the country, including decisions by four federal courts of appeals, two of them weighing in for the first time. In addition, the United States Supreme Court has now denied certiorari review in Demahy v. Schwarz Pharma, Inc., 702 F.3d 177 (5th Cir. 2012), cert. denied, 134 S. Ct. 57 (2013).40 None of these courts have been persuaded by the rationale offered by this Court's original opinion.
Among the courts that have not been persuaded by our original decision is the Court of Appeals for the Fifth Circuit, which has decided two additional cases reaffirming the sound rationale it first embraced in Demahy. See Lashley v. Pfizer, Inc., 750 F.3d 470 (5th Cir. 2014); Del Valle v. Teva Pharm. USA, Inc., 750 F.3d 470 (5th Cir. 2014) (consolidated cases).
Likewise, the Court of Appeals for the Eighth Circuit has decided yet another case reaffirming its position. In Bell v. Pfizer, Inc., 716 F.3d 1087 (8th Cir. 2013), the Eighth Circuit held that, under Arkansas law, (i) the plaintiff's contention that "her injuries were foreseeable" was "insufficient" to impose a duty on the brand-name defendants; (ii) that the plaintiff had to "show that a product manufactured or distributed by the brand[-name] defendants caused her injuries"; and (iii) that because the plaintiff "never used Reglan the brand[-name] defendants manufactured, [she] could not hold them liable under Arkansas law." 716 F.3d at 1092-93. Further, the Eighth Circuit flatly rejected the plaintiff's suggestion that there was an "exception" to the "Arkansas product identification requirement" for "misrepresentation and fraud." Id.
Recent appellate court decisions in Iowa are in accord. In Huck v. Trimark Physicians Group, 834 N.W.2d 82 (Iowa Ct. App. 2013) (unpublished disposition), the Iowa Court of Appeals reaffirmed the settled, common-law rule that "'a plaintiff in a products liability case must prove that the injury-causing product was a product manufactured or supplied by the defendant.'" (Quoting Mulcahy v. Eli Lilly & Co., 386 N.W.2d 67, 76 (Iowa 1986).) Furthermore, much like decisions of this Court in the past, see, e.g., Pfizer, Inc. v. Farsian, 682 So. 2d 405 (Ala. 1996), the Huck court explained that plaintiffs who allege physical injuries caused by a product have, "regardless of the theory of liability" asserted, a products-liability claim that requires "product identification," a requirement that cannot be circumvented by pleading claims of "strict liability, negligence, misrepresentation, breach of warranties," and the like. See also note 31, supra.
Shortly before the release of the opinion in this case on rehearing, the Iowa Supreme Court vacated the decision of the Iowa Court of Appeals. It did so, however, in an opinion specifically rejecting this Court's opinion on original submission in the present case and agreeing with the Iowa Court of Appeals' position on the issue before us: "We adhere to [certain] bedrock principles ..., and join the multitude of courts that have concluded brand[-name] defendants owe no duty to consumers of generic drugs." Huck v. Wyeth, Inc., [Ms. 12-0596, July 11, 2014] ___ N.W.2d ___, ___ (Iowa 2014) (also declining, in its words, "to step onto the slippery slope" that could lead to brand-name-manufacturer liability for harm caused by copies of other types of products manufactured by competitors).
Three of the federal courts of appeals that have addressed the issue since our opinion on original submission specifically acknowledge our decision. All three of them, the United States Courts of Appeals for the Sixth, Tenth, and Eleventh Circuits, rejected our reasoning. See Strayhorn v. Wyeth Pharm., Inc., 737 F.3d 378 (6th Cir. 2013); Schrock v. Wyeth, Inc., 727 F.3d 1273 (10th Cir. 2013); and Guarino v. Wyeth, LLC, 719 F.3d 1245 (llth Cir. 2013).41 See also Metz v. Wyeth, LLC, 525 F. App'x 893 (11th Cir. 2013) (not published in F.3d). Two of those circuits, the Tenth Circuit and the Eleventh Circuit, have now weighed in for the first time.
