preparing for future health litigation: the application of products liability law to nanotechnology...

Preparing for Future

Health Litigation:The Application of Products Liability

Law to Nanotechnology

John C. Monica, Jr.Patrick T. Lewis

Porter Wright Morris & Arthur

International Congress of NanotechnologySan Francisco, California

November 3, 2005

Tort Claims

• Strict Liability

• Negligence

• Intentional Torts

Why Products LiabilityIs Important to Your Business

• Trial lawyers are a real threat to your bottom line:– Lawsuits cost the American economy $300

billion per year.– When it comes to products liability law, your

best intentions do not matter.

The Asbestos Analogy

• Asbestos has been described as one of the great debacles in American litigation history

• The Rand Institute estimated in 2002 that 730,000 people filed asbestos claims, naming 8,400 defendants, at a total cost of $70 billion

• Dozens of “innocent” companies were bankrupted due to the costs of the litigation

Asbestos Litigation: From a $1 Billion to $70 Billion Business

• What made asbestos litigation so big? Three main factors:– The alleged discovery of “smoking gun memos”

drafted by asbestos industry executives that suggested manufacturers knew that asbestos was dangerous and hid that knowledge from the public.

– The huge pool of potential claimants – The long latency period between asbestos exposure

and the onset of alleged asbestos-related disease• In 1982, asbestos litigation cost $1 billion.• By 2002, the litigation costs had exceeded $70

billion, and continues to rise.

Nanotechnology: The Next Asbestos?

• Unions and trial lawyers have already begun the drumbeat over health implications of nanotechnology:– “There have been plenty of red flags, but the

dollar signs have blotted out the warning signs.”

– “We might not know [if] nanotech will make you sick, but industry knows it can certainly make you rich.”

– “Nanotechnology could be the new asbestos.”

What is Products Liability Law?

• Products liability law governs when, and how much, a manufacturer or supplier of a product must pay to someone injured by that product.

• Products liability is a function of state, not federal, law, and so the rules vary state to state.

The Three Main Products Claims

• There are three major kinds of products liability claims– Defective Design– Failure to Warn– Defective Manufacture

• Punitive damages can be awarded to plaintiffs under some circumstances

Defective Design

• A defective design is one that is unreasonably dangerous “the foreseeable risks of harm posed by the

product could have been reduced or avoided by the adoption of a reasonable alternative design …, and the omission of the alternative design renders the product not reasonably safe.”

Reasonable Alternative Design

• Risk-Utility Test– A simple cost-benefit analysis: do the benefits

outweigh the risks of a given design?– Is there a safer, practical, alternative design for the

product?

• What’s a “reasonable alternative design?”– An alternative design is “reasonable” if it is both

safer and practical. – It must have been available to the manufacturer at

the time the product was manufactured.

What is a “Failure to Warn?”

• A product is defective because of inadequate instructions or warnings when: “the foreseeable risks of harm posed by the

product could have been reduced or avoided by the provision of reasonable instructions warnings by the seller or other distributor, or a predecessor in the commercial chain of distribution, and the omission of the instructions or warnings renders the product not reasonably safe.”

What Do Manufacturers Need to Warn About?

• Any product has an almost infinite number of risks associated with it, but nobody can warn about all of them.

• The law expects warnings to be provided for all inherent risks that reasonably foreseeable

product users and consumers would reasonably deem material or significant in deciding whether to use or consume the product.

What Risks Do Not Need To Be Warned About

• Generally, a manufacturer need not warn about:– Very small or inconsequential risks that a

reasonable customer would not deem material to his or her decision to use the product

– Obvious and generally known risks

A Tale of Two Ladders• An example of what is and is not a risk that a

manufacturer need warn about:– A man falls off a ladder because he places the ladder

in front of a door, and someone opens the door• No warning needed – risk is obvious

– A man falls off a ladder because he failed to fully “lock” both crossbars before climbing it

• Warning is needed– not obvious; and – material to a person’s decision to use the ladder w/o locking the

crossbars.

