Case Name: JOHN SMITH, Plaintiff-Appellant, v. CUTTER BIOLOGICAL, INC., a division of Miles Inc., MILES LABORATORIES, INC., TRAVENOL LABORATORIES, INC., AMOUR PHARMACEUTICAL CORPORATION, ALPHA THERAPEUTICS CORPORATION, and UNITED STATES OF AMERICA, Defendants-Appellees
Court: Supreme Court of the State of Hawaii
Jurisdiction: Hawaii
Decision Date: 1991-11-29
Citations: 72 Haw. 416
Docket Number: NO. 14754
Parties: JOHN SMITH, Plaintiff-Appellant, v. CUTTER BIOLOGICAL, INC., a division of Miles Inc., MILES LABORATORIES, INC., TRAVENOL LABORATORIES, INC., AMOUR PHARMACEUTICAL CORPORATION, ALPHA THERAPEUTICS CORPORATION, and UNITED STATES OF AMERICA, Defendants-Appellees
Judges: LUM, C.J., PADGETT, HAYASHI, WAKATSUKI, AND MOON, JJ.
Reporter: Hawaii Reports
Volume: 72
Pages: 416–459

Head Matter:
JOHN SMITH, Plaintiff-Appellant, v. CUTTER BIOLOGICAL, INC., a division of Miles Inc., MILES LABORATORIES, INC., TRAVENOL LABORATORIES, INC., AMOUR PHARMACEUTICAL CORPORATION, ALPHA THERAPEUTICS CORPORATION, and UNITED STATES OF AMERICA, Defendants-Appellees
NO. 14754
(NO. 89-15839 - D.C. NO. CV-87-0891)
NOVEMBER 29, 1991
LUM, C.J., PADGETT, HAYASHI, WAKATSUKI, AND MOON, JJ.

Opinion:
OPINION OF THE COURT BY
LUM, C.J.
This court has accepted a request to address certified questions from the Ninth Circuit Court of Appeals. Smith v. Cutter Biological, Inc., 911 F.2d 374 (9th Cir. 1990).
I.
CERTIFIED QUESTIONS OF LAW
1. Does Hawaii's Blood Shield Law, Haw. Rev. Stat. § 327-51, preclude Smith from bringing a strict liability claim?
2. Does Hawaii's Blood Shield Law, Haw. Rev. Stat. § 327-51, preclude Smith from bringing a negligence claim?
3. Would Hawaii allow recovery in this case when the identity of the actual tortfeasor cannot be proven? If Hawaii would allow recovery, what theory (i.e. burden- shifting, enterprise liability, market share or other) would the Hawaii Supreme Court adopt?
Id. at 376. In considering our responses to the questions, we note that the issue as to questions two and three concerns the causation factor in negligence. The instant problem is that the plaintiff cannot identify which particular defendant caused his injury.
Our consideration of the issues is limited to the facts as stated in this record. Procedurally, this case reached the Ninth Circuit Court on a summary judgment motion. The order granting summary judgment did not rule on duty and breach as to the manufacturers; summary judgment was granted on the basis that plaintiff failed to prove causation.
The other elements of negligence, i.e., duty, breach and damages, are not at issue here. We note that at least two courts have determined, in cases similar to the instant action, that there was no breach of duty. Jones v. Miles Laboratories, Inc., 887 F.2d 1576 (11th Cir. 1989); McKee v. Cutter Laboratories, Inc., 866 F.2d 219 (6th Cir. 1989). However, those cases are distinguishable. We do not render an opinion as to whether appellant here will overcome the obstacles met by plaintiffs in those cases; the duty and breach issues here have not only not been decided, they are not before this court on the certified questions. Therefore, we do not deal with the viability of those questions.
Our conclusions deal only with this case — as it comes to us. Therefore, on our reading of the record as it stands, the relevant statutes, and the relevant case law, we answer "yes" to question one, and "no" to question two. Our answer to question three is "yes," using the alternative market-share theory of recovery, as defined herein.
II.
Appellant is a hemophiliac who has tested HIV-positive with the AIDS virus. He claims that his exposure to the AIDS virus occurred in 1983 or 1984, through injections of the Antihemophilic Factor Concentrate (Factor VIII or AHF). Factor VIII, as more fully discussed in Part III, is a blood protein which enables the blood to properly coagulate when a hemophiliac suffers a bleeding episode. The original source of the Factor VIII is through blood donors.
The United States Tripler Army Medical Hospital (U.S.) was appellant's dispensary for Factor VIII during the period of time in which appellant claims to have been infected. According to appellant, appellee manufacturers furnished to the U.S. the Factor VIII which was used by appellant. Upon appellant's first being tested for HIV antibodies in 1986, the results were positive.
