$185 Million Verdict Stands in Product Liability Case After Washington Supreme Court Clarifies Choice of Law Rules

On Oct. 30th, the Washington Supreme Court (6-3) issued a significant decision that will shape how product liability cases are handled when multiple states have connections to the dispute. Erickson v. Pharmacia LLC involves three Washington teachers who became seriously ill after exposure to toxic chemicals in their school, and Pharmacia, the successor-in-interest to Monsanto ― the company that made those chemicals ― and that was headquartered in Missouri.  The case addressed fundamental questions about which state’s laws should apply when a case touches multiple jurisdictions.

The Story Behind the Legal Issues

Kerry Erickson, Michelle Leahy, and Joyce Marquardt were teachers at Sky Valley Education Center in Monroe, Washington (SVEC). Between 2011 and 2016, they worked in aging school buildings constructed in the late 1960s. During their time there, all three experienced troubling health problems: headaches, rashes, fatigue, blurred vision, and respiratory issues. They noticed their symptoms improved when away from school but returned upon their return.

The culprit? Polychlorinated biphenyls, or “PCBs” — toxic chemicals that were once prized for their durability and fire resistance, making them ideal for electrical equipment, caulking, and paint. In the 1930s, Monsanto Company began manufacturing PCBs at its headquarters in St. Louis, Missouri and the chemicals became ubiquitous in construction during the 1960s and 70s.

But Monsanto’s own testing as early as the 1930s showed PCBs posed serious health risks. By 1979, the EPA banned their manufacture entirely after identifying severe toxic effects on humans and wildlife. Unfortunately, PCBs remained embedded in countless buildings across America, including the Sky Valley Education Center.

The SVEC teachers’ health deteriorated so severely that all three were forced to retire. They sued Pharmacia LLC, the pharmaceutical company that became Monsanto’s successor-in-interest. After a seven-week trial featuring dozens of expert witnesses, a jury awarded the teachers $50 million in compensatory damages and an additional $135 million in punitive damages.

Pharmacia appealed. The Washington Court of Appeals reversed in a split decision, and the Washington Supreme Court granted review.

Why Two States’ Laws Were at Issue – Injury & Conduct Causing Injury

The Erickson case presented a classic conflict of laws scenario because both Washington and Missouri had significant connections to the dispute.

Washington’s connections – where the injuries occurred: the three teachers lived in Washington, worked in Washington, and suffered their injuries at a school building located in Washington. Washington has strong interests in protecting its residents from dangerous products, ensuring adequate compensation when they’re harmed, and regulating conduct that affects people within its borders.

Missouri’s connections – where the conduct causing the injury occurred: Monsanto’s corporate headquarters was located in St. Louis, Missouri. More critically, all the key decisions about PCBs were made there: the corporate offices that handled sales and marketing were in Missouri; the medical department that conducted research into PCB hazards was in Missouri; and the executives who decided whether to warn consumers about dangers were in Missouri. In other words, while the injury occurred in Washington, the alleged wrongful conduct—designing a dangerous product, failing to adequately test it, and failing to warn about known dangers—took place primarily in Missouri.

This geographic split created the legal puzzle: which state’s laws should govern when both have legitimate interests in the outcome?

The Choice of Law Puzzle

The Washington Court of Appeals reversed the verdict and ordered a new trial, finding errors in how the trial court applied different states’ laws to different parts of the case. This set up the central question for the Supreme Court: When a case involves parties and conduct from multiple states, how do courts decide which state’s law to apply?

Everyone agreed that Washington’s Product Liability Act should govern the basic question of whether Pharmacia was liable for selling a defective product. After all, the teachers were injured in Washington, and Washington has legitimate interests in protecting its residents from dangerous products and ensuring they receive compensation when harmed.

But two other issues created conflicts between Washington and Missouri law:

The Statute of Repose: A statute of repose cuts off a manufacturer’s liability after a certain period of time, regardless of when the injury occurs or is discovered. Under Washington’s Product Liability Act, manufacturers generally cannot be held liable for harm caused after a product’s “useful safe life” has expired—presumptively 12 years after the product was delivered. Missouri has no such limitation. Since the PCBs in question were manufactured decades before the teachers’ exposure, this issue was critical.

