Over 11 years ago the blog published a post called “Anatomy of a Mass Tort,” which endeavored to explain the life cycle of this type of litigation.  We’ve decided to revisit and update that post, given the changes that have taken place over the intervening years.

And change it has.   Our original post mentioned class actions several times. It didn’t mention personal jurisdiction, multi-plaintiff complaints, third-party litigation funding, or plaintiff fact sheets.

So here is anatomy of a mass tort 2.0.

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Today, we’re stepping back.  Instead of analyzing specific doctrines or new cases, we’re going to give you a run down of the whole enchilada:  a mass tort, start to finish.

With a mass tort, the entire process can be described without ever typing these words:  “the product was defective” or “someone was hurt.”  Unfortunately, those words have become unnecessary to describe the anatomy of a mass tort.

A mass tort hardly needs a trigger anymore.  At bottom, all that’s necessary is a drug or device with a decent sized market and something to attract the other side’s lawyers.  Look, for example, at the best-selling drugs of 2007, when we first wrote the post. They include Lipitor, Nexium, Plavix, Seroquel, and more.  Of the top 20, just looking at the names, 15 of them resulted in easily recognizable mass torts.  Unless you’re inclined to believe that the FDA erroneously approves drugs three quarters of the time, then it’s pretty clear that all that’s really essential to a mass tort is “mass.”

Still there is usually some sort of trigger.  A number of events can set off the avalanche.

First, the most significant would be adverse regulatory action – a mandatory recall or a label change adding a boxed warning or a significant new risk.  Mass torts commonly follow in the wake of regulatory action; the idea that they somehow induce regulatory action is plaintiff-side propaganda 95% of the time.

Second, even in the absence of regulatory action, plaintiffs try to stir up trouble.  Thus, they try to generate bad press – something nasty said on 60 Minutes, or a similar program will rev up the clanking machinery of the litigation industry.  In Bone Screw it was David Kessler’s hysterical response on “20/20” to off-label, yet standard of care, spinal surgery.

Third, short of that, a voluntary recall, even though no government agency demanded it, whereby a manufacturer took its product off the market, has also led to mass tort action.  That was one of the things that happened with Vioxx.

Fourth, a significant verdict in what was once a one-off case can provide the necessary spark − nothing catches the eye of the plaintiff’s’ bar like big money.

Fifth, although it may be as much of an excuse as a true cause, a critical article in the scientific literature can prompt the other side to do its thing. That’s what happened with hormone therapy – a much anticipated scientific article didn’t show the expected advantages, but rather a moderate increased risk (less than double) as to a single (the highest) age group that wasn’t even the principal target population for that product.  In the mass-tort frenzy that followed, all these distinctions got lost in the shuffle. Since tort “market” was large, and the risk relatively common, it was off to the races and damn the details.

Finally, these days the trigger doesn’t even have to involve the product.  An adverse event befalling another product in the same group of drugs or devices can lead to copycat mass tort litigation against the entire group.  Plaintiffs are currently suing over every second generation anticoagulant, every IVC filter, and every conceivable kind of surgical mesh. Think Vioxx and Cox II analgesics, or Baycol and statins, or AcroMed’s pedicle screw device, with litigation spreading to every other device on the market that used similar bone screws.  Close used to count only in horse shoes, hand grenades, and H-bombs − you can add mass torts to that list (particularly if you can find a synonym beginning with “h.”  (We can think of one easily enough, but the Blog, unlike ATRA, isn’t allowed to use it.)

How much (if any) of this is really good policy?  We have to think that the litigenic effects of FDA regulatory action, and of all recalls, mandatory or voluntary, cannot help but to deter actions that proper public health policy should encourage.  We’re afraid that fear of litigation may deter companies from voluntarily undertaking (or acquiescing in a regulatory agency’s request for) a product recall or a label change.  That doesn’t mean we agree with it, though, since delay in such situations usually makes things worse in the end.

Back when product liability was shiny and new, strict liability was justified because it supposedly would causes companies to internalize risks and thereby reduce those risks. These days fear of mass tort litigation can also influence corporate decision-making, in ways that are harmful to the public.

But we digress.  Back to our anatomy lesson.

Regardless of what is the triggering event, the creation of the mass tort itself follows – almost entirely extra-legally.

Advertisements.

Since the courts discovered that lawyers have a constitutional right to use advertisements to solicit clients, they have done so – with a frequency that would no doubt have shocked the Founding Fathers.  Anybody who watches TV knows what we’re talking about.

And it’s not just lawyers, either.  Media specialists and third-party litigation funders also combine to run (with apologies to Marlowe) the race that launched 100,000 TV (and internet) ads.  Anyone who responds – and many do – become “inventory,” their claims available for sale in bulk to enterprising lawyers hoping to cash in on the next mass tort.

Thus, within hours after the triggering event, “law firm” websites will invite product users to sign on as potential clients.  Similar solicits in other forms of media follow.

This early stage is usually the point of no return.  The lawyers involved will freely buy, sell, and trade the would-be clients that have signed up – to the point where those clients often don’t know who their lawyers actually are.  But once they have clients, no matter how attenuated the relationship, lawyers cannot ethically let them go.  Regardless of the facts, the mass-tort litigation process takes on a life of its own.

So, counsel who specialize in representing plaintiffs in mass tort strike first in their favorite venues.  Some of these are in state court.  There, they try to keep their chosen courts by filing multi-plaintiff complaints – in numbers less than 100 to avoid a federal statute called “CAFA” – with people from all over the country, but at least one in the home state of at least one defendant to prevent defendants from being able to take the cases to federal court.

The only thing the plaintiffs in these massive complaints have in common is that they claim some injury from the same product (although sometimes they sue multiple manufacturers of the same kind of product).  The only thing the complaint tells the defendant about the plaintiffs is their state of residence.  Try filing an adverse event report (which the FDA requires for every litigation complaint no matter how weak) with that.

Defendants counter with “snap” removals.  If the only thing preventing removal of a case to federal court is a defendant from the place where the plaintiff chose to file suit, then removal before service is a good idea for defendants.  Monitoring the state-court dockets and taking action before the plaintiff gets around to serving that defendant gets such cases to federal court. The statute allows it, and so do a lot of courts.

Other plaintiffs want to be in federal court so they can create multi-district (“MDL”) litigation.  Even in federal court – heck, especially in federal court – the race is also on.  The big money in MDL litigation, for those lawyers who want to work, is to be on the Plaintiffs’ Steering Committee.  That requires knowledge of the obscure ins and outs of MDL procedure, but it also requires a client base.  So candidates for the steering committee work in league with the media solicitors to scoop up lots of inventory to file in federal courts that they think would make a good home for an MDL proceeding.  These are usually the most competent plaintiffs’ lawyers. They’re itching to do some work, to try some cases, and to maintain or to establish their reputations in the field.

The final decision on where to where an MDL is located rests with a committee of judges, and competing lawyers will file lots of cases in various places (usually their home federal courts).  Defendants also have some say, and often prefer to be where their principal place of business is located.  Where an MDL is located can be important for other reasons besides the composition of the plaintiffs’ steering committee.  Federal issues, like preemption, differ between the circuits, and in MDLs the law of the circuit where the MDL is located will apply.

At this point, our original post mentioned class actions.  They’re really not many of them in mass torts anymore – practically none in cases alleging personal injury.  Class actions still get filed in mass torts, mostly on behalf of insurance or government programs that supply drugs, but as our cheat sheets show, they are rarely certified and nowadays are the “tail” rather than the “dog” in mass torts.

These MDL specialist plaintiffs’ lawyers are very good at what they do, but because the written rules don’t apply, and the rules that do are esoteric and hidden, it’s mostly the same repeat players over and over again. That the resulting steering committees tend to be less diverse than the current crop of White House interns is an unfortunate consequence of the overall lack of rules and reliance on a good old boys network rather than the stringent competition conducted by our clients  Our clients actually care about this kind of thing, and unlike the inventory on the other side, our clients get to choose their lawyers, rather than vice versa.

But we digress again.

Most plaintiffs’ lawyers in mass torts, however, do not seek leadership positions, because that would require, well, work.  It’s far easier to collect some inventory from the advertisers, throw them in the judicial hopper, do nothing, watch how the litigation plays out, and then spring into action only after the parties announce a global settlement.  No muss; no fuss; just big bucks.

MDLs are perfect for these lawyers.  The federal rules largely don’t apply – at least to plaintiffs.  Defendants are precluded from challenging the adequacy of complaints that don’t contain basic information like whether the plaintiff actually used the product at issue or had the injury that is the subject of the MDL.  Defendants aren’t allowed to take so-called “case specific” discovery or to file “case-specific” motions.  With the rules becoming figments of the imagination, at most defendants get “fact sheets,” most of which contain incomplete or even downright false information.

