T.H. v. Novartis Pharm. Corp.

Citation4 Cal.5th 145,226 Cal.Rptr.3d 336,407 P.3d 18
Decision Date21 December 2017
Docket NumberS233898
CourtCalifornia Supreme Court
Parties T.H., a Minor, etc., et al., Plaintiffs and Appellants, v. NOVARTIS PHARMACEUTICALS CORPORATION, Defendant and Respondent.

4 Cal.5th 145
407 P.3d 18
226 Cal.Rptr.3d 336

T.H., a Minor, etc., et al., Plaintiffs and Appellants,
v.
NOVARTIS PHARMACEUTICALS CORPORATION, Defendant and Respondent.

S233898

Supreme Court of California

Filed December 21, 2017


Public Justice, Leslie A. Brueckner ; Thorsnes Bartolotta McGuire, Benjamin I. Siminou, San Diego, Kevin F. Quinn and Charlynne I. Rejaian for Plaintiffs and Appellants.

Alan Charles Dell'Ario, Napa, and Jeffrey R. White for Consumer Attorneys of California and American Association for Justice as Amici Curiae on behalf of Plaintiffs and Appellants.

Chavez & Gertler, Nance F. Becker, San Francisco; Public Citizen Litigation Group and Allison M. Zieve for Public Citizen, Inc., as Amicus Curiae on behalf of Plaintiffs and Appellants.

William Alvarado Rivera for AARP and AARP Foundation as Amici Curiae on behalf of Plaintiffs and Appellants.

Hollingsworth, Eric G. Lasker, Joe G. Hollingsworth, Katharine R. Latimer ; Morrison & Foerster, Erin M, Bosman and Julie Y. Park, San Diego, for Defendant and Respondent.

226 Cal.Rptr.3d 339

H. Sherman Joyce, Lauren Sheets Jarrell; Manufacturers' Center for Legal Action, Linda E. Kelly, Patrick N. Forrest, Leland P. Frost; Shook, Hardy & Bacon, Phil Goldberg, Paul B. La Scala, Irvine, and Gabriel S. Spooner, Irvine, for National Association of Manufacturers and American Tort Reform Association as Amici Curiae on behalf of Defendant and Respondent.

Hugh F. Young, Jr. ; Reed Smith, David E. Stanley, Los Angeles, and James M. Beck for Product Liability Advisory Council, Inc., as Amicus Curiae on behalf of Defendant and Respondent.

Gregory Herbers and Michelle Stilwell for Washington Legal Foundation as Amicus Curiae on behalf of Defendant and Respondent.

Martin S. Kaufman ; Greenberg Traurig, Robert P. Charrow and Anna B. Laakmann for Atlantic Legal Foundation as Amicus Curiae on behalf of Defendant and Respondent.

Deborah J. La Fetra, Sacramento, and Anastasia P. Boden for Pacific Legal Foundation as Amicus Curiae on behalf of Defendant and Respondent.

Covington & Burling, Jeffrey M. Davidson, San Francisco, Michael X. Imbroscio, Paul W. Schmidt and Gregory L. Halperin for Pharmaceutical Research and Manufacturers of America as Amicus Curiae on behalf of Defendant and Respondent.

Fred J. Hiestand, Sacramento, for The Civil Justice Association of California as Amicus Curiae on behalf of Defendant and Respondent.

Williams & Connolly, Kannon K. Shanmugam, Allison Jones Rushing and Connor S. Sullivan for Chamber of Commerce of the United States of America as Amicus Curiae on behalf of Defendant and Respondent.

Haynes and Boone, Mary–Christine Sungaila, Costa Mesa, and Polly Fohn for International Association of Defense Counsel and Federation of Defense & Corporate Counsel as Amici Curiae on behalf of Defendant and Respondent.

Shook, Hardy & Bacon and Alicia J. Donahue, San Francisco, for Genentech, Inc., and California Life Sciences Association as Amici Curiae on behalf of Defendant and Respondent.

Cuéllar, J.

4 Cal.5th 154

Under California law, a brand-name drug manufacturer has a duty to warn of known or reasonably knowable adverse effects arising from an individual's use of its drug. (See Stevens v. Parke, Davis & Co.(1973) 9 Cal.3d 51, 65, 107 Cal.Rptr. 45, 507 P.2d 653.) In

407 P.3d 22

this case, we examine whether—and if so, under what circumstances—a brand-name drug manufacturer may be sued under a theory of "warning label" liability when the

4 Cal.5th 155

warning label for its drug was alleged to be deficient, but the plaintiffs were injured by exposure to a generic bioequivalent drug bearing the brand-name drug's warning label.

Plaintiffs' mother, J.H., was prescribed terbutaline, a generic form of the brand-name drug Brethine, to suppress premature labor during her pregnancy. Plaintiffs T.H. and C.H. were born full term, but were diagnosed with developmental delays at three years of age and autism by the time they turned five. Through their father as guardian ad litem, the minors allege that those responsible for the terbutaline label knew or should have known—based on studies of the drug's effects in rats and in humans—that the drug posed a serious risk to fetal brain development. They further allege that the drug's label unreasonably failed to include a warning about this risk.

