Jurisdiction is hardly the spiciest of topics we discuss on this blog and yet it definitely qualifies for frequent-blogging status. That’s likely because as defendants, we don’t get first choice of jurisdiction. We get hauled into the court of plaintiff’s preference after which we are afforded some ability to change jurisdiction but that often requires putting up a fight – such as challenging fraudulent joinder or misjoinder. So, jurisdiction becomes a recurring theme. An undertaking at the start of each new case. Do I want to be in this court? If not, do I have a viable alternative?

Those questions predominately involve whether the federal courts have some basis for subject matter jurisdiction. Today’s case, while about jurisdiction, is about a type we rarely, if ever, have discussed here or have much experience with – the boundaries of tribal court jurisdiction. And while the case involves pharmacies and wholesalers, the court’s rationale for its decision would apply to other non-tribal entities sued on similar theories, such as drug and device manufacturers.

In McKesson Corp. v. Hembree, 2018 WL 340042 at *2 (N.D. Okla. Jan. 9, 2018), three pharmacies and three wholesalers who had been sued by the Cherokee Nation in the District Court for the Cherokee Nation filed for a petition for a preliminary injunction to halt the underlying action on the ground that the Cherokee Nation lacked jurisdiction. There are two components to the underlying lawsuit. First, the Cherokee Nation brought a parens patriae action on behalf of tribal members for violations of the Cherokee Nation Unfair and Deceptive Trade Practices Act (“CNUDPA”). Id. at *1-2. Second, the Cherokee Nation also asserted common law claims for nuisance, negligence, unjust enrichment, and civil conspiracy. Id. at *2. All of the claims are based on allegations that the pharmacies and wholesalers either knowingly or negligently distributed or dispensed prescription opioid drugs to the detriment of the tribe and its members. Id.

The defendants sought the injunction in federal court because the scope of a tribal court’s jurisdiction is a federal question. Id. at *3. The opinion contains a discussion of whether defendants were required to seek relief from the tribal court first and also examines whether defendants met the requirements for a preliminary injunction. We won’t address those aspects of the decision here, but wanted you to know they existed if you are interested. We focus on the substance of the ruling that the tribal court did not have jurisdiction.

Indian tribes in the United States have a recognized type of self-government but it is limited to “managing tribal land, protecting tribal self-government, and controlling internal relations.” Id. (citation omitted). The exercise of trial power is limited and tribal courts are not courts of general jurisdiction. One major limitation is that tribal jurisdiction does not extend to nonmembers of the tribe, with two narrow exceptions:

[a] tribe may regulate, through taxation, licensing, or other means, the activities of nonmembers who enter consensual relationships with the tribe or its members, through commercial dealings, contracts, leases, or other arrangements. [And]

[a] tribe may also retain inherent power to exercise civil authority over the conduct of non-Indians on fee lands within its reservation when that conduct threatens or has some direct effect on the political integrity, the economic security, or the health or welfare of the tribe.

Id.  Essentially there is a “presumption against tribal civil jurisdiction over non-Indians.” Id. at *4.  In this legal framework, the court analyzed whether the Cherokee Nation had jurisdiction over the two types of claims brought by plaintiff – CNUDPA and common law.

In its complaint, the Cherokee Nation alleged that the pharmacies and wholesalers violated the CNUDPA by violating the federal Controlled Substances Act (“CSA”). The CSA, however, like the FDCA, does not provide a private right of action. Id. at *5. So, we would say the claim is facially invalid regardless of jurisdiction. But that wasn’t the question the before the court and regardless of whether the claim was valid, the tribal court had no jurisdiction over a CSA claim, because there is no provision in the CSA that provides a tribal court jurisdiction over such a claim. Id. Remember, tribal courts are not courts of general jurisdiction. So, for example, the CSA differs from federal statutes the specifically allow tribal court jurisdiction over matters such as child custody disputes and mortgage foreclosure actions. Without such a provision, the court found that the tribe lacked jurisdiction over the CNUDPA claim because it was an unauthorized attempt to privately enforce the CSA. Id.

As to the common law claims, because they were being brought against non-tribe members, the court looked to see if they fit one of the two exceptions to the rule prohibiting such jurisdiction. The first exception is based on consensual relations which the Cherokee Nation said the pharmacies and wholesalers entered in with the tribe and its members by distributing products within the tribe’s jurisdictional area. But the exception is not so broad as to allow jurisdiction for any dealings with non-members:

Because nonmembers have no say in the laws and regulations that govern tribal territory[,] … those laws and regulations may be fairly imposed on nonmembers only if the nonmember has consented, either expressly or by his actions. Even then, the regulation must stem from the tribe’s inherent sovereign authority to set conditions on entry, preserve tribal self-government, or control internal relations.

Id. at *6 (citation omitted). The opinion details the extent, or lack thereof, of the relationship between the defendants and the Cherokee Nation, concluding that “at most, any relationships between Plaintiffs and the Cherokee Nation or its members are simply routine business or consumer transactions.” Id. (“the mere act of doing business with a tribe or its members even on tribal land, does not subject a nonmember to broad tribal civil authority”). Given that drug and device manufacturers are even more removed from direct dealings with individuals and health care plans, they would have an even more attenuated relationship that should not fit within this exception.

This first exception typically applies to a tribe’s right to tax or regulate business activities of nonmembers on tribal lands, not to claims of negligence or unjust enrichment. The pharmacies and wholesalers did not have contractual relationships with the Cherokee Nation relating to opioids and their conduct was not specifically directed at the Cherokee Nation or its members. Finally, there is no nexus between the allegations of the complaint and the Cherokee Nation’s sovereign authority over conditions on entry, self-government, or control of internal relations. Id. at *7.

The second exception has to do with conduct that threatens or directly impacts “the right of reservation Indians to make their own laws and be ruled by them.” Id. The Cherokee Nation offered declarations attesting to the harm done to tribe members from the opioid epidemic arguing that the conduct alleged in the complaint rises to a “mass tort.” Id. The court was sympathetic, as we all are, to the damage being done by opioid abuse. “However, a generalized threat of injury to the tribe or to its members for tortious conduct is not enough to confer tribal jurisdiction.” Id. at *8. The threat which invokes the exception is a threat to “tribal sovereignty.” Therefore, even if the conduct occurred on tribal lands, it does not constitute a threat to the tribe as a whole and the second exception does not apply.

With no applicable exception, the court granted the preliminary injunction to prevent the case against the pharmacies and wholesalers from moving forward. This is a completely legal analysis, with broad applicability in any alleged “mass tort.” Therefore, another significant jurisdictional victory for defendants.

Today’s post is another guest post from Kevin Hara, of Reed Smith, who is on his way to becoming a semi-regular blog contributor.  This post is about forum non conveniens, which is more discretionary, and less enforceable than personal jurisdiction as a limitation on plaintiff-side (or even defense-side) forum shopping, but which, as Kevin’s post demonstrates, is still better than nothing.  As always with our guest posts, the author deserves 100% of the credit, and any blame, for what follows.

