H. (T.) v. NOVARTIS PHARMACEUTICALS CORPORATION

Amicus Curiae Brief of Chamber of Commerce of the United States of America

Cal.December 15, 2016

Ee PE’ AED SUPREWv: & 7 ee adeoe Nat Y SUPREME COURT No. 8233898 F | [ E D INTHE DEC 15 2016 SUPREME COURT OF CALIFORNIA Jorge Navarrete Clerk T.H., A MINOR, ET AL., Deputy Plaintiffs and Appellants, Vv. NOVARTIS PHARMACEUTICALS CORPORATION, Defendant and Respondent. Review of a Decision of the California Court of Appeal, Fourth Appellate District, Division One, No. D067839 Reversing a Judgmentof the Superior Court of San Diego County, Super. Ct. No. 37-2013-00070440-CU-MM-CTL,Hon. Joan M. Lewis Application by the Chamber of Commerceof the United States of America For Leave to File A Brief As Amicus Curiae in Support of Respondent KANNON K. SHANMUGAM Counsel ofRecord ALLISON JONES RUSHING CONNOR S. SULLIVAN” WILLIAMS & CONNOLLY LLP 725 Twelfth Street, N.W. Washington, DC 20005 (202) 434-5000 kshanimugam@we.com AttorneysforAmicus Curiae ChamberofCommerce ofthe United States ofAmerica ™Admitted in New York and practicing law in the District of Columbia pendingapplication for admission to the D.C. Bar under the supervision of bar memberspursuant to D.C. Court of Appeals Rule 49(c)(8). APPLICATION OF THE CHAMBER OF COMMERCEOF THE UNITED STATES OF AMERICA FOR LEAVETO FILE A BRIEF AS AMICUS CURIAE IN SUPPORT OF RESPONDENT To the Honorable Tani Cantil-Sakauye, Chief Justice: The Chamber of Commerce of the United States of America (Chamber) respectfully moves forleaveto file a brief as amicus curiae in this matter in support of respondent. THE AMICUS CURIAE The Chamber of Commerce of the United States of Americais the largest organization of businesses in the world. It represents 300,000 direct members and represents the interests of more than 3 million companies and professional organizations ofall sizes, in every industry, and acrossall regions of the country. One of the Chamber’s most important responsibilities is representing its membersbefore the courts,legislatures, and executive branches of the States and the federal government. The Chamber regularlyfiles briefs as amicus curiaeinlitigation that touches on issues of vital concern to the Nation’s business community. In fulfilling this role, the Chamber has appeared manytimes before this Court and the Courts of Appeal. INTEREST OF AMICUS CURIAE The Chamber seeks permissionto file this brief to assist the Court in understanding the perspective of the business community on the proper standard for imposing tort liability for harm arising from a product. This proceeding may have a widespread, serious impact on product developers in all fields that have until now relied on their understanding of long-settled principles of tort liability. As the Nation’s leading business organization, the Chamber is uniquely positioned to explain the prevailing rule nationwide for imposing liability on a manufacturer only for harm traceable to the manufacturer’s own product, and to address the significant policy consequences that might arise from expanding that rule by holding a manufacturer responsible for harms inflicted by its competitors’ products. CONCLUSION The application for leave to file the attached brief as amicus curiae should be granted. s/ Kannon K. Shanmugam KANNON K. SHANMUGAM Counsel ofRecord ALLISON JONES RUSHING CONNOR S. SULLIVAN” WILLIAMS & CONNOLLY LLP 725 Twelfth Street, N.W. Washington, DC 20005 (202) 484-5000 kshanmugam@we.com AttorneysforAmicus Curiae Chamber ofCommerceofthe United States ofAmerica DECEMBER7,2016 “" Admitted in New York andpracticing law in the District of Columbia pending application for admission to the D.C. Bar underthe supervision of bar members pursuant to D.C. Court of Appeals Rule 49(c)(8). No. 8233898 IN THE SUPREME COURTOF CALIFORNIA T.H., A MINOR,ET AL., Plaintiffs and Appellants, Vv. NOVARTIS PHARMACEUTICALS CORPORATION, Defendant and Respondent. Review of a Decision of the California Court of Appeal, Fourth Appellate District, Division One, No. D067839 Reversing a Judgmentof the Superior Court of San Diego County, Super. Ct. No. 37-2013-00070440-CU-MM-CTL, Hon. Joan M. Lewis Brief of the Chamber of Commerceofthe United States of America As Amicus Curiae in Support of Respondent KANNON K. SHANMUGAM Counsel ofRecord ALLISON JONES RUSHING CONNORS. SULLIVAN” WILLIAMS & CONNOLLY LLP 725 Twelfth Street, N.W. Washington, DC 20005 (202) 4384-5000 kshanmugam@we.com AttorneysforAmicus Curiae Chamber ofCommerceofthe United States ofAmerica *Admitted in New York andpracticing law in the District of Columbia pending application for admissionto the D.C. Bar underthe supervision of bar members pursuant to D.C. Court of Appeals Rule 49(c)(8). ii CERTIFICATE OF INTERESTED ENTITIES OR PERSONS Pursuant to California Rule of Court 8.208, the following brief is filed by the Chamber of Commerceof the United States of America, a non-profit organization and not a party to this action. The Chamberof Commerceof the United States of America and its counselcertify that it knowsof noentity or person that mustbe listed under Rule 8.208. CALIFORNIA RULE OF COURT8.200(c)(3) STATEMENT Counsel for the Chamber of Commerce of the United Statesof America certifies that this brief was not written in whole or part by counsel for any party, and noperson or entity other than the Chamber of Commerce of the United States of America or its counsel has made a monetary contribution to the preparation or submission of this brief. s/ Kannon K. Shanmugam KANNON K. SHANMUGAM DECEMBER7, 2016 ili TABLE OF CONTENTS Page Introduction ........cccccscessescssssessessesssesesescesvsrceeseensenssesscsessssossasonsosseseaseneaseeenes 1 AYQUMENL......cescecsssessesseceseescsscsnecnecsusenesseesseneeseencansnnensnscanensenscncorsanencenseneets 2 I. Fundamentalprinciples of tort law preclude the imposition of liability on a former manufacturer for harm caused by products manufactured by another........scesecssessereesseneenteeneesesees 2 Il. Thereis no valid justification to create an exception to fundamental principles of tort law in the context of the pharmaceutical inGUstry.......eecssseceseessesenseneneeensenensensesssnesreenes 9 Ill. Creating an exception to fundamentalprinciples of tort law in the context of the pharmaceutical industry would have serious adverse policy CONSEQUENCES........ssesecreereeeereseneseereneesens 20 CONCLUSION .......:cccccsecceescesssessesscecccscsccessssesccsessessseeecsensessessasensseneessaessesesensess 30 iv TABLE OF AUTHORITIES Page FEDERAL CASES Christian v. Minnesota Mining & Manufacturing Co., 126 F. Supp. 2d 951 (D. Md. 2001)...seseecseecerssceesssseseesessesensesenenenees 9 Darvocet, Darvon & Propoxyphene Products Liability Litiga- tion, In re, 756 F.3d 917 (6th Cir. 2014) .....ecseeecsssseseneneesenees passim Foster v. American Home Products Corp., 29 F.3d 165 (4th Cir. 1994)...eessssesecsseeeeressseneereseeneeseoeeers 7, 13, 16 Guarino v. Wyeth, LLC, 719 F.3d 1245 (11th Cir. 2013) .....sesssecseee 15 Lashley v. Pfizer, Inc., 750 F.3d 470 (5th Cir. 2014)...eseeeeee 14,15 Lyman v. Pfizer, Inc., Civ. No. 09-262, 2012 WL 2970627 (D. Vt. July 20, 2012)......9, 16, 27 McConkey v. McGhan Medical Corp., 144 F. Supp. 2d 958 (B.D. Tenn. 2000) .......ecescsssseeesssereenssssnenseseneesens 9 Mensing v. Wyeth, Inc., 588 F.3d 603 (2009), rev'd, 564 U.S. 604 (2011), opinion reinstated in relevant part, 658 F.8d 867 (8th Cir. 2011) «0.sessecessesessseneessensensrneeneennes 13, 14 Moretti v. Wyeth, Inc., 579 Fed. Appx. 568 (9th Cir. 2014), cert. denied, 185 S. Ct. 1898 (2015)oo.eseesssseseeseeeeeeenenseeseeeseensees 15 PLIVA, Inc. v. Mensing, 564 U.S. 604 (2011)...esesseseeees 12, 17, 18, 19 Schrock v. Wyeth, Inc., 727 F.3d 1273 (10th Cir. 2013)...ceeeeeeeee 3, 15 Smith v. Wyeth, Inc., 657 F.3d 420 (6th Cir. 2011)...sssecseeseeteeeeees 14 Wyeth v. Levine, 555 U.S. 555 (2009)...seeesssessesssessssesseenecnnennsensenscescess 18 Page STATE CASES Brown v. Superior Court, 44 Cal. 3d 1049 (1988) ........sssessesssesneees 7,8, 25 Conte v. Wyeth, Inc., 168 Cal. App. 4th 89 (2008).......ss.sesessssseeee 16, 17 Garcia v. Superior Court, 50 Cal. 3d 728 (1990)......sessecssessesssseseeeneesnennees 5 Hanberry v. Hearst Corp., 276 Cal. App. 2d 680 (1969) ......