So while defendants are spending tens of millions of dollars complying with the plaintiffs’ massive discovery (a mass tort largely eliminates “proportionality” from discovery directed at our clients), if they want any discovery at all from plaintiffs – they have to pay for that, too.  Defendants have to pay to check the accuracy of the fact sheets, and to collect the plaintiffs’ medical records.  Since this is information that, in non-mass-tort cases, plaintiffs would pay for in responding to discovery, it’s tailor-made for those plaintiffs’ attorneys who want a free ride until settlement.

And that’s just the core litigation.  Mass torts also spawn peripheral litigation. The target company (or industry) will probably be enmeshed in securities litigation, with shareholders seeking “stock drop” damages and alleging that the company knew all about what the product liability plaintiffs are suing over, but kept it hidden from investors.  If the company has insurance, the insurers will bail and seek to deny coverage.  State attorneys general, or even the federal government, might sue.  There could even be the odd False Claims Act case, or two.

It’s the American legal system in all its glory.  Mass torts are essentially a lawyer’s full employment act.  Mass torts are even counter-cyclical – they tend to rise when the economy doesn’t; when more people need money and more investors have funds to underwrite litigation.

In any event, the mass tort proceeds.  Plaintiffs petition the MDL Panel to create a coordinated proceeding.  That gets sent somewhere, with or without the defendant’s acquiescence.  A significant number of MDL judges are also repeat players.  We’re sure that at least some of them enjoy the power and the notoriety – in addition to the relatively interesting work.

Non-MDL actions also proceed, to the extent that plaintiffs who want to be in state court are successful in staying there.  Personal jurisdiction developments are making this harder, as federal courts are less likely to tolerate the multi-plaintiff complaint jurisdictional dodge.  Several states are known for coordinated state-court mass tort proceedings, such as California, Pennsylvania, New Jersey, Missouri, and in some types of mass torts, New York, and Florida.

In the MDL proceeding, the target defendants search for a silver-bullet defense – one that can get rid of thousands of cases at once.  These are mostly preemption and Daubert expert witness exclusion, although occasionally other issues, such as warning adequacy as a matter of law, innovator liability, or even the statute of limitations, can serve that function in particular mass torts.  Preemption bars plaintiffs from recovering because federal law says “no.” It doesn’t matter how strong or weak a plaintiff’s state-law tort claim is on the merits.  A win on the (general causation) Daubert ground means that plaintiffs are barred from recovery because no legitimate scientific evidence links the defendant’s product to the plaintiffs’ alleged injury.  These are the kind of rulings that, when they happen, often wind up on our annual “best of” list.

In all-too-many mass torts, the defendant loses on the wholesale level, preemption doesn’t apply and at least one plaintiff-side causation expert gets through Daubert.  So the litigation continues.  The next bump comes just before the two-year mark. That is the statute of limitations for product liability claims in most states.  Plaintiffs’ lawyers who have been holding back cases, trying to determine whether the federal or state litigation will provide them the most recovery with the least work, have to fish or cut bait. If they don’t file complaints then, well, the strongest legal malpractice claims involve blown statutes of limitations.  So at two years, the rest of the inventory shows up.

At the two-year point defendants at last have a pretty good idea of the magnitude of the mass tort.  And, with most new cases time-barred, defendants can begin to think about what a global settlement might look like, now that news of settlement negotiations won’t just spark another round of advertising and still more litigation.  Defendants’ depressed stock prices may start to rebound.

But even now the tricks continue.  Litigation shifts to states with longer statutes of limitations, more lenient discovery rules, and no borrowing statutes.  New Jersey comes to mind.  Fights over conflict of laws arise.  Litigation tourists go to states where they think such arguments might win.  Defendants respond with personal jurisdiction challenges to cases filed in states where neither they nor the plaintiffs actually reside.  More side issues to keep lawyers busy.

Then what?  Maybe the parties try a few “bellwether” cases.  Here, plaintiffs open their bag of tricks wide.  MDL judges all-too-often view everything through the prism of settlement, and anything that puts pressure on defendants to fork over big bucks will be employed by at least some of them.  Repeat player MDL judges – especially lately – seem to get picked because they have a good settlement track record.  Settling judges tend to be what mass-tort plaintiffs like, and therefore these plaintiffs have forum shopped to get MDLs before them. It’s all about settlement leverage.  Settling MDL judges will routinely deny preemption, even where it’s widely recognized, look kindly on new and expansive causes of action, allow plaintiffs to manipulate the bellwether selection process so that only plaintiffs’ best cases get tried, make horrendous evidentiary rulings, and force defendants to try cases with multiple plaintiffs at the same time.

In most of these situations, if the defendant wins – presto – that’s a final judgment and the plaintiffs have an immediate right to appellate review.  If the plaintiffs win, well turnabout certainly isn’t fair play.  There’s no final order and no appeal.  Interlocutory appeals?  Rarer than hen’s teeth.  Why would an MDL judge pushing settlement do that?  In this one-way system, the only way a defendant ever gets to appeal a loss, is after losing a bellwether trial.  In that situation the appellate court has a Hobson’s choice, find a way to affirm or let “years of MDL time and effort go to waste.”

The actual safety of the product is largely irrelevant.  That the FDA reviewed the product and allowed it to be marketed is – if the plaintiffs have anything to say about it – is equally irrelevant. Plaintiff’s counsel, employing reptile litigation tactics, tells the jury in opening statement to, “Send a message to this company that put profits before safety!” or the other favorite, “This is the case of a company that stuck its head in the sand and refused to admit the truth!” Or perhaps. “In this case the defendant tried to hornswoggle the FDA.”  And it goes downhill from there.

Defense counsel responds:  “This is the case of Joe Blow, who:

Saw a doctor who knew everything about the risk at issue, and who didn’t need a warning to decide what to do.

Has expert witnesses who are liars and will say anything for money.

Didn’t [read][follow] the warnings.

Had so many prior risk factors that the injury was waiting to happen.

Recklessly misused the product, which was obtained illegally in any event.

Since we haven’t identified any particular product, we can’t be more specific about how a trial would look, so we picked a few of both sides’ greatest hits.   The jury – between six and twelve people from which any anybody with any relevant scientific background has been excluded − hears from (among many possibilities) neurosurgeons, epidemiologists, pharmacologists, pathologists, biostatisticians, and bioethicists.  Then the jury decides the critical issue:   Who is worse?  The evil defendant or the reckless plaintiff?

Then we start counting.  If the defendant wins most of the trials, the mass tort loses its value, the plaintiffs’ attorneys would rather litigate something else, and one way or another the mass tort goes away with a whimper rather than a bang.  If the plaintiffs ring the bell – often assisted by a punitive damages claim or a consolidation of multiple plaintiffs − the litigation continues for a while, until those awards are overturned on appeal (see Vioxx and testosterone, and we hope Pinnacle Hip) or the risk becomes too extreme for the defendant to continue (see Actos).

Eventually, everyone’s exhausted.  Counsel wrestle with inventories and the aggregate settlement rule, or perhaps cy pres and some sort of settlement class action that even more blatantly favors the plaintiffs’ lawyers over their clients than other forms of mass-tort settlements.  The steering committee gets paid for all the work it supposedly did on all plaintiffs’ behalf, even though they’re free to screw any plaintiffs that don’t settle − since they only owe fiduciary duties to their own clients.

Finally, everyone goes home and tries to figure what else to do for the first time in five years.  So they turn on the tube looking for bad news that’s good for them, or start googling product recalls.

Then the whole thing starts over again.

 

 

Just two weeks ago, we largely praised an MDL court’s handling of sanctions for a plaintiff’s stonewalling in response to discovery obligations, but thought the plaintiff got off pretty light for some really egregious conduct.  Today, we report on a circuit court’s affirmance of discovery sanctions against a plaintiff counsel’s conduct for being overly aggressive in its pursuit of discovery. In light of the holiday today, we will be extra careful in how we describe the plaintiff’s counsel’s conduct and refrain from drawing any conclusion about what the conduct here says about the counsel. We will leave to the reader to decide whether the sanction imposed here—about $25,000 in costs and fees—will have a sufficient deterrent effect and whether the cost of an appeal of a $25,000 sanction after the plaintiff lost summary judgment was worth it.

