This is a new one. We’ve heard of companies being sued for putting dangerous products on the market. We’ve also heard of companies getting bullied into expensive settlements despite a lack of evidence pointing to a specific danger. But this time around, California’s court system took things full circle.
A California appeals court ruled that companies can be sued for not inventing a new product and bringing it to market. As the Wall Street Journal so perfectly summarized it, “Behold California’s new tort standard: You should have built that.”
About 24,000 patients are suing Gilead Sciences for not bringing an “allegedly safer version” of a drug to market quickly enough. The HIV drug was approved by the Food and Drug Administration (FDA) in 2001, but Gilead says that early studies did not clearly demonstrate that the new drug was an improvement.
A California superior court ruled in 2022 that Gilead could be held negligent for failing to develop better products, and now, this ruling has been affirmed by the appellate court.
“We conclude that the legal duty of a manufacturer to exercise reasonable care can, in appropriate circumstances, extend beyond the duty not to market a defective product,” wrote Associate Justice Jeremy Goldman.
Thus marks the beginning of a new California Gold Rush for the modern industry of irresponsible mass tort lawyers who manipulate the system to line their own pockets.
Mass torts are an important part of our judicial system because they help level the playing field between individuals and large corporations. However, there are many trial lawyers who abuse the mass tort system for their own personal gain, and they do it using weak, incomplete (and sometimes just plain false) scientific research.
These bad actors are skilled at hiring so-called expert witnesses to create their own version of “facts” and recruiting thousands of willing plaintiffs through television and online ad campaigns. By flooding state courts with lawsuits, they force companies to do one of two things: pay millions to defend every lawsuit and possibly go bankrupt, or settle with the attorneys, regardless of the truth.
Settlements can run into the billions of dollars with most going to attorney’s fees. An entire cottage industry of these types of lawyers has been created to find the next big payday.
Typically, a tort lawsuit requires proving the defendant caused direct harm to individuals. But with this new legal precedent in place, the sky is the limit for these law firms. If they can find a new product that might be better than what is on the shelves right now, they can sue the creators of the product for not selling it sooner. Today it’s medicine, but tomorrow it can be technology, food, consumer products, and whatever else the imagination can conjure.
As the Journal points out, “once a company starts tinkering with a new and potentially improved product, it could be legally obligated to bring it to market, no matter the commercial or technological barriers.”This puts innovators in a nearly impossible position. Move too fast and put a risky product on the market? Expect a lawsuit. Conduct thorough research to evaluate risk and exercise an abundance of caution? Expect a lawsuit.
Nobody wants to walk that tightrope.
On a personal note, I began my career in the world of biotechnology and life sciences, and I spent my early years in the laboratory setting. I fell in love with science and innovation in the lab, where we would ask questions like “how does that work?” and “what can we safely do with it?”
I fear that California’s decision to declare open season on innovators is going to extinguish the curiosity and passion of scientists in the lab who are working so hard to make life better for people in a world that constantly demands that we make more from less. I also fear that those in the C-suite and legal departments of these companies will decide it’s no longer worth the financial risk to turn the laboratory lights on in the first place.
Balancing innovation with risk is not an easy task. We don’t want to freak out over things that aren’t scary while missing something that is. We also don’t want to live in a world that is losing out on benefits because we are misrepresenting the risk that is there.
There are limitations to certainty in risk analysis — we rarely have all the information we want or need. Thus, we have to use the best methods and best evidence possible and make some subjective decisions on ways to account for the uncertainty that remains.
The Center’s goal is to find ways to minimize that subjectivity and to educate stakeholders at the Intersection of science, justice, and the economy on what the existing evidence really tells us, and what its limitations are. It’s hard to do this when bad actors are clogging up the mass tort system with opportunistic wolf cries.