Punitive Damages: Missouri law allows juries to award punitive damages to punish egregious misconduct and deter future wrongdoing. Washington law generally doesn’t allow punitive damages, viewing them as an improper “windfall” to plaintiffs.

The challenge was determining whether Washington’s Product Liability Act had to apply as a complete package, or whether different states’ laws could apply to different issues within the same case.

The Washington Supreme Court’s Framework

The Washington Supreme Court reaffirmed a principle it established over 50 years ago: courts should analyze each legal issue separately and apply the law of whichever state has the “most significant relationship” to that particular issue. Legal scholars sometimes call this issue-by-issue analysis “dépeçage.”  Dépeçage, a French term meaning “dismemberment,” is a concept within the field of conflict of laws whereby different issues within a single case are governed by the laws of different jurisdictions. This approach requires courts to examine several factors: Where did the injury occur? Where did the conduct causing the injury take place? Where do the parties reside or have their headquarters? Most importantly, what are each state’s actual interests and policies regarding the specific issue in dispute? Chief Justice Stephens, writing for the court, emphasized that this nuanced approach serves the interests of both states better than a rigid, one-size-fits-all rule.

In this case, for example, Washington law governed whether Pharmacia was liable for manufacturing a defective product, while Missouri law governed the availability of punitive damages and the statute of repose. The Supreme Court clarified that dépeçage is not merely permissible but is sometimes the most rational outcome when multiple states have legitimate interests in different aspects of the same dispute.

Pharmacia argued that here, dépeçage would create a “Frankenstein’s monster” cobbling together laws from different states in ways neither state intended. The court rejected that argument and explained that when properly applied through careful analysis of each state’s interests, issue-by-issue analysis actually respects both states’ policies better than forcing a single state’s law to govern everything.

The court noted that Pharmacia contended that applying Missouri law to the issue of repose or punitive damages for an out-of-state corporation—while hypothetically applying Washington law to an in-state corporation for the same tortious conduct—would result in violation of the dormant commerce clause of the United States Constitution. But further noted that Pharmacia cited no authority supporting the claim that a court’s application of another state’s law under a choice of law analysis violates the dormant commerce clause or that a state unconstitutionally discriminates against an out-of-state resident by applying the law of the resident’s home state.

Applying the Framework to PCB Exposure

For the statute of repose, the court concluded Missouri law should apply—meaning there would be no time limit barring the teachers’ claims. Why? Because Monsanto’s headquarters, medical research department, and decision-making authority were all located in Missouri. The company’s testing on PCB toxicity happened there. Its choices about whether to warn consumers were made there.

Washington’s statute of repose was designed primarily to protect retail businesses located within Washington from prolonged litigation exposure. That policy interest isn’t served by protecting an out-of-state corporation from liability for decisions made at its Missouri headquarters. Meanwhile, Missouri has a strong interest in deterring companies headquartered within its borders from engaging in conduct that harms people nationwide.

The court applied similar reasoning to punitive damages. Missouri’s law allowing punitive damages aims to punish and deter corporate misconduct. Washington’s prohibition on punitive damages serves to protect defendants from “windfall” awards—but again, the court reasoned, Washington has minimal interest in protecting out-of-state corporations that caused harm through decisions made elsewhere.

Importantly, the court clarified that applying Washington law to determine basic liability while applying Missouri law to punitive damages doesn’t create an improper hybrid. The jury properly found liability under Washington’s product liability standards. Missouri law simply governed whether additional punitive damages were appropriate based on how egregious Pharmacia’s conduct was.

Why The Erickson Case Matters

This decision reaffirms Washington’s approach to conflicts between state laws. Rather than mechanically applying one state’s law to every issue, courts must carefully consider which state has the greatest interest in having its law applied to each specific question.

For plaintiffs in product liability cases, Erickson provides important clarity in Washington: companies can’t necessarily invoke the protective provisions of the state where injury occurred while escaping accountability under the laws of their home state. For defendants, the decision emphasizes that choice of law is genuinely about competing state interests—not just about forum shopping. As PCB litigation continues to unfold in Washington and other states, the Erickson case will serve as an important precedent for balancing the rights of injured individuals against the interests of manufacturers operating in our interconnected national economy.

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