Companies across various industries have misled the public by concealing the risks of their products. Sugar manufacturers have downplayed the dangers of high-fructose corn syrup and diverted public attention toward fat, causing an epidemic of diabetes, obesity, and heart disease. Fossil fuel companies have misled the public about the causes, certainties, and effects of global warming, resulting in massive, unregulated CO2 emissions and creating one of the greatest threats to humanity.
For their part, opioid manufacturers have concealed the dangers and addictive nature of painkillers, leading to the opioid crisis.
According to Professor Wes Henricksen, all of these schemes fall into a category of wrongdoing known as “public fraud schemes to conceal product hazards.” These schemes do not fit into any traditional framework of torts, and those who are harmed have no way to seek redress against the perpetrators. For example, if a used-car dealer fails to disclose that a car for sale was in an accident or misrepresents the mileage on its odometer, this deceptive conduct is labeled “fraud” and punished according to the law. A person harmed by the fraud can seek compensation from the seller or the car dealership. However, when an opioid manufacturer claims that its painkillers are completely safe and non-addictive, and further conceals studies that demonstrate the falsity of both claims, this deceptive conduct is not called fraud. On the contrary, it is permitted. The false statement by the used-car salesman has a minor effect on a single individual—the buyer. If the buyer believes the lies, he or she loses money. The false statement by the opioid manufacturer has a much greater effect on a massive number of people. Addiction, suffering, and death not only could result from this lie, but did result from it and continue to happen every day.1
Public health problems have deep-rooted political economics that reflect the distribution of power in society and shape its policy responses. As Stanford professors Cuéllar and Humphreys teach,2 the policy response to the explosion of opioid use, dependence, and overdose in the U.S.—triggered by a fourfold increase in opioid prescriptions beginning in the mid-1990s —requires an understanding of the institutional incentives and pressures associated with the distribution and use of addictive legal drugs, and particularly how these pressures can undermine the effectiveness of regulatory governance. Pharmaceutical companies and physicians encountered a combination of regulatory loopholes as well as lax state and federal oversight standards. Pain clinics and prescription “pill mills” proliferated. For pharmaceutical companies, the ability to market addictive drugs through close relationships with physicians was facilitated by a variety of legal strategies that allowed for “willful blindness” on the part of physicians, thereby limiting their risk of administrative and criminal liability. Civil liability casts a shadow over certain aspects of the opioid epidemic, as its scope in this context depends on restrictions affecting litigation and access to the courts (including limits on class-action lawsuits and legal remedies).
On November 9, 2021, the Oklahoma Supreme Court overturned a $465 million verdict against Johnson & Johnson, which was accused of creating a public nuisance through a deceptive marketing campaign that promoted opioid use. In the view of the State Supreme Court, the manufacturer’s opioid marketing campaign cannot be equated with a tort because it concerned the sale of a legal product. The trial court’s decision had held the defendant liable, reasoning that this tort does not require proof of interference with another’s property; interference with the rights of the community at large is sufficient. In fact, two other defendants in the case—the manufacturers Purdue Pharma and Teva Pharmaceuticals—had accepted a settlement prior to the trial. The State Supreme Court held that applying public nuisance laws to legal products would create unlimited liability for those who manufacture, market, and sell legal products. The tort of interference with the right to health would involve sick animals, polluted drinking water, or the discharge of sewage onto a property—circumstances that provide no benefit to the community. However, prescription opioids have a beneficial use in the treatment of pain. Furthermore, the Court acknowledged that Johnson & Johnson was or should have been aware of the dangers associated with opioid abuse and dependence and, therefore, could have warned the public. However, the failure to warn relates to product liability, a tort distinct from a public nuisance. The court cited the Restatement (Third) of Torts, which has served as the basis for decisions in which most courts have rejected public nuisance theories in cases involving products that caused harm. Another argument for dismissing the obligation to pay damages is that opioid manufacturers have no control over the misuse of their products after sale. The court drew a parallel with cases that reject liability on the part of firearms manufacturers, on the grounds that they would have a duty to mitigate the risk of illegal trafficking, and also considered that treating the case as an application of the public nuisance theory would be a way to circumvent rules regarding statutes of limitations, thereby making the defendants perpetually liable for their products,” in a form of “endless liability.”
