The plaintiff in Salinero v. Johnson & Johnson, __ F.3d __, No. 20-10900, 2021 WL 1681237 (11th Cir. Apr. 29, 2021), tried a new twist to get around the learned intermediary rule—and it did not work.  The district court rejected the plaintiff’s attempt to graft a “financial bias” exception onto Florida’s learned intermediary rule, and the Eleventh Circuit affirmed the order with a published opinion stating correctly that no such exception exists.

Here is what happened.  The plaintiff was treated with the defendant’s implanted mesh device and a few years later experienced symptoms that she attributed to the device.  After a second procedure by the same surgeon, the plaintiff sued the device’s manufacturer for various claims, including failure to warn.  Id. at *2.  The defendant moved to dismiss based on Florida’s learned intermediary doctrine, which is similar to other states:  In cases involving medical products, the duty of a device manufacturer to warn of dangers runs to the physician who prescribed the device—the learned intermediary.  Id. at *4.  As a result, “a plaintiff must show that her treating physician would not have used the product had adequate warnings been provided.”  Id.

We call this warning causation, indeed we have been accused of fixating on warning causation, but only because it can be a winning issue with the right physician testimony or when there is no physician testimony at all.  The implanting surgeon testimony in Salinero was about as strong as it gets:

As he clearly stated in his deposition, an improved IFU [or instructions for use] would not have change his choice of implant for the surgery. . . . [¶]  [The prescribing surgeon] was also clear that an IFU containing more information on the risks posed by [the device] would not have altered his decision to use the implant in [Plaintiffs’] surgery. . . . [¶]  Furthermore, and perhaps most importantly, [the surgeon] provided explicit, uncontroverted testimony that he believed his decision to use [the device] as the mesh implant for [Plaintiff] was correct.

Id. at *5.  There you have it.  Additional or different warnings from the defendant would not have made any difference, and the surgeon said after the fact that he would not do anything differently.  Indeed, the device remained his “preferred implant” for similar procedures.  Id.  The plaintiffs therefore could not meet their causation burden under the undisputed facts.

Since the plaintiffs clearly lost on the facts, they tried to change the law, specifically by urging the district court to create a “financial bias” exception to the learned intermediary doctrine.  Under this proposed exception, “financial ties between the treating physician and the manufacturer [would] defeat the assumption of objectivity underlying the defense.”  Id. at *6.  The plaintiffs’ argument was quite similar to, and cited the same bad cases as, our prior post on this precise subject.

You can see the plaintiffs’ tack.  They had no evidence to dispute the surgeon’s testimony, so they attacked his motives with evidence that he had served as a consultant and an expert for the manufacturer and had earned substantial fees in the process.  Id. at *3.  The problem for plaintiffs was there is no such exception to the learned intermediary rule:

The trouble with the argument is that no Florida court, as best we can tell, has ever recognized, let alone adopted, a “financial bias” exception to the learned intermediary doctrine with respect to prescription drugs or medical devices . . . .  For us to create a wholly new doctrine, virtually out of whole cloth, would work a profound change in Florida’s law.  Sitting in diversity, we are Erie bound to follow Florida’s courts as they expound on tort law and nothing we can discern in Florida’s case law would suggest, let alone enable us to predict, this is a path its courts are likely to go down.

Id. at *6.  The plaintiffs therefore had neither the facts nor the law on their side, and we commend the Eleventh Circuit for its Erie restraint.  The plaintiffs cited an asbestos case from Florida Supreme Court, Aubin v. Union Carbide Corp., 177 So. 3d 489 (Fla. 2015).  But that case concluded only that a manufacturer may not be able to reasonably rely on an intermediary supplier to pass on necessary warnings that would render the product less valuable.  Id. at *7.

The Aubin case did not create a “financial bias” (or any) exception to the learned intermediary doctrine, and it arose “in a sharply different context.”  Id.  The following quote distinguishes Aubin, but also underscores the Eleventh Circuit’s understanding of the rationale behind the learned intermediary rule in the first place:

[A] physician who has significant education and training and understands the complexity of a medical drug or device is in a profoundly different position than an intermediary manufacturer of construction materials that include asbestos.  In this case, and on this record, we are satisfied that [the surgeon] did just what is expected of physicians.  He used his individualized medical judgment to determine what treatment to offer [Plaintiff].

Id.  Again, what we like most about this opinion is that both the district court and the Eleventh Circuit declined invitations to create new Florida law without Florida precedent.  That was the position we took in our prior post.  And in the process, the courts correctly applied the learned intermediary doctrine to undisputed facts to reach the correct result.

This blog has discussed Merck Sharp & Dohme Corp. v. Albrecht, 139 S. Ct. 1668 (2019), and its progeny on multiple occasions. We provided a quick take when Albrecht was issued; discussed the decision’s possible ramifications here and here; expressed consternation at certain parts of the decision; reported here and here on how it is viewed by the plaintiffs’ bar; and analyzed cases applying Albrecht here, here, and here. And if that weren’t enough, Bexis has published an article on the decision.

Today, we provide a short report on a new law review article that takes a defense-friendly look at Albrecht and some of the open issues that survive it. The article is Victor E. Schwartz & Christopher E. Appel, Where’s the Beef?: A Guide to Judges on Preemption of State Tort Litigation Involving Branded Drugs, 89 U. Cin. L. Rev. 597 (2021).

The one true holding of Albrecht is that the “question of pre-emption is one for a judge to decide, not a jury.” Albrecht, 139 S. Ct. at 1672.

Everything else is dicta, but also where most of the action is.

Schwartz and Appel begin by recounting the Supreme Court’s recent pharmaceutical-preemption quadrilogy: Wyeth v. Levine, 555 U.S. 555 (2009); PLIVA, Inc. v. Mensing, 564 U.S. 604 (2011); Mutual Pharmaceutical Co. v. Bartlett, 570 U.S. 472 (2013); and, of course, Albrecht itself.

Central to their recounting is Wyeth’s holding that a failure-to-warn claim implicating a branded drug is not preempted “absent clear evidence that the FDA would not have approved” the labelling change purportedly required by state law. 555 U.S. at 571. That holding, say Schwartz and Appel, “is the predicate for the Court’s decision in Albrecht.” 89 U. Cin. L. Rev. at 599. Indeed, the decision addresses Wyeth’s “clear evidence” standard at the outset. It says—according to the Court, “holds”—that “‘clear evidence’ is evidence that shows the court that the drug manufacturer fully informed the FDA of the justifications for the warning required by state law and that the FDA, in turn, informed the drug manufacturer that the FDA would not approve a change to the drug’s label to include that warning.” Albrecht, 139 S. Ct. at 1672.

Having set the stage, Schwartz and Appel then turn to “a number of outstanding issues that will likely play out in lower courts in the wake of” Albrecht. 89 U. Cin. L. Rev. at 609.

That much remains to be decided was signaled by Albrecht itself, where “[t]wo concurring opinions offered widely divergent views on how lower courts might apply the ‘clear evidence’ exception.” 89 U. Cin. L. Rev. at 607. On the one hand, Schwartz and Appel note, Justice Thomas expressed the view that “preemption could only be obtainable where the FDA has issued a final ruling rejecting a manufacturer’s application to change a warning or has issued a supplemental ruling formally rejecting a warning change made unilaterally by the manufacturer pursuant to the CBE process.” Id. They contrast Justice Thomas’s “narrow view” with Justice Alito’s “more pragmatic approach,” which would consider not only formal agency actions with the force of law but also other FDA “communications” and conduct. Id. at 608.

According to Schwartz and Appel, given that divergence, “[t]he most important outstanding issue following Albrecht is what communication, action, or inaction by the FDA is sufficient to satisfy the ‘clear evidence’ exception.” 89 U. Cin. L. Rev. at 609.

Arguing that Albrecht does not expressly require “a formal agency ruling rejecting a manufacturer’s” proposed labeling change (89 U. Cin. L. Rev. at 610), Schwartz and Appel identify various post-Albrecht decisions that have found “clear evidence” that the FDA would have disapproved of a labeling change purportedly required by state law even though the agency did not formally reject a labeling change proposed by a manufacturer. They helpfully recount cases finding “clear evidence” in FDA inaction; in contemporaneous FDA approval of warnings other than those supposedly required by state law; and in the FDA’s denial of a citizen’s petition.

