Prior to the mid-90s, Alabama was known as “tort hell,” a place National Review judicial writer Jack Park says was “marked by outlandish punitive-damage awards, dodgy procedures, and plaintiff-friendly legal doctrines.”
The most notorious example of the Alabama Supreme Court’s apparently severe anti-business bias during that time period took place in BMW v. Gore. In that case, the state’s highest court affirmed a lower court’s decision to award $2 million to the plaintiff on the grounds that BMW had reduced his car’s value by $4,000 by touching up its paint job. That’s an unheard of ratio of 500:1.
Things began to change in 1994 when Republicans took control of the court’s majority, ushering in a period during which the rule-of-law was the court’s top priority. The state quickly left behind its reputation for judicial activism, and businesses and entrepreneurs around the country began taking notice. Major manufacturers like Mercedes-Benz, Airbus, Honda, Hyundai, Thyssen-Krupp and Remington have expanded into the state, often citing Alabama’s reliably fair courts as one of their main reasons for moving in.
But last week, the Alabama Supreme Court — now 100 percent Republican-controlled — bucked the conservative trend of the last couple of decades and ruled that drug companies could be held liable for not warning doctors about side effects from drugs they did not even produce.
The Wall St. Journal explains what happened in Wyeth v. Weeks:
Danny Weeks claims Wyeth (a pharmaceutical company) failed to warn his doctor of the side effects of the acid-reflux drug Reglan — except that he took a generic version of the drug known as metoclopramide. By the time Mr. Weeks used the drug, Wyeth no longer even controlled the brand-name product, which it sold in 2001.
In January 2013 the Alabama Supreme Court shrugged off those details and found for Mr. Weeks. Pfizer asked for a rehearing and last week the court wrote in a 145-page opinion that the brand-name manufacturers could be held liable. The 6-3 majority ruled that a patient can only get a prescription for a drug through a health-care provider and the health-care provider relies on warnings provided by the brand-name drug makers.
This “dubious legal concept,” as the Wall St. Journal refers to it, is known as “innovator liability.” In short, it means that “innovators” — companies that create new and original products — can be held liable for damages caused by other companies who create knockoff versions of their products.
Only two lower courts in the entire country have previously adopted this approach. Those courts were in California and Vermont, which are not exactly two states whose lead you would expect Alabama to follow.
Justice Michael Bolin, who authored the majority ruling, said that he does not believe the court is turning the state’s tort law “on its head.”
“Nor are we creating a new tort of ‘innovator liability,’ as has been suggested,” he continued. “Instead, we are answering a question of law involving a product that, unlike any other product on the market, has unprecedented federal regulation… Nothing in this opinion suggests that a plaintiff can sue Black & Decker for injuries caused by a power tool manufactured by Skil based on labeling or otherwise.”
Bolin was joined in his opinion by justices Tommy Bryan, James Allen Main, Lyn Stuart and Alisa Kelli Wise. Justice Greg Shaw separately issued a concurring opinion, and only Chief Justice Roy Moore and justices Glenn Murdock and Tom Parker dissented.
“The Alabama court’s reasoning contradicts the overwhelming trend in federal and state courts on innovator liability,” The Wall St. Journal editorial board wrote in response to the decision. “Seven different federal courts of appeal, including the Fourth, Fifth, Eighth, Ninth, Tenth and Eleventh Circuits, have said that innovators cannot be tagged for suits that are product liability complaints on drugs they did not manufacture.
“That won’t do much good in Tuscaloosa because the Alabama case can’t be appealed,” they concluded. “Watch the trial lawyers swoop in now.”
Follow Cliff on Twitter @Cliff_Sims
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