-ssssseesesreees 5 Huck v. Wyeth, Inc., 850 N.W.2d 353 (lowa 2014), cert. denied, 185 S. Ct. 1699 (2015) .....seseesererseececesscessesees 19, 22, 26 Kelly v. Wyeth, No. Civ.A.MICV200303314B, 2005 WL 4056740 (Mass. Super. Ct. May 6, 2005) .......ssscscsseececesesssesseresssseenssesssncescesens 21 Kesnerv. Superior Court ofAlameda County, No. $219534, 2016 WL 7010174 (Cal. Dec. 1, 2016)..............++ passim Randi W. v. Muroc Joint Unified School District, 14 Cal. 4th 1066 (1997)...ccssecccsssssssssescsssesssesssensssssssssesesssssnscssnssseseoes 5 Sindell v. Abbott Laboratories, 26 Cal. 3d 588 (1980)........csseeseseeees 3,4 Small v. Fritz Companies, 30 Cal. 4th 167 (2008) .......--seceeseressesseeseees 7,8 Webb v. Special Electric Co., 63 Cal. 4th 167 (2016)......ssssesssseseesseseneenne 4 Wyeth v. Weeks, 159 So. 3d 649 (Ala. 2014)......-sssseesesseeseesesssentennerseennes 16 STATUTES AND REGULATIONS Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No. 98-417, 98 Stat. 1585 ..cssssssssscccsssssssssseesssseesensse 11 21 U.S.C. § B55(j) vvceesssscessssssssssscsssssesccsssescceeceesennnsscesnnusesseesnsseeees 1 D1 U.S.C. § B55({(2)(A) sesesssssssssseecsssssscsssssceeeesensescernssseseusseeensseees 12 21 U.S.C. § B55(G(AVG)sasessssssssssscsessssccsssseceessnnnsseeesasessennsssesnssses 12 OL U.S.C. § BBB(D)(L) sssccccesessseesssscssssssssssssessessssssnssscssceceeeeeenssunnunsssssseeses 10 OL U.S.C. § 355(A) ssssssssssssesesssssssssssssssssssssesessssssussanssssseeeseeeeeeesusnessssseeeees 10 vi Page Statute and regulations—continued: 21 C.P.R. § 814.70...cceeeesseensesesneateneneeneneensenesescesseeesseceereseeseneneees 11,12 PL C.B.R. § 814.71 ineeessscscssssscsesnessensensenesesenscseeenseneensneenensees 11, 12, 17, 27 21 CPLR. § 814.72...ccscecscsscssssssnsseseestenscensnesonssessassseseeaseetenessenses 11, 17, 27 PL C.B.R. § 314.80...cceeesceccessseesssessseesrensseesesecsensseesseescerenensenesensesenes 11, 12 21 CLE .LR. § 814.81ccecccesccessssecseeseteseeecsenssencessnscssenecenessensenensenses 11,12 21 C.F LR. § 314.94(a)(8) oc.sccscccssssesssssesseesesesseseenecnesnscescsecesentensenssnenseaeenses 12 21 C.B.R. § 314.97.cccessssssccsesecesoescssesreesseenssceesensesacoesscssussssssenreneseaneananeaes 12 P1 CLE .LR. § 314.98...cccccsccessscccsssscsssssesessessnssascncneessenscnesaseneessenseressennenees 12 21 CLBLR. § BIAL2T(a)(T) on. .seeccscesscsesscecsseeerseeencssecenesavensssssseessennesersaeanenees 12 Ala. Code § 6-5-5380 (2016) 0.0... essssscssssessresessenrsessreceesesseeessnseseesssanensenennes 15 MISCELLANEOUS Abbreviated New Drug Application Regulations, 57 Fed. Reg. 17,950 (Apr. 28, 1992) .....-.ssesssssssersesesssesensneetenenseneees 12 Sarah C. Duncan, Note, Allocating Liabilityfor Deficient Warnings on Generic Drugs: A Prescriptionfor Change, 13 Vand. J. Ent. & Tech. L. 185 (2010)...ceeceeteeneeeteeteeeeeees 22, 23 Lars Noah, Adding Insult to Injury: Payingfor Harms Caused by a Competitor’s Copycat Product, 45 Tort Trial & Ins. Prac. L.J. 673 (Spring-Summer2010)......21, 26 Restatement (Second) of Torts § 311 (1965)«0....seeseenetseseeenees passim Restatement (Third) of Torts: Products Liability § 2(b) (1998)............ 4 Teresa Moran Schwartz, Prescription Products and the Proposed Restatement (Third), 61 Tenn. L. Rev. 1857 (1994)...eccsssessnseseeerseesscseseescssssensesssesenees 24 vii Page Miscellaneous—continued: Victor E. Schwartz et al., Warning: Shifting Liability to Manufacturers ofBrand-Name Medicines When the Harm Was Allegedly Caused by Generic Drugs Has Severe Side Effects, 81 Fordham L. Rev. 1835 (2018) ....-sssssssscesernnsernseeess passim H. William Smith III, Note, Vaccinating ALDS Vaccine Manufacturers Against Product Liability, 4? Case W.Res. L. Rev. 207 (1992).......cssessesseesescceecsrsonssensenseneaes 25 vill INTRODUCTION It is a fundamental and well-settled principle of tort law, both in California and acrossthe Nation,thatliability for harm caused by prod- ucts is limited to the persons who actually madeor sold the injurious products. That principle applies regardless of the theory ofliability upon which a plaintiff proceeds. A manufacturer thus has no duty to warn about products made and sold by a competitor, and it cannot be held liable for injuries caused by its competitor’s products when the manufacturer has madeno representations about those products. Sim- ilarly, a former manufacturer—which at one time made a product but no longer does so—cannotbeheldliable for injuries caused by products made by another. In each instance, the manufacturer neither controls the manufacture of the product that caused the injury nor has a duty (or, in many instances, even the ability) to warn consumers about the product. That longstandingprinciple of tort liability applies with equal force in the pharmaceutical industry, as courts around the country have confirmed. More than a hundred state and federal courts to have con- sidered the questions presented here have concluded that pharmaceu- tical manufacturers, like all other manufacturers, may be held liable only for harm causedbytheir own products. Thereis no reason to carve out an exception for the pharmaceutical industry and send California down the path toward eroding basic tort doctrines and disturbing set- tled expectations about the scopeof tort liability. Creating an exception to ordinarily applicable tort principles in the pharmaceutical context would lead to undesirable public-policy con- sequences. The cost of innovation would inevitably increase, and in- vestmentin developing and marketing innovative products would inev- itably decrease—harming the economy and, uniquelyin this field, pub- lic health. The Court should not tamperwith prevailing tort principles andrisk such profound problems for industrial and pharmaceutical in- novation. ARGUMENT I. FUNDAMENTAL PRINCIPLES OF TORT LAW PRE- CLUDE THE IMPOSITION OF LIABILITY ON A FOR- MER MANUFACTURER FOR HARM CAUSEDBYPROD- UCTS MANUFACTURED BY ANOTHER The American business community organizesits activities across the country in reliance on certain universally applicable rules of tort law. One ofthoseprinciples is the venerable principle that a company can be held liable only for harms caused by products it actually made or sold. That principle, and otherslike