The Nebraska Supreme Court issued a gem of a Daubert opinion in an Accutane case last week, Freeman v. Hoffman-La Roche, Inc., No. S-17-800, 2018 WL 2296772, at *2 (Neb. May 18, 2018).  We don’t write much about Nebraska, but the last time we waxed on about the beauty of the Platte River Valley, we actually received a few emails.  That was when we wrote last year about the Daubert order that the Nebraska Supreme Court has now affirmed, in an opinion that is as correct and straight-headed as the order it was reviewing.  Indeed, the current opinion might actually be the end of this case, which has been kicking around in the Nebraska state courts amazingly since the late 1990s.

Nebraska keeps a low profile. Growing up in California, we were told that Nebraska is in the Midwest.  But then we went to college in New England and learned that Nebraska is just plain “West,” unqualified by any prefix.  Sandwiched in between Colorado and Iowa, we suppose that either moniker could justifiably apply.  Nebraska has the country’s largest railyard, including a tall public viewing tower from which you feel as if you are looking down on a sprawling model train set.  We know because we have been there.  We had a few hours to kill in North Platte one day (don’t ask why) and we Googled “things to do in North Platte.”

There is a city in Nebraska named Kearney and a street in San Francisco named Kearny. They are spelled differently and pronounced differently (Nebraskans say Car-nee,” while Californians say “Ker-nee.”).  But they are named after the same guy.  Go figure.

Legalwise, Nebraska is the only state with a unicameral legislature—i.e., one chamber, with no separate house and senate.  The Nebraska state motto is “Equality Before The Law.”  We like that motto a lot, and we were even more impressed when we learned that it predates the Fourteenth Amendment by one year.  We begrudgingly admit that we prefer “Equality Before The Law” over our home state’s motto, “Eureka!”  The former echoes a bedrock principle of our post-Civil War legal tradition and is both declaratory and aspirational.  California’s motto celebrates sudden wealth.  Must have been sponsored by plaintiffs’ lawyers.

We like the Nebraska Supreme Court’s opinion in Freeman v. Hoffman-La Roche a lot, too.  The plaintiff was prescribed Accutane for chronic acne and allegedly experienced Crohn’s disease in her colon and rectum as a result.  2018 WL 2296772, at *2.  There is, however, no reliable scientific evidence showing a causal relationship between Accutane and this particular condition, so when it came time to produce the expert opinions necessary to prove her claims, the plaintiff could not come through.

She banked on a single expert, whom the trial court found to have applied an unreliable methodology and who “unabashedly cherry-picked supporting studies from an overwhelming contrary body of literature.” Id. The trial court’s 42-page order is among the more thorough orders on expert opinion that you will see, and you can review our take on it here.  It’s a strong order showing that the trial court understood who this expert was and what he was offering.

The Nebraska Supreme Court agreed, and it affirmed the exclusion of the expert’s opinions and the trial court’s order granting summary judgment. The Nebraska Supreme Court must have been as impressed with the trial court’s order as we were, because it affirmed the result in just a few pages.  Under Nebraska’s standard—known as the Daubert/Schafersman framework—the court must determine whether an expert’s methodology is reliable and whether the expert applied the methodology properly to the facts. Id. at *3.

This expert employed a “weight of the evidence” methodology, under which he purported to form an opinion based on a variety of disparate data—animal tests, case reports, epidemiological studies, etc. Id. at *4.  That methodology, according to the Nebraska Supreme Court, is generally accepted.  But the problem was and remains that the expert did not apply the methodology in a reliable fashion. Id. He recognized that there was no study determining that Accutane use was a risk factor for Crohn’s disease, but theorized that it would be a risk factor for a particular type of Crohn’s disease—Crohn’s disease of the colon.

Where did he get that? Well, essentially from nowhere.  He disregarded all but one of the epidemiological studies finding no significant relation between Accutane use and irritable bowel syndrome, which is a disease of the colon.  He also found studies reporting no association between Accutane use and Crohn’s disease a “waste of time” because they did not account for the “different manifestations” of Crohn’s disease.  He admitted, though, that the scientific community does not agree that “different manifestations” of Crohn’s disease make any real difference.  He also admitted that Crohn’s disease has a different clinical presentation and different causes than ulcerative colitis, but then he still relied on one study on ulcerative colitis to support his causation opinion. Id. at *4.  So Crohn’s disease is different, except when it isn’t.

Most tellingly, the expert rejected epidemiological studies on Crohn’s disease that showed no association because they did not focus narrowly on Crohn’s disease of the colon.  But then he relied on anecdotal case reports of Crohn’s disease in Accutane patients whether they reported disease of the colon or not.  So the location of the disease was critical when it helped him, but was immaterial when it did not.  As we said before, this is called talking out of both sides of your mouth, and it is neither good nor scientific.

Taking its cue from the trial court, the Nebraska Supreme Court thus concluded:

The objective of the trial court’s gatekeeping responsibility is to make certain that an expert, whether basing testimony upon professional studies or personal experience, employs in the courtroom the same level of intellectual rigor that characterizes the practice of an expert in the relevant field. Clearly, cherrypicking studies from an overwhelming contrary body of literature without valid, supporting reasons for why the other studies were disregarded does not meet the standard of intellectual rigor required of expert witnesses.

Id. at *5.  Without admissible expert opinion, the plaintiff tried to fill the gap with “internal documents,” but that fell short, too.  To the extent the documents were in the record, they did not show a causal relationship.  Id.  Summary judgment affirmed.  This expert’s opinion was shallower than the Platte River itself—a mile wide at its mouth and six inches deep, as some Nebraskans like to say.  We got that saying, by the way, from Bexis.

We immediately called for the further appeal and reversal of the hideous decision in In re Fosamax (Alendronate Sodium) Products Liability Litigation, 852 F.3d 268 (3d Cir. 2017).  However, we’re just bloggers.  Thus, we were greatly pleased when the United States Supreme Court, on December 8, 2017, requested the views of the Solicitor General on whether to grant certiorari in the Fosamax appeal, now known as Merck, Sharp & Dohme Corp. v. Albrecht, No. 14-1900 (U.S.).

We’re even more pleased, now that we have read the Solicitor General’s responsive brief, which we have just received.  Getting right to the point – the bottom line:

In the view of the United States, the petition for a writ of certiorari should be granted.

United States Amicus br. at 1.  Even though “[n]o circuit conflict yet exists,” the issue in its MDL context is sufficiently “significant” to grant certiorari now.  Id. at 12.

Although the question is close, . . . this Court should grant certiorari.  The underlying issue in this preemption case is a significant one:  whether the meaning and effect of an FDA labeling decision is a question of law for courts to resolve or a question of fact for lay juries to determine.  The petition cleanly presents that issue in an MDL context in which hundreds of separate cases . . . turn on its proper resolution.

Id. at 22-23.

First, the Solicitor General believes that preemption is a legal issue, not one for the jury, as the Third Circuit held in its unprecedented ruling:

The court of appeals erred in holding that a jury must determine whether FDA’s . . . decision − which declined to approve petitioner’s proposal to revise [the drug’s] Warnings and Precautions section . . . − preempted respondents’ state-law failure-to-warn claims arising from that same type of injury.  Where, as here, FDA renders a decision declining to approve a drug-labeling change, the interpretation of that administrative decision and its significance for a failure-to-warn claim are legal questions for a court to resolve, not factual questions for a jury.

Id. at 12.  “The meaning and effect of such agency action is a legal question within the exclusive province of a court.”  Id. at 13.  “Judges, rather than lay juries, are best suited to evaluate the scope of an agency’s legal determination in light of the relevant statutory and regulatory context.”  Id. at 14.

Second, the Solicitor General believes that the FDA’s rejection of the defendant’s request for a label change was “clear evidence” supporting preemption:

[B]ecause FDA’s decision here prevented petitioner from modifying the relevant labeling before late 2010, the court of appeals erred in rejecting petitioner’s impossibility-preemption defense.

Id. at 12.  “Nothing is ‘hypothetical’ about FDA’s actual 2009 decision in this case.”  Id. at 16.

[Levine] did not resolve how to determine the meaning and effect of an actual FDA labeling-supplement decision. . . .  [T]he court of appeals erred in transplanting [Levine’s] discussion about a hypothetical regulatory scenario to support a requirement for “clear evidence” about the scope and effect of the actual agency labeling decision in this case.

