Uncertain Risks Associated with Products May Pose Real Legal Risk for Manufacturers and Insurers

By Brendan H. Fitzpatrick | April 17, 2017

A difficult question facing manufacturers is when — absent regulatory requirement to do so — must they warn consumers of potential, but not established, hazards associated with the use of their products. There is no set answer, but the changing legal landscape suggests that waiting for scientific consensus that a product conclusively causes harm to issue a warning may be taking on legal risk. Headline-grabbing verdicts against Johnson & Johnson relating to claims that genital use of the company’s talcum powder products causes ovarian cancer illustrate why a manufacturer must be aware of the controversial issue of when it may need to warn of potential, but unproven, risks.

In 2016, juries in three cases in St. Louis, Missouri, awarded staggering verdicts of $72 million, $55 million, and $70 million to plaintiffs who claimed that genital use of Johnson & Johnson talcum powder products caused their ovarian cancer and Johnson & Johnson failed to warn of the risk. The plaintiffs relied on expert witnesses who opined that use of the talc products caused ovarian cancer; these opinions were based on several studies that suggested the same. Although this risk is far from established or accepted in the scientific community, plaintiffs argued that Johnson & Johnson knew of the risks and that a Food and Drug Administration (FDA) regulation stating that “[t]he label of a cosmetic product shall bear a warning statement whenever necessary or appropriate to prevent a health hazard that may be associated with the product” required Johnson & Johnson to warn consumers of such potential or theoretical risks, even if there was not scientific consensus. See 21 C.F.R. § 740.1. The three St. Louis juries, evidently, accepted the arguments in reaching these massive verdicts, which include punitive damages designed to act as a deterrent and for retribution.

Johnson & Johnson vigorously disputed the theory that talc caused ovarian cancer and insisted that the scientific community must agree that something is a danger before a company must warn consumers. To this day, it continues to sell its talcum powder products without any warning that use of the product may cause ovarian cancer. The company points to the FDA, the Center for Disease Control, the National Cancer Institute, the American Cancer Society, and others that agree the current scientific literature does not support the conclusion that genital use of cosmetic talcum powder causes ovarian cancer.

Johnson & Johnson argued that the studies relied upon by plaintiffs that suggest causation are significantly flawed in that they contain, for example, methodological failings and inconsistencies. It also relied on other studies that lack these failings, were more comprehensive and reliable, and arrived at contrary conclusions regarding the relationship between talc and ovarian cancer. In sum, a major component of the defense was to attack the causation theory. It followed that if the product does not cause the injury, there was no risk requiring a warning.

So, should a risk-averse manufacturer simply warn of all potential hazards associated with use of its products? Not so fast. Human factors experts, researchers and even governmental regulators caution against warning of theoretical hazards. Warning of remote or hypothetical hazards will increase the number of warnings in the marketplace. Scientists suggest that as the number and prevalence of warnings increases, people will increasingly ignore warnings. Another concern is that more warnings will lead to information overload for consumers. Likewise, warnings of uncertain, unproven, or theoretical hazards may cause warnings to be viewed as false alarms, thereby reducing their impact and negatively affect the impact of warnings of credible hazards. In its rulemaking on labeling of prescription drugs, the FDA identified some of the problems of warning of speculative risks, suggesting that such practices will limit physician appreciation of far more significant hazards, can cause meaningful risk information to lose significance, and can lead to labeling that does not accurately portray the product’s risks. See Federal Register Vol. 71, No. 15, p. 3935. Finally, warning of potential but unproven risks associated with a product may impact the market for the product.

Courts recognize, to a certain extent, the difficult position a defendant faces when plaintiffs’ claims relate to speculative or theoretical hazards. Consider, for example, the case of Rosa v. TASER International, Inc. decided by the U.S. Court of Appeals for the Ninth Circuit. In that case, Rosa died of cardiac arrest while in police custody after he was shocked by police using TASER stun guns. The cause of death was determined to be metabolic acidosis, which makes cardiac arrest more likely. The plaintiffs brought suit against TASER for failing to adequately warn under both negligence and strict liability theories. California law places a duty on manufacturers to warn of a particular risk if it is “known or knowable” in light of the generally recognized and prevailing best scientific and medical knowledge available at the time of manufacture and distribution.

In review, the court explained that although a manufacturer is held to the knowledge and skill of an expert in the field in determining what is knowable, a “manufacturer is not under a duty to warn of every report of a possible risk, no matter how speculative, conjectural, or tentative, because inundating the public indiscriminately with notice of any and every hint of danger would inevitably dilute the force of any specific warning given.” Rosa v. TASER Int’l, Inc., 684 F.3d 941, 946 (9th Cir. 2012). The court then looked at the evidence offered by the plaintiff to demonstrate that it was knowable that use of the stun gun could cause metabolic acidosis — specifically, four peer-reviewed scientific journal articles. The court rejected two of the articles because they did not tie risk directly to the product’s technology. The court rejected the other two because they offered only hypothetical conjecture about the TASER/acidosis link rather than tested conclusions; they merely suggested that TASER technology might pose an acidosis risk.

Despite the three large verdicts against it, Johnson & Johnson has found some successes in defense of the claims against it, including most recently in St. Louis. In March 2017, a St. Louis jury returned a complete defense verdict for Johnson & Johnson and the talc supplier. In that case, the defense argued not only that talc does not cause ovarian cancer, but that the cause of the plaintiff’s ovarian cancer and her uterine and colon cancers was genetic. See Swann v. Johnson & Johnson, et al, Case No. 1422-CC09326-01, 22nd Jud. Cir. Ct. of Missouri. In New Jersey, which utilizes a more stringent standard for acceptability of an expert witness’s testimony than the court in St. Louis, the defendants successfully persuaded the court that the plaintiffs’ experts’ opinions that talc causes ovarian cancer were not scientifically reliable, ending those cases. Johnson & Johnson also argues that it has no legal duty to warn of these hypothesized risks because federal regulatory agencies have considered and rejected requiring such warnings; twice the FDA has rejected citizen petitions for warnings on cosmetic talcum powder products. Faced with significant potential legal liability, Johnson & Johnson steadfastly maintains that talc does not cause ovarian cancer and therefore has not failed to warn.

Nevertheless, the results of the talc and ovarian cancer trials in St. Louis suggest that waiting for scientific consensus on a potential but unconfirmed hazard may subject a manufacturer to significant legal liability under a failure to warn theory. Following the 2016 verdicts against Johnson & Johnson in St. Louis, plaintiffs’ lawyer advertising for such claims dramatically escalated across the country. There are now thousands of similar cases pending against Johnson & Johnson and others — despite studies indicating that talc does not cause ovarian cancer and regulatory agencies’ rejection of warning labels for talc.

The takeaway for manufacturers — and their insurers — is that they must make themselves aware of potential or developing theories of risks associated with their products and they need to be aware that they may face potential liability for failing to warn of those risks. Analysis in the context of potential legal duties to warn is highly recommended to have an informed understanding of potential legal risks for potential product hazards. As revealed in the ongoing and developing talc and ovarian cancer litigation, waiting on scientific consensus of the existence of a hazard associated with a product or governmental instruction to warn may expose a company, and its insurers, to significant real legal risk.

Brendan H. Fitzpatrick is a partner with Goldberg Segalla in the firm’s Baltimore office. He defends entities involved in toxic tort, product liability, and environmental litigation including equipment and product manufacturers, distributors, suppliers, contractors, and premises owners.

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