Schwartz and Appel also explain why, from a policy perspective, courts should be willing to find “clear evidence” even in the absence of formal FDA action rejecting a manufacturer’s proposed labeling change. “It is,” they say, “not difficult to imagine how problematic and disruptive” it would be if formal rejection were required before state-law failure-to-warn claims were preempted:

Risk-adverse branded drug manufacturers unsure about a potential need for an added warning would have an incentive to pursue warning changes more readily through the CBE process just so the FDA formally repudiates the warning change after it has been made, which would establish a clear basis to preempt failure-to-warn claims. As a result, branded drug warnings could experience increased volatility through back-and-forth labeling changes introduced by the manufacturer and rejected by the FDA, creating confusion for prescribing physicians and impeding patient safety.

89 U. Cin. L. Rev. at 611.

Finally, noting that “the Court in Wyeth may have created an impression that a branded drug manufacturer is generally free to unilaterally change a warning if and when it sees fit,” Schwartz and Appel emphasize that “FDA regulations make plain that the circumstances” under which the CBE regulation may be used “are limited.” 89 U. Cin. L. Rev. at 616–17. They stress that the CBE regulation may be invoked only “in light of ‘newly acquired information’” and that “the newly acquired information must provide ‘reasonable evidence of a causal association’” between the drug and “a ‘clinically significant adverse reaction[].’” Id. at 617. They then cite to various cases finding failure-to-warn claims preempted because the manufacturer could not avail itself of the CBE regulation.

With that summary, we express our thanks to Schwartz and Appel for their helpful article.

Today’s case, BCBSM, Inc. v. Celgene Corp., 2021U.S. Dist. LEXIS 52785 (March 22, 2021), is an antitrust case. The plaintiffs alleged that a pharma company suppressed generic competition. We enjoy reading antitrust cases, always doing so with a healthy skepticism about the merits of the claims. We did, after all, attend the University of Chicago. But the BCBSM case is of immediate interest because of its sound application of the modern learning on personal jurisdiction.

The case was filed in Minnesota state court. The defendant removed to federal court. The plaintiffs moved to remand the case to state court for want of federal subject matter jurisdiction. The defendant argued that there was subject matter jurisdiction despite the that one of the plaintiffs shared Delaware citizenship with it, and despite the fact that all of the claims traveled under state law. Why? According to the defendant, the Delaware plaintiff was fraudulently joined, so there was diversity, and the claims turned on federal law. Meanwhile, the defendant argued that Minnesota courts could not exercise personal jurisdiction over the claims brought against it by the Delaware plaintiff in this case.

We’ve seen this movie before. (Here, for example.) There is a key threshold decision: should the court decide subject matter jurisdiction or personal jurisdiction issue first? Plaintiffs always urge resolution of subject matter jurisdiction first, hoping to return to the friendlier confines of state court. Defendants invariably head first to personal jurisdiction. Which route should the court choose? It’s a matter of discretion and courts typically select the easier route. In BCBSM, the issue of fraudulent joinder was complicated and unclear under Eighth Circuit law, and the issue of whether federal law really governed was worse. By contrast, personal jurisdiction was a factual and doctrinal picnic. So the court went to the picnic.

The question was whether the Minnesota federal court could exercise jurisdiction over the Delaware plaintiff’s claim against the Delaware defendant. To support personal jurisdiction, the plaintiffs pointed to reimbursement for certain drug purchases in Dakota County Minnesota – primarily through a particular pharmacy benefit manager (PBM). But there was no allegation that the Delaware plaintiff worked with that PBM, or was involved with any Minnesota reimbursements at all. There was no connection between that Delaware plaintiff and Minnesota. In short, the Delaware plaintiff was not a resident of the forum, suffered no harm in the forum, and none of the conduct animating its claim occurred in the forum. The BCBSM court was right; it was easy to decide it had no jurisdiction over the Delaware plaintiff’s claims against the defendant. Goodbye, Delaware plaintiff.

With the exit of the Delaware plaintiff, the subject matter jurisdiction suddenly became simple. The court did not need to mess with the knotty question of federal question, because it was now confronted with a simple matter of diversity jurisdiction. The parties on opposite sides of the v. were citizens of different states, and the amount in controversy exceeded $75,000.

Things got even simpler for the Minnesota court. After it determined it had subject matter jurisdiction over the claims brought by the non-Delaware plaintiffs against the defendant, it then transferred the case to federal court in New Jersey, because that court was well acquainted with both the parties and the antitrust issues afoot. Plus, opt-out cases were already there waiting. Judicial economy ruled the day. The plaintiffs’ choice of forum merited some deference, but not enough. Goodbye, Minnesota.

For almost as long as we’ve been blogging, we’ve complained about some courts’ flaccid and lackadaisical Daubert gatekeeping.  It’s not just trial courts, but courts of appeals as well.  Now it appears that the Advisory Committee on Civil Rules of the Federal Judicial Conference shares our frustrations.  The Committee recently approved a couple of amendments to Fed. R. Evid. 702 intended to clamp down on inordinately generous gatekeeping.  Here are the new amendments as we understand them:

Rule 702. Testimony by Expert Witnesses

 A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if [the court finds that] the proponent has demonstrated by a preponderance of the evidence that:

(a) the expert’s witness’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;

(b) the testimony is based on sufficient facts or data;

(c) the testimony is the product of reliable principles and methods; and

(d) the [expert witness’s has reliably applied] expert’s opinion reflects a reliable application of the principles and methods to the facts of the case.

Brackets and italics indicate deletions; bold and underlining indicate additions.

The first of these proposed changes specifies that, to admit an expert opinion, a court must find all of the substantive Rule 702 criteria – helpfulness to the jury, sufficient basis, reliability, and fit – have been met by a preponderance of the evidence.  The Draft Committee Notes explain that this change is explicitly to reject “many” overly lenient judicial applications of Rule 702:

First, the Rule has been amended to clarify and emphasize that the admissibility requirements set forth in the Rule must be established to the court by a preponderance of the evidence. . . .  [M]any courts have held that the critical questions of the sufficiency of an expert’s basis, and the application of the expert’s methodology, are questions of weight and not admissibility.  These rulings are an incorrect application of Rules 702 and 104(a). . . .

The Committee concluded that emphasizing the preponderance standard in Rule 702 specifically was made necessary by the courts that have failed to correctly apply it when applying the reliability requirements of that Rule.

The amendment clarifies that the preponderance standard applies to the three reliability based requirements added in 2000. . . .  The amendment focuses on subdivisions (b)-(d) because those are the requirements that many courts have incorrectly determined to be governed by the more permissive Rule 104(b) standard. . . .

[T]his does not mean, as certain courts have held, that arguments about the sufficiency of an expert’s basis always go to weight and not admissibility.  Rather it means that once the court has found the admissibility requirement to be met by a preponderance of the evidence, any attack by the opponent will go only to the weight of the evidence.

(Emphasis added).  This preponderance standard is not really new; it has ostensibly been the law all along, but too many courts have succumbed to the improper reasoning that “if it’s a close call, it goes to the weight.”  Thus, the Civil Rules Committee decided that an explicit reminder – right in the black letter of Rule 702 – is necessary.

This new amendment rejects treating problems with helpfulness to the jury, sufficient basis, reliability, and fit as mere matters of “weight” for the jury to decide.  We did a quick Westlaw search of Daubert cases that used “method!” or “basis” within the same sentence as “weight” within four words of “admissibility.”  It produced 920 cases.  Even a more circumscribed search using the exact phrase “weight not admissibility” produced 162 opinions.  That gives some idea of the magnitude of this problem.

The Civil Rules Committee seems convinced as well.  The Agenda Book released ahead of the recent meeting, indicated that this rules change enjoyed “unanimous” support:

Amendment to Rule 702 (Testimony by Expert Witnesses). Judge Schiltz explained that the committee was looking at two issues relating to testimony by expert witnesses.  The first was what standard a judge should apply when considering whether to allow expert testimony.  It is clear that a judge should not allow expert testimony without determining that all requirements of Rule 702 are met by a preponderance of the evidence.  The requirements are that the testimony will assist the trier of fact, that it is based on sufficient facts or data, that it is the product of reliable principles and methods, and that the expert reasonably applied those principles and methods to the facts at hand.  It is not appropriate for these determinations to be punted to the jury, but judges often do so.  For example, in many cases expert testimony is permitted because the judge thinks that a reasonable jury could find the methods are reliable.  There is unanimous support in the Evidence Rules Committee for moving forward with an amendment to Rule 702 that would clarify that expert testimony should not be permitted unless the judge finds by a preponderance of the evidence that each of the prerequisites are met.