As you might expect for a case that got to an appeal on a sanction order, the history of Vallejo v. Amgen, Inc., — F.3d –, 2018 WL 4288360 (10th Cir. Sept. 10, 2018), is complicated. Our summary of the pertinent facts is just a summary, with more flavor in the actual case. The case involves an estate suing over a fatal blood cancer called myelodysplastic syndrome (“MDS”) in a patient taking a well-known biologic for psoriasis. Perhaps because of track record of the medication and the relative novelty of the claimed injury, the court ordered that the first phase of discovery should focus on whether the medication can cause MDS. (It appears that the medication has been studied in the treatment of MDS in multiple studies among the hundreds completed over decades.) After disputes arose on the scope of such general causation discovery, the magistrate held a hearing at which presented an expert, who claimed needed every clinical trial on the drug and all information relating to possible effects on “red blood cells, white blood cells, platelets, or any precursor cells for these blood cell lines.” The magistrate concluded that the scope of discovery sought by plaintiff was unreasonable. Ignoring that, plaintiff served broad discovery requests and the defendant objected on scope, burden, and proportionality, offering to produce a range of documents focused on the medication and MDS. Plaintiff sought to require the defendant to search adverse events for 206 terms, but the magistrate “limited discovery to 15 search terms that provided the most specificity to MDS.”

Plaintiff also sought discovery on other medications of the same class and the defendant objected. The magistrate ordered the defendant to product non-public studies on the possible relationship between the medication and MDS. Defendant also offered up a global safety officer for deposition and plaintiff demanded the names of everyone who ever worked on adverse event handling for the medication or had responsibility for any evaluation of its relationship to MDS. The magistrate allowed the plaintiff to depose the safety officer to find out other witnesses as needed. Because the defendant had not submitted affidavits to prove the burden of coming up with a list of just everyone who had worked on the medication over decades, the magistrate advised the parties that they would need to “quantifiably explain the burden of providing the requested information” going forward. Plaintiff sought clarification from the magistrate and appealed the discovery order to the district judge. The district judge denied the appeal, noting the role of proportionality in discovery.

Meanwhile, plaintiff noticed up the safety officer for deposition beyond what the magistrate had ruled was permissible and the magistrate had to issue a protective order until the district court could rule. When the deposition started after the district court’s ruling, plaintiff sought to question beyond the scope of the rulings. The magistrate suspended the deposition for more briefing and to set a time to supervise the deposition when it reconvened. When that happened, plaintiff’s counsel tried to reargue prior rulings, argued with the magistrate, and “asked the witness questions which were explicitly beyond the scope of discovery as ordered by the court.” Thereafter, the magistrate denied a motion to compel additional depositions and document production, noting that plaintiff’s counsel had plenty of information on causation from what had been produced and from other sources. The magistrate also directed plaintiff to disclose the general causation experts her counsel had claimed to have when arguing with the magistrate during the safety officer’s deposition. Plaintiff again appealed and the district court again denied it.

After all this and some more jockeying, the defendant moved for sanctions for plaintiff’s counsel’s “repeated attempts to circumvent the court’s limitations on the first stage of discovery and abused the judicial process.” Defendant sought about $141,000 in fees and costs and the magistrate awarded about $25,000 for a variety of sanctionable conduct. The district court came to the same conclusion on its de novo review after appeal. After summary judgment was granted because plaintiff failed to name a causation expert, despite the claims of her counsel that she had retained one, the appeal to the Circuit Court followed. If are not exhausted after that recap, then you have more tolerance for discovery fights than do most courts we know. You might also reflect on the question of whether the burdensome discovery plaintiff sought and the fights that she initiated on discovery issues were part of a scheme to avoid having to prove general causation.

In affirming, the Tenth Circuit not only reinforced the limits on what counsel can do when they keep losing discovery fights, but provided guidance on some recurring issues in discovery. We start with the final word:

Attorneys are entitled to advocate zealously for their clients, but they must do so in accordance with the law, the court rules, and the orders of the court. The district court properly exercised its inherent power to sanction Vallejo’s counsel, and we find no abuse of discretion.

Focusing on the motion to compel that plaintiff filed after the first attempt at deposing the safety officer, this was easily characterized as “relitigation of issues already decided by the court.” It did not matter whether plaintiff had a basis for the positions that it took initially. As the magistrate held—within its discretion per the Circuit Court—“absent any change in circumstances, filing additional motions raising the same arguments was harassing, caused unnecessary delay, and needlessly increased the cost of this litigation.”

On the issue of proportionality, the Circuit Court affirmed that proof of burden can be established by means other than sworn statements. While statements in a brief (signed by counsel) are not proof, a court may consider “common sense” in evaluating the burden part of proportionality. In this case, it also had plaintiff’s counsel’s demonstration of how many hits a small portion of plaintiff’s preferred search terms produced. So, plaintiff’s counsel could not excuse misconduct by claiming no limits should have been imposed in the first place.

Her efforts to turn the focus to alleged misrepresentations by the defendant’s counsel were similarly rejected, as the Circuit Court was “satisfied that the district court did not rely on misrepresented facts by [defendant] in issuing its discovery orders.” Nor could she shift the focus to how the magistrate conducted the discovery hearing in terms of questioning of defendant’s expert, whose core opinion was that the Biologic License Application had relevant information on causation. Among other things, the district court did not rely on defendant’s expert in limiting the scope of discovery. Plaintiff also tried to claim she should have had access to all the information FDA might consider in evaluating medical causation, but this was a red herring given the difference between FDA standards and court standards, the absence of any MDS signal, and the court’s discretion to limit discovery on general causation. Plaintiff’s last gasp was to claim her case was prejudiced by the sanctions against her, but it was her counsel’s decision to claim she had general causation experts and her failure to name even one when required, instead trying to get by with a designation of an unspecified employee of one of the companies involved with the medication.

In short, plaintiff’s counsel conduct was sanctionable because the court set limits on discovery within its discretion and then plaintiff’s counsel chose to relitigate them and flaunt them until plaintiff lost for the fundamental reason of having no general causation expert. The fact that plaintiff ultimately lost despite pursuing these tactics reinforces that the tactics were obstructionist rather than excusing the tactics themselves. Even on the defense side, where we have been known to litigate aggressively on issues like the scope of discovery and the sufficiency of general causation, Vallejo can be instructive on the need to respect final rulings as the law of the case.

We’ll get to today’s case in a moment, but first, a few words about SCOTUS and expiration dates.

 
One hundred and one years ago tomorrow saw the birth of Lewis Powell, who served as a United States Supreme Court Justice from 1972 to 1987.  Powell succeeded Hugo Black.  More interesting, considering current events, is that Powell was succeeded by Anthony Kennedy. Whether Judge Brett Kavanaugh succeeds Justice Kennedy is a matter of some some controversy.  One reason for that controversy is that Justice Kennedy was often a swing vote.  In a prior post, we recounted our one close encounter with Anthony Kennedy.  He impressed us a smart jurist who was determined to do the right thing.  Still, it must have seemed somewhat vexing to SCOTUS litigants that everything likely turned on the predilections of one Justice.  The other eight Justices often seemed predictable, almost a done deal.  But Justice Kennedy, at least on some issues, was the wild card.  We have no evidence that Justice Kennedy purposely positioned himself as the swing vote, or that he reveled in his inflated importance, but his importance as a swing vote was undeniable.
 
We have also seen no evidence that Justice Kennedy patterned himself after his predecessor, but it is remarkable how similar they were in locating themselves right at the center of the Court.  Justice Powell was often a swing vote.  If our affirmative action jurisprudence is a bit of a mess, some of the blame for that must go to Justice Powell, whose controlling opinion in the 4-1-4 landmark Bakke decision created a slippery standard that sprung from Powell’s idea of the perfect academic affirmative action program – the Harvard College admissions system.  Even back in 1978, it was pretty obvious that the Harvard system was not quite the holistic, individual-respecting scheme that Powell portrayed. (The legal defense of U.Cal Davis Medical School’s affirmative action program was entrusted to the great Archibald Cox.  During oral argument, Justice Blackmun asked whether the set-aside seats could be compared to athletic scholarships.  Cox replied, “Well, I’m from Harvard … “ – laughter intervened – “I don’t know whether that’s our aim, but we don’t do it very well.”)  Given the current lawsuit challenging Harvard admission policies, the Bakke compromise and its progeny seem even more fragile.  

