Trafficking in human blood: Titmuss (1970) and products liability

Law and Contemporary Problems

Volumn 72, Issue 3, 2009, Pages 1-15

  Havighurst, Clark C ^a  

^a NONE

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EID: 77951990438     PISSN: 00239186     EISSN: None     Source Type: Journal    
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References (75)

1. RICHARD M. TITMUSS, The Gift Relationship: From Human Blood to Social Policy (1970) [hereinafter The Gift Relationship (1970)]. Publication in the United Kingdom was followed by publication in the United States in 1971.
2. No fewer than five reviews and columns focusing on the book appeared in the New York Times and the Washington Post alone. E. Wayles Brown Jr. & George E. Clifford, The Blood Business, WASH. POST, Mar. 12, 1971, at B1.
3. Robert Claiborne, Blood Will Tell, Wash. POST, May 9, 1971, at 244
4. Alvin Gouldner, The Gift Relationship, N.Y. Times, Mar. 21, 1971, at BR2
5. Anthony Lewis, Blood Relationship, N.Y. Times, Jan. 25. 1971, at 43
6. Richard Locke, Books of the Times, N.Y. Times, Mar. 13, 1971, at 27
7. see also Alfred Friendly, The Gift of Blood-U.S. Found Wanting, L.A. Times, Jan. 31, 1971, at E3.
8. RICHARD M. TITMUSS, The Gift Relationship: From Human Blood to Social Policy (Ann Oakley and John Ashton eds., 1997) [hereinafter The Gift Relationship (1997)].
9. E.g., Robert M. Solow, Blood and Thunder, 80 YALE L.J. 1696 (1971).
10. E.g., Lewis, supra note 2, at 43. Titmuss's raising the question of altruism in the economy and public policy prompted much thoughtful commentary.
11. See, e.g., Kenneth J. Arrow, Gifts and Exchanges, 1 PHIL. & PUB. AFF. 343 (1972) (reflecting on "the descriptive and prescriptive issues raised by Titmuss'[s] evidence and assertions")
12. A.J. Culyer, Blood and Altruism: An Economic Review, in Blood Policy: Issues and Alternatives 39 (David B. Johnson ed., 1977) (discussing both "overt issues regarding the best ways of collecting and distributing blood" and "the indirect issues relating to social policy and the role of altruism in society"). For a recent revisitation of Titmuss's ideas and influence, see Pete Alcock, Richard Titmuss in the 21st Century-Commentary, 20 EUR. J. POL. ECON. 803 (2004)
13. Philippe Fontaine, Richard Titmuss on Social Cohesion: A Comment, 20 EUR. J. POL. ECON. 795 (2004)
14. David Reisman, Richard Titmuss: Welfare as Good Conduct, 20 EUR. J. POL. ECON. 771 (2004)
15. Jim Tomlinson, Richard Titmuss, Welfare as Good Conduct: A Comment, 20 EUR. J. POL. ECON. 799 (2004).
16. Julian Le Grand, Afterword to The Gift Relationship (1997), supra note 3, at 333-35
17. Titmuss wrote a chapter reciting many of the usual arguments advanced by the medical profession against relying on tort and antitrust law to ensure good performance in the health-care sector. The Gift Relationship (1970), supra note 1, at 158-72.
18. For a full, relatively recent description of the worldwide blood industry, see Douglas Starr, Blood: an Epic History of Medicine and Commerce (1998)
19. Clark C. Havighurst, Legal Responses to the Problem of Poor-Quality Blood, in Blood Policy, supra note 5, at 21(arguing that "legal rules designed with incentives and what Professor Coase calls 'transaction costs' in mind would have greatly alleviated the problems which Professor Titmuss regarded as conclusive proof of the dangers of commercialism")
20. Reuben A. Kessel, Transfused Blood, Serum Hepatitis, and the Coase Theorem, 17 J.L. & ECON. 265 (1974) (arguing from economic principles for strict liability for transferring defective blood).
