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CRAIG FOSTER; KAREN FOSTER, as parents and next friends, Guardians and/or
Administrators of the Estate of Brandy Foster, Plaintiffs-Appellants, v. AMERICAN
HOME PRODUCTS CORPORATION, Defendant-Appellee, and
BARRE-NATIONAL CORPORATION, Defendant. CRAIG FOSTER; KAREN
FOSTER, as parents and next friends, Guardians and/or Administrators of the
Estate of Brandy Foster, Plaintiffs-Appellees, v. AMERICAN HOME PRODUCTS
CORPORATION, Defendant-Appellant, and BARRE-NATIONAL
CORPORATION, Defendant.
No. 93-1627, No. 93-1664
UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT
29 F.3d 165; 1994 U.S. App. LEXIS 17232; CCH Prod. Liab. Rep. P14,041
March 7, 1994, Argued
July 14, 1994, Decided
PRIOR HISTORY:
States District Court for the District of Maryland, atBaltimore. M. J. Garbis, District Judge. (CA-91-2996).
[*166] OPINION
DISPOSITION:
American Home Products Corporation/Wyeth-Ayerst ("Wyeth") is a prescription drug manufacturer. Craig and COUNSEL: Argued: Richard L. Duncan, GILREATH &
Karen Foster brought suit against Wyeth when their ASSOCIATES, Knoxville, Tennessee, for Appellants.
daughter Brandy died after being given the generic equivalent of one of Wyeth's brand name prescription drugs. The district court granted summary judgment for Wyeth [*167] as to the Fosters' products liability countsbecause Wyeth did not manufacture the drug Brandy was On Brief: Karl J. Nelson, WHITEFORD, TAYLOR & given, but it allowed the Fosters to proceed on a negligent PRESTON, Towson, Maryland, for Appellee.
misrepresentation theory. It later granted Wyeth summaryjudgment on the negligent misrepresentation [**2] claim JUDGES: Before NIEMEYER and HAMILTON, Circuit
on the ground that the Fosters failed to show reliance.
Judges, and CHAPMAN, Senior Circuit Judge. SeniorJudge Chapman wrote the opinion, in which Judge This appeal presents two issues: whether the district court correctly held that a manufacturer of a brand nameprescription drug may be held liable on a negligent OPINION BY: CHAPMAN
misrepresentation theory for a death caused by anothercompany's generically equivalent drug; and, if so, whether the district court correctly dismissed the Fosters' 29 F.3d 165, *167; 1994 U.S. App. LEXIS 17232, **2; claim for failure to show reliance. We hold that a name misrepresentation, and the district court agreed. 1 The brand manufacturer cannot be held liable on a negligent district court then granted Wyeth summary judgment on misrepresentation theory for injuries resulting from use of the negligence, strict liability and breach of warranty another manufacturer's product, and therefore do not promethazine at issue, however, it allowed the negligentmisrepresentation claim to stand. The district court stated that it was assuming for summary judgment purposes thatWyeth was promoting the use of promethazine in general, Phenergan is a brand name prescription drug as opposed to only its own product, Phenergan. It further manufactured and sold by Wyeth. On August 28, 1988 Dr. Martin Berger prescribed Phenergan Syrup Plain forinfant twins Brandy and Bradley Foster, who were Promethazine Syrup Plain, a generic equivalent of Phenergan manufactured and sold by My-K Laboratories, Inc. The active ingredient in both Phenergan Syrup Plain for Brandy Foster, then Wyeth may beliable for any harm caused to Brandy as a promethazine several times over the next few days, [**3] last on the night of September 10, 1988. The following morning, six-week-old Brandy was found dead in hercrib. The autopsy report attributed Brandy's death to Sudden Infant Death Syndrome ("SIDS"). A pediatrician misrepresentation claim to be distinct from the Fosters' from the Maryland SIDS Center at the University of products liability claims and therefore unaffected by the Maryland opined that Brandy's death was caused by the fact that [**5] Wyeth did not manufacture the product The Fosters brought suit in state court against Wyeth Although we have some question whether the and Barre-National Corporation. At that time the Fosters Fosters' complaint actually alleged negligent thought Barre-National had manufactured the generic misrepresentation, as there was no such count and promethazine Brandy was given. Wyeth removed the case to federal court on grounds of diversity of "negligent misrepresentation," we address this citizenship, and the district court granted Barre-National appeal on the assumption that it did because the summary judgment when it was determined that My-K Laboratories manufactured the generic promethazineBrandy took. The Fosters then brought suit against Wyeth then filed a motion for summary judgment on My-K, but agreed to a dismissal with prejudice for the negligent misrepresentation claim, arguing that the Fosters had not shown reasonable reliance. With itsmotion Wyeth filed an affidavit signed by Dr. Berger The Fosters' complaint against Wyeth contained four stating that he prescribed Phenergan for Brandy based counts: Negligence -- Wrongful Death, Negligence -- only on his own experience with the drug and did not rely Survivorship, Strict Liability, and Breach of Warranty.