Agenda Book at p.36 (Report of the Advisory Committee on Evidence Rules).  Thus, it seems that there is strong likelihood that this amendment will ultimately be approved.

The second amendment tweaks the requirement that expert opinions fit the facts of the particular case to require that the necessary “reliable application of the principles and methods to the facts of the case” appear in the expert’s actual “opinion.”  The Draft Committee Notes reflect that this amendment was to preclude “extravagant claims that are unsupported by the expert’s basis and methodology.”

Rule 702(d) has also been amended to emphasize that the trial judge must exercise gatekeeping authority with respect to the opinion ultimately expressed by a testifying expert.  A testifying expert’s opinion must stay within the bounds of what can be concluded by a reliable application of the expert’s basis and methodology.  Judicial gatekeeping is essential because jurors may be unable to evaluate meaningfully the reliability of scientific and other methods underlying expert opinion, and jurors may lack a basis for assessing critically the conclusions of an expert that go beyond what the expert’s basis and methodology may reliably support.

Id. at p.2 (emphasis added).

Thus, experts should henceforth be prohibited from “assertions of absolute or one hundred percent certainty” particularly when “the methodology is subjective and thus potentially prone to error.”  Id.  Experts are also precluded from exaggerating the reliability of their opinions beyond “those inferences that can reasonably be drawn from a reliable application of the principles and methods.”  Id.  We’ve encountered this problem as well, where experts recites things like “differential diagnosis” (actually “etiology”) or “Bradford Hill,” as if the label alone is enough to establish “fit,” and all too often reviewing courts don’t bother to look beneath the label to see what’s actually there – or not there.  This amendment will make it clearer that substance, not labels, are what is important under Rule 702.

While we don’t think that these amendments by themselves will resolve the current Daubert morass, they are a welcome step in the right direction, and their eventual adoption cannot, in our reliable and fully supported opinion, come too soon.

One of the intriguing things about cases decided by a jurisdiction’s highest court is that pronouncements by such courts can often have far-reaching implications.  Sometimes they pan out, as the application of the First Amendment to the FDA’s ban on off-label promotion seems to be doing following Sorrell v. IMS Health, Inc., 564 U.S. 552 (2011).  With some, the results are conflicting, as with the “independence principle” in PLIVA, Inc. v. Mensing, 564 U.S. 604 (2011).  And sometimes they don’t pan out.  Anyway, thinking outside of the box is always fun.  So that’s what we’re doing today.

In our first case, the United States Supreme Court recently held that the Federal Trade Commission couldn’t seek the “monetary relief” of “restitution and engorgement” based on language in the Federal Trade Commission Act, 15 U.S.C. §53(b) (§13b of the FTCA), allowing the FTC to “grant mandatory injunctions and such other and further equitable relief as they deem appropriate in the enforcement of such final orders of the Commission.”  See AMG Capital Management, LLC v. FTC, 141 S.Ct. 1341 (U.S. 2021) (answering “no” to the question “Did Congress, by enacting §13(b)’s words, ‘permanent injunction,’ grant the [FTC] authority to obtain monetary relief directly from courts, thereby effectively bypassing the process set forth in [other parts of the FTCA]?”).

As one would expect, a lot of the AMG decision turned on the specific context of the FTCA.  141 S.Ct. 1348-50 (explaining how “[t]he language and structure of §13(b), taken as a whole, indicate that the words “permanent injunction” have a limited purpose − a purpose that does not extend to the grant of monetary relief”).  These include:

  • The “permanent injunction” phrase appears in a separate “provision that focuses upon purely injunctive, not monetary, relief.”   Id. at 1348.
  • “[T]he structure of the Act” – that other sections of the FTCA “gave district courts the authority to impose limited monetary penalties and to award monetary relief.”  Id. at 1349.
  • The provision of the FTCA that explicitly governs when “monetary relief” may be sought “comes with certain important limitations that are absent in §13(b).”  Id.

All together AMG concluded that “to read §13(b) to mean what it says, as authorizing injunctive but not monetary relief, produces a coherent enforcement scheme.”  Id.

So that takes us back to the first “consideration” the Court addressed in AMG – what the statutory language actually provided − and, more specifically the disconnect between the FTC’s demands for “monetary relief” with the language of the FTCA limited to “injunctive” relief:

For one thing, the language refers only to injunctions.  It says, “in proper cases the Commission may seek, and after proper proof, the court may issue, a permanent injunction.”  An “injunction” is not the same as an award of equitable monetary relief.

141 S.Ct. 1347 (citations omitted) (emphasis added).

That got us thinking about Fed. R. Civ. P. 23, and in particular comparing AMG to Rule 23(b)(2), which permits class actions for “final injunctive relief.”  By analogy, can the discussion of injunctive versus monetary relief in AMG be used to prevent the courts from claiming “authority” (the word used in AMG) to order the payment of money (such as funding “medical monitoring”) in a Rule 23(b)(2) class?  After all “what it says,” AMG, 141 S.Ct. 1349, is limited to “injunctive . . . or declaratory relief”:

the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole; or

Fed. R. Civ. P. 23(b)(2).

Taking the AMG analogy further, Rule 23:  (1) addresses solely “injunctive” relief in 23(b)(2); (2) is structured so that a separate provision, Rule 23(b)(3), governs monetary relief; and (3) class actions for money “come[] with certain important limitations that are absent in” Rule 23(b)(2) – such as predominance, superiority, and manageability.

Thus, we invite our defense-minded audience to consider whether it is now appropriate to argue, based on the Supreme Court’s reasoning in AMG, that as to monetary relief, Rule 23(b)(2) did not “g[i]ve that remedy in the first place.”  141 S.Ct. 1351.  Are we off the wall?

Our second case comes not from the United States Supreme Court, but rather from the New Jersey Supreme Court − Hager v. M&K Construction, ___ A.3d ___, 2021 WL 1380984 (N.J. April 13, 2021).  Hager held that New Jersey employers are obligated to reimburse now-legal medical marijuana prescriptions on the same basis that they pay for any other employee benefit required under that state’s Workers’ Compensation statute.  We don’t deal with medical marijuana much on this blog, but it is a prescription drug of sorts, so when we find something useful in this area, we’ve discussed it.

The interesting thing to us about Hager is its treatment of federal preemption – the employer in Hager argued that, regardless of what New Jersey law might require, it could not be forced to pay for something that remained illegal under supreme federal law.  2021 WL 1380984, at *16.  The New Jersey Supreme Court found no preemptive conflict, given how both Congress and the Executive Branch had treated the illegality of cannabis in recent years.  Congress has passed a number of legislative “riders” that “deprioritized prosecution for possession of medical marijuana.”  Id. at *15-16.  The Department of Justice, under both Democratic and Republican administrations, has similarly “deprioritized − but not prohibited − federal prosecution of marijuana activities that are legal under state law.”  Id. at *15.  Hager went into great detail about these actions, so we won’t.

Based on these executive and legislative actions, Hager added the imprimatur of the judicial branch, finding that there was no longer any conflict between federal law (marijuana being illegal under the Controlled Substances Act) and New Jersey state law under which medical marijuana (and as of 2021, recreational as well) is legal.  Hager determined that, based on congressional and DoJ actions, the illegal status of marijuana has been repealed “by implication.”  Id. at *17.

Congress has, for seven consecutive fiscal years, prohibited the DOJ from using funds to interfere with state medical marijuana laws through appropriations riders. The present rider and its predecessors have changed federal law. . . .  The rider language leaves “no doubt” as to its effect by “forbidding the use of funds to interfere with state medical marijuana schemes. . . .  Congress is empowered to amend the CSA [Controlled Substances Act] via an appropriations action provided it does so clearly, and the most recent appropriations rider, in our view, clearly is intended as a substitute” to the CSA . . . .  Therefore, we find that Congress has spoken through the most recent appropriations rider and give it the final say.

