Several Reed Smith attorneys, including Bexis, will be presenting an hour-long webinar entitled (so creatively) “3D Printing and Tort Liability” next Thursday beginning at noon Eastern Time. You can pick up an hour of CLE in a number of states. Anyone who is interested can register here. We’re biased, but we believe that the written materials alone (including the first public availability of a forthcoming law review article on this topic) are worth the price of admission – it’s free.
The U.S. Supreme Court’s game-changing Bauman opinion in 2014 has us writing a lot on personal jurisdiction. A while back we marveled over how quickly lower courts have responded to Bauman. We had anticipated that it would take the passage of an entire generation of lawyers and judges steeped in International Shoe for Bauman’s more disciplined concept of general personal jurisdiction to take root. The actual results have been better than we expected. There have, however, been some bumps in the road. There was the California Supreme Court’s aggressive take on specific personal jurisdiction in Bristol-Myers Squibb Co. v. Superior Court, where the court expanded this prong of personal jurisdiction beyond recognition. The court essentially slapped the “specific jurisdiction” label on concepts of general jurisdiction that the U.S. Supreme Court overruled. We discussed that case here and here.
Another open battlefield is jurisdiction by consent, and a district court in Pennsylvania recently entered an order favoring consent that again stretches personal jurisdiction beyond Constitutional limits. The case is Bors v. Johnson & Johnson, No. 16-2866, 2016 U.S. Dist. LEXIS 128259 (E.D. Pa. Sept. 20., 2016), and the district court in Bors held that a foreign corporation consented to general personal jurisdiction in Pennsylvania merely by registering to do business in Pennsylvania. Id. at **1-12. It was undisputed that the corporation had no other contacts with Pennsylvania and that the plaintiff’s action arose from commercial transactions that occurred outside that commonwealth. In this district court’s view, the foreign corporation registration alone justified subjecting the corporation to general personal jurisdiction in Pennsylvania, i.e., personal jurisdiction over any dispute whatsoever, no matter the subject matter.
The district court was not writing on a clean slate. Since Bauman, several courts have considered consent to jurisdiction, and most have decided that registering to do business does not alone constitute consent to personal jurisdiction. A notable example is Brown v. Lockheed-Martin Corp., 814 F.3d 619 (2d Cir. 2016), where the Second Circuit rejected “jurisdiction by consent” based on business registration and which prompted us to create our post-Bauman jurisdiction scorecard (including all consent cases), which you can find here. The Second Circuit rejected general personal jurisdiction because allowing jurisdiction though “routine bureaucratic measures” would rob Bauman of any meaning by way of a “back door thief.” 814 F.3d at 640. Nice. In another major decision, the Delaware Supreme Court relied on Bauman to reverse its older decisions that had recognized jurisdiction by consent. See Genuine Parts Co. v. Cepec, 137 A.3d 123, 144-48 (Del. 2016).
For the district court in Bors, there was one fact that trumped everything else, including Bauman’s due process analysis: Pennsylvania’s statute “specifically advis[ed] the [foreign corporation] registrant of its consent to personal jurisdiction through registration.” Id. at *2 (citing Pa. Consol. Stat. Ann. § 5301). From this manifestation of “consent,” the district court found general personal jurisdiction and held that “general and specific jurisdiction principles applying to non-consensual personal jurisdiction do not apply.” Id.
We have numerous problems with the district court’s somewhat glib disregard for “general and specific jurisdiction principles” based on “consent” language placed in a state statute.
First, the starting point for the court’s analysis is that courts “can find personal jurisdiction in three ways: consent to general jurisdiction, general jurisdiction, or specific jurisdiction.” Id. at *5. We do not claim to be the world’s experts on personal jurisdiction, but this formulation struck us as odd. A legion of cases speaks of two kinds of personal jurisdiction—general and specific. So we looked at the district court’s authority, a single unpublished order from the Eastern District of Pennsylvania dated 1996. That order does not set forth “consent to general jurisdiction” as a separate basis for personal jurisdiction. It describes general and specific jurisdiction (“Personal Jurisdiction can be either general or specific”) and ruled that the defendant’s forum contacts were insufficient to support personal jurisdiction. American Fin. Cap. Corp. v. Princeton Elec. Prods., No. Civ. A. 95-4568, 1996 WL 131145, at *3 (E.D. Pa. Mar. 20, 1996). It is a classic pre-Bauman forum contacts analysis. It may be that there is some case out there identifying the district court’s “three ways” to find jurisdiction, but the district court did not cite one, and presumably neither did the plaintiffs. The Supreme Court’s recent forays in personal jurisdiction surely have not.
Second, the district overstated the power of consent. There is no doubt that a defendant can consent to jurisdiction. In California, for example, we still have the “general appearance,” and if you answer the complaint, you waive objections to personal jurisdiction in that case. Parties to a contract can consent to personal jurisdiction in a particular forum for disputes arising from the contract. But those consents are limited, i.e., specific. We view it as altogether different for a district court to cite a line from a statute and a routine business registration to impose general personal jurisdiction, i.e., jurisdiction over all matters. In this regard, the district court relied heavily on another district court’s order in Acorda Therapeutics, Inc. v. Mylan Pharm. Inc., 78 F. Supp. 3d 572 (D. Del. 2015), which based personal jurisdiction on the defendant’s business registration in Delaware. Bors, at *10. But the district court failed to mention that (1) the Delaware Supreme Court took a look at Bauman after Acorda and eliminated consent to general jurisdiction; (2) another judge in a companion case disagreed that business registration constituted consent to jurisdiction; and (3) the Federal Circuit affirmed the Acorda order not on the basis of business registration, but only because the defendant’s forum contacts were sufficient to exercise specific jurisdiction. (The district court could have learned all about this by reading our post on Acorda.) In the end, we disagree with the district court’s statement that there is no “distinction” between a forum selection clause and finding general personal jurisdiction based on business registration. We see a big difference: One is confined to a specific subject matter, the other is not.