An important point is that this is the second decision within a month in which a court has addressed the “public nuisance” claim against opioid manufacturers. In a lawsuit that highlights the opioid epidemic—which has claimed the lives of more than 700,000 Americans—at a cost of more than $500 billion to the economy over the past twenty years —on average, 130 people die every day from an opioid overdose (a trend that has worsened during the pandemic)—surprisingly, four opioid manufacturers have secured the pharmaceutical industry’s first major legal victory. A judge in the Orange County Superior Court (California) ruled that the plaintiffs failed to demonstrate how many medically unnecessary prescriptions were issued as a result of alleged deceptive marketing by opioid manufacturers. Even if it were possible to infer that the deceptive marketing caused an increase in inappropriate prescriptions, there was no evidence demonstrating the extent to which the volume of such prescriptions contributed to a public nuisance. In other words, the plaintiffs were unable to distinguish between the increase in legitimate prescriptions for federally approved painkillers and those that were illegitimate or otherwise unlawful. Even if the companies engaged in false or misleading marketing—the judge noted—“any subsequent adverse consequences resulting from appropriate drug prescriptions did not provide evidence to show that, without broad speculation, the volume of these prescriptions helped create the public nuisance and, if so, to what extent.”
Both rulings underscore what legal experts have asserted from the outset regarding the opioid litigation: that attempting to apportion responsibility would be very difficult, because opioids pass through a series of entities—including manufacturers, medical supply distributors, physicians, and pharmacies, including large retailers—before reaching the patient. In fact, lawsuits have already been filed against pharmacy chains and distributors.
In terms of a national strategy for the various class-action lawsuits filed against opioid manufacturers, the precedents set in Oklahoma and California may influence plaintiffs to accept a proposed $5 billion national settlement offered by Johnson & Johnson (in this case, its pharmaceutical division, Janssen, which manufactured its opioids), given that if upcoming cases go to trial rather than being settled, there will be opportunities for the defendants to secure further victories. Along these lines, another manufacturer—Teva—stated that a clear victory for the many patients in the U.S. suffering from opioid addiction will only come once comprehensive settlements are finalized and resources are made available to all who need them.
It is difficult to predict whether these decisions are atypical, as they are the first cases decided among thousands that employ similar defense strategies. In any case, according to experts, the game has only just begun—not only in Oklahoma and California, but in several other U.S. states as well. In other words, other judges may diverge from these precedents and find the plaintiffs’ broader approach persuasive. Specifically in California, the state will appeal. According to the lawyers: “The people of California will have the opportunity to seek justice on appeal and ensure that no opioid manufacturer can engage in reckless corporate practices that endanger public health in the state for its own profit.”
Undeniably, two objective factors threaten the success of these lawsuits. First, the fact that the medication was approved by the federal government. Furthermore, it is a major challenge to establish a causal link between the corporations and the illegal trafficking of opioids. The defendant companies have argued that the plaintiffs must specify exactly what illegal marketing behavior on their part caused the opioid epidemic—or whether the crisis would have arisen anyway.
In a broader context, the use of the “public nuisance” theory has also failed to work for those harmed by other schemes—whether a smoker who developed lung cancer caused by tobacco smoke or plaintiffs who have sued fossil fuel companies and greenhouse gas emitters, based on global warming. The problem is that the “public nuisance” argument does not address the intentional fraud inherent in these corporate schemes. Although they clearly involve deceptive conduct that intentionally misleads the public for economic gain, these schemes go unpunished because there is no civil liability based on fraud that offers aggrieved plaintiffs a viable alternative to seek damages from the wrongdoers. Consequently, the defendants profit immensely, while the victims continue to suffer economic and physical harm—and, in many cases, death—as a result of the deceptive schemes.
At first glance, strict liability for a defective product that enters the stream of commerce and causes harm to consumers (product liability) would seem to be the tort that would provide a viable avenue for aggrieved claimants to seek redress against the wrongdoers. Although this claim relieves the plaintiff of the burden of proving foreseeability, it ignores the unlawful nature of the conduct. Thus, the damages sought would not have been caused by the conduct at issue here, which is the defendant’s fraud. Furthermore, the plaintiffs would face enormous obstacles in proving that the product in question was “excessively dangerous,” a fundamental requirement. Regardless of which test is applied—consumer expectation or risk-utility—the defendant is able to rely on “purchased science” generated by industry-funded scientists to argue that the product was not excessively dangerous.
