Brown v. GlaxoSmithKline, LLC ( 2024 )

No. 11 May 2, 2024 225
IN THE SUPREME COURT OF THE
STATE OF OREGON
PROVIDENCE HEALTH SYSTEM - OREGON,
Petitioner on Review,
v.
Thomas BROWN,
Respondent on Review,
and
Maria Del Carmen Espindola GOMEZ,
Respondent on Review.
(CC 15CV23066) (CA A169544) (SC S070082)
En Banc
On review from the Court of Appeals.*
Argued and submitted November 9, 2023.
David R. Fine, K&L Gates LLP, Harrisburg,
Pennsylvania, argued the cause and filed the briefs for peti-
tioner on review. Also on the briefs were Elizabeth H. White,
K&L Gates, LLP, Portland, and Robert B. Mitchell, K&L
Gates, LLP, Seattle, Washington.
Travis Eiva, Eiva Law, Eugene, argued the cause and
filed the brief for respondents on review.
Hillary A. Taylor, Keating Jones Hughes, P.C., Portland,
filed the brief for amicus curiae Oregon Association of
Hospitals and Health Systems.
Keith J. Bauer, Parks, Bauer, Sime, Winkler & Walker,
LLP, Portland, filed the brief for amicus curiae Salem Health
Hospitals & Clinics. Also on the brief was Michael Walker.
Shayna M. Rogers, Cosgrave Vergeer Kester, LLP,
Portland, filed the brief for amici curiae Oregon Medical
Association and American Medical Association.
______________
* Appeal from Multnomah County Circuit Court, Gregory F. Silver, Judge.
323 Or App 214, 523 P3d 132 (2022).
226 Brown v. GlaxoSmithKline, LLC
David W. Cramer, MB Law Group, LLP, Portland, filed
the brief for amicus curiae Oregon Association of Defense
Counsel.
Sage R. Vanden Heuvel, Quinn Emanuel Urquhart &
Sullivan, LLP, Los Angeles, CA, filed the brief for amici
curiae The Chamber of Commerce of the United States of
America and The Oregon Liability Reform Coalition.
Kristi Gifford, Callahan Law Office, Milwaukie, filed the
brief for amicus curiae Oregon Trial Lawyers Association.
Also on the brief was Kirc Emerson, Richardson Wang, LLP,
Portland.
FLYNN, C.J.
The decision of the Court of Appeals is affirmed. The judg-
ment of the trial court is reversed, and the case is remanded
to the trial court for further proceedings.
Cite as 372 Or 225 (2024) 227
FLYNN, C.J.
The Oregon legislature long ago codified a rule of
strict product liability that applies to “[o]ne who sells” an
unreasonably dangerous, defective product, if the seller is
“engaged in the business of selling” such a product. ORS
30.920(1). At issue in this case is whether that statute
applies to a hospital that supplies and administers a drug
that causes harm. The trial court concluded that the stat-
ute was inapplicable under those circumstances and, on
that basis, granted the hospital-defendant’s motion for sum-
mary judgment. The Court of Appeals disagreed with the
trial court’s construction of the statute and reversed and
remanded. Brown v. GlaxoSmithKline, LLC, 323 Or App
214, 523 P3d 132 (2022). This court allowed review, and we
now affirm the decision of the Court of Appeals. As we will
explain, we conclude that (1) the legislature did not intend
to exclude hospitals from the scope of ORS 30.920(1); (2) a
hospital that supplies and administers a dangerously defec-
tive drug in conjunction with providing a healthcare service
can be a “seller” that is “engaged in the business of sell-
ing” for purposes of liability under ORS 30.920; and, con-
sequently, (3) the trial court erred in granting the motion
for summary judgment. Thus, we affirm the decision of the
Court of Appeals, reverse the trial court’s judgment, and
remand for further proceedings.
I. BACKGROUND
On review of a grant of summary judgment, this
court views “all parts of the record” before the court in the
light most favorable to the nonmoving party—here plain-
tiffs, Brown and Gomez. Two Two v. Fujitec America, Inc.,
355 Or 319, 331, 325 P3d 707 (2014); ORCP 47 C. We describe
the pertinent facts consistent with that standard.
Brown and Gomez are the parents of M, who suf-
fered irreparable heart defects as a result of in utero expo-
sure to the drug Zofran, which Providence Health System
- Oregon administered to Gomez. Gomez was seven weeks
pregnant with M when she went to the emergency room of
Providence’s Newberg Medical Center complaining of nau-
sea, vomiting, and other symptoms. A Providence emergency
228 Brown v. GlaxoSmithKline, LLC
department physician evaluated Gomez and prescribed her
four milligrams of injectable Zofran, which a Providence
nurse administered. That prescription was fulfilled by
Providence’s internal pharmacy. Because the parties do not
dispute that the physician, nurse, and pharmacy’s actions
are attributable to Providence, we refer to those individuals
and institutions collectively as Providence.
As part of her emergency department visit, Gomez
signed a “Conditions for Services” form, which stated that
she agreed “to pay for the services or products provided by
Providence.” Providence billed Gomez specifically for the
emergency room visit. Although that bill did not list a spe-
cific charge for Zofran, the parties agree that Gomez was
prescribed and administered Zofran as part of her emer-
gency room visit for which the bill was sent. Gomez later
gave birth to M, who was diagnosed with irreparable heart
defects.
Brown and Gomez brought suit as plaintiffs, on
their own behalf and as guardians ad litem for M, against
Providence, as well as against the manufacturer of Zofran.1
As pertinent to this appeal, plaintiffs asserted a claim for
strict liability under ORS 30.920, alleging that Providence
was a “seller” of Zofran “engaged in the business of selling
Zofran and products of the kind,” that Providence “sold,
distributed, vended, administered and/or supplied Zofran”
to Gomez while she was pregnant with M, that Zofran was
“unreasonably dangerous and defective” in multiple ways,
and that, as a result of the defective condition of Zofran,
M “suffers from permanent and life-threatening congenital
heart defects.”2
Providence moved for summary judgment, con-
tending that, as a matter of law, “[a]s a provider of health
services, [Providence] is neither a seller in the business of
selling Zofran injectable nor is it a distributor of Zofran,”
so it could not be subject to liability under ORS 30.920.