Id. at 16-17 (emphasis added).  The FDA was not quibbling about language when it rejected the label change at issue, but instead the “FDA’s decision thus was based on the lack of adequate data to support a warning.”  Id. at 21.  “Indeed, nearly a year later, FDA announced − after reviewing further data − that it had yet to find any ‘clear connection’” between the drug and the alleged risk.  Id. at 22.

Third, “clear evidence” was used in Levine “not in its ‘strict evidentiary sense’ but merely as a ‘useful reminder’ that a general presumption concerning a legal interpretation should control if substantial doubt exists.”  Id. at 18.  Thus, the Third Circuit’s “clear and convincing” evidentiary gloss in Fosamax was also error.  Rather, “to establish impossibility preemption, a name-brand drug manufacturer cannot rely on speculation or merely plausible interpretations of ambiguous features of FDA’s regulatory framework and practices.  Id. at 18-19.

Now we wait. If the Court grants review, Albrecht will likely be the most significant preemption decision since Levine itself.

When we were on a jury last month we were warned not to consult any outside sources.  And we didn’t.  When we were in high school last century and studied the works of Eliot, Lawrence, Joyce, Waugh, and (another) Eliot, we were instructed not to consider extraneous issues, such as biography or social conditions.  Our teachers were still in the grip of the New Criticism and, therefore, so were we. 

 

But we found today’s case, Lynch v. State, 2018 Conn. Super. LEXIS 851 (Conn. Superior Ct. April 17, 2018), tough sledding without doing some research beyond the four corners of the opinion.  The case is about a plaintiff who was inseminated by a sperm bank donor, came down with a cytomegalovirus (CMV), and gave birth to children with serious injuries.   What we learned courtesy of the internet is that CMV is fairly common and usually doesn’t cause terrible maladies.  The problem is that if a CMV-negative woman gets infected with CMV during pregnancy, there is a possibility of birth defects.  That is what happened here.  The plaintiff had been CMV negative.  That is something she knew and her doctor knew, but the sperm bank did not know it.  The sperm donor tested as CMV-positive, though he no longer actively suffered from CMV.  The sperm bank accurately disclosed the CMV-positive status of the sperm.  What the sperm bank did not do was tell the plaintiff that if she was CMV-negative, then CMV-positive sperm could pose a risk.  But, presumably, the plaintiff’s doctor would know that.  We know it from reading a Wikipedia article.  We never attended medical school, not even for ten seconds.  Call us a semi-learned, blogging defense hack.

 

The sperm bank moved for summary judgment, arguing that it did not owe the plaintiff a duty of care because a sperm bank does not have a duty to inquire into its clients’ CMV status, nor is it obligated to engage in an informed consent discussion with clients regarding the clients’ CMV status.  The Connecticut court agreed with the sperm bank and dismissed the case.  How is this a drug or device case?  It isn’t, but the scope of duty to warn and the relevance of the learned intermediary doctrine both poke their way into this case, and that is enough for us to stand up and take notice.    

 

Pursuant to the regulations, sperm banks are required to test their donors for certain diseases, including CMV. But the regulations do not impose on sperm banks an obligation to discuss the implication of the tests they run with the purchasers.  The evidence here showed that the sperm bank fulfilled its obligation to test for the sperm donor’s CMV status and to report the results accurately.  The results indicated that the donor was fully recovered and immunized from the virus, and that he was not actively infected with CMV at the time of the donation. Due to these test results, the defendants reported that the donor was CMV-positive.  The evidence did not show any knowledge on the part of the sperm bank that the plaintiff was CMV-negative.  The only duty the sperm bank had to the plaintiff was to conduct the required testing on the donor and to report the results of the tests, which it did.

 

The Connecticut court analogized to the duties that a pharmacy owes to its customers.  A previous Connecticut court applied the learned intermediary doctrine to pharmacists. Yay for the Nutmeg State. The court held that imposing a general duty on pharmacies and pharmacists to investigate and evaluate all of the medications that their customers’ physicians prescribed would impose a burden outside the scope of their normal duties, as the main job of pharmacists is to dispense the medications that their customers’ physicians prescribe. The learned intermediary doctrine makes sense in the pharmacist context given the fact that physicians have more knowledge than pharmacists about their patients’ needs and proclivities. Holding otherwise would put pharmacists between the physician-patient relationship.  The sperm bank is like a pharmacist.  (That’s a sentence we never thought we would write, but there it is.) The plaintiff’s doctor testified that he would typically advise CMV-negative patients to choose CMV-negative sperm. (The opinion does not make clear why that did not happen here.)  The court reasoned that holding that the sperm bank “had a duty to inform the plaintiff parents about the risks that CMV posed would also put the sperm bank in the middle of the physician-patient relationship.” 

 

Most of the Lynch opinion contains a discussion of the scope of duty.  There is a lot about foreseeability. (It throws us back to first year in law school, when we sat in the last row, next to the guy who always added to the seating chart a space for “Garth, the Most Savage Troll of All.”  Only one teacher ever had the temerity to call upon Garth.)  Even beyond foreseeability, the court asked whether the sperm bank might have assumed a duty to the plaintiff because either its failure to exercise care increased the risk of harm or the harm was suffered because of the plaintiff’s reliance upon the defendant’s undertaking. No and no.  First, the information that the sperm bank made available on its website about sperm CMV status did not appear to increase the risk of the type of harm that the plaintiff allegedly suffered. Although the website did arguably give some medical advice by saying that the risk of acquiring CMV from donor sperm is low, the website also informed its customers that this is a medical issue that clients should discuss with their physician. This language “clearly suggests that the sperm bank’s customers should not rely on the information provided on the website and that they should ask their physicians about CMV.”  Back to the learned intermediary.  Second, there is no evidence that the plaintiff relied on this information when selecting the donor’s sperm. The plaintiff testified that she did not discuss her or her donor’s CMV status with any representative from the defendant sperm bank, and there is no indication that she saw the page on the website that allegedly created a duty.  The Lynch court went back to the pharmacy example.  It is possible for a pharmacy or pharmacist to assume a duty when they have “specific knowledge of potential harm to specific persons in particular cases.”  But here, “this exception is not applicable because the defendant sperm bank had no knowledge of the plaintiff mother’s CMV status.” 

 

Applicable federal regulations did not help the plaintiff’s case.  Test results will show that a donor is CMV-positive even if the donor had contracted and then subsequently recovered from the virus. FDA regulations provide that a sperm donor who is actively infected with CMV is ineligible to donate. Here, the sperm bank tested the donor and determined that he was CMV-positive, but that he had fully recovered from the virus and was not actively infected with it at the time of his donation.  There was no violation of the regulations.

 

Finally, there was the usual argument from a plaintiff that summary judgment should be denied until discovery is complete.  But a party requesting more time to conduct discovery bears the burden of establishing a valid reason why the motion should be denied, including some indication as to what steps the party has taken to secure facts necessary to defeat the motion. That burden was not met here.  Thus, the court granted the defendant summary judgment.

It’s been a few years since we talked about the conundrum facing pharmacies if they suspect prescriptions are medically unnecessary or improper. Back in 2015, two cases were decided within days of each other that allowed claims to go forward suggesting that a pharmacy could be potentially liable for both filling suspect prescriptions (see here) and for not filling suspect prescriptions (see here). Hence “damned if you do (question a prescription) and damned if you don’t.” We obviously have issues with both decisions as our prior posts explain. We don’t like the creation of new, ill-defined duties and we don’t like anything that creeps around in learned intermediary territory. But this is also a state-by-state issue and we have found other states not willing to make the leap to find that pharmacies have a duty to monitor patients or warn about excessive prescriptions. See Hernandez v. Walgreen Company, 2015 Ill. App. LEXIS 986 (Ill. App. Ct. Dec. 28, 2015). So, there is no bright line regarding what a pharmacy should do and it certainly seems at a minimum that pharmacies in different states are going to have to follow different rules – interesting when you consider the vast majority of prescriptions are filled by large national chains.

While the overarching question remains unanswered, a recent Seventh Circuit decision took a closer look at the substance of a “damned if you don’t” case that made it all the way to trial and found that most of it shouldn’t have survived summary judgment.

In Mimms v. CVS Pharmacy, Inc., — F.3d —, 2018 WL 2126720, *1 (7th Cir. May 9, 2018), plaintiff was a pain management physician who prescribed, among other things, opioids. On several occasions, CVS pharmacy employees informed customers that they would not fill Dr. Mimms’s prescriptions leading Dr. Mimms to sue CVS for alleged defamation. Id.   By the time the case went to trial it was based on four statements allegedly made by CVS employees:

  • “CVS doesn’t fill Dr. Mimms’[s] prescriptions or prescriptions for any other pill mills.”
  • “Dr. Mimms went to jail.”
  • “Dr. Mimms has been … or will be arrested.”
  • “Dr. Mimms is under DEA investigation.”