it, provide a backstop on which manufacturers and other businesses depend. No matter the theory of liability, in any jurisdiction, under any setoffacts, liability does not ex- ist unless some instrumentality connects a product, act, omission, or representation to a particular injury. No such link exists whena plain- tiff is injured by a product the defendant manufacturer did not make and about which it has not made any representations. And that goes double when a manufacturerhas left the field and has turned overre- sponsibility for manufacturing and warning about the product to an- otherentity. As this Court has explained, “as a general rule, the imposition of liability depends upon a showingby theplaintiff that his or her injuries were causedby the act of the defendant or by an instrumentality under the defendant's control.” Sindell v. Abbott Laboratories, 26 Cal. 3d 588, 597 (1980) (citations omitted). That rule, moreover, “applies whether the injury resulted from an accidental event or from the use of a defec- tive product.” Id at 597-598. “[G]eneral tort principles” do not “impose liability with respect to a defendant that did not sell, distribute, manu- facture, or otherwise have contact with theallegedly harmful product.” Schrock v. Wyeth, Inc., 727 F.3d 1278, 1284 (10th Cir. 2013). Absent the link of a common“instrumentality” leading from the defendantto the plaintiff, defendants would pay for harmsthey did not cause, breaking the essential connection that justifies imposing liability in the first place.’ 1 This Court’s recent decision in Kesner v. Superior Court ofAla- meda County, No. 8219534, 2016 WL 7010174 (Cal. Dee.1, 2016), fol- lows the same rule. There, this Court held that employers have a duty 3 The foregoing rule holds no matter the theory of liability: whethera plaintiff frames the claim in terms of fraud,strict liability, or something in between, tort law always requires a link between the plaintiffs harm and the defendant’s act or statement. As this Court noted only a few monthsago, the Third Restatement of Torts puts the question of failure-to-warn liability in straightforward terms: “the overarching inquiry” for failure-to-warn liability, regardless of the — “doctrinal categor[y]” the plaintiff pleads, is “whether ‘foreseeable risks of harm posed by the productcould have been reducedor avoided’ by warnings and the absenceof a warning rendersthe product unsafe.” Webb v. Special Electric Co., 63 Cal. 4th 167, 181 n.6 (2016) (emphasis added) (quoting Restatement(Third) of Torts: Products Liability § 2(b) (1998)). This requirement of an instrumentality, accepted in case after case throughout the country, applies with full force in California. See Sindell, 26 Cal. 3d at 597-598. Contrary to plaintiffs’ suggestion (Br. 23-26, 49-50), Section 311 of the Second Restatement of Torts does not to prevent harm whentheir employees “act as vectors carrying asbes- tos from the premises to household members.” Slip op. 2; see also id. at 9 (observing that “it was foreseeable that people who work with or around asbestos may carry asbestos fibers home with them”). In other words, this Court imposedliability precisely because the plaintiffs’ in- juries were caused by “asbestos fibers that [the defendants] used on [their] property’—an instrumentality linking the defendants’ alleged negligence with theplaintiffs’ harm. Jd. at 30. do away with the fundamental requirement of an “instrumentality ” linking the plaintiff and the defendant. To the contrary, this Court ha s applied Section 311 to hold parties liable precisely becausetheir state - ments were about the instrument that causedthe injury at issue—an d reliance on those representationsput the injured party in harm’s way . For example,in both Garcia v. Superior Court, 50 Cal. 3d 728, 736- 737 (1990), and Randi W. v. Muroc Joint Unified School District, 14 Cal. 4th 1066, 1077-1078 (1997), the defendants had made representa- tions about the future conduct of specific individuals, and those same individuals later injured others. Those individuals—the subject of the representations at issue in each case—provided the very “instrumen- tality” required under the generalprinciples of tort law to link the al- leged wrongdoers’ misrepresentationsto the plaintiffs’ harm. See Gar- cia, 50 Cal. 3d at 736. And the alleged wrongdoers could fairly be held liable for the dangers posed by their statements, because they made representations about the individuals who caused the injuries. The rea- sonable reliance of others on those representations effectively aimed dangerousindividuals at the ultimate victims and led directly to those victims’ eventual harm. See Randi W., 14 Cal. 4th at 1078.2 2 Similarly, in Hanberry v. Hearst Corp., 276 Cal. App. 2d 680 (1969), the plaintiff was injured by a product whose quality the defendant had certified. See id. at 685. In this case, plaintiffs attempt to vault over that fundamental principle of tort law by layering two unsupportable propositions on top of each other: first, that a former manufacturer can be liable for inju- ries caused by products it no longer makes but has divested to another entity, and second, that the former manufacturer can be liable for inju- ries caused not evenby its divested product but by a product made by another. Neither proposition finds any support in the law. A manufac- turer should not face liability for harm caused by a productit did not make—whether that product is one it formerly made but no longer makes, or a version ofits product that was actually made by a compet- itor. To begin with, even when a manufacturer continuesto makeits own innovative product, it should only faceliability when that product caused a plaintiff's harm. Where,as here, the plaintiff was injured by a product made by a competitor, no common instrumentality exists, and the resulting gap precludesliability. For the same reason, only the manufacturer of the product causing injury should face thepossibility of failure-to-warn liability based on inadequate or misleading warnings about the product. The innovator manufacturer never made a state- ment about “the product” that injured the plaintiff. Only the actual manufacturer’s knowledgeofrisk and actions to remediateit provide a basis for misrepresentation liability; the innovator manufacturer’s statements, made about a productthe plaintiff never used, cannot. See Small v. Fritz Companies,30 Cal. 4th 167, 173-174 (2003); Resta tement (Second) of Torts § 311(1) (1965); cf Kesner v. Superior Court ofA la- meda County, No. S219534, 2016 WL 7010174 (Cal. Dee. 1, 2016), slip op. 17 (noting that this Court’s “duty analysis looks to the time when the duty was assertedly owed”); Brown v. Superior Court, 44 Cal. 3d 1049, 1060 n.8 (1988) (agreeing with the proposition that “a manufac- turer’s knowledge should be measured at the tume a drug is distrib- uted” (emphasis added)). The gap betweenplaintiff and defendant in a case such as this one, brought against a manufacturer that had entirely left the market by the timetheplaintiffwas injured,is even larger. Here, the innovator manufacturer no longer even had control over the original product at the time of the injury. And, attenuating liability even further, the plain- tiff was not injured by the original