With new grass on the field, the 2019 baseball season is underway and optimism springs eternal.  Here in Philadelphia, the Phillies have actually around the top of the NL east for the first time since, umm…., last year actually.  But this year, having added possibly the best player and best catcher in the league, it’s not smoke and mirrors.  We won’t wonk you out with stats, but in 2019 (unlike 2018) the Phillies have a significantly positive runs/runs allowed ratio.  If only the pitching holds up.

Speaking of one, two, three, yer out, consider the recent developments in Covidien mesh litigation.  Specifically, consider three recent wins:  Nowell v. Medtronic, Inc., ___ F. Supp.3d ___, 2019 WL 1434971 (D.N.M. March 29, 2019); Kennedy v. Covidien, LP, 2019 WL 1429979 (S.D.N.Y. March 29, 2019); and Barnes v. Medtronic, PLC, 2019 WL 1353880 (E.D. Mich. March 26, 2019).  Apparently emboldened by settlements in the Vaginal Mesh litigation, the other side’s funders have turned their solicitation machine on all mesh products indiscriminately, and this sort of scattershot litigation is the result.  But here, three different complaints, in three different states in three different parts of the country were all dismissed on the pleadings in less than a week.

Let’s take a look.

Starting with the oldest (a relative term), Barnes alleged grossly negligent design, grossly negligent manufacture, breach of implied warranty, and fraud.  2019 WL 1353880, at *1.  Since mesh is a Class II device, under the questionable decision in Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996), Medtronic’s preferred preemption defense isn’t widely available.  Didn’t matter.  There’s more than one way to win a motion to dismiss.  Probably due to some quirk in Michigan law, plaintiff didn’t just allege a design defect, but rather a “grossly” negligent design.  Whatever that quirk was, the allegation didn’t help the plaintiff much.  As in most places, Michigan requires more for design claims than second-guessing the defendant’s design – there must an alternative design.  Id. at *2.  But the plaintiff in Barnes alleged only a non-mesh surgical procedure and two completely different types of mesh.  Id.  We’ve said it before.  An alternative design is a different way to make this product, not being forced to make something else.  Or, as Barnes put it, “In jurisdictions requiring plaintiffs to prove the existence of a safer alternative design, a design for a different, albeit similar, product will not suffice, even if it serves the same purpose.”  Id. at *2 (citation and quotation marks omitted).

Plaintiff’s theory alleges that all polyester hernia meshes are unacceptable.  Her proposed alternatives are alternative treatment methods or alternative types of mesh, not alternative production practices or designs for polyester hernia mesh. . . .  Plaintiff’s design defect claim cannot succeed by categorically challenging the safety of polyester mesh and pleading only alternative categories of products as alternative production practices.

Id.

Plaintiff in Barnes also tried to use a version of res ipsa loquitur to salvage manufacturing and implied warranty claims.  That didn’t work either.  “The manufacturer did not implant the mesh into Plaintiff’s abdomen.  At least one surgeon had to open the sealed, sterile packaging” and that “could easily have affected the integrity of the mesh implant.”  Id. at *3.  In the face of an alternative cause, res ipsa loquitur evaporated.  Case dismissed.

In Kennedy, similar claims failed similarly.  Plaintiff claimed no alternative design need be pleaded, even though New York (like Michigan) required that element before a defendant could be liable.  Lose.  2019 WL 1429979, at *3 (enforcing “the general requirement that an alternative design must be pleaded, even if it is not fully developed”).  “[A]lleging that the product should not be used at all is insufficient to satisfy the feasible alternative design element.”  Id. at *4.  Manufacturing defect?  Plaintiff didn’t come close to alleging one – directly or through circumstantial evidence.  Id.  Warning defect?  The complaint was word salad:

Plaintiff’s claim for failure to warn cannot survive the present dismissal motion because it does not identify how the warnings were inadequate or insufficient. . . .  Plaintiff has failed to provide factual support for his conclusory assertion that Defendant’s warnings did not adequately caution physicians and patients concerning the risks associated with [the product].

Id. at *5 (citation omitted).  As we’ve pointed out, New York federal courts have tended to be good on TwIqbal.

Kennedy picks up speed, knocking down the plaintiff’s remaining claims like a row of dominoes.  Negligence?  Fails just like strict liability.  Id.  Implied warranty?  “Plaintiff has not alleged or argued a factual basis for concluding that the product was not minimally safe for its expected purpose.”  Id. at *6.  Express warranty?  “Plaintiff does not identify a specific warranty made by Defendant that he relied on.”  Id. Fraud and misrepresentation?  There wasn’t any.  “[T]he advertising material incorporated into the Complaint appears to have disclosed the risks of the conditions that Plaintiff has allegedly suffered.”  Id. at *7.  Consumer fraud.  Plaintiff made it all about him.  “Plaintiff has not pleaded sufficient facts to establish that Defendant’s conduct was consumer-oriented.”  Id.  Unjust enrichment?  Absent a defect or a misrepresentation, “there is no equitable basis for a requiring restitution.”  Id. at *8.

Two down.

But Nowell is the biggest and baddest of the lot (and the one that will be published).  Nowell has no fewer than 89 separate headnotes, but one has to wade through 22 Westlaw pages of “D said; P said” before getting to the first one.  Why is it the baddest – that is to say, the best?  Well, check out our learned intermediary rule “head count” post.  New Mexico is one of the states where the supreme court has never spoken, and in the past one pro-plaintiff court tried to say the rule didn’t apply.  Nowell went our way.  To paraphrase (badly) Carl Sagan, absence of state high court precedent is not precedent for absence of the learned intermediary rule.  “[S]ilence on the part of the state means only that it has not had occasion to review the matter, not that it disagrees with the federal court’s interpretation of state law.”  2019 WL 1434971, at *44 (citation and quotation marks omitted).

Pursuant to the learned-intermediary doctrine, the prescribing physician acts as a learned intermediary between a prescription drug manufacturer and the ultimate user, and the manufacturer satisfies its duty to warn by providing adequate warnings to the prescribing physician.  The learned intermediary doctrine states that once a manufacturer warns a doctor about a drug’s inherent dangers, it has fulfilled its legal duty to provide a warning. . . .  [A] plaintiff cannot prevail against a prescription drug manufacturer in a failure to warn case where the manufacturer warned the “learned intermediary” of the drug’s inherent risks.  The overwhelming majority of jurisdictions to address this issue apply the learned intermediary doctrine to define a pharmaceutical company’s duty to warn of risks associated with the use of a prescription drug.

Id. at 40 (citations and quotation marks omitted).  That’s not all, there several more pages of learned intermediary rule discussion, going through every favorable New Mexico case known to man (or at least to Bexis).  Id. at *40-47.  Further supporting the learned intermediary rule is the worlds longest footnote, number 25, which includes:

[M]edical device manufacturers may use the learned-intermediary doctrine in failure-to-warn cases.  Numerous courts have allowed medical device manufacturers to use the learned-intermediary doctrine to defend against failure-to-warn claims.  See, e.g., . . . James M. Beck, Anthony Vale, Drug and Medical Device Product Liability Deskbook §2.03 n.51 (noting that courts within every federal circuit apply the learned-intermediary rule to medical devices). . . .  The Court has not found any case that does not apply the learned-intermediary doctrine to medical devices, and the Court does not think that the Supreme Court of New Mexico would be the sole entity to refuse to apply the learned-intermediary doctrine to such products. . . .