21. See Kozup v. Georgetown Univ., 663 F. Supp. 1048, 1058-61 (D.D.C. 1987) (rejecting in a blood case strict liability both for "breach of the implied warranties of merchantability and fitness for a particular purpose under the Uniform Commercial Code" and "under the theory of strict liability in tort for an unreasonably dangerous product, under the Restatement (Second) of Torts § 402A"), aff'd in part, vacated in part on other grounds, 851 F.2d 437 (D.C. Cir. 1988).
22. Perlmutter v. Beth David Hosp., 123 N.E.2d 792 (N.Y. 1954).
23. Marc A. Franklin, Tort Liability for Hepatitis: An Analysis and a Proposal, 24 STAN. L. REV. 439 (1972) (reviewing extensively and critically the state of the law governing liability for transfusion hepatitis).
24. See, e.g., Guido Calabresi & Kenneth C. Bass, Right Approach, Wrong Implications: A Critique of McKean on Products Liability, 38 U. CHI. L. REV. 74, 83-86 (1970) (seeking to identify optimal bearers of risk of transfusion hepatitis and endorsing strict liability)
25. see also Clark C. Havighurst & Lawrence R. Tancredi, "Medical Adversity Insurance"-A No-Fault Approach to Medical Malpractice and Quality Assurance, 51 Milbank Mem. Fund Q. 125 (1973) (using transfusion-related hepatitis to illustrate the potential benefits of a system imposing strict liability for predefined injuries deemed preventable in many, though not necessarily all, cases).
26. Kessel, supra note 10. The so-called "Coase Theorem" emphasizes that, because of transaction costs, efficiency requires that risks fall on parties in the best position to minimize them or to induce others to do so. See Ronald H. Coase, The Problem of Social Cost, 3 J.L. & ECON. 1 (1960).
27. See generally Havighurst, supra note 10
28. Likewise, there is also no discussion of strict liability as a potential restraint on abuses in commercial blood banking in Douglas Starr's generally fascinating journalistic account of the worldwide market for human blood. See Starr, supra note 9.
29. See infra notes 25-28 and accompanying text. For an early proposal to use strict liability for selected, often preventable, medical injuries as a way both to ensure fair compensation at low administrative cost and to strengthen incentives to prevent such compensable events, see Havighurst & Tancredi, supra note 14
30. see also Clark C. Havighurst, "Medical Adversity Insurance"-Has Its Time Come?, 1975 DUKE L.J. 1233 (1975). Over the intervening years, others have developed and elaborated versions of this proposal.
31. See, e.g., Randall Bovbjerg & Lawrence R. Tancredi, Liability Reform Should Make Patients Safer: "Avoidable Classes of Events" Are a Key Improvement, 33 J.L. MED. & ETHICS 478 (2005)
32. Lawrence R. Tancredi, Designing a No-Fault Alternative, 49 Law & Contemp. Probs. 277 (Spring 1986).
33. During the 1950s and 1960s, blood shield laws were adopted by 47 states. These laws exempt blood and blood products from strict liability or implied warranty claims on the grounds that they are a service rather than a product. The laws were developed on the premise that given the inherently risky nature of blood and blood products, those providing them required protection if the blood system was to be a reliable resource. Inst. of Med., HIV And The Blood Supply: An Analysis of Crisis Decisionmaking 2 (1995).
34. Cunningham v. MacNeal Mem'l Hosp., 266 N.E.2d 897 (Ill. 1970) (relying on Restatement (Second) OF Torts § 402A).
35. Blood and Organ Transaction Liability Act, 745 ILL. Comp. Stat. 40/2 (West 2000).
36. Takashi Okuno, Letter to the Editor, The Cunningham Case and Blood Usage, 220 J. Am. Med. Ass'n 1015, 1015 (1972).
37. See INST. OF MED., supra note 20, at 2.
38. See Lucian Leape, Error in Medicine, 272 J. Am. Med. Ass'n 1851, 1855-57 (1994) (describing shortcomings in the medical profession's traditional, error-focused approach to quality problems).
39. See Allan H. McCoid, The Care Required of Medical Practitioners, 12 VAND. L. REV. 549 (1959) (a classic article supporting the medical profession's model of the tort system as one guided by experts representative of the profession).