**********

As a child of the 80s (slight pause for the chuckling and/or groaning here), there are so many images that flash through one’s mind as we reflect, fondly, for the most part, on that decade in discussing an Illinois appellate court’s decision in McIver, et al., v. American Medical Systems, Inc., et al., 2017 IL App (5th) 170011-U, 2017 WL 6327143 (Ill. App. Dec. 8, 2017), sending litigation tourists on an about-face based on the doctrine of forum non conveniens.  Though spelled differently, this McIver case makes us recall another MacGyver, the hit 80s television show (which, incidentally, my wife and I enjoy watching together in reruns.)  However, before delving into MacGyver/McIver, it is impossible to not to discuss some pop culture references from that era, even though we could not explore even the tip of the 80s iceberg: but there was the music – from pop, Michael Jackson, Madonna, Prince, to rock bands known for ballads, a la Journey, Bon Jovi, Van Halen, Duran Duran and too many others to name, including the hair bands, the rise of rap music, heavy metal, and a bevy of one-hit wonders.  There was the fashion – perhaps stretching that word a bit – legwarmers, parachute pants, camouflage, perms, bangles, hairspray, and shoulder pads!  Who can forget the movies? Back to the Future, the Indiana Jones trilogy (not including Crystal Skull which came much later, apologies Shia Labeouf), ET, The Shining, Empire Strikes Back, Return of the Jedi, Wall Street, The Color Purple, Beverly Hills Cop, Karate Kid, Sly, Arnie, Bruce Willis, all things explosions and action! and far more.  The events.  Lakers v. Celtics.  Air Jordan. The tragic Challenger explosion.  Chernobyl.  Mount Saint Helens (not all the explosions were in the movies, unfortunately).  Macintosh Computers.  Windows.  The fall of the Berlin Wall.  Perestroika.  Prozac.  CDs.  The Oprah Winfrey Show.  Rubik’s Cube.  All of the above, and so much more.

Before we disappear down a virtual “Who Framed Roger Rabbit?” hole, let’s revisit the classic 80s television series, “MacGyver,” starring Richard Dean Anderson that is apropos to our discussion today.  MacGyver was iconic for numerous reasons, with Anderson as the title character, a secret agent for the fictional Department of External Services, physicist, special forces veteran, and problem solver extraordinaire.  Although MacGyver undoubtedly qualifies as campy, far-fetched, and perhaps melodramatic, it was also imaginative, witty, clever, fun, and at times, touching.  MacGyver famously extricated himself –  and the world – from the brink of doom on countless occasions using ordinary objects, often including his ever-trusty Swiss Army knife (rather than, say, a sonic screwdriver), to perform extraordinary feats.  For instance, MacGyver is now officially defined in the Oxford English Dictionary, as a verb meaning “Make or repair (an object) in an improvised or inventive way, making use of whatever items are at hand.”  See, perhaps the most notable real-world example, here.  Some of MacGyver’s most amazing inventions or accomplishments included using candlesticks, a rubber mat, and an electrical cord to improvise a defibrillator; smashing a pair of binoculars, removing a prism, and deflecting a laser beam back to the emitter, destroying it; plugging a sulfuric acid leak with chocolate, containing sugars which react with acid to form elemental carbon, and a gummy residue (tested successfully by mythbusters); and using jumper cables with coins in the teeth, wiring them to a generator, an creating an arc welder (which, incidentally also proved to be functional.)

But not even MacGyver, despite his quick thinking and unparalleled toolbox, could “MacGyver” jurisdiction over the defendant in the McIver case for the Maryland resident plaintiffs.  McIver was yet another multi-plaintiff complaint filed in 2012 in Illinois state court, involving 75 plaintiffs from 23 states, (only one from Illinois), joined in a single action, alleging product liability claims in connection with prescription pelvic mesh products manufactured by AMS.  Id. at *1.  As with most other multi-plaintiff complaints, the only connection among plaintiffs is that they all received pelvic mesh implants.  The defendant filed a motion to sever the claims of the non-resident plaintiffs, arguing misjoinder, and concurrently filed a motion to dismiss for wrongful venue.  Id.  The parties agreed that the defendant would answer or respond to the complaint after resolution of the motions, as ordered by the court.  In March 2013, the trial court denied defendant’s motion to sever, apparently reasoning that venue was proper based solely on the presence of one Illinois plaintiff, with the order stating “that AMS would have to defend a case in St. Clair County regardless of whether the motion to sever were granted.”  Id.  Shades of the reversed California Supreme Court BMS decision.  The plaintiffs prepared the order, which significantly failed to provide a deadline for the defendant to answer or respond to the complaint, nor did the court order such an answer.  As an aside, given what we know of St. Clair County, it comes as no surprise that the trial court denied the motions to sever or dismiss.  As indicated, had plaintiffs filed McIver this year, the defendant very well could have moved to dismiss for lack of jurisdiction under BMS.

Time passed, and 73 of the 75 plaintiffs settled with the defendant, leaving only Paula and Earl Conway of Essex, Maryland.  Id. at *2.  After the court set the case for trial, the defendant, now faced with only nonresident plaintiffs, filed a motion to dismiss based on forum non conveniens (this was still pre-BMS), arguing that “’the public and private interest factors relevant to the consideration of its motion strongly favored dismissing [plaintiffs’ action]’” such that it could be refiled in Maryland.  Id.  The overwhelming majority of relevant events, including plaintiff’s mesh implant, her treating physicians, and medical records were located in Baltimore, and fact witnesses including friends, family, and coworkers “would be expected to live in or around Baltimore County.”  Id.  After receiving answers to interrogatories confirming that plaintiffs’ fact witnesses all resided outside the state of Illinois, the defendant supplemented its motion, asserting that plaintiffs’ case had “absolutely no connection” to Illinois.  Id. at *3.

It being St. Clair County, the defense lost again, as the trial court denied the motion without explanation.  Id.

On appeal, the defendant argued that the trial court abused its discretion in denying the forum non motion (with which we wholeheartedly agree), and plaintiffs claimed that the motion was untimely under Illinois Supreme Court Rule 187(a).  That rule mandates that any forum non conveniens (“FNC”) motion must be filed not later than 90 days after the last day that a party may file its answer.  Id.  The appellate court noted that the trial court ordered the parties to meet and confer, but did not order the defendant to file an answer and, since no answer was filed, the FNC motion was timely under Rule 187(a)’s “unambiguous” deadline. Id.

Strike one.

Plaintiffs claimed defense-side “gamesmanship” despite their own drafting the scheduling order at issue, claiming that the defendants should have filed the FNC motion at the “earliest opportunity.”  Id. at *4.  Again, the appellate court disagreed, finding that the defendant brought the motion with “reasonable and appropriate promptness,” noting that the parties had tentatively agreed to the filing deadline for AMS’s answer, but “[a]t no point did the plaintiffs seek an order requiring” the defendant to answer by a specific date.  Id.

Strike two.

Ultimately, the court went further, and stated that “even assuming that [the defendant] had filed an answer in 2013,” it would still conclude that the 2016 forum non conveniens motion was timely.  Id.  The court’s reasoning was simple – the case started with 75 plaintiffs from 23 states, and only after all but the two Maryland plaintiffs were dismissed, could the defendant have “had a clear and valid basis for seeking” transfer to that forum.  Id. at *5.

Strike three.

Additionally, the appellate court found no prejudice to the plaintiffs, despite their case being pending more than four years when the defendant filed motion.  Plaintiffs provided no discovery during all that time, and only later – more than four years after filing – did plaintiffs’ initial discovery responses confirm that plaintiffs’ witnesses resided predominantly in Maryland.  Id.

Nor was the court sympathetic to plaintiffs’ claim that transfer would cause delay.  Plaintiffs’ own fault, the court found, because any plaintiff filing in a foreign jurisdiction (litigation tourists) and combining his/her claims with other claimants in one action takes a “calculated risk” that those choices might result in dismissal or delay.  Id.  The court put it bluntly: “[t]o the extent that the present case languished in the circuit court, it did so without objection and with the plaintiffs’ implicit consent.”  Id. (emphasis added)

Finally, reaching the merits of the FNC issue, the court considered both the private and public interest factors, along with plaintiffs’ choice of forum, which was “much less reasonable,” because the vast majority of relevant events occurred outside of St. Clair County.  Id. at *7.  Neither the defendant nor the plaintiffs were Illinois residents, and the convenience of the parties was neutral.  Id.  However, access to evidence “strongly favor[ed] a transfer” to Maryland, given the location of most of the witnesses in that state.  Id.  Likewise, compulsory process would be impossible in Illinois, and the costs of securing witnesses overwhelmingly supported transfer.  Id.  Finding that the practical applications of the trial were a nonfactor, the court turned to the public interest factors, concentrating on which state, Illinois or Maryland, had a greater interest in the litigation.  Id. at *8.  The fact that the plaintiff’s mesh implant surgery occurred in Maryland, combined with the unfairness of imposing jury duty on Illinois residents, favored transfer to avoid burdening its taxpayers with a matter “otherwise unrelated to their state.”  Id. In sum, the appellate court ruled that the trial court erred in denying the forum non conveniens motion because Illinois had “no relevant or significant factual connections to the case.”  Id. at *9.