Appellant filed suit against the four appellee manufacturers of Factor VIII for negligence and strict liability. Defendants moved for summary judgment. Despite acknowledging "that this is a case in which it might be reasonable to apply the principles of market share theory of liability," the district court granted summary judgment in favor of appellees, holding that appellant failed to prove specifically which manufacturer's product caused his infection. Appellant took the case to the Ninth Circuit, which certified the questions to this court.
III.
The first question asks whether the Hawaii Blood Shield Law precludes a strict liability claim. The blood shield statute reads as follows:
Exemption from strict liability. No physician, surgeon, hospital, blood bank, tissue bank, or other person or entity who donates, obtains, prepares, transplants, injects, transfuses, or otherwise transfers, or who assists or participates in obtaining, preparing, transplanting, injecting, transfusing, or otherwise transferring any tissue, organ, blood or component thereof, from one or more persons, living or dead, to another person, shall be liable as a result of any such activity, save and except that each such person or entity shall remain liable for the person's or its own negligence or wilful misconduct.
Hawaii Revised Statutes (HRS) § 327-51 (1985) (emphasis added). The answer to this question then depends on whether Factor VIII can be categorized as a "blood component." Appellant argues that the legislature was merely referring to blood or blood plasma for the definition of blood component. The legislative history does not appear to us to be that narrow. The history states that:
Th[e] bill... provide[s] an exception to the doctrine of strict liability on tort when there is a transfer of part of the human organism from one person to another. . . . [Tjhe imposition of strict liability upon persons . . . engaged in scientific procedures dealing with . preparing . . . human . . . blood[] or component thereof could inhibit, at the expense of the health and welfare of the people of Hawaii, the exercise of sound medical judgment in this area and may restrict the availability of important scientific knowledge and skills.
Sen. Conf. Comm. Rep. No. 773, in 1971 Senate Journal, at 1135. We do not believe that "preparing blood components" of humans, as noted in the history quoted, intends a limitation to blood or blood plasma. The legislature declined to define that phrase.
Looking to the definition by the federal Food and Drag Administration, a component "means that part of a single-donor unit of blood separated by physical or mechanical means." 21 C.F.R. § 606.3(c) (1990). Factor VIII is a blood protein, essential for normal coagulation, which can be extracted from human blood. The extraction involves a process called plasmapheresis. That process separates part of the blood, called cryoprecipitate, from whole blood. The clotting factors making up Factor VIII are obtained from the cryoprecipitate, and then freeze-dried. Factor VIII's usefulness is substantially greater than cryoprecipitate, which, prior to the refinement of Factor VIII, was the primary treatment for hemophilia.
Therefore, we believe that Factor VIII is a component prepared from blood. See also Roe v. Miles Laboratories, Inc., 740 F. Supp. 740 (D. Alaska 1989). With that finding, we answer the first question in the affirmative; Hawaii's blood shield statute precludes a strict liability claim.
IV.
The second question is tied to the third question. It requires that this court decide what the Hawaii blood shield statute means by the phrase "its own negligence." Appellees' argument is that the phrase bars a lawsuit where the tortfeasor cannot be positively identified. In other words, the question is virtually identical to the first query in the third certified question. The distinction is, in the first instance, whether the legislature, by means of the blood shield statute, allows a claim against an unidentified tortfeasor, and in the second instance, whether this court would allow such an action based on the general development of Hawaii tort law. If "its own negligence" literally means the negligence must be of that particular defendant and have caused the damage to the plaintiff, then there would be no room to consider any of the various multitortfeasor theories of liability.
Looking at the legislative history behind the blood shield statute, we note that it merely states that excluding strict liability does not "affect remedies based upon other legal theories, such as negligence or willful misconduct." Sen. Conf. Comm. Rep. No. 773, in 1971 Senate Journal, at 1135. The wording on which appellees rely so heavily, "own negligence," is conspicuously absent from the history. Lacking that wording, or any other wording giving such an indication, we believe that the legislature has not spoken on this issue. We believe a lacuna exists, and we are free to use our own determination to explain pertinent words in the blood shield statute. Therefore, the second question is answered in the negative.
V.
The final question posed to this court comes in two parts. The first part asks whether this court would allow recovery in negligence when the actual tortfeasor cannot be proven. We concluded, in Part IV, that the Hawaii blood shield statute does not mandate specific identification of the tortfeasor. We now consider whether general Hawaii tort law would allow the action.