Although Providence did not dispute that it supplied and
1
Plaintiffs’ claims against the manufacturer of Zofran, GlaxoSmithKline,
LLC, are not before this court.
2
Plaintiffs voluntarily withdrew an additional claim for negligent misrepre-
sentation that they also had alleged against Providence.
Cite as 372 Or 225 (2024) 229
administered Zofran to Gomez, it emphasized that “[t]he
undisputed evidence in this case establishes plaintiff Gomez
came to [Providence] not to purchase Zofran injectable or
any other medication but for the provision of emergency
medical services.” Providence also emphasized that it sup-
plies drugs like Zofran through its in-house “institutional
drug outlet” (or internal pharmacy), which—unlike a retail
pharmacy—dispenses Zofran and other drugs only for phy-
sicians to administer to a patient in the hospital. Providence
argued that the legislature did not intend ORS 30.920 “to
create a new statutory claim against hospitals for products
used in the course of providing health services to patients.”
The trial court agreed and granted Providence’s motion.
The Court of Appeals reversed. The court concluded
that “one ‘sells’ a product” within the meaning of ORS 30.920
“when one transfers ownership of the product to another in
exchange for valuable consideration; a ‘seller’ is one who car-
ries out such a transfer; and ‘selling’ is the act or process of
such a transfer.” Brown, 323 Or App at 223. That court also
construed “seller engaged in the business of selling” to mean
one who “carries on commercial activity composed in part of
the act of selling the product, viz., transferring ownership
of the product to another in exchange for valuable consid-
eration.” Id. at 223-24. Accordingly, the Court of Appeals
concluded that, under the facts alleged, one could determine
that “Providence was a ‘seller * * * engaged in the business of
selling’ within the meaning of ORS 30.920” when Providence
provided Zofran to Gomez for valuable consideration, and
when Providence kept a stock of Zofran in its internal phar-
macy for distribution to patients. Id. at 232-33.
Providence then petitioned for review, which we
allowed.
II. ANALYSIS
Summary judgment is appropriate when there is no
genuine issue of material fact such that the moving party—
here Providence—is entitled to judgment as a matter of
law. ORCP 47. Here, Providence sought summary judgment
on the basis that, as a matter of law, this case fails to sat-
isfy two of the requirements for strict liability under ORS
230 Brown v. GlaxoSmithKline, LLC
30.920. Providence contends that it did not “sell” the Zofran
to Gomez, within the meaning of ORS 30.920, because it did
not transfer “the full panoply of rights attendant to owner-
ship” in the dose of Zofran when it administered the drug to
Gomez. Providence also contends that it is not a “seller * * *
engaged in the business of selling” Zofran, either because
the legislature did not intend the statute to apply when the
“essence of the transaction” with a consumer is providing a
service, or because the legislature did not intend the stat-
ute to apply to hospitals. Plaintiffs disagree. They urge this
court to adopt the Court of Appeals’ construction of the stat-
ute and conclude that, under the plain terms of ORS 30.920,
hospitals are sellers of drugs when they dispense drugs
through their internal pharmacy.
The parties’ arguments raise questions of stat-
utory construction that we resolve by employing the ana-
lytical framework set out in PGE v. Bureau of Labor and
Industries, 317 Or 606, 859 P2d 1143 (1993), and modified in
State v. Gaines, 346 Or 160, 206 P3d 1042 (2009). Under that
framework, we examine the text and context of ORS 30.920,
together with legislative history to the extent that it aids
our analysis, all with the “paramount goal” of determining
the legislature’s intent. Gaines, 346 Or at 171-72.
As we will explain, our examination of the text, con-
text, and legislative history of ORS 30.920 leads us to the
following conclusions about the legislature’s intent: “Sells”
includes transactions of the type through which Providence
both supplied and administered the Zofran to Gomez, and a
hospital that charges for supplying a dangerously defective
drug in conjunction with providing a healthcare service can
be a “seller” that is “engaged in the business of selling” for
purposes of strict liability under ORS 30.920. Accordingly,
we agree with the Court of Appeals that the trial court erred
in granting Providence’s motion for summary judgment.
A. Statutory Construction
1. Text and context
Plaintiffs’ strict liability claim is governed by ORS
30.920. As pertinent, that statute describes the require-
ments for strict products liability in Oregon:
Cite as 372 Or 225 (2024) 231
“(1) One who sells or leases any product in a defective
condition unreasonably dangerous to the user or consumer
or to the property of the user or consumer is subject to lia-
bility for physical harm or damage to property caused by
that condition, if:
“(a) The seller or lessor is engaged in the business of
selling or leasing such a product.”
The statute also specifies how questions about those require-
ments should be resolved:
“(3) It is the intent of the Legislative Assembly that the
rule stated in subsections (1) and (2) of this section shall be
construed in accordance with the Restatement (Second) of
Torts sec. 402A, Comments a to m (1965).”
We turn first to the parties’ dispute over the meaning
of the terms “sells,” and “seller,” neither of which is defined,
before addressing what it means to be “engaged in the busi-
ness of selling.” When determining what the legislature
intended an undefined statutory term to mean, “it is helpful
to understand” how the term was used when the legislature
enacted the statute. Marshall v. PricewaterhouseCoopers,
LLP, 371 Or 536, 540, 539 P3d 766 (2023). If the term is one
of common usage, we generally presume that the legislature
intended the ordinary meaning of the term, for which we
often consult contemporaneous dictionaries. Id. at 540-41;
see also Comcast Corp. v. Dept. of Rev., 356 Or 282, 296, 337
P3d 768 (2014) (observing that “we frequently consult dictio-
nary definitions of the terms, on the assumption that, if the
legislature did not give the term a specialized definition, the
dictionary definition reflects the meaning that the legisla-
ture would naturally have intended”); id. at 296 n 7 (noting
that this court relies on dictionaries “contemporaneous with
the enactment of the statute”).