Thankfully, the appellate court considered the facts – in conjunction with some common sense – and the applicable law, and reversed and remanded with instructions to dismiss the case.  Even though this decision is non-precedential, it puts some handwriting on the wall.  Litigation Tourists Go Home, even from St. Clair County.  And if not FNC, personal jurisdiction under BMS is waiting in the wings.  Not even MacGyver, with his remarkable ingenuity, endless amounts of duct tape, Swiss Army knives, and any assortment of household items, could craft a way back into Illinois state court for these litigation tourist plaintiffs.

Perhaps you have heard that elections have consequences. That is true not only for high-profile issues that hog the headlines on CNN and Fox News, but it is also true for drug and device litigation regulation. Such drug and device regulation can be just as important, if not considerably more important, than whatever current political claptrap is getting all the bandwidth.  Drug and device availability and innovation actually affects people’s lives regularly and profoundly. Despite the typical claims of plaintiff lawyers at trial, the FDA is not a paper tiger.  The FDA’s actions and attitudes have a huge impact on the industry.  Those attitudes and actions can oscillate with election results. For example, in 2016, the FDA issued 15 warning letters to drug and device manufacturers regarding alleged false or misleading advertising. 2017 saw only three such warning letters and one untitled letter.  Change is in the air.  We did not see any coverage this weekend of the FDA’s January 12, 2018 statement “on FDA decision to seek additional time to reassess rule that would have changed longstanding practices for how the agency determined the ‘intended use’ of medical products.”  Take a look at the FDA’s announcement here:  https://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm592358.htm.  If you are a completist, here is the full proposal of delay from the Federal Register:  https://www.federalregister.gov/documents/2018/01/16/2018-00555/clarification-of-when-products-made-or-derived-from-tobacco-are-regulated-as-drugs-devices-or.  Whatever else you might think about the Trump vs. Obama administrations, this rethink is an example of the new FDA leadership doing the right thing.

The background is a bit byzantine.  In the waning days of the Obama administration, on January 9, 2017, the FDA issued a Final Rule on “Clarification of When Products Made or Derived from Tobacco are Regulated as Drugs, Devices, or Combination Products; Amendments to Regulations Regarding ‘Intended Uses.’” That “clarification” was both a trick and a double-cross.  The tobacco features were a distraction from the FDA’s desperate attempt to save its constitutionally-suspect enterprise of clamping down on communications about off-label use of drugs or devices.  As we have described several times before, the FDA’s power to punish off-label promotion rests on a regulatory two-step, whereby off-label promotions are said to prove an indicated use not included in the label and, thus, not accompanied by adequate directions for use – making the product misbranded. Got that? The regulations supporting this tortured logic have been around since the 1950s, but a recent series of court decisions invoking the First Amendment called into question the FDA’s interpretation of “intended use” and its efforts to shut down truthful medical-science communications about potential benefits from off-label use.  In a 2015 proposed rule, the FDA proposed striking the language from the regulations permitting the FDA to consider a manufacturer’s mere knowledge of actual use as evidence of intended use. Good news, right? We thought so.  But not so fast. The FDA’s January 9, 2017 proposal reversed course, retained knowledge of off-label use as evidence of intended use, clarified that any relevant source of evidence, whether circumstantial or direct could demonstrate intended use, and ultimately invoked the dreaded “totality of the evidence” standard.  A constitutionally frail regulatory regime looked like it was about to become even worse – even more vague, over broad, and chilling.

We bemoaned this ugly turn of events, as did many other legal commentators.  Not to take undue credit, but we suspect that the eruption of the legal blogosphere on this issue had a beneficial result.  The incoming Trump administration placed a brief hold on new regulations, and then delayed the “intended use” regulation to March 19, 2018 so that comments could be received and considered.  Did comments pour in?  Yes they did.  Fifteen comments came in.  Two addressed the tobacco issues.  (That portion of the regulation will go forward.)  Thirteen criticized the new broadening of the types of evidence that could be considered in determining intended use.  One of those comments was written by PhRMA.  We summarized that excellent, persuasive comment here.  Read as a whole (or, if you prefer, the totality of the circumstances), the comments made a strong case that the proposed final rule violated the First Amendment, was so vague as to implicate due process, interfered with the practice of medicine, departed from existing statutes, cases, regulations, and past practices, and would have negative health implications.  You all spoke up, and the FDA listened. The bottom line is that the FDA is now proposing to “delay until further notice” the portions of the final rule amending the FDA’s existing regulations describing the types of evidence that may be considered in determining a medical product’s intended uses.  The FDA will receive comments on this proposal through February 5, 2018.  If you haven’t spoken up on this very important issue, speak up now.  How many times in your life and career can you take a position that actually makes a difference, and that both saves lives and free speech?

We sometimes spend time on this blog grousing.  Not this time.  Well done, FDA. Well done, all of you who contributed to the debate.

Several years ago, in a post entitled “Negligence Per Se Trivia,” we included the following:

In Kentucky, negligence per se has been codified, and claims based on federal (but not state) statutes or regulations (like the FDCA) are prohibited.  St. Luke Hospital, Inc. v. Straub, 354 S.W.3d 529, 534 & n.14 (Ky. 2011); T & M Jewelry, Inc. v. Hicks, 189 S.W.3d 526, 530 (Ky. 2006).

Our only other encounter with Kentucky FDCA-based negligence per se claims involved a misbegotten case that held such a claim wasn’t preempted, but didn’t address the claim’s viability under state law.  See Steiden v. Genzyme BioSurgery, 2012 WL 2923225 (W.D. Ky. July 18, 2012)

We thought we’d look at this issue more closely.  Here is what’s going on.  The earlier of these cases, T & M, involved a peculiar state statute that “codifies the doctrine of negligence per se in Kentucky.”  189 S.W.3d at 530.  That statute provides:

A person injured by the violation of any statute may recover from the offender such damages as he sustained by reason of the violation, although a penalty or forfeiture is imposed for such violation.

Ky. Rev. Stat. §446.070.  In determining the scope of this statute, T & M construed it in pari materia (that’s legal Latin for “in conjunction with other provisions about the same subject”) with the rest of that chapter, pointing out that “numerous provisions in KRS Chapter 446 refer to ‘the statute laws of this state,’ and also repeatedly refer to acts or intent of ‘the General Assembly.’”  189 S.W.3d at 530 (footnotes containing citations omitted).  Against that legislative background, the Kentucky Supreme Court concluded that plaintiffs claiming “injur[y] by the violation of any statute” in Kentucky were limited to asserting violations of Kentucky – not federal (or other state) – statutes:

Thus “any statute” in KRS 446.070 has been held to be limited to Kentucky statutes and not to federal statutes or local ordinances.  The Kentucky General Assembly did not intend for KRS 446.070 to embrace the whole of federal laws and the laws of other states and thereby confer a private civil remedy for such a vast array of violations.

189 S.W.3d at 530 (footnotes containing citations omitted).

That limitation has been the law of Kentucky ever since. In St. Luke Hospital, Inc. v. Straub, 354 S.W.3d 529 (Ky. 2011), a case involving (state) constitutional civil rights litigation, the Kentucky high court reiterated this holding while rejecting the plaintiff’s state-law analogy to 42 U.S.C. §1983:

Precedent acknowledges some restrictions on the applicability of KRS 446.070.  The “any statute” language used applies to Kentucky statutes. Our courts have considered the application of the statute to federal laws and regulations. . . .   Violations of federal laws and regulations . . . do not create a cause of action based on KRS 446.070.