The story of how Powell came to be appointed to the High Court was told in Bob Woodward’s book, The Brethren. (We hear Woodward has another book out.)  President Nixon was politically hobbled in 1972.  In trying to fill an earlier SCOTUS vacancy, Nixon had two of his selections rejected by the Senate.  Powell was an interesting choice.  He was from Virginia, which fit in with Nixon’s southern strategy.  But Powell would not fit into what we now consider the usual mold.  He had never been a judge. (Black had been a senator, not a judge.  Chief Justice Warren had also been a politician.  Douglas headed the SEC. It used to be acceptable for Justices not have to have a judicial track record.  Why the change?). Powell was a corporate lawyer. He represented the tobacco industry. He was a leader in the ABA.  He wrote a famous memo about how corporate America should deal with a hostile media.  There were plenty of reasons why Nixon would have liked Powell.  But there was one important reason why Powell would be acceptable to Senators who weren’t enamored with Nixon: Powell was 64 years old.  Woodward reported that a Senator waved a cigar and told Powell why he would be confirmed: “We think you’re going to die.”  (Powell himself was not all that fired up to join SCOTUS.  He had turned down an earlier offer.  He did not think he had the constitutional law chops of a Douglas, Black, or Brennan.  Plus, he was not eager for the huge pay cut.)

Recently John Oliver’s Last Week Tonight show argued for eliminating life tenure for judges.   Oliver supported a proposal for staggered 18 year terms.  (Powell served 15 years on SCOTUS.)  Every four year presidential term would include an opportunity to appoint at least two SCOTUS justices.  The system would permit reasonable turnover.  It would avoid the dangers of a gerontocracy.  It might somewhat reduce the temperature of SCOTUS confirmation hearings, since there wouldn’t be a multigenerational impact at stake.  Such a change would require a constitutional amendment.  Spoiler alert: it won’t happen.  But while we’re just dreaming, we have another reason for cuddling up to this idea.  When presidents harbor the hope of appointing a Justice who will support certain policies/rules for thirty years, that means they will select relatively young people.  That elevate-them-when-they-are-young approach also offers the advantage of proffering someone with a limited paper record and a limited target area for skeptical senators. Thus, instead of a SCOTUS appointment being the capstone of a long, distinguished career, it is more and more conferred on jurists in mid-career.  As we slouch toward dotage, we less and less like the idea of such important jobs going to juveniles.  Frankly, we hate seeing presidents and Supreme Court Justices younger than ourselves.  It is an annoyance almost as painful as being forced by some website to enter our birth year in a drop down menu, and scrolling down and down.  And down. 
[Quick quiz: Which Supreme Court Justice served the longest term?  Answer below.]

Why are we pondering these issues at this moment?  Obviously, the ongoing Kavanaugh kerfuffle is top of mind.  We also find ourselves ruing life tenure when we read a judicial decision that seems gruesomely wrong-headed.

And now we get to today’s case.  
 
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In Sumpter v. Allergan Inc., 2018 WL 4335519 (E.D. Mo. Sept. 11, 2018), the plaintiff brought suit over ruptured silicone breast implants.  The implants were premarket approval (PMA) medical devices.  As the Sumpter court acknowledges, the Medical Device Amendments Act “preempts claims challenging the safety and effectiveness of … PMA devices.”  Federal law dislodges any state laws (including via jury verdicts) that are “different from, or in addition to, any requirement applicable under [federal law].”  In the face of this rather clear preemption, the plaintiff in Sumpter ditched her design defect and failure to warn claims.  All that was left was the claim for manufacturing defect.  And here begins the Sumpter court’s descent into sheer awfulness.  As a preliminary matter, the Sumpter court tells us that, “[g]enerally, manufacturing defect claims that allege the ‘manufacturer failed to adhere to the specifications imposed by a device’s PMA’ are not preempted at the pleading stage.”  That quote is from the 2009 Hofts decision out of the Southern District of Indiana.  More than once, this blog has derided Hofts for its mangling of Riegel and Twombly and Iqbal.  Hofts made our list of the ten worst decisions of 2009.  Most courts that have considered Hofts have rejected it.  But not the Sumpter court.  If anything, Sumpter manages to multiply Hoft’s errors.  First, the plaintiff, as is all too typical, never comes close to specifying what the manufacturing defect was.  Second, the Sumpter court’s standard for assessing what constitutes a manufacturing defect is altogether wrongheaded.  A manufacturing defect happens when the product is out of spec from its design,  Something about the particular product is different from a product that is manufactured correctly.  Maybe something is in there that shouldn’t be, or something is missing.  Ot a component was flawed.  But that is not the Sumpter court’s test.  No, the Sumpter court concludes that a claim for manufacturing defect will lie when plaintiffs say that the products differed from the “intended result.”  What does that mean?  Presumably, a case was brought because someone was injured.  That is never the “intended result.”  Does “intended result” end up requiring a perfection that exists nowhere in the law, on any assembly line, in any product portfolio, or, indeed, on our planet? Moreover, the mere existence of a malfunction cannot, by itself, give rise to an inference that the manufacturer violated the FDCA.  Where is there any basis to invoke the infernal Riegel “parallel violation”?  Through the Sumpter looking-glass, every product liability case contains a manufacturing defect claim destined for a jury.  
 
The closest the plaintiff came to articulating a semi-specific manufacturing defect claim was an allegation of “material fatigue.”  Was there any hint in the case that the materials in the implants at issue were in any way out of spec, or different from the norm?  Nope.  Rather, the plaintiff “extrapolated from the injuries” that “there must have been a manufacturing defect.”  Goodbye TwIqbal.  Goodbye whatever is the relevant state law on manufacturing defect.  Hello, new-fangled res ipsa loquitur theory, even though the Sumpter court never uses those magic Latin words.  Under the Sumpter court’s reasoning, once one claims injury from a product, there’s a manufacturing defect that is immune from a motion to dismiss.  (Unless, one supposes, one is in an outlier case where the product was intended to inflict injury.  And then, surely, there is another legal claim at hand.)  The Sumpter court has defectively manufactured a tort claim that, by all rights, should be dismissed based on well-established, clear SCOTUS precedent.
 
The only consolation is that, as we have pointed out many times before, manufacturing defect claims are hard to win.  The odds are long against the likelihood that the plaintiff will ever demonstrate a true manufacturing defect.  Then again, erroneous jury instructions could wreak havoc in favor of even an empty claim, and how can we predict that won’t happen?
 
Justice Powell once said that history “teaches us tolerance for the human shortcomings and imperfections which are not uniquely of our generation, but of all time.”  Tolerance, indeed.  Plus, unlike with SCOTUS, the Sumpter court might some day get reviewed by a higher court.  And then there is the highest authority of all: the DDL blog ten-worst list at the end of this year.  
[Answer to question:  William O. Douglas sat on the High Court for 36 years and 211 days.  He was confirmed at the age of 40.  The judge we clerked for had clerked for Douglas, and could never utter WOD’s name without a growly follow-up along the lines of “…that bastard.”  Apparently Douglas, while being brilliant and charismatic, was not always very nice.]

Although they have nothing to do with the Affordable Care Act, health-care-related so-called “death panels” do exist.  These panels are operated by state agencies and private health insurance companies, and they decide whether to reimburse as “medically necessary” (or some similar definition) any type of medical care that comes into question.  They’re an unfortunate necessary – quackery should not be reimbursed.  But such panels used to reject any form of off-label use, until states and the federal government passed laws and regulations telling them that they couldn’t.  As we’ve explained elsewhere, off-label use can frequently represent the medical standard of care.

But in Harborth v. State, ex rel. Dep’t of Workforce Services, ___ P.3d ___, 2018 WL 4011635 (Wyo. Aug. 22, 2018), we ran into one of the limits to those protections – and to off-label use – that we haven’t seen in a published opinion in quite some time.  Something isn’t “off-label” when there is no FDA-approved label at all. The Wyoming Supreme Court affirmed a coverage denial of therapy involving the implantation of a medical device that had never been approved by the FDA for labeling and marketing for any intended use whatsoever.

How could that happen?

The FDA only regulates prescription medical products in the United States.  In Harboth, the claimant had a history of chronic back problems.  Ultimately the state worker’s compensation panel approved a rather expensive and involved surgical procedure:

a foraminotomy at L4-5 and transforaminal lumbar interbody fusions (TLIF’s) at both L5-S1 and T12-L1.  [Claimant] testified that [the recommended] surgery would cost approximately $400,000.