The reason this case is before this court is because the legislature has not fully legislated in the field of torts. When the occasion arises for which there is no specific rule to apply, "we are free to fashion an appropriate rule of law." Armstrong v. Cione, 69 Haw. 176, 738 P.2d 79 (1987). We must consider what justification there is for deviating from the traditional proof in a negligence case, which, as this court has previously said, includes the factor of causation. See Knodle v. Waikiki Gateway Hotel, Inc., 69 Haw. 376, 385, 742 P.2d 377, 387 (1987).
Appellees take issue with applying theories which were developed, in a large part, for remedies in the field of diethylstilbestrol (DES) drug litigation and the inherent problems associated with those actions. Their strongest argument against using these theo ries is the lack of comparison of DES to Factor VIII as a fungible product. DES was produced by more than 200 different companies, some of which are defunct, but the identical formula was used universally in a highly regulated industry. With Factor VIII, there are only a handful of manufacturers, and although the product is fungible insofar as it can be used interchangeably, it does not have the constant quality of DES. The reason is obvious — the donor source of the plasma is not a constant. Therefore, Factor VIII is only harmful if the donor was infected; DES is inherently harmful. As we see that the lack of screening of donors and failure to warn are the breaches alleged, appellees' argument for not using DES theories is not convincing. We find consideration of the theories discussed in the DES cases to be helpful, as we strive to find an equitable and fair solution to the case at bar.
Our initial reference is to the reasoning of the Supreme Court of California, in Sindell v. Abbott Laboratories, 163 Cal. Rptr. 132, 607 P.2d 924, cert. denied, 449 U.S. 912, 101 S. Ct. 285, 66 L. Ed. 2d 140 (1980). We subscribe to the policy reasons propounded in Sindell, and discussed infra, for by-passing the identification requirement.
In addition, we note that tort law is a continually expanding field. As discussed in the American Law Institute Enterprise Responsibility for Personal Injuries — Reporter's Study (1991) (ALI Study), the field of torts has now expanded to include personal injury actions described in three tiers of actions. I ALI Study 9. These are loosely defined as first, the traditional level which includes accidents where an individual defendant causes harm to a stranger. The second level includes product defects and medical mishaps which include high stakes cases with erratic jury results. Finally, the third tier includes "mass" torts where toxic exposure to many plaintiffs may, many years later, cause cancer or other illness. Id. at 9-10. It is this final tier with which this case deals. It necessitates considering how to fairly deal with the plight of plaintiffs unable to identify, for no fault of their own, the person or entity who should bear the liability for their injury.
No longer can we apply traditional rules of negligence, such as those used in individual and low level negligence to mass tort cases, especially here, where we are dealing with a pharmaceutical industry that dispenses drugs on a wide scale that could cause massive injuries to the public, and where fungibility makes the strict requirements difficult to meet. The problem calls for adopting new rules of causation, for otherwise innocent plaintiffs would be left without a remedy. We concede that there is a difference of opinion regarding the need for this change. For instance, in regard to DES cases, the Illinois Supreme Court refused to adopt the market-share theory of liability, in part because "[acceptance of market share liability and the concomitant burden placed on the courts and the parties will imprudently bog down the judiciary in an almost futile endeavor." Smith v. Eli Lilly & Co., 137 Ill. 2d 222, 253, 560 N.E.2d 324, 338 (1990). In addition, that court criticized the fairness of results in apportioning damage when reliable information on all manufacturers might not be available. Id. Part of that reasoning, of course, is based on the fact that the potential number of defendants in DES cases extends into the hundreds. Id. at 254, 560 N.E.2d at 338. The numbers here are not nearly so large, and therefore, the harshness of the result, that is, burdening the innocent plaintiff without a remedy, to us seems totally unfair and out of step with current efforts to allow recovery when the proper case is brought.
The policies in Sindell and Hall convince us that it is appropriate to consider a negligence action where the actual tortfeasor cannot be proven. Therefore, although inherent in the proof of negligence is proof of causation, we believe that this state is amenable to consideration of group theories of liability.
VI.
The second part of the third certified question asks what theory or theories this court might adopt where the tortfeasor cannot be proven. There are several theories which have evolved in the last several years. The genesis of these theories comes from Sindell v. Abbott Laboratories, 163 Cal. Rptr. 132, 607 P.2d 924, cert. denied, 449 U.S. 912, 101 S. Ct. 285, 66 L. Ed. 2d 140 (1980). The theories are generally described as: alternative liability, concert of action, enterprise or industry-wide liability, and market-share liability. In the evolution of the DES cases, the market-share theory has undergone various modifications, to suit the policies and needs of the particular courts.