[T]he learned-intermediary doctrine applies to [plaintiff’s] failure-to-warn claims.  Accordingly, the Defendants had a duty to warn only [her] treating physicians of the [device’s] risks.  Argument that the Defendants owed or breached a duty to warn [plaintiff] directly is therefore irrelevant.  In reaching its conclusion that the learned-intermediary doctrine would apply to surgically-implanted medical devices in New Mexico, wide-spread national recognition of the doctrine’s value encourages the Court.  See Headcount: Who’s Adopted the Learned Intermediary Rule?, Drug and Device Law, https://www.druganddevicelawblog.com/2007/07/headcount-whos-adopted-learned.html (last visited March 17, 2019) (collecting cases and statutes, and noting that “all 50 states and two other jurisdictions … have precedent supportive of the learned intermediary rule”).

That’s right, Nowell quoted both Bexis’ book and the Blog in its learned intermediary rule discussion.  That’s a first, as far as we know.  Yet another reason to appreciate Nowell.

Turning to plaintiff’s retinue of claims, the New Mexico statute of limitations barred plaintiff’s warranty, negligence, and strict liability claims.  Id. at *49-51.  Then, turning to the kind of issues we follow more closely, the complaint in Nowell gets thoroughly TwIqballed.  Causation is not adequately alleged.  Plaintiff does not even allege that she had any of the laundry list of “common injuries caused by hernia surgeries” contained in the complaint.  Id. at *52.

The Court construes only three allegations in the Amended Complaint as representing facts germane to [plaintiff’s] negligence claim. . . .  Taken together, these facts — even read liberally — fall short of adequately alleging that the Defendant’s mesh was a proximate cause of [plaintiff’s] later injuries. . . .  [N]othing in the Amended Complaint endeavors to explain why the Defendants’ mesh is a likely, let alone proximate, cause of [plaintiff’s] injury.

Id. at *53 (citations omitted).

Nowell also held that product defect was inadequately pleaded.  The complaint “includes a litany of conclusory allegations regarding the mesh’s failure rates and tendency to cause injury, but, again, does not present a defect that could lead to the mesh’s failure and resultant injury.”  Id. at *54.  To complete the triple play of failure to plead any of the elements of strict liability, she didn’t plead any alternative design either.

[Plaintiff] has not alleged that, when she underwent her surgery, an alternative mesh existed which lacked the design defect and therefore would have prevented her injuries.  Although the Amended Complaint states that “[s]afer and more effective alternatives to hernia mesh exist,” it merely alleges surgical techniques alternative to the use of hernia mesh altogether . . ., but not alternative designs to the Defendants’ mesh. . . .  [A] design-defect claim will not stand if the only alternative is an outright ban. . . .  [Plaintiff’s] failure to allege a feasible design alternative is a further basis on which the Court will dismiss her strict liability claims.

Id. at 55 (citations and quotation marks omitted).

The warning claims also failed in Nowell.  “[M]any of the risks that [plaintiff] mentions are precisely the risks that the FDA considers attendant to all hernia repairs surgeries.”  Id.  Warning causation also went unalleged.  “[Plaintiff] does not allege that any of the above warnings would have prevented [her surgeon] from using the Defendants’ mesh to repair [her] hernia.”  Id.

Just as plaintiff had failed to plead defect adequately, she also failed to plead a lack of merchantability for implied warranty purposes.  “[T]hese conclusory allegations amount to naked assertions devoid of the factual enhancement necessary to bridge the gap between possible and plausible.”  Id. at 57 (citations and quotation marks omitted).  Finally, punitive damages were dismissed for failure to plead “scienter.”  Id. at *58.  Ultimately, “[i]n the end, the Amended Complaint does no more than say that [plaintiff] had a mesh implant, and, years later, had an infection.”  Id. at 57 n.27.

So that’s one, two, three strikes you’re out at the old ball game.  We certainly hope things stay “the old ball game.”  A right to these kinds of early dismissals are precisely what defendants are deprived of in multidistrict litigation.

Every day our inbox overflows with legal news aggregation emails. Some of the items are useful. Some must have been authored by Captain Obvious. Some are irrelevant to our practice. We would have thought that comfortably residing in that last category are discussions of the burgeoning marijuana field. The “Week in Weed” and other such periodic news blasts clue us in that there are loads of lawyers out there working on something that would have been unthinkable when we were in our salad days. It is just like high school again; there’s a clique of cool people over there, and we are definitely not a part of it.

Not that there was any reason for us to join the 420 gang. We were one of the five or six people who actually believed Bill Clinton when he said he tried pot but never inhaled. Like the non-inhaler-in-chief, we had a problem drawing hot leaf smoke into our lungs. Unlike other people who trained themselves to get past the initial revulsion, we took our body’s signal to heart and headed toward other dissipations. If something is called an acquired taste, doesn’t that really mean it’s bad? (We mean aside from scotch.)

Reefer was never our thing. It still isn’t. But we are not judging those who chose differently. As an AUSA tasked with prosecuting federal crimes, including drug crimes, we were grateful we never handled any marijuana cases. The fact that Title 21 makes a minor pot sale a federal crime seemed ridiculous to us then, and even more so now. Whither federalism? (But U.S. Attorney offices, at least in big cities, have internal guidelines about what to prosecute, and low-level marijuana distribution is unlikely to satisfy those guidelines. Heck, we wouldn’t indict on heroin trafficking if the amount was too small. This might be most useful thing we ever tell you.) Even crazier, marijuana is on schedule 1, which is supposed to be reserved for the highly dangerous and utterly useless controlled substances – even though there are doctors who prescribe it for legitimate uses.

This much too prolix lead-in brings us to today’s case, Horn v. Medical Marijuana, Inc., 2019 U.S. Dist. LEXIS 65609 (WDNY April 17, 2019). Lo and behold, it is almost a real product liability case involving medicinal marijuana. Almost. The plaintiffs were husband and wife residents of the broad-minded state of New York. They bought a form of cannabidiol (CBD) online from a seller in Colorado, an even broader-minded state. CBD is an oil derived from hemp. The husband had read that CBD might alleviate pain from a recent motorcycle accident. In deciding to purchase the CBD, the plaintiffs tried to make sure that CBD did not contain THC, the psychoactive part of marijuana that gets people high and potentially gets them into trouble with the law. The plaintiffs relied on four sources of information: (1) innitially, an article in High Times magazine, (2) YouTube videos, (3) the seller’s website, and (4) a call to the seller’s 1-800 number. The last three sources stated that CBD did not contain THC, and the magazine article (“CBD is for Everyone!”) said there was not enough THC in CBD to get anyone in trouble.

Guess what? The husband got in trouble. He was employed by a trucking company, which had a random drug testing program. He tested positive for THC and was fired. The wife also worked for the trucking company, and she resigned because she thought it unsafe to work alone. The plaintiffs sued the seller of the CBD, alleging, inter alia, fraud, breach of contract, violations of RICO, and – ta da! – product liability.  We’ll leave the merits of the claim alone, although why someone subject to random drug testing would be reading High Times magazine would seem like a valid topic of inquiry.

As a preliminary matter, the court decided that CBD was a controlled substance in 2012, when plaintiffs bought the product, though it probably would not be considered such after Congress tinkered with the law in 2014. That ends up mattering with respect to the RICO claim, and it might also matter to those of you sucking hard on your CBD vape pens as a means of combatting stress from work, family, politics, or the Sixers’ inability to guard the perimeter. In any event, the defendant moved for summary judgment. It won some and lost some.

One of the fraud claims was based on a New York State consumer fraud statute. The Horn court ruled that law inapplicable, because the transaction was out-of-state and the statute is not applied extraterritorially. That result is a little surprising, because the defendant did ship the product to plaintiffs in New York, and that is where the consumption and testing and firing occurred. But the court reasoned that if the plaintiffs had been deceived, it was before anything had been shipped to New York. Hmmmm. Good defendant result. We might use it some day. If a typical, summary-judgment-hating, plaintiff-friendly judge adopts this reasoning, we’ll celebrate. Maybe CBD will be involved in said celebration.