Third, and perhaps most importantly, the district court lost sight of the limits on general and specific jurisdiction imposed by due process and the United States Constitution. This is important because the district court is basing personal jurisdiction on a Pennsylvania long-arm statute. Remember the case that the district court cited for the “three ways” to establish personal jurisdiction? That case says flat out that “[i]f the long-arm statute confers jurisdiction, it must of course comport with the Due Process Clause of the Constitution.” American Fin. Cap. Corp., 1996 WL 131145, at *3 (emphasis added). This is as about as close to a truism as you ever get in the law. Yet, the district court in Bors disregarded authorities on general and specific personal jurisdiction because they dealt with “nonconsensual” jurisdiction. Not so fast. The “consent” here is bestowed by a state statute, and the statute can only operate within the confines of the Constitution and due process. That was the whole point of Bauman. The Constitution does not allow a state to assume general personal jurisdiction over a corporation, no matter how hard it tries, unless the corporation is “at home” in that state, barring “exceptional” circumstances, which did not exist in Bors. The district court should not have performed an end run on this binding law.
This order is not the last word on “jurisdiction by consent.” From our point of view, the fault with the order lies with its elevation of consent to be co-equal with general and specific jurisdiction. Doing so ignores that general and specific jurisdiction have Constitutional dimensions and that any jurisdiction based on consent needs to operate within that structure, not outside of it.
With one sentence, a circuit judge signaled yesterday that the Fifth Circuit is watching with acute interest what’s going on in the Pinnacle Hip Implant MDL in Dallas:
Although the district court misapplied Rules 43(a) and 45(c), I concur in the denial of the petition for a writ of mandamus.
Oh my. While that may not be a shot across the bow of the MDL bellwether process, it’s an attention-grabber.
Technically, this was a loss for the defendants. They asked the Fifth Circuit to direct the MDL court to vacate an order authorizing plaintiffs to subpoena company witnesses no matter where they are in the country to testify at a bellwether trial via satellite or other contemporaneous transmission. And the Fifth Circuit denied the petition. But petitions for writs of mandamus are always lost. The possibility of victory is so slim that the legal background sections of most petitions actually find it useful to argue that it is untrue that writs of mandamus are “never” issued. It’s only “hardly ever.”
But the one-sentence concurrence by Circuit Judge E. Grady Jolly is a victory of other sorts.
First, it announces that the MDL court got it wrong. The MDL court issued a blanket order authorizing the contemporaneous transmission testimony. Yet the Advisory Committee notes to FRCP 43(a), which addresses trial testimony in open court, say that video trial depositions are preferred to contemporaneous transmission testimony and, as in every drug or device mass tort, plaintiffs have already taken trial-ready video depositions of the company witnesses and those videos are available to be played to the jury at trial. Also, the MDL court analyzed no individual facts or circumstances of specific witnesses before issuing its blanket order, even though FRCP 43(a) authorizes courts to accept contemporaneous transmission testimony only for “good cause in compelling circumstances.” The court also ignored FRCP 45’s 100-mile rule, instead twisting it to require potential witnesses across the country to go to a courthouse within 100 miles of them to testify by satellite. Requiring company witnesses to testify live (and prepare), trial after trial, will burden witnesses and, in the end, it will pressure the defendants. It’s meaningful that there is now a concurrence stating that the MDL court misapplied the federal rules.
Second, and more interesting, the concurrence could elicit practical responses from the MDL court. For instance, will it take the hint and vacate its order? That certainly seems advisable—or, at least, it is advisable to reconsider it. Also, while a “mode of testimony” issue is not an easy issue to tee-up in a post-trial appeal, the Fifth Circuit may be more willing in this instance to take it up—or, at least, speak on it—given that it already signaled to the MDL court its importance.
Additionally, the appeal of the second bellwether trial will be heard soon enough by the Fifth Circuit, and that will involve the many controversial evidentiary and procedural rulings made during that trial by the MDL court. With that on the horizon and with the language of Judge Jolly’s concurrence yesterday, will the MDL court now alter its approach to those same evidentiary and procedural rulings at the third bellwether trial, which starts on October 3? Again, there is reason to do so. The gaze of the Fifth Circuit is now firmly fixed on this MDL and this bellwether trial. The defendants have made sure of it. And it all starts Monday.
This post is from the non-Reed Smith side of the blog.
If you’re even remotely interested in the topic of preemption in Pre-Market Approved (PMA) medical devices that were used in an off-label manner, simply search this blog for our Infuse cases. There are dozens and almost all are complete victories for the defense. What occasionally survives are fraud or misrepresentation claims, although they have a tough time meeting the heightened pleading standard of Rule 9(b), or failure to warn claims where a court recognizes failure to submit adverse events to the FDA as parallel to a state law duty to warn physicians. As you’ll easily see from our prior writings, we don’t understand that parallelism at all.
The most recent Infuse victory strikes a blow at each and every attempt by plaintiffs to circumvent, dodge, sidestep, and elude preemption and pleadings standards. And with each by-pass blocked, plaintiffs’ claims had nowhere to go.
As a quick refresher, Infuse is a medical device used to stimulate bone growth in spinal fusion surgeries. It is a multi-component device that received FDA PMA approval for use in single-level, anterior, lumbar surgeries. Aaron v. Medtronic, Inc., — F. Supp.3d –, 2016 WL 5242957, *1-2 (W.D. Ohio Sep. 22, 2016). Aaron is actually a consolidation of the claims of several hundred plaintiffs who alleged they were injured by their surgeon’s use of the Infuse device in an off-label manner. Specifically, they allege the device was either implanted without all of its component parts, implanted posteriorly, implanted at multiple levels, or implanted in their cervical or thoracic spines. Id. at *2. Plaintiffs’ causes of action are fraud/misrepresentation, strict liability failure to warn, strict liability design defect, negligence, and breach of express and implied warranties. Id. Defendants moved to dismiss all claims on several grounds, including most predominantly preemption.
Before getting to the substantive analysis, the court had to consider what pleadings standard to apply. Wait. Isn’t it TwIqbal? What’s the issue? The answer is the Seventh Circuit decision in Bausch v. Stryker. The Aaron plaintiffs alleged that they did not need to plead the specific federal law or regulations that defendant allegedly violated because medical device products liability cases should have a “more permissive” review standard. Id. at *3. Plaintiffs got that idea from Bausch which held that particularity in pleading the specific FDA regulations violated was not necessary due to much of the “critical information” being kept confidential. Id. at *3-4. Many courts disagree with Bausch, including the Sixth Circuit which held in a non-medical device case that a “natural imbalance of information” does not warrant lowering Rule 8’s pleading standards. Id. at *4. The discovery process cannot be used to find sufficient factual support for plaintiffs’ pleadings after the fact. So, Aaron applies TwIqbal, not some watered down version (although the court does state that some of plaintiffs’ claims might not have withstood application of that lesser standard).
