I’ve previously reported on Wyeth, Inc. v. Weeks, the Alabama Supreme Court decision that put Alabama back on the road to tort hell. Shortly after that post the Alabama Supreme Court agreed to rehear the case, which they did yesterday. Let’s hope they see the wisdom in reversing themselves. As the Wall Street Journal editorial board succinctly explained in today’s paper:
The Alabama Supreme Court put businesses on edge in January when it endorsed a theory of innovator liability that would allow plaintiffs lawyers to sue manufacturers over products they didn’t make. The court revisited that ruling in oral argument on Wednesday, and a better decision would reduce the threat of similar nitwit lawsuits across the economy.
The case began when Alabama resident Danny Weeks sued pharmaceutical company Wyeth for fraud over side effects he said he suffered from taking the generic version of the acid reflux drug Reglan. Wyeth didn’t produce the drug that he took and hadn’t made Reglan for years before he took it. But because federal law requires generic manufacturers to use the same warning labels as brand-name drugs, the court ruled 8-1 that Wyeth was on the hook for Mr. Weeks’s complaints.
Plaintiffs lawyers need no invitation to launch creative lawsuits, but to the extent that liability is genuine it belongs to the maker of the product. In Alabama’s bizarre regime, brand-name manufacturers would make all the investment in a drug. Then when it goes generic they’d lose the profit from the reduced sales and be open to liability suits for products they no longer control.
The effect would be to make brand-name companies the de facto insurers of the entire industry, depleting their profitability and reducing the incentive to invest in new products. The FDA should write a new rule, and we’re glad the Alabama justices are giving the case a second look.
Read the whole piece.