Reversal of $48 Million Product Liability Verdict Required Due to Inconsistent Jury Findings on Failure to Warn Claims and Misapplication of Consumer Expectation Test

In Trejo v. Johnson & Johnson, et al. (No. B238339, filed 6/30/2017), the California Second Appellate District held, among other things, that the jury’s finding that defendant was liable for negligent failure to warn was fatally inconsistent with its finding of not liable for strict liability failure to warn, which required reversal of Plaintiff’s $48 million product liability verdict.

The Trejo Court further held that “whether a reasonable manufacturer under the same or similar circumstances would have warned of the danger” is a necessary question as to the cause of action for negligent failure to warn, and that the trial court’s refusal to include that question on the special verdict form over the defendant’s objection also constituted reversible error. Additionally, the Court held that negligent and strict liability design defect claims based on a theory of defendant’s failure to sell an alternative product not approved by the FDA is impliedly preempted by federal law. Finally, the Trejo Court held that the consumer expectation test does not apply where the issue of design defect involves complex questions of feasibility, practicality, risk, and benefit beyond the common knowledge of jurors; thus, the trial court’s application of the test was in error.

Defendant McNeil is a manufacturer of Motrin (a brand name ibuprofen product). In 1994, the FDA approved McNeil’s application for OTC (over-the-counter) ibuprofen gel caps, concluding “the drug is safe and effective for use as recommended in the submitted labeling.” In October 2005, the FDA approved warnings and instructions for OTC Motrin which did not include specific warnings about skin reddening, rash, and blisters as a possible allergic reaction. In July 2005, the FDA made a “class label change,” directing McNeil and other manufacturers of OTC ibuprofen products to change their labels within six months to add three additional symptoms – skin reddening, rash, and blisters. McNeil made the requested changes to its labels.

In October 2005, Plaintiff suffered a rare skin disease known as TEN after taking Motrin. Plaintiff sued McNeil and its corporate parent, Johnson & Johnson, on various theories of product liability, four of which went to trial: strict liability failure to warn and negligent failure to warn based on defendant’s failure to include symptoms of SJS/TEN (skin reddening, rash, and blisters) on Motrin’s warning label, and strict liability design defect and negligent design defect, based on McNeil’s failure to sell an allegedly safer product, dexibuprofen rather than ibuprofen. The jury found McNeil liable for negligent failure to warn (but not for strict liability failure to warn), negligent design and strict liability design under the consumer expectation test (but not under the risk-benefit test).

I. Inconsistent Special Verdict Findings

The evidentiary basis of plaintiff‘s failure to warn theory for both strict liability and negligence was that OTC Motrin was defective because its warning label did not include the potential side effects of skin reddening, rash and blisters. The Trejo court held that by finding McNeil not liable under a strict liability theory, this “disposed of any liability for failure to warn” on a negligence theory. This is because (1) the strict liability instructions “more than subsumed the elements of duty to warn set forth in the negligence instructions” (Valentine v. Baxter Healthcare Corp. (1999) 68 Cal.App.4th 1467, 1482); (2) under the instructions, there is no “real difference between a warning to ordinary users about a product use that involves a substantial danger, and a warning about a product that is dangerous or likely to be dangerous for its intended use” (ibid.); (3) McNeil’s duty under the strict liability instructions ―to warn of potential risks and side effects― envelope[d] a broader set of risk factors than the duty, [under the] negligence instructions, to warn of facts which make the product ‘likely to be dangerous’ for its intended use” (id. at p. 1483); and (4) the reference in the strict liability instructions to “potential risks . . . that were known or knowable by the use of scientific knowledge” encompasses the concept in the negligence instructions of risks McNeil “knew or reasonably should have known.” Furthermore, “in strict liability, as opposed to negligence, the reasonableness of the defendant’s failure to warn is immaterial.” (Id. at 1484).

The Trejo court also relied on Oxford v. Foster Wheeler LLC (2009) 177 Cal.App.4th 700 for the proposition that the finding of negligence can be reconciled with the finding of no liability for strict liability failure to warn only if the record reveals some other basis on which the jury, under the court‘s instructions, could have found defendant to have been negligent.” (Id. at p. 719). Ruling out any other potential basis for negligence, the Trejo court concluded “a finding of negligent failure to warn is logically and legally inconsistent with the jury‘s finding on plaintiffs’ strict products liability failure to warn.”

II. Failure to Include Necessary Question on Verdict Form

Defendants’ proposed verdict form for negligent failure to warn included the following question: “Would a reasonable manufacturer, distributor or seller under the same or similar circumstances have warned of the danger of or instructed on the safe use of OTC Motrin.” The trial court believed that the question was unnecessary because the instruction on negligent failure to warn included this element. The Trejo court reversed, holding “because this question resolves a necessary element of a negligent failure to warn claim, it was error to exclude it from the special verdict.”

“Negligence law in a failure-to-warn case requires a plaintiff to prove that a manufacturer or distributor did not warn of a particular risk for reasons which fell below the acceptable standard of care, i.e., what a reasonably prudent manufacturer would have known and warned about. Strict liability is not concerned with the standard of due care or the reasonableness of a manufacturer’s conduct’.” (Carlin v. Superior Court (1996) 13 Cal.4th 1104, 1112.) Thus, the question defendants sought to be included in the special verdict form—whether a reasonable manufacturer under the same or similar circumstances would have given a warning—is an essential inquiry in the negligent failure to warn claim. (See CACI No. 1222.) The question regarding strict liability failure to warn does not address this element of negligent failure to warn.