Another theoretically possible avenue would be to file lawsuits based on negligence. The tort of negligence is the primary tort in common law jurisdictions, consisting of a failure to exercise the standard of care that a reasonably prudent person would have exercised in a similar situation. Its elements include: (1) a duty on the part of the defendant to protect the plaintiff from harm; (2) a breach of that duty; and (3) actual damages to the plaintiff that are proximately caused by the defendant’s failure to exercise the duty of care. Negligence claims are ill-suited to the opioid scheme, which involves intentional and unlawful conduct. Such conduct is not the result of an accident or carelessness. Furthermore, the issues of causation that affect claims against the wrongdoers are also present in negligence actions. Actual and immediate causes are potentially problematic due to the gradual and slow-developing nature of the harm—such as cancer, global warming, and environmental damage. Negligence, as well as consumer protection laws, has failed to prohibit these schemes, punish those who carry them out, or provide adequate redress to those harmed by them.
To make matters worse, the weaknesses in the U.S. legal framework also extend to the criminal sphere. The problem of excessive opioid prescribing persists because the current law criminalizing this conduct is unclear and lacks national uniformity. Therefore, the creation of a new federal statute specifically targeting physicians is the appropriate response to the opioid epidemic. The enactment of a new federal criminal law, incorporated into the Federal Criminal Code, that specifically targets scenarios that have defined the opioid crisis is a significantly effective strategy—both to support healthcare professionals engaged in legitimate pain management practices so they can continue to use these medications to alleviate their patients’ suffering, but also as an appropriate punishment and an effective deterrent for physicians whose prescribing practices result in the deaths of their patients.3
Given the inadequacy of current legal protections, the doctrinal proposal is to close this legislative gap in order to advance various objectives of civil liability policy. As suggested by Loyola Law School Professor Rebecca Delfino, the enactment of a liability law targeting perpetrators of fraud schemes would allow for the transfer of losses to those responsible for causing them, expanding the scope of liability to those who engage in intentional tortious conduct. Plaintiffs harmed by the consumption of sugar, tobacco products, and opioid painkillers, as well as those harmed by rising sea levels and other effects caused by global warming, are members of the public who did not profit from the dangerous product. On the contrary, it is the companies that market and sell the toxic products—whose fraud allowed the products to be used—that cause the harm.4
Returning to civil liability, the argument is made for applying in the U.S. the provisions of the Restatement (Third) of Torts: Intentional Torts to a Person (§110) "If fault lies in one’s intent and act, and not in the identification of a particular victim, then liability for the intent and act seems perfectly appropriate, even if the particular victim was not the intended one.... Furthermore, it can be argued that an intentional aggressor must assume the risk that his aggression will result in unintentional injury or that the aggressor must be subject to appropriate incentives to deter aggression.”
That is to say, just as the “transferred intent” doctrine has been applied to intentional torts, ensuring that wrongdoers do not escape liability toward those who have been harmed, so too do those harmed by fraudulent schemes deserve the right to seek compensation from the companies whose schemes allowed their toxic products to enter the stream of commerce and cause harm.
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- Henricksen, Wes, Deceive, Profit, Repeat: Public Deception Schemes to Conceal Product Dangers (2020). Cardozo Law Review, Forthcoming, Available at SSRN.
- Cuéllar, Mariano-Florentino and Humphreys, Keith N., The Political Economy of the Opioid Epidemic (December 12, 2019). Yale Law & Policy Review, Vol. 38, No. 1, 2019, Available at SSRN.
- Delfino, Rebecca, The Prescription Abuse Prevention Act: A New Federal Statute to Criminalize Overprescribing Opioids (February 10, 2020). Loyola Law School, Los Angeles Legal Studies Research Paper No. 2020-03, Forthcoming, to be published in Yale Law & Policy Review Vol. 39 pp. XX (2021), Available at SSRN or here.
- Henricksen, Wes, Deceive, Profit, Repeat: Public Deception Schemes to Conceal Product Dangers (2020). Cardozo Law Review, Forthcoming, Available at SSRN.