354 S.W.3d at 534 & nn.10, 14 (citing T & M).  Other Kentucky courts continue to follow these holdings that plaintiffs claiming injuries from statutory/regulatory violations under Kentucky law cannot assert violations of federal enactments.  Harrison Memorial Hospital, Inc. v. Wellcare Health Insurance Co., 509 S.W.3d 69, 75 (Ky. App. 2016) (no negligence per se or other private recovery for alleged Medicaid reimbursement violations), review denied (Ky. Feb. 9, 2017); Brock v. Bennett, 2015 WL 136330, at *4 (Ky. App. Jan. 9, 2015) (no negligence per se based on alleged violation of Federal Building Code), review denied (Ky. Sept. 16, 2015); Jackson v. JB Hunt Transportation, Inc., 384 S.W.3d 177, 182-83 (Ky. App. 2012), review denied (Ky. Dec. 12, 2012) (no negligence per se based on alleged violation of federal trucking regulations); Gordon v. Turner, 2016 WL 3636073, at *7-8 (E.D. Ky. June 29, 2016) (same as Jackson); Gonzalez v. City of Owensboro, 2015 WL 4594505, at *8 (W.D. Ky. July 30, 2015) (no negligence per se based on alleged violation of National Electrical Code); Wise v. Pine Tree Villa, LLC, 2015 WL 1611804, at *3 (W.D. Ky. April 10, 2015) (no negligence per se based on alleged violation of federal regulations governing certification of long-term care facilities); Halcomb v. Britthaven, Inc., 2015 WL 998560, at *4 (E.D. Ky. March 5, 2015) (same as Wise); Vanhook v. Somerset Health Facilities, LP, 67 F. Supp.3d 810, 817-18 (E.D. Ky. 2014) (no negligence per se based on alleged violation of federal Social Security regulations); Kelter v. Wasp, Inc., 2014 WL 4639914, at *8 (W.D. Ky. Sept. 16, 2014) (no negligence per se based on alleged violation of federal OSHA regulations); McCarty v. Covol Fuels No. 2, LLC, 978 F. Supp.2d 799, 808-09 (W.D. Ky. 2013) (no negligence per se based on alleged violation of federal mine safety regulations); Pace v. Medco Franklin RE, LLC, 2013 WL 3233469, at *2 (W.D. Ky. June 25, 2013) (same as Wise); Cummins v. BIC USA, Inc., 2011 WL 1399768, at *3 (W.D. Ky. April 13, 2011) (no negligence per se based on alleged violation of federal childproofing regulation).

Notably in Young v. Carran, 289 S.W.3d 586 (Ky. App. 2008), a plaintiff seeking to recover for purported HIPAA violations, after losing under Ky. Rev. Stat. §446.070, tried to maintain the same claim under some sort of residual “common law” negligence per se theory that supposedly survived the legislature’s action.  That gossamer-thin attempted distinction also failed, with a unanimous court holding:

[Plaintiff] next contends that [HIPAA regulations] impose a duty of care on Appellees allowing for a Kentucky “common law” negligence per se claim.  [plaintiff’s] reliance upon T & M . . . in support of her argument is misplaced.  In that case, the Supreme Court of Kentucky used provisions of [a] federal [statute] to define a duty of care for purposes of a common law negligence action − not a KRS 446.070 negligence per se claim.  Indeed, the Court expressly refused to apply the act in a negligence per se context.  Therefore, her claim must be rejected.

Id. at 589 (citations omitted).  There is thus no “lingering” common law out there.  Sadler v. Advanced Bionics, Inc., 929 F. Supp.2d 670, 681 n.10 (W.D. Ky. 2013).

In drug/medical device litigation, Kentucky courts that have addressed the issue have held that Ky. Rev. Stat. §446.070 bars all negligence per se claims asserting violations of the FDCA or FDA regulations.  Waltenburg v. St. Jude Medical, Inc., 33 F. Supp.3d 818, 837 (W.D. Ky. 2014); Sadler, 929 F. Supp.2d at 681.

We think that these cases, while correctly decided, do not do §446.070 justice. The statute isn’t limited to negligence per se, indeed the statute is not targeted against any particular cause of action.  Rather, the legislature cast its statutory net much more broadly − the universe of claims covered by §446.070 extends to any “person injured by the violation of any statute.”  That language reaches any supposed “parallel” claim, no matter how captioned.  The recent decision, Moore v. Zydus Pharmaceuticals (USA), Inc., ___ F. Supp.3d ___, 2017 WL 4365162 (E.D. Ky. Sept. 29, 2017), involving generic drugs, rather than medical devices, thus took a step in the right direction in holding that §446.070 precluded any “negligence” claim, not merely one denominated “negligence per se.”

The Kentucky Supreme Court’s holding in T & M . . . offers binding and unequivocal precedent concerning the scope of KRS 446.070 and demonstrates that [plaintiff] does not have a state based right to sue for negligence in this matter.

Id. at *7.  We think the same thing could be said for any “parallel” claim, whether purporting to sound in strict liability, warranty, or any other theory.  As long as the claim is brought by a “person injured by the violation of any statute” – which parallel claims, by their nature, must be – then, quite apart from preemption, they may not be brought under Ky. Rev. Stat. §446.070.  We also note that the same result could also be reached under implied preemption under Buckman Co. v. Plaintiffs Legal Committee, 531 U.S. 341 (2001), since in §446.070 the Kentucky legislature abolished any “parallel” state-law action.

Last week, we took a short Western Caribbean cruise to celebrate a jarringly-advanced birthday. While the weather wasn’t an asset (it was 43 degrees when we departed Fort Lauderdale, and hovered in the 60s for most of the trip), we left behind record cold and treacherous ice in Philadelphia, so we had no climatic complaints.  We were slightly apprehensive, however, because we were sailing on the very ship that had been in the news a few weeks earlier for a norovirus outbreak that sickened a couple hundred passengers.  But we convinced ourselves that the adverse publicity surrounding the recent outbreak would ensure that pre-sailing sanitation and onboard precautions were at an all-time high.  And we were correct:  the entrance to every venue on the ship was blocked by crew members bearing giant bottles of hand sanitizer, application of which was required for passage.  Even at the 24-hour soft-serve frozen yogurt machine (if we were assured this would be operational at all times, we could happily exist without dining rooms), the crew member manning the controls would not hand over a cone to anyone who did not sanitize first.  It apparently worked:  we came through unscathed and heard of no reports of illness on the ship.  (We also had a blast — played round after round of trivia, “clear kayaked” off the coast of Cozumel, drank many glasses of wine, and spent hours and hours motionless except for turning the pages of our book.)  Bottom line was that the cruise line did all that it was supposed to do to protect its passengers.  Beyond that, people had to be smart and careful, because the ship’s duty only extended so far.

Today’s case also involves questions of duty and of whether the defendant’s duty extended as far as the plaintiff said it did.   In Liu v. Janssen Research & Development, LLC, No. B269318, 2018 WL 272219 (Cal. Ct. App. Jan. 3, 2018), an unpublished decision from the California Court of Appeal, the plaintiff’s son and decedent died after briefly participating in a clinical trial for a long-acting injectable form of the defendant’s antipsychotic medication.  The decedent had begun treatment for mental illness nine years earlier, and had been taking another antipsychotic medication for five of those years.  His treating psychiatrist was the doctor selected to be the principal physician/investigator for the defendant’s clinical trial, and it was she who invited the decedent to participate in the study.

