Market Share Liability

08.17.11 | Permalink

A plaintiff is master of his suit. With that, a plaintiff has the choice to name any and all defendants. A problem can arise, however, when a product is fungible. A product is fungible, or “functionally interchangeable,” when it has similar substitutes. In certain markets, there can be several fungible products where the manufacturer is unknown to a user. In the event of injury, it can become difficult for the plaintiff to determine exactly who or how many defendants to name.  More precisely, the issue often becomes how to distribute liability and to whom.

In 1980, the California Supreme Court addressed this dilemma in Sindell v. Abbot Labs., 607 P.2d 924 (Cal. 1980). In Sindell, the plaintiff developed cancer during her adult life as a result of her mother taking synthetic estrogen while the plaintiff was in-utero.  The drug, diethylstilbestrol (“DES”), was manufactured by roughly 200 companies, five of which made up ninety percent of that market. The plaintiff was unable to distinguish exactly which manufacturer was responsible for the drug ingested by her mother, and therefore named the top five manufacturers as defendants. Because the plaintiff could not positively identify the manufacturer, the issue was whether the named defendants could be held liable for the plaintiff’s cancer and, if so, how would that liability be distributed among them. The court held the named manufacturers liable and published the first opinion exercising the doctrine of market share liability (“MSL”). Under the doctrine of MSL, a plaintiff must show:

1) the defendants in the suit manufactured a fungible product that caused personal injury;

2) the product contained a design defect that caused the harm;

3) each manufacturer sold the product in an unreasonably dangerous manner;

4) the plaintiff cannot identify the manufacturer of the specific product that caused the injury; and

5) enough manufacturers are joined as defendants so that a substantial share of the market is accounted for.

Under the doctrine, liability is apportioned among manufacturers consistent with their share of the market of the product in question.  This doctrine has been mostly limited to the DES context.  Various jurisdictions, including Florida, have declined to apply MSL to topics outside of the DES context, including asbestos, handguns, and lead paint.

The Florida Supreme Court adopted a variant of MSL in Conley v. Boyle Drug Co., 570 So.2d 275 (Fla. 1990). Here, the same basic principles as MSL apply with the inclusion that a defendant-manufacturer can exculpate itself by showing that it did not produce or market the product in a given geographic area or time period. Furthermore, Florida requires a plaintiff to show a genuine attempt to identify the specific manufacturer before the doctrine can be applied. 

Once applied, MSL shifts the plaintiff’s burden of having to identify a specific manufacturer to the defendants having to exculpate themselves.  The shift is a departure from the traditional tort law principles with regard to a plaintiff having to prove causation from a specific tortfeasor.  Some courts, however, have justified the departure by taking the perspective that MSL is updating antiquated tort principles to address the modernization of economies and markets. Critics contend the doctrine presents economic disincentives for manufacturing and undesirable social costs. For instance, when the costs of litigation and damages for a select few tortfeasors are spread among industry participants, that expense is passed along to the consumer through general price increases. This should not present an alarming effect just yet, however, as the reach and applicability of MSL is severely limited under present case law.  In the twenty one years since adoption, Florida has yet to expand the applicability of MSL far beyond DES cases. If history is any indicator, further expansion appears unlikely.

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