A. Alternative Liability
This theory is epitomized in the well-known case of Summers v. Tice, 33 Cal. 2d 80, 199 P.2d 1 (1948). In that case, two hunters negligently shot in the direction of the plaintiff; one of them injured him. Upon deciding that both were wrongdoers and negligent to the plaintiff, the court felt that it was unfair to leave an impossible burden of proof on the plaintiff, and shifted that burden to the defendants to absolve themselves. The rule of Summers v. Tice is included in the Restatement (Second) of Torts (Restatement) as follows:
Where the conduct of two or more actors is tortious, and it is proved that harm has been caused to the plaintiff by only one of them, but there is uncertainty as to which one has caused it, the burden is upon each such actor to prove that he has not caused the harm.
Restatement § 433B(3) (1965). The comments in the Restatement also suggest that this theory may appropriately be subject to modification at a later time. Id. comment h.
Two presumptions follow this theory. First, the plaintiff must prove that "all defendants acted tortiously and that the harm resulted from the conduct of one of them." Sindell, 163 Cal. Rptr. at 139, 607 P.2d at 931 n.16, citing Restatement § 433B comment g. This has been interpreted to mean that the tortious actions must occur simultaneously. Starling v. Seaboard Coast Line R.R., 533 F. Supp. 183, 191 (S.D. Ga. 1982) (court considering theories in asbestos related injury). However, another court, in applying the theory in a Factor VIII case, disagreed. See Poole v. Alpha Therapeutic Corp., 696 F. Supp. 351, 356 (N.D. Ill. 1988).
Second, all responsible parties must be joined. Sindell, 163 Cal. Rptr. at 139, 607 P.2d at 930-31. Typically, this theory is useful in multiple car crash cases, cases of pollution by several defendants, and injury during medical operations where the plaintiff is sedated. In re Agent Orange Prod. Liab. Litig., 597 F. Supp. 740, 822-23 (E.D.N.Y. 1984), aff'd, 818 F.2d 145 (1987), cert. denied, 484 U.S. 1004, 108 S. Ct. 695, 98 L. Ed. 2d 648 (1988). Additionally, however, joint and several liability is inherent in the application of alternative liability.
We choose not to alter the theory to the point that it would be useful on the facts here. Several problems arise which lead us to this decision. First, we look at the various theories of negligence which appellant suggested. One argument is that there was a duty to properly select and screen donors; other arguments follow the same line of reasoning — that the manufacturers should have implemented verified surrogate laboratory tests, or that they should have ceased using plasma from donor centers where the population groups had significant numbers of AIDS incidents. It is obvious that each manufacturer acted at various different times, so the simultaneous requirement of a strict application of the theory fails. Also, although appellant has alleged that manufacturers are "most" of the possible tortfeasors, and the manufacturers have not clearly rebutted that argument, it is still subject to factual proof and findings. Finally, we do not believe that joint and several liability is appropriate under the circumstances of this case. Therefore, this theory cannot be applied here, unless modified, and we choose not to do so based on these facts, as other theories, discussed infra, have already been appropriately modified.
B. Concert of Action
This theory derives from the criminal law concept of aiding and abetting. Starling, 533 F. Supp. at 187. See Restatement § 876. Concert of action is usually applied with a small number of defendants, a single plaintiff, and a short time period between the tort and its discovery. The defendants' joint plan is the basis of the cause of action, and most often the plaintiff is able to identify which defendant actually caused the injury. Abel v. Eli Lilly & Co., 418 Mich. 311, 338, 343 N.W.2d 164, 176, cert. denied, 469 U.S. 833, 105 S. Ct. 123, 83 L. Ed. 2d 65 (1984). The court stated that the identification did not preclude use of the theory. Id. According to the court, the only burden of plaintiffs to withstand a summary judgment motion, for failure to state a cause of action, was to "allege that the defendants were jointly engaged in tortious activity as a result of which the plaintiff was harmed." Id. Inherent in this theory is the application of joint and several liability. As the Michigan court also stated, "[i]f plaintiffs can establish that all defendants acted tortiously pursuant to a common design, they will all be held liable for the entire result." Id.
Even if we thought this theory appropriate in a Factor VIII case, again, we do not wish to burden defendants with joint and several liability. Therefore, we choose not to allow this theory to be applied to this case.
C. Enterprise or Industry-Wide Liability
The essence of the enterprise theory is that there is joint control of the risk throughout a particular industry. The theory originated in the blasting caps case, Hall v. E.I. Du Pont de Nemours & Co., 345 F. Supp. 353 (E.D. N.Y. 1972). The basis of the case was that there was an industry-wide standard concerning safety; the safety planning was delegated to a central group; and there was cooperation in the manufacture and design. Policy dictates that when all of those facts occur, the entire enterprise is liable. Therefore, the industry-wide standard became the cause of the plaintiff's injury.