The decedent underwent a screening EKG, which revealed several abnormalities, and a blood test, which revealed slightly elevated liver enzymes. The treater concluded that the results were not clinically significant, and “based on [the decedent’s] otherwise normal physical examination and denial of a family history of cardiac disease,” she admitted him to the study. Liu, 2018 WL 272219 at *1.

Three days later, after a second blood test, the decedent was injected with a non-therapeutic one-milligram dose of the study drug to test for adverse reactions. A second EKG was performed within two hours.  The next day, the results of this EKG and the pre-injection blood test were analyzed, and they indicated worsened cardiac function and much higher liver enzymes than four days earlier.  The decedent was admitted to an acute-care hospital, where he was diagnosed with cardiomyopathy, pneumonia, failing liver function, and altered mental state.  He died two days later.

The plaintiff sued a host of study defendants, including the treater and the drug manufacturer, for negligence, product liability, and negligent failure to warn. After much motion practice, the case proceeded to trial on only the negligence claims and against only the drug manufacturer.  The defendant moved in limine to exclude the plaintiff’s cardiology and pharmacology experts’ opinions that the one-milligram test dose contributed to the decedent’s death, but the trial court admitted the testimony.

At the close of evidence, the trial judge granted a partial directed verdict, finding that the physician/investigator (the treater) was not the agent of the defendant for purposes of finding the defendant vicariously liable for her medical negligence. This left two issues for the jury to consider: 1) whether the defendant manufacturer had an independent duty to intervene in the decedent’s medical care, even if the medical issues “preexisted, or were unrelated to, the study itself,” id. at *5; and 2) the defendant’s duty to monitor the administration of the study drug, including the issue of whether the one-milligram test administration caused the decedent’s death.  The jury found that the defendant was negligent and that its negligence was a substantial factor in causing the decedent’s death, assessing the defendant’s fault at 70% and awarding $5.6 million in damages.

On appeal, the Court of Appeal considered whether the defendant had a duty to intervene in the decedent’s treatment for his preexisting heart disease, and whether there was sufficient evidence that the single one-milligram test dosage was a substantial factor in causing the decedent’s death. With respect to the first question, the court held, “We agree as a matter of law that defendant, as the drug manufacturer/sponsor of a clinical trial, undertook a general duty not to harm the study participants as part of the clinical trial protocols. Administration of the [test dose] fell within the scope of this duty, and we will discuss the sufficiency of the evidence to support liability under this duty of care . . . . But the significant legal question . . . is whether the general duty not to harm study participants encompassed a duty to diagnose or treat [the decedent’s] preexisting, life-threatening heart disease and to intervene in the medical care and decisions precipitated by [the decedent’s] abnormal test results.  . . . [W]e conclude that it did not.”  Id. at *6.

The court’s holding turned on the question of foreseeability. It explained that the general duty FDA regulations impose on study sponsors – to ensure compliance with study protocols and the participants’ safety – is intended to “protect participants generally from foreseeable harm caused by the drug studies themselves, including participants’ adverse reactions to study medications.” Id. at *7.   But it cited state law decisions standing for the proposition that “it is not foreseeable to a study sponsor that study physicians with the primary responsibility for participants’ health and safety will fail to recognize, diagnose, and properly treat preexisting, life-threatening conditions that first manifest during drug studies,” as did the decedent’s heart and other conditions. Id. (citations omitted).  Simply put, “it is not reasonably foreseeable to a drug study sponsor that the response by study physicians . . .  would fall below the standard of care for a medical practitioner.” Id. at *8.

That left the question of medical causation. As noted, the jury’s verdict was based on the testimony of the plaintiff’s cardiology and pharmacology experts. Both experts testified on direct examination that the test dose was a substantial factor in causing the decedent’s death.  But, while the pharmacologist testified that the drug could cause heart arrhythmias, she admitted that there was no evidence that the decedent died from an arrhythmia.  And, while the cardiologist “unequivocally concluded the administration of any amount of the test drug . . . was sufficient to push the decedent ‘over the edge,’ [he] did not provide a reasoned explanation that illuminated for the jury how or why such a low dose of [the drug] could have had such a substantial effect on [the decedent’s] life-threatening heart disease.” Id. As such,  the appeals court found that, “at best, [both] causation experts opined as to a theory that might have contributed to [the decedent’s] death, [they] did not provide the necessary factual basis to qualify that theory as substantial evidence.” Id. at *12.

Judgment for the plaintiff reversed. And though the decision is unpublished and can’t be cited, it reinforces the reality that duties are not unlimited and drug companies aren’t responsible for medical care and aren’t liable for everything that happens to everyone who takes their drugs.  We like this decision and wish it were published – we’ll keep our eyes open for one that is.  And now, we’d gladly use a gallon of hand sanitizer for one more stroll around the deck with a frozen yogurt cone.

Today’s guest post comes to us courtesy of Dick Dean and Nick Janizeh, both of Tucker Ellis. They’ve been thinking (as have we all) about the ramifications of the BMS decision on personal jurisdiction, and have come up with some conclusions that we found interesting, and we hope that you do, too.  As always, our guest posters are entitled to 100% of the credit (and any blame) for what follows.

*(************

In Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017) (“BMS”) [ed. note – our post here], the United States Supreme Court concluded that specific jurisdiction must be premised on a defendant’s in-state conduct giving rise to a plaintiff’s alleged injury.  The Court explained that plaintiffs therefore could not pursue their claims in a state in which they did not reside or in which they were not injured if a defendant conducted no activity in that state connected to the injury.  That other in-state plaintiffs may be advancing similar claims as part of a coordinated proceeding did nothing to change this analysis.

BMS signaled the end of litigation tourism wherein non-resident plaintiffs could tack their claims onto another state’s mass coordinated proceeding.  Or so it seemed.  Recently, a trio of decisions from state courts have distinguished BMS and permitted out-of-state plaintiffs who were not injured in the forum state to prosecute their claims in that forum.  As explained below, the court in each case nevertheless found jurisdiction over non-resident defendants by pointing to a “connection” to the defendants’ conduct within the forum state.

In the DePuy ASR Hip™ Systems Cases, a California court permitted a Connecticut resident who was implanted with a hip replacement device in Connecticut, had the device removed in Connecticut, and received follow-up care in Connecticut to advance her claims (which included design, warning, and manufacturing defect) in California. DellaCamera v. DePuy Orthopaedics, Inc., No. CGC-11-509600, at 3 (Cal. Super. Ct. Nov. 1, 2017).  Even given all these Connecticut connections, the court found specific jurisdiction as to DePuy (a non-California corporation) on the basis that the defendant had “collaborate[d]” with two California-resident doctors on the design of the hip implant. Id. at 5.  The court found that this “distinguishe[d] the case from the situation in BMS, where the U.S. Supreme Court found that the nonresident defendant did not develop, manufacture, label, package, or create a marketing strategy for the drug in the forum state, and where it was not alleged that the nonresident defendant engaged in relevant acts together with the California resident defendant.” Id. at 6-7.

A Missouri state court issued the second decision as part of the talcum-powder, ovarian-cancer litigation. Even after another talc case involving an out-of-state resident was thrown out of Missouri state court just a month prior for want of personal jurisdiction (Fox v. Johnson & Johnson, No. ED104580, 2017 WL 4629383, at *2-3 (Mo. Ct. App. Oct. 17, 2017) [ed. note – our post here], the court denied the non-resident defendants’ motion to dismiss a Virginia plaintiff’s claims and instead decided to preserve a $110.5 million jury verdict in favor the out-of-state plaintiff (see Slemp v. Johnson & Johnson, No. 1422-CC09326-02, at 11-12 (Mo. Cir. Ct. Nov. 29, 2017)).  The defendants argued that there was no personal jurisdiction because the plaintiff purchased and used the products and developed cancer in Virginia, not Missouri. Id. at 3.  But the court nevertheless found jurisdiction, stating that, “by contrast [to BMS], there is evidence [here] that Defendants’ conduct giving rise to Plaintiffs’ claims occurred in Missouri.  Plaintiffs allege that Defendants engaged in relevant acts within the state of Missouri, including enlisting a Missouri company, PTI Union, LLC, to manufacture, mislabel, and package . . . the very products which caused injury to the Plaintiffs.” Id. at 6-7.  Put differently, the court found jurisdiction over the named defendants because of a contractual relationship they had with an in-state manufacturer who was not a named party in the case. See id.