40. For the suggestion that strict liability for transfusion-related hepatitis could be implemented through a form of provider-financed casualty insurance, which would automatically (that is, without litigation) compensate victims, see Havighurst & Tancredi, supra note 14
41. Leape, supra note 25, at 1857 (embracing "total quality management" for health-care organizations and stating "[e]rrors must be accepted as evidence of system flaws, not character flaws"). For proposals to assign liability to corporate actors that are in a better position than individual physicians to recognize and remedy quality problems, see Kenneth S. Abraham & Paul C. Weiler, Enterprise Liability and the Evolution of the American Health Care System, 108 HARV. L. REV. 381 (1994) (proposing hospital liability for physician torts)
42. Clark C. Havighurst, Vicarious Liability: Relocating Responsibility for the Quality of Medical Care, 26 Am. J.L. & Med. 7 (2000) (arguing that making organized health plans vicariously liable for the torts of their participating providers would both inspire integrated efforts to improve quality and restore needed legitimacy to managed health care by making plans responsible for the quality, as well as the cost, of care).
43. See Inst. of Med., supra note 20, at 1 ("In the early 1980s blood became a vector for HIV infection and transmitted a fatal illness to more than half of the 16,000 hemophiliacs in the United States and over 12,000 blood transfusion recipients.").
44. A history of public and private responses to the HIV crisis in the United States, including some contemporaneous documents, has been provided by a committee of the Institute of Medicine. Id. That definitive history focused mostly on deficiencies in the FDA's response to the epidemic and not on the industry's own actions, but concluded that, although the likelihood that AIDS was transmitted by blood was fairly clear by early 1983 at the latest, blood safety policies changed very little during 1983. Many officials of the blood banks, the plasma fractionation industry, and the FDA accepted with little question estimates that the risk of AIDS was low ("one in a million transfusions"), and they accepted advice that control strategies (such as automatic withdrawal of AHF [antihemophilic factor] concentrate lots containing blood from donors suspected of having AIDS, or a switch from AHF concentrate to cryoprecipitate in mild or moderate hemophiliacs) would be ineffective, too costly, or too risky. Id. at 3-4. For a journalistic account of the blood industry's history, including poignant stories of many victims of HIV-contaminated blood and their efforts to obtain legal relief, see STARR, supra note 9. Starr describes scandals in government-managed programs, particularly in Japan and France, in a way suggesting that Titmuss was not necessarily right in thinking that government control would provide a reliable shield against bad blood.
45. In order to induce affected businesses to act as private attorneys general policing injuries to competition on behalf of the general public, the antitrust laws allow treble-damage recoveries only for harms to an individual's or firm's "business or property." 15 U.S.C. § 15(a) (2006). Conceivably, individuals suffering personal injuries as a result of an antitrust violation might have an implied right of action for ordinary damages.
46. See Summers v. Tice, 199 P.2d 1 (Cal. 1948) (holding any potential tortfeasor liable among a group of potential tortfeasors even though plaintiff could not prove which specific tortfeasor caused the harm)
47. Sindell v. Abbott Labs., 607 P.2d 924 (Cal. 1980) (adopting market-share liability whereby each defendant in a negligent industry must prove they didn't cause the specific harm or be held responsible for a percentage of the damage relative to their market share).
48. The district court in one AIDS case reviewed the plaintiffs' evidence of concerted action by the fractionators, including some of the documents mentioned herein, Doe v. Baxter Healthcare Corp., 178 F. Supp. 2d 1003, 1010-12 (S.D. Iowa 2001), aff'd, 380 F.3d 399 (8th Cir. 2004), and concluded that, for purposes of the plaintiff's civil conspiracy claims, "plaintiffs have submitted sufficient evidence of concerted action to survive summary judgment on the merits." Id. at 1018.