Id. Defendant moved for summary judgement on all four statements which was denied. Id. Defendant moved for judgment as a matter of law as to the first three statements at the conclusion of plaintiff’s case at trial. That too was denied and a verdict was entered in favor of plaintiff. Id.

Under Indiana law, to prove defamation, plaintiff had to establish that the speakers acted with actual malice. That is that they either knew their statements were false or had serious doubt as to their truth. Id. The district court found that plaintiff had met its burden regarding knowledge of falsity by showing that “CVS’s corporate office had concluded an investigation of Mimms and had not stopped stores from filling his patients’ prescriptions.” Id. In other words, the court imputed the knowledge of the principal to its agent which it is not permitted to do. Id. at *2 (citing New York Times v. Sullivan, 376 U.S. 254, 287 (1964)). Plaintiff had to prove that the employees themselves knew their statements were false or had serious doubts about their truth, which he did not do. Plaintiff pointed to emails from corporate officers to store supervisors asking supervisors to remind employees that company policy is not to make derogatory statements when refusing to fill prescriptions. Id. But there was no evidence that the email was sent to any of the speakers and more importantly it contained no information that would have informed speakers about the truth or falsity of their statements. So, plaintiff had no evidence from which a reasonable juror could conclude that the first three statements were made with actual malice. The court granted judgement as a matter of law as to those statements.

There was, however, some evidence that created a genuine dispute as to whether the speaker of the fourth statement – plaintiff was under DEA investigation – doubted its veracity. Id. So, while that statement would have survived summary judgment, the court found that CVS is entitled to a new trial based on erroneous trial rulings. At trial CVS was not allowed to offer evidence that Dr. Mimms’s former clinic had been subpoenaed for records of his prescriptions. That evidence CVS argued went to whether the statement was in fact true – a complete defense to defamation. Id. at *3. Even though Mimms had left the clinic at the time the subpoena was issued, “the fact that the DEA was seeking records for Mimms’s patients shortly after he left the practice supports CVS’s claim that Mimms was under investigation.” Id. CVS was also prohibited from introducing a transcript from a criminal trial in which a Health and Human Services agent testified that he investigated Mimms with a DEA agent. The Seventh Circuit found that the unduly prejudicial portions of the transcript could be redacted. It also concluded that the district court unnecessarily relieved plaintiff of his stipulation not to assert a hearsay objection to the transcript at trial. CVS relied on that agreement in deciding not to seek live testimony of the agent. Id. Finally, CVS was prohibited from offering evidence that Mimms’s professional reputation was already tarnished. While prejudicial, of course, the state of plaintiff’s reputation in a defamation action is critical to the issue of damages. Not allowing the evidence was an abuse of discretion. Add it all up and CVS is entitled to a new trial – one that feels like it should be drastically different than the first one.

 

We bloggers don’t generally consider the Drug and Device Law sandbox to extend to illegal drugs.  We regard that as a completely separate can of worms.  But what of a drug – like marijuana – that’s in between being legal and being illegal?  In an increasing number of states, marijuana’s current situation is a bit like Schroedinger’s famous cat, legal and illegal at the same time depending on who’s enforcing what law.

The same could be said of sports betting – at least until last week, when the United States Supreme Court decided Murphy v. National Collegiate Athletic Assn., ___ S. Ct. ___, 2018 WL 2186168 (U.S. May 14, 2018).  The federal government had banned sports betting (except in Nevada), but a number of states (including New Jersey, the real plaintiff) were champing at the bet to legalize – and reap tax revenues from – gambling on sporting events.

The Supreme Court basically said that the federal government couldn’t force the states to abstain from legalizing sports betting.  The feds could not “commandeer” state law enforcement and require them to keep sports betting illegal:

The [statutory] provision at issue here − prohibiting state authorization of sports gambling − violates the anticommandeering rule. That provision unequivocally dictates what a state legislature may and may not do.　.　.　.  [S]tate legislatures are put under the direct control of Congress.  It is as if federal officers were installed in state legislative chambers and were armed with the authority to stop legislators from voting on any offending proposals. A more direct affront to state sovereignty is not easy to imagine.

Murphy, 2018 WL 2186168, at *13.  See Id. at *17 (“Just as Congress lacks the power to order a state legislature not to enact a law authorizing sports gambling, it may not order a state legislature to refrain from enacting a law licensing sports gambling.”). The federal scheme “would break down if a State broadly decriminalized sports gambling.”  Id. at *19.

The Court viewed both affirmative and negative demands that the states do what the feds want as barred by that principle:

Here is an illustration.  [The statute] includes an exemption for [Nevada], but suppose Congress did not adopt such an exemption.  Suppose Congress ordered States with legalized sports betting to take the affirmative step of criminalizing that activity and ordered the remaining States to retain their laws prohibiting sports betting. There is no good reason why the former would intrude more deeply on state sovereignty than the latter.

Id.  This example certainly seems to resembles certain noises emanating from the current Department of Justice that it might seek to roll back state legalization of marijuana.

Now, let’s be clear, “commandeering” is not something that dissolves federal powers provided for in the constitution.  It would not allow the department to re-institute Jim Crow, let alone slavery.  Federal powers in the constitution (such as power over interstate commerce) remain:

The legislative powers granted to Congress are sizable, but they are not unlimited. The Constitution confers on Congress not plenary legislative power but only certain enumerated powers.  Therefore, all other legislative power is reserved for the States, as the Tenth Amendment confirms.  And conspicuously absent from the list of powers given to Congress is the power to issue direct orders to the governments of the States. The anticommandeering doctrine simply represents the recognition of this limit on congressional authority.

Id. at *10.  But once the state decides to legalize the activity within its borders, the feds can’t force the states to keep that activity illegal under state law.  Id. at *18 (“If the people of a State support the legalization of sports gambling, federal law would make the activity illegal.”).  A federal law that only operates only to “undermine[] whatever policy is favored by the people of a State” is both “perverse” and “weird.” Id. at *18.

Thus, what Murphy calls “the anticommandeering principle” is limited.  While it could well prevent DoJ from – as the “example” above indicates – “order[ing] States with legalized [marijuana] to take the affirmative step of criminalizing that activity,” id. at *13, the feds still retain the power, for example, to ban marijuana from interstate commerce.  Murphy also leaves open the possibility that a federal statute, phrased (unlike the law before the Court) explicitly in terms of federal preemption and not directed at states, might have provided means of avoiding the anticommandeering principle.  Id. at *15-16 (“every form of preemption is based on a federal law that regulates the conduct of private actors, not the States”). So that’s another possible source of federal power to continue prohibition, should Congress choose to act in that fashion.

There’s one other place where would be marijuana entrepreneurs – and states wishing to raise revenue from taxing such enterprises – might be able to put the anticommandeering principle to good use.  One big problem has been federal laws that prevent even legalized marijuana businesses from accessing the banking system.  While the feds can certainly continue that practice, whether it’s a good or bad idea, with respect to federally regulated banks, we think that Murphy casts considerable doubt on whether the federal government can tell state banks that they cannot accept deposits from marijuana businesses that the state regulating those banks has declared to be legal.

We don’t claim to know all the ins and outs of anticommandeering – a word we had never seen before reading Murphy.  But if a state, in its wisdom, chooses to legalize commerce in marijuana, it seems equally “perverse” and “weird” to require those legal businesses to bury the money they legally make in their basements rather than to deposit it in a bank regulated by the same government that legalized their activities.

 

We have an adorable, pigtailed, toddler grand-niece. We play a game with her that involves placing one building block on the table and asking her how many blocks there are.  She answers, “One.”  We take that block away and replace it with another.  Again, the answer is “one.”  Then we place both blocks on the table and ask, “How much is one plus one?”  As brilliant as she is beautiful, she answers, “Two!”   Simple, right?  But those of us who practice in the mass tort space are far too accustomed to reading opinions laying out the building blocks of an obvious holding then failing to conclude that one plus one equals two.

Not so the lovely opinion on which we report today. In Young v. Mentor Worldwide LLC, 2018 WL 2054591, — F. Supp. 3d — (E.D. Ark. May 1, 2018), the plaintiff was implanted with the defendant’s sub-urethral sling in 2003 to address her stress urinary incontinence.  In two subsequent surgeries, in 2006 and 2008, portions of the sling were removed.   In 2013, more than five years after the last revision surgery, the plaintiff filed suit, asserting all of the usual claims and alleging permanent injury from the defendant’s product.

