We know of only a couple of cases that have allowed “experts” to testify on the subject of punitive damages.  First, in the Actos litigation, the court allowed a so-called “ability to pay” expert opinion to be presented to the jury.  In re Actos (Pioglitazone) Products Liability Litigation, 2013 WL 6383104, at *5 (W.D. La. Dec. 4, 2013).  What’s that?  We can only offer the description found in the opinion:

[The expert] provided a report that describes the methodology by which economists determine how large a payment a company can make without significantly interrupting its business operations.  The report . . . discuss[es ] the two-step process that economists use to evaluate financial information and to determine whether a company has the wherewithal to make a large payout of whatever nature.  Finally, [the expert] explains how economists use financial information to determine whether or not a company will be impacted by the obligation to make a large payment.

Id. at *2 (footnotes omitted).

Then, in the Pinnacle Hip litigation, plaintiffs were twice allowed to introduce punitive damages experts.  First, in In re DePuy Orthopaedics, Inc. Pinnacle Hip Implant Products Liability Litigation, 2014 WL 3557345 (N.D. Tex. July 18, 2014), they were allowed to present expert “calculations” that opined on “the amount that Defendants could afford to pay before being adversely affected.”  Id. at *9-10.  Essentially the same thing happened two years later, in In re DePuy Orthopaedics, Inc., 2016 WL 6271474 (N.D. Tex. Jan. 5, 2016), with a different expert permitted to opine on the defendant’s “ability to run its business” despite punitive damages and “what constitutes a significant change in [defendant’s] market value.”  Id. at *9.  This expert made “calculations of figures which would not affect [defendant’s] day-to-day operations.  Id.

So, how did that work out?

Well in Actos, the jury that heard the opinion brought back a punitive damages award of $9 billion against two defendants.  In re Actos (Pioglitazone) Products Liability Litigation, 2014 WL 5461859, at *7 (W.D. La. Oct. 27, 2014).  Because the accompanying compensatory award was $1.475 million, id. at *46, the punitive damages award was blatantly unconstitutional (ratios of 5424/1 and 8136/1).  Consequently, it was reduced by over 99% to a still outrageously excessive (ratio of 25/1) $36.875 million.  Id. at *55.  The case settled on appeal, so the constitutionality of even the reduced amount was never decided.

In Pinnacle Hip, the jury in 2016 awarded $60 million in punitives.  Aoki v. DePuy Orthopaedics, Inc., 2016 WL 10828742, at *1 (N.D. Tex. July 5, 2016), reversed, 888 F.3d 753 (5th Cir. 2018) (awarding new trial for reasons unrelated to punitive damages).  That award was illegal under Texas law, which capped punitive damages.  See Tex. Civ. Prac. & Rem. Code § 41.008(b).  Thus the punitive damages award was reduced to $1.834 million – a reduction of 97%.  Aoki, 2016 WL 10828742, at *1.  Because of the Texas statute, the original award’s constitutionality did not have to be decided.  We didn’t find any further discussion of punitive damages in Pinnacle Hip in 2014, so that must have been the trial the defendants won, so the punitive damages expert never actually testified.

Based on that small sample, it seems undeniable that this kind of punitive damages-related expert testimony should never be allowed.  Its sole purpose is to induce the jury to return verdicts that are either illegal, unconstitutional, or both.  Expert testimony that causes the jury to act unlawfully cannot possibly “help the trier of fact” as required by F.R. Evid. 702(a).  Or, as the Advisory Committee pointed out, when the Rules of Evidence were first adopted:

Under Rules 701 and 702, opinions must be helpful to the trier of fact, and Rule 403 provides for exclusion of evidence which wastes time.  These provisions afford ample assurances against the admission of opinions which would merely tell the jury what result to reach, somewhat in the manner of the oath-helpers of an earlier day.  They also stand ready to exclude opinions phrased in terms of inadequately explored legal criteria.

1972 Advisory Committee Notes to F.R. Evid. 704.

Actos and Pinnacle Hip deviated from had previously been an virtually unanimous rule that “expert testimony on punitive damages is neither desirable nor necessary, and indeed, would invade the sacrosanct role of the jury.”  Voilas v. General Motors Corp., 73 F. Supp.2d 452, 468 (D.N.J. 1999).  Except for expert testimony limited to the amount of a defendant’s net worth, expert testimony has – quite properly – been excluded as to punitive damages.

[T]he Court finds there are no credentials that could qualify an individual as a punitive damages expert, primarily because the area of assessing punitive damages, implicative of various societal policies and lacking any basis in economics, rests strictly within the province of the jury and, thus, does not necessitate the aid of expert testimony. . . .  Under the guise of providing guidance to the jury, [the expert’s] report in effect thwarts the jury’s broad discretion by suggesting three approaches to ascertaining punitive damages and by calculating actual ranges of awards under each approach.  The Court has no reason to believe [this expert], or any other expert for that matter, is more qualified than the average juror to make a straightforward determination whether to punish [defendant] and if so, to what extent.

Id. at 464 (citation and footnote omitted).  See Lopez v. Geico Insurance Co., 2013 WL 9720887, at *2 (D.N.M. Oct. 9, 2013) (“punitive damages are entirely within the purview and ability of a jury to determine because they involve social, rather than economic concerns, and the assessment of those damages does not require any particular expertise”); Salinas v. State Farm Fire & Casualty Co., 2012 WL 5187996, at *5 (S.D. Tex. Feb. 23, 2012) (“punitive damages expert testimony “impermissible”; the “methods and calculations are merely a way to suggest a specific amount of punitive damages to the jury”); In re Welding Fume Products Liability Litigation, 2010 WL 7699456, at *49, 74 (N.D. Ohio June 4, 2010) (“an expert may not suggest the amount of an appropriate punitive damages award”: expert “may not opine that a defendant could or should pay an amount in punitive damages within a certain range”) (footnote omitted); Dering v. Service Experts Alliance LLC, 2007 WL 4299968, at *9 (N.D. Ga. Dec. 6, 2007) (“expert opinion on the amount of punitive damages is improper”; “[t]he amount of punitive damages is to be determined by the enlightened conscience of an impartial jury”); Anderson v. Boeing Co., 2005 WL 6011245, at *2 (N.D. Okla. Aug. 2, 2005) (no expert “is more qualified than the average juror to make a determination whether the proof merits punitive damages, and if so, to what extent”); Hayes v. Wal-Mart Stores, Inc., 294 F. Supp.2d 1249, 1250-51 (E.D. Okla. 2003) (testimony on amount of punitive damages that would “have no effect on the financial status of the” defendant” “would invade the province of the jury and would not be helpful”).

In prescription medical product liability litigation, other courts have excluded the type of testimony that contributed to the illegal/unconstitutional verdicts in Actos and Pinnacle Hip.  In a hormone therapy case, Lea v. Wyeth LLC, 2011 WL 13193321 (E.D. Tex. Sept. 16, 2011), the court excluded an expert’s “opinion on potential methods of measuring punitive damages.”  Id. at *1.  The testimony was both “problematic” and “prejudicial”:

The more problematic issues are whether [the expert] is qualified to proffer an opinion on potential methods of measuring punitive damages and whether that opinion will assist the jury.  [He] opines that punitive damages in this case may be measured in a manner equivalent to an SEC fine, an antitrust violation, or a $100 speeding ticket.  The SEC metric would result in a range of punitive damages between $6.4 billion and $7.1 billion, the metric for an antitrust violation would yield a range of punitive damages between $19.1 billion and $21.3 billion, and the speeding-ticket metric would yield $168 million or $1.13 billion in damages. . . .

Even if these metrics would assist the jury, which the court need not decide, the court finds that the amounts proffered are wholly prejudicial to the extent that they are listed as part of a potential range of punitive damages.

Id. at *4 (citations omitted).

The same testimony was excluded in a second hormone therapy case.  Baldonado v. Wyeth, 2012 WL 1520331 (N.D. Ill. April 30, 2012).  The same expert purported to “extrapolate” from “SEC fines, antitrust violations, and speeding fines” to arrive at the supposed “proper level.”  Id. at *3.  Didn’t happen.  The testimony itself “not proper.”  Id.  “The amount, if any, is for the jury to decide based on the facts of this case and the applicable punitive damages law.  Such expert testimony would invade the province of the jury.”  Id.