product, now made and sold by an- other, but instead was injured by an alternative version made and sold by a competitor. No even arguable instrumentality linked the innova- tor manufacturer’s acts and statements with the plaintiffs injury. It would “stretch . . . foreseeability” far beyond that concept’s capacity if a manufacturer faced liability for harm even after another company has acquired control over, and responsibility for, the original product whose competing alternative causedtheplaintiff's injuries. Foster v. American Home Products Corp., 29 F.3d 165, 171 (4th Cir. 1994). The same reasoning applies whena plaintiff seeks to hold the original, divested manufacturerliable on a failure-to-warn theoryofli- ability. The warnings issued by a previous manufacturer provide no basis for failure-to-warn liability after that manufacturer has sold the right to make,andprofit from, that product. At the pointof divestiture, the obligation to issue adequate warnings—and liability for inadequate ones—falls on the product’s current manufacturer, “ensur[ing] that those ‘best situated’ to prevent such injuries are incentivized to do so.” Kesner,slip op. 21 (quoting Escola v. Coca Cola Bottling Co., 24 Cal. 2d 453, 462 (1944) (Traynor, J., concurring)). Nor could a plaintiff plausi- bly claim to have reasonablyrelied on any past statements of a previous manufacturer when the current manufacturer continued to produce the product and to makerepresentations aboutits features and safety. See Small, 30 Cal. 4th at 173-174; Brown, 44 Cal. 3d at 1060 n.8; Restate- ment (Second) of Torts § 311(1). The original manufacturer’s warnings were about its product, not about the product produced by the new manufacturer after divestiture—andcertainly not about that product’s competing alternatives. Courts nationwide have agreed that a former, divested manufac- turer—regardlessof industry—shouldnotbeliable for injuries caused by its former product (or competing versions thereof), on the ground that the divested manufacturer lacked the power to make changes to the product or its warningsafter divestiture. See, e.g., In re Darvocet, Darvon & Propoxyphene Products Liability Litigation, 756 F.3d 917, 940 (6th Cir. 2014); Lyman v. Pfizer, Inc., Civ. No. 09-262, 2012 WL 2970627, at *16 (D. Vt. July 20, 2012); Christian v. Minnesota Mining & Manufacturing Co., 126 F. Supp. 2d 951, 957-959 (D. Md. 2001); McConkey v. McGhan Medical Corp., 144 F. Supp. 2d 958, 963-964 (E.D. Tenn. 2000). In short, it is immaterial whethera plaintiff, injured by a prod- uct, asserts a claim arising in fraud, negligence, or strict liability. Ifthe defendant manufacturer did not produce that product or make repre- sentations about it, then it cannot be liable. Nor does the outcome changeif the plaintiff argues that he or she was harmed by the defend- ant’s statements about its own product (a product the plaintiff never used), as opposed to statements about the product that actually inflicted the plaintiff's injury. Under fundamental rules that govern tort dis- putes everywhere—rules that California law incorporates and ap- plies—only the producerorseller of a product, or the one who makes representations aboutit, should be held responsible for harm that prod- uctinflicts. Il. THEREIS NO VALID JUSTIFICATION TO CREATE AN EXCEPTION TO FUNDAMENTAL PRINCIPLES OF TORT LAW IN THE CONTEXT OF THE PHARMACEUTI- CAL INDUSTRY The foregoing basic principles of tort law apply across all indus- tries, and there is no reason to carveout an exception to those principles solely for pharmaceutical manufacturers. Courts across the Nation have overwhelmingly held that pharmaceutical manufacturers are not liable for injuries caused by their competitors’ products. In the absence of an instrumentality linking a defendant’s product or statements to the plaintiffs injuries, those courts—including every federal court of ap- peals to consider the question and state courts in more than a dozen jurisdictions—have concluded that such a defendant cannot be consid- ered to have causedthe plaintiffs injuries or to have a duty to warn against them. Contrary to plaintiffs’ contention (Br. 36), there is no “unique twist” to this case or any of the other cases presenting the same ques- tion that have been decided over the last two decades. Instead, this case requires nothing morethan a simple application of the well-estab- lished principles that govern every tort case. Under those principles, the answeris clear: a manufacturer maybe called to account only for the harmsits own products inflict, regardless of the theory ofliability on which theplaintiff's claim is based. A. By way of background, a pharmaceutical manufacturer seeking regulatory approval from the Food and Drug Administration (FDA) for a new drug must submit a new drug application (NDA), showing that the drug is safe for use, effective for its indications, and that the proposed label accurately and sufficiently describes the risks of its use. See 21 U.S.C. § 355(b)(1), (d). Once granted, an NDAbrings 10 with it certain responsibilities, including the obligation to submit annual reports demonstrating the safety, effectiveness, and appropriate label- ing of approved drugs. See 21 C.F.R.§§ 314.80, 314.81. Pharmaceutical manufacturers that hold NDAs mayalso submit supplemental applica- tions to change the label and accompanying warningsof a drug; they are required to dosoifthey learnof a risk not already adequately iden- tified. See 21 C.F.R. §§ 314.70, 314.71. A pharmaceutical manufacturer may sell an NDA to another company, transferring ownershipofthe right to make the drug as well as the attendant regulatory obligations. See 21 C.F.R. § 314.72. There- after, the new NDAholder has exclusive authority to revise the label and submit supplemental applications regarding label changes, and it has the exclusive responsibility to monitor the market and submit an- nual reports and supplemental applications to FDA. See 21 C.F.R. §§ 314.70, 314.71. Congress has also created a streamlined process for approvalof generic versions of brand-name drugs once the patent exclusivity ac- corded to new pharmaceutical products expires. See Drug Price Com- petition and Patent Term Restoration (Hatech-Waxman) Act of 1984, Pub. L. No. 98-417, 98 Stat. 1585 (codified as amended at 21 U.S.C. § 355(j)). A generic pharmaceutical manufacturer can submit an abbre- viated new drug application (ANDA), which requiresonly that the man- ufacturer show its product is “bioequivalent” to the brand-name drug. 11 See 21 U.S.C. § 355(j)(2)(A)(iv). That allows the generic manufacturer to rely on the safety and efficacy studies conducted by the original brand-name manufacturer at its own expense. See id. After ANDA approval, a generic manufactureris required to maintain a label and accompanying warnings for its product that are “the same” as those used for the brand-namedrugwith which the generic version competes. PLIVA, Inc. v. Mensing (2011), 564 U.S. 604, 618 (citing 21 U.S.C. § 355(j(2\(A)(v), 355(j)(4)(G), and 21 C.F.R. §8 314.94(a)), 314.127 (a)(7)). While generic pharmaceutical manufacturers are not authorized independently to update the labels for their products, Mensing, 564 U.S. at 613, they otherwise have similar responsibilities to those