Opinion ID: 1207107
Heading Depth: 1
Heading Rank: 2

Heading: The Action Against Exclusive

Text: In the seminal case of Greenman v. Yuba Power Products, Inc. (1963) 59 Cal.2d 57 [27 Cal. Rptr. 697, 377 P.2d 897, 13 A.L.R.3d 1049], Justice Traynor, writing for the court, held a manufacturer strictly liable in tort for injuries caused by a defective product which it knew would be used without inspection for defects. In Vandermark v. Ford Motor Co. (1964) 61 Cal.2d 256 [37 Cal. Rptr. 896, 391 P.2d 168], the strict liability doctrine was extended to retailers of defective products. (1a) Plaintiff asserts that a pharmacy which sells prescription drugs is in the same position as a retailer of any other consumer product, and that the reasons advanced in Greenman and Vandermark for imposing strict liability necessarily apply to a pharmacy. Exclusive counters that a pharmacist who dispenses a prescription drug is primarily furnishing a service rather than selling a product, and that the rationale underlying imposition of strict liability does not justify application of the doctrine to him. Before reaching the merits of these conflicting claims, we observe that pharmacists perform a broad range of tasks, from selling razor blades and dental floss to treating patients in a health care facility by ordering laboratory tests and administering drugs by injection (Bus. & Prof. Code, § 4046, subd. (c)(4)) and acting as consultants regarding medication prescribed for patients at such facilities (Cal. Admin. Code, tit. 22, § 72375). The discussion which follows relates only to the duties in a community pharmacy of a pharmacist who fills prescriptions for drugs on the order of a physician or other medical care provider, and who has used due care in compounding and labelling the drug. There are no cases in California deciding whether a retail pharmacy is strictly liable for injuries caused by an inherent defect in a drug. In Florida ( McLeod v. W.S. Merrell Co. (Fla. 1965) 174 So.2d 736, 739), North Carolina ( Batiste v. American Home Products Corp. (1977) 32 N.C. App. 1 [231 S.E.2d 269, 275]) and New York ( Bichler v. Willing (1977) 58 App.Div.2d 331 [397 N.Y.Supp.2d 57, 59-60]) a pharmacy is held not to be strictly liable for defects in a prescription drug. These cases rely on section 402A of the Restatement Second of Torts, which declares that unavoidably unsafe products such as drugs are not defective if they are accompanied by an appropriate warning ( id., com. k), and that a seller is only required to warn of defects of which he knew or should have known ( id., com. j). It is critical to the issue posed to determine if the dominant role of a pharmacist in supplying a prescription drug should be characterized as the performance of a service or the sale of a product. Both parties accept as a general rule that those who sell their services for the guidance of others ... are not liable in the absence of negligence or intentional misconduct. ( Gagne v. Bertran (1954) 43 Cal.2d 481, 487 [275 P.2d 15].) This principle was applied in Carmichael v. Reitz (1971) 17 Cal. App.3d 958 [95 Cal. Rptr. 381], the primary authority on which the trial court relied. A doctor who prescribed a drug purchased by the patient at a pharmacy was held not to be strictly liable for injuries resulting from its use. In response to the argument of the plaintiff that the doctor was in a sense a retailer of the drug, the court stated that the doctor prescribed the medication only as an aid to effect a cure and was not in the business of selling the drug. The court observed, [T]he distinction between a transaction where the primary objective is the acquisition of ownership or use of a product and one where the dominant purpose is to obtain services has not been obliterated. Where the services sought are professional in character, the distinction applies a fortiori.  ( Id., at p. 978.) On this theory, a hospital was held not strictly liable as the supplier for injuries arising out of the use of a surgical needle which broke during an operation. ( Silverhart v. Mount Zion Hospital (1971) 20 Cal. App.3d 1022, 1027 [98 Cal. Rptr. 187, 54 A.L.R.3d 250].) Magrine v. Krasnica (1967) 94 N.J. Super. 228 [227 A.2d 539], held that a dentist was not strictly liable for injuries caused by a needle which broke during the course of treatment due to a latent defect. The court characterized the difference between a sale and a service as follows: [T]he essence of the transaction between the retail seller and the consumer relates to the article sold. The seller is in the business of supplying the product to the consumer. It is that, and that alone, for which he is paid. A dentist or physician offers, and is paid for, his professional services and skill. That is the essence of the relationship between him and his patient. ( Id., at p. 543.) (Accord: Babcock v. Nudelman (1937) 367 Ill. 626 [12 N.E.2d 635] [holding optometrists and oculists who examined eyes and sold eyeglasses, exempt from a tax imposed on retailers of tangible goods on the ground that their main objective was to provide a service and that the sale of eyeglasses was purely incidental to the service]; see also Barbee v. Rogers (Tex. 1968) 425 S.W.2d 342.) As might be anticipated, the parties differ sharply as to whether the main function of a pharmacist is to provide a service or to sell a product. Plaintiff asserts that the duties of a pharmacist in filling a prescription do not differ from