product liability

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With Hollywood celebrities speaking out both in favor of and against the use of drugs like Ozempic and Wegovy for weight loss, it was only a matter of time before demand outpaced supply. Although most might believe that increased demand is a good problem to have, a recent case involving Ozempic shows that pharmaceutical companies with popular drugs might face increased competition, without the ability to obtain legal remedies against their competitors.

In two prior blog posts, we covered how online marketplaces, like Amazon, are being held responsible for defective and counterfeit products sold on their platforms.  In the latest development in this space, California’s Court of Appeal (Second Appellate District) determined that Amazon could be held strictly liable for injuries a consumer suffered from a defective hoverboard she bought from the retailer, even though Amazon neither manufactured nor sold the product.  Loomis v. Amazon.com LLC.

When a pharmaceutical company withdraws a product from the market, the basis for the withdrawal can affect whether a competitor can commercialize a generic version of that product. A generic cannot be approved if, in the FDA’s view, the product was withdrawn for “safety and effectiveness” reasons.

But how does the FDA reach that conclusion? A newly filed case may shed some light on the Agency’s decision-making process.

Consider a hypothetical person named Jane, who bought a chair twenty years ago. The chair was designed to help relieve back pain, but it actually made it worse. Because Jane was trying many different remedies, she did not associate the chair with the new pain. Additionally, the problems with the chair were not discovered for many years, when a newspaper reported that the company had known this was a possibility. However, Jane had stopped using the chair after just a couple months, when she underwent a medical procedure that relieved her pain. Jane wants to bring a products liability claim for personal injury and negligent design, but are her claims time-barred? The answer may depend on the state in which Jane brings the action.

In a recent post, we summarized recent developments in litigation and legislative activity concerning whether online marketplaces may be directly liable for the sale of defective and counterfeit products on their platforms. Now the executive branch has weighed in, with President Trump issuing (on Prime Day, no less) a Memorandum on Stopping Counterfeit Trafficking on E-Commerce Platforms Through Fines and Civil Penalties.

Consumers are doing more and more shopping online. But when a consumer buys a product that is defective or counterfeit, are online marketplaces liable for misconduct by third-party sellers?

E-commerce platforms have generally avoided being treated like their brick-and-mortar counterparts by arguing that they do not actually “sell” goods, but rather provide services (e.g., payment processing, storage, shipping) to third-party sellers, who in turn sell products to consumers. However, recent court decisions and looming legislation may change this dynamic, opening up online marketplaces to product liability and intellectual property claims for products sold by third-parties on their platforms.

In July 2020, the Pennsylvania Supreme Court agreed to tackle the thorny question of whether Amazon can be held liable for defective products sold by third parties on its website. The Third Circuit offered up the case in June after hearing arguments in February and concluding that it was “unable to predict based on existing case law, if and how the Pennsylvania Supreme Court would apply [the law] to e-commerce businesses like Amazon.” The Pennsylvania Supreme Court agreed to address this matter of first impression and decide whether Amazon faces strict liability for products purchased from third-party vendors when the product “was neither possessed nor owned by” Amazon.