of NDAholders: they are also required to monitor the market and to sub- mit annual reports and supplementalapplications (when appropriate) to FDA. See 21 C.F.R. §§ 314.70, 314.71, 314.80, 314.81, 314.97, 314.98; Abbreviated New Drug Application Regulations, 57 Fed. Reg. 17,950, 17,961 (Apr. 28, 1992). B. Since 1996, at least 134 state and federal decisions have concluded that pharmaceutical manufacturers cannot be held liable for products made and sold by others. Those decisions rely on three basic lines of reasoning. First, general principlesof tort law impose liability on manufacturers only for injuries caused by their own products, and do not impose a duty on manufacturers to warn consumers about the 12 risks associated with other manufacturers’ products. Second, the labels and warnings issued by innovator manufacturers are representations only about the safety of their own products, not about the safety of their competitors’ products. Third, policy considerations, especially the need to promote innovation, strongly counsel against creating a special rule for pharmaceutical manufacturers for injuries resulting from their competitors’ products. The first federal court of appeals to confront this question was the Fourth Circuit, in a 1994 case on whethera plaintiff injured by tak- ing the generic version of a drug could recover for his injuries from the manufacturer of the drug’s brand-name analogue. See Foster, 29 F.3d at 168-169. The Fourth Circuit concluded that the brand-name manu- facturer could not be held liable. See id. at 169. The court reasoned that each manufacturer was responsible for preventing the consumers of its own products from being injured, and correspondingly liable only for its own products’ harms:it “stretch{ed] the concept of foreseeability too far” to require brand-name manufacturers to take responsibility for harm that befell those who neverused their products. See 2d. at 169- 171. Since Foster, six other federal courts of appeals have likewise held that brand-name pharmaceutical manufacturers should not be held liable for injuries caused by their competitors’ products. For ex- ample, the Eighth Circuit held, in an opinion reinstated after a reversal 13 on other grounds by the Supreme Court,that a plaintiff could not ade- quately show that the brand-name manufacturers “owed her a duty of care necessary to trigger liability” under Minnesota law, in part be- cause their statements about their products were representations made to “their customers,not the customersof their competitors.” Mensing v. Wyeth, Inc., 588 F.3d 608, 618 n.9, 614 (2009) (emphasis added), rev'd, 564 U.S. 604 (2011), opinion reinstated in relevant part, 658 F.3d 867 (8th Cir. 2011). The Sixth Circuit followed suit, applying Kentuckylaw to “reject the argument that a name-brand drug manufacturer owes a duty of care to individuals who have never taken the drug actually manufac- tured by that company.” Smith v. Wyeth, Inc., 657 F.3d 420, 424 (2011). Several years later, the Sixth Circuit revisited the issue in a multidis- trict litigation, examining the law of some 22 States and concluding in each case either that a manufacturer owed no duty to a plaintiff injured by a drug produced by its competitor, or that the plaintiff's suit was otherwise barred under state-specific product-liability statutes or rules. See Darvocet, 756 F.3d at 937-939, 941-954. The Fifth, Ninth, Tenth, and Eleventh Circuits have also held that a plaintiff has a claim only against the manufacturerof the product that caused the injury, no matterthe theory ofliability. See Lashley v. Pfizer, Inc., '750 F.3d 470, 476 (5th Cir. 2014) (per curiam) (concluding that, “because [a]ppellants did not ingest the brand manufacturers’ 14 products, these defendants have no common-law duty to them”); Moretti v. Wyeth, Inc., 579 Fed. Appx. 563, 565 (9th Cir. 2014) (holding that “Nevada law [does not] recognize[] a claim against the [b]rand [defendants for misrepresentation”), cert. denied, 135 S. Ct. 1398 (2015); Guarino v. Wyeth, LLC, 719 F.3d 1245, 1253 (11th Cir. 2013) (concluding that “Florida law does not recognize a [misrepresentation] claim against the brand manufacturerof a prescription drug when the plaintiff is known to have consumed only the generic form”); Schrock, 727 F.3d at 1283-1286 (noting that “[n]o authority is cited to suggest that a manufacturer may be held liable under Oklahomalaw for con- cealing a defect in a product that is never purchased or used by the plaintiff’). In all of these eases, the courts, while applying the law ofdiffer- ent States, reached the same conclusion. While there are certain vari- ations in tort law from State to State, the law of each State grows out of and incorporates certain commonprinciples. Oneof those principles is that a defendant can be held liable only for harm fairly traceable to its own acts or omissions—and,in the product-liability context, an indi- vidual manufacturer can thus be called to account only for harms caused by its own products. Courts have consistently concluded that manufacturers cannotbeheld responsiblefor failing to warn againstor 15 prevent harm caused by products they did not make, from which they did not profit, and about which they made no statements at all. C. For much the samereasons, courts have refused to disrupt settled principles of tort law in order to hold former, divested manufac- turers liable for injuries caused by products they no longer make. Whetherthe claim soundsin fraud, negligence,or strict liability, there is no plausible basis to impose a duty on manufacturers to avoid harm from products made by another. See, e.g., Darvocet, 756 F.3d at 940; Lyman, 2012 WL 2970627,at *16-17. Even the Court of Appeals’ deci- sion in Conte v. Wyeth, Inc., 168 Cal. App. 4th 89 (2008)—thesole extant state-court case finding brand-name manufacturersliable for injuries 3 Only Wyeth v. Weeks, 159 So. 3d 649, 670, 672 (Ala. 2014), threat- ened to reshape the settled understanding on the question presented here. But Weeks was promptly repudiated by the Alabamalegislature, which enacted a statutory prohibition on holding a defendantliable for harms caused by any product it had not “designed, manufactured,sold, or leased.” Ala. Code § 6-5-530(a) (2016). In any case, Weeks rested on a basic misunderstandingof the state of the law. The Alabama Supreme Court scarcely considered the vast body of law rejectingliability for brand-name manufacturers for inju- ries caused by generic products, instead considering only the Fourth Circuit’s decades-old decision in Foster. See Weeks, 159 So. 3d at 666- 670. The Alabama Supreme Court found Foster unpersuasive largely because the Fourth Circuit understood generic manufacturersto be re- sponsible for the content of their own labels. See id. at 669-670. As discussed above, however, the Fourth Circuit was ultimately correct in this regard: although generic pharmaceutical manufacturers cannot unilaterally revise the labels or warnings accompanying the drugs they sell, they remain responsible under FDA regulations to inform FDAof all adverse drug reactions and, when appropriate, to propose new or different warnings to addressthe product’s risks. See p. 11, supra. 