“But if the context or legislative history of a statute
indicate that the legislature intended a term to have a mean-
ing drawn from a specialized trade or field, so-called terms
of art, we consider the meaning and usage of those terms in
the discipline from which the legislature borrowed them.”
Marshall, 371 Or at 541 (internal quotation marks omitted).
And for terms drawn from the legal field, we often look, “for
starters at least,” to contemporaneous legal dictionaries to
232 Brown v. GlaxoSmithKline, LLC
determine what specialized meaning the legislature may
have intended. Id. (internal quotation marks omitted).
The Court of Appeals looked to a dictionary of
common usage to determine the “ordinary meaning” that
the legislature presumably intended for all of the disputed
terms. See 323 Or App at 223 (quoting Webster’s Third New
Int’l Dictionary (unabridged ed 2002)). But, as our discus-
sion in Marshall cautions, some terms of common usage also
are used as terms of art in the context of a specialized field,
such as the legal field. Id. at 542. And when a statute uses
such terms, consulting both ordinary usage and contem-
poraneous legal dictionaries can supply a helpful starting
point to understand how the legislature intended to use the
term. See id. at 542-43 (considering definitions in both ordi-
nary and legal dictionaries to determine the legislature’s
intended meaning for terms “injury” and “property”).
a. “Sells” and “seller”
The term “sell”—the root of both “sells” and
“seller”—is a term of common usage that sometimes is used
as a term of art in the legal field, but both common-usage
dictionaries and legal dictionaries identify a similar range
of meanings, including simply an act of transferring prop-
erty to another for consideration. At the time that the leg-
islature enacted ORS 30.920, common usages of the term
“sell,” included “to give up (property) to another for money or
other valuable consideration,” to “hand over or transfer title
(as goods or real estate) for a price,” “to offer for sale,” and
“to give up in return for something else.” Webster’s Third
New Int’l Dictionary 2061 (unabridged ed 1976);3 Webster’s
Collegiate Dictionary 786 (7th ed 1970). And as a legal term
of art, “sell” was defined as simply “[t]o dispose of by sale.”
See Black’s Law Dictionary 1220 (5th ed 1979) (defining
“sell”).
3
An advantage in consulting definitions set out in Webster’s Third New Int’l
Dictionary to understand how the legislature would have understood the words
that it uses in statutes—and one reason that this court consults that dictionary
so frequently—is that, unlike other dictionaries, which set out to prescribe the
“ ‘correct’ usage” for words, Webster’s “is a dictionary with a ‘descriptive’ focus,
reporting ordinary usage.” Kohring v. Ballard, 355 Or 297, 304 n 2, 325 P3d 717
(2014).
Cite as 372 Or 225 (2024) 233
Definitions of the term “sale,” in turn, referred to
a broad range of transactions. As a term of common usage,
“sale,” referred (somewhat circularly) to “the act of selling”
and also more particularly to “a contract transferring the
absolute or general ownership of property from one person
or corporate body to another for a price.” Webster’s at 2003
(unabridged ed 1976); see also Webster’s Collegiate at 759
(defining “sale” as “the act of selling” and also “the trans-
fer of ownership of and title to property from one person to
another for a price”). The definitions of “sale” as a legal term
of art were extensive, but included both broad references to
the “[t]ransfer of property for consideration either in money
or its equivalent” and “[a]n agreement by which one gives
a thing for a price in current money, and the other gives
the price in order to have the thing itself.” Black’s at 1200.
Those definitions, collectively, suggest that the legislature
enacted ORS 30.920 with the intent that one who “sells” or
is a “seller” of a product could include anyone who transfers
the product to another in exchange for money or other valu-
able consideration.4
Providence, nevertheless, urges this court to pre-
sume that the legislature intended “sell” for purposes of ORS
30.920 to incorporate the legal definition of “ownership”—as
meaning the “[c]ollection of rights to use and enjoy prop-
erty, including the right to transmit it to others,” Black’s
at 997—or the definition of “sale” that appears in Oregon’s
Uniform Commercial Code, which specifies that, “[i]n this
chapter, unless the context otherwise requires * * * [a] ‘sale’
consists in the passing of title from the seller to the buyer for
a price.” ORS 72.1060(1). From those definitions, Providence
concludes that it did not “sell” the Zofran that it supplied
and administered to Gomez, because a patient in that con-
text does not acquire the right to “use the medication as she
4
Our statement that the term “sells” includes an exchange for valuable con-
sideration accommodates some contextual indications that the legislature may
have intended that liability under ORS 30.920 would not be contingent on a con-
sumer purchasing the product. See Restatement (Second) of Torts § 402A comment
l (1965) (explaining that, for the rule of strict product liability to apply, “[i]t is not
even necessary that the consumer have purchased the product at all”; instead,”[h]
e may be a member of the family of the final purchaser, or his employee, or a guest
at his table, or a mere donee from the purchaser”); ORS 30.920(3) (specifying leg-
islative intent that liability under the statute “shall be construed in accordance
with the Restatement (Second) of Torts sec. 402A, Comments a to m (1965)”).
234 Brown v. GlaxoSmithKline, LLC
wishes, nor can she transfer it to someone else.” According
to Providence, a “ ‘sale’ involves the transfer of title and
ownership in a product, and that means that the transferee
receives the full panoply of rights attendant to ownership.”