2018 WL 4011635, at *1.

Before agreeing to cover this surgery, the state required “two peer reviews.”  Id.  That took some time, and in the interim, the claimant got cold feet.  Id. at *2.  She was also in “excruciating pain” waiting for worker’s comp. to make up its mind.  Id. at *3.  The claimant investigated various treatments for her condition online, and learned about “artificial disc replacement surgery using the ‘M6’ artificial disc.”  Id. The surgeon who performed this procedure was in Germany.  The claimant crossed the pond and had the surgery.  Not only was it “successful,” but it cost a fraction of the $400,000 that the “death panel” was prepared to pay for the other type of surgery.  Id. at *4 (surgery was “appeared to be a success”), *10 (“surgery cost[] $340,000 less than [the initially proposed] procedure”).

The state’s version of a “death panel” nonetheless “denied compensation for the surgery, finding that it was not reasonable and necessary medical treatment.”  Id. at *3.

Why?

Because it could. The relevant reimbursement guidelines authorized payment for “off-label use,” but the M6 device had only received governmental approval for use in the European Union, and not from the FDA. Id. at *3 (“there has been no United States FDA approval of the M6-L disk replacement system”).

If the surgery had really been “off-label use” (ironically, a basis for the denial of the claim by the panel), then the claimant may have had a chance:

Rules recognize optional approaches to verifying that a procedure or device lacking FDA approval is reasonable and necessary. . . .  For “off-label use of medical services,” the health care provider must submit a comprehensive review of the medical literature supporting the off-label use, including “at least two (2) reliable prospective, randomized, placebo-controlled, double-blind trial[s].”

Harborth, 2018 WL 4011635, at *5 (citations to various rules omitted).

But the procedure had to involve “off-label use” in order to fit under these rules.  “‘Off-label use of medical services’ is defined as:  ‘Medications, treatments, procedures or other medical services used for other than the approved Food and Drug Administration (FDA) indications.’  Id. at *6 (citation and quotation marks omitted).  Off-label use is OK:

[O]nce the FDA has cleared a device for introduction into the stream of commerce, physicians may use the device in any manner they determine to be best for the patient, regardless of whether the FDA has approved the device for this usage.  This practice by physicians is known as “off-label” usage.

Id. (citation and quotation marks omitted).  But for the use of a device to be “off-label,” that device must first have been approved for marketing and labeling by the FDA for something.  The M6 wasn’t:

“[O]ff-label” medical service [i]s one that deviates from a use that has been approved by the FDA. . . . Under . . . the Division Rules, the plain definition of “off-label” use does not encompass the surgical implantation of an M6 artificial disc adjacent levels. The M6 artificial disc is not approved for any use by the FDA.  Thus, there is no “label” from which a medical provider may deviate.

Id. (citations and quotation marks omitted) (emphasis added).

Because the rules and regulations under which the state’s workers compensation system operated were “clear and unambiguous” in defining off-label use, nothing else mattered.  It didn’t matter that the claimant appeared to have a better prognosis (she returned to work, which was questionable under the other surgical alternative).  It didn’t matter that the surgical option the claimant pursued saved the state hundreds of thousands of dollars.

[Claimant] urges us to consider the success of her surgery as documentation of its safety and effectiveness. . . . [I]t may be tempting to weigh the actual outcome of surgery into the determination of compensability. Because [she] underwent surgery costing $340,000 less . . . and returned to her previous work duties with no restrictions and no pain medication, the evidence of her outcome is especially compelling. However, . . . it would be unreasonable to view the outcome of a medical procedure as a factor that trumps all others. [The] . . . Rules do not award compensation for medical treatments only if they are “successful” . . .; instead, in order to receive medical benefits, a claimant must show that his treatment is “reasonable and necessary.” A patient might fail to respond to reasonable and necessary medical treatment; and, likewise, a patient may benefit from elective, “unnecessary” medical treatment.

Id.  Anecdote, unfortunately for this claimant, is not data.  “A claimant’s successful surgery is only a single instance of success, and is not a substitute for objective and verifiable medical data demonstrating the procedure’s overall record for safety and effectiveness.”  Id.

It’s been a long time since we’ve seen a court draw this distinction.  In Gaston v. Hunter, 588 P.2d 326, 330 (Ariz. App. 1978), the court held that informed consent rules applicable to off-label use do not apply to an “experimental” medication that had not yet received FDA approval for anything, and was still under clinical investigation.  Similarly, in Retkwa v. Orentreich, 584 N.Y.S.2d 710 (N.Y. Sup. 1992), it was not off-label use to employ “liquid injectable silicone” in surgery where the material was not being sold as a medical device at all (a prior opinion in the same case called it “non-medical grade”).  “It is a reasonable assumption that most patients, confronted with a doctor’s recommendation for injection of a foreign substance, presume that such substance has been the subject of official testing, consideration, and approval.”  Id. at 712 n.6.

Whatever ones opinion of the third-party payor would-be “death panels,” and whether or not the “ends” in Harborth should have justified the means, the decision is a reminder that not everything that doctors do with FDA-regulated prescription medical products fits neatly into the two categories of “labeled use” (called “intended use” by the FDA) and “off-label use.”  With the Internet making ever more medical information (and disinformation) available without regard to national borders, we would not be surprised to encounter more cases where the distinction drawn in Harborth is relevant.

We have always had a soft spot for zebras.   They are the equine world’s version of some of our favorite acquaintances — the ones who always dress a little outlandishly and always stand out from the crowd. (Fun facts:   1. Although most zebras have black stripes on a white background, a white-on-black specimen shows up every now and again.   2. All zebras have dark-pigmented skin under their coats, and the stripes are only hair-deep. Compare Dalmatians, whose spots are visible on their skin from the birth, though the spotted fur comes later.)   Zebra fondness aside, we often find ourselves, in our ongoing occupation of the mass tort space, arguing that plaintiffs hearing hoof-beats should have thought “horses,” not “zebras.” Less obtusely, we mean that judges should apply the discovery rule correctly and should hold that suits are time-barred when plaintiffs with adequate information fail to make obvious causal connections within the correct limitations period.

That is why we were so happy to read today’s case. We rarely report on statute-of-limitations decisions, but Adams v. Zimmer, 2018 U.S. Dist. LEXIS 136707 (E.D. Pa. Aug. 14, 2018), is a worthy exception.   In Adams, the plaintiff underwent surgery to replace her right hip joint, and was implanted with the defendant’s prosthetic hip, in January 2011. Eight months after surgery, in September 2012, she began experiencing pain in the region of the artificial hip. When the pain didn’t abate, the plaintiff’s doctor performed blood tests to test her metal ion levels because there had been reports of adverse local tissue reaction to the metals used in the artificial hip. There was no definitive diagnosis at that time, but the plaintiff’s doctor testified that, by February 2013, he informed the plaintiff that the prosthetic hip might be causing her symptoms.

The plaintiff dislocated her right hip in November 2014.   She testified in deposition that she knew that the prosthetic hip had dislocated and that this was “abnormal.” On January 7, 2015, her doctor noted in his records that he recommended “further investigation of the right hip,” and that the plaintiff might require surgery to replace the femoral head. 2018 U.S. Dist. LEXIS 136707 at *9. In deposition, the doctor testified repeatedly that he had informed the plaintiff of his recommendation and of the possible need for revision of the artificial hip. Testing performed on January 12, 2015 confirmed a tissue reaction to the artificial hip, and, by January 30, 2015, the plaintiff had decided to proceed with hip revision surgery. In her deposition, she testified that she understood that the surgery would involve replacing the defendant’s device with a new prosthesis. She underwent surgery on February 12, 2015 and filed her complaint on February 10, 2017. The defendant moved for summary judgment, arguing that Pennsylvania’s two-year statute of limitations barred the plaintiff’s claims.

The plaintiff argued that she “did not make the factual connection” between her injury and the defendant’s device until the date of surgery.  Id. at *20. If this were true, then she would have beaten the statute by two days. But the judge wasn’t buying it. Explaining that “as soon as, through the exercise of reasonable diligence, the injured party should be able to link her injury to the conduct of another, the clock begins to run,” id. at *23-24, the court held that the plaintiff “knew or should have known that the [defendant’s device] was a factual cause of her injury by the time she decided to proceed with hip revision surgery on January 30, 2015.” Id. at *26. In other words, “once [the plaintiff] knew for certain that [her doctor] needed to remove the [device], she had received enough facts to make the connection between her injury” and the device, and “no reasonable juror could conclude otherwise.” Id. at *27. Nor was the court swayed by the plaintiff’s argument that, even if she knew that the device was causing her symptoms, she did not know it was “defective” until it was removed. The court emphasized, “This misstates the legal standard,” which required only that the plaintiff connect her injuries to the device to start the clock running on her claims. Id. at 31. Finally, while the court acknowledged that the plaintiff hadn’t missed the running of the statute by much, and that granting summary judgment would deny the plaintiff recourse for serious injuries, it held that it could not “arbitrarily enforce the statute of limitations,” however sympathetic the plaintiff, and that it was “constrained to grant the motion for summary judgment.” Id. at *33-34.

