Murphy v. E. R. Squibb & Sons, Inc.

• Decision Date: 30 December 1985
• Citation: 221 Cal.Rptr. 447,40 Cal.3d 672,710 P.2d 247
• Court: California Supreme Court
• Parties: , 710 P.2d 247, 54 USLW 2362, Prod.Liab.Rep. (CCH) P 10,818 Christine A. MURPHY, Plaintiff and Appellant, v. E.R. SQUIBB & SONS, INC. et al., Defendants and Respondents. L.A. 31970.

Page 447

221 Cal.Rptr. 447

40 Cal.3d 672, 710 P.2d 247, 54 USLW 2362,

Prod.Liab.Rep. (CCH) P 10,818

Christine A. MURPHY, Plaintiff and Appellant, v. E.R. SQUIBB & SONS, INC. et al., Defendants and Respondents.

L.A. 31970.

Supreme Court of California.

Dec. 30, 1985.

David Manning Chodos, Joseph A. Shaub and Simke, Chodos, Silberfeld & Soll, Los Angeles, for plaintiff and appellant.

Haight, Dickson, Brown & Bonesteel, Robert L. Dickson, Ralph Campillo, Santa Monica, Roy G. Weatherup, Northridge, Baker & Camusi, William P. Camusi and Philip J. Brimble, Los Angeles, for defendants and respondents.

Richard D. Waugh, Downey, Brand, Seymour & Rohwer, Sacramento, Marsha N. Cohen, Hassard, Bonnington, Rogers & Huber, David E. Willett, Richard R. Sheridan, San Francisco, Crosby, Heafey, Roach & May, Richard J. Heafey, Peter W. Davis and James C. Martin, Oakland, as amici curiae on behalf of defendants and respondents.

MOSK, Justice.

We consider issues relating to the liability of a manufacturer and a pharmacy for the production and sale of an allegedly defective drug, stilbestrol (DES). We will decide whether a pharmacy at which the drug was purchased may be held strictly liable for alleged defects in the product (as distinguished from ordinary negligence), and whether a manufacturer which sold 10 percent of DES nationwide may be found to have had a "substantial" share of the market for the purpose of applying the "market share" doctrine enunciated in Sindell v. Abbott Laboratories (1980) 26 Cal.3d 588, 163 Cal.Rptr. 132, 607 P.2d 924.

Plaintiff filed an action for personal injuries allegedly resulting from DES taken by her mother in 1951 and 1952 during pregnancy for the purpose of reducing the risk of miscarriage. The complaint sought damages on the theory of strict liability, alleging that the drug was defectively designed, with the result that plaintiff developed clear cell adenocarcinoma at the age of 23. As defendants, plaintiff joined Exclusive Prescription Pharmacy Corporation (Exclusive) where plaintiff's mother purchased the DES, and E.R. Squibb & Sons, Inc. (Squibb). The first cause of action alleged that Squibb was the manufacturer of the DES used by plaintiff's mother. The second count, added after our decision in Sindell, alleged that plaintiff was unable to identify the manufacturer, but that Squibb supplied a "substantial percentage" of DES for use by pregnant women to prevent miscarriage.

Before jury selection began, the court granted Exclusive's motion for judgment on the pleadings, holding that a pharmacy may not be held strictly liable for dispensing a prescription drug. The court determined that Exclusive rendered a professional service in supplying the DES, that the consumer of the drug was the doctor who prescribed it rather than plaintiff's mother, and that as a matter of policy the doctrine of strict liability should not be extended to a pharmacy.

In support of her second cause of action plaintiff offered to prove that Squibb sold 10 percent of the DES in the national market. The court ruled that as a matter of law 10 percent of the national market was not a "substantial percentage" within the meaning of Sindell, and it dismissed the second cause of action. The matter went to trial against Squibb on the first cause of action alleging that Squibb had actually supplied the DES taken by plaintiff's mother. ¹ The parties introduced evidence on whether Squibb was the manufacturer of the offending drug, and the trial court instructed the jury that plaintiff had the burden of proof on this issue. The jury returned a special verdict, finding that plaintiff's mother had purchased the DES at Exclusive, and that the DES which she purchased was not manufactured by Squibb. The trial court entered judgment in favor of defendants, and plaintiff appeals.

The Action Against Exclusive

In the seminal case of Greenman v. Yuba Power Products, Inc. (1963) 59 Cal.2d 57, 27 Cal.Rptr. 697, 377 P.2d 897, Justice Traynor, writing for the court, held a manufacturer strictly liable in tort for injuries caused by a defective product which it knew would be used without inspection for defects. In Vandermark v. Ford Motor Co. (1964) 61 Cal.2d 256, 37 Cal.Rptr. 896, 391 P.2d 168, the strict liability doctrine was extended to retailers of defective products.

