Over the past decade, mass tort litigation involving de minimis levels of impurities has skyrocketed. One need only turn on the evening news to see advertisements for litigation related to allegedly carcinogenic or teratogenic impurities in products as varied as heartburn medication, baby food, acne treatments, and sunscreen. As companies have engaged in ever more stringent and effective product stewardship – preventing dangerous products from ever reaching the consumer market – enterprising plaintiff attorneys have at the same time become more creative in developing new theories of liability based on low levels of impurities in a product (as opposed to the product at issue) in order to keep the gravy train of mass tort litigation on the tracks.
A new partner has emerged for the plaintiffs’ bar in their quest to increase the volume of mass tort cases. It is an analytical lab called Valisure, and it is based in New Haven, Connecticut. A common thread in many of the “impurity” cases currently pending is analytical testing by Valisure. Engaged in a symbiotic relationship with the plaintiff’s bar, its mission is seemingly to further the rent-seeking behavior of impurity lawsuits.
What is rent-seeking? Rent-seeking is an economic theory that posits transfers of wealth have social costs when individuals spend real resources and efforts to capture them.[1] Rent-seekers attempt to obtain these financial gains and benefits through the manipulation of the distribution of economic resources.[2] In other words, rent-seeking behavior involves seeking a redistribution of the “pie” of economic resources after the inputs into and distribution of the “pie” has already been decided.
There are, of course, social benefits to rent-seeking behavior in certain cases. A classic example is a “patent race.” A patent race occurs when firms or individuals compete to produce a patent or new invention first.[3] A major benefit of winning a patent race is the patent-holder receives a period of exclusivity on the patent, even though others may also be able to invent or create the same invention. Thus, even though there are costs to consumers of the patent system, the rent-seeking behavior of attempting to receive all financial gains on a product via governmental intervention even if others are capable of inventing it is encouraged. This is because economic theorists believe the patent system leads to “follow-on” innovation.[4]
In the context of mass tort litigation, it is easy to conceive of potential societal benefits from the rent-seeking behavior of plaintiffs and their counsel. In product liability mass tort lawsuits, plaintiffs typically seek a redistribution of economic benefits from manufacturers to consumers and their counsel. This redistribution of wealth can 1) hypothetically deter bad behavior by manufacturers, 2) act as a pseudo-regulatory mechanism to restrict dangerous products when regulators or legislators are too slow to act, and 3) make victims “whole” after their earning capacity and quality of life has been reduced by allegedly dangerous products. But at least as to the first two “benefits” they are totally dependent on the product actually requiring extra-legislative regulation – and in the case of impurity litigation, that’s where plaintiffs’ rent-seeking behavior moves from a societal benefit to a societal harm.
It is indisputable that the subjects of impurity litigation over the past decade are beneficial products to society. Sunscreen is the easiest example – according to the American Academy of Dermatology – “Who Needs Sunscreen? Everyone. Sunscreen use can help prevent skin cancer . . . [and] can also help prevent premature skin aging, such as wrinkles and age spots, caused by too much unprotected UV exposure.”[5] Yet the Valisure lab targeted sunscreen for impurity testing – discovering some sunscreen samples with levels of benzene impurities up to 6 ppm. This detection led to a plethora of class action lawsuits and settlements – yet scientists found months later that the levels of benzene in sunscreen paled in comparison to the levels seen in the ambient environment and foods consumed by the average American.[6] Like most taxes – whether levied by the government or private settlement - it seems likely that the real result of plaintiff’s rent-seeking behavior involving sunscreen will be making sunscreen products less attainable to consumers as costs are passed along to them.
Other recent targets of impurity litigation include acne medications, hair care products, pharmaceutical products, and feminine care products. All of these products clearly have societal benefits and have been safely used for decades. Yet rent-seeking behavior continues, and personal injury and class action lawsuits have proceeded against the manufacturers of these beneficial products. Often, Valisure analyses provide the basis for these suits. The litigation trend seems likely to continue as long as rent-seeking behavior involving impurities is rewarded by litigation settlements and juries spurred by lawsuits that demand products with lower levels of impurities than the general environment or the food we buy at the grocery store.
[1] Tollison 2012, The Economic Theory of Rent-Seeking - The economic theory of rent seeking on JSTOR
[2] https://corporatefinanceinstitute.com/resources/economics/rent-seeking/#:~:text=Rent%2Dseeking%20is%20a%20concept,the%20distribution%20of%20economic%20resources.
[3] https://wwws.law.northwestern.edu/research-faculty/clbe/events/innovation/documents/thompson_kuhn_patent_race.pdf
[4] Id.
[5] Sunscreen FAQs (aad.org)
[6] BENZENE IN SUNSCREEN: HOW MUCH OF A HEALTH RISK IS IT? - Society for Risk Analysis - Society for Risk Analysis (sra.org)
Enterprising plaintiff attorneys have . . . become more creative in developing new theories of liability based on low levels of impurities in a product (as opposed to the product at issue) in order to keep the gravy train of mass tort litigation on the tracks.