We have been on the receiving end of all of the arguments the plaintiff made in Adams. And we have fought – not always successfully – for decisions that apply the law rigorously and aren’t swayed by sympathy. We are pleased that the Adams court did just that.

We sometimes sit around trading stories about the dumbest lawsuits we have ever seen. Our personal favorite is a class action that the Drug and Device Law Spouse defended years ago seeking damages against a national shipping company because items sent by “Second Day Air” did not always go in an airplane.  The packages arrived as promised, but the plaintiffs were shocked, shocked to learn that items sent from San Francisco to Palo Alto were carried in an ordinary (and Earth-bound) truck.  There is also the one about the guy who sued his dry cleaner for $67 million after the cleaner lost his pants.  It was reported that the cleaner showed up in court and tendered the trousers—cleaned and pressed.  The plaintiff was unimpressed.

Many cite the famous McDonald’s coffee spill case of the 1990s as a dumb and frivolous lawsuit, but at least that plaintiff suffered a serious injury—third degree burns that required skin grafts and an extended hospital stay. It was uncontested that the coffee drinker had standing to sue, regardless of what you think about the ultimate allocation of fault.

We cannot say the same for the plaintiff in a class action that an MDL judge in New Jersey dismissed last year for lack of standing, which the Third Circuit has now affirmed. In In re Johnson & Johnson Talcum Powder Products Marketing, Sales Practices and Liability Litigation, No. 17-2980, 2018 WL 4225028 (3d Cir. Sept. 6, 2018), the plaintiff used the defendants’ talcum powder, which worked exactly as it was supposed to without any ill effect.  She did not allege any defect in the product; she did not allege any injury or disease; she did not allege any increased risk of injury or disease; and did not allege any fear of developing any injury or disease in the future. Id. at *2.  She also allegedly used up the product. Id. In other words, there was no durable good or remaining product that she claimed she could not use.  Whatever she purchased, she used it until it was gone. Id.

What a frivolous lawsuit that no intelligent and scrupulous lawyer ever should have filed, right? Well, not exactly.  The district court’s order dismissing the case and the Third Circuit’s opinion affirming that result are clearly correct.  And, “frivolous” is probably a fair description.  Be that as it may, this class action was not a random misfire conceived in the minds of attorneys who didn’t know any better.  This class action was a deliberate and calculated attempt to test the limits of Article III standing and to stretch even further the wrongly decided opinion on standing in Cottrell v. Alcon Laboratories, the Third Circuit opinion that we ranked as the fourth worst drug and device decision of 2017.  That was the opinion where the Third Circuit held that purchasers of eye drops had standing to sue, even when the product labeling was indisputably accurate and the product worked exactly as expected.  How then did the eye drop purchasers suffer any compensable injury?  The bottle dispensed drops that were too big, allegedly resulting in the users paying more than they should have.  We are being charitable in our description of Cottrell.  In fact, the allegations of injury there were too speculative to support standing, as other another Circuit has found and as we have explained here, here, and here.

But at least the plaintiffs in Cottrell attempted to plead an economic injury.  The plaintiff in the J&J Talcum Powder case wanted to take Cottrell one step further by establishing standing to sue while affirmatively pleading no injury at all.  She and her lawyers lost.  The plaintiff in J&J alleged that she suffered an economic injury because, had she been informed that using baby powder could lead to an increased risk of ovarian cancer, she would not have purchased the powder in the first place. Id. at *2.  In other words, she had buyer’s remorse and sincerely wished she had not purchased the product after she consumed it with no harm or worry. Id. at *1.

Those facts did not allege an economic injury. As the Third Circuit explained, there are generally three ways to plead an economic injury.  A plaintiff can allege an “alternate product theory” by alleging that, but for the defendant’s conduct, he or she would have purchased an alternative, less expensive product.  A plaintiff can also allege a “premium price theory,” under which he or she claims that wrongful advertising of a product as “superior” induced the plaintiff to pay an unfair premium.  Finally, a plaintiff can allege that he or she was deprived of the “benefit of the bargain” and did not get what he or she paid for.

The plaintiff’s allegations missed all of these theories. She did not allege that any cheaper alternative existed, and she did not identify any unlawful “premium” paid for her powder. Id. at *2-*3.  As for the “benefit of the bargain,” she alleged only that she was promised that the baby powder was “safe,” when it allegedly was “unsafe” because of an increased risk of ovarian cancer. Id. at *3.

Let’s keep one thing straight. We do not believe there is any reliable scientific evidence that talcum powder can cause ovarian cancer, and we reported on a California court finding exactly that here.  But even taking the plaintiff’s allegations as true, conclusory allegations of purchasing an “unsafe” product did not establish an economic injury sufficient to support Article III standing.  Distinguishing Cottrell, the Third Circuit held that “a plaintiff must do more than offer conclusory assertions of economic injury in order to establish standing.  She must alleged facts that would permit a factfinder to value the purported injury at something more than zero dollars without resorting to mere conjecture.” Id. at *4.

Having used the product, and having failed to allege any injury or even an increased risk or fear of injury, the plaintiff did not have the facts. So what did she offer instead?  A promise of “models for calculating damages and restitution that are linked to her theory or relief and are based on the evidence in the case.” Id. at *6.  Aha, the experts will take care of it all in “models.”  Forgive us for being skeptical, but also give the Third Circuit credit for insisting that a plaintiff still must allege facts:

[E]ven at the pleading stage, a plaintiff must set forth sufficient factual allegations that, if proven true, would permit a factfinder to determine that she suffered at least some economic injury.  . . .

[Plaintiff] fails to allege even that the Baby Powder provided her with an economic benefit worth one penny less than what she paid. We must, therefore, conclude that she received the benefit of her bargain and has suffered no economic injury.

Id. at *7.  The Third Circuit also ruled that an alleged increased risk to others did not count because the plaintiff’s “references to Baby Powder being unsafe to others are not relevant to determining whether [she] has standing herself.” Id. at *8 (emphasis in original).

The Third Circuit found the plaintiff lacked standing to sue for restitution and injunctive relief for similar reasons: Her restitution claim rested on mere conjecture, and her claim for injunctive relief made no sense because she was not at risk of suffering an economic injury.  We don’t blame the plaintiffs’ lawyers for trying to stretch Cottrell beyond the breaking point, but in the end they did not succeed.  The Third Circuit summed it up this way:  “[Plaintiff’s] wish to be reimbursed for a functional product that she has already consumed without incident does not itself constitute an economic injury within the meaning of Article III.”  Amen.

This isn’t the first time we’ve written about the Hyde case in the Bard IVC Filters MDL.  Back in July we reported on some pretrial rulings in that bellwether case.  Get ready for more.  The decision on tap for today, Hyde v. C.R. Bard, Inc., 2018 WL 4215028 (D. Arizona Sept. 4, 2018), is sort of a man-bites-dog item, as it involves a motion in limine by the plaintiffs to exclude warnings information.  Generally, we on the defense side are the ones arguing to keep prejudicial information out, so the posture of Hyde is interesting.  Just in case you haven’t committed the facts of Hyde to memory, here’s a refresher:  Mrs. Hyde received an IVC filter implant in 2011.  Three years later, she learned that the filter had tilted, perforated the IVC wall, and fractured.  The plaintiffs brought a lawsuit sounding in various theories.

[Interlude for discovery.  Interlude for motion practice.]

Applying Wisconsin law, the Court granted summary judgment on the failure to warn claims. (As we reported back in July, the plaintiffs proffered no evidence that a different warning would have inspired the doctor to employ a different device or do anything differently.)  That ruling left claims for strict liability design defect, negligent design, negligence per se, loss of consortium, and punitive damages.  In advance of trial, the plaintiffs filed a motion to exclude the device’s instructions for use (“IFU”) and certain guidelines published by the Society of Interventional Radiologists (“SIR”).  Usually, plaintiffs love to trot out the IFU and point out offending lacunae. What’s different here?

The plaintiffs argued that because the failure to warn claims had been dismissed, the instructions and warnings set forth in the IFU were no longer relevant to any issue in the case and should therefore be excluded.  Similarly, the plaintiffs argued that the SIR guidelines, which evinced the knowledge of IVC filter complications in the medical community, were no longer relevant in the wake of dismissal of the failure to warn claims.  According to the plaintiffs, design defect must be tested against consumer expectations, and the IFU and SIR guidelines play no role with respect to such consumer expectations.   Plainly, the plaintiffs wanted the IFU and SIR guidelines out.  The defendants wanted them in.   We’re guessing the IFU warnings must be quite clear and that the SIR guidelines must be quite helpful for the defense.