those of any other retailer: he reads the prescription, fills the container with the proper type and dosage of the medication required, types up a label, attaches it to the container, and exchanges the medication for payment by the customer. In essence, argues plaintiff, a pharmacist is the functional equivalent of an experienced clerk at a hardware store. Exclusive and amici curiae [2] paint a dramatically different picture of the role of the pharmacist, characterizing him as a professional who provides an important health service. They point out that with a few exceptions specified by statute, only a physician or a licensed pharmacist may compound or dispense prescription drugs (Bus. & Prof. Code, § 4050 et seq.). [3] In order to obtain a license, a pharmacist must have graduated from a four-year college of pharmacy or the department of pharmacy of a university, have one year of practical experience under the supervision of a registered pharmacist, and pass a written examination given by the California State Board of Pharmacy (Board) (§§ 4085, 4087). He must comply with continuing education requirements as a condition to renewal of his license (§ 4098.5), and is subject to rules of professional responsibility and to disciplinary proceedings for violation of those rules (§ 4350 et seq.). A pharmacist is required not only to assure that the drug prescribed is properly selected, measured and labelled but, according to the Board, he must be alert to errors in prescriptions written by doctors, and contact the doctor in case of doubts or questions regarding the drug prescribed. In addition, the pharmacist may discuss with the patient the proper use of the drug and the potential side effects, and must be aware of the possibility of harmful interaction between various medications which the pharmacist knows the patient is using. According to the Board, about 22 percent of patients are counseled by the pharmacist, who spends one and one-half to two hours a day in such consultation. (Citing Cal. Pharm. (Jan. 1985) 1984 Lilly Digest Rep., p. 33, table 19.) It seems clear to us that the pharmacist is engaged in a hybrid enterprise, combining the performance of services and the sale of prescription drugs. It is pure hyperbole to suggest, as does plaintiff, that the role of the pharmacist is similar to that of a clerk in an ordinary retail store. With a few exceptions, only a licensed pharmacist may dispense prescription drugs, and as indicated above there are stringent educational and professional requirements for obtaining and retaining a license. A pharmacist must not only use skill and care in accurately filling and labelling a prescribed drug, but he must be aware of problems regarding the medication, and on occasion he provides doctors as well as patients with advice regarding such problems. In counseling patients, he imparts the same kind of information as would a medical doctor about the effects of the drugs prescribed. A key factor is that the pharmacist who fills a prescription is in a different position from the ordinary retailer because he cannot offer a prescription for sale except by order of the doctor. In this respect, he is providing a service to the doctor and acting as an extension of the doctor in the same sense as a technician who takes an X-ray or analyzes a blood sample on a doctor's order. Nevertheless, it cannot be disputed that a sale in fact occurs. There is an obvious distinction between the doctor who provides a patient with a prescription for a defective drug ( Carmichael, supra, 17 Cal. App.3d 958), a dentist who uses a faulty drill ( Magrine, supra, 227 A.2d 539) or a hospital that uses a defective needle during surgery ( Silverhart, supra, 20 Cal. App.3d 1022), and a pharmacist who fills a prescription. The pharmacist is in the business of selling prescription drugs, and his role begins and ends with the sale. His services are rendered only in connection with the sale, and a patient who goes to a pharmacy to have a prescription filled generally is seeking to purchase the drug rather than to obtain the advice of the pharmacist. By contrast, the doctor, dentist and hospital in the cases cited above are not in the business of selling the drug or device; they use the product in the course of treatment as one element in their efforts to effect a cure, and furnishing the services does not depend on sale of a product. Ordinarily, in deciding whether the sale or service aspect of an enterprise predominates, we would confine our consideration to the type of factors discussed above. In the case of a pharmacy, however, we must broaden our inquiry. The Legislature has provided in section 4046 that the practice of pharmacy is not only a profession (subd. (a)), but also a dynamic patient-oriented health service that applies a scientific body of knowledge to improve and promote patient health by means of appropriate drug use and drug related therapy (subd. (b)). (Italics added.) This declaration that a pharmacist provides a health service is similar to section 1606 of the Health and Safety Code, which declares that the distribution or use of whole blood or plasma is a service for all purposes and shall not be construed to be a sale. (2) The object of section 1606 is to avoid application of the doctrine of strict liability to those who make or sell blood or blood plasma, or to those who use it in blood transfusions, thereby promoting the constant availability of an adequate supply of