[Volokh] Eugene Volokh: Suing Cold Medication Manufacturers Because Drug Dealers Make Drugs out of the Medication:

[notify at powerblogs.com]

Posted by Eugene Volokh:
Suing Cold Medication Manufacturers Because Drug Dealers Make Drugs out of the Medication:
http://volokh.com/archives/archive_2009_01_04-2009_01_10.shtml#1231193259


   No, it's not some hypothetical offered by critics of lawsuits against
   gun manufacturers; it's a real case. From [1]Ashley County v. Pfizer,
   Inc., decided today by the U.S. Court of Appeals for the Eight Circuit
   (some paragraph breaks added):

     The Defendants are manufacturers and distributors of
     over-the-counter cold and allergy medications containing either
     ephedrine or pseudoephedrine. None of the Defendants are retailers,
     nor do they sell the medications directly to the public. The
     Counties allege that the Defendants marketed and sold their
     products in Arkansas knowing that the products were being used
     illegally to manufacture methamphetamine. [Footnote: In their
     briefs to this court, the Counties allege that the Defendants
     intentionally targeted methamphetamine cooks by printing
     "pseudoephedrine" on the outside packaging of their cold medicines.
     These allegations were not included in the complaint, by which we
     are constrained in reviewing this dismissal on the pleadings. In
     any event, the Counties do not dispute that the packaging complied
     with the federal Food and Drug Administration regulations.]

     The Counties allege that the Defendants knew that their products
     were being used illegally at least as early as 1986 when the
     federal Drug Enforcement Administration (DEA) began pushing for
     controls over the sale of products containing ephedrine or
     pseudoephedrine. During two different time periods, in 1995-1996
     and in 1998-1999, the DEA placed restrictions on the importation of
     bulk ephedrine and tracked the sales of ephedrine and
     pseudoephedrine outside of "blister packs." According to the
     Counties, methamphetamine use and abuse declined dramatically
     during these time periods, but the Defendants allegedly fought to
     create loopholes in the regulations to continue reaping large
     profits in the sale of their products. In time, the Counties say,
     methamphetamine cooks learned how to exploit the loopholes, and
     methamphetamine use rose again.

     The Counties claim that the Defendants knew of measures they could
     have voluntarily taken to reduce the availability of their products
     to methamphetamine cooks but consciously chose not to, fighting
     regulatory efforts in order to continue reaping large profits. The
     actions that the Defendants (who are manufacturers and wholesalers)
     allegedly should have voluntarily taken included directing the
     retailers to place the products behind the counter of retail
     stores; requiring the retailers to make retail purchasers sign for
     products when purchased from the retailer; educating the retailers
     and their employees about suspicious behavior by persons seeking to
     purchase the products for illegal use; requiring the retailers to
     lock the products in display cases; and requiring the retailers to
     limit the amount of product that could be purchased at retail by an
     individual during a specified period of time. These measures were
     eventually included in DEA regulations issued in 2005. The Counties
     also alleged that two of the Defendants, Warner Lambert and Pfizer,
     developed effective alternative cold medications that did not
     contain ephedrine or pseudoephedrine and that could not be used to
     produce methamphetamine, but that neither of them brought the
     alternative products to market.

     The Counties assert that the Defendants knew they were selling far
     more than the legitimate market for their products consumed as
     evidenced by the fact that the revenues of one of the Defendants,
     Perrigo, declined rapidly from $182 million to $30 million once
     regulations were passed in 2005 limiting access to the Defendants'
     products. The Counties also allege that the DEA sent letters to
     some of the Defendants warning them that their products were being
     used to make methamphetamine and that an executive from Pfizer
     admitted that the pharmaceutical industry was responsible for a
     portion of the methamphetamine problem in the United States. The
     Counties do not allege, however, that any of the Defendants
     violated any federal or state regulation governing the manufacture,
     distribution, packaging, or sale of their products. Nor do the
     Counties dispute that the sale of products containing ephedrine and
     pseudoephedrine is heavily regulated by both state and federal
     agencies.

   ([2]Show more of this post.)

   Fortunately, the court rejected the claim, finding that manufacturers
   of lawful products couldn't be held responsible because criminals
   misused those products -- and extensively relying on the gun cases
   that rejected similar liability arguments. (The court noted that a few
   cases did accept similar arguments in the gun cases, before Congress
   preempted most such lawsuits. But the court concluded that Arkansas
   law, the law applicable in this lawsuit, would likely follow the
   majority view.)

   The fact is that many products -- cars, guns, medical supplies,
   knives, alcohol, and more -- have many lawful uses, but are also
   misused by criminals. Manufacturers may well be aware of this; surely
   any alcohol manufacturer must know that many of its sales (and
   especially many of its sales in college towns) end up coming from
   minors. And manufacturers might indeed be able to pressure retailers
   into imposing various restrictions that might or might not help avoid
   these crimes.

   But these restrictions often involve considerable costs for consumers:
   privacy costs ("requiring the retailers to make retail purchasers sign
   for products"), convenience costs ("requiring the retailers to limit
   the amount of product that could be purchased at retail by an
   individual during a specified period of time"), risks of
   discrimination based on supposedly "suspicious behavior" ("educating
   the retailers and their employees about suspicious behavior by persons
   seeking to purchase the products for illegal use"), information costs
   (discouraging manufacturers from accurately labeling the contents of
   the products, for fear that this will be seen as "intentional[]
   target[ing]" for criminal use), and the like. More broadly, these
   restrictions change the consumer-seller relationship from one where
   the seller generally focuses on satisfying the consumer to one where
   the consumer is scrutinized by the seller, and must satisfy the seller
   about the consumer's bona fides.