The next question the court had to answer is whether any of plaintiffs’ allegations about off-label use changed the Riegel test for PMA preemption – a two-step analysis that requires the court to determine first whether the FDA has established any specific requirements for the device (satisfied in PMA devices) and if so, whether plaintiffs’ state law claim impose requirements that are different from or in addition to the federal requirements. Plaintiffs’ argument is that because the device was used off-label the FDA has not established any PMA requirements for Infuse as it was used on plaintiffs. Incorrect said the court. “Premarket approval extends to all components of an approved device, even when a physician uses the components separately.” Id. at *6. This is confirmed by the FDCA’s definition of “device” to include “any component” of the device. Id. at *7. So, off-label allegations don’t change the first part of the Riegel test – PMA devices are subject to specific federal requirements.
Moving to step two of Riegel, the court had to determine whether any of plaintiffs’ state law claims were parallel claims. Traditional failure to warn is always easy – it’s expressly preempted because the defendant cannot provide any warning other than that approved by the FDA. Id. But, plaintiffs have tried to morph their failure to warn claims into claims for failure to submit adverse event reports to the FDA. A claim unfortunately recognized by the Ninth and Fifth Circuits. We’ve never understood how an FDCA requirement that a device manufacturer submit adverse event reports to the FDA was the same as a state law duty to warn physicians and the Aaron court likewise did not see the connection. There is no Ohio state law duty to report adverse events to the FDA and the federal duty to do so “is not identical and thus not parallel, to the state-law duty to provide warnings to patients or their physicians.” Id. at *8. That seems readily apparent to us, but the court goes further in breaking it down. It starts with a simple concept that the Ninth and Fifth Circuits have overlooked: “Adverse-event reports are not warnings.” Id. They are regulatory submissions. Adverse event reports are anecdotal accounts of incidents. More importantly, they are not “valid scientific evidence” upon which the FDA may base a labeling change. Id. In other words, if the theory accepted by courts who have recognized this cause of action is that by submitting adverse event reports to the FDA, the manufacturer is “warning” the FDA who will then in turn require manufacturers to warn doctors – that theory is just wrong. There is no federal requirement that manufacturers submit adverse event reports to physicians or the public. There is no state-law requirement that medical device manufacturers submit adverse event reports to the FDA. The requirements are not “genuinely equivalent.” Id. There is no parallel claim.
Even if not persuaded on express preemption, a failure to submit adverse event reports to the FDA fits squarely within Buckman implied preemption. As noted above, there is no state law for failure to submit reports to the FDA. The duty to submit doesn’t exist absent the FDCA, so plaintiffs’ claim is “an impermissible attempt to enforce exclusively federal requirements with no counterpart in state law.” Id. at *12.
Design defect seems like an easy preemption question in a PMA case as well. The FDA has approved a specific design. Any design defect claim asks a jury to find that the device should have been designed in a manner different than that approved by the FDA. Express preemption. Once again plaintiffs tried a little sidestep maneuver. In their response to the motion to dismiss, they cite to some FDA manufacturing regulations and argue that their design defect claim should survive based on allegations not asserted in the complaint that defendant failed to adhere to FDA manufacturing standards. Id. at *10. But the complaint didn’t allege a manufacturing defect claim, only design defect. As to the latter,
allowing a design defect claim to proceed would be tantamount to holding that a medical device design that has been approved by the FDA can nonetheless by legally deficient – an encroachment on federal regulatory authority that 21 U.S.C. §360(k) was specifically designed to prevent.
The next expressly preempted claim was breach of express warranty. Because plaintiffs alleged breach of warranty as to effectiveness and safety, a jury would have to find the device not safe and effective – which would directly conflict with the FDA’s PMA conclusion that the device was safe and effective. Id.
The last preempted claim was for “off-label promotion.” Another concept for which no state-law duty exists. The “very concept” of off-label promotion doesn’t exist outside the MDA and its requirement that the FDA approve medical devices and their labels. Id. at *12. There is nothing in Ohio state law that prohibits manufacturers from promoting their devices for off-label uses. Any allegation that off-label promotion is unlawful is actually a claim for violating the FDCA. Therefore, it is impliedly preempted as an attempt to privately enforce the FDCA, something that has been left exclusively to the FDA. Id. at *13.
Although all plaintiffs’ product liability claims were dismissed as preempted, the court still reviewed other state law arguments for dismissal, including one based on comment k of the Restatement. Comment k provides an exemption from strict liability for unavoidably unsafe products, such as prescription drugs and medical devices. Plaintiffs argued that whether any particular medical device is unavoidably unsafe is a case-by-case determination that could not be made at the pleadings stage. The court thought defendant had the better argument: “Infuse’s classification by the FDA as a Class III medical device inherently means that it is unavoidably unsafe.” Id. at *15. The court was satisfied that Infuse was an unavoidably unsafe product based on the FDA’s determination that it needed to be a restricted device due to its “potential for harmful effect,” and that Class II regulatory controls weren’t sufficient to ensure safety and effectiveness. Id.
The court was also unpersuaded by plaintiffs’ arguments that it was too early in the proceedings to determine whether there was a less risky alternative design because “there is no alternative design for Infuse that could lawfully be marketed.” Id. Manufacturers are prohibited from changing the design of a PMA device without FDA permission. No need to belabor the issue in discovery.
That brings us to plaintiffs’ fraud claims which are subject to the heightened pleadings requirements of Rule 9. The court focused on one of the ways in which plaintiffs’ fraud allegations failed to meet that standard. Plaintiffs alleged both that their surgeon, acting as defendant’s agent, knew about the risks of using the Infuse device in an off-label manner and concealed those risks from plaintiffs, and that defendant did not adequately inform plaintiff’s surgeon of the risks and that he was justified in relying on defendant’s concealments and misrepresentations. Id. at *17. While you can plead alternative causes of action, you can’t plead inconsistent versions of the facts in support of a single claim. Id. Plaintiffs can’t have it both ways. Either the surgeon had or did not have knowledge of the risks. The contradictory allegations defeated plaintiffs’ fraud-based claims.