Luckily for the defendants, Wisconsin law was quite clear and quite helpful for them.  In 2011, the same year as the plaintiff’s implant, the Wisconsin legislature enacted tort reform that included adoption of  section 2 of the Restatement (Third) of Torts (1998).  (We wrote about the cheesehead tort reform here.)  Section 2 employs a risk-utility balancing test and consideration of a broad range of factors, including the instructions and warnings accompanying the product.  Consumer expectations are in that broad range of factors, but no longer make up the whole ballgame. They definitely are not a basis for excluding information otherwise relevant to safety.

Under post-2011 Wisconsin law, a jury must consider not only whether there was a reasonable alternative design, but also whether a failure to adopt that design rendered the filter “not reasonably safe.”  Can the IFU and the SIR guidelines help a jury answer that question?  Almost certainly, yes.  The SIR guidelines lay out the acceptable rates of risk in IVC filters. Thus, they are relevant to the jury’s determination of whether the filter was reasonably safe.  The IFU tells physicians about risks of the filters and how to mitigate them.  That information, too, is relevant in determining whether the filter was reasonably safe.  The defendants are free to argue to a jury that the warnings provided with the filter “disclosed the risks of complications, that the medical community was aware of those risks and found them to be acceptable, and that the omission of an alternative design therefore did not render the filter ‘not reasonably safe.’”

Moreover, the IFU and SIR guidelines are relevant to the plaintiffs’ punitive damages claims.  The plaintiffs will surely try to persuade the jury that the defendants acted with “malice.”  But what the defendants, via the IFU,  told physicians about the device’s risks is relevant to whether the defendants acted with “intentional disregard for patient safety.”   The SIR guidelines are relevant to the defendants’ “awareness of filter complication rates and the extent of harm posed by filter complications, and can also inform the jury of risk levels found acceptable by interventional radiologists – a relevant fact for deciding whether Defendants ‘acted with a disregard for patient safety.”

We began this post by remarking how odd it seemed that it was the defense that wanted warnings information in, and the plaintiffs that wanted it out.  It also seems a bit odd to us that it is the plaintiffs who are insisting on a strict line of demarcation between different tort theories (failure to warn vs. design defect), and the defense who treat the line as kind of fuzzy.  But we’ve seen something like this before.  You needn’t strain your memory too much to recall how in the Bartlett case the plaintiff tried to evade preemption by arguing that the case was only about design defect and that failure to warn was out of bounds.  The defense demonstrated that there were aspects of the design defect claim that were implicated by preemption principles.  The result was a resounding defense SCOTUS victory that many of us are trading heavily on today and expect to do so for a good long while.

“Thinking out of the box” has become a hackneyed phrase, but sometimes it is perfectly accurate.

 

 

One of our primary goals is to bring you the latest and greatest news in the drug and device litigation world. But sometimes we don’t learn of a case at the time it’s decided. So, then we need to move on to another of our guiding principles – if it’s good for the defense, we talk about it. So, while today we happen to have come upon a case that was decided in 2017, it dovetails with our recent post Taking Out the Laundry With TwIqbal where we talked about plaintiffs’ attempts to bluff their way to a valid parallel violation claim. And that’s exactly what the plaintiff in Rand v. Smith & Nephew, Inc., 2017 WL 8229320 (C.D. Cal. Apr. 5, 2017) tried to do. Plaintiff put together a “laundry list” of allegations that the defendant’s device violated with no hint of what exactly the defendant did that was in violation. In our prior post we commented that “most courts are willing to use TwIqbal to call bull$%@&! on these types of allegations.” Fortunately, Rand can be added to that list.

The device at issue in Rand is a hip resurfacing prosthesis that underwent pre-market approval from the FDA. That’s why we are talking about parallel violation claims. Following a nice Riegel analysis, the court looked at plaintiff’s allegations for each cause of action.

Strict liability: Under California law, this is a claim for a design, manufacturing and warning defect. Because the FDA reviews “device design, manufacturing processes, and device labeling” as part of the PMA, “the MDA preempts state-law claims against these three aspects of PMA-compliant devices.” Id. at *4. So, plaintiff made 2 laundry lists – one of “various federal regulations” and another of defendant’s alleged misconducts. Double the nonsense.

First, plaintiff included regulations that go to the adequacy of defendant’s PMA application. “But FDA’s approval demonstrates the agency’s reasonable assurance of [the device’s] safety and effectiveness based on the application.” Id. So any claim premised on those regulations is preempted. Second, the court moved on to TwIqbal finding some allegations so poorly pleaded that it is “impossible to determine whether they add to federal requirements and hare hence preempted.” Id. Finally, some allegations were completely conclusory.

Plaintiff’s second list wasn’t much better. Not only did it include conclusory allegations – basically just speculation – but plaintiff also included alleged misconduct that was irrelevant. For example, plaintiff alleged wrongdoing regarding device components used in off-label combinations but plaintiff was implanted with such a combination. In other words, plaintiff was tossing pasta at the wall and just hoping something stuck. That’s not good enough under TwIqbal.

The only allegation that made the cut was failure to report adverse events. Id. This is California, so it’s to be expected.

Negligence: This largely mirrors plaintiff’s strict liability claim and suffers the same fate. The only new “misconduct” included in the negligence count was about defendant’s withdrawal of the device for “demographics groups” to which plaintiff didn’t belong. Irrelevant. Id. at *5. And, plaintiff surmised that defendant’s breach proximately caused his injury but provided no support for that allegation. Id. The entire negligence claim was dismissed.

Breach of express warranty: Again, most of plaintiff’s allegations are insufficient:

Without more details, the statements that [defendant’s] devices are of merchantable quality, safe, effective, and fit and proper for its intended use are no more than an affirmation merely of the value of the goods or a statement purporting to be merely the seller’s opinion or commendation of the goods. Such unspecific statements do not create a warranty.

Id. (citation and quotation marks omitted). The court did find that a press release cited by plaintiff created an express warranty but plaintiff failed to allege how the press release violated any PMA requirement. Without that, the claim was dismissed without prejudice.

Breach of implied warranty: This claim was preempted:

Both types of implied warranties involve an assertion that the goods are fit for then intended purpose. Implied warranty of merchantability further imposes labeling requirement and requires that the goods conform to the statements on the label. But these conditions are precisely what a PMA entails. Thus, unless the defendant violates these conditions under the PMA, § 360k(a) expressly preempts this claim.

Id. at *6 (citation omitted). Since plaintiff used the device for the purpose the FDA approved – no breach of implied warranty claim.

Fraudulent concealment: Here again plaintiff attempts to rely on a failure to report adverse events to state his claim. But essential to a fraud claim is that defendant had a duty to disclose the concealed fact to plaintiff. Id. We think this negates failure to report as a basis for strict liability as well and we’ve made our views on that clear many times. Here, plaintiff didn’t allege that federal regulations require defendant to report adverse events to plaintiff – nor can he because that’s not the law. That means that this would be an “additional requirement” which is preempted. Id..

The claim also failed for no allegation of intentional concealment by defendant and for not satisfying Rule 9(b)’s heightened pleading requirement for fraud. Id.

It may not be the latest and greatest, but it adds to the wealth of decisions tossing plaintiffs’ multi-paragraph list of violations which are a lot more bark than bite.

In the early days of the Blog, in 2009, when Bexis and Mark Herrmann were operating in relative obscurity, we posed the question whether it was ethical to remove to federal court a case that may well be non-removable and hope that opposing counsel is “asleep at the switch”:

“Heck, I’ll remove it anyway.  Opposing counsel may be asleep at the switch and not file a motion to remand within 30 days.  If plaintiff doesn’t timely move to remand, the objection to removal is waived, and my case can be tried to judgment in federal court.”

Is that ethical?

We received one response, which we discussed, that an:

attorneys’ first obligation should be to the integrity of the legal system, and not to their clients’ interests.  Even so, I’m not sure I’d say ‘no’ to either question, given that a yes answer means that incompetent attorneys who don’t realize they are violating the rules would have an advantage over competent attorneys.

With that the issue dropped off the radar.

That question returned to our minds when we researched our recent post on removal before service.  We came up with case after case holding that the so-called “forum defendant” rule was waivable, not jurisdictional, and thus that failure to move for remand in a case that featured complete diversity of the parties – but a defendant located in the forum state – was waiver so that the case stayed in federal court.  That means if a defendant is savvy enough to remove before service in accordance with the express terms of 28 U.S.C. §1441(b)(2), and opposing counsel is, as we said before, “asleep at the switch,” the removal succeeds regardless of a court’s substantive views on removal before service.