Specifically, in Schrock v. Wyeth, the Court of Appeals for the Tenth Circuit joined all the other federal courts of appeals that have addressed the issue by declining to "impose a duty on drug manufacturers to warn of dangers in their competitors' products" because the brand-name defendants "d[id] not have any relationship with the [plaintiffs]." 727 F.3d at 1283. And in Guarino v. Wyeth, LLC, the Eleventh Circuit explained in no uncertain terms that there simply can be "no liability when we know with certitude that a given manufacturer did not produce the allegedly dangerous product." 719 F.3d at 1251.
This Court continues to stand alone as the only appellate court in the country to hold that a brand-name manufacturer may be responsible for injuries caused to a party who ingests a generic drug that the brand-name manufacturer did not manufacture or sell. According to Wyeth, over 90 cases (a figure that includes trial courts) have now been decided in 25 states, including every state that borders Alabama, the federal circuit court that encompasses Alabama, and all six federal courts of appeals to have considered the issue. With the exception of two or three federal district court decisions already identified, all of them disagree with the position taken by this Court.
If the cases that decide the issue differently than we do were not logical and well reasoned, if they were not based on time-tested, bedrock legal principles, or if they did not resolve all the alleged distinctions between prescription-drug cases and other types of cases that have been raised in the main opinion and in the special concurrence, then perhaps their sheer number would not matter. But they are all these things.
The Eleventh Circuit Court of Appeals has put it this way:
"Our conclusion is fortified by the fact that the overwhelming national consensus -- including the decisions of every court of appeal and the vast majority of district courts around the country to consider the question -- is that a brand-name manufacturer cannot be liable for injuries caused by the ingestion of the generic form of a product. See, e.g., Bell v. Pfizer, Inc., 716 F.3d 1087, No. 12–1674 ... (8th Cir. June 14, 2013) (rejecting negligence, misrepresentation, and fraud claims against the brand manufacturer of metoclopramide, and explaining that '[a]n overwhelming majority of courts considering this issue ... have rejected [plaintiff's] theory of liability' (internal quotation marks omitted)); Demahy v. Schwarz Pharma, Inc., 702 F.3d 177, 182–83 (5th Cir. 2012) (per curiam), petition for cert. filed, 81 U.S.L.W. 3519 (U.S. Mar. 7, 2013) (No. 12–1093); Smith [v. Wyeth, Inc.], 657 F.3d [420] at 423–24 [(6th Cir. 2011)] ('The plaintiffs' argument -– that the name-brand defendants' liability stems from the fact that the regulatory structure governing name-brand and generic drugs makes it foreseeable that patients and their physicians will rely on the name-brand labels to use and prescribe generic drugs -– has been rejected by all but one of the courts that have considered it.'); Mensing [v. Wyeth, Inc.], 658 F.3d [862] at 867 [(8th Cir. 2011)] (expressly reinstating the portion of the opinion holding that brand-name manufacturers cannot be held liable under Minnesota law for damage caused by generic drugs); Foster v. Am. Home Prods. Corp., 29 F.3d 165, 170–71 (4th Cir. 1994); Gardley–Starks v. Pfizer, Inc., 917 F. Supp. 2d 597 ... (N.D. Miss. Jan. 10, 2013) ('The Court concludes that Mississippi law, consistent with the vast majority of courts to consider this issue, would not recognize a cause of action -- however styled -- against a brand manufacturer for injuries caused by use of its competitors' generic product.'); see also id. at ... n. 4 (noting the defendants' citation to 'sixty-six decisions applying the law of twenty-three different jurisdictions holding that brand-name manufacturers of a drug may not be held liable under any theory for injuries caused by the use of a generic manufacturer's product'). But see Kellogg v. Wyeth, 762 F. Supp. 2d 694, 708–09 (D. Vt. 2010); Wyeth, Inc. v. Weeks, ... No. 1101397 ... (Ala. Jan. 11, 2013), reh'g granted (June 13, 2013); Conte v. Wyeth, Inc., 168 Cal. App. 4th 89, 85 Cal. Rptr. 3d 299, 310 (2008). Although only the law of Florida controls the outcome here, the cases denying recovery to plaintiffs bringing claims identical to those we confront in this case are legion, and this mountain of authority steels us in our determination that Florida law does not recognize a claim against the brand manufacturer of a prescription drug when the plaintiff is known to have consumed only the generic form."