on any representations made by Wyeth. The district court Wyeth moved for summary judgment on all counts, granted Wyeth's motion for summary judgment on the arguing that it could not be liable for Brandy's death ground that the Fosters had not shown that Dr. Berger because it did not manufacture the promethazine [**4] relied on representations made by Wyeth in his decision to prescribe Phenergan for Brandy and Bradley.
At the summary judgment hearing, the Fosters The Fosters now appeal the district court's dismissal argued that their complaint also sounded in negligent 29 F.3d 165, *168; 1994 U.S. App. LEXIS 17232, **5; of their negligent [**6] misrepresentation claim, and to being held liable for such injury.
determination that Wyeth could be held liable on a negligent misrepresentation theory for injuries caused by The Fosters insist, however, that the fact that Wyeth did not manufacture the promethazine should not shield Wyeth from an action for negligent misrepresentation.
This argument, as well as the district court's assumption We review the district court's decision granting summary judgment de novo. Moore v. Winebrenner, 927 F.2d 1312, 1313 (4th Cir.), cert. denied, 112. S. Ct. 97 products, appears to stem from certain practices of the generic drug industry and from the federal regulatoryscheme governing generic drug manufacturing and sales, Although there is no recognized cause of action The following description oversimplifies the federal statutory and regulatory scheme for drug manufacturer for injuries stemming from use of another premarketing approval, but is sufficient for manufacturer's product, the district court allowed the Fosters' negligent misrepresentation action to proceedbecause he viewed it as distinct from the Fosters' [*169] The Food, Drug and Cosmetics Act requires products liability claims. We are unable to see any that manufacturers obtain regulatory approval for drugs validity in this distinction. Although actions for negligent prior to marketing them. 21 U.S.C.A. § 355(a) (West misrepresentation arise in many contexts other than [**9] Supp. 1994). For drugs that have never before been products liability, in this case the allegations of negligent marketed, the approval process requires submission of a misrepresentation are an effort to recover for injuries new drug application ("NDA"), which in turn mandates caused by a product without meeting the requirements the costly and time-consuming studies of the drug's safety law imposes in products liability actions. Maryland law and effectiveness. See 21 U.S.C.A. § 355(b)(1) (West requires a plaintiff seeking to recover for an injury by a Supp. 1994). As a result of the Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No.
manufactured the product at issue. See Tidler v. Eli Lilly 98-417, 98 Stat. 1585, generic drugs can now gain & Co., 271 U.S. App. D.C. 163, 851 F.2d 418, 424 approval pursuant to an abbreviated new drug application (D.C.Cir. 1988) (federal court applying Maryland law ("ANDA"), which permits the applicant to provide data refused to adopt non-identification theories of product demonstrating that the generic drug is the same as a liability because such theories had not been recognized previously approved drug in terms of its suggested usage, by Maryland courts); Lohrmann v. Pittsburgh Corning active ingredients, method of administration, dosage, Corp., 782 F.2d 1156, 1163-64 (4th Cir. 1986) (verdict in strength, and bioequivalence 3 in lieu of the studies favor of asbestos manufacturers affirmed when plaintiff necessary for an initial NDA. 21 U.S.C.A. § 355(j)(2)(A) did not demonstrate exposure to defendants' products); (West Supp. 1994). Thus, a manufacturer is not required Jensen v. American Motors Corp., 50 Md. App. 226, 437 to perform safety and effectiveness studies if it can prove A.2d 242, 247 (Md. Ct. Spec. App. 1981) ("Regardless of its drug is equivalent to a previously approved drug for the recovery theory, the plaintiff in product litigation which such testing has already been performed. The must satisfy three basics from an evidentiary standpoint: generic manufacturer must use the same labeling as the (1)the existence of a defect; (2)the attribution of the defect to the seller; and (3)a causal relation between the U.S.C.A. § 355(j)(2)(A)(v) (West Supp. 1994). However, defect and the injury."). The Fosters are attempting to manufacturers of generic drugs approved pursuant to hold Wyeth liable for injuries caused by another ADNAs may alter a drug's labeling "to add or strengthen manufacturer's product, and we are persuaded that the a contraindication, warning, precaution or adverse Maryland courts would reject this effort to [**8] reaction" or "to delete false, misleading or unsupported circumvent the necessity that a defendant be shown to indications for use or claims for effectiveness" without have manufactured the product that caused an injury prior prior FDA approval. 21 C.F.R. §§ 314.70(c)(2), 314.97 29 F.3d 165, *169; 1994 U.S. App. LEXIS 17232, **10; We do not accept the assertion that a generic misrepresentations on its product labels if it did not significant difference between the rate and extent initially formulate the warnings and representations itself.