Also, in Burton v. Wyeth-Ayerst Laboratories Div., 513 F. Supp. 2d 708, 717 (N.D. Tex. 2007), a fen-phen case, the court found such testimony “wholly prejudicial.”  Neither a “suggestion of a range of jury awards” nor an “opinion on the potential economic impact of a specific punitive damage award” was admissible.  Id. at 719.  “The court cannot allow such random speculation to be presented to the jury under the guise of expert testimony.”  Id. at 717.

Thus, the general rule has always been that “punitive damages experts” are an oxymoron.  Legitimate “experts” on punitive damages do not exist, except for the limited purpose of calculating a defendant’s net worth, as the assessment of punitive damages is for the jury alone.  Yes, a couple of notorious MDLs deviated from that rule in recent years.  But the outcomes in Actos and Pinnacle Hip speak for themselves.  Those results were predictably disastrous.  Even those judges − whose mistaken decisions to allow such testimony had caused the problem in the first place − had to declare those punitive damages verdicts illegal (Pinnacle Hip) or unconstitutional (Actos).  Thus, those deviations only reinforce the correctness of the general rule that excludes “experts” on punitive damages from testifying.

Today’s guest post is by Camille L. Fletcher and Joshua Kipnees, both with Patterson Belknap.  We actually sought out this guest post, which is rare.  We first saw it on one of Patterson’s in-house firm blogs, and it was one of those rare law firm posts that did more than describe a case, offer a couple of obvious observations, and end with an invitation to “contact your [fill in name of firm] lawyer for more information.”  Rather, this post contained what we like – good, solid legal research.  Since it also covered a topic, FDA warning letters, of interest to our readers, we invited the authors to send us a version as a guest post, and they graciously agreed. So here it is.  As always our guest posters deserve 100% of the credit (and any blame) for what they write.

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Consumer class actions involving goods regulated by the Food and Drug Administration (“FDA”) coexist in parallel with FDA enforcement efforts.  Consumers have no private right of action to enforce the Food, Drug, and Cosmetics Act (“FDCA”)—the statute the FDA is charged with implementing—and attempts to use state consumer protection laws that interfere with the FDA’s regulatory regime are preempted.  Even so, private litigants often invoke FDA guidance, rules, and statements regarding labeling practices as evidence that a manufacturer’s marketing claims are—or are not—susceptible to challenge as deceptive advertising under state law.

Parties and courts in consumer class actions often rely on FDA warning letters for guidance on FDA interpretation of its rules and regulations.  FDA field offices issue warning letters to manufacturers it believes have violated the FDCA or its implementing regulations.  [Ed. note:  As discussed here, FDA warning letters are not even pre-reviewed by an FDA lawyer]  Issuance of a warning letter is not an enforcement action in and of itself; it is a predicate to the FDA’s enforcement process that affords the manufacturer a chance to comply voluntarily before action is taken.  When citing a manufacturer for advertising or labeling related-violations, the FDA will typically list in the warning letter examples of claims it identified, through its review of the manufacturer’s marketing, as improper.  Employing precatory language, the FDA advises the manufacturer that it “should take prompt action” to correct the violation, and that its failure to do so “may result” in regulatory action without further notice.  The FDA may ultimately take no further action, even if the manufacturer’s response to the warning letter is deficient; in fact, according to a 2013 analysis of the FDA’s enforcement activity, warning letters rarely precipitate further action on the FDA’s part.  See Jennifer L. Pomeranz, A Comprehensive Strategy to Overhaul FDA Authority for Misleading Food Labels, 39 Am. J.L. & Med. 617, 631-34 (2013).  Even the FDA’s own Guidelines recognize that such letters are only “informal and advisory” and “do[] not commit FDA to taking enforcement action.”  FDA Regulatory Processes Manual, § 4-1-1 (Apr. 2019).

For these reasons, courts have repeatedly held that FDA warning letters are too preliminary and informal for manufacturers to challenge in court.  See Holistic Candlers & Consumers Ass’n v. Food & Drug Administration, 664 F.3d 940, 944 (D.C. Cir. 2012); Cody Labs., Inc. v. Sebelius, 446 Fed. Appx. 964, 969 (10th Cir. 2011) (collecting cases and noting that every court to consider the question has held that an FDA warning letter does not constitute “final agency action” subject to judicial review).  [Ed. note:  see our prior posts on Holistic Candlers here and here]

But in suits between private litigants, parties often invoke FDA warning letters as bellwethers for the FDA’s stance on a particular type of labeling claim.

Several courts have found that the fact that the FDA has issued warning letters regarding the same or similar claims to support a preemption or primary jurisdiction defense, because it indicates the FDA’s intent to regulate a particular labeling practice.  E.g., Kelley v. WWF Operating Co., 2017 U.S. Dist. LEXIS 86971, *8-*18 (E.D. Cal. June 5, 2017) (finding that while positions the FDA had taken in its warning letters regarding soymilk labeling lacked coherence, the fact that FDA had issued them supported referral of the issue to the FDA on primary jurisdiction grounds); Hood v. Wholesoy & Co., 2013 U.S. Dist. LEXIS 97836, at *17 (N.D. Cal. July 12, 2013) (dismissing case on primary jurisdiction grounds because FDA issuance of warning letters and draft guidance helped to demonstrate the labeling claim at issue was “committed to the FDA’s expertise,” even though the FDA’s position was still “not settled”).  Reliance on FDA warning letters for this limited purpose is sensible and does not require giving weight to its analysis; that the FDA has chosen to speak on the issue is more germane than what it specifically has said.

On the other hand, some courts have construed statements in warning letters to reveal the FDA’s substantive position on the propriety of certain labeling claims.

For instance, in Reid v. Johnson & Johnson, 780 F.3d 952 (9th Cir. 2015), the plaintiffs alleged that the defendant had falsely labeled its vegetable oil-based buttery spread as containing “no trans fat,” when its product did contain some trans fat.  Only two years earlier, the Third Circuit—the only other US Court of Appeals to have considered the issue—had concluded, with respect to the very same product, that FDA regulations permit “no trans fat” labeling claims, even when a small amount of trans fats per serving is present; therefore, such claims were not misleading and, because they were preempted, could not be challenged as such.  Young v. Johnson & Johnson, 525 Fed. Appx. 179, 182-83 (3d Cir. 2013).

Yet the Ninth Circuit in Reid reached a different result, relying in large part on FDA warning letters issued to manufacturers not involved in the litigation for labeling their products as “no trans fats” and “trans-fat free.”  Reid, 780 F.3d at 962.  The panel regarded the FDA warning letters as “materials establishing the legal principles governing [the] case,” which it found it could consider without taking judicial notice of their contents.  Id. at n.4.  Although acknowledging that the warning letters were “informal and advisory,” the panel announced it would “defer to the FDA’s interpretation of its own rules, even if the product of an informal and non-final process, unless its interpretation is clearly erroneous.”  Id. at 962.  Accordingly, the panel reasoned, “given that the FDA has indicated in warning letters that claims like ‘No Trans Fat’ are not authorized,” the defendant could not “shield itself from liability with the FDA’s regulations.”  Id. at 967.

The Ninth Circuit recently reaffirmed Reid in Hawkins v. Kroger, 906 F.3d 763, 771 (9th Cir. 2018), holding that “0g trans fats” was interchangeable with a “no trans fats” claim, and therefore, was an unauthorized nutrient-content claim.  Despite reciting Reid’s analysis at length and opining that “Reid squarely controls here,” the Kroger panel noticeably omitted any mention of FDA warning letters addressing “no trans fat” claims and their influence on the outcome in Reid.  Id. at 771-72.