But we are not persuaded. Although Providence’s incorpora-
tion of the rights of “ownership” is understandable given the
Court of Appeals’ reliance on “ownership” to define “sell,” see
323 Or App at 223, the reliance is misplaced.
As an initial matter, the words “ownership” or
“title” do not appear in the text of ORS 30.920. The Court
of Appeals included the term “ownership” in its definition of
“sells” through an exercise of linking definitions: Webster’s
defines “sell,” in part, as referring to offering an item “for
sale”; and one of its definitions of “sale” refers to transfer-
ring “ownership of property from one person or corporate
body to another for a price (as a sum of money or any other
consideration)”; therefore “one ‘sells’ a product when one
transfers ownership of the product to another in exchange
for valuable consideration.” 323 Or at 223 (quoting Webster’s
at 2003, 2061-62 (unabridged ed 2002)). And Providence
takes the exercise a step farther by linking to a legal defini-
tion of “ownership” and what it assumes to be a restrictive
concept of “title.”
But the fact that transferring “ownership” or “title”
is included in some definitions of “sale”—which, in turn,
appears in some definitions of “sell”—does not mean that
the legislature intended the term “sells” to convey that strict
liability under ORS 30.920 is limited to transactions in
which a consumer acquires the defective product in a form
that accommodates transfer to a new owner. As a matter
of logic, the fact that a transfer of the “full panoply” of the
rights of ownership is a “sale,” does not mean that every
“sale” transfers what Providence views as the “full panoply”
of the rights of ownership, let alone that “sells” is limited
in that way. And, as a matter of statutory construction,
we reiterate our oft-repeated caution that dictionary defi-
nitions are only a useful starting point for understanding
what the legislature may have intended the terms of a stat-
ute to mean. Marshall, 371 Or at 543. Some of the defini-
tions of “sale” that we quoted above make no reference to
Cite as 372 Or 225 (2024) 235
transferring “title” or ownership rights. But even when dic-
tionary definitions supply clear definitions of the terms used
in a statute, we do not rely “solely on dictionary definitions
to determine the meaning of statutory terms ‘without crit-
ically examining how the definition fits into the context of
the statute itself.’ ” Id. (quoting State v. Gonzalez-Valenzuela,
358 Or 451, 461, 365 P3d 116 (2015)).
Here, the context of the statute as a whole persuades
us that strict liability for one who “sells” a defective prod-
uct is not limited to those who transfer the “full panoply” of
ownership rights to the product, or “title” to the product in
the formal sense contemplated by Providence. As the text
of ORS 30.920(1) makes clear, the legislature created strict
liability that applies equally to one who “sells or leases” a
defective product if the “seller or lessor is engaged in the
business of selling or leasing such a product.” (Emphasis
added.) The legislature’s decision to create identical liabil-
ity for transactions consisting of a lease, which transfers
fewer than all rights of ownership, suggests that the legisla-
ture was not concerned about limiting liability to those who
transfer all rights of ownership in a product, which makes it
more likely that it did not intend liability for one who “sells”
a defective product to be limited in that way. See, e.g., State
v. Hubbell, 371 Or 340, 351, 537 P3d 503 (2023) (describ-
ing and applying the “oft-invoked principle of statutory con-
struction” under which, “when a word appearing in a list or
grouping is capable of more than one meaning, the meaning
that is more consistent with the other words in the group
may better reflect legislative intent”); Black’s at 800 (defin-
ing “lease” with respect to “tangible personal property” as
meaning “a contract by which one owning such property
grants to another the right to possess, use and enjoy it for
specified period of time”).
Equally significant, ORS 30.920(3) specifies that
the liability provisions of the statute are to “be construed in
accordance with the Restatement (Second) of Torts sec. 402A,
Comments a to m (1965).” That section of the Restatement
addresses strict products liability, and the comments explain-
ing the scope of that liability are context for what the legis-
lature intended ORS 30.920 to cover. Griffith v. Blatt, 334 Or
236 Brown v. GlaxoSmithKline, LLC
456, 467-68, 51 P3d 1256 (2002). Neither the terms “owner-
ship” or “title,” nor the concept “rights of ownership,” appears
in the comments to section 402A. Moreover, comment l illus-
trates that liability can be based on transactions in which
a product is entirely consumed by being administered to
the consumer. The comment explains that a “customer in
a beauty shop to whose hair a permanent wave solution is
applied by the shop” may recover in strict liability. Id. As with
a drug that is administered intravenously, the application of
a permanent wave solution leaves the consumer no ability to
transfer the solution to anyone else, because the product is
consumed—which is its intended purpose.5 Accordingly, we
are unpersuaded by Providence’s argument that we should
construe ORS 30.920 as if the legislature had intended to
exclude from the meaning of “sells” the transfer of defective
products that the consumer fully consumes.
b. “Engaged in the business of selling”
Next, we consider the parties’ dispute regarding
what the legislature intended by the requirement that strict
liability for a defective product applies to a “seller” that is
“engaged in the business of selling such products.” According
to Providence, the phrase “engaged in the business of sell-
ing” does not include hospitals that supply pharmaceutical
drugs to consumers in conjunction with health care services.
Providence proposes two reasons for that exclusion: First, it
contends that the phrase limits strict liability to businesses
for which the “essence of the transaction” with the public is
selling a product,6 and, second, it contends that the legisla-
5
The concept of transferring the rights of ownership may look different in
the context of a product that is consumed in the process of transfer. For example,
Providence argues that it did not transfer ownership of the Zofran to Gomez, but
it also did not retain ownership of the Zofran, which leaves the question, “Where
did ownership of the Zofran go?” Similarly, the concept of transferring “title” that
is used for Oregon’s Commercial Code is flexible enough to explain what happens
when a cafe serves a glass of wine or plate of scrambled eggs to a customer. See
ORS 72.3140 (under UCC, “sale” includes serving food or drink to be consumed on
the premises); Gardyjan v. Tatone, 270 Or 678, 680, 528 P2d 1332 (1974) (observ-
ing that plaintiff, seeking recovery from restaurant that sold an omelet tainted
with staphylococcal germs, “could have alleged a breach of the implied warranty
of merchantability” under the commercial code “or strict liability in tort”).
6
Providence maintains that the “essence” of its transaction with Gomez was
not the “selling” of Zofran. Although the supplying of Zofran to treat Gomez’s nau-
sea arguably was part of the essence of the transaction, we accept Providence’s
characterization for purposes of this opinion.