We thus conclude that the CSA . . . is effectively suspended . . . and that it would be inappropriate for this Court to give any legal effect whatsoever to the earlier statutory enactment.  The earlier statute cannot coexist with the enacted appropriation and, consequently, must be deemed to be suspended by adoption of the later appropriation act.  We repeat that the case for federal pre-emption is particularly weak where Congress has indicated its awareness of the operation of state law in a field of federal interest, and has nonetheless decided to tolerate whatever tension there is between them . . . .

[W]e find here that this clear, volitional act in the form of appropriations law takes precedence over the earlier legislation.  Because DOJ enforcement of the CSA may not, by congressional action, interfere with activities compliant with [New Jersey state law], we find that there is no positive conflict and that the CSA and the Act may coexist.

Id. at *19-20 (lots of citations and quotation marks omitted) (emphasis added).

So according to the unanimous New Jersey Supreme Court, the illegality of marijuana under the federal Controlled Substances Act has been impliedly repealed and suspended by the appropriations riders passed by Congress that forbid federal enforcement against marijuana-related activity that is legal under state law.  The Hager court recognizes that its holding “departs from the holdings of other state supreme courts.”  Id. at *20 (citations omitted).  However, in New Jersey, anyway, Hager is the law unless and until it is overturned by the United States Supreme Court.

Treating recent congressional and DoJ actions as “implied suspension as opposed to implied repeal,” 2021 WL 1380984, at *18, of the illegality of marijuana under federal law – at least in New Jersey – opens up a number of possibilities.  The one that intrigues us the most has to do with an area we don’t know much about – banking.  Perhaps the most significant way that federal illegality continues to hassle the cannabis industry is by forbidding banks to enter into normal depository relationships with this industry due to the purported federal illegality of marijuana − the very thing that Hager now rejects.

Thus, as with AMG, we invite any cannabis-oriented readers of ours to consider whether it can now be considered legal – at least in New Jersey – for New Jersey state-chartered banks to treat cannabis-related businesses in the same fashion that they would treat any other sellers of legal products.  Off the wall?  Time will tell.

We hope, when our time on earth is up, we are remembered as someone who possessed skills and made contributions.  We are certain that gardening will not be among them.  In that vein, we recently hired professionals to plant a lovely new bed at the end of our driveway.  We were admonished that we must water for at least a month until the bed became self-sustaining.  And water we did.  Too late, we regretfully report, we learned that it is possible to have too much of a good thing, at least where water and new plantings are concerned.

Not so for good decisions on issues that are important in our own practice.  In that vein, we are pleased that the last week or so brought a bumper crop of great results for the Taxotere defense team, all under the In re: Taxotere (Docetaxel) Prods. Liab. Litig. caption – two Fifth Circuit appellate affirmances and several victories from the MDL court.  We share the former today and will save the others for our next post.

First Case:  Claims Are Time-Barred

As blog readers know, Taxotere is a chemotherapy drug, used to treat certain cancers, including breast cancer.   The MDL plaintiffs are women who claim to have suffered permanent hair loss after their breast cancer was treated with Taxotere.  Today’s first case, — F.3d —, 2021 WL 1560724 (5th Cir. Apr. 21, 2021), is a decision on three plaintiffs’ appeals of the MDL court’s grant of summary judgment for the defendant on statute of limitations grounds.

Some background:  Louisiana applies a one-year “prescriptive period,” or statute of limitations, for personal injury claims, including product liability claims.  In their MDL master complaint, the plaintiffs defined “permanent hair loss” as hair loss that persists six months after the completion of chemotherapy.  All three plaintiffs suffered “permanent hair loss,” as the complaint defined it, after their chemotherapy treatment.  All three filed their Complaints years (six to seven years) later.  The MDL granted summary judgment for the defendant on all three suits, holding that the claims were “facially prescribed” (time-barred on their face – more about this in a moment) and that the doctrine of contra non valentum (a discovery rule-esque doctrine – more below) did not save the claims.  All three plaintiffs appealed.

The Fifth Circuit explained that Louisiana’s one-year “liberative prescription period” (limitations period) “commences to run from the day injury or damage is sustained.”  2021 WL 1560724 at *2 (citation to statute omitted).  The burden of proof “is normally on the party pleading prescription” (a defendant arguing that the case is time-barred);  “however, if on the face of the petition it appears that prescription has run, the burden shifts to the plaintiff to prove a suspension or interruption of the prescription period . . . .”  Id.  (internal punctuation and citations omitted).

In this case, the appellants argued that the one-year prescription period did not begin to run until they “learned of their injury and its cause,” and that they did not acquire this knowledge until years after their treatment.  The appellees countered that, under the plaintiffs’ own definition, as pled in the master complaint, the injuries were sustained, and prescription began to run, six months after the last chemotherapy treatment, when all three appellants’ hair loss persisted.  The Fifth Circuit agreed, affirming the MDL court’s holding that the appellants’ claims were “facially prescribed.”

It then turned to the issue of whether the prescription period was tolled for these appellants.  Unlike some Louisiana prescription statutes, the statute that applies to products liability cases does not include tolling language.  Instead, the equitable doctrine of contra non valentum agere non currit prescriptio (“no prescription runs against a person unable to bring an action,” contra non valentum for short) tolls the prescription period in certain “exceptional circumstances.”  There are four such “exceptional circumstances,” but the only one that possibly applies to this case is the fourth:  the period is tolled “where the cause of action is not known or reasonably knowable by the plaintiff, even though this ignorance is not induced by the defendant.”  Id. at *4 (citations omitted).  As the court explained, this doctrine is “often named the ‘discovery rule’” and it “applies only when such ignorance is not willful and does not result from negligence.”  Id. (citations omitted).  Actual knowledge is not required, under this doctrine – constructive notice suffices:

Whatever is notice enough to excite attention and put the plaintiff on [her] guard and call for inquiry is tantamount to knowledge or notice of everything to which inquiry may lead, and such information or knowledge as ought to reasonably put the plaintiff on inquiry is sufficient to start the running of the prescription.  That means prescription runs from the time there is notice enough to call for inquiry about a claim, not from the time when the inquiry reveals facts or evidence sufficient to prove the claim.

Id. (emphasis in original, internal punctuation and citations omitted).  In other words, a Louisiana plaintiff must “seek out those whom [she] believes may be responsible for a specific injury.”  Id. at *5 (citations omitted).  Plaintiffs “are not entitled to wait to sue until they are certain of what and/or who caused their injury.”  Id. 

Here, the appellants testified in deposition that they attributed their initial hair loss to their chemotherapy treatments, and the court held that “the standard of ‘knew or should have known’ [meant that] they needed to investigate Taxotere as a potential cause” of their persistent hair loss.  Id. at *6.  A “reasonable inquiry,” according to the court, “would likely [have included] consultation with doctors . . . .”  Id.  None of the appellants asked her doctor what might be causing her persistent hair loss.  In addition, “a plaintiff with persistent hair loss might instead search for the cause herself.”  Id.  If she had, she would have learned that, by 2006, a group of women “with an online presence” argued that the defendant’s product caused them to suffer permanent hair loss.  By 2010, articles had been published about this possible relationship.  (Plaintiffs pled much of this material in their own complaints.)  But the appellants did not file suit until 2016.

The Court concluded, “[W]e find that Taxotere as a possible cause of the persistent hair loss was not an obscure possibility . . . , [and], insofar as we are concerned with evaluating each Appellant’s effort to seek the cause of her injury, diligence required that Taxotere be explored as a possible explanation, . . . [and a] reasonable inquiry would have uncovered at least some information that linked Taxotere to persistent alopecia.”  While the appellants did not link the appellee to their injuries “until they saw [lawyer] advertisements in 2016,” that is “not the question.”  The appellants “did not act reasonably in light of their injuries, and their causes of action were reasonably knowable in excess of one year” before they filed suit.  Id.  (internal punctuation and citations omitted).  Summary judgment affirmed, in a testament to solid reasoning (and a “be careful how you plead the definition of your injury” cautionary tale).