Last year, a federal judge in the Southern District of New York—the first court in the Second Circuit to address the question—followed Reid in holding that state law claims based on “no trans fat” statements were not authorized by the FDA, and thus, not preempted.  Bowling v. Johnson & Johnson, 2018 U.S. Dist. LEXIS 52142, at *4-*13 (S.D.N.Y. Mar. 28, 2018).  Unlike in Reid, the Bowling court appeared to recognize that it could only consider FDA warning letters regarding “no trans fat claims” if it could properly take judicial notice of their contents, thus implicitly rejecting Reid’s determination that the letters articulated “‘legal principles governing [the] case’” available for consideration on a motion to dismiss.  Bowling, 2018 U.S. Dist. LEXIS 52142, at *9 n.3 (quoting Reid, 780 F.3d at 962 n.4).  But despite acknowledging that, ordinarily, “’communications with the FDA are not public records of agency actions’” subject to judicial notice, the Bowling court construed the warning letters as “publicly available evidence of agency actions” and took notice of their contents.  Bowling, 2018 U.S. Dist. LEXIS 52142, at *12.  Accordingly, the court relied on these letters as “support” for its conclusion that the FDA’s “regulations do not authorize ‘no trans fat’ claims.”  Id. at *13.

It is curious that a court’s determination of the lawfulness of a manufacturer’s labeling under FDA regulations should turn on isolated FDA warning letters to other companies, which may have resulted in no actual enforcement action.  Indeed, given courts’ recognition that warning letters merely contain “conclusions by subordinate officials of the FDA” and that the positions taken in such letters may subsequently be revoked or modified through the administrative process, there is little justification to imbue them with the force of law – much less as “governing” legal principles that dictate the interpretations of FDA rule on a motion to dismiss.  Biotics Research Corp. v. Heller, 710 F.2d 1375, 1378 (9th Cir. 1983).  And it is a particularly unfair result that manufacturers should be bound by the contents of warning letters when they are simultaneously told such letters are too informal to challenge in court.

Judicial reliance on FDA statements in warning letters is far from universal, and several courts, unlike Reid and Bowling, have declined to infer a labeling claim is unlawful merely because it has been identified in a warning letter.  See Caudill Seed & Warehouse Co. v. Jarrow Formulas, Inc., 2017 U.S. Dist. LEXIS 160827, at *29-*33 (W.D. Ky. Sep. 29, 2017) (finding that the FDA warning letter was not entitled to deference because it was “informal and advisory and not a final statement of an agency as to legality”); Craig v. Twining N. Am., 2015 U.S. Dist. LEXIS 14839, at *17-*19 (W.D. Ark. Feb. 5, 2015) (declining to defer to FDA’s statements in warning letter issued to different manufacturer regarding similar claim because, in part, warning letters “do not mark the consummation of the FDA’s decision making”); Gitson v. Trader Joe’s Co., 2013 U.S. Dist. LEXIS 144917, at *23-*24 (N.D. Cal. Oct. 4, 2013) (finding that plaintiffs “place too much reliance on the FDA warning letters” as evidence that soymilk labeling statement is false and misleading and “simply do not bear weight” on whether a reasonable consumer would be deceived).  [Ed. note:  see our own (less current) case list, here]  This approach, in our view, more faithfully corresponds with the limited role and significance of warning letters in the FDA’s enforcement process.   According only minimal weight to such letters, commensurate with their purpose as informal advisory tools, not only removes a thumb on the scale against manufacturers in class actions, it also shows due regard for the FDA’s jurisdiction and rulemaking process by declining to attribute to the FDA a formal position it did not necessarily intend to assume.  The FDA should be taken at its word that it considers its letters to be “informal and advisory,” and nothing more.

It is a fairly common situation.  A company is facing an issue that someone thinks the board of directors ought to know about, so general counsel retains outside counsel to provide advice.  Maybe outside counsel prepares a memo.  Maybe he or she appears at a board meeting to give a presentation with others from the company.  Later on, someone asks for those materials—the memorandum and the presentation, as recorded in meeting minutes or PowerPoint slides.

Are the presentation to the board and related materials protected by the attorney-client privilege or the attorney work product doctrine, or both?

The answer is probably both, but it is not automatic.  A recent order in the Birmingham Hip Resurfacing MDL is worth a read on these points because it lays out the rules and correctly found that such documents were protected.  The documents at issue were (1) a 62-page document prepared for the board regarding “current and anticipated litigation issues” (the “Briefing Document”); (2) minutes from three board meetings that “reflect legal presentations” by the company’s Chief Legal Officer and “summarize a presentation . . . related to the Briefing Document”; and (3) multiple copies a “PowerPoint summary of certain aspects of the Briefing Document.”  In re Smith & Nephew Birmingham Hip Resurfacing Hip Implant Prods. Liab. Litig., No. 1:17-md-2775, 2019 U.S. Dist. LEXIS 91795, at *26-*28 (D. Md. May 31, 2019).

We put the description of these documents largely in quotes because, in describing the documents in the way that it did, the district court tipped its hand.  Sure, there were three sets of documents at issue, but as the district court saw them, the meeting minutes and PowerPoint slides were derived from (“summarized”) the Briefing Document, which itself related to “current and anticipated litigation issues.”  Id.  When reading the Background section of the order, it is not difficult to predict that the district court will find the documents protected and not discoverable.

And, the district court delivered.  We start with the ground rules.  The work product doctrine—called a “privilege” in some places and “protection” in others—means what it says.  It protects an attorney’s work in preparation for litigation, lest one side gain an unfair advantage by appropriating the results of the other side’s efforts:

“The work-product privilege protects from discovery ‘an attorney’s work done in preparation for litigation.’”  In re Grand Jury Subpoena, 870 F.3d 312, 316 (4th Cir. 2017) . . . .  The protection extends to both “‘fact’ work product and ‘opinion’ work product,” though opinion work product is afforded “greater protection” than fact work product, Grand Jury Subpoena, 870 F.3d at 316.  Opinion work product “represents the actual thoughts and impressions of the attorney,” and “can be discovered only in very rare and extraordinary circumstances.”  Id. (citing In re John Doe, 662 F.2d 1073, 1080 (4th Cir. 1981)).  Fact work product, on the other hand, “is a transaction of the factual events involved and may be obtained upon a mere showing of both a substantial need and an inability to secure the substantial equivalent of the materials by alternate means without undue hardship.”

Id. at *28-*29 (some citations omitted).  The attorney-client privilege is different from work product mainly because it protects attorney-client communications, but it often overlaps.  The district court in Birmingham Hip applied the “classic test” for attorney-client privilege:

The privilege applies only if (1) the asserted holder of the privilege is or sought to become a client; (2) the person to whom the communication was made (a) is a member of the bar of a court, or his subordinate and (b) in connection with this communication is acting as a lawyer; (3) the communication relates to a fact of which the attorney was informed (a) by his client (b) without the presence of strangers (c) for the purpose of securing primarily either (i) an opinion on law or (ii) legal services or (iii) assistance in some legal proceeding, and not (d) for the purpose of committing a crime or tort; and (4) the privilege has been (a) claimed and (b) not waived by the client.

Id. at *29-*30 (citations omitted).

Applying these rules, the district court concluded that all the documents were privileged and protected by the work product doctrine, and it found that neither protection was waived.  With regard to the Briefing Document, outside counsel spearheaded the creation of the document, and the document’s “primary aim” was to give legal advice to the board of directors.  We again are using quotes around “primary aim” because the characterization of the document is important.  The memo included factual material.  Most memos do, or else they would be little more than mini-treatises.  The point is that including facts in legal communications does not negate the privilege.

As the district court observed, “The factual information informs the legal strategy and was likely compiled in order to assist in the provision of legal advice and to provide context to facilitate the Board of Director’s understanding of the legal advice.”  Id. at *31.  Thus, because the “primary purpose” was to provide legal advice, the Briefing Document was privileged; and because it set forth a litigation strategy for both pending and anticipated litigation, it was work product, too.  Id. at *31-*32.

The district court applied similar analyses to the meeting minutes and PowerPoint presentations.  The PowerPoint slides similarly were “developed to facilitate the presentation of the Briefing Document to the Board,” and the minutes summarized the presentation and detailed the status of litigation.  Id. at *32-*33.