of absorption of two drugs with the same active When a generic manufacturer adopts a name brand ingredients administered at the same molar dose manufacturer's warnings and representations without under similar experimental conditions, or when a independent investigation, it does so at the risk that such difference in the extent of absorption in such warnings and representations may be flawed. In cases circumstances is not medically significant and involving products alleged to be defective due to certain other requirements are met. 21 U.S.C.A. § inadequate [*170] warnings, "the manufacturer is held 355(j)(7)(B) (West Supp. 1994).
to the knowledge and skill of an expert . . . . Themanufacturer's status as expert means that at a minimum For economic reasons, generic manufacturers accept without question the studies performed by name brand discoveries, and advances and is presumed to know what manufacturers and simply copy verbatim the [**11] is [**13] imparted thereby." Owens-Illinois v. Zenobia, name brand drugs' package circulars. Although generic 325 Md. 420, 601 A.2d 633, 639 (Md. 1992) (quoting manufacturers do not advertise, they still are able to Borel v. Fibreboard Paper Prods. Corp., 493 F.2d 1076, generate sales, as pharmacists often substitute generic 1098 (5th Cir. 1973), cert. denied, 419 U.S. 869, 42 L. drugs for name brand prescriptions because the generics Ed. 2d 107, 95 S. Ct. 127 (1974)). The same principle cost less. Unless a physician affirmatively indicates that a applies in the instant case; as an expert, a manufacturer of prescription is to be dispensed as written, the pharmacist generic products is responsible for the accuracy of labels may substitute a lower priced generic equivalent for the placed on its products. Although generic manufacturers name brand drug actually prescribed. Md. Heath Occ.
must include the same labeling information as the Code Ann. § 12-508 (Michie Supp. 1993).
equivalent name brand drug, they are also permitted toadd or strengthen warnings and delete misleading The Fosters argue that because generic drugs are statements on labels, even without prior FDA approval.
required by federal law to be equivalent to their name 21 C.F.R. § 314.70 (1993). The statutory scheme brand counterparts, any representations Wyeth makes governing premarketing approval for drugs simply does when advertising Phenergan also apply to generic not evidence Congressional intent to insulate generic promethazine, and name brand manufacturers, such as drug manufacturers from liability for misrepresentations Wyeth, know that generic manufacturers rely on their made regarding their products, or to otherwise alter state studies and duplicate their labeling, and that if the name products liability law. Manufacturers of generic drugs, brand manufacturer does not issue a warning, it will like all other manufacturers, are responsible for the simply not be made. Wyeth is also aware that when Phenergan is prescribed, the patient may actually receive We also reject the contention that a name brand The Fosters make two assertions regarding this manufacturer's statements regarding its drug can serve as scenario. First, a plaintiff will be unable to recover from the basis for liability for injuries caused by another undertake the expense of developing pioneer drugs, manufacturer did not formulate any of the representations performing the studies necessary to obtain premarketing it made regarding its product, but simply duplicated the approval, and formulating labeling information. Generic name brand manufacturer's representations regarding the manufacturers avoid these expenses by duplicating name brand drug. Second, if a doctor prescribes successful pioneer drugs and their labels. Name brand Phenergan in reliance on misrepresentations made by advertising benefits generic competitors because generics Wyeth, and generic promethazine is substituted and are generally sold as substitutes for name brand drugs, so causes injury to the patient, Wyeth should be held the more a name brand drug is prescribed, the more responsible because such a result was entirely foreseeable potential sales exist for its generic equivalents. There is no legal precedent for using a name brand manufacturer's 29 F.3d 165, *170; 1994 U.S. App. LEXIS 17232, **14; statements about its own product as a basis for liability Cross Keys is distinguishable from the instant case, for injuries caused by other manufacturers' products, over as the architects in Cross Keys used U.S. Gypsum's plan whose production the name brand manufacturer had no but failed to follow its specifications, while the Fosters control. This would be especially unfair when, as here, did not use Wyeth's product at all, and the language the generic manufacturer reaps the benefits of the name [**17] on which the Fosters rely is dicta.
brand manufacturer's statements by copying its labels andriding In sum, the Fosters offer no authority for their assertion that one manufacturer can be held liable for injuries stemming from another manufacturer's product, approved drugs cannot be construed to create liability of and demonstrate no basis in the federal drug approval a name brand manufacturer when another manufacturer's scheme for treating drug manufacturers differently from other manufacturers in products liability actions.
