Dechert Re:Torts is a monthly newsletter covering news and developments related to product liability and mass torts litigation.

Inside this issue:

• A Prescription for Liability: Michigan Repeals Flagship Drug Immunity Law
• Unclear for Takeoff: Canadian Airline Liable for Chatbot Misinformation
• It’s (Still) Important Enough to Get It Right
• Gilead Appeals New “Duty to Innovate” Negligence Claim: A Potential Shift in Manufacturer Liability?
• A Package Deal: FDA and Manufacturers Halt PFAS Use in Disposable Food Containers
• FDA Urges Careful Evaluation of Third-Party Data in Regulatory Submissions

Hot Topics

A Prescription for Liability: Michigan Repeals Flagship Drug Immunity Law

Michigan’s recent repeal of immunity provisions under its Product Liability Act has potentially significant implications for pharmaceutical companies operating and litigating there. Since 1995, Michigan’s Product Liability Act granted an absolute presumption of non-defectiveness to the manufacturer and seller of an FDA-approved pharmaceutical product if “the drug and its labeling were in compliance with [FDA]’s approval at the time the drug left the control of the manufacturer or seller.” Garcia v. Wyeth-Ayerst Lab’ys, 385 F.3d 961, 964 (6th Cir. 2004). The Act permitted narrow exceptions where a plaintiff demonstrated that bribery or fraud corrupted the approval process. See id. For nearly 30 years, pharmaceutical companies enjoyed unparalleled protection under this provision. See, e.g., In re Proton-Pump Inhibitor Prod. Liab. Litig., 2022 WL 5265300 (D.N.J. Sept. 20, 2022) (dismissing 197 Michigan plaintiffs from the proton-pump inhibitor MDL).

The Michigan legislature repealed this provision effective February 13, 2024. As a result, pharmaceutical companies now face a weaker “rebuttable presumption” against liability for FDA-approved drugs: “the manufacturer or seller is not liable if, at the time the specific unit of the product was sold or delivered to the initial purchaser or user, the aspect of the product that allegedly caused the harm was in compliance with” FDA and other relevant regulatory standards. See Mich. Comp. Laws Ann. § 600.2946(4).

The impact of this repeal remains unclear. For instance, it is not clear whether it applies to all products liability cases filed after the effective date, even if they allege injuries that occurred before the effective date; or whether pharmaceutical companies with major operations in Michigan, originally attracted by its immunity provision, may search for another home.

Even after the repeal, pharmaceutical companies have other protections. For example, Michigan has caps on damages in products liability actions, for both noneconomic damages and if a product causes death or permanent loss of a vital bodily function, subject to annual adjustment based on the consumer price index. See id. § 600.2946a.

Takeaway: Michigan repealed the longstanding presumption of non-defectiveness enjoyed by FDA-approved products, removing a one-of-a-kind protection after almost 30 years.

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Unclear for Takeoff: Canadian Airline Liable for Chatbot Misinformation

Last month, the British Columbia Civil Resolution Tribunal (“BCCRT”) determined that Air Canada would be forced to honor a company policy that its chatbot had invented. Moffatt v. Air Canada, 2024 BCCRT 149.

The dispute arose in 2022 when a customer asked Air Canada’s support chatbot for information about applying for a bereavement fare discount. Id. at ¶ 2. The chatbot told the customer he would be partially refunded for his ticket if he applied for the reimbursement within 90 days of his ticket purchase. Id. at ¶ 15. But this was not Air Canada’s policy, which requires passengers to request bereavement fares prior to their ticket purchase. Id. at ¶ 19. When the customer attempted to apply for the discount post-flight, the airline refused, stating that the chatbot had erred and the request should have been submitted before the flight. Id. at ¶¶ 21-23. Air Canada argued that the chatbot was a “separate legal entity” that is responsible for its own actions and further argued that it was not liable because the chatbot provided the customer a direct link to Air Canada’s correct policy. Id. at ¶¶ 27-28.

The BCCRT rejected both arguments. First, the Tribunal found that Air Canada was responsible for all information disseminated on its website, whether it originated from a static page or from its chatbot. Id. at ¶ 27. Second, the Tribunal held that it was not the customer’s responsibility to discern that one part of Air Canada’s website (the chatbot) was inaccurate and that another part (the linked policy) was correct. Id. at ¶ 29.

BCCRT decisions are not precedent setting in Canada, let alone the United States. But this reasoning, if adopted in United States courts, would be of interest across a variety of industries, including the drug and device space. For example, FDA regularly monitors websites and social media postings and issues warning letters based on digital representations about a drug’s uses and efficacy. Cf. Victor v. R.C. Bigelow, Inc., No. 13-CV-02976-WHO, 2014 WL 1028881, at *12 (N.D. Cal. Mar. 14, 2014) (considering off-label representations in connection with misbranding and false advertising claims); see also Wilson v. Frito-Lay N. Am., Inc., No. 12-1586 SC, 2013 WL 1320468, at *6 (N.D. Cal. Apr. 1, 2013) (“It is true that statements not actually printed on a label itself can constitute ‘labeling’ for FDCA purposes.”). If drug and device makers employ generative AI tools to field inquiries and communicate information, they should consider how to reduce exposure to potential liability.

Takeaway: Those seeking to implement AI tools for customer communication should take steps to ensure that chatbots are trained to provide accurate information. Chatbot tools should also be accompanied by conspicuous disclaimers.

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It’s (Still) Important Enough to Get It Right

In last month’s edition of Re:Torts, we covered a recent oral argument in City of Huntington, W.Va. v. Amerisourcebergen Drug Corp. (Jan. 24, 2024) (No. 22-1918) in which the Fourth Circuit asked if it should certify a question to the Supreme Court of West Virginia as to whether West Virginia law permits a public nuisance claim against national pharmaceutical companies. We noted that the Fourth Circuit was indicating a cautious approach toward these issues but had yet to issue a certification. It has now done so.

The Fourth Circuit recently asked the West Virginia high court: “Under West Virginia’s common law, can conditions caused by the distribution of a controlled substance constitute a public nuisance and, if so, what are the elements of such a public nuisance claim?” Order at 4, City of Huntington, W.Va. v. Amerisourcebergen Drug Corp. (Mar. 18, 2024) (No. 22-1918). The Fourth Circuit explained that a “negative answer to this question is outcome determinative to the present appeal” and that “there is no controlling appellate decision, constitutional provision, or statute of West Virginia answering this question.” Id. The answers reached by the Supreme Court of West Virginia, and by the Ohio Supreme Court to a similar question certified by the Sixth Circuit in Trumball County v. Purdue Pharma, L.P., may meaningfully inform the contours of these claims and Re:Torts will continue its coverage of them.