16 caused by products other than their own—apparently assumed that such manufacturers would no longerfaceliability if they left the market andno longersold the brand-nameproductatall. See id. at 107. D. The United States Supreme Court’s decision in Mensing supports the conclusion that a former brand-name pharmaceutical manufacturer—nolongerlegally authorized to make any changes to the label or warnings accompanying the brand-name drug—cannot face li- ability for harm caused by a generic version of that drug produced by another manufacturer. In Mensing, the Supreme Court, deferring to FDA’sinterpretation, held that the governing statutes and regulations forbade a generic manufacturer from independently altering the label or warnings accompanying its product without prior approval from FDA, thus preempting the state-law duty the Mensing plaintiffs ar- gued the generic manufacturershadfailed to honor. 564 U.S. at 614- 615. The logic of that decision applies with equal force here. Under FDA’s regulations, a manufacturer that transfers its NDA to a new ownersimultaneously transfersall the rights and obligations attendant to that application, 21 C.F.R. § 314.72; no one other than a current NDA holder is permitted to revise the drug’s label or warnings unilaterally, 21 C.F.R. § 314.7124 4 On the other hand, a current application holder—whether brand- name or generic—has an ongoing responsibility to advise FDAofad- verse drug reactions and, when necessary, propose enhancedor altered labels and warningsforindividual products. See p. 11, supra. 17 In other words, a manufacturer, having sold the right to make a given drug: (1) no longer makesthat drug; (2) did not publish the warn- ings accompanying either the current brand-nameor generic product; and (3) unlike current drug manufacturers, cannot change the drug’s warnings in any way. Barred by law from taking any action that would protectit from liability when a consumer is injured by inadequate warn- ings on the generic version of the drug, the manufacturer should not face liability for failing to do what the law forbids. As the Court recog- nized in Mensing,“federal drug regulation has dealt” those injured by generic drugs an “unfortunate hand.” 564 U.S. at 625 (majority opin- ion); see also id. at 644 (Sotomayor, J., dissenting) (noting that “Tif] brand-name manufacturers . . . leave the market . . . there will be no manufacturer subject to failure-to-warnliability”). As in othersimilarly situated cases,plaintiffs here argue that, in the wake of Mensing and Wyeth v. Levine, 555 U.S. 555 (2009), the law anomalously treats brand-name and generic pharmaceutical manufac- turers differently: under Levine, consumers injured by brand-name pharmaceuticals may sue brand-name manufacturers for their harms, while under Mensing, generic manufacturers are notliable for injuries their products inflict. But the merefactofthis inconsistency infederal preemption law does not justify reshaping the accepted principles of state tort liability and discarding principles that guide the decisionmak- ing of manufacturersin all industries. “As always, Congress and the 18 FDAretain the authority to change the law and regulations if they s o desire,” and resolving inconsistencies such as this one is the prope r province of those federal actors. Mensing, 564 U.S. at 626. That is es- pecially true given that the choice of liability rule implicates “healt h care policy for the [entire] country.” Victor E. Schwartz et al., Warn- ing: Shifting Liability to Manufacturers of Brand-Name Medicines When the Harm Was Allegedly Caused by Generic Drugs Has Severe Side Effects, 81 Fordham L.Rev. 1835, 1875 (2013) (Schwartz). It would create more problems thanit would solve if longstand- ing fundamentalprinciples of tort law were modified to address poten- tially temporary anomalies in federal preemption law. That is espe- cially true because the question of whether to expandtort liability to those that did not manufacture the injury-causing product “involves policy choices . . . more appropriately within the legislative domain.” Huck v. Wyeth, Inc., 850 N.W.2d 353, 376 (lowa 2014) (internal quota- tion marks omitted), cert. denied, 135 S. Ct. 1699 (2015). And any ex- ception this Court sought to carve into fundamental tort principles, even if intended to apply only to the pharmaceutical industry, would introduce uncertainty across all industries in the calculation of what tort liability an innovator should expectto face. The Court should not accept the invitation to create a far-reaching solution to a potentially temporary problem when that solution risks significant costs to th e public and the economy by discouraging innovation. 19 Il. CREATING AN EXCEPTION TO FUNDAMENTAL PRIN- CIPLES OF TORT LAW IN THE CONTEXT OF THE PHARMACEUTICAL INDUSTRY WOULD HAVE SERI- OUS ADVERSE POLICY CONSEQUENCES Courts across the Nation have recognized that public-policy con- siderations strongly support the conclusion that fundamental principles of tort law forbid imposingliability on a manufacturer for harm caused by its competitors’ products, or on a former manufacturerafter it left the business of making the productat all. Shifting liability onto inno- vative manufacturers in any industry comesat too high a cost and risks too much. A. Theoriginal developer of a product incurs significant costs. And no matter how costly its development, a new product may never even be sold, muchless prove successful,if regulatory or market- place obstacles prove insuperable. Even if the developer manages to steer a product to the marketplace and marketit successfully, it has no guarantee that its profits will ever coverits investment. And of course, the developer must also consider, and price in, the potential cost oflia- bility to consumers for the product. The challenges a developer faces are all the moresignificant given the competition of alternatives, which can crowd theoriginal developerout of the market entirely—especially when competitors can entirely forgo the cost of development, regula- tory approval, and marketing. 20 As manycourts have recognized, those challenges are especially acute for pharmaceutical manufacturers. See Kelly v. Wyeth, No. Civ.A.MICV200303314B, 2005 WL 4056740, at *4 (Mass. Super. Ct. May6, 2005). Developing,and obtaining approval for, groundbreaking drugs can require enormousinvestment over decades. And federal law and regulations are especially solicitous towards competing generic versions. But similar problems “may arise with other types of con- sumer goods, ranging from nonprescription drugs and foods to house- hold chemicals and appliances; in other words,crossovertort litigation could occur in any market served by brand-name companies that ac- tively promote their wares but face competition from largely identical but lower-priced store brands”or other competing alternatives. Lars Noah, Adding Insult to Injury: Paying for Harms Caused by a Com- petitor’s Copycat Product, 45 Tort Trial & Ins. Prac. L.J. 6738, 694 (Spring-Summer 2010) (Noah). Whateverthechallenges of developing new products, developers have always been ableto rely on the settled understanding that their exposure to risk is limited to the products they manufacture orsell themselves. That settled understanding allows manufacturersto antic- ipate their