A DUTY TO RESEARCH MAY ACCOMPANY A DUTY TO WARN

“Dangers that a seller ‘should know’ include those that are reasonably foreseeable or scientifically discoverable at the time the product is sold. . . . A manufacturer also has a duty to instruct users on the safe use of its product. . . . In this regard, a manufacturer is held to the knowledge and skill of an expert. . . . This means that it must not only keep abreast of scientific knowledge, discoveries, and advances, but, more importantly, test and inspect its product. . . . This duty to research and experiment is commensurate with the dangers involved. . . . A manufacturer may not rely unquestioningly on others to raise concerns about its product, but must instead show that its own conduct was proportionate to the scope of its duty.”

Wood v. Phillips Petroleum Co., 199 S.W.3d 870, 873 (Tex. App. 2003)

Defect in Manufacture

• The most straightforward of the products liability claims.

• A product is defective in manufacture when the product departs from its intended design

even though all possible care was exercised in the preparation and marketing of the product.

Important Strict Liability Considerations

• A manufacturer is always liable for a defectively manufactured product.

• It does not matter– How good the manufacturer’s quality control

and assurance processes are, or– The complexity of the product being

manufactured

What Can Nanotechnology Companies do to Reduce Their Risk?• Evaluate the risk of products liability

throughout the entire product life cycle.– Design:

• Is there a safer design that is not much more expensive to produce?

• If not, can we reduce the risk of danger by warning customers about it?

– Manufacture:• Keep an eye on the quality assurance process.• Pay attention to product returns and adverse events

involving the product to see if a pattern is forming

What Can Nanotechnology Companies do to Reduce Their Risk?• An example: Nano-scale materials in

medical implants– The design: use nano-scale materials instead

of titanium in human hip implants to increase strength and durability.

– Defects?• What if the implant releases particles into the

surrounding tissue from ordinary wear & tear? The effect those loose nanomaterials might have will be the subject of lawsuits.

What Can Nanotechnology Companies do to Reduce Their Risk?

– Defects, cont.• What if the released nanomaterials move into the

bloodstream and breach the brain-blood barrier?

– Manufacturers are responsible for understanding how their products work, and are responsible for warning users about dangers they cannot abate with an alternative design.


– What can a manufacturer do?• Use unbiased, internal and external scientists to

research these issues.• Stay connected to the scientific community at large

to learn of new research that might impact your products.

• Remember: Keep products liability considerations in mind throughout the life cycle of the product, not just at the beginning or end.

ETC Group “Biggest, Reddest Flags”

1 1997 – Titanium dioxide/zinc oxide nanoparticles from sunscreen are found to cause free radicals in skin cells, damaging DNA. (Oxford University and Montreal University) Dunford, Salinaro et al.

2 March 2002 – Researchers from the Center for Biological and Environmental Nanotechnology (CBEN, Rice University, Houston) report to US EPA that engineered nanoparticles accumulate in the organs of lab animals and are taken up by cells. "We know that nanomaterials have been taken up by cells. That sets off alarms. If bacteria can take them up then we have an entry point for nanomaterials into the food chain." – Dr. Mark Wiesner

3 March 2003 – Researchers from NASA/Johnson Space Center report that studies on effects of nanotubes on the lungs of rats produced more toxic response than quartz dust. Scientists from DuPont Haskell laboratory present varying but still worrying findings on nanotube toxicity. "The message is clear. People should take precautions. Nanotubes can be highly toxic." – Dr. Robert Hunter (NASA researcher)


4 March 2003 – ETC group publishes first scientific literature survey on nanoparticle toxicity by toxicopathologist Vyvyan Howard. Dr. Howard concludes that the smaller the particle, the higher its likely toxicity and that nanoparticles have various routes into the body and across membranes such as the blood brain barrier. "Full hazard assessments should be performed to establish the safety of species of particle before manufacturing is licensed. We are dealing with a potentially hazardous process." – Dr. Vyvyan Howard

5 July 2003 – Nature reports on work by CBEN scientist Mason Tomson that shows buckyballs can travel unhindered through the soil. "Unpublished studies by the team show that the nanoparticles could easily be absorbed by earthworms, possibly allowing them to move up the food-chain and reach humans" – Dr. Vicki Colvin, the Center’s director

6 January 2004 – Research by Dr. Günter Oberdörster is published showing that nanoparticles are able to move easily from the nasal passageway to the brain. "The nanotechnology revolution may design particles that are very different chemically from the ones we are exposed to, and they might have very different properties that made them more harmful. We should be vigilant." – Professor Ken Donaldson, University of Edinburgh.