Because Arkansas law, which governs the plaintiff’s claims, imposes a three-year statute of limitations on product liability lawsuits, the defendant moved for summary judgment, alleging that the plaintiff’s claims were time-barred. The court denied the motion, finding a question of fact as to when the plaintiff’s cause of action accrued under the applicable discovery rule.

Motion to Bifurcate Trial

Flash forward to the eve of trial. Arguing that resolution of the statute of limitations defense would require only a few witnesses and would likely take only two days, the defendant asked the court to bifurcate the proceedings in a novel manner, holding a preliminary trial on the statute of limitations and moving on to a full trial on the merits of the plaintiff’s claims only if necessary.  The plaintiff opposed the motion, arguing that resolution of the statute of limitations issue would require admission of evidence of the defendant’s alleged fraudulent concealment and that a single jury should resolve all of the issues at the same time.

The court disagreed, holding,

Regardless of whether the [plaintiff is] entitled to pursue a fraudulent concealment claim, [the defendant’s] statute of limitations defense is potentially dispositive, and preliminary trial will not consume the time and expense necessary for a trial on the merits.  The Court finds that a separate, initial trial on the statute of limitations question is especially warranted in this case, as it will promote judicial economy, avoid confusion of the issues, and prevent possible undue prejudice.

Young, 2018 WL 2054591 at *2.

Motions to Exclude Expert Testimony

The defendant also moved to exclude the testimony of two of the plaintiff’s experts, a biomedical engineer and a pathologist.

Biomedical Engineer

The biomedical engineer sought to testify about the mechanical structure of the defendant’s product “and to offer his opinion that the design and testing of [the product] was inadequate, that the product was defective for its intended use, and that [the defendant] failed to warn about the significant risk of complications and adverse events from the use of the product.” Id. at *3.  The defendant moved to exclude the expert’s testimony about the adequacy of the warnings, arguing that the expert was not qualified to offer such opinions.  The court agreed, holding, “The record is void of information indicating that [the expert’s] expertise in the area of biomedical engineering and product design qualifies him to opine as to the adequacy of warnings at issue or that his opinion on this ultimate issue of fact would be helpful to the jury.” Id.

The expert’s report also included statements to the effect that the defendant was “fully aware” of a high rate of complications associated with the product. The defendant moved to exclude these statements on the ground that they were inadmissible expressions of “corporate intent and legal conclusions.”  Again, the court agreed, holding, “The Court finds that a jury is capable of making its own determinations as to [the defendant’s] intent, motive, or state of mind, and that [the expert’s] opinion on these subjects does not meet the helpfulness criteria of Rule 702.” Id. (citation omitted).

Pathologist

The pathologist’s report stated that his general causation opinions were “based on his review of over 300 explanted mesh samples, which include[d] hernia meshes, pelvic organ prolapse meshes, and slings used to treat urinary incontinence.” Id. at *4.  He acknowledged that only ten of the 300 samples he examined were manufactured by the defendant, and those were samples he received from plaintiffs’ attorneys.

The defendant argued that the expert’s opinions about other types of mesh and other manufacturers’ products were irrelevant and unreliable. In deposition, the expert testified that “all of this background” was necessary to “interpret accurately case-specific material.”  The court disagreed, holding, “The Court finds that neither [the expert’s ] explanation nor [the plaintiff’s] arguments demonstrate that information about various types of polypropylene mesh products . . . is relevant in this case, which deals with a specific mesh product, used for a specific purpose.” Id. Further, the expert “admit[ted] that he [had] no knowledge as to how the mesh implants he has examined were selected, thus there is no assurance that they were randomly selected and no way of projecting the potential rate of error.” Id. The court concluded, “After careful review, the Court cannot find that [the expert’s] proposed opinion testimony is the product of reliable principles and methods, and [the defendant’s] motion to exclude will be granted.

We love this opinion – logical, correct, and elegant in its simplicity. We hope that others follow suit, and we will keep you posted.

This guest post is by Reed Smith associate Lora Spencer, who (as you might suspect) calls Texas her home.  In her first rodeo on the blog, she discusses a recent MDL decision that she thinks is a few pickles short of a barrel, and hopes it’s not a harbinger of things to come.  Not exactly a conniption fit, but close.  As always our guest posters deserve 100% of the credit (and any blame) for what they write.

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“Everything is bigger in Texas”—or is it? The plaintiffs in Aron v. Bristol-Myers Squibb, 2018 U.S. Dist. LEXIS 39146 (S.D.N.Y. Mar. 9, 2018), would have y’all believe that pharmaceutical manufacturer tort liability, at least, is bigger in Texas.  But, first, before getting to this “Texas Expansion,” here are some interesting “reported” facts about Texas.  Pay attention, there may be a pop quiz, if not now, perhaps at your next networking event.  Knowing such factoids will surely make your “lone star” shine brightly.

Texas is a really BIG state. Texas is ranked 2nd in the country in population and size.  Texas’s total area is twice the size of Germany (albeit half the size of Alaska).  Of 45 United States presidents – three of them hail from Texas—all of them since 1963, hence the slogan “read my lips, no new Texans.”  King Ranch, located in south Texas, is considered “the birthplace of Texas ranching” and is larger than Rhode Island.  Texas also has the most rattlesnakes of any state.  And the weight of the catfish consumed by Texans each year exceeds that of the Paris Eiffel Tower (at least the one in Texas).  “Texas is just too big,” said no Texan ever.  Apparently Aron takes the same view.

Aron purported to apply Texas law in what appears to be the first reported opinion from the Farxiga MDL.  Maybe future opinions will be better.  Aron denied the defendants’ motion to dismiss plaintiffs’ amended complaints under Rule 12(b)(6).  Id. at *9.  Farxiga has only one labeled indication—lowering blood glucose in adults with type 2 diabetes.  Id.  Because everything is bigger in Texas, so is the complaint, which included three Texas plaintiffs with no business being joined in the same complaint.  Getting a free pass on misjoinder, these three plaintiffs brought “causes of action claims, under Texas law, based on the defendants’ failure to warn of [drug] risks …, negligent testing, and gross negligence.” Id. *16.

Failure to Warn

The most important thing about Texas product liability law is that most of it is now statutory.  Under Texas law, in a products liability suit, a statutory presumption precludes a defendant drug manufacturer from being liable for failure to warn claims if its warnings were approved by the Food and Drug Administration (FDA).  Texas Civ. Prac. & Rem. Code Ann. § 82.007.  However, a plaintiff may rebut this presumption by establishing one or more of five statutory exceptions.  Id. at (b)(1-5).

In Aron, the relevant exceptions were § 82.007 (b)(1) and (3).  2018 U.S. Dist. LEXIS 39146, at *17.  Section (b)(1) allows a plaintiff to rebut the presumption by proving fraud on the FDA—that “the defendant, before or after pre-market approval … withheld from or misrepresented to the [FDA] required information that was material and relevant to the performance of the product and causally related to the claimant’s injury.”  Civ. Prac. & Rem. § 82.007(b)(1).  Section (b)(3) avoids the presumption if the plaintiff can show off-label promotion – that “the defendant recommended, promoted, or advertised the pharmaceutical product for an indication not approved by the [FDA], the product was used as recommended, promoted or advertised; and the claimant’s injury was causally related to the recommended, promoted, or advertised use of the product.”  Id. at (b)(3).

As regular blog readers know, a claim predicated on fraud on the FDA should be preempted. Buckman Co. v. Plaintiffs Legal Committee, 531 U.S. 341 (2001).  Unsurprisingly, the defendants argued the FDA fraud exception is preempted by federal law. Aron, 2018 U.S. Dist. LEXIS 39146, at *20.  The court noted conflicting Fifth and Second Circuit decisions concerning § 82.007(b)(1) and a similar Michigan statute. Compare Lofton v. McNeil Consumer & Specialty Pharms., 672 F.3d 372 (5th Cir. 2012) (applying Texas law) (discussed here), with Desiano v. Warner Lambert & Co., 467 F.3d 85, 95 (2d Cir. 2006) (applying Michigan law), aff’d by equally divided court, 552 U.S. 440 (2008).  However, because the plaintiffs did not plead the fraud exception with “sufficient particularity,” Aron did not decide the preemption issue.  Id. at *21.  Given the other rulings in Aron, its punting on preemption is probably just as well.  In true Texas fashion, Hi-Yo Silver away!  The plaintiffs failed to rebut the presumption using §82.007 (b)(1). Id.