The documents therefore were protected, and defendant did not waive any privilege or protection by inadvertently producing copies of the slides or by sharing the slides with a non-lawyer consultant.  Here, the district court followed Federal Rule of Evidence 502(b), which states that disclosure does not operate as a waiver if (1) the disclosure is inadvertent, (2) the holder of the privilege or protection took reasonable steps to prevent disclosure, and (3) the holder promptly took reasonable steps to rectify the error.  Id. at *34-*35.

The parties did not dispute that the disclosure was inadvertent, and the defendant had retained a document vendor, who “implemented quality control measures to safeguard against the inadvertent disclosure of documents,” including training and a second-level review.  Id. at *35-*36.  This might be the takeaway of this order—that quality control in document production is important as a general matter, but also specifically to make a Rule 502(b) showing in the event you need to.  The district court’s finding that the defendant “promptly clawed the documents back” closed the “no waiver” loop.  Finally, sharing the PowerPoint slides with a consultant did not operate as a waiver because the consultant was retained to assist with a presentation to the FDA and thus had a common interest.  Id. at *35-*37.

The order lays out the law well and applies it correctly.  We recommend it.

Missouri courts keep showing us surprisingly good things on the personal jurisdiction front. In Mitchell v. DePuy Orthopaedics, Inc., 2019 U.S. Dist. LEXIS 92621 (W.D. Missouri June 3, 2019), the plaintiff twice had a knee replacement implant while she lived in Kansas, then sued in Missouri, claiming that, after she moved there, that is where she suffered injuries and where she sought treatment for her injuries. She alleged negligence, strict liability, breach of warranty, misrepresentation, fraud — all based on the defendants’ design, license, manufacture, distribution, sale, and marketing of the medical devices. The defendants moved to dismiss for lack of personal jurisdiction, contending that all of the plaintiff’s claims arose out of events that took place in Kansas, not Missouri.

If any of this sounds familiar, it should. Less than a month ago we reported on another Missouri case where the plaintiff had moved in from out of state. And if it occurs to you that this is two days in a row of personal jurisdiction cases – well, congrats, you are one of our truly loyal and attentive readers.

The plaintiff in Mitchell conceded that the Missouri court lacked general jurisdiction over the defendants, but argued that specific jurisdiction existed because the plaintiff suffered injuries in Missouri, plus the defendants did plenty of marketing and selling of knee replacements in Missouri. The first point isn’t wholly silly (though it still loses), but the second one is, at least for anyone who has kept up with specific jurisdiction case law over the last five years.

The Mitchell court began by reciting the Int’l Shoe “minimum contacts” and Burger King “purposeful directing activities toward forum residents” standards. Those old standards take one only so far. But the Mitchell court also invoked a couple of more recent tests that end up deciding this case:

1. In Walden v. Fiore, 571 U.S. 277 (2014), SCOTUS held that contacts “that the defendant himself creates with the forum State serve as a basis for jurisdiction, … but contacts formed by the mere unilateral activity of those who claim some relationship with a non-resident do not.”

2. In Bristol-Myers Squibb Co. v. Superior Court of California, 137 S. Ct. 1773 (207), SCOTUS held that specific jurisdiction does not exist when the defendant’s contacts with the forum lack a connection to “the specific claims at issue.”

Armed with these precedents, the Mitchell court held that the plaintiff’s move to neighboring Missouri did not create specific personal jurisdiction. Those were the unilateral acts of the plaintiff. The defendant’s Missouri registration, advertising, and product sales were irrelevant because they bore no relationship to plaintiff’s injuries. Moreover, the plaintiff never saw the claimed advertising.

The plaintiff endeavored to evade the recently clarified specific jurisdiction doctrine by arguing that a “short drive” across a state border “should not preclude jurisdiction because, given defendants’ contacts in Missouri,” the plaintiff’s claim “could just as easily have arisen out of defendants’ activities in Missouri, rather than Kansas.” That is not a principle; it is a whine. The Mitchell court pointed out that under the plaintiff’s ‘logic,’ a national company could be sued by any resident of any state in any state. That would not only be a world without the Walden and Bristol-Myers cases, it would be a world without fair play and due process. Accordingly, the court transferred the action to Kansas. (That was the the plaintiff’s suggested alternative to flat-out dismissal, and the defendants did not oppose it.)

That is good news for the defendant, because the law in Kansas is more defense-friendly, and some would say the same about the judges and juries. It is actually good news for everyone, because as good as the barbecue is in Kansas City, Missouri, there is a place just a “short drive” to the other side of the river that is even better.

Personal jurisdiction being a key issue for us here at DDL Blog, we’ve talked a lot about the “minimum contacts” needed to establish jurisdiction over an out-of-state defendant.  Not many cases, however, analyze the two specific jurisdictional tests for minimum contacts.  That’s likely because in most cases, it doesn’t make a difference whether you use the “but for” or the “proximate cause” test.  Except when it does.

Lynch v. Olympus America, Inc., 2019 WL 2372841 (D. Col. Jun. 5, 2019) is such an exception.  The court was ruling on the Japanese defendant’s motion to dismiss for lack of personal jurisdiction and all defendants’ motions to dismiss for failure to state a claim.  This is the second go-round on these motions.  The first set of motions on the original complaint were granted seven months ago, with leave to amend.  Following the filing of an amended complaint and some limited jurisdictional discovery, defendants renewed their motions and this time they were denied.

Plaintiff underwent an endoscopy for which her doctor used defendants’ scope.  Following surgery, plaintiff developed an infection.  She alleges the scope was defective because as designed it could not be cleaned properly to eliminate contaminates from prior procedures.  Id. at *1.  The amended complaint also now alleges that (i) Olympus Medical, the Japanese defendant, had contact with a Colorado doctor who served as an evaluator of defendant’s prototype devices, (ii) plaintiff’s doctor was invited to and visited Olympus Medical in Japan, (iii) Olympus Medical’s representatives traveled from Japan to Colorado and met with plaintiff’s doctor and others to “enhance the doctors’ loyalty” and “boost sales,” and (iv) an Olympus Medical employee attended a seminar in Colorado where its products were demonstrated.  Id. at *6.

The personal jurisdiction question before the court was whether those allegations satisfied the minimum contacts requirements – did they demonstrate that the defendant “purposefully directed its activities at residents of the forum state” and did “the plaintiff’s injuries [ ] arise out of the defendant’s forum-related activities.”  Id. at *6.  The allegations show activities directed to Colorado residents.  At issue was “whether those contacts are adequately related to the claims at issue, whether [p]laintiff’s injuries arose from those contacts.”  Id. at *7.  There are two different tests that courts use when faced with this issue.  “Proximate cause” is the more stringent of the two tests requiring a plaintiff to establish both cause in fact (“but for” cause) and legal cause – that the defendant’s contacts with the state “gave birth to the cause of action.”  Id.  “The proximate cause test is just what it sounds like – a requirement that defendant’s contacts with the forum are the proximate cause of the resulting harm.  Id. at *7.  Where the “but for” test only requires a showing that “but for defendant’s contacts with the forum, plaintiff would have suffered the injury at issue.”  Id. at *6.  “[A]ny event in the causal chain leading to the plaintiff’s injury is sufficiently related to the claim to support the exercise of specific jurisdiction.”  Id. at *8.

In addressing what test to use for this analysis, the Tenth Circuit specifically left the question open, finding that in the cases before it it was unnecessary to decide the issue.  Id. at * 6.  Not so for the Lynch court.  Starting with proximate cause, the court applied the facts (as alleged).  Of the four “contacts” enumerated above, the court found that item (ii) was not to be considered for personal jurisdiction because traveling to Japan was an “out of state” contact.  The contact must be with the forum itself, not with people who reside there.  Id. at *8.  With respect to the rest of the in-state contacts, none were tied to the alleged design defect at issue in the case.  Therefore, plaintiff’s injury did not arise out of Olympus Medical’s contacts with Colorado and personal jurisdiction could not be found under the proximate cause test.  Id.