The main premise against this theory is stated in one of the DES cases:
The underlying rationale in all of the decisions rejecting enterprise liability is that the law of torts does not include a theory of liability which would allow an entire industry to be held strictly liable for an injury caused by a defective product. Enterprise liability as described in Hall is predicated upon industry-wide cooperation of a much greater degree than that alleged by the plaintiff.
Martin v. Abbott Laboratories, 102 Wash. 2d 581, 600, 689 P.2d 368, 380 (1984). That premise is directly disputable by reading Hall, as the court states:
There is thus no support for defendants' argument that to establish joint control of risk, plaintiffs must demonstrate that the explosives industry was "rigidly controlled" through the trade association with regard to blasting cap design,... and that the object of such control was some particularly reprehensible breach of duty. The variety of business and property relationships in which joint control of risk has been found demonstrates the flexibility of the doctrine. Liability is not limited to particular formal modes of cooperation, nor to illegal or grossly negligent activities.
345 F. Supp. at 374.
However, another court has aptly stated the plaintiff's burden of proof with a showing:
(1) that the product was manufactured by one of a small number of defendants in an industry; (2) the defendants had a joint capacity to reduce the risks of the product; and (3) each of them failed to take steps to reduce the risk at a substantially concurrent time by delegating their responsibility to an association.
Conley v. Boyle Drug Co., 477 So. 2d 600, 604 (Fla. App. 1985), rev'd on other grounds, 570 So. 2d 275 (Fla. 1990) (specifically approving the analysis of the lower court as to alternative, concert of action, enterprise, and Sindell market-share theories of liability).
Based on the steps as set forth in Conley, the enterprise theory appears to be a somewhat persuasive method of approaching this case. We note that the pleadings do not raise the allegation that the defendants had the joint capacity to reduce the risk. Appellant does not even argue this theory in his opening brief; however, the facts alleged in the brief lend credibility to this type of argument. Were it not that we are again faced with the inherent application of joint liability, and the fact in addition that we find one aspect of the Hall scenario convincingly distinguishable, we might endorse this theory in answer to the certified question.
First, we mention the distinguishable characteristic of Hall, which is convincingly pointed out to us by appellees and the court in Sindell v. Abbott Laboratories, 163 Cal. Rptr. 132, 607 P.2d 924, cert denied, 449 U.S. 912, 101 S. Ct. 285, 66 L. Ed. 2d 140 (1980). The court there noted that "the drug industry is closely regulated by the Food and Drug Administration,... [t]o a considerable degree, therefore, the standards followed by drug manufacturers are suggested or compelled by the government." Id. at 143, 607 P.2d at 935. With the government in control of the parties' actions, it is unfair to hold them liable for following the standards. Appellees' arguments convince us that such reasoning is appropriate here, too, to eliminate this theory on these facts.
We further digress to expound on our reluctance to adopt joint liability in the Factor VIII cases. First, as we are writing a new chapter in tort law in the State of Hawaii, we endeavor to set principles which we think would be adopted by our legislature. We note that by statute, joint and several liability in tort was abolished to some extent as of October 1991. HRS § 663-10.9 (Supp. 1990). As to what is still allowed, damages are still limited by the doctrine of modified comparative negligence. HRS § 663-31 (1985). Therefore, we believe the legislature has seen a need to balance the equities in this evolving field.
In addition, as noted by many of the opinions in DES cases, there is an inherent unfairness in holding one or two parties responsible in full for the actions of tortfeasors who may escape liability for some reason. It seems at least a fair trade-off, where the plaintiff cannot identify which party actually caused his injuries, to at least allow the defendants to limit their share of liability to their relative proportion of the market. Therefore, we move on to discuss, and endorse, market-share liability, with modifications.
D. Market-Share Liability and Its Progeny
This theory has been most susceptible to variations and refinements, especially in DES litigation, but also in line with the law of the state in which it has been applied. It was first defined in Sindell, 163 Cal. Rptr. 132, 607 P.2d 924, cert. denied, 449 U.S. 912, 101 S. Ct. 285, 66 L. Ed. 2d 140 (1980). The policies there stated included: 1. the reasoning of Summers v. Tice, 33 Cal. 2d 80, 199 P.2d 1 (1948), that between innocent plaintiffs and negligent defendants, the negligent parties should be held liable; 2. advances in science and the creation of fungible goods whose source cannot be traced; 3. the financial ability of defendants to bear the costs; and 4. the fact that manufacturers are in a better position to prevent defective products from reaching the consumer market. Sindell, 163 Cal. Rptr. at 144, 607 P.2d at 936. We expand on those policies to acknowledge that defendants may bear the loss by passing that cost of doing business on to consumers. In addition, we feel that equity and fairness call for using the market-share approach. Another justification is that where many drugs can be lethal, and it is difficult for the consumer to identify the source of the product, the burden should shift. The concept itself meets the objectives of tort law, both by providing plaintiffs a remedy, but also by deterring defendants from negligent acts.