However, fraud on the FDA is only one of § 82.007’s five exceptions.  Properly raising any one of them will get a plaintiff past a presumption-based motion to dismiss.  Id. at *17.  Plaintiffs got away with pleading the “off-label” marketing exception, under § 82.007 (b)(3). Id. at *20.  Plaintiffs alleged:  (i) defendants promoted Farxiga to prescribing physicians for off-label uses, specifically obesity and hypertension, (ii) such off-label promotion caused the physician to prescribe Farxiga for off-label use, (iii) plaintiffs used Farxiga for off-label purposes, and (iv) off-label use caused the plaintiffs injuries.  Id. at *20-22.  Plaintiffs cited press releases, advertisements, and clinical trial protocols to support their claim that off-label marketing occurred.  Id.  However, Aron failed to discuss the pleading of causation  Not one of the various off-label statements was linked to any particular prescriber, let alone to a prescription that caused these plaintiffs’ injuries.  Never mind that physicians may, and often do, prescribe drugs for unapproved uses as part of their practice of medicine.  Aron let the plaintiffs slide on causation.  All hat and no cattle.

Negligent Testing

Aron also allowed the plaintiffs’ negligent failure to test claim to stand.  2018 U.S. Dist. LEXIS 39146, at *22.  The plaintiffs alleged the defendants negligently failed to test Farxiga thoroughly before releasing the drug into the market, failed to analyze pre-market test results, and failed to conduct sufficient post market testing and surveillance.”  Id. at *23.  Defendants argued the plaintiffs’ negligent testing claim is “inextricably intertwined” with the plaintiffs’ failure to warn claim and is inadequately pleaded. Id. The Fifth Circuit, applying Texas law, has so held—twice.  “[A] negligent testing claim is, as a matter of Texas law, a variation of an action for failure to warn.” Dow Agrosciences LLC v. Bates, 332 F.3d 323, 333 (5th Cir. 2003) (applying Texas law), reversed on other grounds, 544 U.S. 431 (2005) (preemption).  Plaintiff’s “negligence claims, such as the alleged failure to adequately test [the product], are subsumed within” a failure to warn claim. Skotak v. Tenneco Resins, Inc., 953 F.2d 909, 912 n.5 (5th Cir. 1992) (applying Texas law).

Even though Fifth Circuit law should have controlled on this point of state law, Aron chose to follow cases that it asserted recognized “an independent cause of action based on negligent failure to test.”  Id. at *22-23.  The most significant of the three, Am. Tobacco Co. v. Grinnell, 951 S.W. 2d 420 (Tex. 1997), certainly did not.  Rather, the Texas Supreme Court’s holding was quite the opposite:

[Plaintiff’s] negligent testing claim is predicated on [defendants’] duty to test and ascertain the dangers inherent in its products about which it must warn consumers.  Because the negligent testing claim is inextricably intertwined with the [plaintiffs’] negligent failure to warn claim, we hold that summary judgment was also proper on this claim.

Id. at 437.  “Inextricably intertwined” is about as far from “an independent cause of action” as you can get.  Of the other two cases, Murthy v. Abbott Laboratories, 847 F. Supp.2d 958 (S.D. Texas 2012), is notorious for improperly construing Texas law.  The other, Romero v. Wyeth Pharmaceuticals, Inc., 2012 WL 12547449, at *4 (E.D. Tex. Aug. 31, 2012), essentially followed Murthy. Aron is another instance of improper federal court judicial activism attempting to push state (Texas) law where no state court has ever gone.

Gross Negligence

Apparently, in Texas, it is not enough just to plead negligent testing. The plaintiffs also pled gross negligence.  2018 U.S. Dist. LEXIS 39146, at *24.  The defendants argued that “[i]t is merely a restatement of plaintiff’s deficient negligence count.” Id.  However, Aron looked to the elements of gross negligence, and held the plaintiffs sufficiently pled facts to support an inference of gross negligence.  Id. at *25.  Those facts oddly included a September 2013 “post market” study.  Id. at *26.  Supposedly, the defendants “terminated” that study in “2013 without posting any results.”  Id. at *9.  However, the FDA did not approve Farxiga until January 8, 2014. Id. at *9.  That does not sound like gross negligence, but rather a preempted fraud on the FDA claim.  Whether or not anything was “posted,” the alleged study termination occurred before the FDA’s approval of this product, so the only reporting duty was imposed by federal law—not Texas law—and it ran to the FDA.  Any public “posting” of product-related information before FDA approval would illegally promote an unapproved product, which almost certainly explains lack of any such post.

With Aron, the Farxiga MDL is not exactly off to a good start.  Will this be another instance of MDL abuse in the making?  Saddle up, and get ready for a wild ride, the prominent phrase “Everything is BIGGER in Texas” is unfortunately reflected in Aron’s approach to product liability.

A case from Alabama this week got us to thinking about two topics on which we write a lot — innovator liability and personal jurisdiction. We thought the most interesting part of Bexis’ recent post on innovator liability was its suggestion that innovators sued over the use of generic drugs should consider objecting to jurisdiction.  After all, it is one thing to say that an innovator manufacturer can be potentially liable for a generic manufacturer’s warnings under state tort law.  It is a fundamentally different question whether the innovator manufacturer can be subject to personal jurisdiction in that state under the U.S. Constitution.  The plaintiff’s use of the generic drug cannot alone support specific personal jurisdiction over the innovator for the simple reason that the innovator did not make or sell the drug.

How does any of this relate to the aforementioned case from Alabama? Well, what if an enterprising plaintiff argued that a prescription drug manufacturer is subject to personal jurisdiction in the forum state because the manufacturer submitted a New Drug Application for its product to the FDA.  Seems like a strained proposition, but that is what the plaintiff argued in Blackburn v. Shire U.S., Inc., No. 2:16-cv-963, 2018 U.S. Dist. LEXIS 78724 (N.D. Ala May 10, 2018).  Innovator liability was not at issue in Blackburn, but innovator manufacturers are all NDA holders.  Thus, if the Blackburn plaintiffs are correct and merely submitting an NDA can result in personal jurisdiction in distant forums, then innovators will not get very far with the jurisdictional challenges that Bexis has suggested.

Fortunately, the district court in Blackburn faithfully applied the law and properly rejected NDA-based personal jurisdiction.  The plaintiff took a prescription drug and sued five different companies with “Shire” in their names over allegedly inadequate warnings after developing a kidney injury. Id. at **1-2.  The district court dismissed three of the defendants for lack of personal jurisdiction, but the plaintiff later moved to reinstate one of them, the holder of the drug’s NDA. Id. at **3-4.  According to the plaintiff, the court could exercise specific jurisdiction because the defendant, “as the NDA holder” for the drug, “placed [the drug] into the stream of commerce to reach Alabama consumers, such as himself.” Id. at *16.

The issue was specific jurisdiction, and the district court started by quoting BMS:

In order for a state court to exercise specific jurisdiction, the suit must arise out of or relate to the defendant’s contacts with the forum.  In other words, there must be an affiliation between the forum and the underlying controversy, principally, an activity or an occurrence that takes place in the forum State and is therefore subject to the State’s regulation.  For this reason, specific jurisdiction is confined to adjudication of issues deriving from, or connected with, the very controversy that establishes jurisdiction.

Id. at *15 (quoting Bristol-Myers Squibb v. Superior Court, 137 S. Ct. 1773, 1780 (2017) (emphasis in original).  As a general rule, it is not sufficient that a defendant might have predicted that its goods would reach the state.  Rather, the defendant must have “targeted” the forum and “purposefully availed itself of the privilege of conducting activities within the forum.” Id. at **15-16 (citations omitted).

The plaintiff did not dispute that the defendant had not actually manufactured or sold the drug. Instead, the plaintiff contended that the defendant, as the NDA holder, should be deemed a “manufacturer” for jurisdictional purposes.  The district court had little difficulty rejecting these “semantics.” First, the plaintiff argued that the defendant established sufficient minimum contacts when it sought permission from the FDA to manufacture, market, and sell the drug in Alabama and other states.  But merely seeking permission from the FDA or submitting an NDA “does not rise to the level of targeting Alabama or invoking the benefits and protections of its laws (especially when none of these activities occurred within Alabama or were directed at Alabama).” Id. at *17

Second, the plaintiff argued that the defendant purposefully availed itself to Alabama by crafting a “defective label that it knew would be purchased by Alabama residents.”  But this is just a version of “the defendant might have predicted its product would be sold in the state,” which is not sufficient to establish personal jurisdiction. Id. at *17. Third, the plaintiff argued that the that the actions of the entities that actually sold the drug should be attributed to the defendant under some sort of alter ego theory, but the plaintiffs’ proposed amended complaint did not allege any facts supporting such a theory. Id. at *17-18.