But, the “but for” test is “significantly less demanding.”  Id.

The less restrictive but-for standard permits the court to focus not on the issue of whether Olympus Medical’s Colorado contacts were proximately related to the challenged design of the scope, but rather on the issue of whether Olympus Medical’s actions directed at Colorado were for the purposes of developing and promoting the use [of the scope] by physicians and patients in Colorado.

Id.  The court found plaintiff’s allegations sufficient to demonstrate that Olympus Medical’s contacts with Colorado were for the purposes of promoting its devices, including the one at issue, and “cultivating the relationship” with doctors, including plaintiff’s own physician.  Id. at *9.  That showing was sufficient to satisfy the “but for” test and establish personal jurisdiction.

Interestingly, the court never directly decides which test should be applied.  Instead, it concludes that because “there are sufficient minimum contacts to support personal jurisdiction under at least one of the available tests,” that is enough.  Id. at *10 (emphasis added).  But isn’t that like starting with the answer you want – sufficient contacts – and working backwards to find the question that gets you there?  Or, doesn’t it simply negate the proximate cause test?  If failing the harder test and passing the easier test means you pass – why use the harder test at all?  And it’s not like if you fail “but for” you are somehow going to pass “proximate cause.”  We don’t see Lynch as really clearing up the fundamental question of which test should be applied.

After resolving the minimum contacts question, the court did go on to address “fair play and substantial justice.”  Defendant argued that the burden Olympus Medical would face litigating in Colorado offended those concepts.  Id. at *10.  But the most significant burden the court identified was the expense of translating documents – and that’s a burden for plaintiff, not defendant.  Id. at *12.  So, that’s a little silver lining for defendants.  If you’re interested in more on translation burden, see our post here.

As we mentioned earlier in this post, all of defendants’ substantive motions were also denied.  The amended complaint states claims for design defect, warning defect, fraud and misrepresentation.  Id. at *11-18.  We won’t belabor those rulings here.  But we do note that the court applied the learned intermediary rule to medical devices.  Id. at *14.  And, in dictum, suggested that Colorado’s heeding presumption may not apply to medical devices.  Id. at *18n.7.

Bexis vividly remembers how he first learned of 21 U.S.C. §337(a).  It was early 1995, and he had just joined the Danek Medical legal team in the early going of the Orthopedic Bone Screw MDL.  The plaintiffs’ complaints went on and on about “negligence per se” and purported violations of the FDCA.  Bexis figured that he better learn all he could about negligence per se as fast as he could.  He had already (since 1987) been churning out internal monthly memos to the firm product liability group about new developments in Pennsylvania personal injury law, and some of those cases involved negligence per se.  So he searched for the term.  That produced a couple of intriguing (and then relatively recent) OSHA cases, Ries v. National Railroad. Passenger Corp., 960 F.2d 1156 (3d Cir. 1992), and Rolick v. Collins Pine Co., 975 F.2d 1009 (3d Cir. 1992) – and Third Circuit law governed where the just-being-established Orthopedic Bone Screw MDL was situated.

OSHA has a provision, 29 U.S.C. §653(b)(4), that provided, in relevant part “Nothing in this chapter shall be construed . . . to enlarge or diminish or affect in any other manner the common law. . . .”  Both Rolick and Ries had held that that provision meant that “a violation of an OSHA regulation could not constitute negligence per se.”  Rolick, 975 F.2d 1015 (quoting Ries, 960 F.2d at 1165.  That seemed pretty good, so Bexis pulled out the maroon colored statute book that contained the FDCA and read it from beginning to end, looking for anything analogous that he could argue did the same for tort claims based on the FDCA.  He found §337(a), which provides:  “all such proceedings for the enforcement, or to restrain violations, of this chapter [the FDCA] shall be by and in the name of the United States.”

That seemed pretty good, even better than the OSHA language in some respects.  There wasn’t much law, and nothing in the product liability field, but it was “run whatcha brung.”  With plaintiffs trying to create new causes of action, it was up to our side to create new defenses.  So Bexis ran (some would say amok) with §337(a) throughout the Bone Screw MDL litigation – eventually all the way to the Supreme Court where, in a Bone Screw appeal, the Supreme Court agreed.  “The FDCA leaves no doubt that it is the Federal Government rather than private litigants who are authorized to file suit for noncompliance with the medical device provisions.”  Buckman Co. v. Plaintiffs Legal Committee, 531 U.S. 341, 349 n.4 (2001) (quoting §337(a)).

That, in a nutshell, is how Buckman came to be.

And Buckman (and §337(a)) is the gift that keeps on giving, most recently in Amarin Pharma, Inc. v. International Trade Comm’n, 923 F.3d 959 (Fed. Cir. 2019).  Yes, that’s the same Amarin.  Amarin v. ITC, involved completely different claims concerning the same drug, Vascepa, that several years ago produced the landmark First Amendment decision in Amarin Pharma, Inc. v. FDA, 119 F. Supp.3d 196 (S.D.N.Y. 2015).  This time Amarin asserted Lanham Act claims that competing products containing the same active ingredient were “deceptively” labeled and advertised as “dietary supplements” when they were really illegal “new drugs” that had never received proper FDA approval.  923 F.3d at 961-62.  It filed a statutory action (under the Tariff Act of 1930) with the International Trade Commission, seeking to bar importation of those “supplements.”  Id. at 961.

The FDA, however, had reached no such conclusion, and let the ITC know about it:

[T]he FDA submitted a letter urging the Commission not to institute an investigation and instead to dismiss Amarin’s complaint.  In the FDA’s view, the FDCA prohibits private enforcement actions, including unfair trade practice claims that seek to enforce the FDCA.

Id. at 962 (record cites omitted).  The ITC agreed with the FDA, “declining to institute an investigation and dismissing the complaint.”  Id.  Amarin appealed.

Amarin’s main argument was that a more recent Supreme Court decision, POM Wonderful LLC v. Coca-Cola Co., 573 U.S. 102 (2014), which we blogged about here and here, meant that §337(a) was a dead letter in the Lanham Act context and that it could therefore challenge the FDA classifications of products – here, dietary supplement versus prescription drug – in a private action.  Once again, the FDA intervened, filing an amicus brief through the Department of Justice in Amarin v. ITC.  The FDA liked Buckman and §337(a) in a big way:

“The FDCA leaves no doubt that it is the Federal Government rather than private litigants who are authorized to file suit for noncompliance with” the FDCA.  Buckman Co. v. Plaintiffs’ Legal Comm., 531 U.S. 341, 349 n.4 (2001).  Private parties are expressly prohibited from bringing “proceedings for the enforcement, or to restrain violations, of ” the FDCA.  21 U.S.C. §337(a).  Yet that is precisely what Amarin seeks to do here. Amarin’s claims, though nominally brought under the Tariff Act, attempt to enforce or restrain violations of the FDCA because they seek − as a necessary component of the stated cause of action − to prove FDCA violations and compel obedience to the FDCA through the remedies provided by that statute. For that reason, the International Trade Commission correctly concluded that Amarin’s claims are precluded by the FDCA.

Amarin v. ITC, FDA amicus brief at 1 (now also available at 2018 WL 8459460).

And again:

The FDCA prohibits private proceedings “for the enforcement, or to restrain violations, of” that statute.  21 U.S.C. §337(a).  The FDCA instead commits enforcement exclusively to the federal government to ensure that complex enforcement decisions are made with the benefit of FDA’s scientific and regulatory expertise.  As a consequence, private parties . . . may not initiate proceedings in a court or administrative agency to remedy alleged violations of the FDCA.  Nor can private parties circumvent that prohibition by wrapping their FDCA enforcement claims inside some other cause of action.  The FDCA prohibits “all” private proceedings to enforce or restrain violations of the FDCA, id., including private claims that are nominally brought under another statute but seek to prove violations of the FDCA.

Id., FDA amicus brief at 7 (emphasis original).

