4) Market Share Liability

American law developed the theory of market share liability to address the special challenges presented by DES litigation. DES is a drug that was prescribed to pregnant women between the years 1951 and 1971. It was banned for use during pregnancy when it was discovered that it caused a signature cancer in some of the adult daughters of those women who had taken it. The responsibility of the manufacturers of DES and the link between the DES and the cancer were never at issue. However, the latent nature of the injury prevented many plaintiffs from identifying which of approximately 300 drug companies manufactured the DES taken by their mothers. The plaintiffs could not rely on alternative liability because that principle is normally restricted to a small number of defendants all of whom can be brought before the court. Some of the manufacturers of DES had gone out of business. The defendant companies were not joint tortfeasors because they were not involved in concerted action and there was no joint venture to market DES. At best, there was parallel tortious conduct.

A solution was found in market share liability. It was first recognized in California in Sindell v. Abbott Laboratories. [Note 68: 607 P.2d 924 (Cal. 1980).] Since then it has been developed and modified in a variety of ways by other states. A robust version of this theory was adopted by the New York Court of Appeal in Hymowitz v. Eli Lilly & Co. [Note 69: 539 N.E.2d 1069 (N.Y. 1989)] In that state, it is necessary to join, as defendants, manufacturers who collectively enjoyed a substantial share of the national DES market at the time that the prescription for DES was filled for the plaintiff's mother. Liability may then be imposed on each defendant in proportion to its share of the national DES market at that time. The culpability of each defendant is, consequently, measured by the risk each defendant created to the American public at large. It is no excuse, therefore, that an individual defendant did not market DES in New York where the plaintiff's mother lived. [Note 70: Most other states that have accepted market share liability permit a defendant to prove the absence of causation.] Proof that the defendant did not market DES to pregnant women is, however, exculpatory because the defendant did not contribute in any way to the risk to children. Each defendant is severally (individually) liable for its proportionate share of the plaintiff's loss. A defendant who had a 30 percent share of the national market is liable for 30 percent of the plaintiff's damages. There is no joint and several liability of all defendants for all of the plaintiff's loss. Indeed, if the defendants sued collectively had an 85 percent of the national market, the plaintiff will not be able to recover more than 85 percent of her damages.

Although the market share doctrine is generally restricted to DES cases in the United States, it is capable of being applied to other mass product liability litigation involving indeterminate defendants. It may be applied to a wide range of toxic products and compounds such as asbestos and Agent Orange where the significant time between exposure and illness makes it difficult to determine which manufacturer caused the plaintiff's loss. The idea of a collective liability of this nature has not been addressed by Canadian courts as yet. Consequently, market share liability has neither been accepted nor rejected. It does, however, provide a vivid illustration of the inherent power of judges to fashion innovative solutions to new problems where the demands of justice and fairness are sufficiently compelling.