Opinion ID: 2033455
Heading Depth: 1
Heading Rank: 10

Heading: Third Restatement

Text: The provisions of the Second Restatement regarding products liability were changed dramatically in the Third Restatement, published by the American Law Institute in 1997. As stated in the introduction to the Third Restatement, the institute was required to answer questions that were not part of the products liability landscape when the Second Restatement was completed. Thus, the Third Restatement is a complete overhaul of the Second Restatement in the area of products liability. Section 6 of the Third Restatement pertains specifically to prescription drugs, with § 6(c) applying to design defects. Section 6 at 144-45 states in part: (a) A manufacturer of a prescription drug or medical device who sells or otherwise distributes a defective drug or medical device is subject to liability for harm to persons caused by the defect. A prescription drug or medical device is one that may be legally sold or otherwise distributed only pursuant to a health-care provider's prescription. (b) For purposes of liability under Subsection (a), a prescription drug or medical device is defective if at the time of sale or other distribution the drug or medical device: (1) contains a manufacturing defect as defined in § 2(a); or (2) is not reasonably safe due to defective design as defined in Subsection (c); or (3) is not reasonably safe due to inadequate instructions or warnings as defined in Subsection (d). (c) A prescription drug or medical device is not reasonably safe due to defective design if the foreseeable risks of harm posed by the drug or medical device are sufficiently great in relation to its foreseeable therapeutic benefits that reasonable health-care providers, knowing of such foreseeable risks and therapeutic benefits, would not prescribe the drug or medical device for any class of patients. In addition, § 6, comment b. at 146-47, states in part: The traditional refusal by courts to impose tort liability for defective designs of prescription drugs and medical devices is based on the fact that a prescription drug or medical device entails a unique set of risks and benefits. What may be harmful to one patient may be beneficial to another. Under Subsection (c) a drug is defectively designed only when it provides no net benefit to any class of patients. Courts have concluded that as long as a drug or medical device provides net benefits to some persons under some circumstances, the drug or device manufacturer should be required to instruct and warn health-care providers of the foreseeable risks and benefits. Courts have also recognized that the regulatory system governing prescription drugs is a legitimate mechanism for setting the standards for drug design. In part, this deference reflects concerns over the possible negative effects of judicially imposed liability on the cost and availability of valuable medical technology. This deference also rests on two further assumptions: first, that prescribing health-care providers, when adequately informed by drug manufacturers, are able to assure that the right drugs and medical devices reach the right patients; and second, that governmental regulatory agencies adequately review new prescription drugs and devices, keeping unreasonably dangerous designs off the market. Nevertheless, unqualified deference to these regulatory mechanisms is considered by a growing number of courts to be unjustified. An approved prescription drug or medical device can present significant risks without corresponding advantages. At the same time, manufacturers must have ample discretion to develop useful drugs and devices without subjecting their design decisions to the ordinary test applicable to products generally under § 2(b). Accordingly, Subsection (c) imposes a more rigorous test for defect than does § 2(b), which does not apply to prescription drugs and medical devices.... . . . . ... Subsections (c) and (d) recognize common-law causes of action for defective drug design and for failure to provide reasonable instructions or warnings, even though the manufacturer complied with governmental standards. Section 6, comment f. at 149, states in part: A prescription drug or device manufacturer defeats a plaintiff's design claim by establishing one or more contexts in which its product would be prescribed by reasonable, informed health-care providers. That some individual providers do, in fact, prescribe defendant's product does not in itself suffice to defeat the plaintiff's claim. Evidence regarding the actual conduct of health-care providers, while relevant and admissible, is not necessarily controlling. The issue is whether, objectively viewed, reasonable providers, knowing of the foreseeable risks and benefits of the drug or medical device, would prescribe it for any class of patients. Given this very demanding objective standard, liability is likely to be imposed only under unusual circumstances. The court has the responsibility to determine when the plaintiff has introduced sufficient evidence so that reasonable persons could conclude that plaintiff has met this demanding standard. As of this writing, no state court has faced the issue of whether to adopt § 6(c). A few federal courts have discussed this section, but only to the extent of either predicting whether the applicable state court would adopt § 6(c) or declining to apply it in the absence of state precedent. See, Wheat v. Sofamor, S.N.C., 46 F.Supp.2d 1351 (N.D.Ga.1999); Sita v. Danek Medical, Inc., 43 F.Supp.2d 245 (E.D.N.Y.1999); Gebhardt v. Mentor Corp., 191 F.R.D. 180 (D.Ariz.1999); Taylor v. Danek Medical, Inc., No. CIV.A. 95-7232, 1998 WL 962062 (E.D.Pa. Dec.29, 1998). There are several criticisms of § 6(c), which will be briefly summarized. First, it does not accurately restate the law. It has been repeatedly stated that there is no support in the case law for the application of a reasonable physician standard in which strict liability for a design defect will apply only when a product is not useful for any class of persons. Rather, as illustrated by the discussion of the treatment of comment k. under the Second Restatement in other jurisdictions, the majority of courts apply some form of risk-utility balancing that focuses on a variety of factors, including the existence of a reasonable alternative design. The few cases that the Third Restatement cites to as support for the reasonable physician test also apply a risk-utility test. Thus, § 6(c) does not restate the law and instead seeks to formulate new law with no precedential support. See, e.g., George W. Conk, Is There a Design Defect in the Restatement (Third) of Torts: Products Liability? 