Various other fraud claims failed for lack intent, or because the defendant was not responsible for the contents of a third party magazine article. Only the 800 number call-based fraud claim could proceed.

Amazingly, the court allowed the RICO claim. RICO, we daresay, is abused as much and as perniciously as most controlled substances. The Horn court held that interstate shipment of the product, which was a controlled substance at the time (remember earlier how we told you that hemp was legalized only later?), could constitute a “pattern of racketeering activity.” Yikes. That issue will go to the jury. The defendant must be hoping that at least some of the jurors will be offended by the notion that selling CBD with minimal THC equates to racketeering. Social media research on potential jurors could be crucial. We went on to a website (High Times, naturally) to learn what are the most reliable signs of marijuana use. Possession of drug paraphernalia is an easy one. Then there’s this list: lack of focus during conversation, decreased motivation, increased appetite, inappropriate laughter, financial problems …. Say, wait a minute, we appear to be surrounded by potheads.

For anyone looking for a deep insight from this case, the survival of the RICO claim provides a potentially cautionary tale.  Cannabis may not be as illegal as it used to be, but under federal law it’s still a schedule 1 controlled substance.  That there seems to be an informal federal moratorium on pot prosecutions is all well and good, but anyone in that business shouldn’t expect private plaintiff’s lawyers to practice the same restraint.  As long as marijuana remains illegal, that status will hang over any and all product liability, or near product liability, litigation involving this product.

Speaking of product liability, the product liability discussion is almost an afterthought in the Horn opinion. The court dismissed those claims because New York product liability law does not permit recovery for economic loss. New York law is in accord with most other states. After all, Rest. (Second) of Torts section 402A is limited to “physical injury.” (By the way, the wife’s claimed economic damage was too remote.). To be sure, the plaintiffs in Horn also claimed negligent infliction of emotional distress, but at this point the court brings us back to law school torts class. Remember how courts fretted over claims of negligent infliction of emotional distress, trying to come up with limiting principles (e.g., special relationships) or guarantee of genuineness (e.g., concomitant physical injury)? It’s like a flashback from a drug much more potent than marijuana. The court found no such special circumstance in this case, so the court was able to weed out the marijuana product liability claims. But if ever we were to see such a claim, it might look a bit like the Horn case.

This message is directed primarily to our overseas readers, and those who represent non-United States drug and medical device companies.  Under FDA registration regulations, non-United States manufacturers (and other regulated companies) that import their regulated products into this country are required to appoint a domestic “agent” for regulatory purposes:

(i) Registration of foreign establishments

(1) Every person who owns or operates any establishment within any foreign country engaged in the manufacture, preparation, propagation, compounding, or processing of a drug or device that is imported or offered for import into the United States shall. . . .

(A) upon first engaging in any such activity, immediately submit a registration to the [FDA] that includes–

(i) with respect to drugs, . . . the name of the United States agent of each such establishment . . . who imports or offers for import such drug to the United States for purposes of importation; and

(ii) with respect to devices, . . . the name of the United States agent for the establishment . . . who imports or offers for import such device to the United States for purposes of importation. . . .

21 U.S.C. §360(i) (emphasis added).  The corresponding FDA regulations are 21 C.F.R. §207.69(b) (for drugs), and 21 C.F.R. §803.58(a) (for devices).

Our advice is that, overseas manufacturers (and others required to register) ought to consider the product liability consequences of where they locate their FDA regulatory agents, in addition to all the other criteria that go into making these decisions.

The reason is personal jurisdiction, and the occasion for this advice is the recent decision in Vaughan v. Olympus America, Inc., ___ A.3d ___, 2019 WL 1549345 (Pa. Super. April 10, 2019), underscoring that the location of an overseas company’s FDA-mandated agent is a place where such companies can, and will, be sued.  Vaughn involved a duodenoscope described as being “designed for reuse on multiple patients” so that it “must be disinfected – or ‘reprocessed’ – after each use.”  Id. at *1. Various reusable devices have, in the last couple of years, been targeted by plaintiffs alleging sterilization-related claims.

Critically, for the overseas defendant in Vaughn, it used a Pennsylvania subsidiary as its FDA-registered “agent.”  From a personal jurisdiction standpoint, that a meant that the agent was indisputably “at home” in Pennsylvania.  The relevant principal place of business was in Pennsylvania – in Lehigh County, not particularly close to (or far from) Philadelphia.  Id.  As readers might have guessed by now, the plaintiff in Vaughn was a blatant litigation tourist.  Everything having to do with the use of the device, the pertinent medical treatment, and the claimed injuries took place in North Carolina.  Id. at *1, 8.

The court in Vaughn reversed the jurisdictional dismissal of the overseas defendant, and also the forum non conveniens transfer of the rest of the case to North Carolina.  That’s unfortunate because the case was, of course, filed in Philadelphia rather than in the county where the Pennsylvania subsidiary was actually located.  What’s worse is the lack of any definitive precedent to say the result in Vaughn is necessarily incorrect on the jurisdictional issue.

The effect of “agency” allegations on personal jurisdiction is murky.  In Daimler AG v. Bauman, 571 U.S. 117 (2014), the Ninth Circuit below had allowed general personal jurisdiction on the basis of a breathtakingly broad and vacuous claim of parent-subsidiary “agency” that purportedly existed, and created jurisdiction over the parent, anytime “the subsidiary ‘performs services that are sufficiently important to the foreign corporation that if it did not have a representative to perform them, the corporation’s own officials would undertake to perform substantially similar services.” 571 U.S. at 134 (quoting opinion below).  The Supreme Court criticized that agency theory:

[It] stacks the deck, for it will always yield a pro-jurisdiction answer. . . .  The Ninth Circuit’s agency theory thus appears to subject foreign corporations to general jurisdiction whenever they have an in-state subsidiary or affiliate, an outcome that would sweep beyond even the “sprawling view of general jurisdiction” we rejected [in a prior case].

Id. at 136 (citation to Bauman Ninth Circuit dissent omitted).  However, Bauman did not ultimately decide any agency issue, because (as everyone knows) even allowing the aggregation of jurisdictional contacts, the defendants were not “at home” as Due Process required for general jurisdiction.

The Ninth Circuit’s extremist assertion of jurisdictional agency in Bauman has fallen by the wayside in the wake of the Supreme Court’s criticism.  See Ranza v. Nike, Inc., 793 F.3d 1059, 1071 (9th Cir. 2015) (recognizing that “[t]he Supreme Court invalidated this test” in Bauman).  However, the Supreme Court in Bauman noted that:

Agency relationships . . . may be relevant to the existence of specific jurisdiction.  [A] corporation can purposefully avail itself of a forum by directing its agents or distributors to take action there.

571 U.S. at 135 n.13 (citations omitted).  Bauman “therefore embraces the significance of a principal-agent relationship to the specific-jurisdiction analysis, though it suggests that an agency relationship alone may not be dispositive.”  In re Chinese-Manufactured Drywall Products Liability Litigation, 753 F.3d 521, 531 (5th Cir. 2014).  By no means does Bauman support allegations of agency as creating “general jurisdiction,” 571 U.S. at 135 n.13, particularly if the result would be “exorbitant” and “unacceptably grasping” assertions of jurisdiction over any plaintiff’s claims by multiple states.  Id. at 138-39.