After stating its policies, the Sindell court stated:
[W]e hold it to be reasonable in the present context to measure the likelihood that any of the defendants supplied the product which allegedly injured plaintiff by the percentage which the DES sold by each of them for the purpose of preventing miscarriage bears to the entire production of the drug sold by all for that purpose.
Id. at 145, 607 P.2d at 937. Included in the definition was a requirement that a substantial percentage of the market must be joined as defendants, and that an exculpatory clause be included. Id. We feel that this basic theory, with modifications and distinctions to suit the policies of this state, discussed infra, provides an appropriate modem for appellant's case. The relevant considera tions are: 1. defining the market, 2. identification and joint and several liability, and finally 3. exculpatory allowances.
1. Defining the Market
Criticisms of Sindell include the need for a definition of "substantial share" of the market, in order not to distort the share of liability. Martin v. Abbott Laboratories, 102 Wash. 2d 581, 602, 689 P.2d 368, 381 (1984). The Martin court adopted a narrow definition of the market, that being the plaintiff's particular geographic market. Id. at 605, 689 P.2d at 382. The justification is that the narrow market share purports to make a "particular defendant's potential liability . . . proportional to the probability that it caused plaintiff's injury." Id. This policy was later reaffirmed by the same court, with acknowledgement that lacking evidence of the specific market, then "other figures, . . . such as within the county, state, or even in the country may in certain circumstances be introduced." George v. Parke-Davis, 107 Wash. 2d 584, 592, 733 P.2d 507, 512 (1987). The Florida Supreme Court, in Conley v. Boyle Drug Co., 570 So. 2d 275 (Fla. 1990), agreed with the Washington court that the relevant market should be "as narrowly defined as the evidence in a given case allows." Id. at 284. The court found this manner of definition to be consistent with the Martin theory of allowing a defendant to exculpate itself by showing no participation in that market. It does meet the goal of market-share liability to impose liability only on those companies who could have manufactured the injurious product.
Another court has specifically adopted the national market as the best option. Hymowitz v. Eli Lilly & Co., 73 N.Y.2d 487, 511, 539 N.E.2d 1069, 1077, cert. denied, 493 U.S. 944, 110 S. Ct. 350, 107 L. Ed. 2d 338 (1989). Several premises supported this holding: 1. it was difficult to reliably determine any market smaller than the national one, 2. it avoided the need to establish separate matrices as to market share, and 3. it avoided an unfair burden on litigants. Id. at 511, 539 N.E.2d at 1077. The national market was intended to "apportion liability so as to correspond to the over-all culpability of each defendant, measured by the amount of risk of injury each defendant created to the public-at-large." Id. at 512, 539 N.E.2d at 1078. This provides equitable relief for plaintiffs, and a rational distribution of responsibility among defendants. It also avoids a windfall escape to the producer who happens to sell only to certain distributors. The culpability, therefore, is for marketing the product.
As we are faced here with a minimal number of manufacturers of the product, we believe that culpability for marketing the product is a better policy. Should the issue arise under different circumstances at some point, we may find it appropriate to narrow the definition. For this case, however, we believe the national market is the more equitable consideration.
2. Identification and Joint and Several Liability
Courts differ on their requirements of an assertive effort on the part of plaintiffs to identify the actual manufacturer of the specific product which caused the harm. We take another approach to this concern. Whereas manufacturers here argue that appellant should have kept a log of which manufacturer's product he was using, we fail to see how such failure affects the viability of appellant's suit in view of our adoption of the theory of market-share liability.
Plaintiffs should use due diligence to join all manufacturers, but failure to do so is not a defense. Failure to do so may affect the percentage of recovery, discussed infra. However, manufacturers are permitted to implead other manufacturers. But, in this case, all manufacturers are joined, so the issue is not before us. However, we note in passing that the conditions of the Martin court, which would allow plaintiffs to initiate suit against only one defendant, and of Sindell, which would require plaintiffs to join a "substantial" number of defendants, are immaterial as long as plaintiffs realize their recovery will depend on joining as many manufacturers as they can; plaintiffs will endeavor to join all manufacturers.
