New York Law Review

Tag: Concerted Action

  • Rastelli v. Goodyear Tire & Rubber Co., 79 N.Y.2d 289 (1992): No Duty to Warn About Another’s Defective Product

    79 N.Y.2d 289 (1992)

    A manufacturer of a non-defective product has no duty to warn about potential dangers arising from the use of its product in conjunction with another manufacturer’s defective product, where the first manufacturer did not contribute to the defect, had no control over it, and did not produce it.

    Summary

    Francene Rastelli sued Goodyear for the wrongful death of her husband, who was killed when a multi-piece tire rim exploded while he was inflating a Goodyear tire. The rim was manufactured by Firestone and Kelsey-Hayes, not Goodyear. Rastelli argued Goodyear had a duty to warn about the dangers of using its tires with multi-piece rims and that Goodyear engaged in a concerted action with other manufacturers to suppress safety information. The New York Court of Appeals held that Goodyear had no duty to warn about a defect in another manufacturer’s product and that the evidence was insufficient to establish a concerted action claim because it only showed parallel activity.

    Facts

    John Wunderlich was killed in June 1984 while inflating a Goodyear tire mounted on a multi-piece rim. The rim, an RH5 model, consisted of parts manufactured by Firestone and Kelsey-Hayes. Goodyear did not manufacture or sell the rim or its parts. The Goodyear tire was compatible with some, but not all, multi-piece rim assemblies. Rastelli, as administratrix, sued Goodyear and other rim manufacturers alleging negligence, strict products liability, breach of warranty, and concerted action.

    Procedural History

    The Supreme Court denied Goodyear’s motion for summary judgment. The Appellate Division modified, granting summary judgment to Goodyear on the breach of warranty claims but otherwise affirmed, finding sufficient evidence for the concerted action, strict products liability, and negligence claims. Goodyear appealed to the New York Court of Appeals by leave of the Appellate Division.

    Issue(s)

    1. Whether Goodyear may be subject to concerted action liability under the alleged facts in this product liability action.
    2. Whether Goodyear has a duty to warn against its non-defective tire being used with an allegedly defective tire rim manufactured by others.

    Holding

    1. No, because the plaintiff only demonstrated parallel activity among rim manufacturers, which is insufficient to establish a concerted action claim.
    2. No, because Goodyear had no control over the rim’s production, did not place it in the stream of commerce, and its tire did not cause the rim’s defect.

    Court’s Reasoning

    Regarding the concerted action claim, the Court stated that “[i]t is essential that each defendant charged with acting in concert have acted tortiously and that one of the defendants committed an act in pursuance of the agreement which constitutes a tort.” The court found that the plaintiff’s allegations and exhibits showed only parallel activity among the rim manufacturers, such as campaigning for OSHA regulations and lobbying against a ban on multi-piece rims. This was insufficient to prove an agreement or common scheme to commit a tort. Citing Hymowitz v. Lilly & Co., the court emphasized that parallel activity alone is not enough to justify holding one manufacturer liable for another’s product.

    Regarding the duty to warn, the Court declined to impose a duty on Goodyear to warn about another manufacturer’s product’s defects. The court reasoned that Goodyear’s tire was not defective, and the accident would not have occurred if a sound rim had been used. The Court distinguished cases where the combination of two sound products creates a dangerous condition. Here, the defect was solely in the rim, and Goodyear had no role in its production or distribution. “Goodyear had no control over the production of the subject multipiece rim, had no role in placing that rim in the stream of commerce, and derived no benefit from its sale. Goodyear’s tire did not create the alleged defect in the rim that caused the rim to explode.”

  • Bichler v. Eli Lilly and Co., 55 N.Y.2d 571 (1982): Concerted Action Liability for DES Manufacturers

    55 N.Y.2d 571 (1982)

    A pharmaceutical manufacturer can be held liable under a concerted action theory for injuries caused by prenatal exposure to diethylstilbestrol (DES) if it acted in concert with other manufacturers, either through an express or implied agreement or by providing substantial assistance to the wrongful conduct of others, even if the plaintiff cannot identify the specific manufacturer of the DES ingested by their mother.