For example, in one of our removal before service cases, Selective Insurance Co. v. Target Corp., 2013 WL 12205696 (N.D. Ill. Dec. 13, 2013), the court held:

Plaintiff asserts §1441(b) (2) − the “forum defendant rule” − as a basis for remand, arguing that because defendant . . . is an Illinois citizen, removal was improper.  This rule is statutory, not jurisdictional, and thus may be waived or forfeited.

Id. at 1 (citing Hurley v. Motor Coach Industries, Inc., 222 F.3d 377, 379 (7th Cir. 2000)).  The cited Hurley decision held just that:

We must decide, therefore, whether the forum defendant rule is jurisdictional, in the sense we have been using the term, or if it is of a lesser status.  That question has been bouncing around the federal courts of appeals for more than 75 years, yet oddly enough it remains unresolved in this circuit.  The overwhelming weight of authority, however, is on the “nonjurisdictional” side of the debate.

Id. at 379. Hurley cited the following “overwhelming” precedent supporting the waivability of the forum defendant rule.  Snapper, Inc. v. Redan, 171 F.3d 1249, 1258 (11th Cir. 1999); Korea Exchange Bank v. Trackwise Sales Corp., 66 F.3d 46, 50 (3d Cir. 1995); In re Shell Oil Co., 932 F.2d 1518, 1522 (5th Cir. 1991); Farm Construction Services, Inc. v. Fudge, 831 F.2d 18, 21-22 (1st Cir. 1987); Woodward v. D. H. Overmyer Co., 428 F.2d 880, 882 (2d Cir. 1970); Handley-Mack Co. v. Godchaux Sugar Co., 2 F.2d 435, 437 (6th Cir. 1924), with only Hurt v. Dow Chemical Co., 963 F.2d 1142, 1145-46 (8th Cir. 1992), going the other way.

Another pre-service removal case reached the same conclusion.  The court in Almutairi v. Johns Hopkins Health System Corp., 2016 WL 97835 (D. Md. Jan. 8, 2016), stated:

I am unaware of any specific guidance from the Supreme Court or the Fourth Circuit concerning whether a motion to remand based on the “forum defendant rule” constitutes a procedural or a jurisdictional challenge to removal.  See Councell v. Homer Laughlin China Co., 823 F. Supp. 2d 370, 378 (N.D.W. Va. 2011) (recognizing that the Fourth Circuit “has yet to rule on this question…”).  However, “[o]f the ten circuits that have spoken on the issue, nine have found that removal by a forum defendant is a procedural defect, and thus waivable.”  Id.

Almutairi, 2016 WL 97835, at *5.  In addition to the cases previously cited by Hurley, Almutiari added:  Lively v. Wild Oats Markets, Inc., 456 F.3d 933, 939-40 (9th Cir. 2006), Handelsman v. Bedford Village Assocs. Ltd. Partnership, 213 F.3d 48, 50 n.2 (2d Cir. 2000), Blackburn v. United Parcel Service, Inc., 179 F.3d 81, 90 n.3 (3d Cir. 1999), and Pacheco de Perez v. AT & T Co., 139 F.3d 1368, 1372 n.4 (11th Cir. 1998).

So at least in the context of removal before service, we now unhesitatingly answer our question from 2009 in the affirmative.  By all means remove before service, even in the face of adverse precedent in some district courts.  At best, the plaintiff will miss the issue entirely and will waive any reliance on the forum defendant rule (which is waivable everywhere but in the Eighth Circuit).  At worst, (1) the case is randomly assigned to a federal who has already ruled adversely, and (2) the plaintiff seeks remand in a timely fashion.  In that situation, as our recent removal-before-service posts demonstrate, the defense side has both the upper hand in the argument, and significant appellate support.  See, e.g., Encompass Insurance Co. v. Stone Mansion Restaurant, Inc., ___ F.3d ___, 2018 WL 3999885, at *4-5 (3d Cir. Aug. 22, 2018); Novak v. Bank of N.Y. Mellon Trust Co., 783 F.3d 910, 912, 914 (1st Cir. 2015); La Russo v. St. George’s University School, 747 F.3d 90, 97 (2d Cir. 2014).  A combination of persuasive argument and recent arguments might get a fair-minded judge to change his/her mind.  Even the worst possible result – remand accompanied by an order to pay counsel fees – isn’t all bad, since the sanctions order would be immediately appealable.

But we want to make one thing perfectly clear.  Pre-service removal involves only statutory language relating to diverse “forum defendants.”  There is nothing in the statute, or in the case law, that allows the presence of a non-diverse defendant to be avoided by pre-service removal.  Pre-service removal does not make non-diverse cases diverse.  Any counsel who screws up this fundamental distinction deserves whatever sanctions a court hands out.

 

You haven’t heard of Blue Car syndrome?  Remember the last time you went car shopping. You found a particular make and model (a “blue car”) and then, like magic, you see that same “blue car” 10 times in the next week. It’s in the parking lot of your gym. It pulls up next to you in traffic. It’s even parked down the block from your house. The blue cars didn’t just suddenly appear. So what happened? It’s sometimes called the Baader-Meinhof phenomenon or frequency illusion. It occurs when something you’ve just noticed, like a new car, suddenly crops up everywhere. You really are seeing more blue cars, but not because there are more blue cars, but because you are now noticing them more.

That might not strictly speaking be true for us and pre-service removal — we’re pretty sure we’d notice whenever the issue came up – but it certainly feels like out of nowhere pre-service removal became a hot topic last month. No sooner did we update our research on the issue, then the Third Circuit makes a favorable ruling allowing pre-service removal. Just five days after that decision, the Northern District of Illinois does the same thing.

In Cheatham v. Abbott Laboratories Inc., — F. Supp. 3d –, 2018 WL 4095093 (N.D. Ill. Aug. 28, 2018), plaintiff, a citizen of Louisiana sued Abbott, a citizen of Illinois and Delaware, in state court in Illinois. Before the complaint was served on defendant, it removed the case to federal court and plaintiff promptly moved for remand arguing the forum defendant rule. Id. at *1-2. As with any pre-service removal case, the dispute turned on the interpretation of the “properly joined and served” language of 28 U.S.C. §1441(b)(2). If a “properly joined and served” defendant “is a citizen of the State in which [the] action is brought,” removal is not permitted. Id.

Defendant’s argument: Under the plain meaning of the statute, as defendant was not served at the time of removal, the forum defendant rule does not apply. Cheatham, at *3-4.

Plaintiff’s argument: Allowing pre-service removal undermines the purpose of the forum defendant rule to preserve the plaintiff’s choice of forum where there is no prejudice to an out-of-state party. Id. at *2-3.

That’s the debate: purpose v. plain meaning. And that is the split among the courts to have decided the issue. Although, as our recent update points out, plain meaning has been gaining ground in the recent circuit court decisions on the issue. The Cheatham decision does a nice job of setting out both arguments with citations to cases going both ways before ultimately concluding that “the statutory text must control. Courts must give effect to the clear meaning of statutes as written.” Id. at *5 (citations omitted).

Courts that have applied the “purpose” interpretation believe that it is necessary to look beyond the language of the statute to be “faithful to Congressional intent.” Id. at *3. Those courts seem to be particularly concerned by “snap removals” – where a defendant learns of the filing of a lawsuit from monitoring the docket and then immediately removes the case. In the age of online filing, docket monitoring is not new or uncommon. Plaintiff called it both improper and strategic gamesmanship. Id. at *2. But just because something is strategically advantageous to one side doesn’t make it improper. Nor does it make it gamesmanship in the sense that it is a dubious tactic.

When Congress completely re-wrote 28 U.S.C. §1441(b) in 2011 it left the “properly joined and served” language intact. If you want to talk about Congressional intent, the buck stops in 2011. In fact, the Cheatham court, like others applying the plain meaning of the statute, acknowledge that “Congress will rewrite the statute if it feels that removal where an in-forum defendant has not yet been served constitutes an abuse of the judicial system.” Id. at *5. Having left that provision in place, the forum defendant rule does not apply where the forum defendant has not been served at the time of removal.   Defendant learned of the action “before it became a forum defendant that was both properly joined and properly served,” id., and promptly removed it. There was no bending of the rules required. Diligence isn’t gamesmanship.

And, we actually don’t think pre-service removal is not a frequency “illusion” – it’s real and going in defendants’ favor.