Michigan recently signed into law a repeal of the immunity provision under its Product Liability Act, presenting a new litigation risk in Michigan for pharmaceutical companies. The provision had granted near-complete immunity to pharma for the past 30 years, as the only of its kind nationwide. Michigan’s new law—Senate Bill 410 (SB 410)—removes this immunity, leaving intact a rebuttable presumption of non-liability and caps on non-economic damages.
SB 410 goes into effect on February 13, 2024, and is likely non-retroactive, meaning alleged injuries would have to occur after that date for the new law to apply. Commentators predict increased Michigan litigation relating to opioid use, insulin price gouging, and Medicaid fraud.
SB 410 Heightens Pharma Litigation Risk
The Act’s now-repealed immunity provision provided a near-absolute defense to manufacturers and sellers of FDA-approved pharmaceuticals in tort suits. Specifically, the provision had immunized pharma from product liability claims where a drug was FDA approved and labeled compliantly, except where bribery or misinformation contributed to approval.
The immunity provision was among the strongest corporate liability shields nationwide. Under the provision, Michigan courts dismissed several high-stakes product liability cases. And few plaintiffs successfully side-stepped that protection—for instance, where Michigan residents filed suit out-of-state, choice-of-law rules mandated application of the immunity provision. Following the provision’s repeal, pharma should anticipate increased product liability litigation in Michigan.
SB 410 Retains Limited Pharma Protection
SB 410 retains two primary pharma protections—a rebuttable presumption of non-liability and caps on non-economic damages.
As before, where the injurious aspect of a product complies with applicable state or federal standards, a product liability defendant is presumed not liable unless sufficient evidence rebuts that presumption. The presumption attaches to all theories of tort liability, including design defect, failure to warn, and breach of express or implied warranties. The presumption aligns Michigan with other jurisdictions with the same standard. See Wis. Stat. § 895.047(3)(b); Tenn. Code Ann. § 29-28-104(a); Co. Code § 13-21-403(3); Ky. Rev. Stat. § 411.310.
SB 410 also leaves intact Michigan’s annually-adjusted non-economic damages caps. Currently, those damages are capped at either $537,900 or $960,500 based on the severity of injury.
SB 410’s Retroactivity for Resolution
SB 410 will likely apply only to cases in which the alleged injury occurred after the effective date of February 13, 2024. That is because Michigan courts typically apply the statutory effective date to the date of injury (not, e.g., the date the complaint is filed), and Michigan courts hold a presumption against the retroactive application of statutes.
But application of SB 410 is currently unsettled where an injury occurs before the effective date and (1) the complaint is filed before the effective date and resolved after the effective date, or (2) the complaint is filed and resolved after the effective date. Ultimately, limited application of SB 410 in these circumstances is probable, which would narrow newly-actionable claims under this law.
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