Second Case:  No Warnings Causation

The second decision brings us particular joy, as it relates to our favorite (oft-misapplied) doctrine.   In this case, — F.3d —, 2021 WL 1526429 (5th Cir. April 19, 2021), the appellant was treated with Taxotere for an aggressive form of breast cancer that had spread throughout her body.  She had serious pre-existing cardiac conditions that affected her doctor’s treatment choices.  He recommended a Taxotere-based chemotherapy regimen as her best option for reducing the risk that her cancer would recur.

At the time (2013), Taxotere’s warnings did not include a warning of the risk of permanent hair loss, though, the doctor was aware – and warned the appellant – of the risk of temporary alopecia and of the risk that the hair might grow back with a different color, texture, or thickness.  The appellant did not ask about alternatives that would avoid this risk, and she consented to the recommended treatment.  Her lawsuit asserted the usual litany of claims, including failure to warn.  The appellee moved for summary judgment only on the warnings claim, and the MDL court granted the motion.  After conferral, all of the plaintiff’s remaining claims were dismissed, the district court entered final judgment, and the plaintiff appealed.

On appeal, the Fifth Circuit explained that, in Louisiana (like most everywhere else), a plaintiff asserting a failure-to-warn claim must prove both that the warning was inadequate and that the inadequate warning was both a cause-in-fact and proximate cause of the alleged injuries.  Because it was undisputed that the prescribing information did not warn of the risk of permanent hair loss, the inquiry, on summary judgment and on appeal, focused on the second prong, so-called “warnings causation.”  To defeat summary judgment on this prong under Louisiana’s learned intermediary doctrine, a plaintiff must adduce evidence that “a proper warning would have changed the decision of the prescribing physician, i.e. that but for the inadequate warning the prescribing physician would not have used or prescribed the product.”  2021 WL 1526429 at *3 (internal punctuation and citations omitted).  The appellant, like so many plaintiffs we have encountered, tried to muddy this standard, arguing that “the focus of [the court’s] inquiry should be how patient choice would have steered the conversation and the ultimate prescribing decision” if the warning had been provided.  And, while the court conceded that, “under Louisiana law, the decision to use a drug in a particular circumstance rests with both the doctor and the patient, . . . [the] causation analysis  in a failure-to-warn claim asserted against a drug’s manufacturer . . . is focused on the prescribing physician’s decision to prescribe the drug.”  Id. (internal punctuation and citations omitted).  The court concluded,

So, to the extent that patient choice is relevant, that relevance is cabined to helping us decide whether [the appellant’s] evidence – including that of other available treatments and the importance she places on her appearance – is sufficient to introduce a genuine dispute of material fact as to whether [the doctor’s] prescribing decision would have been different had he known that [the] risk of alopecia was potentially permanent rather than temporary.  It is not.

Id.  In reaching this conclusion,  the court expressly rejected the MDL court’s conclusion, made repeatedly in Taxotere decisions, that “the chemotherapy decision-making process is unique,” which the MDL court used to shift the focus of warnings causation towards the plaintiff’s actions, rather than the prescriber’s.   2021 WL 1526429, at *3 n.4  (“Under Louisiana state law, we find no support for this proposition and no occasion to deviate from binding caselaw to apply this standard.”)

First, the doctor testified that the inclusion of the permanent alopecia warning had not materially altered his risk benefit analysis for Taxotere, and that alopecia is a widely-known side effect of chemotherapy drugs.  The court emphasized, “The specific type of alopecia appears . . . to have had no effect on [the doctor’s] prescribing decision, and this support the conclusion that [the defendant’s] failure to warn could not have been the cause of [the appellant’s] injury.”  Id. at *4 (internal punctuation and citation omitted).  Second, the doctor “repeatedly testified that a . . . label warning of potentially permanent hair loss . . . would not have changed his” prescribing decision.  In fact, he testified that, if someone with appellant’s cancer and medical history came to him today, he would make the same recommendation.  Id. at *4.   Finally, there was no indication that the appellant had sought alternatives that might carry less risk of hair loss, notwithstanding her claim that her appearance was important to her.  In other words, “there [was] little evidence that [the appellant] might have steered the conversation in such a way that [the doctor] would have changed his prescribing decision had he known” of the risk of permanent hair loss.  At most, the court concluded, there was a “scintilla of evidence” in support of the appellant’s position, which was “insufficient to create a genuine dispute of material fact” as to whether a “permanent hair loss” warning would have changed the doctor’s prescribing decision.”  Id.  Again, summary judgement affirmed, in another great decision resting on a correct analysis of the applicable standard and burden of proof.

We will report on the second group of Taxotere victories in an upcoming post.  In the meantime, if you are driving around, our yard is the one with the swamp.  Stay safe out there.

We are careful when discussing discovery sanctions, particularly spoliation, for a simple reason.  The companies we represent that make medical products tend to have allegations about failing to produce discoverable information in the course of the litigation against them.  Indeed, there is a style of litigating against drug and device companies, and other corporate defendants, that focuses on burdensome discovery, discovery-on-discovery, and motions on discovery and discovery-on-discovery in the hopes that the defendants will settle before plaintiffs get to their holy grail, default judgment entered in their favor.  The willingness of some state courts to head down this road has been a major driver in fights over litigation tourism, including personal jurisdiction and the enactment of CAFA.  Even in federal court, some MDLs—like Actos and Pradaxa—have seemed to feature allegations of spoliation by the defendants more than anything like the merits of plaintiffs’ claims.  In other litigations, it looks like the plaintiffs have pushed a similar spoliation angle, but the courts have not bought it.  Overall, when you represent a company in a bunch of cases, you know there will be lots of documents to produce and continuing claims that you did not produce enough.  If the issues in the litigation implicate events in the distant past and/or a number of entities in different places, then the chances increase that spoliation allegations will accompany the complaints about non-production.

On the other side of the “v,” it often seems like a different story.  We have tracked decisions imposing requirements on plaintiffs suing drug or device manufacturers to maintain documents, access electronic sources, produce documents, etc., and we can say that significant sanctions against a plaintiff for failing to produce documents are rare and a spoliation instruction against a plaintiff is rarer.  Purcell v. Gilead Sciences, Inc., No. 17-3523, 2021 U.S. Dist. LEXIS 77379 (E.D. Pa. Apr. 22, 2021), takes a deep dive into these issues in a False Claims Act case brought by two former sales representatives over the marketing of two of defendant’s drugs.  We will jump to the end and state that the plaintiff was assessed relatively small financial sanctions and a spoliation instruction was denied without prejudice while a last-ditch effort was going to be pursued to find some of the missing materials.  As we recount a boiled-down version of history and the court’s analysis, we invite the reader to ask the question “how would things be different if the defendant manufacturer and its counsel did what the plaintiff and his counsel did here?”  Ask it a few times if you want.

The nature of the Relators’ allegations are not clear, but they clearly implicated the preservation and discovery of text messages they sent while working for the defendant.  In fact, one of the relators (we will call her “Relator 1”) produced thousands of text messages, including hundreds to/from the other relator (we will call him “Relator 2”), and attempted to withhold hundreds more.  Relator 2 produced five text messages and attempted withhold nine more, all to/from Relator 1.  This was a tip off for the defendant.  Although the suit was filed in 2017, concerned events starting before then, and he kept working for defendant until 2018, the few texts Relator 2 produced started in July 2019.  This was another tip off.  Despite an order requiring the parties to preserve documents and making text messages discoverable, multiple representations of relators’ counsel about compliance, letter writing, motions practice, hiring an independent third-party vendor, a deposition of Relator 2, and two hearings—the latter of which included experts for both sides—Relator 2 still had not produced an additional text message one year later.  Yet, the record was quite clear that otherwise discoverable messages existed when the suit was filed—by which time the relators certainly had to retain relevant evidence—and were created while the case was pending but before discovery began after the case was unsealed.  That is the short version.  While spoliation inferences and instructions under Fed. R. Civ. 37(e) require the court to find that “the party acted with intent to deprive another party of the information’s use in the litigation,” the reality is that a party—particularly a large corporate defendant—will have to come forward with a convincing explanation about the lack of bad intent.  Here, the court found that Relator 2 and his counsel had offered no such explanation.  Even though the court found that they had failed to comply with its orders and misrepresented compliance to the defendant, it determined the record was insufficient to find that Relator 2 had acted with such bad intent.