Finally, the Philadelphia Court of Common Pleas found jurisdiction over all but one of the 71 cases currently pending before it as part of Pennsylvania’s pelvic mesh mass tort program. See Order, In re: Pelvic Mesh Litig., No. 829, at 1 (Phila. Ct. Comm. Pleas Dec. 4, 2017); “Pa. Judge Affirms Jurisdiction On Out-Of-State Mesh Cases,” Law360 (Dec. 5, 2017).  The court issued a one-page order dismissing the lone Prolift +M case from the program because the Prolift +M product did not “touch” Pennsylvania in any way during its manufacturing process.  By contrast, a Pennsylvania company had one—albeit small—role in the manufacturing process for the products at issue in the other 70 cases.  Specifically, that company wove together filaments of mesh, which had been made in other states, and then sent the woven mesh out of state for further processing.  Notably, however, that company had been dismissed from the litigation pursuant to the Biomaterials Access Assurance Act, 21 U.S.C. §§ 1601, et seq. before this jurisdictional challenge was advanced.

These three decisions are examples of state courts finding jurisdiction over non-resident plaintiffs’ product liability claims so long as it can be shown that the product was somehow designed or manufactured in state. Moreover, the entity responsible for the design or manufacture—as was the case in the talc and mesh litigations—need not even be a named defendant.  But the Supreme Court did not go that far.  In BMS, the Supreme Court found that a contractual relationship between a non-resident drug manufacturer and an in-state named co-defendant that distributed the drug was insufficient to find specific jurisdiction over the out-of-state manufacturer.  137 S. Ct. at 1783.

Assuming there can be personal jurisdiction based on contractual relationships with third parties not named as defendants, there is a more basic flaw in these opinions. Just because there is specific jurisdiction over one claim (e.g., design defect), that is insufficient to find specific jurisdiction over all claims (e.g., warning claims, breach of warranty claims, and the laundry list of other claims that is usually appended to complaints against the pharmaceutical industry).  Several federal circuits have adopted this claim-by-claim standard. See, e.g., Remick v. Manfredy, 238 F.3d 248, 256-60 (3d Cir. 2001) (conducting specific-jurisdiction analysis as to each individual cause of action); Action Embroidery Corp. v. Atl. Embroidery, Inc., 368 F.3d 1174, 1180 (9th Cir. 2004) (“Personal jurisdiction must exist for each claim asserted against a defendant.” (emphasis added)).  So too have several state courts. See, e.g., Blume Law Firm PC v. Pierce, 741 N.W.2d 921, 925 (Minn. Ct. App. 2007) (“When multiple claims are raised, personal jurisdiction must be established for each claim.”); Moncrief Oil Int’l Inc. v. OAO Gazprom, 414 S.W.3d 142, 150 (Tex. 2013) (“[S]pecific jurisdiction requires us to analyze jurisdictional contacts on a claim-by-claim basis.”).  And it has even been applied in the products liability context. See, e.g., Seiferth v. Helicopteros Atuneros, Inc., 472 F.3d 266, 275 (5th Cir. 2006) (“[P]laintiff bringing multiple claims that arise out of different forum contacts must establish specific jurisdiction for each claim.” (emphasis added)); see also id. (noting that plaintiff brought four claims—defective design, failure to warn, negligence, and negligence per se—and explaining that only the design claim arose out of defendant’s contacts with the forum state, the other three did not); In re Testosterone Replacement Therapy Prods. Liab. Litig., 164 F. Supp. 3d 1040, 1048-49 (N.D. Ill. 2016) (citing Seiferth); Novy v. C.R. Bard, Inc., No. 16-cv-02853, 2016 WL 6393596, at *4-5 (D. Ariz. Oct. 28, 2016) (“Plaintiffs argue that out-of-state Plaintiffs ‘do not have to separately establish personal jurisdiction for each claim as though they were in a vacuum.’ . . .  This Court does not agree.”).

Admittedly, the three cases discussed in this post present unique examples and do not permit much wiggle room to evade the thrust of BMS—especially in the drug and device sphere (after all, in how many states is a drug designed or components of a device manufactured?).  But they all fail to address well recognized due process considerations that were not in play in BMS.  That is, specific jurisdiction must be considered on a claim-by-claim basis.  This is well recognized in the pre-BMS case law and should not be forgotten in the post-BMS landscape.

Today we are talking about a case that is not exactly in the heartland of what we generally examine.  It is not a product liability or mass tort case.  But it is reasonably close.  It is kind of an off label promotion/False Claims Act case.  Okay, let’s admit what it really is: a wrongful discharge/employment case.   The plaintiff alleged that she was constructively discharged because she blew the whistle on what she perceived to be unlawful off label promotion.  The notion of causation is front and center.  The causation issue is always near and dear to our defense hearts.

And yet.  And yet.  Not so long ago we watched a mock jury reach agreement that whether or not the product caused the plaintiff’s injury, the mock jurors were hell-bent on awarding damages.  The jury decided that there were things about the company’s conduct that could be improved, and their verdict would set such improvements in motion.   Swell.  The mock jurors were essentially mocking the jury instructions.  Causation-schmausation.  We shudder at the realization that real, not mock, jurors also do this.  Every. Damned. Day.

Today’s case is also literally near to us, because it was authored by the Third Circuit, which is just down the street from several of us DDL blogsters.  It is also apparently a decision of first impression on the appellate level — that a “but for” (and not a lesser “motivating factor”) causation standard is necessary for FCA retaliatory discharge claims.  So sit back and take in this DDL-adjacent blogpost, wherein we lay out a significant ruling on a significant issue by a significant court.

The case is DiFiore v. CSL Behring, LLC, 2018 U.S. App. LEXIS 92 (3d Cir. Jan. 3, 2018), and is primarily focused on the federal False Claims Act (FCA) anti-retaliation provision protecting employee-whistleblowers who engage in activity protected by the FCA.The district court granted summary judgment in favor of the employer on the wrongful discharge claim because the plaintiff had failed to show constructive discharge as a matter of law. Then the FCA retaliation claim proceeded to trial. The judge instructed the jury that the FCA retaliation provision required that protected activity be the “but-for” cause of adverse actions against the employee. In the jury instruction, the judge listed some, but not all, of the alleged adverse actions.  The jury found in favor of the employer.  On appeal, the employee raised three arguments:  (1) the court improperly granted summary judgment on the state law wrongful discharge claim; (2) the but-for causation standard for retaliation was too exacting; and (3) the court erred by not listing all the alleged adverse actions in its jury instruction.  That middle issue is the reason you are reading about the DiFiore case on the DDL.  Otherwise, you’d have to run to an Employment Discrimination Law (EDL) blogpost to find out about it.