But Vaughn was not about multi-state general jurisdiction, or even some sort of “loose and spurious” equivalent masquerading as “specific” jurisdiction.  Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773, 1781 (2017).  Nor was Vaughn a case of a plaintiff making broad, vague, and factually unsupported agency allegations.  Cf. Williams v. Yamaha Motor Co., 851 F.3d 1015, 1024 (9th Cir. 2017) (agency allegations devoid of facts showing “right to control” “fail to make out a prima facie case for any such agency relationship”).

Rather, Vaughn involved a formal, FDCA-mandated form of agency that cannot be asserted as a basis for jurisdiction in multiple states.  See 21 C.F.R. §207.69(b) (overseas applicant “must designate a single United States agent”); 21 C.F.R. §803.58(a) (referring to designation of “a U.S. agent” or “the U.S. agent”).  Thus, Vaughn is not a reprise of the off-the-deep-end assertion of what purports to be “specific” jurisdiction in Hammons v. Ethicon, Inc., 190 A.3d 1248 (Pa. Super. 2018), discussed here, an opinion that OKed a theory of jurisdiction that would allow a potentially unlimited number of non-case-specific business contacts and relationships to create the functional equivalent of general jurisdiction for plaintiffs from any number of states.

Since we can’t dismiss the specific jurisdiction agency analysis in Vaughn (as opposed to the forum non conveniens part of that opinion) as plainly wrong, or plainly contrary to the jurisdictional policies articulated by the United States Supreme Court, we repeat the advice we offered at the beginning:

Be careful.  Don’t stumble into a place where you really don’t want to be.

Non-United States, FDA-regulated entities need to consider (in addition to all the regulatory and practical considerations), the jurisdictional ramifications of where their statutorily mandated American “agents” are located.  That place, for the reasons enunciated in Vaughn, is likely to become a focus for litigation – particularly product liability litigation – involving the overseas entity’s products.  Some states have better, and some states have worse, litigation environments.  There’s a reason that the North Carolina plaintiff in Vaughn came to Pennsylvania.  There may well be reasons, Dear Readers, that you (or your clients) might want the opposite result.

If the promise of adaptive artificial intelligence (sometimes called “Machine Learning”) is to be achieved in the medical area, FDA’s regulation of medical devices is going to have to graduate from geometry to calculus.  By its nature, machine learning changes the details of its output constantly.  The rigid regulatory model requiring FDA pre-approval of all “major changes” (defined as anything that could affect product safety or effectiveness) that has served FDA, and the public health, well for many years cannot handle adaptive artificial intelligence.  The fundamental insight of the calculus was that it allowed measurement of rates of change rather than change itself.  FDA is going to have to come up with something analogous to evaluate, not every particular change created by machine learning, but rather rates and directions of change.  And FDA is trying.  This guest post by Reed Smith attorneys MIldred Segura, Maryanne Woo, and Christopher Butler takes a deep dive into FDA’s self-described “first step” at creating a regulatory regime for this potentially transformative technology.

In advance, please pardon all the acronyms, they’re unavoidable in this area.

**********

FDA (this acronym doesn’t count) Commissioner Scott Gottlieb was not around very long, but in one of his last statements as Commissioner, he described FDA’s recent discussion paper we are discussing today a “first step toward developing a novel and tailored approach” to how the agency regulates Artificial Intelligence/Machine Learning (“AI/ML”) (acronym #1).  It is one small step in a series of steps FDA intends to take before its ultimate giant leap to a Total Product Lifecycle (“TPLC”) (acronym #2) regulatory framework for AI/ML-based medical devices.  FDA has been discussing TPLC regulation generally for a couple years now as part of its Digital Health Innovation Action Plan, but this is different.  It is the agency’s first try at tackling AI/ML.  This is the hard nut.  It represents an important aspect, perhaps the most important aspect, of FDA’s ultimate goal of TPLC oversight for digital health.

FDA has already cleared or approved several examples of AI/ML-based Software as a Medical Device (“SaMD”) (acronym #3).  For instance, last year, FDA authorized an AI-based device for detecting diabetic retinopathy, an eye disease that can cause vision loss.  FDA also authorized a device using artificial intelligence to alert providers of a potential stroke in patients.  The AI/ML used in these devices, however, are like moon rocks, “locked” in shape.  Their algorithms do not change and any alteration would likely require additional FDA premarket review.  In contrast, the excitement in this space is about AI/ML algorithms stems from them being “adaptive” and having the ability to “learn” from real-world experience.  Adaptive AI/ML is more like a nebula, a non-solid body that changes shape depending upon whatever nearby material is exerting gravitational pull.  These types of algorithms will change over time and may provide different outputs or may change the intended use from what FDA originally authorized.

While the authors scoff at those who are not convinced the moon landing was real, despite the photographic and hard (the moon rocks again) evidence, we do agree FDA cannot rely on a single snapshot of an adaptive AI/ML algorithm at the premarket approval stage to guarantee continued safety and effectiveness throughout its many iterations.  At the same time, however,  FDA does not want to stifle innovation in technology, which Dr. Gottlieb recognized has “the potential to fundamentally transform the delivery of health care.”

So, what to do?

FDA has built some of the framework on which to base its launch into the new (final?) frontier of AI/ML-based SaMD regulation.  The most significant is its Software Precertification (Pre-Cert) Pilot Program. The big departure accomplished by this voluntary test program, compared to traditional medical device evaluation, is that FDA scrutiny focuses more on the developer itself rather than the device.  Pre-Cert will be given only to those “manufacturers who have demonstrated a robust culture of quality and organizational excellence, and who are committed to monitoring real-world performance of their products once they reach the U.S. market.”  That amounts to a method of addressing the direction of device-related change.

Building on the precertification working model, FDA’s discussion paper ventures into regulation of AI/ML-based SaMD modifications after FDA’s initial review.  Electronicovigilence anyone?  It suggests its level of regulatory action would depend on the type and effect of the modification.  For example, a change in the data inputted into the device might lead to better precision in the analysis.  That type of change would likely not merit premarket approval.  On the flip side, the AI/ML may have modified itself to such a significant degree that a device originally intended only to aid diagnosis could now be relied upon to provide a definitive diagnosis.  For example, an app that was used to flag skin moles as potentially cancerous (and recommend a visit to a doctor) could morph into a program that could definitively diagnose melanoma (without a trip to the doctor).  Such a change in the possible use for a life-threatening condition would necessitate pre-market approval (“PMA”) (acronym #4).

And then there is the mushy middle (or should that be “muddle”?).  The AL/ML may have learned enough to evolve to accept new types of data inputs that could improve, but not change, its original function.  For example, a device that relied upon heart rate data to diagnose types of atrial fibrillation has self-modified to gain the capacity to use oxygen saturation as well as heart rate to make that diagnosis.  For this middle ground, FDA suggested a “focused review,” which unfortunately remains as unfocused as the pre-corrective optics Hubble telescope.  FDA is aware of this vacuum and is looking for input , but it is clear FDA wants manufacturers to reach out affirmatively and report modifications of any type, before any adverse safety event or any indication of an issue with efficacy.

FDA has clearly signaled it is looking for help – even asking if these modifications are the type typically encountered with AI/ML-based SaMD.  As with all discussion papers, there are more questions than answers, but with this one, it seems as if FDA is sending out a SETI (extra-bonus acronym #5) regulatory signal hoping for as many people to respond to it as possible.  Such as, should FDA require submissions to characterize of the process of AI/ML-based SaMD self-modification, and if so, how?

Another aspect of the new frontier raised by FDA’s discussion paper is the proposed framework for transparency and performance monitoring during the total product lifecycle.  FDA believes that applying a TPLC approach to the regulation of software products is particularly important for AI/ML-based SaMD due to such software’s ability to adapt and improve from real-world use, and necessary to permit AI/ML-based devices to safely enter the healthcare space.