Guarino, 719 F.3d at 1252-53 (emphasis added).
The bedrock principles of tort law in this State are no different than the bedrock principles of tort law in every other state in this country, including the two dozen states whose laws have been considered in what the Eleventh Circuit call an "overwhelming national consensus." There is no reason for this State not to be part of that consensus.42
One of the many amici curiae briefs supporting Wyeth asserts, with supporting authority:
"Developing a prescription drug and taking it to market is a monumental undertaking. On average, it requires more than seven years and almost $2 billion to develop a single drug, obtain FDA approval for it, and bring it to market. 'Name brand manufacturers undertake the expense of developing pioneer drugs, performing the studies necessary to obtain premarketing approval, and formulating labeling information.' Foster [v. American Home Products Corp.], 29 F.3d [165] at 170 [(4th Cir. 1994)].
"Brand-name manufacturers make research and development decisions against a particular legal backdrop. Under traditional tort principles, the brand-name manufacturer knows that it can be held responsible for injuries caused by its products under certain circumstances. See Wyeth v. Levine, 555 U.S. 555 (2009). The brand-name manufacturer also knows, however, that it will not be held liable for injuries caused by products that it neither made nor distributed. See, e.g., Foster, 29 F.3d at 168, 171.
"....
"... [T]he Plaintiffs' novel liability theory would retroactively frustrate legitimate investment-backed expectations. Decisions were made and capital invested decades ago to produce a drug for sale in a legal system that (as is traditional) allows recovery for injuries caused by the brand-name company's own product, but not for injuries caused by the products made by its competitors. The abrupt change that the Plaintiffs seek would wipe away that system and replace it with bet-the-company uncertainty.
"[Looking forward], Plaintiffs' theory would destroy the predictability needed by brand-name manufacturers trying to decide whether to invest almost $2 billion and seven years of time to develop a new drug. ..."
Brief of amici curiae, The Chamber of Commerce of the United States of America and the Business Council of Alabama, at 20-24 (emphasis in original; some citations omitted).
Even proponents of the result urged by the plaintiffs admit that such a result is unfair to the brand-name manufacturers. See, e.g., Allen Rostron, Prescription for Fairness: A New Approach to Tort Liability of Brand-Name and Generic Drug Manufacturers, 60 Duke L.J. 1123, 1181 (Feb. 2011) (admitting that "[u]nder the [approach of the California appeals court in] Conte{39} if a drug lacks adequate warnings, its brand-name manufacturer may wind up being liable for harm to those who took either the brand-name or the generic version of the drug, whereas the generic manufacturers likely will wind up not being liable to anyone. That asymmetry is particularly unfair given that the brand-name manufacturers make substantial investments in developing new drugs from which generic producers profit by copying."); Wesley E. Weeks, Picking Up the Tab for Your Competitors: Innovator Liability After PLIVA, Inc. v. Mensing, 19 Geo. Mason L. Rev. 1257, 1259 (Summer 2012) (conceding that holding brand-name manufacturers liable "is far from ideal. The brand-name manufacturer invests resources to produce helpful pharmaceuticals, and under innovator liability, it would be liable for harm caused by its competitors' drugs. As this reduces the profitability of creating new drugs, it could provide drug developers with a negative incentive, reducing the number of beneficial drugs developed in this country. Meanwhile, generic drug manufacturers are insulated from failure-to-warn lawsuits by the preemption recognized in [PLIVA].").