The Third Circuit rejected these arguments and affirmed the decisions below.  We will get to the Third Circuit’s analysis momentarily, but let’s first supply a bit more background.  The plaintiff in DiFiore had risen to Director of Marketing. That’s a pretty high position for a whistle-blower.  The plaintiff took issue with what she saw as off-label marketing strategies, such as reference to off label sales in forecasts.  The plaintiff expressed her concerns to her supervisors, and she claimed in her lawsuit that the company initiated a third-party compliance audit in part because of her complaints.  So far so good.  But the plaintiff contended that, as a consequence of her protected conduct, she suffered several adverse employment actions, including warning letters about her interactions with other employees and failure to pay off her company credit card charges, an uncharacteristically poor performance review, deteriorating relationships with supervisors, diminution of duties, removal from a committee, and a Performance Improvement Plan (PIP) that she interpreted to be a death knell.  The PIP required improvement the designated areas within 45 days or she could be subject to discipline up to and including termination.  According to the plaintiff, most employees hit with a PIP were eventually terminated.  After receiving the PIP, the plaintiff reached out to a supervisor and an HR employee and requested a meeting to discuss an amicable separation.  The meeting was canceled for unspecified reasons.  Then the plaintiff resigned.  Then the plaintiff sued.

1.  Wrongful discharge

The plaintiff in DiFiore was not actually fired, so she needed to allege constructive discharge.  Under Pennsylvania law, constructive discharge occurs when working conditions “are so intolerable that a reasonable employee is forced to resign.”  The court concluded that while the plaintiff might have been subjected to difficult or unpleasant working conditions, those conditions fell well short of being unbearable. You might (certainly a plaintiff lawyer would) suggest that the difference between unpleasant and unbearable could be a jury question.  But the court emphasized that the plaintiff “did not sufficiently explore alternative solutions or means of improving her situation. She made no attempt to comply with the PIP.”  She chose to resign rather than reschedule the canceled meeting.  None of that was disputed. Based on those facts, the court held that no reasonable jury could find constructive discharge.

2. But-for Causation for Retaliation

This is the issue that most interests us.  We more than occasionally noodle over False Claims Act cases, off label promotion, and a little thing called causation.  Under the FCA’s anti-retaliation provision, an employee is entitled to relief if she was “discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of lawful acts” conducted in furtherance of an FCA action. 31 U.S.C. § 3730(h)(1).  The district court (we are in an Inn of Court with this Judge, and he is lightning smart and relentlessly fair, by the way) ruled that the plaintiff was required to show that her protected activity was the “but-for” cause of an adverse action.  Thus, that standard found a home in the jury instructions.  The plaintiff in DiFiore argued that a lower standard applies and she should have been required to prove only that her protected activity was a “motivating factor” in the adverse actions taken by the employer.  That “motivating factor” resides as dicta in an earlier Third Circuit decision, but in the meantime SCOTUS came out with a pair of decisions interpreting identical “because of” language in similar statutes (ADEA and Title VII) to require that illegal motive (age-ism or retaliation) be the “but-for” cause of the employer’s adverse action. Even if the earlier Third Circuit “motivating factor” language was not mere dicta, the intervening SCOTUS precedents controlled (there was no need for an en banc call), so the district court got it right.  The jury was properly instructed, and the defense verdict was affirmed.  Lesson for DDL practitioners: even if you do not do much employment work, remember that statutory “because of” language translates into a but-for standard.

3. Listing of adverse employer actions

The plaintiff contended that the district court’s inclusion of only four of the alleged adverse employer actions in the jury instructions—the two warning letters, the mid-year performance review, and the PIP—may have confused the jurors and led them to believe that they were not permitted to consider evidence of other incidents beyond those four events. But the Third Circuit took in the totality of the circumstances below, including that the district court correctly instructed the jury that its determination should take into account the totality of the circumstances. The district court instructed the jury that the four events occurred “among other things.” The district court’s list was, on its face, illustrative, not exhaustive.  It is hard to say that the district court got it wrong, and it is impossible to say that the omission of certain examples was prejudicial.  The district court’s failure to follow the plaintiff’s list exactly could not be a basis for reversal.

Last week we posted about the need to consider the level of detail and specificity you include in any filing. We happened to stumble across another case that prompted a word to the wise – proofread, proofread, proofread. Today’s case is a defense victory in the battle between state and federal forums, but perhaps more importantly it is a reminder that in the age of “cut and paste,” proofreading is more important than ever.

Grant v. Johnson & Johnson, 2017 U.S. Dist. LEXIS 214078 (S.D.N.Y. Dec. 19, 2017), is not a drug or medical device case. But it involves an attempt by plaintiffs to use local pharmacies to defeat federal diversity jurisdiction and that is something drug and device defense lawyers face on a regular basis. Plaintiff filed a complaint in state court alleging that defendants, including a local New York pharmacy, sold and distributed products containing asbestos which caused plaintiff to develop mesothelioma. Id. at *3. Defendants then removed the case to federal court arguing that the local pharmacy was fraudulently joined. Id. at *3-4. Defendants alleged that plaintiff had not pleaded any facts to support a claim that the pharmacy had ever sold or that plaintiff had ever purchased from it any products containing asbestos. Id. at *4n1.

About a month later, plaintiff filed an amended complaint dismissing the originally named pharmacy and adding five new pharmacy, non-diverse entities as parties. Id. at *4. Plaintiff admitted that the original pharmacy never should have been named. It was an “inadvertent mistake.” In the rush to meet a filing deadline, plaintiff’s counsel copied the allegations from another client’s complaint. Id. at *4-5. Talk about a flub, a botch, a bungle. And it took plaintiff almost a month after removal to fix it. Nobody’s perfect. But naming the wrong defendant – not because of inaccurate, incomplete, or unknown information – but because you didn’t bother to proofread your complaint, is something that should have been caught and remedied immediately.

Once plaintiff “fixed” the complaint, she moved to remand. But sloppiness didn’t win her any points with the court, and more importantly, it revealed plaintiff’s real motive in naming the non-diverse defendants. Which also didn’t help plaintiff’s cause.

First, the procedural posture in this case is slightly different than what we are used to seeing when talking about fraudulent joinder. Because plaintiff admitted that the original pharmacy was improperly joined, its citizenship is discounted for purposes of determining diversity. So, complete diversity existed when the case was removed. Id. at *7n3. The question before the court was whether to allow plaintiff, post-removal, to join the new non-diverse pharmacies. If joinder were permitted, the case would have to be remanded to state court. However, “[w]hen joinder after removal would destroy subject matter jurisdiction, a plaintiff must do more than satisfy the permissive joinder requirements of Fed. R. Civ. P. 20 to succeed on a motion to remand the case.” Id. at *6. That is why, in addition to the permissive joinder rules which would be satisfied in this case, the court considers three additional factors in determining whether to allow a joinder that defeats diversity: (1) whether there was a delay and the reason for it; (2) whether there is any prejudice to the defendant; and (3) plaintiff’s motivation for the amendment. Id. So, why this case doesn’t, strictly speaking, deal with fraudulent joinder, the analysis is quite similar. Id. at *9. The court must examine the “relationship of the non-diverse defendants to the controversy . . . as an independent consideration under the joinder analysis.” Id.

Now for that analysis. The court did not believe there was either a significant delay or prejudice to defendant. Id. at *7. The court recognized the possibility of multiple litigation if joinder was denied based on plaintiff’s stated intention of filing the claims against the new pharmacies in state court. But the court was unpersuaded because “none of these non-diverse Defendants were originally sued . . . even though their existence was known to Plaintiff.” Id. at *8.

But what really drove the court’s decision was the combination of plaintiff’s counsel’s sloppiness and motive for joinder. Needing to make a deadline did not excuse counsel’s inattention:

Plaintiff’s counsel, as he admits, was essentially “copying and pasting” parts of one complaint into that of another—merely lifting a defendant from one complaint and inserting it into another—even though there was no factual or legal basis to do so.