Because the essential basis of a negligence failure to warn claim is that the manufacturer did not warn of a particular risk that “a reasonably prudent manufacturer would have known and warned about,” (Carlin, supra, 13 Cal.4th at p. 1112) the trial court erred in excluding this question from the verdict form.

III. Plaintiff’s Design Defect Claim Preempted

“Even in the absence of an express pre-emption provision, the Court has found state law to be impliedly pre-empted where it is “impossible for a private party to comply with both state and federal requirements.’ [Citations.]” (Mutual Pharmaceutical Co., Inc. v. Bartlett (2013) __ U.S. __, 133 S.Ct. 2466, 2473; see also PLIVA, Inc. v. Mensing (2011) 564 U.S. 604, 618 [“[S]tate and federal law conflict where it is ‘impossible for a private party to comply with both state and federal requirements’.”].)

21 U.S.C. Section 379r, “authorizes the FDA to regulate, among other things, the ingredients and labeling of nonprescription, over-the-counter (OTC) drugs …. Section 751 of the FDCA [Federal Food, Drug, and Cosmetic Act], codified at 21 U.S.C. Section 379r(a), specifically prohibits state requirements that are not identical with federal requirements: ‘no State … may establish or continue in effect any requirement—[¶] (1) that relates to the regulation of a drug … and [¶] (2) that is different from or in addition to, or that is otherwise not identical with, a requirement under this chapter ….’” (Eckler v. Neutrogena Corp. (2015) 238 Cal.App.4th 433, 439, fn. omitted.)

The Trejo court concluded that plaintiff‘s design defect claim that defendants should have withdrawn Motrin from the market was preempted by the impossibility preemption analysis of Bartlett, which held, in pertinent part, that a manufacturer may not be required to stop selling a product in order to avoid a state products liability claim. (Bartlett, supra, 133 S.Ct. at p. 2477.)

The Trejo court recognized the Bartlett Court’s distinction between prescription drugs and OTC drugs. Lower courts are divided about whether Bartlett’s preemption analysis applies to OTC drugs. (See Brown v. Johnson & Johnson, 64 F.Supp.3d 717, 721 (E.D.Pa. 2014) [“The Supreme Court has not addressed whether federal law can preempt state law design defect claims brought against manufacturers of brand-name or non-prescription drugs.”]; Hunt, supra, 6 F.Supp.3d at p. 703 [“The scope of the Bartlett holding has been the subject of much debate among lower courts.”].) The Trejo court held preemption is not limited to prescription drugs.

As grounds for extending the preemption to OTC drugs, the Trejo court held “under federal law-including 21 U.S.C. § 355, 21 C.F.R. §§ 310.3 and 314.70, and Bartlett – defendants could not unilaterally change the chemical composition of Motrin from ibuprofen to dexibuprofen without FDA approval in order to satisfy consumer expectations or to increase the benefits or decrease the risks of Motrin. Nor could they be required to stop selling the FDA-approved Motrin in order to avoid state liability.” (Bartlett, supra, 133 S.Ct. at p. 2477.)

IV. The Consumer Expectation Test Should Not Have Been Applied

As a general rule, “[t]he consumer expectations test is reserved for cases in which the everyday experience of the product’s users permits a conclusion that the product’s design violated minimum safety assumptions, and is thus defective regardless of expert opinion about the merits of the design.” (Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 567.) “The critical question, in assessing the applicability of the consumer expectation test, is not whether the product, when considered in isolation, is beyond the ordinary knowledge of the consumer, but whether the product, in the context of the facts and circumstances of its failure, is one about which the ordinary consumers can form minimum safety expectations.” (Pannu v. Land Rover North America, Inc. (2011) 191 Cal.App.4th 1298, 1311–1312.)

The Trejo court held the consumer expectation test should not have been applied because the circumstances of Motrin‘s failure involved technical details and expert testimony regarding “the effect of the product upon an individual plaintiff’s health” (Morson v. Superior Court (2001) 90 Cal.App.4th 775, 792), and the ultimate question of whether Motrin was defectively designed “calls for a careful assessment of feasibility, practicality, risk, and benefit” (Soule, supra, 8 Cal.4th at p. 562). (Citations omitted.)

Instead, “the consumer expectation test applies only when the defect can be determined by common knowledge regarding minimum safety expectations, not where (as here) an expert must balance the benefits of design against the risk of danger.” (Stephen v. Ford Motor Co. (2005) 134 Cal.App.4th 1363, 1370, fn. 6). Furthermore, the Trejo court held, the plaintiff should “present pertinent non-expert testimony related to the features of the [product], which would allow a trier of fact to evaluate the safety of the [product‘s features].” (Mansur, supra, 197 Cal.App.4th at p. 1379.)

There are several key takeaways from the Trejo opinion. First, negligent failure to warn and strict liability failure to warn go hand-in-hand. Where strict liability and negligence theories are based on the same alleged failure to warn, a manufacturer cannot be negligent without also being strictly liable. Such an inconsistency will require the verdict to be reversed. Second, with respect to special verdict forms, it is crucial that defendants make a record of proposed questions to be included that are rejected by the court. If there are questions or issues you believe should be included on a verdict form, defense counsel must ensure that the record reflects that he or she asked the trial court to include them. Finally, although plaintiff’s counsel almost always argue for the application of the consumer expectation test, that test has narrow applicability in a product liability action and should be excluded in cases involving technical details requiring expert testimony.

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July 10, 2017