The longer version (even our abridged version of it) sounds way worse.  Relator 2 had five electronic devices and cloud storage as potential sources of electronic information.  The main focus was the smartphone he used from 2013 through March 2019, when he replaced it with a new model and put the old phone in a drawer in his house.  He never produced a text message from the first phone, which he had used in connection with his employment for defendants over five years, including almost a year after bringing suit.  The old phone did not go to his counsel until after opposing counsel had complained about the adequacy of production and been assured that all reasonable steps had been taken to preserve documents and produce them, including Relator 2’s texts.  In the interim, it had been wiped.  The independent vendor found forty-two unproduced texts in the backup for his new phone, but efforts to get texts from the old phone from any of the obvious sources had failed.  The mysterious wiping may have been—again, Relator 2 and his counsel offered no benign explanation, just ignorance and non-compliance—from one of Relator 2’s daughter taking phone from the drawer, changing the passcode through the cloud service, and trying to use it as her own phone, which resulted in a number of failed attempts to access the phone before providing it to a vendor.  Of course, the old phone and the various back-up sources were known to be sources of evidence in a pending federal lawsuit, but the relators’ counsel did not obtain them until late in the game.  Even when the court held the first hearing and ordered relators to facilitate the third-party forensic review, relators’ counsel somehow failed to turn over the new phone or information to allow cloud access for the old phone.  We could go on, especially if we wanted to highlight how a corporate defendant could never get away with such apparent shenanigans.

Instead, we will go to the rulings on the two types of sanctions sought, basically costs under 37(b) and spoliation under 37(e).  On the former, the court found lots of non-compliance by Relator 2 and his counsel.  For instance, they “did not comply with their obligations to preserve any possible evidence,” counsel “did not ensure compliance with [the ESI order] by undertaking reasonable steps to ensure all of his electronically stored information including his text messages shall not be permanently deleted or altered,” and they “offer no explanation for this failure to preserve since August 2017 and disregard of our [ESI order] despite their statement of compliance on March 18, 2020.”  Id.at **22-24.  Such non-compliance (and misrepresentations) caused the defendants to incur significant costs and fees, for which relators’ counsel was ordered to pay up to about $20,000 plus the full cost (instead of half) of the third-party vendor’s work.  In addition to that not being much given the conduct at issue, it was also payable by counsel not Relator 2.  As the court found, “[w]e have no basis to impute the Relators’ counsel’s strategy on disclosing partial information to Mr. Purcell and thus do not impose a monetary sanction on him nor may his lawyers seek or obtain repayment from their clients.”  Id. at *25.  This may change, though, as further sanctions were possible once the third-party vendor finished its work.  That work could change the court’s finding—with our italics—that there was “no basis today to find Mr. Purcell” was personally responsible for wiping the old phone or preventing access to its backup.  Id. at *22.

That could also change the denial without prejudice on the second type of sanctions sought.  While the court found that it could not meet the 37(e) requirement of Relator 2’s “intent to deprive” the defendant of the text messages from his old phone—the one he used during the relevant time period, including for a year and a half after he brought suit—it did find Relator 2 and his counsel “acted in conscious disregard (either through oversight or negligence) in their preservation of electronically stored information.”  Id. at *28.  It also noted they had no benign explanation for how or when the old phone got wiped.  If further evidence shows that Relator 2 or his lawyers “intentionally deleted these texts as opposed to his family using and changing the activation code and [] backup” in a way that led to accidentally deleting everything from the old phone, then an order for an adverse instruction would probably be issued.  Id. at *33.  As we suggested at the start, we prefer litigation to be decided on the merits rather than on motions about discovery.  That preference applies across the board, but we do look forward to evening out the playing field when it comes to the rules for discovery and potential sanctions on both sides of the “v.”

 

Covid has altered how and where we practice law. Along the way, it has also improved our exercise regimen. Every couple of days, we receive bankers boxes of binders and documents and then tote them upstairs to what passes for our home office.

For some reason, that makes us think of hernia mesh litigation.

Cosh v. Atrium Med. Corp., 2021 U.S. Dist. LEXIS 59649 (SDNY April 2, 2021), is round two of a battle between mesh plaintiffs and the manufacturer. The plaintiff alleged that she experienced stomach injuries from implantation of hernia mesh. The complaint included the usual litany of causes of action – design defect, manufacturing defect, and failure to warn, among others. The defendant moved to dismiss the complaint and won. The plaintiff filed another complaint, the defendant again moved to dismiss the complaint, and again won.

Under New York law, a claim for design defect must be supported by a showing of a safer, feasible alternative product. The plaintiff made no such showing. The plaintiff alleged that the defendant “could have used heavyweight small-pore mesh instead of midweight mesh or non-woven mesh instead of a knitted or woven mesh,” but did “not allege facts showing this would be technically and economically feasible and result in a safer design.” Moreover, when the plaintiff suggested the use of entirely different materials, the court reasoned that “alleging that the product should not be used at all is insufficient to satisfy the feasible alternative design element.” Hmmmm. What if that reasoning applied to pelvic mesh litigation? In any event, the safer alternative requirement has doomed several other hernia mesh cases, and you can read about them here and here and in other posts on this blog site.

The manufacturing defect claim was originally tossed because the plaintiff had not identified anything specifically wrong with the manufacturing process. In the amended complaint, the plaintiff pointed to an FDA complaint and warning letter involving the factory where the hernia mesh was made. But other medical devices were made in the same factory. The FDA complaint and warning letter were not aimed at the specific unit making the hernia mesh, and there was no allegation as to what precisely the violations were and how they could conceivably have played a role with respect to the plaintiff’s injuries.

The failure to warn claim did not address any communications to the plaintiff or her doctor concerning safety or efficacy. Rather, it “merely reframed Plaintiffs’ design and manufacturing defect allegations.” The plaintiff added an allegation that the defendant had failed to follow up on some adverse events, but there was no suggestion that the plaintiff or her doctor had relied on that or anything else the defendant said or failed to say.

This time when the court dismissed the Cosh complaint, it did so for good, ordering that the case be closed. It was not a heavy lift.

A little over a year ago, the Southern District of New York dismissed a multi-plaintiff amiodarone suit primarily on the grounds of preemption.  We discussed the decision in our post on lessons learned from the Amiodarone Litigation.  Now we can add to those lessons the Second Circuit’s affirmance of the dismissal.  Notably, the appellate court concluded that it did not need to reach the preemption issues because all of plaintiffs’ claims were implausibly pled under either Federal Rule of Civil Procedure 8 or 9.  Frei v. Taro Pharmaceutical USA, Inc., — Fed. Appx. –, 2021 WL 1541141 (2nd Cir. Apr. 20, 2021).

Plaintiffs’ complaint contained causes of action for failure to warn, negligent marketing, negligence per se, and fraud.  Id. at *1.  Regardless of the cause of the action, the appellate court found the case boiled down to three theories:  (1) defendant failed to make Medication Guides available to patients; (2) defendant failed to ensure the accuracy of reference materials relied on by physicians such as the physician Desk Reference (“ PDR”); and (3) defendant concealed information about adverse events.  Id. at *2.    What was missing from plaintiffs’ complaint however, were any allegations of the defendant’s wrongdoing.

We’ve discussed plaintiffs’ medication guide theory in the context of other cases (see post noted above).  It just doesn’t fly.  It is based solely on an FDA regulation that only requires manufacturers to provide guides “in sufficient number” or the “means to produce” them to “distributors, packers, or authorized dispensers” – not end users.  21 C.F.R. §208.24(b)(1-2).  Plaintiffs did not allege that defendant violated the requirements of the regulation. Rather, they created a “hypothetical enhanced duty” to provide medication guides directly to end users but failed to allege how defendant violated that duty either.  Id.

As far as providing misleading information in physician reference materials, plaintiffs’ complaint contains no allegations concerning what the misleading information was and only general allegations that defendant’s intent was to deceive physicians.  Id.  Moreover, the reference materials are considered labeling and therefore, defendant, as a generic manufacturer, could not change the information from that provided by the brand manufacturer.  Plaintiffs failed to explain what defendant’s “contribution to or authority to correct the reference materials was.”  Id.  Since plaintiffs could not demonstrate what role defendant had in creating the reference materials (none), this theory of liability was also not viable.