Id. at *9. This is not a trivial thing. Naming the wrong defendant in a complaint may be compared to mistakenly inviting someone to a party. The invitee is now on the hook for a gift, possibly new attire, transportation, a sitter, etc. In other words, it isn’t no harm, no foul. And that’s a modest analogy at best. Once named, a defendant at a minimum has to retain counsel and likely will have to take some affirmative action to get itself extricated from the suit. Certainly more expensive than a bottle of wine and a new tie. Moreover, being named in a lawsuit is a public event that carries with it a certain stigma. To borrow from criminal law – innocent until proven guilty. While that may be true in the courtroom, it’s not necessarily the case in the court of public opinion. One lawsuit may not mean much to a large pharmacy chain, but it can be very unsettling and disruptive to a mom-and-pop shop, or an individually named pharmacist or sales representative, or a small town doctor. So, “oops,” doesn’t cut it.

Adding insult to injury, the amended complaint naming the “correct” pharmacy defendants contained only “boilerplate allegations and is devoid of any specific allegations” about these pharmacies. Id. at *10. Plaintiff lumps all defendants together in almost every allegation with no attempt to “explain what each Defendant’s respective role was.” Id. This also means plaintiff wrongly attributes things like manufacturing and design to the pharmacy defendants. Id. Finally, while plaintiff identifies these new defendants as the locations where she purchased the products over a span of 27 years, the complaint doesn’t allege when these transactions occurred or in what quantity the products were sold. Id.

Taking all of this into consideration, the court concluded:

[W]hile it is certainly plausible that Plaintiffs motive in now seeking to join the Pharmacy Defendants may not be solely to destroy diversity, based on plaintiff’s litigation behavior to this point and the course [s]he has selected to arrive at the current motion, Plaintiff’s motives for joinder are improper and violate the principles of fundamental fairness.

Id. at *11(quotation marks and citation omitted). Joinder was denied so as not to deprive the properly named defendants of their entitlement to litigate in federal court.

We don’t know how the court would have ruled on the remand motion if plaintiff had named the correct defendants the first time around. Given the comments on the boilerplate allegations, we’d like to be optimistic that the result would be the same and the pharmacies would have been found fraudulently joined. We’ll never know because of plaintiff’s carelessness which clearly inured to the benefit of defendants. But we all copy and paste. So, another word of caution – proofread and proofread again.

Summary judgment isn’t normally available for credibility issues.  During the “summary judgment trilogy” of 1986, the Supreme Court stated, “[c]redibility determinations, the weighing of the evidence, and the drawing of legitimate inferences from the facts are jury functions, not those of a judge . . . ruling on a motion for summary judgment.”  Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986).  Or, more recently, “[a] district court generally cannot grant summary judgment based on its assessment of the credibility of the evidence presented.”  Schlup v. Delo, 513 U.S. 298, 332 (1995).  But every rule has its exceptions for extreme circumstances.

The key word from Schlup is “generally,” and in today’s case, Gill v. Teva Respiratory, LLC, 2017 WL 6614228 (D. Conn. Dec. 27, 2017), the plaintiff’s own testimony was simply too unbelievable and contrary to all other evidence (and common sense) to defeat summary judgment.  The plaintiff claimed to have inhaled a thumb tack – that’s right, a thumb tack – from the defendant’s allegedly sealed medical device (an inhaler).  She sued both the maker of the inhaler and the intermediate seller (a pharmacy).  Both received summary judgment.

There were a lot of problems with her story.  For one thing, after she inhaled the thumb tack, she didn’t seek medical attention for “several days,” despite the problem being serious enough to require surgery.  Id. at *1.  But that wasn’t even the basis for the ruling.

  • Plaintiff claimed that she put the product in her car’s “glove compartment” for about a “week” before ever using it, leaving it in its original packaging.  Id. at *1.
  • The manufacturer produced extensive “evidence about its manufacturing and inspection process to preclude any inference that it could have allowed the thumbtack to enter the inhaler.”  Id.; see also id. at *2 (further describing process).
  • Plaintiff’s medical records refuted her testimony, indicating that she had kept the product “in her purse” and “not [in] her glove compartment.”  Id. at *1.
  • While in her purse, the product’s “cap had fallen off,” and “her children had put the thumbtack inside the inhaler.”  Id.
  • While plaintiff claimed she had used the product only once, the product’s “mechanical counter” indicated that it had been used 34 times.  Id. at *2.

In response, plaintiff did nothing. She “did not conduct any discovery.”  She “neither disputed defendants’ evidence” nor submitted any opposing “statement of material facts” as the rules required.  Id.  Plaintiff’s lassitude resulted in the defendant’s factual statement being “deem[ed]” “true.”  Id.  Most importantly, plaintiff “had no explanation for the[] statements as reported in her medical records.” Id. at *2.

Thus, the facts about manufacturer’s quality control systems were deemed true, the plaintiff’s testimony was refuted by her own medical records, and plaintiff offered no explanation for anything. “It is not simply that plaintiff has failed to rebut defendants’ evidence” about its quality control; it was the weakness of plaintiff’s own testimony.  Id. at *3.

This situation was sufficiently extreme to support entry of summary judgment on the basis of the plaintiff’s testimony offered in support of an injury from an alleged defect in the device being incredible and unworthy of belief.

[I]n rare circumstances a court must necessarily undertake some evaluation of a plaintiff’s credibility at the summary judgment stage. . . .  [W]here the plaintiff relies almost exclusively on his own testimony, much of which is contradictory and incomplete, it will be impossible for a district court to determine whether the jury could reasonably find for the plaintiff, and thus whether there are any “genuine” issues of material fact, without making some assessment of the plaintiff’s account.

Id. at *2 (quoting Rojas v. Roman Catholic Dioceses, 660 F.3d 98, 105 (2d Cir. 2011)).  “[T]here may be certain extraordinary cases, where ‘the facts alleged are so contradictory that doubt is cast upon their plausibility, [for which] the court may pierce the veil of the complaint’s factual allegations and dismiss the claim.” Id. (quoting Jeffreys v. City of New York, 426 F.3d 549, 555 (2d Cir. 2005)).

Those “rare circumstances” were present in Gill:

[P]laintiff’s own account of the facts − which is the only evidence relied on by plaintiff to sustain her claim − is rife with irreconcilable contradiction.  Plaintiff has no explanation for the multiple medical notes . . . reflecting that the inhaler was in her purse with the cap off and accessible to her children, rather than in its original packaging in her glove compartment as plaintiff claimed.  Nor does plaintiff have any explanation for why the inhaler’s dosage count reflected its prior use 34 times, rather than her initial use of a new inhaler as plaintiff self-servingly claimed.

Id. at *3.  Summary judgment was therefore appropriate, since “the manifest contradictions and discrepancies in plaintiff’s own account, no reasonable jury could conclude that the thumbtack entered the inhaler at any time that the inhaler was in the possession or control of either one of the defendants.”  Id.

The alternative – letting juries decide every “credibility” dispute, no matter how far-fetched of fanciful the plaintiff’s testimony might be – was not sound jurisprudence. To “require district courts to allow parties to defeat summary judgment simply by testifying to the allegations in their pleadings would license the mendacious to seek windfalls in the litigation lottery.” Id.

Having seen far too many “mendacious” plaintiffs obtain “windfalls” in “litigation lottery” settlements, we could not agree more.

These past few weeks, our loyal readers have descended into “The Lows” and then climbed to “The Highs” with us as we reviewed the 10 worst (and bonus worst) and 10 best cases of 2017.

If you found yourself wanting more information on these cases and their impact – perhaps with a side of CLE credit – we’re pleased to announce that four of your bloggers (Bexis, Steve McConnell, Eric Alexander, and Steven Boranian) will be presenting a free 90-minute webinar on “The Good, the Bad and the Ugly: The Best and Worst Drug/Medical Device Decisions of 2017” on January 17 at 12 p.m. EST.

The webinar is presumptively approved for 1.5 general CLE credit in California, Illinois, New Jersey, Pennsylvania, Texas and West Virginia. (For lawyers licensed in New York, it’s eligible for 1.5 credit under New York’s Approved Jurisdiction Policy.)

The program is free and open to anyone interested in tuning in, but you do have to sign up, which you can do here.