Cite as 372 Or 225 (2024) 237
ture did not intend strict liability to extend to hospitals that
sell a medication to consumers in the course of providing
medical services.
Neither the common meaning of “engaged in the
business of selling” nor that phrase in the context of the
statute supports Providence’s limiting construction. Looking
first to the contemporaneous meaning of the terms, “seller”
was defined similarly in both ordinary-usage and legal
dictionaries as simply meaning one that “offers for sale,”
Webster’s at 2062 (unabridged ed 1976), or “sells anything,”
Black’s at 1220. Common usages of “engage” were “to begin
and carry on an enterprise, esp[ecially] a business or profes-
sion,” “to employ or involve oneself,” or “to take part : par-
ticipate.” Webster’s at 751 (unabridged ed 1976). “Business,”
as used in this context, commonly means “a usu[ally] com-
mercial or mercantile activity customarily engaged in as a
means of livelihood and typically involving some indepen-
dence of judgment and power of decision.” Id. at 302. And
“selling” was used to refer to “the act, process, or art of offer-
ing goods for sale.” Id. at 2062; see Black’s at 1200, 1220
(defining “sell”—the root of “selling”—as “[t]o dispose of by
sale” and the term “sale” as meaning “[t]ransfer of property
for consideration”). Accordingly, we understand the ordi-
nary usage of the phrase “engaged in the business of sell-
ing” products to include those whose business activity reg-
ularly involves transferring products to others in exchange
for consideration.
The context of the statute as a whole further sug-
gests that the legislature intended the phrase “engaged
in the business of selling” to have a meaning consistent
with the ordinary usages of the terms. As described above,
the comments to section 402A of the Restatement provide
important context that informs our understanding of what
the legislature intended by “engaged in the business of sell-
ing.” ___ Or at ___ (slip op at 12:9-11). As we will explain,
those comments point to a construction of “engaged in the
business of selling” that is not compatible with Providence’s
contention that the phrase excludes businesses for which
the “essence of the transaction” between the business and
consumer is providing a service.
238 Brown v. GlaxoSmithKline, LLC
As an initial reference point, the beauty-salon
example in comment l suggests that the legislature did not
intend to limit the scope of strict liability to transactions in
which the “essence of the transaction” with the consumer is
the sale of a product. Although comment l is focused on who
qualifies as a “user or consumer” of a product, it makes clear
that liability can arise even when the only transaction in
which the consumer participates is primarily the purchase
of a service.
The scope of the rule comes through even more
clearly in comment f, which clarifies what engaged in the
“business of selling” a product means:
“It is not necessary that the seller be engaged solely in the
business of selling such products. Thus the rule applies to
the owner of a motion picture theatre who sells popcorn
or ice cream, either for consumption on the premises or in
packages to be taken home.”
Restatement § 402A comment f. As that example illustrates,
however, a business can be engaged in the business of sell-
ing a type of product even when selling such products is
ancillary to the service (entertainment) that represents “the
essence” of the business’s interaction with consumers. In
fact, the comment suggests that the primary limitation on
what qualifies as “engaged in the business of selling” is that
it excludes “the ordinary individual who makes the isolated
sale.” Id. As comment f explains:
“The rule does not, however, apply to the occasional
seller of food or other such products who is not engaged
in that activity as a part of his business. Thus it does not
apply to the housewife who, on one occasion, sells to her
neighbor a jar of jam or a pound of sugar. Nor does it apply
to the owner of an automobile who, on one occasion, sells it
to his neighbor, or even sells it to a dealer in used cars, and
this even though he is fully aware that the dealer plans to
resell it.”
Id. Relatedly, comment f specifies that, even for merchants
otherwise engaged in the business of selling products, the
rule of liability does not apply to sales made “out of the usual
course of business, such as execution sales, bankruptcy
sales, bulk sales, and the like.” Id.
Cite as 372 Or 225 (2024) 239
Thus, construing ORS 30.920 in accordance with
the comments to section 402A—as the legislature has
directed—we conclude that the distinction between one who
is “engaged in the business of selling” a product and one who
is not depends on whether the seller sells the product as part
of the usual course of its business, even if selling the prod-
uct is ancillary to providing services to the consumer. That
construction is bolstered by the purpose of imposing strict
liability on one “engaged in the business of selling”:
“The basis for the rule is the ancient one of the special
responsibility for the safety of the public undertaken by one
who enters into the business of supplying human beings
with products which may endanger the safety of their per-
sons and property, and the forced reliance upon that under-
taking on the part of those who purchase such goods.”
Id.Finally, relevant context for interpreting the text
of ORS 30.920 comes from this court’s prior decisions
addressing strict products liability under the common
law, of which we presume the legislature was aware when
it enacted ORS 39.920. See, e.g., Montara Owners Assn. v.
La Noue Development, LLC, 357 Or 333, 341, 353 P3d 563
(2015) (“The context for interpreting a statute’s text includes
the preexisting common law, and we presume that the leg-
islature was aware of that existing law.”). Although strict
products liability in Oregon is now governed exclusively by
the statutory framework in ORS 30.920, Griffith, 334 Or at
466, this court had previously adopted and applied section
402A as Oregon’s common-law standard for strict products
liability claims, Heaton v. Ford Motor Co., 248 Or 467, 470,
435 P2d 806 (1967). But concerns that the rules of liability
might continue to evolve if left entirely to the courts, at least
in part, motivated the legislature to “stabilize the rules of
[product] liability” by codifying section 402A, albeit with a
few modifications that expanded liability beyond what 402A
described. Ewen v. McLean Trucking Co., 300 Or 24, 28,
706 P2d 929 (1985); see also Allen v. The Heil Company, 285
Or 109, 119 n 5, 589 P2d 1120 (1979) (“It should be remem-
bered that [section] 402A is not a statute and that as an
attempted restatement of common law it is binding upon
240 Brown v. GlaxoSmithKline, LLC
this court only so long and in such particulars as we may
find appropriate.”).