Finally, for plaintiffs’ allegation that defendant failed to report adverse events they were relying on a general statistical analysis that given the sheer number of amiodarone prescriptions and the number of people diagnosed with pulmonary toxicity, there must be “tens of thousands” of adverse events that were not reported.  Even if plaintiffs had support for this assertion, it is aimed at the entire amiodarone market, not defendant.  But an allegation that all manufacturers collectively failed to report says nothing about whether this defendant concealed information.  Id. at *3.

The opinion is short and sweet and while not preemption focused, it gets the job done.

This post is from the non-Reed Smith side of the blog.

This blog has repeatedly lamented the tendency of MDL courts to flout federal pleading standards when assessing the sufficiency of master complaints. All too often MDL courts disregard Rule 8(a), which—as authoritatively interpreted by the Supreme Court in Twombly and Iqbal—requires plaintiffs to plead facts plausibly suggesting an entitlement to relief, and Rule 9(b), which requires that fraud be alleged with particularity. Today we report on another example of this unfortunate tendency, In re: Allergan Biocell Textured Breast Implant Product Liability Litigation, 2021 WL 1050910 (D.N.J. Mar. 19, 2021). Although the court got a number of things right and dismissed a few claims from the master complaint, it allowed all too many of the claims to proceed on frustratingly familiar grounds that effectively insulate MDL master complaints from many motions to dismiss.

As its full name indicates, In re: Allergan involves the manufacturer’s Class III textured breast implants and Class II textured tissue expanders, which were voluntarily recalled after evidence suggested that they cause a certain form of cancer at a higher rate than other textured breast implants. The plaintiffs allege that the process by which the implants were manufactured resulted in “overly aggressive and inconsistent texturing” that in turn allegedly increased the implants’ surface area and led particles to form on their surface. The plaintiffs claim that these purported conditions caused them to suffer cancer or be at a higher risk of suffering cancer. Based on those allegations, the plaintiffs assert failure-to-warn, manufacturing-defect, negligence-per-se, breach-of-warranty, misrepresentation, and consumer-fraud claims under the state laws of various states.

The manufacturer moved to dismiss the plaintiffs’ master complaint, moving to dismiss all claims on state-law grounds and moving to dismiss the claims implicating Class III devices on preemption grounds as well. The motion to dismiss on preemption grounds targeted claims involving devices that had received premarket approval (PMA) from the FDA and devices that that had been cleared by the agency under the Investigational Device Exemption. Applying unduly lenient pleading standards, the court granted the motion in small part and denied it in large part. The court justified its application of a lax pleading standard on two grounds.

First, the court refused to consider whether the master complaint adequately pleaded certain elements of the plaintiffs’ claims, precisely because those claims were asserted in an MDL master complaint. For example, the court declared that it “need not review the factual sufficiency of Plaintiffs’ negligent misrepresentation allegations,” explaining that assessing their “factual sufficiency under the potentially varying state laws of negligent misrepresentation would be both cumbersome and unrealistic at this stage, especially when individual Plaintiffs may allege separately in their Short Form Complaints [the] misrepresentations to which they each [supposedly] have been exposed.” 2021 WL 1050910, at *32. Indeed, time and again the court “decline[d] to scrutinize … at this stage” of the proceedings whether the master complaint alleged facts sufficient to establish elements of the plaintiffs’ claims. Id. at *42. This is true with respect to claims subject to Rule 8(a) as well as claims subject to Rule 9(b). Simply put, the court would not apply the otherwise applicable pleading requirements because the complaint at issue was a master complaint in an MDL. When one compares the result in the In re: Allergan MDL to the opposite result in D’Addario v. Johnson & Johnson, 2021 WL 1214896 (D.N.J. 2021), a one-off case raising similar allegations against another manufacturer’s textured breast implants, the MDL effect is cast in sharp relief.

The court’s second justification for ignoring basic federal pleading standards is in some sense even more disturbing because it would by its logic apply to all cases, not just MDLs. According to the court, “fairness compels that some leniency be afforded plaintiff[s] from the stringent Twombly/Iqbal pleading standards to allow [their manufacturing-defect] claim to proceed” because the plaintiffs “do[] not have access to” the relevant PMAs, which are confidential, and are thus supposedly unable to plead a specific federal violation, as is necessary to avoid express preemption under 21 U.S.C. § 360k(a). 2021 WL 1050910, at *13 (internal quotation marks omitted). That of course echoes the Seventh Circuit’s abominable decision in Bausch v. Stryker Corp., 630 F.3d 546 (7th Cir. 2010), which we have pilloried many times, including here and here. And, as in Bausch, the court’s analysis fails to appreciate that both Twombly and Iqbal involved situations in which the plaintiffs did not have access to information within the defendant’s control. In Twombly, the plaintiffs asserted an antitrust claim that required them to prove, and thus to allege, a conspiracy among the defendants. Despite the defendants controlling the information that would be necessary to establish a conspiracy, the Supreme Court held that the plaintiffs were required to plead facts sufficient to plausibly suggest an entitlement to relief. Iqbal confirmed that requirement, holding that a plaintiff who brought a Bivens action had to plead facts sufficient to plausibly suggest that the defendant acted with “discriminatory intent,” even though the defendant’s mental state was known only to the defendant. In short, Twombly and Iqbal hold that a plaintiff must plead facts sufficient to state a claim even where the plaintiff is at an informational disadvantage. Like Bausch before it, In re: Allergan cannot be reconciled with this Supreme Court precedent.

You know that things are not going to go well from a defense perspective when a court ignores Twombly and Iqbal. And, sure enough, there is much to dislike in In re: Allergan.

That said, the court did get some things right.

Rejecting the plaintiffs’ contrary contention, the court held that claims implicating devices used pursuant to the Investigational Device Exemption (IDE) are subject to express preemption under 21 U.S.C. § 360k(a). 2021 WL 1050910, at *8.

Another bright spot in an otherwise dreary decision is the court’s recognition that the Changes Being Effected (CBE) regulation, which allows device manufacturers to change a device label under certain circumstances without receiving prior FDA approval, “is permissive, not mandatory”—and that a state-law failure-to-warn claim that would require a manufacturer to have used the CBE process to change its label is therefore preempted under § 360k(a) because it would impose “a state-law duty that differs from or adds to the federal requirements.” 2021 WL 1050910, at *9–10 (internal quotation marks omitted). On this basis, the court dismissed the plaintiffs’ failure-to-warn claims insofar as they rested on the allegation that the manufacturer failed to revise its labeling to warn of the purportedly enhanced risk of cancer.

Satisfying too is the court’s recognition that § 360k(a) preempts claims implicating a device that had originally been classified as a Class II device but was subsequently reclassified as a Class III device and given premarket approval. As the court put it, “claims against … reclassified devices, which had the PMA approval when used by Plaintiffs, are treated no differently from the claims against the” devices that were PMA-approved from the outset. 2021 WL 1050910, at *14.

Finally, the court correctly concluded that the plaintiffs’ failure-to-warn claims were expressly preempted insofar as they rested on the manufacturer’s alleged failure “to conduct post-PMA clinical studies,” because “there is no state law duty that requires [a manufacturer] to undertake [such] studies.” 2021 WL 1050910, at *15.

Apart from that and the dismissal of a various claims under the laws of various states, the decision isn’t great, but it does provide ample fodder for this blogpost.

Different models of breast implants are at issue in the In re: Allergan MDL. They were distributed through different legal pathways. The great majority received PMA; a few others were IDE devices; yet others (empty implants used as “tissue expanders”) were cleared through the 510(k) process. As noted above, the court recognized that claims implicating IDE devices, like those implicating PMA devices, are subject to preemption under § 360k(a). Although the manufacturer did not seek dismissal of claims implicating the tissue expanders on preemption grounds, the court nevertheless addressed preemption in the context of 510(k) devices. Without any analysis beyond an indirect citation to the ill-conceived and outdated decision in Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996), the court said in dicta that claims implicating 510(k) devices are not subject to preemption.  As the blog has noted before, that conclusion is dubious not only because the 510(k) today is significantly different from the process by which the Lohr device was cleared, but also given PLIVA v. Mensing, 564 U.S. 604 (2011), and Mutual Pharmaceutical Co. v. Bartlett, 570 U.S. 472 (2013), which suggest that some claims implicating 510(k) devices are at least impliedly preempted even if not expressly preempted.