potentialliability based on their sales; to set the price of their products at a level adequate to cover those projected costs; and to ne- gotiate with insurers to cover that projected liability. Developers de- pend on that understanding when they make decisions about how to 21 develop new products. Relying on that understanding, American in - dustry has achieved dazzling successin innovationin all fields, with ap- propriate opportunity for those injured by innovative products to re- cover from those that produced them. See Huck, 850 N.W.2dat 379- 380, And at the sametime,byplacingliability solely on the actual man- ufacturer of a product, this rule sharpens manufacturers’ incentives to ensure that their products are safe and bear adequate warnings, and underscores for consumersthata product’s manufactureris the author- itative source of warning information for that product. Shifting the cost of harm to consumers onto manufacturers whose products the consumers did not even use risks permanently dis- rupting developers’ability to plan for the future and to project the size of their risk. Developers of new products would face liability arising from product sales made not by them but by their competitors, which took advantageof the innovators’initial investmentin research, regu- latory approval, and marketing. Sucha shift would effectively force in- novators in all industries to serve as insurers for thetort liability aris- ing from all sales of their own andtheir competitors’ products, increas- ing their cost but not the costof competing alternatives—a particularly unjust result where the competitors were able to bring their product s to market without paying for development, regulatory approval, or marketing. See, e.g., Sarah C. Duncan, Note, Allocating Liability fo r 22 Deficient Warnings on Generic Drugs: A Prescriptionfor Change, 18 Vand. J. Ent. & Tech. L. 185, 215 (2010); Schwartz 1861. Noris this merely a short-term issue that would dissipate once industries have navigated the transition to a newliability rule. The as- signmentof tort liability to manufacturers for products they do not make would expose product developers to risk based on sales activity and regulatory compliance they could neither control nor monitor,in- troducing lasting, unavoidable uncertainty into the calculus of product development. A manufacturerinevitably must considertort liability to consumersof its products. But the new rule plaintiffs ask this Court to adopt here would not merely multiply the size of tort liability; it would also renderit unpredictable. Theloss of predictability in projecting risk is even costlier than the dollar value of tort judgments in favor of the class of consumers injured by competitors’ products. See Schwartz 1870. And manufacturers would also face significant planning and com- pliance costs from the need to balance this new rule, applicable only in California, with the long-settled rule that would still apply throughout the rest of the Nation. Unlike in this Court’s recent decision in Kesner, there can be no doubt that the costs posed by the newliability rule plaintiffs urge here “vould . . . impede] [manufacturers’] ability to carry out an activity with significant socialutility.” Kesner,slip op. 20. To the contrary, such a change would havesignificant negative consequences. First, the cost 23 of innovative products would necessarily rise to fund the increased scopeofliability that would follow once competing versions entered the market. That would have particularly grave consequences in the con- text of the pharmaceutical industry, where higher prices could have an effect on public health. See, e.g., Darvocet, 756 F.3d at 944, 945, 947, 948-949; Teresa Moran Schwartz, Prescription Products and the Pro- posed Restatement (Third), 61 Tenn. L. Rev. 13857, 13860 & nn.17-18 (1994) (T. Schwartz). Second, confronted with ballooning and unpredictable liability costs, manufacturers would necessarily devote fewer resources to inno- vation and release fewer innovative new products. See, e.g., Darvocet, 756 F.3d at 944, 945, 947, 948-949; T. Schwartz 1360 & nn.17-18. Man- ufacturers would have less incentive to launch new products because their profits from those products would be decreased (or wiped outal- together) by the murky and expanded scope of their tort exposure. The results of a more expansiveliability regime are highly un- predictable. Perhaps only blockbuster products, promising large and lasting profits, would prove worth the candle. Or perhaps manufactur- ers would eliminate development lines and product categories alto- gether, producing a smaller number of products in order to control their potential liability. No matter the specific strategy adopted by in- dividual manufacturers, the aggregate consequence is clear and una- voidable: consumers would see fewer new products brought to market. 24 See Schwartz 1871. For most types of products, that decli ne might simply representoverall losses to the economy. For the pharma ceuti- cal industry, however, the prospect is much more serious: public health as a whole would suffer, an “unfortunate consequence[]”of im posing excessiveliability on pharmaceutical manufacturers that this Cou rt has previously recognized. Brown,44 Cal. 3d at 1064-1065;see also H . Wil- liam Smith III, Note, Vaccinating AIDS Vaccine Manufacture rs Against Product Liability, 42 Case W. Res. L. Rev. 207, 218 & n.80 (1992) (discussing this Court’s efforts to shape the liability of pharm a- ceutical manufacturers to avoid the risk of “deter[ring] the marketi ng of new productsfor fearof ‘large adverse monetary judgments” (q uot- ing Brown, 44 Cal. 3d at 1063)). Those policy considerations have long informed the fundamental rule that tort liability can attach only where a common instrumental ity links the injured person to the alleged wrongdoer. A more expansi ve liability regime would disturb the existing equilibrium between the un - doubted need to redress injuries and the need to allocateliability in a way that maximizes innovation and overall well-being. This C ourt should not disregard those policy considerations by creating an ex cep- tion to well-settled tort principles for pharmaceutical manufacturer s. Noris there any valid reason to believe that such an exception could remain cabined to the pharmaceutical industry. As one stat e su- premecourt noted, creating such an exception would leave courts on a 25 “slippery slope.” Huck, 850 N.W.2dat 380. “If a car seat manufacture r recognized as the industry leader designed a popularcar seat, c ould it be sued for injuries sustained by a consumer using a competitor’s seat that copied the design?” Id.; see also Schwartz 1869-1870 (noting tha t “there is no principle limiting competitor liability to prescriptio n drugs”). At a minimum,a newruleoftort liability for the pharmaceu- tical industry would destabilize the assumptions made by manufactur- ers in other industries about how fartort liability can run, and prudent manufacturersin all industries would have to consider the possibility that such a rule would be applied to their products as well. B. The negative implications for public policy would simply multiply if a manufacturer could face liability for harm caused by a com- petitor’s product evenafter