Opinion ID: 1432329
Heading Depth: 1
Heading Rank: 8

Heading: market-share alternate liability

Text: Having rejected the application of the four theories which to this date have been proposed in the DES context, this court is faced with a choice of either fashioning a method of recovery for the DES case which will deviate from traditional notions of tort law, or permitting possibly tortious defendants to escape liability to an innocent, injured plaintiff. As noted earlier, the crux of the problem facing this DES plaintiff is that she cannot identify the drug company that she alleges caused her injury. Numerous commentators and courts have identified several reasons for this plight. First, DES was, for the most part, produced in a generic form which did not contain any clearly identifiable shape, color, or markings. DES was a fungible drug produced with a chemically identical formula, and often pharmacists would fill DES prescriptions from whatever stock they had on hand, whether or not a particular brand was specified in the prescription. Second, it has been estimated that possibly as many as 300 drug companies produced or marketed DES during the 24 years DES was on the market, with companies entering and leaving the market throughout this period. Third, it appears that many drug companies may not have kept, or may not be able to locate, pertinent records as to when, where, and what type of DES they produced or marketed. These problems result from the passage of many years between the plaintiff's in utero exposure and the manifestation of cancer. During the intervening years, memories may have faded, medical and pharmaceutical records may have been lost or destroyed, and witnesses may have died. We are presented with a conflict between the familiar principle that a tortfeasor may be held liable only for damage that it has caused, and the sense of justice which urges that the victims of this tragedy should not be denied compensation because of the impossibility of identifying the individual manufacturer of these generic tablets if their manufacture and distribution were otherwise culpable. We believe that a modification of the alternate liability theory somewhat along the lines of the Sindell market-share approach is warranted. Support for such a modification is found in comment h, Restatement (Second) of Torts § 433B(3), at 446 (1964): The cases thus far decided in which the rule stated in Subsection (3) has been applied all have been cases in which all of the actors involved have been joined as defendants. All of these cases have involved conduct simultaneous in time, or substantially so, and all of them have involved conduct of substantially the same character, creating substantially the same risk of harm, on the part of each actor. It is possible that cases may arise in which some modification of the rule stated may be necessary because of complications arising from the fact that one of the actors involved is not or cannot be joined as a defendant, or because of the effect of lapse of time, or because of substantial differences in the character of the conduct of the actors or the risks which they have created. Since such cases have not arisen, and the situations which might arise are difficult to forecast, no attempt is made to deal with such problems in this Section. The rule stated in Subsection (3) is not intended to preclude possible modification if such situations call for it. [1] Because certain manufacturers and distributors produced or marketed an allegedly defective drug for accidents of pregnancy, those manufacturers and distributors all contributed to the risk of injury, even though they may not have contributed to the actual injury of a given plaintiff. Although the defendants in this case have not acted in concert under the concert of action theory, all participated in either gaining approval of DES for use in pregnancy or in producing or marketing DES in subsequent years. Each defendant contributed to the risk of injury to the public and, consequently, the risk of injury to individual plaintiffs. Thus, each defendant shares in some measure a degree of culpability in producing or marketing DES. Moreover, as between the injured plaintiff and the possibly responsible drug company, the drug company is in a better position to absorb the cost of the injury. The drug company can either insure itself against liability, absorb the damage award, or pass the cost along to the consuming public as a cost of doing business. We conclude that it is better to have drug companies or consumers share the cost of the injury than to place the burden solely on the innocent plaintiff. We hold that plaintiff need commence suit against only one defendant and allege the following elements: that the plaintiff's mother took DES; that DES caused the plaintiff's subsequent injuries; that the defendant produced or marketed the type of DES taken by the plaintiff's mother; and that the defendant's conduct in producing or marketing the DES constituted a breach of a legally recognized duty to the plaintiff. At the trial, the plaintiff will have to prove each of these elements to the satisfaction of the trier of fact. We emphasize, however, that the plaintiff need not prove that a defendant produced or marketed the precise DES taken by the plaintiff's mother. Rather, the plaintiff need only establish by a preponderance of the evidence that a defendant produced or marketed the type ( e.g., dosage, color, shape, markings, size, or other identifiable characteristics) of DES taken by the plaintiff's mother; the plaintiff need not allege or prove any facts related to the time or geographic distribution of the subject DES. While the type of DES ingested by the mother should be within the domain of her knowledge, facts relating to time and distribution should be particularly within the domain of knowledge of the DES manufacturers and distributors. We reject the Sindell requirement of joinder of a substantial share of the market because it does not alter the probability under our market-share alternate liability theory that a particular defendant caused the injury. As will be demonstrated, a particular defendant's potential liability is proportional to the probability that it caused plaintiff's injury. Individual defendants are entitled to exculpate themselves from liability by establishing, by a preponderance of the evidence, that they did not produce or market the particular type DES taken by the plaintiff's mother; that they did not market the DES in the geographic market area of plaintiff mother's obtaining the drug; or that they did not distribute DES in the time period of plaintiff mother's ingestion of the drug. [2] The defendants that are unable to exculpate themselves from potential liability are designated members of the plaintiffs' DES market, defined by the specificity of the evidence as to geographic market area, time of ingestion, and type of DES. 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 DES in the plaintiff's particular geographic market. Upon proof of a market share by a preponderance of the evidence, that particular defendant is only liable for its share of the market as it relates to the total judgment. To the extent that other defendants fail to establish their actual market share, their presumed market share is adjusted so that 100 percent of the market is accounted for. Application of this rule of apportionment is illustrated by the following hypotheticals. Assume that plaintiff's damages are $100,000 and defendants X and Y remain subject to liability after exculpation by other named defendants. If neither establishes its market share then they are presumed to have equal shares of the market and are liable respectively for 50 percent of the total judgment, X, $50,000 and Y, $50,000. Assume defendant X establishes that it occupies 20 percent of the relevant market, and defendant Y fails to prove its market share. Defendant X is then liable for 20 percent of the damages, or $20,000, and defendant Y is subject to the remaining 80 percent, or $80,000. Assume that defendant X establishes a market share of 20 percent and defendant Y a 60 percent market share. Then defendant X is subject to 20 percent of the judgment, $20,000, and defendant Y to 60 percent of the judgment, $60,000. The plaintiff does not recover her entire judgment because the remaining 20 percent of the market share is the responsibility of unnamed defendants. The defendants may implead third party defendants in order to reduce their presumptive share of the market or in order to establish an actual reduced market share. This ability of a defendant to reduce its liability reduces the disproportion between potential liability that a particular defendant caused the injury by imposing liability according to respective market shares. In the case where each party carries its burden of proof, no defendant will be held liable for more harm than it statistically could have caused in the respective market. We recognize that the elimination of individual causal responsibility as an element of plaintiff's case is liability enhancing. However, it is also liability limiting insofar as it permits the defendants to apportion liability according to respective market share and further provides that the plaintiff may not be able to recover her entire damages. Under this market share alternate liability theory, the dilution of causal blame that is attributable to a given defendant may be counterbalanced by the corresponding dilution of liability.