We have already discussed our feeling that this action should not be subject to joint liability. We simply reiterate what other courts have said on this point, that " '[t]he cornerstone of market share alternate liability is that if a defendant can establish its actual market share, it will not be liable under any circumstances for more than that percentage of the plaintiff's total injuries.' " Conley, 570 So. 2d at 285, quoting George v. Parke-Davis, 107 Wash. 2d at 595, 733 P.2d at 513. Therefore, we advocate several liability.
We define the rules of distribution as to market share for this case as was done in Martin, that is:
The defendants that are unable to exculpate themselves from potential liability are designated members of the plaintiffs' . . . market[] . These defendants are initially presumed to have equal shares of the market and are liable for only the percentage of plaintiff's judgment that represents their presumptive share of the market. These defendants are entitled to rebut this presumption and thereby reduce their potential liability by establishing their respective market share of [Factor VIII] in the . . . market.
Martin, 102 Wash. 2d at 605, 689 P.2d at 383. As to several liability, we adopt the theory that a particular defendant is only liable for its market share. Defendants failing to establish their proportionate share of the market will be liable for the difference in the judgment to 100 percent of the market. However, should plaintiff fail to name all members of the market, the plaintiff will not recover 100 percent of the judgment if the named defendants prove an aggregate share of less than 100 percent.
John Rapp and Charles Kozak for plaintiff-appellant.
Richard L. Berkman, Pro Hac Vice (Dechert Price & Rhoads, of counsel, of Pennsylvania; Arthur F. Roeca, Roeca & Louie, of counsel, of Honolulu, with him on the brief) for defendantappellee Baxter Healthcare Corporation, fka Travenol Laboratories, Inc.
3. Exculpatory Allowances
As a result of our determination that a national market is appropriate, as long as defendant is actually one of the producers of Factor VIII, there is little to justify exculpation of defendant. However, the exception would occur where defendant could prove that it had no product on the market at the time of the injury. As far as the defendants in this suit are concerned, it appears that none of them would be able to escape liability on that basis.
VII.
In conclusion, we will recognize the basic market-share theory of multi-tortfeasor liability, as defined herein. Acknowledging that this could open a Pandora's box of questions, we believe that we have defined at least a starting point as to appropriately responding to the certified questions. However, as we are deciding issues in a virtual factual vacuum, we recognize that our opinion is limited to the facts presented to us, and we reserve the right to modify or amend our answers to these questions.
Geoffrey R. W. Smith, Pro Hac Vice (McDermott, Will & Smith, of counsel, of Washington, D.C.; Burnham H. Greeley and Janice T. Futa, Greeley, Walker & Kowen, of counsel, of Honolulu; Duncan Barr and Deborah H. Leibman, Pro Hac Vice, O'Connor, Cohn, Dillon & Barr, of counsel, of California, with him on the brief) for defendant-appellee Cutter Laboratories.
The first distinction is that jurisdictionally, those courts' decisions are not controlling here. Second, in Jones, the negligence was based on the failure of the defendant to use "high risk" questioning as to the specifics of whether the donor was ahomosexual. Jones, 887 F.2d at 1580. The decision was based solely on the fact that the donor, who was clearly identified, would not and did not admit that he was a member of one of the "high risk" groups for AIDS. Id. at 1581.
In McKee, the finding of no negligence was based on the fact that at the time of the decedent's being diagnosed with AIDS in October 1983, industry custom did not require the processes developed later to inactivate the AIDS virus. McKee, 866 F.2d at 224. A final distinction is that in both cases, the specific manufacturer was named.
On the other hand, at least one court has approved application of the market-share theory of liability on facts similar to those herein. Ray v. Cutter Laboratories, 754 F. Supp. 193 (M.D. Fla. 1991). Ray was also considered at the summary judgment stage, but the federal court adopted the market-share theory as that was the only multi-tortfeasor theory of liability then approved by the state supreme court. Id. at 195.
Defendants include not only the manufacturers — Armour Pharmaceutical Corporation, Cutter Biological, Inc., Alpha Therapeutics Corporation, and Travenol Laboratories, Inc. (now Baxter Laboratories) — but also the United States of America (U.S.). The allegations against the U.S. are based on negligence and failure to warn. Although designated as an appellee, the U.S. has not filed an answering brief. We note that the claims against the U.S. are not directly pertinent to the certified questions before this court.
AIDS is an infectious disease caused by a virus, as are herpes, smallpox, yellow fever, and hepatitis. R. Jarvis, M. Closen, D. Hermann, A. Leonard, AIDS Law in a Nutshell 1 (West 1990) (hereinafter AIDS Nutshell). The disease was uniquely recognized in June and July, 1981. Id. at5. There are several modes of infection: 1. sexual intercourse, 2. sharing infected syringes, 3. receipt of human tissue, blood, etc., and 4. childbirth or breast feeding. Id. at 7. Once infected, a victim will not test positive for HIV during a "window" period, which lasts between six weeks and six months — although some researchers say the window period may be several years. Id. at 14. Although testing positive, a person may continue to be asymptomatic for seven to ten years. Id.