There are other aspects to the order, but jurisdiction over the NDA holder is what caught our eye. Although we are not fond of saying that an argument “proves too much,” we think that statement applies here.  If merely submitting an NDA creates personal jurisdiction in Alabama, then it would arguably create personal jurisdiction in any state within the FDA’s regulatory reach, i.e., within the United States and its territories.  “NDA holder jurisdiction” would therefore be a form of universal jurisdiction that the Supreme Court condemned in Bauman.  It does not fly.  So for now, Bexis’ advice to innovators remains sound.  Innovators and NDA holders can and should consider challenging personal jurisdiction in cases where they did not make and did not sell the drug at issue.

Last week at the DRI conference in New York an especially talented lawyer delivered an especially interesting address.  Everything about the speech was riveting and splendid, until she deployed the word “fulsome” in the increasingly popular, albeit wrong, fashion, as a synonym for full or complete. About twenty heads spun around to look at us with glee, knowing we had recently railed against this misuse.  How is “fulsome” superior to the simpler, correct words?  The interesting, specific meaning of fulsome is being diluted by foolish pomposity.  Still, the message conveyed to us by this event was not so much about the increasing misuse of “fulsome” but more about our increasing reputation for crankiness.  It is a curse.  When someone hands us a draft for editing, we must pass through it at least twice. Only after clearing away the grammatical wreckage can we review for substance.  It is undeniably a weakness on our part. A misplaced “only” will throw us off and make us want to drop the draft in the trash bin.  It would be wrong to say we “only threw three fits over confusions between ‘uninterested’ and ‘disinterested’ yesterday.”  That “only” belongs next to the word it is modifying, which is “three,” not “threw.” When someone writes that the court “found” something, if the reference is to a legal holding rather than a finding of fact, we reach for the red pen and mutter about the decline of the West.  The Third Circuit “held,” not “found,” that Levine preemption is a fact issue. Of course, the pernicious thing about the Third Circuit’s Fosamax ruling is that it transformed what should be a holding into a finding.  You have probably heard all this before.

 

Are we fretting too much over silly mistakes?  Maybe.  Are we being more than a bit pompous?  Maybe.  Nobody’s perfect.  There are probably no fewer than five dopey mistakes in this post. 

 

Mistakes are not always a big deal.  That is the lesson of a recent Third Circuit ruling in Estate of Goldberg v. Nimoityn et al., No. 17-2870 (3d Cir. April 13, 2018) (not precedential).  The case was a wrongful death med-mal case.  The plaintiff claimed that the doctors and hospital erred in delaying placement of a feeding tube.  The defendants hired an expert witness doctor who opined that the delay in placing the feeding tube was appropriate.  But in that expert’s report there was a mistaken assumption that pneumonia was a factor prompting delay on a certain date when, in fact, the pneumonia diagnosis did not occur until a later date.  At trial, the defense counsel fronted the error with the expert and elicited the expert’s testimony that the mistake was a typo and did not, in any event, affect his ultimate opinion that the delay in placing the feeding tube made sense.  The plaintiff lawyer objected and explained at sidebar that the fronting of the mistake and the explanation by the expert should be precluded because such testimony wandered beyond the scope of the expert report.  The plaintiff lawyer had been salivating over the mistake.  He told the court that he had considered raising the issue before trial.  But surprise seemed more appetizing.  It would no doubt make for a devastating cross.  The problem was that the defense lawyer had surprised the plaintiff by ruining the surprise.  The district court permitted the defense expert to ruin the surprise, reasoning that the ultimate opinion was the same and there was no material surprise.  The case went to the jury, which returned a verdict for the defense.  The plaintiff asked for a new trial, again arguing that the defense expert should not have been allowed to fix his mistake and, furthermore, that the expert’s attribution of the mistake to a typo was perjury.  The district court agreed that the typo explanation was “disingenuous at best,” but continued to believe that there was no prejudicial surprise.  The district court denied the motion for a new trial.  The plaintiff appealed to the Third Circuit.

 

The plaintiff’s main argument on appeal was that the district court erred in failing to exclude the defense expert’s testimony under Federal Rule of Civil Procedure 37(c) (Failure to disclose, to supplement an earlier response, or to admit).  The defense expert never supplemented his expert report.  The expert’s repair of the mistake in his report landed like a sandbag on plaintiff counsel’s head.  So the argument goes.  The Third Circuit reviewed the district court’s decision to admit the expert’s testimony  under the abuse of discretion standard.  The issues were whether the plaintiff was surprised/prejudiced, whether there was an opportunity to cure any prejudice,  and whether the defense exhibited any bad faith.  The plaintiff lawyer acknowledged that he knew about the mistake, so the surprise element was frail.  He was more frustrated than surprised. Further, the plaintiff lawyer did have the opportunity to cross-examine the expert and force him to admit that one of the major bases for his original opinion was a pneumonia diagnosis that did not actually exist.  The point was scored, albeit with less drama than the plaintiff lawyer desired.  The point is that any prejudice was largely cured.  Finally, there was no evidence that the defense acted in bad faith by failing to supplement the report.  The mere passage of two years time between issuance of the expert report and the trial testimony did not, by itself, establish a nefarious plan.

 

The Third Circuit also agreed with the district court that the defense expert’s reference to a typo was implausible, but not clearly perjurious.  The plaintiff expert had, after all, admitted the key fact that the pneumonia diagnosis did not yet exist when he thought it had.  The expert got an important fact wrong and confessed as much.  The opinion does not mention whether the plaintiff lawyer had more than a little fun at cross-examination with the typo whopper.  He certainly could have.  As has been said more than once, and as we seem to be hearing every day now, the cover-up is often worse than the original offense.  Be that as it may, there was no reason to order a new trial just so that the impeachment could have played put just the way the plaintiff lawyer wanted.          

 

There is a certain amount of cleverness in the plaintiff’s argument.  But clever is not the same as right.  One additional fact that makes us sure the Third Circuit is right in Nimoityn is that the Third Circuit was affirming a decision by district court Judge McHugh.  Before he became a judge, Gerald McHugh was one of the preeminent litigators in Philadelphia.  We never were in a case with him, and that is probably a good thing, because McHugh probably would have been on the other side of the v, and even more probably would have beaten our brains out.  We’ve been in the Penn Inn of Court with Judge McHugh for many years, and his contributions during the question periods have been invariably insightful.  Judge McHugh possesses a superabundance of intelligence, integrity, and – well – judgment.  He does not make many mistakes.  (We cannot think of any.)  He did not make one here, and the Third Circuit did not make one in affirming his ruling.

 

 

Bexis has lots of opinions on what’s wrong with mass-tort (especially drug/device) MDLs.  Heck, Bexis has even proposed amendments to the MDL statutes to correct the many severe problems that exist.  Now, Congress has before it possible statutory changes (not holding our breath) and Civil Rules Committee is looking into the same problems.  Maybe something will happen, although rules changes are notoriously protracted, and the cadre of MDL judges (15 judges control 18 MDLs that account for some 47% of the entire federal civil docket) and their plaintiff-side enablers will fight any attempts to curb MDL discretionary excesses.

In the midst of all this, the Duke Law School’s ongoing MDL best practices project held an invitation-only meeting recently, and Bexis was invited as one of the defense-oriented participants. This meeting was conducted under so-called “Chatham House” rules that preclude attributing particular statements to particular persons, so this post summarizing the meeting will not be of the “he said, she said” variety.

Early Dismissal of Meritless Cases

Defense-side participants produced a plethora of statistics that, in MDL after MDL, anywhere between 20% and 45% (eliminating outliers both ways) of all filed MDL cases are ultimately dismissed because the plaintiffs do not have evidence of the most basic information imaginable:  (a) that they actually encountered the product of the defendant being sued; (b) that they suffered one of the injuries that the MDL was about; and (c) that that the timing and amount of the plaintiff’s exposure was plausible under the plaintiffs’ own causation theories.  The missing information that was discussed was not anything expert-related, just product identification, injury, and plaintiffs fitting within whatever might be the plaintiffs’ own asserted parameters of causation.