FDA suggests that companies be required to monitor continuously the accuracy and performance of their devices and any software changes.  Transparency could include regular updates to FDA, device companies and collaborators of the manufacturer, and the public, such as clinicians, patients, and general users.  Monitoring could include adding to a file or annual report, Case for Quality activities, or real-world performance analytics via the Pre-Cert Program.

Right now, these details are as dark and featureless as a black hole, and a lot needs to be done to get from these concepts to real regulation.  As product liability litigators, concerns about the proposed framework’s effects on preemption and duty to warn/learned intermediary doctrine are on our radar screens.  For example, will regulation of SaMD self-modification be “rigorous” enough to support preemption?  Will warning causation come to depend on whether the information in question would have altered the output of AI/ML-based SaMD, instead of the learned intermediary physician?

In addition, adaptive AI/ML modifications maybe occurring at such a high rate as to render this framework untenable, especially as to updating the public.  We anticipate a robust and lengthy discussion before FDA issues any draft guidance and we will be actively watching as these outlines become clearer.

It’s Delaware week here at the DDL Blog.  A couple of days ago we brought you a particularly clear-minded order rejecting innovator liability in the First State (so nicknamed because Delaware was the first of the original 13 colonies to ratify the Constitution in 1787), and yesterday we reported on a pair of Delaware orders granting summary judgment in failure-to-warn cases on proximate causation.

Today we highlight another particularly clear-minded application of warning causation in Delaware, and this case has a twist—the product at issue was a generic drug, and the alleged basis for liability was the generic manufacturer’s alleged “failure to update” its label to match the innovator drug.  In the end, however, none of that mattered because the prescribing physician did not read the label and had never heard of the generic company, which means that any “failure to update” could not possibly have made any difference.

The case is Boros v. Pfizer, Inc., No. N15C-04-029, 2019 WL 1558576 (Del. Superior Ct. Mar. 25, 2019), and here is how things played out.  In February 2013, the FDA approved a stronger warning about QT interval prolongation for the innovator version of a common antibiotic.  The agency later requested that the defendant generic manufacturer update its label to match, and it published a Drug Safety Communication about the change.  Id. at *1.  The generic manufacturer complied, and the FDA approved its updated label three months later.  Id. at *2.

In the meantime, the patient at issue was prescribed the antibiotic, and the pharmacy dispensed the Defendant’s generic version.  The next day, the patient died.  Id. at *1.  Because he was prescribed the drug after the innovator changed its label, but before the generic defendant—the manufacturer that actually made and sold the drug the patient allegedly ingested—updated its label to match, the plaintiffs claimed that a “failure to update” caused the decedent’s death.  Id. at *2.

We have expressed our opinion on “failure to update” claims.  We don’t think much of them.  We don’t, however, need to get into all that today because the Delaware court granted summary judgment on warning causation.  The following facts are all you really need to know:

The parties do not dispute that [the prescribing physician] does not recall ever reviewing a package insert for [Defendant’s] generic azithromycin or for any other [Defendant] produced drug.  [He] has never spoken to or had any written communications with any [Defendant] representative.  [He] has never heard of [Defendant].

Id. at *2.  That’s right.  The prescriber did not read the label, never communicated with the Defendant, and never heard of the Defendant.  On those undisputed facts, it was a short way to holding that a “failure to update” the generic label did not cause any harm:

[The prescribing physician’s] failure to review the package insert prevents the Plaintiffs from establishing that the warnings in [the] package insert proximately caused the Decedent’s death.

Id. at *3.  Like other plaintiffs in similar situations, the Plaintiffs tried to get around this stark inability to prove their case.  First, they emphasized the prescriber’s testimony that if he had seen additional warnings, he would have changed his prescribing practices.  This is a version of the “Doctor, wouldn’t you have like to have known” testimony that plaintiffs’ lawyers commonly elicit, usually with an affirmative response.  After all, what doctor will deny that he or she would “liked to have known” additional information about drugs they prescribe?  Be that as it may, the testimony did not prevent summary judgment in this case because the facts were so clear—the doctor never reviewed or received any information from the Defendant.  Under those circumstances there is simply no way that “updated” information would have had any impact on the decision to prescribe the drug.  Id. at *4.

Second, the Plaintiffs argued that the learned intermediary doctrine may be “eroded or even nullified by over promotion of the drug.”  But even if there is an “over-promotion” exception to the learned intermediary doctrine—and Delaware does not have one—it would not apply here because the prescriber never interacted with the Defendant.  Id. at *5.

Third, the plaintiff argued that the learned intermediary doctrine did not apply because the decedent was himself a medical professional and not a “lay person.”  That is a new one on us, and we have never seen any authority that a “learned patient” negates a “learned intermediary.”  Neither had the plaintiffs, nor the Delaware court.  Id.

Finally, the Plaintiffs argued that the Defendant should have sent a Dear Doctor Letter about the strengthened warning to all physicians.  For one thing, since the FDA had already sent a Drug Safety Communication on this topic, we are not sure what difference a Dear Doctor Letter would have made.  Regardless, the court rejected this argument because the Plaintiffs did not plead it, and they raised the alleged failure to send a Letter for the first time at the summary judgment hearing.  Id. at *5.  Moreover, on the merits, because federal law prohibits generic drug manufacturers from sending Dear Doctor Letters unilaterally, any claim based on the failure to send a Letter was preempted under Pliva v. MensingId. at *6.

It would be tempting to think that warnings-based orders like this have little impact on “failure to update” claims generally, but that would be a mistake.  Failure to read as a basis for negating warning causation is well-established nationwide, as our post here demonstrates.  Significantly, Boros is the first Delaware law decision to address this variant of warning causation.  Moreover, because generic manufacturers do not typically promote their products or otherwise communicate directly with doctors, and because physicians commonly do not read package inserts, the exceptionally clear facts of this case are likely to recur.  The Delaware court’s treatment of the law and evidence was right on the money, and other courts would be wise to follow.  Hats off to Delaware.

There will come a time when there is no such thing as the local radio station. Not only will transmission not occur via radio waves, but there will be nothing local about it. There also may be no banter from the DJ, short for “disc jockey”–a reference to placing flat, round pieces of plastic called records on a machine that spun them around and attracted sound through a needle. The songs or other content may just appear one after the other, perhaps interspersed with advertisements or some sort of pre-recorded public service announcements. Back in the day, however, when we used to select what we wanted to hear by turning a dial find the specific frequency (or amplitude) radio wave assigned to a station, the stations were local and the kitsch factor was high. There were lots of ads and giveaways. Focusing on the “classic rock” stations—probably now labeled as “oldies” or “album rock” stations—they had lots of gimmicks to make you think something special was happening when consecutive songs from the same bands were played. (They tended to be bands, not “artists,” and there were very few songs “featuring” someone not in the band for 15-30 seconds, at least not that would be touted as a reason to listen the song. We digress.) There was a Two-fer Tuesday, where songs from perhaps Led Zeppelin would be played back-to-back. For stations that eschewed the Throwback Thursday that apparently is a thing now on social media, they might offer a Double-Shot Thursday, where songs from perhaps Led Zeppelin would be played back-to-back.

That was all an excruciatingly protracted way of saying that we are rolling out two decisions today from the same judge involving summary judgment on similar allegations about the same drug. They were even decided on same day, last Thursday. Were text effects available, the Thursday in the prior sentence might reverberate in some fancy way. After all that, the decisions were mercifully concise and one even cited back to the Trower decision discussed yesterday. (Yes, Trower was also decided last Thursday.)