the manufacturer divested itself of the busi- ness of making its own product. Evenif a manufacturer could ever be held liable for injury caused by a productit did not makeorsell, that responsibility must end somewhere. Holding a former manufacture r liable in circumstances such as these reaches far beyond any sound limit. In manyindustries,it is of course commonfor manufacturers to sell product lines, brands, and entire businesses to competitors. Cf Noah 694. Andin this regard, pharmaceutical manufacturers are “n o differently situated.” Schwartz 1879. A pharmaceutical manufacture r that divests an entire product line transfers the NDA associated wit h 26 that product and, under FDAregulations, also transfersall the right s and obligations associated with that application (including thesole au - thority to alter the drug’s label or warnings). See 21 C.F.R. §§ 314.71 , 314.72. In any industry, including the pharmaceutical industry, a manu- facturerthatsells the right to maketheoriginal productcan no longer take any action that would avoid tort liability for injuries caused by products it no longer makes, muchless for injuries caused by competing versions thereof. Any recovery against that manufacturer for an injury caused by such a product would necessarily come from a defendant that did not causetheplaintiff's injury, becauseit did not create the product that injured theplaintiff. See Lyman, 2012WL 2970627, at *17° Inthe same way, imposing liability on a former manufacturer for the ade- quacy of warnings issued while that manufacturerstill had control of a product it created would be senseless after that product was sold to an- other manufacturer. Transferofthe productcarries withit the author- 5 It is true, as plaintiffs point out, that juries have the option to ap- portion damage among multiple wrongdoers. Br. 69. But where, as here, the subsequent manufacturer proved unavailable or judgment- proof, only the original manufacturer would actually be available to pay any damages a jury awarded. Under the same circumstances, a manu- facturer sued for damages caused by a productit had divested could not seek contribution or indemnification from the bankrupt or otherwis e unavailable parties to whom it had sold the right to producethe innova- tive product in question. 27 ity to change the warnings and thusthesole responsibility for any lia- bility from a failure to do so. In any case, any warnings the former manufacturer issued wereonly “about” the productsit madeitself, not about products later made by another manufacturer after divestiture. The regime plaintiffs advocate would have profound conse- quences. Expandingtort liability to former manufacturers that have left the market entirely would open the door to perpetualliability for any manufacturer that develops a product. Once on the hook for dam- ages caused by products it once made but no longer does, an innovator manufacturer would face tort liability it could never shut off. Its expo- sure to damages would multiply as long as competitors continuedto sell their own products. And the situationwould be even worse if innovators also faced failure-to-warn liability based on warnings they once issued regarding a product now made and sold by another. Meanwhile, the current manufacturer—the entity “best situated to prevent” injuries caused by its products, Kesner, slip op. 21—would face diminished incentives to maintain the accuracy and adequacy of its own product warnings, placing the public at risk. What is more, expandingtort liability to former manufacturers that have left the market entirely would create even more uncertainty and further cripple manufacturers’ability to project future exposure to risk. Innovative developers would now have to guess not merely at the size of their own liability, but also at the cost of insuring the sales of the 28 product for an unknown period into the future. Any company contem- plating investing in innovative research and development would haveto weigh the benefits of new products against enormousrisksit could nei- ther calculate nor control. This unpredictability would also affect the ability of manufacturers to arrive at meaningful valuations of their product lines and businesses as a whole, hampering their access to credit andtheirability to sell, and license, their own products and prod- uct lines. If the risk ofliability is always a disincentive to investment, such a startling relaxation of the traditionallimits on tortliability risks stopping innovationin its tracks. The dramatic changeto tort law that plaintiffs are seekingin this case threatens serious and unmistakable consequences. This Court should not adopt a rule that would disrupt the process of developing new products in any industry, muchless theprocess of developinglife- saving pharmaceuticals. 29 CONCLUSION The judgment of the Court of Appeal should be reversed. S/ Kannon K. Shanmugam KANNON K. SHANMUGAM Counsel ofRecord ALLISON JONES RUSHING CONNOR S. SULLIVAN” WILLIAMS & CONNOLLY LLP 725 Twelfth Street, N.W. Washington, DC 20005 (202) 434-5000 kshanmugam@we.com AttorneysforAmicus Curiae Chamber ofCommerceofthe United States ofAmerica DECEMBER7, 2016 ™ Admitted in New York and practicing law in the District of Columbia pending application for admission to the D.C. Bar underthe supervision of bar members pursuant to D.C. Court of Appeals Rule 49(c)(8). 30 CERTIFICATION OF WORD COUNT Pursuant to California Rule of Court 8.204(c)(1), I certify that, according to the word-count feature of the computer program used to preparethis brief, this brief contains 6,818 words, including footnotes but excluding content identified in Rule 8.520(c)(8). S/ Kannon K. Shanmugam KANNON K. SHANMUGAM DECEMBER7, 2016 DECLARATION OF SERVICE BY MAIL I, Kannon K. Shanmugam, counsel for amicus curiae, declare that I am overthe age of eighteen years and not a party to or interested party in this action. I further declare that, on December7, 2016, I caused copies of the attached Brief of Amicus Curiaeto befiled with the Clerk of the Court by placing true copies thereof in a sealed envelope with postage fully paid, for shipment via Federal Express. I further declare that I caused copies of the attached Brief of Amicus Curiae to be served by placing true copies thereof in a sealed envelope with postage fully paid, for shipmentvia first-class U.S. mail to the following: Counsel for Defendant and Respondent Eric G. Lasker Joe G. Hollingsworth Katherine R. Latimer HOLLINGSWORTH LLP 1350 I Street NW Washington, DC 20005 Erin M. Bosman Julie Y. Park MORRISON & FOERSTER LLP 12531 High Bluff Drive San Diego, CA 92130 Counsel for Plaintiffs and Appellants Benjamin I. Siminou THORSNES BARTOLOTTA MCGUIRE LLP 2550 Fifth Avenue, 11th Floor San Diego, CA 92108 Leslie A. Brueckner PUBLIC JUSTICE,P.C. 555 12th Street, Suite 1230 Oakland, CA 94607 Courtesy Copies Clerk of the Court California Court of Appeal Fourth Appellate District Division One 750 B Street, Suite 300 San Diego, CA 92101 Clerk of the Court San Diego County Superior Court 220 West Broadway San Diego, CA 92101 ATTN: Hon. Joan M. Lewis I declare underpenalty of perjury that the foregoing is true and correct. Executed at Washington, DC, December 7, 2016. “KANNON K. SHANMUGAM DECEMBER7,2016 fies ee,