The Fosters offer no case in which one manufacturer has been held liable on a negligent misrepresentation The Fosters' negligent misrepresentation action theory for injuries caused by another manufacturer. They against Wyeth also fails because Wyeth is under no duty contend, however, that Village of Cross Keys v. U.S. of care to the Fosters. The elements of the tort of Gypsum Co., 315 Md. 741, 556 A.2d 1126 (Md. 1989), negligent misrepresentation under Maryland law are: supports their theory of liability. In Cross Keys, architectsdesigned a "curtain wall" system for a building based on 1) the defendant, owing a duty of care to the plaintiff, negligently asserts a false 556 A.2d at 1129. The specifications required U.S. Gypsum materials, some of which hadunique designs specially suited for curtain wall systems.
Id. at 1130. The architects' design varied somewhat from statement will be acted on by the plaintiff; the U.S. Gypsum specifications and did not use theunique U.S. Gypsum products. Id. When the curtain wall system leaked, the architects sued U.S. Gypsum claiming they relied on U.S. Gypsum's design and the design was statement which, if erroneous, will cause faulty. Id. at 1127. The Maryland Court of Appeals held that the architects could not [**16] recover against U.S.
Gypsum for negligent misrepresentation because they had 4) the plaintiff, justifiably, takes action not adhered to the U.S. Gypsum specifications, including the use of U.S. Gypsum products, and therefore could notshow reasonable reliance on the publication. Id. at 1135.
Alternatively, U.S. Gypsum had no duty to the architects because they had not adhered to the U.S. Gypsum specifications and therefore had not used the U.S.
Gypsum system. Id. Martens Chevrolet v. Seney, 292 Md. 328, 439 A.2d The language on which the Fosters rely pertains to 534, 539 (Md. 1982) (emphasis [**18] supplied). An U.S. Gypsum's argument that it did not have a sufficient action for negligent misrepresentation will not lie unless nexus with the architects to result in liability because it the defendant owes the plaintiff a duty of care. Weisman did not deal directly with the architects. Id. at 1134. The v. Connors, 312 Md. 428, 540 A.2d 783, 790-92 (Md. court specifically declined to determine the validity of this argument, but expressed strong doubts regarding it,because the architects The Fosters contend that a duty exists in this case publication's intended and foreseeable audience and the purpose of the publication was to generate profits through misrepresentations regarding Phenergan could result in the sale of U.S. Gypsum products. Id. personal injury to users of Phenergan's generic 29 F.3d 165, *171; 1994 U.S. App. LEXIS 17232, **18; equivalents. They point to Jacques v. First National users of other manufacturers' products, a negligent Bank, a negligence action, which noted: misrepresentation action cannot be maintained against iton the facts of this case.
creates a risk of economic loss only, courts have generally required an intimate nexus As a federal court sitting in diversity, we must apply between the parties as a condition to the the applicable state law as it now exists. Erie R.R. Co. v. imposition of tort liability. This intimate Tompkins, 304 U.S. 64, 78, 82 L. Ed. 1188, 58 S. Ct. 817 nexus is satisfied by contractual privity or (1938); Tritle v. Crown Airways, Inc., 928 F.2d 81, 84 its equivalent. By contrast, where the risk (4th Cir. 1990). Under current Maryland law, we find no created is one of personal injury, no such basis for a negligent misrepresentation action on the facts direct relationship need be shown, and the of this case and hold that the negligent misrepresentation claim [**20] should have been disposed of along with the Fosters' other products liability claims. Therefore, it isunnecessary to consider whether the district court 515 A.2d 756, 759-60 (Md. 1986). We think to impose a properly dismissed that claim for failing to demonstrate duty in the circumstances of this case would be to stretch that Dr. Berger relied on representations of Wyeth in the concept of foreseeability too far. The duty required prescribing Phenergan for [*172] Brandy Foster. We for the tort of negligent [**19] misrepresentation arises affirm the district court's grant of summary judgment to when there is "such a relation that one party has the right Wyeth, but on the ground that Maryland law does not to rely for information upon the other, and the other giving the information owes a duty to give it with care." misrepresentation against one manufacturer for injuries Weisman v. Connors, 540 A.2d at 790 (quoting Holt v. caused by another manufacturer's product.
Kolker, 189 Md. 636, 57 A.2d 287, 288 (Md. 1948)).
There is no such relationship between the parties to this case, as Brandy Foster was injured by a product thatWyeth did not manufacture. As Wyeth has no duty to the

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