With that several hundred Infuse claims were dismissed in their entirety. Another great victory for Medtronic and a really strong opinion rejecting some of our least favorite decisions. Win-win.
When we think of prescription medical devices, we usually think of the sorts of devices that are implanted during surgery and tend to end up in litigation—artificial joints, pacemakers, surgical meshes, and bone cements, to name a few. Devices according to the FDCA also include “in vitro reagent[s] . . . intended for use in the diagnosis of disease or other conditions.” There are a whole slew of diagnostic devices that are used to test blood, tissue, or other stuff from the body to provide useful health information. Some of them get used directly by health care professionals, some can be purchased over-the-counter, and some need a prescription for the patient to use it at home. We know that plaintiffs sue over just about every kind of device under a range of theories, but we do not recall seeing consumer fraud claims over prescription diagnostic devices. That is what we have in Andren v. Alere, Inc., No. 16cv1255-GPC(NLS), 2016 U.S. Dist. LEXIS 124252 (S.D. Cal. Sept. 13, 2016), and we thought the issues were interesting enough to spend a little time sharing them with devoted readers.
Andren is a decision on a motion to dismiss a purported class action complaint brought by two plaintiffs, each of whom claimed to have suffered thrombotic events from inadequate anticoagulation as a consequence of inaccurate readings on a defendant’s test kit, which checks blood clotting times for people on anticoagulation therapy. We have some guesses about why they did not just pursue product liability claims for personal injury and some of the hurdles that they would stumble over on the way to class certification. None of that really mattered yet, because they tried to assert claims sounding in fraud and Fed. R. Civ. P. 9(b) requires heightened pleading for such claims. Some background on the device is in order first. Unlike the court, which had a discussion of what beyond the complaint it could consider—which we will omit here—we can say that the defendant recently elected to discontinue and withdraw the device that plaintiffs claim to have used, which followed the earlier recall of lots of the product made since 2008 because of issues with accuracy in certain patient populations or settings. Plaintiffs’ allegations were not limited to the particular device they used and were predictably broad. They alleged that the defendant and its predecessors received thousands of complaints of “malfunctions,” including some number that results with their devices differed significantly from what independent laboratories found on the same samples. Id. at **3-4. They alleged that FDA issued warning letters about adverse event reporting and other issues after 2005 and 2006 inspections of defendant’s predecessor in 2005 and 2006—well before the device at issue was cleared or sold. Id. at **4-5. In April 2014, the test strips portion of the test kit were recalled. In December 2014, the monitor portion and other products in the line were recalled. The recalls were because readings with the kits were sometimes significantly lower than they would have been if tested by laboratories. Id. at **5-6.
They way that these readings (of the International Normalized Ratio or “INR”) work is numbers that are lower than the expected range for someone on anticoagulation therapy (with the range depending on the underlying condition and other factors) should result in increased anticoagulation therapy. Having too much anticoagulation therapy can put a patient at risk for undesired bleeding. Each plaintiff claimed that their readings from the defendant’s test kits were incorrectly high, so they either failed to take a dose of anticoagulation on a certain day or reduced his regular dosage of anticoagulation over time—with each plaintiff apparently taking these actions without consulting health care providers. Id. at **7-9. So, the alleged product issues here were the opposite of the reason for the recalls. And then the plaintiffs claimed to have suffered a stroke (not specified as ischemic or hemorrhagic, but the former is about seven times more common and this one was apparently followed by transient ischemic attacks) or a transient ischemic attacks. Id. Based on the recounting of the medical allegations, then, the plaintiffs claimed the sort of injuries that were also the opposite of the risk implicit in the recall.
Setting that aside—for purposes of their claims, the injuries at issue were economic, not physical harm anyway—the plaintiffs did make allegations that they bought and used the products in reliance on defendant’s “representations that the products were accurate, convenient, effective, reliable, optimal and safe” and would not have purchased or used them if they had known of a risk of erroneous results. Id. They did not specify how they were exposed to any such representations, but the timing of the purported reliance was entirely after the recalls for one plaintiff and both before and after the recalls for the other plaintiff (with his alleged injury occurring in 2016). They did not make any allegations about their prescribing physicians’ respective exposure to or reliance on any representations. One plaintiff alleged that she did not know of the recall until 2016, after her TIA after her stroke. Id. at *8. The other plaintiff did not allege anything about his knowledge of the recall.
In this setting, the Andren court evaluated whether had properly plead any cause of action. The first step was to determine that the heightened pleading standard of Rule 9(b) applied to the counts asserted under the California Consumers Legal Remedies Act, the California Unfair Competition Law, common law fraud, and common law unjust enrichment. These all explicitly alleged fraud or “sound in fraud where Plaintiffs’ allegations are premised on a uniform course of fraudulent contact,” so 9(b) standards apply to all of them. Id. at **15-16. Given how often the California statutes are used for similar fraud-sounding allegations, applying heightened pleading standards—at least when the cases are in federal court—is a good thing.
The unjust enrichment count did not require separate analysis because unjust enrichment is not a separate cause of action under California law. The remaining counts were analyzed under the two basic claims they asserted: 1) that the defendant had materially misrepresented its products and 2) that the defendant had fraudulently concealed facts about its products.
As for misrepresentation, plaintiffs first claimed that reliance could be presumed based on federal security fraud cases, but that argument had already been rejected by the California Supreme Court. Reliance on specific misrepresentations had to be pled, but the misrepresentations did not have to be the “sole or even decisive cause of the injury-producing conduct.” Id. at *17. Plaintiffs did not get that far, as they did not alleged the standard “time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentation.” Id. at **18-19. Plaintiffs never alleged a single representation they saw or heard. Mentioning the content of defendant’s website does not matter without alleging that the plaintiffs saw and relied on it. Without such allegations, there is no claim for misrepresentation.
As for concealment, the plaintiffs had to allege a duty to disclose what was allegedly concealed, which had to be contrary to whatever representation was actually made. Absent a fiduciary relationship, a duty to disclose comes from 1) the defendant’s exclusive knowledge of material facts, 2) active concealment of material facts from plaintiff, or 3) partial representations with material facts suppressed. Id. at *21. Plaintiffs went with the first two options, claiming that the material facts all related to the risk of erroneous results—not specifically high or low results. As you might expect from the time sequence mentioned above, the warning letters and recall announcements discussed in the complaint were among the publically available sources of information about the risk of erroneous readings by the time the plaintiffs claimed to have been owed a disclosure. That meant plaintiffs had not alleged that defendant had exclusive knowledge of a material fact to create a duty. Id. at **23-24. Active concealment also went nowhere because plaintiffs did not allege any facts about concealing anything from them. So, there was no claim for fraudulent concealment.