Plaintiff asserts that a pharmacy which sells prescription drugs is in the same position as a retailer of any other consumer product, and that the reasons advanced in Greenman and Vandermark for imposing strict liability necessarily apply to a pharmacy. Exclusive counters that a pharmacist who dispenses a prescription drug is primarily furnishing a service rather than selling a product, and that the rationale underlying imposition of strict liability does not justify application of the doctrine to him.

Before reaching the merits of these conflicting claims, we observe that pharmacists perform a broad range of tasks, from selling razor blades and dental floss to treating patients in a health care facility by ordering laboratory tests and administering drugs by injection (Bus. & Prof. Code, § 4046, subd. (c)(4)) and acting as consultants regarding medication prescribed for patients at such facilities (Cal.Admin.Code, tit. 22, § 72375). The discussion which follows relates only to the duties in a community pharmacy of a pharmacist who fills prescriptions for drugs on the order of a physician or other medical care provider, and who has used due care in compounding and labelling the drug.

There are no cases in California deciding whether a retail pharmacy is strictly liable for injuries caused by an inherent defect in a drug. In Florida (McLeod v. W.S. Merrell Co. (Fla.1965) 174 So.2d 736, 739), North Carolina (Batiste v. American Home Products Corp. (1977) 32 N.C.App. 1, 231 S.E.2d 269, 275) and New York (Bichler v. Willing (1977) 58 A.D.2d 331, 397 N.Y.2d 57, 59-60) a pharmacy is held not to be strictly liable for defects in a prescription drug. These cases rely on section 402A of the Restatement Second, of Torts, which declares that unavoidably unsafe products such as drugs are not defective if they are accompanied by an appropriate warning (id., com. k), and that a seller is only required to warn of defects of which he knew or should have known (id., com. j).

It is critical to the issue posed to determine if the dominant role of a pharmacist in supplying a prescription drug should be characterized as the performance of a service or the sale of a product. Both parties accept as a general rule that "those who sell their services for the guidance of others ... are not liable in the absence of negligence or intentional misconduct." (Gagne v. Bertran (1954) 43 Cal.2d 481, 487, 275 P.2d 15.) This principle was applied in Carmichael v. Reitz (1971) 17 Cal.App.3d 958, 95 Cal.Rptr. 381, the primary authority on which the trial court relied. A doctor who prescribed a drug purchased by the patient at a pharmacy was held not to be strictly liable for injuries resulting from its use. In response to the argument of the plaintiff that the doctor was "in a sense a retailer" of the drug, the court stated that the doctor prescribed the medication only as an aid to effect a cure and was not in the business of selling the drug. The court observed, "[T]he distinction between a transaction where the primary objective is the acquisition of ownership or use of a product and one where the dominant purpose is to obtain services has not been obliterated. Where the services sought are professional in character, the distinction applies a fortiori. " (Id. at p. 978, 95 Cal.Rptr. 381.) On this theory, a hospital was held not strictly liable as the "supplier" for injuries arising out of the use of a surgical needle which broke during an operation. (Silverhart v. Mount Zion Hospital (1971) 20 Cal.App.3d 1022, 1027, 98 Cal.Rptr. 187.)

Magrine v. Krasnica (1967) 94 N.J.Super. 228, 227 A.2d 539, held that a dentist was not strictly liable for injuries caused by a needle which broke during the course of treatment due to a latent defect. The court characterized the difference between a sale and a service as follows: "[T]he essence of the transaction between the retail seller and the consumer relates to the article sold. The seller is in the business of supplying the product to the consumer. It is that, and that alone, for which he is paid. A dentist or physician offers, and is paid for, his professional services and skill. That is the essence of the relationship between him and his patient." (Id. 227 A.2d at p. 543.) (Accord: Babcock v. Nudelman (1937) 367 Ill. 626, 12 N.E.2d 635 [holding optometrists and oculists who examined eyes and sold eyeglasses, exempt from a tax imposed on retailers of tangible goods on the ground that their main objective was to provide a service and that the sale of eyeglasses was purely incidental to the service]; see also Barbee v. Rogers (Tex.1968) 425 S.W.2d 342.)

As might be anticipated, the parties differ sharply as to whether the main function of a pharmacist is to provide a service or to sell a product. Plaintiff asserts that the duties of a pharmacist in filling a prescription do not differ from those of any other retailer: he reads the prescription, fills the container with the proper type and dosage of the medication required, types up a label, attaches it to the container, and exchanges the medication for payment by the customer. In essence, argues plaintiff, a pharmacist is the functional equivalent of "an experienced clerk at a hardware store." Exclusive and amici curiae ² paint a dramatically different picture of the role of the pharmacist, characterizing him as a professional who provides an important health service. They point out that with a few exceptions specified by statute, only a physician or a licensed pharmacist may compound or dispense prescription drugs (Bus. & Prof. Code, § 4050 et seq.). ³ In order to obtain a license, a...