49. All the documents I reviewed are, I believe, on the public record somewhere, but copies of the documents referenced here are also available in the files of Law and Contemporary Problems. Although I believe enough time has passed to make the observations in this article of only academic interest, I have avoided naming names and being any more specific than necessary to make my point. The editors of Law and Contemporary Problems have verified the descriptions of the documents and the accuracy of the quotations therefrom. I also concede that the factual circumstances were sufficiently complex that my antitrust conclusions could reasonably be disputed, especially since antitrust law has been used mostly to encourage independent pricing decisions rather than to ensure firms' competitive independence in areas affecting product quality. See infra notes 37, 46
50. cf. Clark C. Havighurst & Peter M. Brody, Accrediting and the Sherman Act, 54 Law & Contemp. Probs. 199 (Autumn 1994) (reviewing antitrust principles applicable to competitors' concerted action in setting quality standards and inducing compliance therewith).
51. Inst. of Med., supra note 20, at 58.
52. Expert Witness Report of Clark C. Havighurst, Doe v. Baxter Healthcare Corp., 178 F. Supp. 2d 1003 (S.D. Iowa 2001).
53. See Allied Tube & Conduit Corp. v. Indian Head, 486 U.S. 492, 500 (1988) (approving and protecting, under the antitrust laws, private processes for setting industry-wide standards, but stating, debatably, that "agreement on a product standard is, after all, implicitly an agreement not to manufacture, distribute, or purchase certain types of products"). On the difficult distinction between collectively developing, publishing, and certifying compliance with standards (all lawful) and actually agreeing to do business only in accordance with such standards (unlawful), see Havighurst & Brody, supra note 34, at 230-41 (discussing issues raised by the debatable dictum in Allied Tube).
54. See Copperweld Inc. v. Independence Tube Corp., 467 U.S. 752, 769 (1984) (noting how concerted action "deprives the marketplace of the independent centers of decision making that competition assumes and demands").
55. For example, in another December 1982 memo, a company official stated that the FDA official wanted "ammunition [to support the position] that voluntary efforts of the industry precluded the need for any further regulation." This perception of the interaction of government and the private sector is confirmed by a report of the Institute of Medicine. See generally INST. OF MED., supra note 20. Legally, FDA action in brokering the so-called "consensus" among private entities-including several nonprofit organizations such as the American Red Cross-could not immunize collective action from the antitrust laws. See, e.g., United States v. Socony-Vacuum Oil Co., 310 U.S. 150, 225-27 (1940) ("Though employees of the government may have known of those [anticompetitive] programs and winked at them or tacitly approved them, no [antitrust] immunity would have thereby been obtained."). The hesitancy of the FDA about taking aggressive regulatory action in the AIDS crisis, relying instead on industry initiatives, appears to have been a regrettable response to criticism the government had received in the 1970s for its apparent overreaction to an earlier public-health threat, that era's version of so-called "swine flu." See Inst. of Med., supra note 20, at 59-60.
56. In several negligence cases, courts refused to limit blood banks' liability for communicating AIDS to instances where they deviated from industry or professional standards, leaving open the question whether those standards were themselves negligent. E.g., United Blood Services v. Quintana, 827 P.2d 509, 523-24 (Colo. 1992) (holding that, although blood banks should be held to a professional standard of care, the plaintiff could attempt on remand to show that the blood-banking community's standard of care was deficient)
57. Snyder v. Mekhjian 582 A.2d 307, 313 (N.J. Super. Ct. App. Div. 1990) (deciding that when HIV-infected blood was transfused in August 1984, summary judgment was precluded by questions of fact regarding the reasonableness of the defendant blood bank's conduct in collecting and distributing blood without using surrogate testing, regardless of whether it followed trade association's guidelines)
58. Hernandez v. Nueces County Med. Soc'y Community Blood Bank, 779 S.W.2d 867, 871-72 (Tex. App. 1989) (holding that compliance with federal and published industry standards would not necessarily absolve defendant blood bank from liability for negligence, especially when evidence suggested it had lagged in adopting new screening procedures for hepatitis).
59. In any cartel, there is the possibility that one or more members will violate the anticompetitive agreement, profiting while others abide by it. Nevertheless, neither the possibility of such cheating nor even a likelihood that the cartel will soon self-destruct alters the agreement's illegality under the antitrust laws. Even if one or more of the defendants in the blood cases entered into the restraint of trade with its fingers crossed (as appears to have been the case), the harm to competition and the restraint on the other companies' possible initiatives remained.