226 Cal.Rptr.3d 340

Federal law explicitly conveys to the brand-name manufacturer—and only that manufacturer—the responsibility to provide an adequate warning label for both generic terbutaline and its brand-name equivalent, Brethine. As explained in more detail below, only the brand-name drug manufacturer has unilateral authority to modify the drug's label by adding to or strengthening a warning. Generic drug manufacturers are required to follow the brand-name manufacturer's label to the letter. Accordingly, the manufacturer of Brethine controlled both the form and content of the terbutaline warning label.

Plaintiffs brought suit against defendant Novartis Pharmaceuticals Corporation (Novartis), which manufactured Brethine until December 2001, and aaiPharma Inc. (aaiPharma), which purchased the rights to and manufactured Brethine thereafter—using the same label Novartis had used—when plaintiffs' mother was prescribed the generic bioequivalent in 2007. Plaintiffs claim that Novartis knew or should have known that its warning label failed to alert pregnant women or their physicians to the risk Brethine posed to fetal brain development; that manufacturers of terbutaline were compelled by federal law to include Brethine's deficient label on their own products; that it was foreseeable Novartis's successor (aaiPharma) would not change or update Brethine's deficient label; and that in reliance on the deficient warning label, plaintiffs' mother was prescribed terbutaline, which adversely affected plaintiffs' developing brains in utero. What Novartis asserts in response is that its duty to provide a safe and adequate warning label for Brethine did not encompass those who were prescribed terbutaline in reliance on the Brethine label. Novartis further contends that any such duty should not extend to those who were exposed to terbutaline after Novartis ceased manufacturing Brethine and sold its rights in the drug to aaiPharma.

Such contentions, and the case in which they arise, reach us at a very early stage in the litigation. In reviewing a demurrer, we ask only whether the

4 Cal.5th 156

plaintiff has alleged—or could allege—sufficient facts to state a cause of action against the defendant. ( Schifando v. City of Los Angeles(2003) 31 Cal.4th 1074, 1081, 6 Cal.Rptr.3d 457, 79 P.3d 569.) In our view, plaintiffs have indeed shown that they could allege a cause of action against Novartis for warning label liability. Because the same warning label must appear on the brand-name drug as well as its generic bioequivalent, a brand-name drug manufacturer owes a duty of reasonable care in ensuring that the label includes appropriate warnings, regardless of whether the end user has been dispensed the brand-name drug or its generic bioequivalent. If the person exposed to the generic drug can reasonably allege that the brand-name drug manufacturer's failure to update its warning label foreseeably and proximately caused physical injury, then the brand-name manufacturer's liability for its own negligence does not automatically terminate merely because the brand-name manufacturer transferred its rights in the brand-name drug to a successor manufacturer. We therefore affirm the Court of Appeal, which had directed the trial court to enter an order sustaining Novartis's demurrer with leave to amend plaintiffs' negligence

407 P.3d 23

and negligent misrepresentation causes of action.

I. BACKGROUND

From a certain perspective, the claim underlying this lawsuit is quite straightforward. Plaintiffs T.H. and C.H., who are fraternal twins, sued defendant Novartis for negligence and negligent misrepresentation arising from Novartis's failure to warn of the risks of Brethine, an asthma

226 Cal.Rptr.3d 341

drug sometimes prescribed "off label" to stop or slow preterm labor. Plaintiffs allege that Novartis knew or should have known that Brethine carried a substantial risk of causing developmental and neurological damage to the fetus, yet failed to warn of this risk.

What removes this case from the realm of the ordinary is that plaintiffs' mother was never prescribed Brethine. Rather, she—like many pregnant women experiencing premature labor —was prescribed terbutaline sulfate (terbutaline ), the generic bioequivalent drug. Moreover, Novartis stopped manufacturing Brethine and sold all rights to the drug in 2001, six years before plaintiffs' injury. During the...

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2 cases
  • Allford v. Barton
    • United States
    • California Court of Appeals Court of Appeals
    • March 13, 2019
    ...(Bass).) Decisions by the lower federal courts "are neither binding nor controlling on matters of state law." (T.H. v. Novartis Pharmaceuticals Corp. (2017) 4 Cal.5th 145, 175.) Nevertheless, such decisions may be persuasive when their analysis is thorough and well-reasoned. (Ibid.) In Bass......
  • Allford v. Barton
    • United States
    • California Court of Appeals Court of Appeals
    • March 13, 2019
    ...(Bass).) Decisions by the lower federal courts "are neither binding nor controlling on matters of state law." (T.H. v. Novartis Pharmaceuticals Corp. (2017) 4 Cal.5th 145, 175.) Nevertheless, such decisions may be persuasive when their analysis is thorough and well-reasoned. (Ibid.) In Bass......

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