In Re Des Litigation

7 F.3d 20 (2d Cir. 1993)

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Nature of the Case

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Facts

Pharmaceutical companies produced an estrogen drug called DES. It was used to prevent miscarriage. Eventually, it was discovered that DES caused cancer in women whose mothers had taken the drug. The drug was used from 1941 to 1971 until it was banned. The women who were injured were unable to determine which of the many manufacturers has produced the drug they ingested. This led to the creation of the market share theory of liability under Sindell v. Abbott. The Court held that a plaintiff could recover by showing that her injuries had been caused by DES and by joining as defendants 'the manufacturers of a substantial share of the DES which her mother might have taken.' Each manufacturer would 'be held liable for the proportion of the judgment represented by its share of [the] market unless it demonstrates that it could not have made the product which caused plaintiff's injuries.' New York adopted the market share theory of liability with one exception; “because liability is based on the over-all risk produced, and not causation in a single case, there should be no exculpation of a defendant who, although a member of the market producing DES for pregnancy use, appears not to have caused a particular plaintiff's injury. It is merely a windfall for a producer to escape liability solely because it manufactured a more identifiable pill, or sold only to certain drugstores. These fortuities in no way diminish the culpability of a defendant for marketing the product, which is the basis of liability here.” Ps filed a DES in New York. The sole appellant, Boehringer (D), is a Delaware corporation authorized to do business in New York. D never sold or manufactured DES, but it is the successor to Stayner Corporation, which manufactured limited amounts of DES in Berkeley, California, between 1949 and 1971. Stayner sold products in California, Washington, Oregon, and Montana. It never marketed any products in New York, was not licensed to do business in New York, and had no significant contacts with New York. Their annual revenue from DES was about $5,000. D moved to dismiss for failure to state a claim and for lack of personal jurisdiction. It was denied. Ps settled with the other 32 manufacturers and declined to prosecute D. The suit was eventually dismissed for failure to prosecute. D appealed.