This was plaintiffs’ first complaint, so the court sua sponte granted leave to amend. In so doing, it directed plaintiffs to “clarify whether the [device] was prescribed by Andren’s doctor” and, if it was, “properly alleged a failure to warn Plaintiffs’ prescribing physician in an amended complaint.” Id. at *28. (The other plaintiff apparently conceded that his device was prescribed, which makes sense for a prescription device. If plaintiffs obtained their prescription devices without a prescription, then they might have had a hard time pursuing any claim.) This direction flowed from the court’s analysis, relying largely on the well-known Motus, Norplant and Saavedra decisions, that consumer protection claims for prescription medical products are subject to the learned intermediary doctrine if the “claims are predicated on a failure to warn.” Here, “it appears that the misrepresentations and omissions claims are based on a failure to warn of the [device’s] discrepant results.” Id. at *28. This actually has potentially broad implications, particularly given the California statutes at issue. Even for a diagnostic device that a patient uses at home, consumer fraud allegations have to be based on the prescribing physician’s knowledge and decision making as long as there is a prescribing physician. Just as with product liability claims, the plaintiff may be able to make the right allegations up front about the relevant doctor having been misled by a representation or omission, but proving that is much harder than when the plaintiff’s own memory and speculation about taking a different action are the focus of inquiry. Properly focusing on prescribing physicians also means that class certification, if they ever get that far, should be a pipe dream.
We’ve blogged several times over the past couple years about the 2015 amendments to the federal rules as they pertain to discovery, including electronic discovery. Earlier this year, after the amendments had been in effect for a few months, we complained about how some courts were evading the new rules by citing a Supreme Court case, Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 (1978). Oppenheimer was dependent upon language in the prior Rule 26 − “reasonably calculated to lead to discovery of admissible evidence” − that the 2015 amendments intentionally deleted. We supported our point with empirical research showing that, of 73 citations to Oppenheimer following the amendments’ effective date, more than 70% of them, 53 cases, cited to the headnote for the obsolete language.
Well, it seems that we aren’t alone in recognizing a pattern of disregard for the 2015 amendments in recent discovery decisions. The MDL judge in In re Bard IVC Filters Products Liability Litigation, 2016 WL 4943393 (D. Ariz. Sept. 16, 2016), pointed out the same kind of ongoing judicial disregard for the rules that we spotted earlier. IVC Filters held that – yes, even in an MDL – discovery requests must be proportional to their compliance costs. It just so happens that this judge, Hon. David G. Campbell, is also chair of the Advisory Committee on the Federal Rules. So he knows of what he speaks.
You’re probably thinking that the discovery request in question in IVC Filters had to be pretty absurd, and you’re right. Despite not a single overseas plaintiff in the MDL, plaintiffs sought all communications with foreign regulators from foreign affiliated companies of the defendant. 2016 WL 4943393, at *3-4. Specifically, plaintiffs sought to force the defendant to rummage through electronic communications of affiliates in “Canada, Korea, Australia, India, Singapore, Malaysia, Italy, Ireland, the United Kingdom, Denmark, the Netherlands, Sweden, Norway, Finland, Mexico, Chile, Brazil, and China . . . for the last 13 years.” Id. at *4. You can imagine how expensive and time consuming it would be to sort through that many overseas computer systems. Adding to the expense would be obsolete formats, some over a decade old, in multiple languages. The objective would be hypothetical communications concerning other countries’ regulatory schemes not at issue in the litigation. As we’ve discussed before, foreign regulatory actions, as such, are neither relevant nor admissible in American product liability litigation.
That’s where the 2015 rules changes came in. “The new rule defines the scope of permissible discovery as . . . non-privileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case.” Id. at *1. The language before the amendments was broader. “Before the 2015 amendments . . . inadmissible evidence was discoverable if it ‘appears reasonably calculated to lead to the discovery of admissible evidence.’” Id. IVC Filters pointed out that deletion of the “reasonably calculated” language specifically intended to curtail discovery that had gotten out of hand:
The former provision for discovery of relevant but inadmissible information that appears “reasonably calculated to lead to the discovery of admissible evidence” is also deleted. The phrase has been used by some, incorrectly, to define the scope of discovery. As the Committee Note to the 2000 amendments observed, use of the “reasonably calculated” phrase to define the scope of discovery “might swallow any other limitation on the scope of discovery.” . . . The “reasonably calculated” phrase has continued to create problems, however, and is removed by these amendments.
Id. at *2 (quoting Advisory Committee Notes for 2015 Amendments, 305 F.R.D. 457, 555 (2015)).
Before proceeding to the merits of the dispute, IVC Filters indicated the same displeasure we had expressed in our prior post about courts’ continuing reliance on the now-eliminated “reasonably calculated” language of pre-amendments Rule 26:
The 2015 amendments thus eliminated the “reasonably calculated” phrase as a definition for the scope of permissible discovery. Despite this clear change, many courts continue to use the phrase. Old habits die hard.1
1Last month alone, seven cases relied on the “reasonably calculated” language to define the scope of permissible discovery. Several other cases cited the language as though it were still part of Rule 26(b)(1).
2016 WL 4943393, at *2 & n.1 (citations to the offending cases omitted). We can only hope that, in calling out wayward, erroneous decisions, IVC Filters publicizes the point (which obviously needs reinforcement) that the federal rules governing scope of discovery have changed significantly.
End of rant.
On the merits of the discovery dispute, IVC Filters observed that “most of the communications with foreign regulators originate in the United States and thus will be captured by the ESI [electronically stored information] searches currently underway.” 2016 WL 4943393, at *4. Thus, the amount of new information from plaintiffs’ proposed wild goose chase through the files of foreign subsidiaries was small. Likewise, the information being sought was “only marginally relevant.” Id. The plaintiffs’ “narrow purpose” was “to determine if any of those communications have been inconsistent with Defendants’ communications with American regulators.” Id. Plaintiffs offered only “mere conjecture” that somewhere an affiliate of the defendant might have said something “inconsistent” to a foreign regulator. Id.