7 January 2004 – Nanosafety researchers from University of Leuven, Belgium, write in Nature that nanoparticles will require new toxicity tests: "We consider that producers of nanomaterials have a duty to provide relevant toxicity test results for any new material, according to prevailing international guidelines on risk assessment. Even some 'old' chemical agents may need to be reassessed if their physical state is substantially different from that which existed when they were assessed initially."– Peter H. M. Hoet, Abderrrahim Nemmar and Benoit Nemery, University of Belgium.

8 January 2004 – At the first scientific conference on nanotoxicity, Nanotox 2004, Dr. Vyvyan Howard presents initial findings that gold nanoparticles can move across the placenta from mother to fetus.

9 February 2004 – Scientists at University of California, San Diego discover that cadmium selenide nanoparticles (quantum dots) can break down in the human body potentially causing cadmium poisoning. "This is probably something the [research] community doesn't want to hear." – Mike Sailor, UC San Diego.


10 March 2004 – Dr. Eva Oberdörster reports to American Chemical Society meeting that buckyballs cause brain damage in juvenile fish along with changes in gene function. They also are toxic to small crustaceans (water fleas). "Given the rapid onset of brain damage, it is important to further test and assess the risks and benefits of this new technology before use becomes even more widespread." – Dr. Eva Oberdörster.



• Watch What is Said in Memos– Carelessly-worded internal memoranda have cost

various industries billions of dollars– If there is a safety risk in a product under

development, it should be documented and studied fairly and thoroughly.

– Employees should be counseled to avoid using speculation or hyperbole when describing risks. Trial lawyers love over-the-top “smoking gun” memos, even if they are “junk science” or are later proven wrong. They also love to twist valid science.

EXAMPLE – SCIENTIFIC STUDY

Researcher Eva Oberdoerster published the following article in the July 2004 edition of Environmental Health Perspectives:

Nano's Troubled Waters: Latest toxic warning shows nanoparticles cause brain damage in aquatic species and highlights need for a moratorium on the release of new nanomaterials

ETC Group GenotypeThursday, 1 April 2004www.etcgroup.org

How many warnings do government regulators require before they take action to ensure that uses of nanoparticles are safe before workers in production facilities are harmed and before consumers are further exposed?

At the American Chemical Society’s national meeting last week in Anaheim, California, environmental toxicologist Dr. Eva Oberdörster described what happened when she exposed nine largemouth bass to water containing buckyballs at concentrations of 500 parts per billion. (The concentration level is comparable to pollutant levels commonly found in port waters.)

After only 48 hours, the researchers found "severe" damage to brain tissue in the form of "lipid peroxidation," a condition leading to the destruction of cell membranes, which has been linked, in humans, to illnesses such as Alzheimer’s disease. Researchers also found chemical markers in the liver indicating inflammation, which suggested a full-body response to the buckyball exposure.(2)

Nanotechnology: Looking As We Leap

Environmental Health PerspectivesVol. 112, No. 13, Sept. 2004

Ernie Hood

Eva Oberdšrster . . . describes herself as "shocked“ at the amount of mainstream national press coverage the study has received. She is quick to stress that although some reports have described "brain damage" or even "severe brain damage" in the fish, she has actually characterized her findings as "significant damage in the brain, which is very different from brain damage." After 48 hours' exposure to fairly high doses of fullerenes, the fish probably had the same effect as a very bad headache, she says, but they did survive the exposure. As to the inflammation, Oberdšrster says it could have been an appropriate response to a foreign stressor or a symptom of real physiologic damage.

What Can Nanotechnology Companies do to Reduce Their Risk?• Employ a consistent document retention

policy– Trial lawyers are sensitive to even the slightest

hint that corporations are improperly destroying documents that may be evidence.

– Remember that documents include internal memos, drafts, e-mails, data from scientific studies, etc.

– Consistency in application is key: the policy must be rigidly adhered to!

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