One of the decisions of which the 1979 legisla-
ture presumably was aware when codifying the strict lia-
bility described in section 402A is Hoover v. Montgomery
Ward & Co., 270 Or 498, 528 P2d 76 (1974). Significantly,
in the course of examining whether the defendant could be
strictly liable under section 402A for negligently installing
a tire that was not defective, this court in Hoover described
a “series” of “sale-service hybrid” cases from other juris-
dictions, which held that a party that provides a danger-
ously defective product in the course of providing a service
may be subject to strict liability—when it was “clear that
the product, as opposed to the service, was defective.” Id. at
501-02 (citing Friend v. Childs Dining Hall Co., 231 Mass.
65, 120 NE 407 (1918) (restaurant could be liable for sup-
plying tainted food); State Stove Manufacturing Company v.
Hodges, 189 So 2d 113 (Miss 1966), cert den, 386 US 912(1967) (contractor could be liable for supplying defective hot
water heater); Worrell v. Barnes, 87 Nev 204, 484 P2d 573(1971) (carpenter could be liable for supplying defective gas
pipe fittings); and Carpenter v. Best’s Apparel, Inc., 4 Wash
App 439, 481 P2d 924 (1971) (beauty shop could be liable for
supplying defective permanent wave solution)).
Although Hoover ultimately rejected that approach
as “inapposite to the case at hand,” because the plaintiff
alleged only that the service was defective, id., at 501-2, we
presume that the legislature was aware of our discussion of
the cases imposing strict liability on those who sell defective
products as part of “sales-service hybrid” transactions. That
context suggests that, if the legislature had intended to pre-
clude liability for businesses engaged in selling products in
conjunction with providing a service, it would have under-
stood the need to make that limitation explicit. For all of
the reasons described above, we are persuaded that the text
and context of ORS 30.920 point to a legislative intent that
strict liability for those “engaged in the business of selling”
a product reaches those who supply the product in conjunc-
tion with providing a service, regardless of the “essence of
the transaction.”
Cite as 372 Or 225 (2024) 241
Providence nevertheless argues that the legislature
did not intend that a hospital would be considered a seller
“engaged in the business of selling” for purposes of ORS
30.920. Although nothing in the text of the statute suggests
an intent to exclude hospitals from the scope of liability
under ORS 30.920, Providence points to what it contends
are other contextual indications to support that legislative
intent.
First, Providence contends that applying ORS
30.920 to a hospital that supplies a drug in the course of
providing healthcare services would not fit the justification
for strict liability that is described in comment c. The com-
ment explains, in part, that
“the justification for the strict liability has been said to be
that the seller, by marketing his product for use and con-
sumption, has undertaken and assumed a special respon-
sibility toward any member of the consuming public who
may be injured by it[.]”
According to Providence, “marketing” a product involves
making “goods available to buyers in a planned way that
encourages people to buy more of them,” and it did noth-
ing to encourage patients to seek Zofran. And Providence
faults the Court of Appeals for describing “market” as sim-
ply a synonym for “sell.” See Brown, 323 Or App at 226. Even
accepting Providence’s premise that “market” in comment
c has a meaning distinct from “sell,” however, Providence’s
reliance on comment c is misplaced. In our view, the por-
tion of comment c that Providence emphasizes simply illus-
trates that a business that markets its products should
be held strictly liable—not that proof of marketing should
be required for liability. In fact, the rest of the comment
explains another justification for strict liability that is fully
applicable to a hospital in Providence’s circumstances: “[T]
he public has the right to and does expect, in the case of
products which it needs and for which it is forced to rely
upon the seller, that reputable sellers will stand behind
their goods.” Restatement § 402A comment c. Pursuant to
ORS 30.920(3), we are directed to construe the liability pro-
visions of ORS 30.920 consistently with all the comments
from a to m, and—as explained above—the comments as a
242 Brown v. GlaxoSmithKline, LLC
whole persuade us that a hospital supplying drugs that it
also administers can be subject to strict liability.
Second, Providence insists that relevant context
can be found in the definitions of “hospital” that are set out
in a different, current statute and in a 1979 administrative
rule, both of which treat a hospital as a service provider, and
not a seller of products. See ORS 442.015(15); OAR 333-23-
114(a) (1979). We are not persuaded.
ORS 442.015(15) defines a “hospital,” for purposes
of chapters governing Public Health and Safety, as:
“(a) A facility with an organized medical staff and a per-
manent building that is capable of providing 24-hour inpa-
tient care to two or more individuals who have an illness
or injury and that provides at least the following health
services:
“(A) Medical;
“(B) Nursing;
“(C) Laboratory;
“(D) Pharmacy; and
“(E) Dietary; or
“(b) A special inpatient care facility * * *.”
But ORS 442.015(15) provides no relevant context for
whether the 1979 legislature intended to exempt hospitals
from strict product liability. Beyond the fact the statute does
not purport to prohibit hospitals from selling products, the
definition of “hospital” was not adopted until 2001, and the
statute defines terms for an area of law that is unrelated to
tort liability for a defective product. Or Laws 2001, ch 104,
§ 181; see Ogle v. Nooth, 355 Or 570, 585, 330 P3d 572 (2014)
(explaining that “[a] statute’s context includes other provi-
sions of the same or related statutes”).
Although the administrative rule to which
Providence cites may have been in effect when the legisla-
ture enacted ORS 30.920, it also supplies no relevant con-
text for the scope of the statute. OAR 333-23-114(a) (1979)
was a rule promulgated by the Health Division of the for-
mer Oregon Department of Human Resources. Providence
Cite as 372 Or 225 (2024) 243
argues that the rule defined a “hospital”—for purposes of
the Health Division’s regulatory framework—”entirely with
regard to the professionals who work there and the variety
of healthcare services they provide,” with no hint that the
department “regarded them as sellers of anything.”7 Even
accepting that characterization, however, the existence of
an administrative rule from that distinct regulatory context
provides no reason to conclude that the legislature intended
to exclude hospitals from the liability established by ORS
30.920. Nothing in the rule suggested that hospitals were
precluded from selling medical products to their patients.