    Summary

    Joyce Bichler, a DES daughter, sued Eli Lilly and Co. for cancer resulting from her mother’s ingestion of DES during pregnancy in 1953. Unable to prove Lilly manufactured the specific DES her mother took, Bichler pursued a concerted action theory. The jury found Lilly liable for wrongfully marketing DES without adequate testing, awarding Bichler $500,000. The New York Court of Appeals affirmed, holding that the trial court’s instructions on concerted action were not erroneous and that sufficient evidence supported the verdict, even without proof that Lilly manufactured the specific DES or direct evidence of an agreement among manufacturers. The court emphasized that conscious parallelism in conduct and substantial assistance in encouraging wrongful conduct could establish concerted action liability.

    Facts

    Diethylstilbestrol (DES), a synthetic estrogen, was approved for use in the U.S. in 1941. Initially, 12 manufacturers, including Eli Lilly, submitted separate New Drug Applications (NDAs) relying on a master file compiled by a committee chaired by Lilly. In 1947, the FDA approved DES for miscarriage treatment. In 1971, the FDA banned DES for pregnancy-related issues due to its ineffectiveness and dangers to offspring. Plaintiff Joyce Bichler, exposed to DES prenatally, developed cervical and vaginal cancer. She sued Lilly, alleging her mother’s 1953 DES ingestion caused her cancer in 1971.

    Procedural History

    Bichler sued Lilly in 1974. The trial was bifurcated: first to determine the manufacturer, then to assess liability under a concerted action theory. The jury found Bichler had not proven Lilly was the manufacturer. In the second phase, the jury found Lilly liable under a concerted action theory, awarding $500,000. The Appellate Division affirmed. Lilly’s appeal as of right was dismissed, but the Court of Appeals granted leave to appeal.

    Issue(s)

    1. Whether the trial court’s instructions on concerted action liability were erroneous as a matter of law.

    2. Whether the evidence presented at trial was legally sufficient to support a verdict in the plaintiff’s favor on the issue of concerted action.

    Holding

    1. No, because the trial court’s instructions concerning the pharmaceutical manufacturer’s liability on a concerted action theory for injuries caused by prenatal exposure to DES were not erroneous as a matter of law.

    2. Yes, because, evaluating the evidence in light of those instructions, which became the governing law, the jury’s verdict is supported by a sufficient factual foundation.

    Court’s Reasoning

    The Court of Appeals reasoned that concerted action liability applies when parties act in pursuance of a common plan or design to commit a tortious act. It is sufficient if they actively participate, further the act by cooperation, aid or encourage the wrongdoer, or ratify and adopt the acts for their benefit. The court referenced the Restatement (Second) of Torts § 876. The court noted that Lilly did not properly preserve objections to the jury instructions. Therefore, the instructions became the law of the case. The court found sufficient evidence to support the jury’s findings of both conscious parallelism and substantial assistance. Eight companies filed NDAs to market DES for pregnancy problems between 1947 and 1948, relying on the same studies. Each sought approval for 25mg tablets, stronger than previously approved dosages. The court concluded this parallel conduct and Lilly’s participation in the first wave of filings could support a finding that Lilly substantially encouraged the other 140 manufacturers engaged in marketing DES for the same purpose. The court also rejected Lilly’s argument about the lack of foreseeability, citing expert testimony and evidence of related research. Finally, the court stated that because the case was pleaded and proved exclusively on a failure to test theory, duty to warn arguments did not apply. “All those who, in pursuance of a common plan or design to commit a tortious act, actively take part in it, or further it by cooperation or request, or who lend aid or encouragement to the wrongdoer, or ratify and adopt his acts done for their benefit, are equally liable with him”.