Although infection by blood transmission was not the earliest positively identified method of contracting AIDS, in July 1982, three hemophiliacs were diagnosed with pneumocystic carinii pneumonia, a form of pneumonia which the early (1981) AIDS patients had developed. Kozup v. Georgetown University, 663 F. Supp. 1048, 1051 (D.D.C. 1987), aff'd in part, vacated in part on other grounds, 851 F.2d 437 (D.C. Cir. 1988). In December 1982, there was reported a possible transfusion-associated AIDS case. Id.
Various meetings addressed the issue. In July 1982, the Public Health Service Committee on Opportunistic Infections in Patients with Hemophilia held an open meeting, at which representatives from the American Red Cross (ARC) and several other blood banking and health organizations participated. Id. The report from that meeting stated that "AIDS had 'characteristics which suggest an infectious etiology,' and that a 'possible mode of transmission is via blood products.' " Id. citing Exh. E-l to ARC'S motion for summary judgment.
"In January, 1983, a Workgroup to Identify Opportunities for the Prevention of AIDS was convened. . . . [A]s of the date of the meeting, there were five reported cases of AIDS among hemophiliacs." Id. The concensus that AIDS was blood transmissible finally came in 1984. Id. at 1052. There were some recommendations for screening of donors. Id. Not until 1985 did scientists develop seriologic testing to detect antibodies. AIDS Nutshell, at 17.
See supra note 2, regarding defendants.
Appellant, at one point, attempted to convert this suit to a class action but failed to follow through on the opportunity. Our analysis of the theories of liability might differ were this a class action.
The part referenced in the federal regulations is titled "Current good manufacturing practice for blood and blood components."
Standards for obtaining cryoprecipitate and process control for plasma are also regulated. 21 C.F.R. § 640 and 606.110 respectively.
The precursor of the DES cases is Sindell v. Abbott Laboratories, 163 Cal. Rptr. 132, 607 P.2d 924, cert. denied, 449 U.S. 912, 101 S. Ct. 285, 66 L. Ed. 2d 140 (1980). Sindell arose when demurrers were sustained as to several manufacturers of DES, on the basis that plaintiff could not identify whose product caused the injury. Id. at 134, 607 P.2d at 926-27 n.3. The Sindell court considered the four main theories.
Michigan approved both the concert of action and alternate liability theories in a DES case up on summary judgment. Abel v. Eli Lilly & Co., 418 Mich. 311, 343 N.W.2d 164, cert. denied, 469 U.S. 833, 105 S. Ct. 123, 83 L. Ed. 2d 65 (1984). In the same year, the Washington Supreme Court addressed the issue on appeal from summary judgment, in Martin v. Abbott Laboratories, 102 Wash. 2d 581, 689 P.2d 368 (1984). The Martin court reanalyzed the theories enumerated in Sindell, and then created the market-share alternate liability.
A federal court in Illinois tentatively allowed the alternate liability theory in a DES case, acknowledging that the Illinois Supreme Court had not yet addressed the issue. Poole v. Alpha Therapeutic Corp., 696 F. Supp. 351 (N.D. Ill. 1988). Later, the Illinois Supreme Court did address a DES case, but only as to the market-share theory of liability — which it refused to adopt. Smith v. Eli Lilly & Co., 137 Ill. 2d 222, 560 N.E.2d 324 (1990).
In New York, as in Florida, state courts adopted market-share theories as viable in DES cases. Hymowitz v. Eli Lilly & Co., 73 N.Y.2d 487, 539 N.E.2d 1069, cert. denied, 493 U.S. 944, 110 S. Ct. 350, 107 L. Ed. 2d 338 (1989) (on certified questions and adopting the national market as the base market); Conley v. Boyle Drug Co., 570 So. 2d 275 (Fla. 1990) (adopting Washington's version of market-share liability, and summarily disposing of the other theories).
The Michigan court allowed this theory to be applied in a DES case, which had reached the court on summary judgment, where it appeared the plaintiff could identify the tortfeasor. Abel v. Eli Lilly & Co., 418 Mich. 311, 343 N.W.2d 164, cert denied, 469 U.S. 833, 105 S. Ct. 123, 83 L. Ed. 2d 65 (1984).
One of the difficulties which appellant will have, and we acknowledge that the district court noted the problem earlier, is pinpointing when his injury occurred. That will be necessary as duty must be defined at that period of time.