   Perhaps under certain unusual circumstances it is proper to impose
   such costs, and to change the consumer-seller relationship this way.
   But that should be done through legislatures setting up clear and
   narrow rules before the fact, and not by judges and juries making
   after-the-fact decisions based on vague standards of what sorts of
   consumer sacrifices a reasonable manufacturer should have indirectly
   imposed. This is especially so given that judges and juries in a few
   cases in a few states can affect [3]behavior throughout the country,
   even when the great majority of all decisions on the subject come out
   against liability.

   Here are two examples I offered [4]five years ago, in the context of
   gun manufacturer liability.

   1. Imagine that there was no drinking age for alcohol. A 20-year-old
   buys alcohol in a bar; he drives home; he hits another driver and
   kills him. The dead driver's relatives sue the bar, on the theory that
   it's "negligent distribution" for the bar owner to sell to
   20-year-olds. The court says, "Yes, that's right; we're going to
   conclude that it's unreasonable -- at least presumptively so -- for
   bar owners to sell to 20-year-olds." The court has just essentially
   decided that the drinking age in the jurisdiction will be 21 (since
   bar owners know that by selling to 20-year-olds they risk ruinous
   liability, including punitive damages), applying its view of
   "negligent distribution."

   Is this good? I don't think so. I think here we have a situation where
   judges (and juries) aren't just weighing financial costs and benefits,
   or even financial benefits against financial evaluations of lives or
   injuries saved. They also have to make basic decisions about equality,
   liberty, and privacy. Should under-21-year-olds be in some measure
   second-class citizens (or, if you prefer, not fully adults)? Should
   their social lives be restrained this way? Should you need to show
   your identification in order to buy alcohol? The answers to these
   questions may well be "yes"; our legislatures have generally answered
   them "yes." But I don't think judges should make these decisions under
   tort law (unless the Constitution somehow requires them to make such
   decisions, as in, for instance, First or Fourth Amendment cases, but
   that doesn't apply here). I don't think that four out of seven state
   Supreme Court judges should draw this sort of line.

   2. Car manufacturers could make cars much harder for people to drive
   recklessly (if not today, then within a few years). They could put a
   transmitter in each car that alerts a police station whenever the car
   owner is speeding or even driving erratically (so if you have to speed
   to get your pregnant wife to the hospital, you can do it, but you'd
   have to explain yourself to the police). They might put in special
   devices into which the driver must breathe every so often in order to
   confirm that he's not driving drunk (I'm sure they have their
   weaknesses, but imagine that they're perfected). They could constantly
   transmit the car's position to some central database, so if the car is
   used by a criminal to commit a crime, the police can more easily catch
   the criminal and prevent him from victimizing more people. The list
   could go on. Assume that these features become very cheap soon.

   Someone is killed by a drunk driver who's been driving erratically at
   80 miles per hour for 15 minutes (enough time that the police might
   have stopped him had they known). Moreover, the driver had been in a
   hit-and-run several days before, and if his location had only been
   tracked, he wouldn't have been on the loose to kill again. The
   victim's family sues the car company, for negligent design: The car
   company could have decreased the chance that the car could be used by
   criminals to kill people, but it didn't do so. The court says, "Yes,
   that's right; making cars without these features is negligent, because
   adding these features could save many lives at little cost." Car
   manufacturers now know that if they want to avoid billions of dollars
   in aggregate liability, they have to add the features.

   Is that good? Again, I don't think so. Perhaps one day we'll decide
   that we have to sacrifice our privacy this way. But that
   privacy/safety tradeoff should be made through the democratic process,
   and not by judges.

   My claim, then, is that there's a substantial set of decisions that
   judges shouldn't be making, even applying negligence standards under
   the tort law. I think that category includes deciding that
   manufacturers should (on pain of vast liability) cut off distributors
   -- potentially destroying the distributors' businesses -- for conduct
   that might have been entirely outside the distributors' control, for
   conduct that the distributors were never convicted, tried, criminally
   accused, or even held civilly liable, and in ways that deprive a
   neighborhood's residents of convenient access to devices that in most
   states they are constitutionally entitled to own. If legislatures want
   to impose such a rule, I can understand. But judges ought not.

   I realize that common-law judges have often does this sort of thing,
   at least in some situations -- though, as my examples show, I think
   even advocates of a vibrant common law would say that some tradeoffs
   should be left to the people or their representatives. But I don't
   think they should be doing it now. And while the line between
   permissible application of negligence standards and impermissible ones
   (such as the judge-imposed driving age, or the judge-imposed
   requirements that cars have various self-reporting features) may not
   be clear, the theory that the Arkansas counties were making in the
   Ashley County case is on the improper side of the line. That has been
   my argument about guns, alcohol, and cars, and I think it applies
   equally to pharmaceuticals.

   For more on this, see [5]here, [6]here, and [7]here. Thanks to [8]How
   Appealing for the pointer.

   ([9]Hide most of the above.)

References

   1. http://www.ca8.uscourts.gov/opndir/09/01/081491P.pdf
   2. file://localhost/var/www/powerblogs/volokh/posts/1231193259.html
   3. http://volokh.com/2003_11_16_volokh_archive.html#106936065700403382
   4. http://volokh.com/2003_11_16_volokh_archive.html#106936065700403382
   5. http://volokh.com/2003_03_23_volokh_archive.html#200045364
   6. http://volokh.com/2003_11_16_volokh_archive.html#106936065700403382
   7. http://volokh.com/2003_11_16_volokh_archive.html#106936141550682269
   8. http://howappealing.law.com/
   9. file://localhost/var/www/powerblogs/volokh/posts/1231193259.html