The decisions in Green v. Janssen Pharmaceuticals, Inc., No. 1:15-cv-00401-RGA, 2019 WL 1567841 (D. Del. Apr. 11, 2019), and Hopkins v. Janssen Pharmaceuticals, Inc., No. 14-cv-01366-RGA, 2019 WL 1567840 (D. Del. Apr. 11, 2019), involved claims of gynecomastia from the pediatric use of Risperdal for a range of psychiatric conditions. We have written quite a bit about these claims in the past and the basic facts of these two cases should be familiar. Each plaintiff was prescribed and took Risperdal on and off over the course of several years, claimed to have developed gynecomastia as an adolescent, and then sued as an adult. Each plaintiff also proceeded under Delaware law and was down to just negligent warning and negligent misrepresentation claims by the time the court considered summary judgment. Delaware has the learned intermediary doctrine and requires proof that a different warning would have changes the prescribing decision. Pretty standard. However, Delaware does have a quirk of its law where a warning that is “inadequate as a matter of law” means the learned intermediary doctrine does not apply. We will bite our proverbial tongue on that and just turn to how it played out in these cases.

The analysis of the issue was in Green, where plaintiff contended that his expert’s opinion and some testimony of one of defendant’s employees established inadequacy as a matter of law. Reviewing the issue as if plaintiff had cross-moved for summary judgment, the court determined that the issue of inadequacy was genuinely disputed. Among other things, the condition was discussed in the labeling in place for most of the time that plaintiff was prescribed the drug by ten different doctors and defendant’s FDA expert opined that the label was adequate and disputed the opinions of plaintiff’s expert. That was enough to turn to the issue of proximate cause.

For whatever reason, the plaintiff in Green deposed only one of his ten prescribing physicians. That physician testified that “additional information on the risks associated with Risperdal would not have impacted his decision to prescribe Plaintiff the drug.” While we might have preferred that the court had made it clear in this situation that plaintiff needed favorable testimony from all the prescribing physicians (or at least those whose prescriptions were reliably linked to development of the gynecomastia), this short analysis was enough to get rid of the remaining claims in Green.

The analysis in Hopkins was even shorter. He did not depose any of his physicians, so he had nothing on proximate cause, which was an issue because he had offered the same evidence on inadequacy as a matter of law rejected in Green. Hopkins had two more problems. He took the generic drug, not the drug made by the company he sued. Because there is no innovator liability in Delaware, as affirmed earlier that same day, that also meant summary judgment. He also did not have evidence that he actually had gynecomastia, let alone proof of gynecomastia from specific drugs that he took. Lacking a diagnosis or case-specific expert, Hopkins tried to rely on a generic expert who said that the use of the drug in general can cause gynecomastia sometimes. The court did not have to dwell long in rejecting that.

Collectively, Green and Hopkins illustrate that it should not take long decisions to get rid of the claims of plaintiffs who did not muster basic evidence and hoped to get past summary judgment anyway. Whether this court’s decisions signal a turning of the tables in Risperdal litigation remains to be seen.

It’s tax week, so expect a lot of cases this week from that wonderful no-tax paradise, Delaware. With light traffic (iffy on I-95, to be sure), one can get from our office to Delaware in under a half hour. That’s a worthwhile trip for buying anything in triple or higher digits. It’s also a worthwhile trip if one hankers for decent court rulings. The Philadelphia Court of Common Pleas is a Hobbesian war of all against all, while Delaware courts are a calm, sensible embodiment of John Locke – protecting life, liberty, and the pursuit of property. They also do a pretty good job of protecting common sense. A recent example of that is Trower v. Janssen Pharmaceuticals, Inc., 2019 WL 1571834 (D. Del. April 11, 2019), where a Delaware federal court said No Thanks to the product liability doctrinal abomination known as innovator liability.

The plaintiff alleged that he developed gynecomastia, breast pain, and discomfort from ingesting generic risperidone. The SCOTUS Mensing case meant that the plaintiff was out of luck against the generic manufacturer. Aggrieved by this deprivation – just as Justice Sotamayor was in her Mensing dissent when she fretted that the majority opinion “strips generic-drug consumers of compensation when they are injured by inadequate warnings” – the plaintiff in Trower proposed that “the appropriate solution is to allow plaintiffs to maintain claims against brand name manufacturers for failure to warn, even when the plaintiffs ingested only the generic manufacturers’ products.” This modest proposal was premised on “two policy reasons: (1) it ensures drug labels are consistent and consumers adequately warned, regardless of whether a generic or brand name drug is dispensed by a pharmacist, and (2) imposing liability on brand name manufacturers better reflects what is actually at issue in failure to warn claims.” In addition to these policy arguments, the plaintiff pointed out that a couple of courts have actually bought this argument. One of those courts, of course, was the California Supreme Court. California is quite similar to Delaware, except in terms of size, taxes, weather, earthquakes, and the judicial embrace of common sense. California is the Beach Boys singing “Wouldn’t It Be Nice.” Delaware is George Thorogood explaining why he prefers to drink alone. We’re right there with George. (Except we aren’t because, you know, he wants to be alone.)

The defendant in Trower argued that Delaware law does not support imposing liability on defendants that did not make the allegedly harmful product. It is fundamental to product liability law in Delaware that “a plaintiff must plead facts that identify the allegedly defective product and the manufacturer of that product.” In re Benzene Litig, 2007 WL 625054, at *6 (Del. Super. Ct. Feb 26, 2007). It is also fundamental to product liability law in Delaware that “generic identification of a product is not enough to establish liability absent some other evidence that that generic product was the specific product of a defendant.” Lee v. A.C. & S., Inc., 1986 WL 15421, at *2 (Del. Super. Ct. Dec. 15, 1986).

Come to think of it, those are fundamental precepts in product liability law pretty much anywhere.

The plaintiff in Trower cited to just one Delaware case, Wilkerson v. Am. Honda Motor Co., 2008 WL 162522, at *2 (Del. Super. Ct. Jan. 17, 2008). In Wilkerson, the Superior Court held that a defendant may be liable for a plaintiff’s asbestos exposure from a third-party product if it was reasonably foreseeable that use of defendant’s product would result in use of the third-party product that would result in exposure to asbestos. Id. at *2. That sounds sort of close to putting a defendant on the hook for someone else’s product, but it really isn’t. As the Trower court observed, “[c]onsistent with other Delaware cases, Wilkerson requires that defendant produced the product at the center of the dispute.” Thus, there is no real authority in Delaware law for innovator liability.

That is particularly important in Trower, which involved a federal court. The Third Circuit, almost as much as Bexis, “disfavors district courts creating new state law while sitting in diversity.” Faced with this modesty principle, and faced with the absence of support in Delaware law for innovator liability, the Trower court concluded that “Delaware law does not support imposing liability on a brand name defendant for a generic manufacturer’s product.” Wouldn’t it be nice if all other courts were so sensible?

Then, as if to prove how Delaware always renders such good value, the Trower court went on to rule that the defendant was entitled to summary judgment on an entirely independent ground that the plaintiff did not establish that an additional warning would have changed the plaintiff’s physician’s decision to prescribe risperidone. None of the plaintiff’s physicians had been deposed for this litigation. That seems like a very odd choice by the plaintiff, and it left the court with no choice but to hold that the plaintiff could not “overcome Delaware’s learned intermediary doctrine.”