There’s still more:

Centralizing FDCA enforcement authority within FDA ensures that FDA’s expertise will inform often-difficult factual and legal determinations, such as which requirements apply to particular articles and whether an article is being distributed in violation of the FDCA.  It also ensures that discretionary determinations − like whether enforcement measures should be pursued for a violation, and if so, which remedies are appropriate − will be made by policymakers, not private parties.  And it promotes uniformity. . . .  Congress deliberately chose to centralize within FDA the crucial decision whether to seek to prove and redress alleged violations of the FDCA.  Doing so maximizes the benefits of centralized enforcement.

The FDCA’s prohibition on private “proceedings for the enforcement, or to restrain violations, of” the Act, 21 U.S.C. §337(a), means that private parties may not bring suit under the FDCA itself to remedy what they allege to be violations of the Act.  It also means that private parties may not circumvent this straightforward prohibition by invoking some other cause of action, under another federal statute, in order to bring what is, at bottom, still an action “for the enforcement” or “to restrain violations” of the FDCA. See Buckman, 531 U.S. at 353 (preempting state fraud claims that “exist solely by virtue of the FDCA”).

Id., FDA amicus brief at 9-10 (other citations omitted) (emphasis original).  We particularly like these last two quotes because the twice-emphasized “other” places the government on record squarely on the defense side of the ledger with respect to the “Buckman is nothing more than fraud on the FDA” rationale of a Second Circuit panel back in Desiano v. Warner-Lambert & Co., 467 F.3d 85 (2d Cir. 2006), aff’d by equally divided court, 552 U.S. 440 (2008).

So, almost as much as we liked Amarin winning on the First Amendment, we were rooting against it in Amarin v. ITC.  And that’s what happened.  Private FDCA enforcement – under the Lanham Act or anywhere else – took it on the chin.  As a matter of law, a complaint about the FDA’s failure to act could not be “unfair competition” under either the Tariff Act, the Lanham Act, or seemingly anything else.

First, as the Supreme Court recognized in the aforesaid POM Wonderful decision, “The FDCA provides the United States with ‘nearly exclusive enforcement authority.’”  Amarin v. ITC, 923 F.3d at 966 (quoting POM Wonderful, 573 U.S. at 109).  Under both Buckman and POM Wonderful, “[p]rivate parties may not bring suits to enforce the FDCA.  Id.  Amarin v. ITC discussed various decisions that had examined the relationship between the Lanham Act and the FDCA, particularly PhotoMedex, Inc. v. Irwin, 601 F.3d 919 (9th Cir. 2010); Alpharma, Inc. v. Pennfield Oil Co., 411 F.3d 934 (8th Cir. 2005), and Sandoz Pharmaceuticals Corp. v. Richardson-Vicks, Inc., 902 F.2d 222 (3d Cir. 1990).  Analyzing them, and POM Wonderful, Amarin v. ITC concluded:

[T]he FDA has not provided guidance as to whether the products at issue in this case should be considered “new drugs” that require approval.  Given this lack of guidance . . .  a complainant fails to state a cognizable claim under §337 where that claim is based on proving violations of the FDCA and where the FDA has not taken the position that the articles at issue do, indeed, violate the FDCA. Such claims are precluded by the FDCA.

923 F.3d at 968.  Only if the FDA concluded that the products in question violated the FDCA, could the plaintiff go back to the ITC.  Id. (“Amarin is free to file a new complaint once the FDA issues sufficient guidance with respect to the accused products such that the Commission is not required to interpret the FDCA in the first instance”).  The court thus did not reach the amicus position of the United States (discussed above) that “that all such claims are precluded regardless of whether the FDA has provided guidance.”  Id. (emphasis original).

But having the government on record is a good thing.

In the final holding of significance to blog readers, the court held that POM Wonderful did not expand the traditional role of the Lanham Act with respect to FDCA matters.  Nothing in the Supreme Court’s decision authorized private plaintiffs to usurp the role of the FDA in deciding, in the first instance, whether any given conduct violated the FDCA:

[Plaintiff] views POM Wonderful as rejecting the view that the FDCA precludes Lanham Act claims.  But this reads POM Wonderful too broadly.  Although POM Wonderful held that the FDCA does not categorically preclude a Lanham Act claim . . ., the court did not open the door to Lanham Act claims that are based on proving FDCA violations.  The allegations underlying the Lanham Act claim in POM Wonderful did not require proving a violation of the FDCA itself.  This stands in stark contrast to the allegations in our case, which are based solely on alleged violations of the FDCA’s requirements.

923 F.3d at 969 (POM Wonderful citations omitted).  By the way, there was a dissent in Amarin v. ITC, but only on an issue of appealability, and the dissent did not address the substantive rationale discussed this post.

Thus, Amarin v. ITC is helpful to our side in at least two ways.  First, definitively rejects post-POM Wonderful attempts to pursue new FDCA violations that the FDA has not found, relying on a strong reading of Buckman and §337(a).  Second, the litigation has resulted in a useful explication of the FDA’s current views regarding private FDCA enforcement, which turns out to be at least as strong as anything that the Court held in Buckman itself – and utterly inconsistent with plaintiff-side attempts to hide attacks upon the sufficiency of submissions to the FDA behind the smokescreen of some “other” cause of action.  Particularly given the Supreme Court’s recent comments in Albrecht, 2019 WL 2166393, at *7, about the FDA being “fully informed,” it is a very good thing to have another decision like Amarin v. ITC on the books for the proposition that whether the FDA is fully informed about any particular matter is something for the FDA to decide in the first instance.

Our days of the week are mostly named based on Norse mythology, but our months are firmly Roman. May is named after the deity Maia, whose Roman version was honored for her role in the growth of plants. Her cousin Juno, the queen of the Roman gods, gave us the name for June. In their rituals, the Romans offered up a variety of burnt animals depending on the time of year, deity being honored, and purpose of the offering. Maia might get a pregnant sow consigned to flames, while Juno might get a bull. The growth of greenery in our area and our more controlled use of flames over the last month made us think of these rituals. (Not really, but play along.) The Romans did not eat their sacrifices. Nor did they sacrifice turkeys. They definitely did not slow cook a turkey over smoking embers.

So, what is with the convoluted intro here? Well, the day after last Thanksgiving, we wrote a post that predictably talked about leftover turkey. The case, Cantwell, involved the attempt to plead a claim under Oklahoma law for per se negligence based on an alleged violation of FDA law or regulation in connection with the alleged off-label use of the PMA device at issue. The turkey was the Oklahoma Supreme Court’s decision in Howard that endorsed such a claim in the abstract. When the Cantwell court held that plaintiffs had not come close to pleading the elements of such a claim, it gave the plaintiffs a chance to cure with an amended complaint. We predicted “plaintiffs will try again. If they do, then we would not be surprised if Justice Gorsuch’s former colleagues on the Tenth Circuit get another chance to weigh in on express preemption with a re-heated version of Howard.” About six months later, plaintiffs tried again and we are back with Cantwell and its fowl history. Cantwell v. De La Garza, No. CIV-18-272-D, 2019 WL 2166541 (W.D. Okla. May 17, 2019).

Plaintiffs’ amended complaint re-urged constructive fraud and negligence per se with minor changes and added claims for lack of informed consent and breach of implied warranty. Constructive fraud fell for the same reasons it did before, the manufacturer had no duty to obtain informed consent with a prescription medical device, and plaintiff failed to alleged facts establishing an implied warranty was made.

That leaves us with the re-packaged negligence per se claim. Anticipating the express preemption issue that had not been addressed as to the prior complaint, plaintiffs argued that fifteen paragraphs of the current complaint “are very clear with respect to the protection provided to a consumer of a medical device and the parallel state law enactments applicable to this cause of action.” Id. at *2 (emphasis added). Those paragraphs now included references to the Oklahoma Public Health Code, including its provisions prohibiting the adulteration and/or misbranding of drugs and devices. Id. & n.4. They also alleged that the device was designed and marketed for a specific use different than how it was approved and labeled, citing parts of the FDCA and unspecified “parallel state laws.” Id.

Regarding Ulrich’s conduct in relation to these statutes, Plaintiff alleges only that “Ulrich’s violations during FDA’s premarket approval process and subsequent misrepresentation of its product in advertisements and to its patients constitutes [sic] violations of the abovementioned Federal and State laws, regulations and statutes.”