That’s a classic fishing expedition, and an extremely costly one at that. As all too often happens in MDLs, plaintiffs are pursuing conjectural discovery for the overwhelming purpose of running up the defendants’ discovery costs, and if the foreign affiliates were at all sloppy, litigating discovery sanctions rather than the merits of the case.
Under proportionality principles, this overseas fishing expedition wasn’t worth the cost:
The Court concludes that the burden and expense of searching ESI from 18 foreign entities over a 13-year period outweighs the benefit of the proposed discovery − a mere possibility of finding a foreign communications inconsistent with United States communication.
Id. at *5. Thus IVC Filters held “the proposed discovery is not proportional to the needs of the case considering the factors set forth in Rule 26(b)(1),” and “Defendants need not search the ESI of foreign [affiliates] for communications with foreign regulators.” Id. The court politely told the plaintiffs to stop weaponizing electronic discovery; precisely the intended purpose of the 2015 rules amendments .
The court should be sensitive to party resources; aggressive preservation efforts can be extremely costly, and parties (including governmental parties) may have limited staff and resources to devote to those efforts. A party may act reasonably by choosing a less costly form of information preservation, if it is substantially as effective as more costly forms.
305 F.R.D. at 572-73. Now if we can only get the stragglers to pay attention.
Thanks to our friends at Nelson Mullins for bringing this decision to our attention.
Here we go. Again. The third bellwether trial in the Pinnacle Hip Implant MDL starts on October 3 (less than two weeks away), and the parties began picking a jury two days ago. The lawyers are, no doubt, hunkered down in their hotels and war rooms preparing for a trial that could last through the start of the holidays. And much of the mass tort world will be watching. That’s because the jury in the last bellwether trial came back with an incredible half-billion-dollar verdict at the end of a multi-plaintiff trial in which the court issued a long series of controversial evidentiary and procedural rulings.
And now, even before opening statements, there are ominous signs for the defense at this third bellwether trial. Three days ago, the court issued an order sua sponte—that is, with no briefing—confirming that it is consolidating six different plaintiffs at this one trial. That’s a lot of plaintiffs and no doubt a lot of differences. It’s hard to imagine jurors effectively keeping straight the case-specific evidence presented by each of these half-dozen plaintiffs, all while trying to sift through and understand mountains of complex scientific and medical information and avoid allowing their feelings as to any one plaintiff to affect their judgment as to the others. Without even considering the facts of the cases, a six-plaintiff trial is not good for defendants. There’s a reason that plaintiffs’ lawyers prefer multi-plaintiff trials and that defendants do not.
The court has also issued a procedural order whose impact could stretch beyond this litigation. Under FRCP 43(a), which addresses testimony in open court, the court ordered that plaintiffs may issue notices that require company witnesses who are outside the geographic reach of the MDL court in Dallas to nonetheless testify live at trial via satellite or other means of contemporaneous transmission. The impact of this ruling could be significant. In a mass-tort setting, there are many trials. Requiring company witnesses to prepare for and testify at trial after trial can and does create a significant burden, one that skilled plaintiffs’ lawyers recognize. This burden is ordinarily reduced by trial depositions that can be used at many trials. And these are no ordinary trial depositions. They usually take multiple days and address every key issue and key document. These video-taped trial depositions are not so different from live satellite trial testimony, as in each instance the witness is not in the courthouse or personally in front of the jury. The ramifications of this decision in this and other mass tort litigation is potentially significant. We will follow it closely, and we have no doubt that defendants are not done challenging this order.
Beyond this, we and much of the mass-tort world will be watching to see whether the court will once again allow plaintiffs’ attorneys to introduce to the same type of controversial information—from cancer theories to racism, Saddam Hussain, suicide and the behavior of scientists connected tobacco companies—that it allowed at the second bellwether trial.
Here we go. It all starts on October 3.
We (in its blog-specific singular version) are longstanding country music fans. There is backstory – call us when you are in Philadelphia and we will tell you about it over coffee. Suffice it to say that Nashville, the Grand Ole Opry, and country greats from the 1970’s and 1980’s occupy a significant and permanent place in our soul. So we were moved by a new video making the rounds of social media today. Entitled “Forever Country,” it is features 30 Country Music Association Award winners – both modern and legendary – in a beautiful montage celebrating 50 years of the CMA awards. You can see it here. There is also some pretty cool irony in the choice of “Take Me Home, Country Roads” as the song that opens the video and winds its way throughout. In 1975, John Denver was nominated as Country Music Association Entertainer of the Year. The previous year’s winner, Charlie Rich, was a bit “in his cups,” as they say, when he read the nominations. As he announced Denver as the winner, he struck a match and lit the card on fire in protest, because he did not think Denver was truly “country.” Happy to debate that when we have coffee, but we (unashamedly) love John Denver, as our office neighbors will attest. We are happy that Denver’s signature song was used in this celebration of country music. If it wins him some new fans, better late than never.
Also better late than never to report on today’s case, which just appeared online though it was decided 2 ½ years ago. In Peterson v. Wright Medical Technology, 2014 U.S. Dist. LEXIS 189473 (C.D. Ill. Feb. 13, 2014), the United States District Court for the Central District of Illinois considered the defendant’s motion for summary judgment on the plaintiff’s failure-to-warn claim in a hip implant case. The plaintiff, who was obese, received a new modular artificial hip to address his “significant end stage osteoarthritis” caused by an earlier accident. At the time of the plaintiff’s hip implant, his surgeon “had been an orthopedic surgeon for 31 years and had seen many evolutions of hip implants. He had read several journal articles about modular implants, including the [subject implant].” He had also read the Instructions for Use (“IFU”) included with the implant. He “knew that a patient’s weight and activity level could have an effect on the ultimate outcome of the surgery but had no reason to believe that Plaintiff was not an appropriate candidate for the implantation of this device.” The surgeon explained all of these risks to the plaintiff and required him to attend a two-hour teaching session before obtaining his informed consent. Peterson, 2014 U.S. Dist. LEXIS 189743 at *3-4.
Two years after the plaintiff’s surgery, the titanium modular neck of his artificial hip broke into two pieces. In his complaint, the plaintiff asserted the usual strict liability and negligence claims, along with a punitive damages claim that was later dropped. The defendant moved for summary judgment on the plaintiff’s warnings claims sounding in both strict liability and negligence.