Moreover, Providence offers no reason that an administra-
tive rule identifying the entities that were regulated by the
health authority in 1979 would supply relevant context for
what the legislature intended when it enacted a statute
addressing tort liability for the seller of a defective product.
Third, Providence cites decisions from courts in
other states that have applied some variation on Providence’s
“essence of the transaction” rule to conclude that hospitals
are not strictly liable for harm caused by the defective prod-
ucts that they supply. For the most part, those cases were
decided after the enactment of ORS 30.920 and, therefore,
cannot inform our understanding of what the legislature
intended. Moreover, they rely on common-law principles
from other states and policy considerations that are not part
of this court’s framework for construing an Oregon statute.
See, e.g., Hector v. Cedars-Sinai Medical Center, 180 Cal
App 3d 493, 502, 508, 225 Cal Rptr 595, 598, 602 (1986)
(deciding case based on California common law and policy
considerations); Easterly v. HSP of Texas, Inc., 772 SW 2d
211, 213 (Tex Civ App 1989) (deciding case based on Texas
common law); Cafazzo v. Cent. Medical Health Services, 542
Pa 526, 532, 534-36, 668 A2d 521, 525-26 (1995) (deciding
case based on other jurisdictions’ cases and policy consider-
ations); Royer v. Catholic Medical Center, 144 NH 330, 332-
35, 741 A2d 74, 76-78 (1999) (deciding case based on New
7
OAR 333-23-114(a) (1979) defined a hospital, in relevant part, as “an estab-
lishment with an organized medical staff, with permanent facilities that include
inpatient beds, and with medical services, including physician services and con-
tinuous nursing services under the supervision of registered nurses, to provide
diagnosis with medical or surgical treatment.”
244 Brown v. GlaxoSmithKline, LLC
Hampshire common law and policy considerations). As we
have explained, “this court’s consideration” of limitations
to the liability created under ORS 30.920 “begins and ends
with our construction of the pertinent product liability stat-
utes.” Griffith, 334 Or at 466.
Because two cases were decided before 1979, they
could be relevant to what the 1979 legislature intended. As
we will explain, however, the bare existence of those cases
does not persuade us that the legislature intended to include
a similar limitation on liability for hospitals in Oregon. The
first case is Perlmutter v. Beth David Hospital, 308 NY 100,
107, 123 NE 2d 792, 796 (1954), in which the New York court
decided that a hospital was not liable under the state’s Sales
Act for breaching implied warranties when it transfused
“bad blood” into a patient. The court explained that the
Sales Act, New York’s precursor to the Uniform Commercial
Code, had long been recognized as excluding transactions in
which the transfer of personal property was “an incidental
feature of the transaction,” id. at 104, and the court high-
lighted policy concerns about imposing liability under the
Act “upon the institution or agency actually seeking to save
or otherwise assist the patient.” Id. at 107.
Providence offers no reason to conclude that the
1979 legislature was aware of Perlmutter. Nor is there any
reason to presume that the legislature would have been
influenced by a decision involving principles of New York
sales law when codifying a strict product liability rule that
is based on principles of tort law. See Heaton, 248 Or at
470 (explaining that the liability that the court had recog-
nized for dangerously defective products “was specifically
rationalized as strict liability in tort”); see also Restatement
§ 402A comment l (“The liability stated is one in tort, and
does not require any contractual relation, or privity of con-
tract, between the plaintiff and the defendant.”).
The other case decided prior to 1979 is a decision
by the California Court of Appeal. In that case, the court
declined to extend the state’s common-law doctrine of strict
products liability to a hospital for harm that a patient suf-
fered when a defective surgical needle broke and became
embedded in the patient while the surgeon was suturing a
Cite as 372 Or 225 (2024) 245
wound. Silverhart v. Mount Zion Hospital, 20 Cal App 3d
1022, 1025, 1027, 98 Cal Rptr 187, 189, 190-91 (1971). The
court reasoned, in substantial part, that the hospital could
not be a “seller,” because “the hospital itself was a user of the
needle since such needle was supplied to the hospital for its
use in performing medical services incident to the normal
and ordinary business of the hospital.” Id. at 1028 (empha-
sis added). In other words, the California scenario did not
involve a hospital engaging in a transaction that involved
supplying a product to a patient. Thus, even assuming that
the Oregon legislature was aware of decisions from the
California Court of Appeal, we are not persuaded that the
Silverhart opinion would have influenced the legislature to
exclude hospitals from the reach of ORS 30.920 when they
engage in commercial transactions involving a sales-ser-
vice hybrid. In short, the text and relevant context of ORS
30.920 indicate that the legislature intended the liability for
one “engaged in the business of selling” a product to include
those who supply products to their customers in conjunction
with providing a service, and without any exception for a
hospital that engages in such hybrid transactions.
2. Legislative history
The parties have not offered any useful legislative
history to assist in our construction of ORS 30.920, and, as
we will describe, we have found none. The liability provisions
set out at ORS 30.920 have remained essentially unchanged
since their adoption in 1979.8 Or Laws 1979, ch 866, § 2.
The 1979 legislation added the strict liability provisions
now set out at ORS 30.920 as well as a provision governing
the recovery of punitive damages in a product liability civil
action and provisions governing insurers providing “product
liability insurance.” Or Laws 1979, ch 866, § 2. As explained
above, the 1979 legislature was motivated, at least in part,
to “ ‘stabilize the rules of [product] liability,’ ” which until
then was developing in Oregon entirely through court deci-
sions. ___ Or at ___ (quoting Ewen, 300 Or at 28) (slip op at
17:7-8). In developing the new statute, the legislature heard
8
Oregon Laws 1979 chapter 866, section 2 originally used the phrase “to his
property” instead of “to the property of the user.” Compare Or Laws 1979, ch 866,
§ 2 with ORS 30.920(1).