60. In July 1983, the fractionators began discussing "a possible industry-wide PR [public relations] program to stimulate use of [clotting] Factor VIII despite possible AIDS risk."
61. But see supra notes 33-34 and accompanying text
62. In a deposition, one company executive admitted that the competitors (at a meeting of the PMA Biologic Section) coordinated their donor-screening activities and the content and timing of warnings they would issue, but claimed, "We didn't discuss anything of an antitrust nature." Their lawyers had apparently cautioned them only against discussing prices.
63. The point that basic legal principles should be applied evenhandedly to professionals, nonprofits, and for-profit enterprises alike holds for antitrust as well as tort law and might be usefully developed by critically revisiting Titmuss's lengthy criticism of an antitrust action by the Federal Trade Commission against hospitals and pathologists in Kansas City, Missouri, in the early 1960s. The Gift Relationship (1970), supra note 1, at 158-72 (discussing In re Community Blood Bank of Kansas City, Inc., 70 F.T.C. 728 (1966) (finding unlawful boycott of for-profit blood banks, allegedly prompted by quality concerns), rev'd for lack of jurisdiction, 405 F.2d 1011 (8th Cir. 1969))
64. see CLARK C. HAVIGHURST, JAMES F. BLUMSTEIN & TROYEN A. BRENNAN, Health Care Law and Policy: Readings, Notes, and Questions 545-50, 552-55 (1998) (reproducing, with discussion, extensive excerpts from FTC and dissenting opinions in the Community Blood Bank case).
65. But see Laura Landro, Protecting Organ Recipients-From Donors, WALL ST. J., Dec. 10, 2008, at D16 (describing one recent case of transfusion-transmitted HIV).
66. See id. (noting survey results finding "72,000 transfusion-related adverse reactions in 2006").
67. See id. (describing cooperation among the Centers for Disease Control and Prevention, "private blood banks, tissue banks and organ-donation groups to develop a national 'biovigilance' network")
68. Laura Landro, Hospitals Seek to Limit Use of Transfusions, WALL ST. J., Oct. 29, 2008, at D1 (describing how stricter disease screening decreased the blood-donor pool thereby prompting improved blood-conservation measures at hospitals).
69. For the view that the apparent inability of U.S. political and legal institutions to adhere rigorously and consistently to market principles may force government to adopt nonmarket policies even when they are not theoretically or otherwise clearly justified, see Clark C. Havighurst & Barak D. Richman, Distributive Injustice(s) in American Health Care, 69 LAW & Contemp. PROBS. 7, 80-81 (Autumn 2006)
70. see also Clark C. Havighurst, Why Preserve Private Health Care Financing?, in American Health Policy: Critical Issues For Reform 87 (1993) (arguing that private health plans are hard to defend unless the legal system allows them to offer, and they do in fact offer, consumers a full range of health-care options, including meaningful economizing opportunities). For other statements concerning the price the public pays for treating health care as a field appropriately governed according to professional values and not as an ordinary commercial activity governed principally by private contracts and consumer choice
71. see CLARK C. HAVIGHURST, Health Care Choices: Private Contracts AS Instruments Of Health Reform (1995)
72. Clark C. Havighurst, American Health Care and the Law-We Need to Talk!, HEALTH AFF., July/Aug. 2000, at 84, 97 ("It is simply ironic that the same legal system that with one arm launched an antitrust initiative successfully challenging overt efforts by the medical profession to exercise decision-making authority has with its other arms given medical interests a monopoly over the most important economic decisions affecting American health care.")
73. Clark C. Havighurst, How the Health Care Revolution Fell Short, 65 LAW & CONTEMP. PROBS. 55 (Autumn 2002)
74. Clark C. Havighurst, Starr on the Corporatization and Commodification of Health Care: The Sequel, 29 J. Health Pol. POL'Y & L. 947 (2004).
75. For my critique of another scholar who, like Titmuss, strongly resists treating health care as a commercial activity, see Clark C. Havighurst, An Apology for Professionalist Regimes, 28 J. Health Pol. Pol'y & L. 159 (2003) (reviewing Eliot Freidson, Professionalism: The Third Logic (2001)).