While the court recognized that claims implicating PMA and IDE devices are in principle subject to preemption under § 360k(a), it took an exceedingly narrow view of when claims are preempted.

Citing a series of unpublished Ninth Circuit decisions that mechanically follow that court’s misguided decision in Stengel v. Medtronic, Inc., 704 F.3d 1224 (2013), while at the same time ignoring Mink v. Smith & Nephew, Inc., 860 F.3d 1319 (11th Cir. 2017), and other precedential appellate decisions that have rejected such claims, the court held that failure-to-warn claims predicated on a manufacturer’s alleged failure to file adverse-event reports with FDA are neither expressly nor impliedly preempted

In so concluding, the court disregarded the nature of adverse-event reports, misconstrued Restatement (Second) of Torts § 388 cmt. n, and adopted an unduly restrictive view of Buckman Co. v. Plaintiffs’ Legal Committee, 531 U.S. 341 (2001). The court failed to recognize that, as explained in Aaron v. Medtronic, Inc., 209 F. Supp. 3d 994, 1005 (S.D. Ohio 2016), adverse-event reports are not warnings. The court compounded that error by misreading the Restatement as imposing a state-law duty to submit adverse-event reports to the FDA. Comment n to § 388 says that a manufacturer can satisfy its duty to warn a product’s end-user by warning a third-party “through whom the [product] is supplied” when the manufacturer can reasonably rely on the third-party to convey the warning to the end-user, such as when the third-party has a duty to do so. In treating the FDA as a third-party intermediary for purposes of § 388, the court ignored the obvious fact that medical products such as breast implants are not supplied by the FDA, the fact that the FDA is not obligated to make adverse-event reports public, and the fact that adverse-event reports are not actively distributed to doctors even when made public. Finally, declaring itself “bound by the Third Circuit’s interpretation of the holdings in Buckman,” the court—citing no Third Circuit decision, when the only Third Circuit precedent, Sikkelee v. Precision Airmotive Corp., 907 F.3d 701, 716–17 (3d Cir. 2018), supports preemption—suggests that failure-to-warn claims predicated on a manufacturer’s alleged failure to file adverse-event reports with FDA are not preempted under Buckman because Buckman’s holding is, supposedly, limited to fraud-on-the-FDA claims. 2021 WL 1050910, at *11. That suggestion ignores the various cases that have characterized such failure-to-warn claims as fraud-on-the agency claims and cannot be reconciled with the Supreme Court’s own understanding of Buckman, which, the Court has explained, held that the FDCA preempts any “state tort-law claim based on failure to properly communicate with the FDA.” PLIVA, Inc. v. Mensing, 564 U.S. 604, 619 (2011).

The In re: Allergan court also missed the mark when analyzing whether plaintiffs’ manufacturing-defect claims are preempted. As noted at the outset, the court—ignoring Twombly and Iqbal in the name of “fairness”—excused the plaintiffs’ failure to identify a specific PMA requirement that the manufacturer allegedly violated. Moreover, it held that the plaintiffs could base their manufacturing-defect claims on the manufacturer’s alleged violation of an FDA Current Good Manufacturing Practice (CGMP). 2021 WL 1050910, at *13. There is conflicting law on that point, and the court’s conclusion is arguably contrary to Irizarry v. Abbott Laboratories, 833 F. App’x 947, 949–50 (3d Cir. 2020), in which the Third Circuit affirmed the dismissal of a manufacturing-defect claim, finding that a complaint that “d[id] not set forth the premarket approval requirements” that were allegedly violated “d[id] not plausibly allege” a parallel claim that survived preemption.” This blog has repeatedly argued that because the CGMPs are intentionally vague and designed to give manufacturers complete discretion in how they are to be implemented, a state-law claim based on an alleged CGMP violation necessarily imposes a state-law duty that is “different from, or in addition to” the federal requirements and is thus expressly preempted under 21 U.S.C. § 360k(a).

But even if a CGMP violation could in theory support a manufacturing-defect claim, it is hard to see how 21 C.F.R. § 820.30(g), the CGMP cited by the In re: Allergan court, could sustain a non-preempted claim. To start, § 820.30(g) addresses “design validation,” not manufacturing processes. Furthermore, its requirement that a manufacture conduct “testing of production units under actual or simulated use conditions” is—to the knowledge of this blogger—not found in the law of any state. If it is not, and the court cited no state’s laws to suggest otherwise, then a claim based on an alleged violation of § 820.30(g) would be both expressly preempted, because the state and federal requirements would not be “identical” (Medtronic, Inc. v. Lohr, 518 U.S. 470, 495 (1996)), and impliedly preempted, because the “existence of the[] federal enactment is a critical element in [the plaintiffs’] case.” Buckman, 531 U.S. at 353.

As if these problems weren’t enough, the court’s conclusion that the plaintiffs’ manufacturing-defect claims avoid preemption disregards the essence of their master complaint. To state a manufacturing-defect claim, one must allege and ultimately prove that the particular unit received by the plaintiff differed from its intended design or from other ostensibly identical units. The In re: Allergan plaintiffs, however, do not allege that their textured breast implants differed from their intended design or from other ostensibly identical units. On the contrary, the plaintiffs contend that every Biocell breast implant was defective because the manufacturing process supposedly resulted in the formation of particles and excessive surface areas—and even assert a class action on behalf of all recipients. Thus, plaintiffs’ real complaint is with the manufacturing process as designed and as approved by the FDA. That is to say, the plaintiffs’ manufacturing defect claims “are a frontal assault on the FDA’s decision to approve” the device’s PMA “after weighing the product’s benefits against its inherent risks.” In re Medtronic, Inc., Sprint Fidelis Leads Prod. Liab. Litig., 623 F.3d 1200, 1207 (8th Cir. 2010).

By this point it should not surprise the reader that the In re: Allergan court denied the manufacturer’s motion to dismiss the plaintiffs’ negligence-per-se claims on preemption grounds. What is particularly depressing about the court’s ruling in this regard is that it relied on In re Orthopedic Bone Screw Product Liability Litigation, 193 F.3d 781 (3d Cir. 1999), to support its conclusion. But that decision is part of the same litigation that ended in Buckman, which squarely held that 21 U.S.C. § 337(a) impliedly preempts any state-law claim for which the existence of the FDCA “is a critical element.” 531 U.S. at 353. Given that the plaintiffs’ negligence-per-se claims rest on the defendants’ alleged violation of the FDCA and its implementing regulations, Buckman plainly precludes such claims (as many but not all courts have held). The In re: Allergan court went astray when it concluded that the plaintiffs’ negligence-per-se claims were not preempted under Buckman because they “invoke the statutory violations to prove defendants’ liability for a separate underlying tort, instead of contending the violations themselves form a cause of action.” 2021 WL 1050910, at *14 (quotation marks omitted). But the mere fact that states recognize negligence actions does not save negligence-per-se claims from preemption. Rather, to avoid preemption under Buckman, “the conduct on which the claim is premised must be the type of conduct that would traditionally give rise to liability under state law—and that would give rise to liability under state law even if the FDCA had never been enacted.” Riley v. Cordis Corp., 625 F. Supp. 2d 769, 777 (D. Minn. 2009). A negligence-per-se claim predicated on a violation of the FDCA and its implementing regulations does not satisfy that test.

Despite getting most of the preemption analysis wrong, the In re: Allergan court did ultimately dismiss some of the plaintiffs’ failure-to-warn, negligence-per-se, negligent-misrepresentation, warranty, and medical-monitoring claims on state-law grounds, concluding (after providing useful multi-state surveys) that some states do not recognize the plaintiffs’ theories of liability. That is a good reminder that dismissal on state-law grounds is possible even when a court gets the preemption analysis wrong and that counsel should not rely exclusively on preemption when seeking dismissal of arguably preempted claims.

But the In re: Allergan court let most of the claims (and class allegations) through after declaring once again that it would review the sufficiency of plaintiffs’ allegations “with leniency.” 2021 WL 1050910, at *18. That’s an MDL for you.