Somewhat surprisingly, the plaintiff-side participants did not dispute the basic point – that meritless plaintiffs are widespread, running into the thousands of bogus plaintiffs in the larger MDLs.  Indeed, most of the plaintiff-side speakers professed not just their recognition of the meritless claim problem, but their own annoyance at this phenomenon.  The presence of large numbers of meritless cases artificially skewed who had what say on plaintiff steering committees, which partially depend on numbers of cases.  At the back end, meritless cases produced a bunch of left-over plaintiffs, abandoned by their counsel (who never intended to try cases), bumbling around pro se.

Not one plaintiff-side speaker denied that numerous meritless cases existed in MDLs, or that the absence of effective Rule 8/12/TwIqbal procedures encouraged meritless filings.  Evidently, the “park and ride” plaintiff-side lawyers who pump and dump cases into MDLs don’t attend conferences like this, or if they do, they keep quiet.  At most, the plaintiff-side speakers tolerated bad cases because they would “all work out in the end.”

The defense side vehemently rejected that no-harm, no-foul approach.  Defense participants argued that meritless cases weren’t harmless, but rather skewed MDL litigation from beginning to end – driving up discovery costs, forcing defendants to vet cases that plaintiffs should have done before filing, complicating random plaintiff selection for bellwether trials (more about such trials, below), and inflating settlement demands.  Artificially inflated plaintiff numbers increase the psychological impact of MDLs, given how those numbers find their way into press descriptions and plaintiff solicitations.  Masses of bogus plaintiffs also prevent proper resolution of “proportionality” issues in discovery, since they inflate P-side discovery arguments.

Further, FDA regulations do not contain any “bogus” case exception that would give defendants leeway not to report such cases in their adverse event filings.  Phony cases lead to phony “signals,” since even though adverse event reporting is (according to the FDA) not supposed to establish causation, plaintiff-side experts routinely try to misuse them − and sometimes get away with doing so.  When that happens, it’s garbage in, garbage out.  Inflated plaintiff numbers lead directly to inflated reports, so that meritless cases end up supporting junk science.  This effect is magnified by pleading that would be barred by TwIqbal in non-MDL cases that, such as use of “and/or,” that purport to sue multiple defendants when they could only have used one product, so that each defendant is obligated to report the “adverse event” to the FDA.

Matters livened up a bit further, with that morning’s report from 360 on the extreme position taken by plaintiffs in the Zofran MDL were taking on discovery – that discovery rules in MDLs only apply to defendants.  They were demanding that only 8 of over 400 plaintiffs should submit to any discovery at all – giving bogus Zofran cases a free ride all the way to remand.  The Zofran plaintiffs were so over the top that they even claimed an MDL judge lacked jurisdiction to order discovery.  That’s what Joe Biden would call “malarkey,” and not a single plaintiff-side speaker defended, let alone took, that position.

The problem of widespread filing of bogus cases received the most support for (or the least opposition to) a rules change to facilitate early dismissal of meritless cases.  A rules amendment would have to be simple – not a “Lone Pine” order, but rather something much more basic.  A plausible version could be along the lines of mandatory initial discovery, which exists in “pilot project” form in both the District of Arizona and the Northern District of Illinois.  The local rules could be adapted easily enough to require production of all evidence of product identification/exposure, diagnosis of an injury, and their relative timing within a relatively short fixed period (60-90 days would seem reasonable) after filing of a complaint.  If a plaintiff couldn’t produce any facts or records that plausibly establish a claim, then the meritless action would be dismissed with prejudice.  Maybe a mandatory initial disclosure rule would be limited to MDLs above a certain threshold (100? 500? 1000?) number of plaintiffs.

Defendants might have to compromise – giving something to get something.  MDLs are notorious for imposing onerous discovery obligations on defendants, anyway, so frankly our side wouldn’t be giving up much, except for possibly timing.  One possibility, discussed at the conference in a different context, could involve early technology-assisted review of some categories of electronic documents.  We like predictive coding anyway, so as long as the timing is doable, there might be the basis of a workable compromise here.

Another possibility would be to amend Rule 20 to prohibit joinder of plaintiffs in the same complaint who have nothing in common except suing over the same product.  These multi-plaintiff, misjoined complaints are the primary way that the “park and ride” lawyers file their cases, with practically no factual information about any of the plaintiffs.  Not only do these improper plaintiffs cheat courts out of filing fees, but they burden defendants with the expense of vetting the plaintiffs’ cases.  In addition to forbidding the practice, each misjoined plaintiff could also be required to make a non-refundable deposit into the MDL plaintiffs’ common benefit fund.

Finally, the issue of statute of limitations tolling agreements came up.  There could be a legitimate problem, when a plaintiff’s lawyer finds him/herself up against the statute of limitations with a new client.  We don’t have problems with tolling agreements, as long as they’re one-off, and not an excuse for further abuse.  Tolling agreements cannot be an excuse for rampant failure to vet claims – the example given being “I have 2000 new cases, can I have a tolling agreement for two years.”  Tolling agreements are only appropriate for a short period of time.  We think that the same 60-90 day period mentioned above should be long enough to accommodate counsel who would otherwise have a legitimate need for a tolling agreement.

Interlocutory Appeal of Significant MDL Rulings

Another candidate for a rules change – one meeting with significantly more opposition from our colleagues on the other side of the “v.’ – is the interlocutory appeal of the resolution of certain “significant” motions typically made in MDLs.  Such appeals would correct an imbalance in current practice in that, if defendants win a dispositive motion, it’s an appealable final order, but if defendants lose the same motion, no appeal is available because the denial isn’t final.  Thus, the litigation continues, and the dispositive issue is appealed, if at all, years later – after a bellwether trial or a remand (in the rare event that happens).

That imbalanced access to appellate review is acceptable in an individual case, because delay caused by piecemeal appeals isn’t offset by the need to get things right, right away.  What’s acceptable in a single case, becomes a much bigger problem when the downside of an erroneous denial of a dispositive motion could dispose of hundreds or thousands of cases, particularly an appeal much further down the road adds extraneous pressure to affirm, or else a great deal of MDL activity, based on the resolution defendants contend is erroneous, goes down the drain.

Attorneys on the plaintiffs’ side – as was the case throughout the conference – were content with the status quo.  They pointed to existing certification procedures, but current procedures require the assent of the trial judge that denied the motion in the first place.  If denial is intended to force settlement, which is often the case, that assent won’t be forthcoming.  Plaintiffs pointed to the New Jersey Accutane litigation which has (in)famously been around for some fifteen years.  But that analogy is poor.  Most, if not all, of the delay in Accutane is not due interlocutory appeals, but rather from an prior judge’s extremely poor bellwether trial performance (almost every trial verdict was been reversed), or from appeals concerning the grant of dispositive motions – neither of which have any bearing on the current proposal for a Rule 23(f)-like equivalent permitting interlocutory appeals from motion denials in MDLs whether or not the MDL judge wants to allow it.

Ironically, the Rule 23(f) analogy was attacked by the plaintiff side as a bad analogy, because class actions were mostly “negative value” cases that, unlike mass torts, would go away without certification.  We think the analogy, while not perfect, is better than the other side will admit, for reasons discussed in more detail when we turn to bellwether trials.  Lawyers are, by nature, competitive, and the raised stakes of mass tort MDLs only exacerbates that tendency.  Thus, both sides – but in particular the plaintiffs – pour more money into bellwether trials than the individual cases could possibly be worth.  In that way, bellwethers become “negative value” cases, too.

Once again, a bit of serendipity strengthened the defense arguments.  Just the day before, the Fifth Circuit reversed the bellwether trial verdict in the first of several consolidated trials in the Pinnacle Hip MDL. See In re DePuy Orthopaedics, Inc., Pinnacle Hip Implant Product Liability Litigation, ___ F.3d ___, 2018 WL 1954759 (5th Cir. April 25, 2018).  This was the same MDL where the defendants had tried everything to obtain appellate review of the trial court’s erroneous rulings, including mandamus.  Now, something like seven years of MDL activity in Pinnacle Hip has come to just about naught, largely because no interlocutory appeals process existed to provide timely review of repeated erroneous rulings.

We have to admit, though, the other side has a point that it would be difficult to create a one-size-fits-all interlocutory appeal rule defining exactly what “significant” MDL rulings would be subject to its purview.  Preemption, for sure − nobody on either side disputed that a single preemption motion could be dispositive of so much (up to and including “all”) of an MDL to qualify.  Everything else was subject to considerable debate.  Some Daubert motions can have the same MDL-wide preclusive effect; our 2016 top ten cases post discusses two (Mirena and Lipitor) of these (three (Zoloft) if you count the honorable mentions), but lots of other Daubert motions in MDLs would not come close.