109 Yale L.J. 1087 (2000); Richard L. Cupp, Jr., The Continuing Search for Proper Perspective: Whose Reasonableness Should Be At Issue in a Product Design Defect Analysis? Seventh Annual Health Law Symposium Proving Product Defect After the Restatement (Third) of Torts: Product Liability, 30 Seton Hall L.Rev. 233 (1999); Richard L. Cupp, Jr., Rethinking Conscious Design Liability for Prescription Drugs: The Restatement (Third) Standard Versus a Negligence Approach, 63 Geo. Wash. L.Rev. 76 (1994); Teresa Moran Schwartz, Prescription Products and the Proposed Restatement (Third), 61 Tenn. L.Rev. 1357 (1994); Michael J. Wagner and Laura L. Peterson, The New Restatement (Third) of TortsShelter From the Product Liability Storm for Pharmaceutical Companies and Medical Device Manufacturers? 53 Food & Drug L.J. 225 (1998). Second, the reasonable physician test is criticized as being artificial and difficult to apply. The test requires fact finders to presume that physicians have as much or more of an awareness about a prescription drug product as the manufacturer. See, e.g., Conk, supra. The test also ignores concerns of commentators that physicians tend to prescribe drugs they are familiar with or for which they have received advertising material, even when studies indicate that better alternatives are available. Id. A third criticism of particular applicability to Freeman's case is that the test lacks flexibility and treats drugs of unequal utility equally. For example, a drug used for cosmetic purposes but which causes serious side effects has less utility than a drug which treats a deadly disease, yet also has serious side effects. In each case, the drugs would likely be useful to a class of patients under the reasonable physician standard for some class of persons. Consequently, each would be exempted from design defect liability. But under a standard that considers reasonable alternative design, the cosmetic drug could be subject to liability if a safer yet equally effective design was available. As a result, the reasonable physician standard of § 6(c) of the Third Restatement has been described as a standard that in effect will never allow liability. However, a standard applying a risk-utility test that focuses on the presence or absence of a reasonable alternative design, although also rarely allowing liability, at least allows the flexibility for liability to attach in an appropriate case. See, Cupp, 30 Seton Hall L.Rev. 233, supra; Cupp, 63 Geo. Wash. L.Rev. 76, supra; Conk, supra. See, also, Schwartz, supra (stating that § 6 arguably comes close to eliminating design claims altogether). Fourth, the test allows a consumer's claim to be defeated simply by a statement from the defense's expert witness that the drug at issue had some benefit for any single class of people. Thus, it is argued that application of § 6(c) will likely shield pharmaceutical companies from a wide variety of suits that could have been brought under comment k. of the Second Restatement. See Wagner and Peterson, supra. As the Third Restatement, § 6(c), comment f. at 149, states in part: Given this very demanding objective standard, liability is likely to be imposed only under unusual circumstances. Thus, even though the rule is reformulated, any application of § 6(c) will essentially provide the same blanket immunity from liability for design defects in prescription drugs as did the application of comment k. in the few states that interpreted it as such. We conclude that § 6(c) has no basis in the case law. We view § 6(c) as too strict of a rule, under which recovery would be nearly impossible. Accordingly, we do not adopt § 6(c) of the Third Restatement. It has also been suggested by at least one commentator that rather than apply either § 6(c) of the Third Restatement or a defense under comment k. of the Second Restatement for unavoidably unsafe products, prescription drugs should be treated under the reasonable alternative design test in § 2(b) of the Third Restatement. See George W. Conk, Is There a Design Defect in the Restatement (Third) of Torts: Products Liability? 109 Yale L.J. 1087 (2000). Section 2(b) applies to products in general, rejects the consumer expectations test in favor of a risk-utility test, and requires the plaintiff to show the existence of a reasonable alternative design. However, because § 2(b) was written to apply to products in general and the parties in this case have not addressed whether it should be applied to prescription drugs, we decline to address § 2(b) as the test for prescription drugs, or any product, at this time. We conclude that § 402 A, comment k., of the Second Restatement should be applied on a case-by-case basis and as an affirmative defense in cases involving prescription drug products. Under this rule, an application of the comment does not provide a blanket immunity from strict liability for prescription drugs. Rather, the plaintiff is required to plead the consumer expectations test, as he or she would be required to do in any products liability case. The defendant may then raise comment k. as an affirmative defense. The comment will apply to except the prescription drug product from strict liability when it is shown that (1) the product is properly manufactured and contains adequate warnings, (2) its benefits justify its risks, and (3) the product was at the time of manufacture and distribution incapable of being made more safe. Tansy v. Dacomed Corp., 890 P.2d 881 (Okla. 1994). See, also, Toner v. Lederle Laboratories, 112 Idaho 328, 732 P.2d 297 (1987); Belle Bonfils Memorial Blood Bank v. Hansen, 665 P.2d 118 (Colo.1983). In this case, because the application of comment k. is an affirmative defense, Freeman was only required to plead that the Accutane she took was unreasonably dangerous under a consumer expectations test. Freeman alleged that Accutane was unreasonably dangerous for use, that it was not fit for its intended purpose, that the risks inherent in the design outweighed the benefits of its use, and that Accutane was more dangerous to Freeman than was anticipated due to undisclosed side effects. As facts supporting her allegations, Freeman alleged that Accutane is sold as an acne medication and that the side effects of Accutane present life-threatening conditions. Thus, Freeman alleged facts that the Accutane was dangerous to an extent beyond that which would be contemplated by the ordinary consumer who purchases it, with the ordinary knowledge common to the community as to its characteristics. Accordingly, we conclude that Freeman has stated a theory of recovery based on a design defect.