In this age of scrolling news, headline news, pop-up news, instant alerts – it’s tough to stay current.  For instance, if you were getting Masters updates on Sunday, the last few hours of lead changes, dropped strokes, balls in the water on 12, and nearly every swing Tiger made on the last 4 holes probably had your phone pinging like a pinball machine.  And, if that wasn’t what was blowing up your phone Sunday, it was likely GOT countdowns, conjecture, and general fandom camaraderie.  Whatever it was – it was always changing.  The unfortunate side of real time reporting (often combined with 260 character reporting), is that it can be out-of-date as soon as you hit send.

That’s what happened to us last week.  No sooner had our post on Lempa v. Eon Labs, Inc., 2019 U.S. Dist. LEXIS 54868 (N.D. Ill. Mar. 29, 2019) hit the blog touting that it’s holding was in opposition to the two circuit court of appeals decisions on the same issue then we learned that a third appellate court had weighed in.  Fortunately, it too leaves Lempa as an outlier.

We posted about the district court’s dismissal of Bean v. Upsher-Smith Pharms., 2017 WL 4348330 (D.S.C. Sept. 29, 2017) hereThe district court dismissed plaintiff’s failure to warn and off-label promotion claims both as preempted and barred by the learned intermediary doctrine.  Plaintiff only appealed the dismissal of his failure to warn claim and the Fourth Circuit only reached the learned intermediary issue finding it was unnecessary to reach preemption.  Bean v. Upsher-Smith Pharms., 2019 U.S. App. LEXIS 10260, *3 (4th Cir. Apr. 8, 2019).

Like the other amiodarone cases we’ve discussed, plaintiff’s decedent was prescribed the drug off-label and suffered pulmonary toxicity leading to his death.  Id. at *2.  Also like the other cases, plaintiff did not allege that defendant failed to warn the prescribing physician of the risk of pulmonary toxicity.  Instead, plaintiff alleged his father was not provided with the Medication Guide.  Essentially that is a claim that the manufacturer had some duty to ensure that the end-user of a drug received a warning.  But the appellate court found that South Carolina recognizes the learned intermediary doctrine – “a duty to warn that extends only to physicians” or other learned intermediaries.  Id. at *4.  It is then up to the physician to use his/her “knowledge, training, and experience to provide the patient” with appropriate information so the “patient can make an informed choice.”  Id. at *5 (following the Restatement (Third) of Torts version of learned intermediary).  In this case it was undisputed that the prescribing physician was aware of the risk of pulmonary toxicity.  Id. at *6.  Therefore, defendant satisfied its duty to warn.

Since plaintiff could not demonstrate that the warnings provided to the prescribing physician were inadequate, he argued that they were “ineffective” due to the manufacturer’s off-label promotion.  Id. at *6-7.  But plaintiff explicitly chose not to appeal his off-label promotion claim.  A failure to warn claim concerns “a misrepresentation of risks.”  Id. at *7.  Plaintiff was arguing a misrepresentation of benefits.  He knew that was a separate claim when he filed his lawsuit.  He pleaded it that way.  Then he chose not to appeal it.  “[H]e cannot revive it now, repackaged as a response to the manufacturer’s invocation of the learned intermediary doctrine.”  Id.

And, even if he could, there is no direct-to-consumer exception to the learned intermediary doctrine.  While it is true that the FDA required end-users to receive a Medication Guide, it was “the FDA’s intent that the Medication Guide rule not ‘alter the duty, or set the standard of care for manufacturers.”  Id. at *9 (citing 63 Fed. Reg. 66378, 66384 (Dec. 1, 1998)).

At the risk of dating this post too, we now have two circuits finding the medication guide claim barred by the learned intermediary doctrine – Fourth and Eleventh – and one that found it preempted – Sixth.  If this post becomes outdated by more decisions like these, we don’t mind pinging you again.

A jurisprudential milestone of sorts was recognized last month when the ever rising tide of federal MDL filings surpassed 50% − that’s right, over half – of all cases currently open in the federal judicial system now are contained in multi-district litigation.  As reported, “the 248 MDL dockets accounted for 52 percent of all pending federal civil cases at the end of the last fiscal year.”  Here’s a more detailed review:

A year ago, civil cases concentrated in MDLs made up 47% of the entire federal civil caseload.  The change to majority MDL continues a trend of growing concentration of the federal civil caseload in MDLs which dates back to the early 1990s. . . .  [T]he largest MDLs comprise an even bigger share of the civil caseload than in past years.  At the end of fiscal year 2018, cases in large MDLs with 1,000 or more cases represented 46% of cases in the federal civil court system, compared to 40% at the end of fiscal year 2017, according to calculations based on data from the Judicial Panel on Multidistrict Litigation (JPML) and United States Courts.  The 140,052 cases pending in 24 large MDLs represented 89% of all the cases across 248 MDL dockets at the end of fiscal year 2018.

Rules4MDLs, “MDL Cases Surge to Majority of Entire Federal Civil Caseload” (3/14/2019).  There are no rules for MDLs.

As we’ve discussed many times before, the ordinary Federal Rules of Civil Procedure apply sporadically, if at all in MDLs.  Likewise, some MDL judges apply Daubert rigorously, and others do not.  Some MDLs are disposed of on the basis of federal preemption, while other MDL judges seem never to have granted a preemption motion in their careers.  Appellate opportunities are few and far between, and almost always arise when plaintiffs lose, since defense losses don’t generate immediately appealable orders.  The current MDL system makes the federal judicial system resemble the baroque Holy Roman Empire – an agglomeration of hundreds of feudal principalities, feigning allegiance to one set of laws, but in reality operating more or less independently – with some of those margraves and palatine counts wielding rather despotic power.

Like some wasps do to caterpillars, agglomerations of “plaintiff steering committees,” assisted by shadowy funded media solicitors, have parasitized the federal judicial system, converting it into a system not for justice, but for converting mass solicitations into mass settlements without the merits of 99+% of the filed “inventory” ever being examined.

But what these stories aren’t telling you is that the situation is only going to get worse.

Why?

Because, for all the faults of federal MDL practice, mass tort practice in many states is even worse. That means that most defendants sued in most state courts will try to remove cases to federal court.

In the ensuing procedural gamesmanship, plaintiffs are in the process of losing one of the main ways they gamed the system to keep diverse cases in state court – the so-called “forum defendant rule” whereby even a diverse action could be kept in state court by the presence of defendant domiciled in the plaintiff’s chosen forum. The forum defendant rule applies only to parties “properly joined and served,” and technologically-savvy defendants have discovered that, by monitoring electronic dockets, they can remove diverse cases faster than plaintiffs can serve forum defendants. We call this “pre-service,” “snap,” or “wrinkle” removal, and we’ve chronicled (and advocated) its rise since 2007.

As we thought it would, pre-service removal degenerated into nationwide guerilla warfare for a while, since (as with MDLs) appellate review of removal controversies (remands are not appealable at all) tends to be sporadic and delayed, since removal can only be appealed as of right when the plaintiff ultimately loses on the merits.

But in the last year, that inherently delayed process began reaching a conclusion.

Two courts of appeals, the Second and the Third, confronted pre-service removal head on, and both decisively rejected the “absurd result” argument the plaintiffs had cobbled together to deny effect to the plain language of the removal statute.  Gibbons v. Bristol-Myers Squibb Co., ___ F.3d ___, 2019 WL 1339013 (2d Cir. March 26, 2019), and Encompass Insurance Co. v. Stone Mansion Restaurant Inc., 902 F.3d 147 (3d Cir. 2018).. We wrote “breaking news” posts for both cases.

Since we had the express statutory language on our side, as well as Congress not modifying the relevant language the last time it tinkered with the statute – after pre-service removal had become a “thing” – we always thought the defense side had the better of this argument.  With two emphatic affirmances, we think the rest of the appellate dominoes eventually tumble, and pre-service removal will become the norm across the country.