blood. ( McDonald v. Sacramento Medical Foundation Blood Bank (1976) 62 Cal. App.3d 866, 872 [133 Cal. Rptr. 444].) In keeping with this purpose, it is held that a hospital using blood in a transfusion ( Shepard v. Alexian Brothers Hosp. (1973) 33 Cal. App.3d 606 [109 Cal. Rptr. 132]), a blood bank supplying the blood ( McDonald ) and a manufacturer of blood plasma selling it for transfusion ( Fogo v. Cutter Laboratories, Inc. (1977) 68 Cal. App.3d 744 [137 Cal. Rptr. 417]) are immune from strict liability because the Legislature has declared in section 1606 that they are providing a service rather than making a sale. (1b) It is true that section 1606 of the Health and Safety Code provides not only that the distribution and use of blood and blood plasma is a service, but also that they should be deemed not to constitute a sale, whereas section 4046, subdivision (b), does not expressly declare that a sale is not involved in the practice of pharmacy. Nevertheless, the Legislature could not have been unaware when it enacted this provision that a pharmacist's main function is to fill prescriptions for medications that are sold to the public. Indeed, from a comparative functional aspect, a pharmacist's role is more aptly characterized as the performance of a service than that of the manufacturer and seller of blood plasma. The Legislature must have intended, therefore, that even though a pharmacist is paid for the medication he dispenses, his conduct in filling a prescription is to be deemed a service, and, like the manufacturer of blood plasma, a pharmacy is immune from strict liability. We reject plaintiff's suggestion that because subdivision (b) of section 4046 was enacted at the same time as subdivision (c) of the section (which authorizes a pharmacist to order laboratory tests and give injections in health care facilities) the declaration that the practice of pharmacy provides a health service was intended to apply only to a pharmacist acting in that capacity. (Stats. 1981, ch. 989, § 1, p. 3830.) To the contrary, the broad wording of subdivision (b) indicates that it applies to the practice of pharmacy in general, and we so construe it. There is no definitive legislative history of subdivision (b), and we are not certain, therefore, of the Legislature's motivation in shielding pharmacies from strict liability. The Legislature may have determined that it is not in the public interest to subject them to strict liability, because (like the need to assure an adequate supply of blood plasma) the wide availability of a full range of prescription drugs at economical cost outweighs the advantage to the individual consumer of being able to recover for injuries on a strict liability basis rather than to be limited to claims arising from negligence. If pharmacies were held strictly liable for the drugs they dispense, some of them, to avoid liability, might restrict availability by refusing to dispense drugs which pose even a potentially remote risk of harm, although such medications may be essential to the health or even the survival of patients. Furthermore, in order to assure that a pharmacy receives the maximum protection in the event of suit for defects in a drug, the pharmacist may select the more expensive product made by an established manufacturer when he has a choice of several brands of the same drug. As the Board's amicus brief warns, Why choose a new company's inexpensive product, which has received excellent reviews in the literature for its quality, over the more expensive product of an established multinational corporation which will certainly have assets available for purpose of indemnification 10, 20, or 30 years down the line? The Legislature might have decided also that, since the doctor who ordered the drug provided by the pharmacy cannot be held strictly liable for its defects and in some circumstances the manufacturer who created the defect can also escape liability, it would be unfair and burdensome to expose the pharmacy alone to strict liability since it may provide the drug only on a doctor's prescription, which the pharmacist must strictly follow. [4] Plaintiff emphasizes that some pharmacies are owned by large chain store operations which are as capable as large drug manufacturers to respond in damages. But most pharmacies are not in this category. According to the Board, approximately 3,385 pharmacy permits are held in California by independent operators of 3 or fewer pharmacies, many of which are single drugstores owned by the operating pharmacist. Only 1,165 permits are held by operators of 4 or more pharmacies, and 642 permits are held by hospital pharmacies. Finally, plaintiff contends that even if the pharmacist is personally exempt from strict liability because he provides a service, the merchandising organization which employs him ... should not be so exempted. Plaintiff cites no authority in support of this claim, and we perceive no basis in law or rationale for accepting it. The fact that a pharmacy may be owned by an enterprise which also deals in ordinary merchandise does not justify the conclusion that it should be held strictly liable when it performs a service. Moreover, the policy justifying the grant of immunity from strict liability to the practice of pharmacy would only be effectuated if the pharmacy operation itself is exempted. For the reasons stated above, we conclude that the trial court was correct in granting judgment on the pleadings to Exclusive.