Id. We threw that in a block quote mostly to point out that a court calling you out with a “[sic]” is often not a favorable sign on how it will rule.

While Plaintiffs were required to identify the particular statute or regulation violated to allow for evaluation of express preemption, “federal statues cited in the Amended Complaint encompass multiple subject areas and broad categories of conduct (21 U.S.C. § 331) and mandate the process for premarket approval of certain medical devices (21 U.S.C. § 360e).” Id. Plaintiffs also argued that the manufacturer “manipulated the preapproval process,” while disclaiming that she was pursuing a claim based on fraud on FDA. Id. Thus, the court could not identify from the amended complaint the statute or regulation alleged breached by the alleged misconduct of “designing and marketing its device for an off-label use.” Id. at *3. In attempting to avoid express preemption under the FDCA and implied preemption under Buckman—they stated “federal law does not supply any elements of the claim” and disclaimed “attempt[ing] to enforce any FDA regulation”—plaintiffs were left with nothing supporting a “plausible claim of negligence per se.” Id.

Thus, the court smoked plaintiffs’ claims against the manufacturer and dismissed them with prejudice. Preemption, while providing the indirect heat here, was not directly decided. So, while we would like to claim prescience in November’s augury, it does not look like that issue will be before the Tenth Circuit should plaintiffs pursue a bird-brained appeal.

Last year was a banner year for removal before service, with both the Second and Third Circuits weighing in to support application of the removal statute according its terms, thereby giving their blessing to the so-called “snap” or “wrinkle” removal practice that this Blog has advocated for a decade.  See Gibbons v. Bristol-Myers Squibb Co., 919 F.3d 699, 705-07 (2d Cir. March 26, 2019); Encompass Insurance Co. v. Stone Mansion Restaurant, Inc., 902 F.3d 147, 151-54 (3d Cir. 2018).  Particularly given coincidental personal jurisdiction developments that tend to restrict mass tort plaintiffs seeking aggregation to suing defendants in their “home” courts, removal before service is now another accepted means for combating the other side’s incessant forum-shopping.  E.g., Anderson v. Merck & Co., 2019 WL 161512, at *1-2 (D.N.J. Jan. 10, 2019) (denying remand in 104 Zostavax cases).

Plaintiffs keep trying, however – frankly, we would expect no less.  Thus, the Pennsylvania lawyers among us are particularly pleased with the recent decision in McLaughlin v. Bayer Essure, Inc., 2019 WL 2248690 (E.D. Pa. May 24, 2019), which shot down an attempt to interpose a Pennsylvania procedural peculiarity against defendants’ ability to remove before service.  In Pennsylvania, unlike practically any other state, a plaintiff may serve a bare summons without an accompanying complaint.  Pa. R. Civ. P. 1007.  It’s a rather common practice because, for very little work, a plaintiff so doing can toll the Pennsylvania statute of limitations.  E.g., Sheets v. Liberty Homes, Inc., 823 A.2d 1016, 1018 (Pa. Super. 2003).

Does the service of a bare summons also preclude removal before service?  In McLaughlin the court held it did not.  As we’ve discussed many times before, removal before service works because, according to the express terms of the federal removal statute, the so-called “forum defendant rule” (barring removal when an otherwise diverse defendant is sued in the state court of its domicile), only applies to defendants “properly joined and served.”  28 U.S.C. §1441(b)(2).  Personal-jurisdiction-driven suits against a defendant in its “home” forum bring the forum defendant rule into play, and thus place a premium on removal before service.

Twenty-four snap-removed plaintiffs contended in McLaughlin that service of a Pennsylvania summons without a complaint satisfied the key statutory language.  The court had no trouble batting away this “Hail Mary pass” of an argument.  First, in analogous removal situations, the service of a bare summons doesn’t count.  Only service of a complaint starts the clock ticking on the 30-day removal period.  Murphy Brothers, Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 347-48 (1999); Sikirica v. Nationwide Insurance Co., 416 F.3d 214, 221-23 (3d Cir. 2005); Maneri v. Starbucks Corp., 2017 WL 5885732, at *2 (E.D. Pa. Nov. 29, 2017); Car Sense, Inc. v. Signet Financial Group, Inc., 2012 WL 13014938, at *2 (E.D. Pa. July 9, 2012); Polanco v. Coneqtec Universal, 474 F. Supp.2d 735, 737 (E.D. Pa. 2007); Gladkikh v. Lyle Industries, Inc., 2006 WL 266100, at *2 (Mag. M.D. Pa. Feb. 1, 2006).

Since only service of a complaint effects removal, plaintiffs’ contention that mere filing of a summons meant that all defendants were “properly joined and served” did not hold water.  McLaughlin, 2019 WL 2248690, at *3.

[W]e cannot allow service of the writ of summons to play such a central role in application of the Forum Defendant Rule when the United States Supreme Court and the Third Circuit have made it clear that the Complaint is the operative pleading for purposes of starting the removal process and the writ is largely inconsequential.

Id. (citing Murphy Brothers and Sikirica).  Congress’ “uniformity” purpose in the removal statute would also be frustrated:

because some forum defendants would be considered “properly joined and served” (and thus prohibited from removing) prior to even knowing the nature of the suit against them while others would not be considered joined and served (and thus prohibited from removing) until they received a Complaint setting forth the precise claims against them.

Id. (citations omitted).

Not only that, but to interpret “properly filed and served” to include a bare summons, would require this language to be construed differently from another place in the removal statute where identical language appears.  The same phrase is in 28 U.S.C. §1446(b)(2)(A), requiring the consent to removal of all “properly joined and served” defendants in federal question cases.  But that language has never been construed to require consent of defendants, served only with a bare summons.  Id.; see Car Sense, 2012 WL 13014938, at *2; DiLoreto v. Costigan, 2008 WL 4072813, at *3-4 & n.4 (E.D. Pa. Aug. 29, 2008), aff’d, 351 F. Appx. 747 (3d Cir. 2009).  A uniform construction of “properly joined and served” precluded a bare summons from qualifying:

[W]e can only conclude that forum defendants who have been served with the writ of summons and have not yet received the Complaint should not be considered “properly joined and served” for purposes of the Forum Defendant Rule.  Thus, consistency demands that the presence in litigation of a forum defendant who has been served with a writ of summons but not the Complaint does not defeat removal that is grounded on diversity jurisdiction.

McLaughlin, 2019 WL 2248690, at *4 (citation omitted).

Having lost everything else, plaintiffs in McLaughlin fell back on a variant of the same “absurd result” argument that the Third Circuit had rejected, as to removal before service in any context, in Encompass Insurance.  2019 WL 2248690, at *4.  This didn’t work either.

[I]n assessing whether the result we reach is “absurd or bizarre,” we are guided by the Third Circuit, which has . . . permit[ted] a forum defendant to strategically evade service in order to avoid application of the Forum Defendant Rule and has concluded that the practical outcome of that interpretation of the Rule is not “so outlandish as to constitute an absurd or bizarre result.”  Encompass, 902 F.3d at 153-54.  In light of this precedent, we conclude that an interpretation of the Forum Defendant Rule that permits removal before the forum defendant is properly served with the Complaint is not “so outlandish as to constitute an absurd or bizarre result.”

Id.  Plaintiffs’ threadbare “gamesmanship” argument fell on deaf ears because, essentially, plaintiffs’ own gamesmanship created the situation.  “Plaintiffs could have avoided the result they now face by merely mailing the Complaint to all of the named Defendants simultaneously with their filing of the Complaint.”  Id.

Thus, McLaughlin effectively hoisted plaintiffs on their own procedural petard.  The other side of the “v.” resorts to summons-only service as a quick and easy way to stop the statute of limitations from running.  But for removal purposes, that same neat trick now also means that nobody has been “properly joined and served.”  Service of a bare summons, where as in McLaughlin the forum defendant rule is in play, becomes the procedural equivalent of an engraved invite to defendants to remove the case to federal court.