Another concern is insurability:
"[G]iven the near impossibility of formulating bulletproof labeling, insurability represents a concern: cost spreading would further burden the shrinking share of customers for the brand-name drug (or else later patients taking unrelated drugs produced by that defendant) for the benefit of customers of the competitor's drug (who are already free riding on the original research and development efforts of the brand-name manufacturer). This threatens to chill therapeutic product innovation ...."
Lars Noah, Adding Insult to Injury: Paying for Harms Caused by a Competitor's Copycat Product, 45 Tort Trial & Ins. Prac. L.J. 673, 695 n.69 (2010).
All of these concerns are elevated by the realization that there will be no correlation between the brand-name manufacturer's continued participation in the marketplace with its own drug and its responsibility for generic drugs manufactured and sold by others. Under the rationale urged by the plaintiffs, and accepted by the majority of the Court today, a brand-name manufacturer's complete departure from the marketplace would offer no logical reason for terminating its responsibility for the deficiencies in the labeling associated with generic versions of its drugs that may be marketed indefinitely thereafter by its former competitors and perhaps even new entrants into the market.44 At least one commentator has noted that this is a distinct possibility. See Noah, 45 Tort Trial & Ins. Prac. L.J. at 691-92 (noting as an example Hoffmann-La Roche's recent decision to withdraw its much litigated drug Accutane from the market and observing that, "[a]s a regulatory matter, so long as FDA does not withdraw the innovator's NDA [new drug approval] on safety or effectiveness grounds, existing (and the possibility for future) ANDAs [abbreviated new drug approvals] would remain unaffected").
Finally, and most troubling, I see no principled barrier to the extension of the "foreseeability" doctrine to deficient representations or design defects made by developers of other types of popular products copied by competitors. See, e.g., Huck v. Wyeth, supra. The line drawn today between the prescription-drug industry and all other industry exists only because we say it does; it will continue to exist only for so long as we say it does. There may be differences in the degree of foreseeability, but if foreseeability without relationship is to be the test, the line between the prescription-drug industry and other industry is arbitrary, and there is no principle to which this or other courts may anchor themselves in an effort to hold that line.45
Again, however, even if somehow this Court could guarantee that the "foreseeability" analysis embraced today never finds its way into cases involving other products or endeavors, either in this jurisdiction or in others, the potential deleterious effect on the prescription-drug industry and those that depend upon it provide more than enough concern. In a 1977 case in which a federal court in New York explained that the fact that it was foreseeable that a statement might be relayed to and relied upon by a party with whom the maker had no relationship was not sufficient to create a duty to that party. In so doing, the court heeded the concerns of none other than Professor Prosser:
"[W]here misstatements are claimed to be the cause of loss, even a 'reasonable anticipation that the statement will be communicated to others whose identity is unknown to the defendant, or even knowledge that the recipient intends to make some commercial use of it in dealing with unspecified third parties, is not sufficient to create a duty of care towards them.' W. Prosser, Law of Torts, 708 (4th ed. 1971). The reason for such a rule is obvious. To quote Prosser again, it is required in order to avoid '[t]he spectre of unlimited liability, with claims devastating in number and amount crushing the defendant because of a momentary lapse from proper care. ...' Id."
Demuth Dev. Corp. v. Merck & Co., 432 F. Supp. 990, 993-94 (E.D.N.Y. 1977). We too should heed Professor Prosser's concerns.
The investment and innovation that over the past 50 years have resulted in the fastest pace of medical advances in human history have depended upon the incentives made available by America's free-market system. As they have for all types of products, the free-market system and the legal framework in which it has operated have coupled the risks and rewards of developing and distributing new medicines and, in so doing, have allowed entrepreneurs and innovators to assume both in corresponding measure. We now disrupt this critical dynamic.