Ina recent polio-vaccine liability case, Gannon v. American Products, Inc., __ N.J. __ (2012), the state Supreme Court, without explanation, possibly restricted a theory of liability that it had previously noted as potentially viable. The theory permitted the use of a manufacturer’s market share as a basis for liability for a defective fungible product for which identification of the particular manufacturer was impossible.
The market-share theory was initially explained in Shackil v. Lederle Laboratories, 116 N.J. 155, (1989). The Appellate Division ruling there was reversed by the Supreme Court on the basis that the case involved an allegedly defective DPT vaccine, for which liability was pre-empted by a federal statute.
The Shackil Court had stated: “The foregoing discussion should make clear that our opinion is confined solely to the context of vaccines. It should not be read as forecasting an inhospitable response to the theory of market-share liability in an appropriate context, perhaps one in which its application would be consistent with public policy and where no other remedy would be available. This case, the Court’s first exposure to market-share liability, may therefore come to represent the exception rather than the rule.”
The basis for the market-share theory was that if each defendant were to be responsible for its market share of the defective product, each plaintiff could be compensated correctly, with the losses properly shared by the various manufacturers who could have supplied the particular product. In the aggregate, each manufacturer would bear its correct share of the collective liability to all plaintiffs for the defective product.
The theory was also found inapplicable in Sholtis v. Am. Cyanamid Co., 238 N.J. Super. 8, (App. Div. 1989), involving asbestos contamination, but again was recognized as having application in appropriate cases.
The Supreme Court again noted New Jersey’s hospitability to the theory in Lewis v. American Cyanamid Co.,155 N.J. 544 (1998) (the earlier rejections “should not be considered a per se bar to imposition of market share liability in appropriate context”).
In Gannon, however the court stated: “On February 14, 2008, the trial court granted defendants’ summary judgment motion, finding merit in both issues for reasons expressed in its written opinion. In short, the trial court analyzed the evidence relating to product identification and found that although there was ‘some evidence’ that Lederle Laboratories might have manufactured the vaccine that could be derived from the immunization and health record that plaintiff produced, it was insufficient to meet the standards set forth by this Court. See Shackil v. Lederle Laboratories, 116 N.J. 155, 174 (1989) (rejecting market share theory as alternative to proof of product identification); see also Sholtis v. Am. Cyanamid Co., 238 N.J. Super. 8, 23 (App. Div. 1989) (noting this Court’s rejection in Shackil of market-share theory in vaccine context); Namm v. Charles E. Frosst & Co., Inc., 178 N.J. Super. 19, 27 (App. Div. 1981) (concluding that plaintiff must prove, as an element of prima facie case, that defendant made the specific product that caused injury).”
By the court’s citations to Shackil as rejecting the theory and to the pre-Shackil decision in Namm, which had contained an outright rejection of market-share liability, New Jersey’s earlier warmer reception to the theory might be thought of as chilled. We realize this is dicta possibly changing dicta, and there have been no reported decisions applying the market-share principle. But the product liability bar has taken the strong dictum in Shackil as a basis of claims and settlements in the past 23 years. The bar should know if this is a change of direction. We look to the court for some later clarification.