But widespread pre-service removal means more cases in federal court.  Since so many of the cases being removed in this fashion involve mass torts, we believe that an even larger percentage of pre-service removal cases will wind up in MDLs than federal cases generally.

A second trend is the recent more rigorous enforcement of constitutional due process limits on personal jurisdiction.  As personal jurisdiction restricts forum shopping, the same result should ensue.  A lot of plaintiffs who once would have been litigation tourists will end up having to file in defendants’ “home” states if they want to benefit (usually by hiding in the weeds and waiting for settlement) from any kind of aggregation.  Thus, enforcing the constitutional limits to personal  jurisdiction (and use of pre-service removal) will likewise move those cases, as well, to federal court.

So, yes, the situation with MDLs is bad, and cries out for reforms to prevent warehousing, allow appeals, and shed light on litigation financiers pulling strings from the shadows.  But we think things are going to get worse before they get better.

Last year, we posted about Pennsylvania going off the personal jurisdictional “deep end” in Hammons v. Ethicon, Inc., 190 A.3d 1248 (Pa. Super. 2018), and Webb-Benjamin, LLC v. International Rug Group, LLC, 192 A.3d 1133 (Pa. Super. 2018).  Well, unfortunately they’re still at it, and we’re afraid that the result could well be a lot like the Missouri talc cases, or a bunch of California mass torts – a lot of futile trial activity eventually coming to naught because the trial courts never had jurisdiction to start with.

But maybe not.  Here’s a ray of hope.  Last Wednesday, the Pennsylvania Supreme Court agreed to hear an appeal in the Hammons case.  So whether or not it ultimately takes the United States Supreme Court to straighten Pennsylvania out, the Pennsylvania Supreme Court will have the first opportunity to set things right – which is as it should be.

Today’s decision, In Re: Pelvic Mesh Litigation, Appeal of Ethicon, Inc. & Johnson & Johnson, 2019 WL 1486697 (Pa. Super. April 3, 2019), is – and richly deserves to be – one of the last uncitable, unpublished memorandum decisions issued by the Pennsylvania Superior Court.  On May 1, 2019, new Pa. R.A.P. 126 becomes effective, and thereafter unpublished Pa. Super. memorandum decisions, while still non-precedential, will at least be citable.  Thankfully, Pelvic Mesh falls under the old rule.

Briefly Pelvic Mesh takes Hammons’ wrong-headed approach to post-BMS specific (“case-linked”) personal jurisdiction and applies it to the entire mesh mass tort pending in the Philadelphia Court of Common Pleas.  Once again, the court fails to rely on case specific evidence.  Nowhere in the opinion do we know the names, circumstances, or even the number of so-called “non-resident plaintiffs” whose jurisdictional cases are to be adjudicated.  What was lacking in BMS?  The Supreme Court told us:

The State Supreme Court found that specific jurisdiction was present without identifying any adequate link between the State and the nonresidents’ claims.  As noted, the nonresidents were not prescribed [the product] in California, did not purchase [the product] in California, did not ingest [the product] in California, and were not injured by [the product] in California. . . .  Nor is it sufficient − or even relevant − that [defendant] conducted research in California on matters unrelated to [the product].  What is needed − and what is missing here − is a connection between the forum and the specific claims at issue.

Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773, 1781 (2017) (emphasis added).  In BMS the lower courts had erred by not basing their analysis on the “specific” contacts of the plaintiffs, and instead relying on generalized evidence – including the defendant’s relationship (as here) with a third-party in-state corporate defendant:

[T]he requirements of [personal jurisdiction] must be met as to each defendant over whom a state court exercises jurisdiction. . . .  [T]he nonresidents have adduced no evidence to show how or by whom the [product] they took was distributed [and] dispensed [] to them.”  The bare fact that [defendant] contracted with a [resident] distributor is not enough to establish personal jurisdiction in the State.

Id. at 1783.

As in BMS, the Pennsylvania Superior Court in Pelvic Mesh is creating another “a loose and spurious form of general jurisdiction,” id. at 1781, specifically, a product-related version of “continuous and substantial” contacts with Pennsylvania, but lacking the critical “at home” element.  Any and all plaintiffs in the Pelvic Mesh mass tort, no matter where they reside, and no matter where they “were implanted with one of the [defendants’] eight pelvic mesh devices,” 2019 WL 1486697, at *6, are allowed to establish specific personal jurisdiction based on identical facts:

[Defendant’s] direct oversight of the knitting of the mesh in Pennsylvania, coupled with its reliance on clinical studies performed by a Pennsylvania gynecologist, is sufficient to bring [it] within the jurisdiction of this Commonwealth.

Id.

However, those aren’t plaintiff-specific facts.  Those facts aren’t unique to any plaintiff.  Instead, they are what the Pelvic Mesh court believed to be sufficiently substantial facts connecting the eight mesh products generally to the Commonwealth of Pennsylvania, no matter who the plaintiff happens to be.  Thus, as in BMS, the Pelvic Mesh court created “a loose and spurious form of general jurisdiction” that is woefully insufficient to establish either general or specific jurisdiction.  Under BMS, having an in-state distributor is insufficient, unless the plaintiff used a product so distributed.  137 S. Ct. at 1783.  Other general in-state contacts (conducting research) are not “even relevant.”  Id. at 1781.  See also Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 927 (2011) (rejecting jurisdictional analysis that “elided the essential difference between case-specific and all-purpose (general) jurisdiction”).

“[T]he suit must arise out of or relate to the defendant’s contacts with the forum.”  BMS, 137 S. Ct. at 1780 (citation and quotation marks omitted).  The facts necessary to establish “case linked” jurisdiction, as BMS made clear, are those creating “the specific claims at issue,” id. at 1781, not what a defendant generally does concerning a product.  These non-Pennsylvania plaintiffs, like the non-Californians in BMS, “were not prescribed,” “did not purchase,” “did not ingest” and “were not injured” in Pennsylvania by the product as to which they are seeking compensation.

Those plaintiffs established nothing more than routine business relationships with anyone in Pennsylvania.  Cf. Vaughan v. Olympus America, Inc., ___ A.3d ___, 2019 WL 1549345, at *5 (Pa. Super. April 10, 2019) (conceded “agency relationship” with two subsidiaries having their principal places of business (and thus “at home”) in Pennsylvania).  “[S]pecific jurisdiction is confined to adjudication of issues deriving from, or connected with, the very controversy that establishes jurisdiction. ” BMS, 137 S. Ct. at 1781.  So what if the defendants interacted with a couple of Pennsylvania third parties who had no contact whatever with the plaintiffs.  Those contacts flunk the BMS test.

General jurisdiction involves general (“continuous and substantial”) contacts – such that the defendant is “at home” where suit is brought.  Specific jurisdiction involves specific (“case linked”) contacts that connect the plaintiff’s particular case with the forum.  In most cases, it is that simple.  The jurisdictional mash-up that Pennsylvania courts have so-far created ultimately proves neither.  As in BMS, “the connection between the nonresidents’ claims and the forum [here] is even weaker.  The relevant plaintiffs are not [Pennsylvania] residents and do not claim to have suffered harm in that State.”  Id. at 1872.

As did the California courts, and the Missouri lower courts, it might well take a lot of litigation sound and fury signifying nothing before would-be mass-tort plaintiffs’ last, best hopes are ultimately brought to heel.  It may (or may not, if the Pennsylvania Supreme Court does the right thing) take another United States Supreme Court case, or even two, but eventually Pennsylvania will follow the same constitutional personal jurisdiction standards as the rest of the country.