Then there’s everything else. Choice of law was mentioned, so were punitive damages.  The jurisdictional issue in Pinnacle Hip was critical, but most MDL judges aren’t that overreaching.  So defining “significant” for the purposes of a rules change could well pose complex problems.

Having thought about all that, however, se say, “why bother?” Let defense lawyers in the particular MDL decide.  Call it the “upon further review” rule if you want.  In the NFL, the rules allow coaches a set number of challenges to just about any on-field calls, and if the team wins a challenge they get another one, up to some absolute limit.  NFL coaches get to pick what calls they consider important enough to challenge.  Let counsel do the same for MDL interlocutory review.  Preemption orders should be appealable, and a set number (probably two or three) of other orders could be subject to interlocutory review at each separately represented defendant’s option.  If the defendant wins the appeal, it gets another challenge.

We don’t think that approach will result in an undue number of appeals – especially since the Supreme Court just reduced the appellate courts’ workload by throwing out Alien Torts Claims Act cases against corporations, creating some give.  Delay might be a more serious concern, but as with Rule 23(f), the MDL isn’t being stayed, so discovery and other activity would continue in the meantime.

Another issue raised, which would be beyond the control of the federal rules, is whether interlocutory appeals would sufficiently delay MDLs so as to encourage plaintiffs to file in state court.  News flash – plaintiffs have been avoiding federal court for as long as we can remember.  In one of Bexis’ first MDLs, some 1500 Bone Screw plaintiffs tried to hide out in state court in Tennessee (where the target defendant was “at home” jurisdictionally).  They might even have gotten away with that, had Tennessee not had an unusually short one-year personal injury statute of limitations, which tripped up plaintiffs after they agreed to a universal discovery date that was more than a year before they filed all those multi-plaintiff complaints.  See Maestas v. Sofamor Danek Group, Inc., 33 S.W.3d 805 (Tenn. 2000) (plaintiffs lose on cross-jurisdictional class action tolling; all 1500 cases dismissed).  One more reason for plaintiffs to stay out of federal court doesn’t mean anything.  If anything, avoiding federal court is harder now than before because the Supreme Court decided to enforce constitutional limits on personal jurisdiction.

Bellwether Trials

There was considerable discussion of bellwether trials, but we have doubts that rules could solve the problems that were mentioned.  Our view is to interpret the MDL statute as written, and restrict MDLs to “coordinated or consolidated pretrial proceedings.”  28 U.S.C. §1407(a) (emphasis added).  A textualist approach to the MDL statute would, and we think should, mean no trials, “bellwether” or otherwise, in the MDL transferee court.  Simple.  No rules change needed.

But totally contrary to decades of MDL practice.  Don’t hold your breath – although if someone wants to preserve it for appeal, this issue could be the next Lexecon.

There was some discussion of how bellwether plaintiffs are selected.  The Manual for Complex Litigation favors random selection.  MCL §22.315.  We also lean towards random selection, although we recognize that the other side can game even a random system by either filing, or not filing, certain types of cases in the MDL.  So even random selection needs to be policed to prevent plaintiffs from attempting to skew the result.

We also think that, if the rules were changed to facilitate the early dismissal of facially meritless claims, that would go a long way to solving the problems with random selection.  Right now, any random selection process necessarily exposes the prevalence of meritless cases, so that plaintiffs are loathe to agree to what, abstractly, is the most statistically valid method of yielding a representative selection of cases.

Ensuring “representativeness” was also discussed, but we frankly think that’s futile.  As someone pointed out, “random does not necessarily mean representative.”  Even what might at the beginning be the most representative of cases ceases to be representative once both sides pour more resources into preparing and trying that case than it could possibly be worth if being tried outside of the MDL.  We agree with the comment of one of the plaintiff-side speakers that “spending a million to win $500,000 is not an economic business model.”  Both sides committing extraordinary resources to a bellwether trial is a sure way to ensure that the case for that reason alone ceases to have any representative value.

On the plaintiff side, keeping the business model economic, under MDL circumstances, only encourages the reduction of representativeness.  Instead, we see plaintiffs focused on “ringing the bell” – adding punitive damages or consolidated plaintiffs to the mix to make the case harder to defend.  That’s the practical (as opposed to the textual) reason we oppose bellwether trials.  At minimum, as we’ve discussed before, defendants should take care to craft any Lexecon waivers to exclude punitive damages or consolidations.  We didn’t hear any proposed rules changes that would meaningfully improve the bellwether trial system.

Third-Party Litigation Funding

The group discussed a proposal, pending in Congress, requiring automatic disclosure of third-party funding agreements.  Interestingly, plaintiff-side speakers admitted that they demand disclosure of that kind of information themselves when setting up their steering committees, because their membership must be able to “take the heat,” and lawyers controlled by a “hedge fund” can’t be shaping their strategy.  To at least some plaintiffs’ speakers, third-party funding meant “a dummy in the room and a ventriloquist outside.”  One of the judges in attendance likewise thought that disclosure of third-party funding was a good idea to prevent conflicts.  If both plaintiffs and the judiciary favor disclosure is necessary to prevent conflicts, then it is hard to justify not routinely disclosing it to all sides, as insurance is disclosed.

Proponents of such funding stated that it was only a “professionalization” of activities that had long gone on the plaintiff side of litigation.  Perhaps, but that justification brings the response of “what, then, do you have to hide?”  If third party litigation funding is truly professionalized, then again, it resembles insurance, which is subject to automatic disclosure.  To be considered “mainstream,” third-party litigation funders need to act the part.

Proponents also raised the issue of disclosure of confidential work product if funding agreements are discoverable.  This concern seems like a red herring to us, as the contracts are easily drafted to omit any attorney evaluations of litigation.

Proponents also distinguished two uses of litigation funding. The first, which is more similar to corporate litigation funding arrangements, involves loans to plaintiff-side law firms, secured either by their interests in specific litigation or by interests in their entire pending litigation inventory.  These tend to have lower interest rates and involve less influence over litigation strategies or settlement decisions.  Disclosure of such funding is, however, essential to gauging the relative resources of both sides in determining who is going to pay for what discovery in MDL situations.  Plaintiffs should not be able to play at being David when their funding lines of credit are actually Goliath-sized.

The flip side is what was sometimes referred to as “payday lending” litigation funding − where the plaintiff is receiving what amounts to an advance on possible recoveries.  A lengthy discussion was had of claimed abuses – covering the NFL concussion litigation and the recent New York Times exposé of what has gone on in the Pelvic Mesh litigation.  In either case, immediate disclosure of litigation funding agreements would have prevented, or at least reduced, improper conduct, as transparency in funding would have raised red flags about the terms and timing of the agreements in question.  Suspicious agreements could then have brought to the court’s attention, or been the subject of additional discovery into their provenance.

Additional discovery was another aspect of the third party litigation funding debate.  Proponents argued, with some force, that disclosure of agreements would not be the end of matters.  They raised potential use of discovery into litigation funding as a means of opening yet “another front” in MDL litigation and attempting to disrupt the opposing side’s ability to finance itself.  We think that concern could be valid, but is easily addressed.  Disclosure of insurance hasn’t (except in Louisiana) led to insurance companies being sued directly by opponents of their insureds.  The work product issue raised above provides a useful analogy with, anything beyond the contract subject to a similar “good cause shown” and “otherwise unavailable” standard.  There is no inherent reason that such funding should be the source of additional discovery, but requiring prior court approval serves as another check.

Finally, just as plaintiffs want a look at their opponent’s insurance to know how much defendants have available for settlement, or whether the other side has sufficiently deep pockets, defendants should be able to make similar judgments based on plaintiffs’ third-party litigation funding.  A plaintiff who has to satisfy a funder is unlikely to take in settlement an amount that the defendant believes is reasonable if that means zero dollars in the plaintiff’s pocket.  In this respect, discovery of litigation funding is justifiable for the same reason as third-party litigation liens.  Very few plaintiffs would argue that insurance, health care, and other liens can be kept secret from the other side.  Anyone who has a piece of the potential recovery is, in practice a real party in interest who should be at the table and whose identity should be known to all.  All sides should know who is the ventriloquist and who is the dummy.

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Several other topics were also discussed at the Duke conference, but they overwhelmingly involved the plaintiff side − composition of a plaintiff-side steering committee, judicial efforts to increase diversity on such steering committees, and common fund assessments.  But this post is already quite long, and these other topics are of less interest to our defense-oriented audience.