The court first explained that Illinois has adopted the learned intermediary doctrine and that the defendant’s duty to warn therefore ran to the surgeon and not to the patient. It was undisputed that the implant’s IFU warned of the risks that obesity and the patient’s activity level could contribute to the failure of the device and that the device had a finite service life and could break and need to be replaced at some point. The surgeon “specifically advised Plaintiff that as a relatively young and active man, he would put more use and wear and tear on the hip joint than an older individual and that the artificial materials wear out with time.” Id. at *20. At the time of the plaintiff’s surgery, there had been no reported failures of the type the plaintiff would later experience associated with the specific implant the plaintiff received. Nevertheless, the plaintiff maintained that the defendant should have warned the surgeon that the titanium modular necks of certain of its other implants had failed (in fewer than 20 of over 100,000 total implants), arguing that a brochure published by the defendant “misleadingly indicated that none of the necks had experienced a clinical failure since their inception in 1985 . . . .” Id. at *21. The court responded that there was no evidence that the plaintiff or his surgeon saw this brochure (you can see our updated 50-state “failure to read” post here) or that “the known fractures involved the specific product at issue in this case.” Id.
The plaintiff next asserted that the defendant “knew . . . that the [implant was] more susceptible to fracture in heavier and active individuals . . . .” As the court pointed out, “the IFU specifically convey[ed] this general warning,” and the specific components implanted in the plaintiff were selected by the surgeon based on his knowledge of the plaintiff and of the implant system. Id. at *22. Finally, the plaintiff pointed to literature and reports of modular neck failures dated after the plaintiff’s implant surgery. Because Illinois does not recognize a post-sale duty to warn, the court held that none of these documents was relevant to the plaintiff’s claim as the defendant’s duty to warn was limited to information it possessed at the time of the plaintiff’s implant surgery.
The court concluded,
. . . [G]iven the unavailability of a cause of action based on post-sale warnings in Illinois, . . . [t]he only viable, relevant information is that Defendant was aware of less than 20 failures of a different model implant, no known failures of the model of implant at issue in this case, and that weight and activity could place greater loads on the implant and lead to failure. Given this knowledge, the Court finds that the Defendant adequately warned of the known risks of increased failure for overweight and very active individuals, and [the surgeon] was aware of these warnings and potential dangers.
Id. at *22-23. No genuine issue of material fact, summary judgment for defendant on warnings claims. Simple, neat, correct, and far too uncommon. Time to pour some sweet tea and crank up the country tunes.
This post is from the non-Reed Smith side of the blog.
Choice of law doesn’t get too much attention here at the DDL blog. That is due in some part to the fact that there really isn’t a defense-oriented position to take on it. Which state’s law should apply is a very case-specific analysis and in any given case, you might come out differently. It really depends on which state’s law is more favorable to your legal arguments in a particular scenario. The second reason it probably doesn’t get much attention from us is that in most personal injury, products liability cases, plaintiff’s home state’s law governs – the law where the injury occurred.
But what about when a plaintiff lives in one state but seeks medical treatment in another. Not to be considered disparaging of the many excellent healthcare facilities in southern New Jersey (where this blogger resides), but when you live a stone’s throw from some of the leading specialists in the country who happen to be across the state line in Philadelphia, you take that ride across the Ben Franklin Bridge. That’s not an unusual situation, making the choice of law question of interest.
In Finnerty v. Howmedica Osteonics Corp., 2016 U.S. Dist. LEXIS 123071, *2 (D. Nev. Sep. 12, 2016), plaintiff, a resident of Nevada, sought medical treatment from an orthopedic oncologist located in California. Plaintiff had cancer in his left leg that required either amputation of the leg or a total knee replacement. Plaintiff opted for the replacement and defendant’s modular replacement device was implanted. Id. At the time of surgery, plaintiff was “clinically obese.” Id. The surgery took place in March 2005 and plaintiff had no complications until 2011 – over 6 years later. Id. at *2-3. In August 2011, plaintiff started working as a shuttle driver for a car rental company. The job required him to lift luggage, weighing up to 80 pounds, on a repetitive basis. Id. at *3. In December 2011, while lifting luggage, plaintiff heard a “pop” in his left knee. During revision surgery, it was discovered that the implanted device had fractured. Id. Plaintiff continued to suffer complications and eventually his left leg was amputated.
Plaintiff sued the device manufacturer alleging failure to warn, negligence, strict liability design defect, manufacturing defect, and breach of express and implied warranty. Id. Defendant moved for summary judgment on all counts.
Because plaintiff resides in Nevada but underwent implantation of the medical device in California, the parties disputed which state’s law applied – but only as to the failure to warn claim. Id. at *7. We discuss the impact of that decision below, but we’ll focus on the failure to warn claim first.
Nevada adheres to the most significant relationship test set forth in the Restatement (Second) of Conflict of Laws. Id. at *8. And under the Restatement, in a case for personal injury the law most typically applied is the law of the state where the injury occurred. Id. at *9. That is unless another state has a more significant relationship. In this case, where plaintiff’s home state is not the state in which the medical treatment was obtained, the court opted to weigh all of the significant relationship factors. It concluded that many were a push. Such as, Nevada’s interest in protecting its citizens and California’s interest “in ensuring that surgeries performed within its borders comport with its applicable state laws.” Id. at *10. Where the court found California had an edge was in its “justified expectation” that its law would be applied to surgeries occurring in California. By contrast, “out-of-state visitors do not have a justifiable expectation that they will bring their state’s laws with them when they travel.” Id. at *11. If Nevada residents could do that, the court would be allowing Nevada law to “usurp other states’ legislatures.” Id. Thus, the court concluded that as to failure to warn, California law applied.
Then, applying California’s learned intermediary doctrine, the court granted summary judgment to defendant. First, the evidence showed that the device’s training materials contraindicated use in obese patients or for patients whose occupation includes “significant” lifting. Id. at *14. Second, plaintiff’s surgeon testified that he was aware of the risks of knee replacements in obese patients, but that those risks wouldn’t have changed his decision to implant the device in plaintiff. Id. Because “California law does not impose an additional duty on a device manufacturer to second guess a practicing physician when that physician has already received the necessary warnings,” summary judgment was warranted. Id. at *15.