Of all the products regulated by the FDA, drugs and medical devices receive the most erratic preemption protection. Thank you, Levine, Lohr, and gibberings about CBEs, clear evidence, and parallel claims. Perhaps it is bad form to accuse SCOTUS of incoherence, but we wouldn’t be the first. (Try reading the SCOTUS doctrinal wanderings through obscenity law or jury unanimity requirements and then try to convince yourself that the “least dangerous branch” is not really the least consistent branch.) Anyway, for drugs preemption is least robust for the products that probably most need it, and for medical devices it is often hard to set out the rule for preemption, except that it can be really, really complicated.

By contrast, preemption for ready-to-drink protein shakes is pretty, pretty clear, and pretty, pretty strong. In Rubio v. Orgain, Inc., 2019 U.S. Dist. LEXIS 65214 (C.D. Cal. March 5, 2019), the plaintiffs sued a manufacturer of protein shakes because the advertising said the drinks contained 16 grams of protein while the plaintiffs’ own testing showed only 13.33-14.98 grams of protein. It is not a huge drop in the amount of protein, and it did not deprive the plaintiffs – classes of California and New York purchasers – of the strength to file a muscular complaint alleging violations of California’s False Advertising, Consumer Remedies, and Unfair Competition Laws, violations of various New York Business Laws, violation of the Magnuson-Moss Warranty Act, as well as unjust enrichment, negligent misrepresentation, and fraud. The defendant argued that all these claims were preempted by the Food, Drug and Cosmetic Act (“FDCA”) because the testing the plaintiffs used to determine the amount of protein in the shakes did not comply with the testing methods established by the FDA, and therefore the plaintiffs sought to impose obligations at odds with those set forth by the FDA. The Central District of California court agreed with the defendant and poured all the claims out of court.

Under the FDCA, states are prohibited from imposing “any requirement for the labeling of food that is not identical to the federal requirements.” Right away we see a standard much more defense-friendly than what we see with drugs. Further, there are specific federal regulations not only requiring that the “declaration of nutrition information on the label” include “the number of grams of protein in a serving, expressed to the nearest gram,” but also setting forth the specific testing methodology to count the protein content. And we do mean specific: the “sample for nutrient analysis shall consist of a composite of 12 subsamples (consumer units), taken 1 from each of 12 different randomly chosen shipping cases, to be representative of a lot,” etc.

The plaintiffs in Rubio helpfully attached several certificates of analyses to their complaint in an effort to support their allegation of false labeling. The plaintiffs did not dispute that the testing method they utilized was not compliant with the FDA’s methodology. Instead, the plaintiffs argued that the FDA’s sampling method regulations applied only to FDA enforcement actions, not actions brought by consumers. That is a clever argument. It is also completely at odds with Ninth Circuit precedent that the sampling regulation “is not just an internal guidance, it is an interpretation of the statutory provision requiring that manufacturers disclose a product’s protein content, a concept that requires federal agent clarification if there is to be national uniformity in labeling.” Durnford v. MusclePharm Corp., 907 F.3d 595, 602 (9th Cir. 2018). Did that inconvenient controlling appellate authority dissuade the plaintiffs? It did not. Rather, the plaintiffs urged the district court to disregard the Durnford case as “wrongly decided” and to follow contrary holdings by other California federal courts. Now, we have occasionally believed that the Ninth Circuit has gotten things wrong and said so. SCOTUS has occasionally believed that the Ninth Circuit has gotten things wrong, and has reversed it. But good luck trying to get a district court within the Ninth Circuit to depart from Ninth Circuit authority.

Remember how we said the plaintiffs “helpfully” attached certificates of analysis of shakes’ protein content? Well, they helped themselves straight into preemption and dismissal. Nothing in the certificates suggested that the 12-sample method required by FDA regulations was employed. The Rubio court dismissed the complaint, and it was not really, really complicated — it was pretty, pretty easy.

The next line of the song goes . . . But if you try sometimes you might find, You get what you need.  We like the line.  We like the song.  We like The Stones.  Maybe the Federal Rules Advisory Committee was listening to the tune in 2015 when it decided proportionality needed to be a predominant factor in the scope of permissible discovery.  And, if that’s the case we wonder what kind of rules could be inspired by Time is On My Side, You Gotta Move, Rough Justice, Oh No, Not You Again, or Rock and a Hard Place.  But, as usual, we digress.

Federal Rule of Civil Procedure 26(b)(1) provides in relevant part:

Parties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.

In other words, you’re allowed to get what you need, not what you want.  As defense lawyers, this is extremely important.  Nobody reading this blog is unfamiliar with the excessive costs incurred by companies in discovery.  Largely driven by the need to produce millions of pages of documents.  And in the DDL world, the imbalance between the burden on defendants and the burden on plaintiffs in discovery is so heavily weighted to the defense, the whole scale has tipped over.  Rule 26(b)(1) will not, and cannot, fix the problem.  Nor do we ever expect the scales to be equal.  But proportionality is a concept we can get behind.  Proportionality is an attempt to refocus the discovery process on what’s important – obtaining facts that are necessary to the claims and defenses being asserted.

Sure, sure.  Plaintiffs are going to argue they need 20 years of emails so they don’t miss the one that is sure to bring justice for their client.  Defendants are going to argue volume and cost.  The truth should lie somewhere in the middle – and the way we view 26(b)(1), the judge has been given the tools to draw that line.  And while we’re talking strategy for a minute, defendants take note.  There are six proportionality factors in 26(b)(1) and cost is only one.  Make use of them all.  Put cost in context next to the issues, the resources, and the amount in controversy.  You want to focus the judge on need, not want.

That brings us to today’s case – Burningham v. Wright Med. Group, 2019 U.S. Dist. LEXIS 86823 (D. Utah May 22, 2019) – it’s all about proportionality.  It’s a medical device case.  At some point after the device plaintiff received was manufactured and sold, defendant sold the product line to another company.  Plaintiff wanted to take discovery of that non-party company on the grounds that the discovery was relevant and that defendant had produced similar discovery in other cases.  Id. at *3.  First, the “they did it in another case” argument sounds more like a kindergarten playground argument than a courtroom legal argument.  “But, Johnny’s mom let him.”  The court responded with the equivalent of “I’m not Johnny’s mom.”

Whether Defendants have or have not produced similar information in other matters has no bearing on the court’s determination about whether Defendants should produce the discovery sought by Plaintiffs in this action. Instead, the court must focus on the claims and defenses in this action when determining relevance for purposes of discovery.

Id. at *4.  So much for being like Johnny.  Second, the discovery plaintiff wanted was “about conduct not implicated in this action and that post-dates any of Plaintiffs’ allegations.”  Id.  Leading the court to conclude the discovery was neither relevant nor proportional.

Next, plaintiff wanted adverse event information concerning a product developed, manufactured, and sold in Europe in the 1980s and 1990s by another non-party which defendant subsequently purchased in 1999.  Plaintiff tried his kindergarten argument again arguing that defendant had been ordered to produce this information in other litigations.  Id. at *5.  Once again, the court only cared about the claims and defenses pending before it.  Maybe Johnny had a good reason for jumping off the roof, but you don’t and that’s all that matters.  If that wasn’t enough, the discovery was also not proportional because it was too broad as to time period and not relevant because it concerned a product not at issue and events that took place in Europe dating back 30 years.  Id. at *6.

Finally, plaintiff sought an order that three of his requests for admission directed to defendant were deemed admitted.  Each request asked defendant to admit that a certain device was implanted and that the same device was the subject of a recall.  Defendant admitted the first part, but objected to the second because the recalls were issued by third parties over whom defendant had no control.  Id. at *7.  The court sustained defendants’ objections because the requests were “phrased in the passive voice . . . and do not identify the party responsible.”  Id.  Defendants were not required to provide an admission for such a “vaguely phrased” request.  Id.  Plaintiff also wanted his costs associated with the bringing the motion, but since it was denied . . . no costs awarded.

Rule 26 focuses on need over want and defendants have to drive that point home every chance we get.  We may not be able to make it sound as catchy as The Stones, but we got to try.