246 Brown v. GlaxoSmithKline, LLC
from business groups concerned about rising costs for liabil-
ity insurance that “they attributed to the unpredictability
of potential exposure in what was then a rapidly evolving
branch of the law.” Ewen, 300 Or at 28. They also heard com-
peting concerns from other witnesses and legislators “that
legislation not reduce the financial protection under exist-
ing Oregon law for persons injured by dangerous products.”
Id. But we have found no record indicating that the 1979
legislature heard concerns about applying strict liability to
hospitals or other service providers whose transactions with
consumers involve supplying products in conjunction with
providing a service.
Plaintiffs contend that some indication of legisla-
tive intent can be found in later-enacted statutes, which
create exceptions to the strict liability set out in ORS 30.920
for limited circumstances in which a product is supplied in
the context of medical services, echoing reasoning of the
Court of Appeals. 323 Or App at 228-30 (describing ORS
30.902, 30.908(5), and former 97.300 (1991), renumbered as
ORS 97.968 (1995) and renumbered as ORS 97.985 (2007)).
Although recognizing that the later-enacted statutes were
“not indicative of the legislature’s intent” when it enacted
ORS 30.920, the Court of Appeals nevertheless reasoned
that the exceptions—none of which exempt a hospital sup-
plying a drug in conjunction with medical services—would
have been unnecessary if ORS 30.920 already “exclude[d]
those who sell products in the provision of services.” Id. at
228. We acknowledge that this court has occasionally con-
sulted later legislative history in determining the meaning
of a statute. State v. Cloutier, 351 Or 68, 103-04, 261 P3d
1234 (2011). But, as we ultimately reasoned in Cloutier, the
subsequent “legislative history, at best, arguably confirms
what we have determined to be the intended meaning” of
ORS 30.920, so “we need not address the weight, if any, to
which the [later] legislative history is entitled in this case.”
Id. at 104.
In short, the legislative history adds nothing to the
conclusions that we reached, based on our analysis of text
and context, about the intended scope of strict liability under
ORS 30.920. First, the legislature intended that liability
Cite as 372 Or 225 (2024) 247
for one who “sells” a dangerously defective product would
include transactions in which the product is transferred for
consideration even if the product is fully consumed as part
of the transaction. Second, the legislature intended that a
“seller” includes one who engages in such a transaction and
that a “seller” could be “engaged in the business of selling” a
product when the transfer of such products for consideration
is part of the seller’s usual course of business, regardless of
whether the seller transfers such products only in conjunc-
tion with providing a commercial service. And third, the
legislature did not intend to exempt hospitals that other-
wise meet the definition of a “seller or lessor engaged in the
business of selling or leasing such a product.”
B. Application to this Case
As described at the outset, this case reaches us
from a grant of summary judgment to Providence. A party
is entitled to summary judgment “if the pleadings, deposi-
tions, affidavits, declarations, and admissions on file show
that there is no genuine issue as to any material fact and
that the moving party is entitled to prevail as a matter
of law.” ORCP 47 C. We explained above that Providence
moved for summary judgment on the basis of its legal argu-
ment that, “[a]s a provider of health services, [Providence]
is neither a seller in the business of selling Zofran inject-
able nor is it a distributor of Zofran,” for purposes of liability
under ORS 30.920, and only supplies drugs to be admin-
istered to patients in the hospital. Our conclusion that the
legislature did not intend ORS 30.920 to be construed in the
limited manner that Providence proposes demonstrates why
the trial court erred in granting the motion for summary
judgment.
But Providence’s arguments on appeal add a new
challenge to the premise underlying plaintiffs’ allegation
that Providence “sold” the Zofran that Gomez received at the
emergency room. It notes that although the Court of Appeals
asserted that Providence had specifically charged Gomez for
Zofran, 323 Or App at 232, the record does not support that
assertion. However, to the extent that Providence asserts
that the record does not demonstrate that it sold Zofran
to Gomez—because Gomez’s hospital bill did not include a
248 Brown v. GlaxoSmithKline, LLC
specific charge for that drug—we do not reach that argu-
ment because Providence failed to raise that issue in its
motion for summary judgment.
As we emphasized in Two Two, “[p]arties seeking
summary judgment must raise by motion the issues on
which they contend they are entitled to prevail as a mat-
ter of law,” and a party opposing summary judgment has
no burden to produce evidence on an issue that the moving
party has not raised. 355 Or at 326. In other words, had
Providence raised in its motion for summary judgment the
factual issue whether it had charged Gomez for Zofran,
plaintiffs—who bear the burden of persuasion on that issue
at trial—would have been required under ORCP 47 C to pro-
duce evidence on the issue to defeat summary judgment. See
id. at 325 (explaining significance of a defendant raising an
issue in its motion for summary judgment). But Providence’s
failure to raise that factual issue means that plaintiffs had
no burden to produce evidence regarding their allegation
that Providence “sold” the Zofran that it supplied to Gomez,
and it means that “we accept as true” the uncontested alle-
gations in the complaint for purposes of the summary judg-
ment motion. See Bagley v. Mt. Bachelor, Inc., 356 Or 543,
545-46, 340 P3d 27 (2014) (so holding with respect to issues
of negligence, causation, and damages that the defendant
did not raise in its motion for summary judgment).
Providence sought summary judgment on the basis
that, as a matter of statutory construction, a hospital that
supplies and administers a drug to a patient is not a “seller”
of the drug or “engaged in the business of selling” such drug,
as required for liability under ORS 30.920. And we have
explained why we disagree with Providence’s construction
of the statute. Thus, Providence has not established that it
was entitled to prevail as a matter of law on plaintiffs’ claim
under ORS 30.920.
The decision of the Court of Appeals is affirmed.
The judgment of the trial court is reversed, and the case is
remanded to the trial court for further proceedings.