Doe v. Cutter Biological, Inc.
92 Cal. Daily Op. Serv. 6559, 971 F.2d 375, 92 Daily Journal DAR 10504 (1992)
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Rule of Law:
When a plaintiff is injured by a fungible product but cannot identify the specific manufacturer, Hawaii law permits recovery under a market share liability theory, where each manufacturer is held severally liable for a percentage of the plaintiff's damages corresponding to its national market share.
Facts:
- John Doe and John Smith, both hemophiliacs, received a blood clotting agent known as Factor VIII at Tripler Army Medical Center (TAMC).
- Factor VIII was manufactured and sold in the United States by four companies: Alpha Therapeutic Corporation, Cutter Biological, Armour Pharmaceutical Company, and Baxter Hyland Healthcare Corporation.
- Both Doe and Smith later tested positive for HIV.
- They alleged they were infected with HIV from contaminated Factor VIII sometime during 1983.
- Neither Doe nor Smith could identify which of the four manufacturers supplied the specific infected clotting agent they received.
Procedural Posture:
- John Doe and John Smith filed separate negligence and strict liability suits in Hawaii state court against four Factor VIII manufacturers and the United States.
- The defendants removed the cases to the U.S. District Court for the District of Hawaii.
- The district court granted summary judgment in favor of all defendants in both cases, holding that the plaintiffs' inability to identify the specific manufacturer barred their claims.
- Doe and Smith, as appellants, appealed the summary judgment rulings to the U.S. Court of Appeals for the Ninth Circuit.
- The Ninth Circuit certified three questions of state law to the Hawaii Supreme Court regarding the applicability of Hawaii's Blood Shield Law and the availability of a theory of recovery against unidentifiable tortfeasors.
- The Hawaii Supreme Court answered the certified questions, holding that the Blood Shield Law bars strict liability but not negligence, and that Hawaii would adopt a market share theory of liability for this case.
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Issue:
Under Hawaii law, may a plaintiff recover damages from manufacturers of a fungible product that caused their injury when the plaintiff cannot identify the specific manufacturer that produced the harmful product?
Opinions:
Majority - D.W. Nelson, Circuit Judge
Yes. A plaintiff may recover damages from manufacturers of a fungible product even when the specific tortfeasor cannot be identified. Following the Hawaii Supreme Court's answers to certified questions, this court adopted a modified market share theory of liability. Under this theory, each manufacturer is liable for a percentage of the plaintiff's damages that corresponds to its share of the national market for the product. The court reversed the summary judgment because genuine issues of material fact existed regarding the date of the plaintiffs' infections and what the medical community and manufacturers knew about the risk of AIDS transmission through blood products at the time. The district court also erred by relying on the factual findings of another court in a different case and by improperly excluding the plaintiffs' expert testimony.
Analysis:
This decision is significant for adopting the market share liability doctrine in Hawaii for cases involving fungible goods, providing a path to recovery for plaintiffs who otherwise would be barred by an inability to prove specific causation. It prevents manufacturers of potentially harmful, indistinguishable products from collectively evading liability. Furthermore, the court's rejection of industry custom as a dispositive defense to negligence, particularly in a highly concentrated industry, reinforces the principle that the ultimate standard is one of reasonable prudence, not merely what industry actors agree upon among themselves.
