ATRA Brief Urges Mass. Supreme Judicial Court to Reject Theory of Innovator Liability

Press Releases | August 28, 2017

WASHINGTON, D.C., August 28, 2017 —The American Tort Reform Association (ATRA), along with the National Association of Manufacturers (NAM) and the Pharmaceutical Research and Manufacturers of America (PhRMA) on Friday filed an amicus brief in the Massachusetts case of Rafferty vs. Merck. The brief urges the Massachusetts Supreme Judicial Court to affirm the trial court’s decision rejecting the theory of innovator liability, as it is inconsistent with Massachusetts social policy in two important respects.

First, by subjecting the companies engaged in innovation to liability that bears no relation to their products or revenues (and that instead follows directly from the measure by which their revenues are reduced by their generic competitors), this liability theory, which has been widely rejected, would substantially deter businesses from investing in new research and development, which is essential to creating new products. Massachusetts, which is home to many such businesses, would be less able to attract new businesses to locate there and runs the risk of driving existing firms away. Second, no notion of basic fairness tolerates requiring a product manufacturer to serve as an insurer for injuries caused by its generic competitors’ products.

“In this case, the liability issue is critical, since it would unfairly subject brand-name companies to unpredictable and potentially immense liability, stifling innovation and undermining public health,” said ATRA president Tiger Joyce. “Brand-name companies do not owe a duty to users of generic medicines,” added Joyce.

“At least 35 different courts, including six federal courts and various state courts have rejected innovator liability, recognizing that it would disrupt the innovators’ ability to invest further in innovation which could lead to more life-saving drugs,” said Joyce. “It is our hope that the court recognizes that innovator liability is fundamentally unfair and inconsistent with Massachusetts tort principles.”

ATRA’s brief can be found here.

The American Tort Reform Association, based in Washington, D.C., is the only national organization dedicated exclusively to tort and liability reform through public education and the enactment of legislation. Its members include nonprofit organizations and small and large companies, as well as trade, business and professional associations from the state and national level. The American Tort Reform Foundation is a sister organization dedicated primarily to research and public education.

-ATRA-