The court also granted summary judgment on the breach of warranty claims for lack of any representation (express) and lack of privity (implied). Id. at *20-22.
As mentioned above, however, as to all remaining claims, the parties agreed that Nevada law applied. Since the judge did not need to decide the issue, there is no analysis of the choice of law on the other claims. But that leaves us to wonder why the defendant didn’t press the same choice of law argument across the board – or at least as to the design defect claims because those claims aren’t allowed under California law, but are under Nevada law. That turned out to be a significant distinction. Applying Nevada law to the strict liability design and manufacturing claims, the court denied defendant’s motion for summary judgment finding a battle of the experts created a genuine issue of material fact. Id. at *18-20.
We don’t know if the court, conducting a choice of law analysis, would have reached a different conclusion on design defect than it did on failure to warn. We tend to think it would not. California is still the location where the injury occurred and we can think of no compelling reason why the scales would tip back to Nevada for a design claim. This one may remain a mystery to us.
A federal judge in Wisconsin issued an order a few weeks ago that covers two topics on which we often write—negligence per se and implied preemption. The two concepts are not unrelated. We most commonly see negligence per se when plaintiffs try to privately enforce a provision of the FDCA, i.e., by using an alleged violation of a safety-related provision of the FDCA as the basis for their state law claim. State law does not always allow this, but even when it does, such a claim should not withstand implied preemption under Buckman. That is because Buckman and section 337(a) of the FDCA make it clear that litigants cannot privately enforce the FDCA, and a negligence per se claim based on a purported violation of the FDCA is an unveiled attempt to accomplish exactly that.
It seems pretty straightforward to us, but some courts still resist. That is what happened in Marvin v. Zydus Pharmaceuticals (USA) Inc., No. 15-cv-749, 2016 U.S. Dist. Lexis 112047 (W.D. Wis. Aug. 23, 2016), where the plaintiffs based their negligence per se claim on the defendants’ alleged failure to provide medication guides for distribution with amiodarone prescriptions. The basis for the claim was the federal regulation requiring manufacturers of some prescription drugs to make medication guides available either by providing a sufficient number of guides to distributors and dispensers or by providing the means to produce guides in sufficient numbers. Id. at **2-3 (citing 21 C.F.R. §§ 208.1, 208.24(b)).
The defendants allegedly did not provide medication guides to the decedent’s pharmacy, but do the decedent’s heirs have a private right of action? The defendants justifiably did not think so, and they moved to dismiss on the basis that the plaintiffs’ claims were impliedly preempted. Along the way, the district court ordered supplemental briefing on whether Wisconsin law would recognize a claim of negligence per se in the first place.
We are fond of Wisconsin. We once drove from a deposition in Marquette, Michigan, to visit family in Minneapolis. As students of the geography of the Upper Midwest will tell you, that took us across the entire width of Wisconsin. One day we will return to partake of “fresh cheese curd,” which we saw advertised at multiple roadside markets along the way. We have more recently learned that it is commonly deep fried and served at carnivals and county fairs across the region.
But for now, we will respectfully state that the district court in Marvin came to the wrong result. The district court held first that federal law did not impliedly preempt the negligence per se claim, and in reaching that result, it cited and quoted extensively from the Seventh Circuit’s abominable Bausch opinion. Faithful readers will be familiar with the disdain we have heaped on Bausch for, among other things, its recognition of a “parallel claim” based on even the most general FDA regulations and its blithe rejection of implied preemption without citing or even acknowledging section 337(a). The posts are too numerous to list, but you can get the gist here and here.
The district court followed Bausch—not surprisingly, since Wisconsin is within the Seventh Circuit—but that allegiance regrettably led the court to make the same mistakes. The district court discussed Buckman, but like Bausch it allowed a state-law claim that purported to enforce the FDCA without discussing section 337(a), let alone explain how that section would permit such a claim. Id. at **4-6. Instead, the district court accepted the plaintiffs’ argument that they “allege in this case that defendant violated a well-recognized state law duty to warn that is independent of federal requirements.” Id. at *11. That is post hoc rationalization at its best, since the claim asserted—the failure to provide medication guides per federal regulations—is anything but “independent of federal requirements.” To the contrary, the claim is entirely “dependent” on federal requirements because the plaintiffs are using federal law to define the substance of their claim. Bausch strikes again.
Having cleared the implied preemption hurdle, the district court next held that Wisconsin law would permit a negligence per se claim based on the FDCA. What caught our eye here is that, in deciding this issue, the district court citing and discussed section 337(a) extensively. So the court was aware of the statutory prohibition on private rights of action, yet it both rejected implied preemption and permitted a negligence per se claim. It is difficult to reconcile this result with the statute’s mandate.
The district court acknowledged some difficulty with it as well. It discussed cases going both ways, but ended up giving credence to cases allowing the cause of action. An example is Valente v. Sofamor, S.N.C., 48 F. Supp. 2d 862 (E.D. Wis. 1999), where the neighboring district held that “even though the Act does not provide an express statement regarding liability, its clear expression that the Medical Device Amendments were enacted to protect users of medical devices is sufficient under Wisconsin law to show that Congress intended to allow those provisions to provide the basis of negligence per se claims under state common law.” Marvin, 2016 U.S. Dist. LEXIS 112047, at *14 (discussing Valente). The problem with this is that the FDCA did “provide an express statement regarding liability,” and Congress’s intent is both express and clear. There is no private right of action to enforce the FDCA.
The district court also relied on a Wisconsin Court of Appeals case that allowed a negligence per se claim based on an alleged failure to warn regarding oral contraceptives, but that opinion “did not discuss whether there was a legislative [i.e., congressional] intent to impose civil liability or address the enforcement limitation in § 337(a).” Id. at **16-17. In other words, the Court of Appeals opinion did not address a key issue, and neither had the Wisconsin Supreme Court. Id.
In the end, the district court thought it was a “close call” and allowed the negligence per se claim, but we don’t think it was close at all. The Marvin order perpetuates the fiction that civil actions to enforce FDCA regulations under the guise of negligence per se are somehow “independent” state law claims. Again, we have a difficult time reconciling that result with the statute, but we understand that others disagree. Perhaps someday we can discuss it over a fresh serving of fried cheese curd.