Photo of Bexis

In a pair of cases, the Maryland Court of Appeals (the state’s highest court) rumbled through more than $1 billion in verdicts in a gasoline spill case, reducing them to nothing (although one plaintiff managed a new trial on one issue unrelated to this post).  See Exxon Mobil Corp. v. Albright, ___ A.3d ___, 2013 WL 673738 (Md. Feb. 26, 2013); Exxon Mobil Corp. v. Ford, ___ A.3d ___, 2013 WL 673710 (Md. Feb. 26, 2013).  While a lot of the analysis in these opinions is devoted to property damage issues (purportedly from groundwater contamination) that we don’t see much in our drug/device sandbox, they also dealt with a couple of issues that are near and dear to our hearts – medical monitoring and fraud on the FDA.

A Tough Medical Monitoring Standard

First, we’re sorry to report, Albright (the lead opinion) did recognize a cause of action for medical monitoring by presently uninjured plaintiffs.  2013 WL
673738, at *26, 31.  That being said, we’re pleased to report that the court attached rigorous requirements to the monitoring cause of action – a “proven necessary medical costs” requirement as tough as any state we’ve seen.

What do we mean?  Well, first, medical monitoring is a “remedy”; thus plaintiffs must first prove some underlying cause of action.  Albright, 2013 WL 673738, at *26-27.  Second, medical monitoring costs must be both “necessary and reasonable.”  Id. at *27 (emphasis original).  “Necessity for medical monitoring . . . must be reasonably certain, rather than merely possible.”  Id. Third, a plaintiff must “experience[] direct and hence discrete exposure.”  Id. at *28 (emphasis original).  Fourth, the condition for which monitoring is allegedly needed must be “related specifically and tangibly to that exposure.”  Id.  Fifth and finally, the risk must be “a direct and proximate result of th[at] exposure.”  Id. (emphasis original).

The court in Albright was determined that medical monitoring not become an excuse for crappy, unsupported claims:

[W]e are wary of damages for speculative claims resting on tenuous proof of risk of disease attributable to the type of exposure. . . . [W]e believe that . . . recovery for a latent disease due to toxic exposure involves necessarily somewhat nebulous forecasts of a potential risk to develop a disease in the future. . . .  Requiring quantifiable and reliable proof, however, will assist courts in determining whether causation and significant risk are present in a plaintiff’s prima facie case.

Id. at *28 (emphasis original).  The medical monitoring standards that the court adopted are expressly intended to “inhibit[] damages awards for speculative, and thus unreliable, opinions as to a plaintiff’s potential risk of developing a future disease.”  Id. at *29.

Altogether, we’d have to say there’s a lot of emphasis original in Albright that we like.

Thus “reliable expert testimony quantifying the risk, is necessary” – not some dumbed-down version.  Id. at *29.  “The prime inquiry into the necessity and reasonableness of a plaintiff’s claimed monitoring costs is whether medical monitoring is, to a reasonable degree of medical certainty, necessary in order to diagnose properly the warning signs of disease.”  Id. at *26 (emphasis original).

Quantifiable and reliable indicators of risk in developing disease are also helpful to determine a “significant” increase in risk of disease, thus ensuring that the nature and extent of medical monitoring is actually greater than that which should be undertaken by the general population, a key purpose in awarding appropriate medical monitoring damages.

Id. at *29.  Such expert opinion must be “particularized to a plaintiff, and demonstrating a reasonable link to toxic exposure.”  Id.  Or, as the court summed things up in the accompanying Ford opinion:

To determine what is a ‘significantly increased risk of contracting a latent disease’ for a particular plaintiff, the plaintiff must present quantifiable and reliable medical expert testimony that indicates the individual plaintiff’s particularized chances of developing the disease had he or she not been exposed, compared to the chances of the members of the public at large of developing the disease.

Exxon Mobil Corp. v. Ford, ___ A.3d ___, 2013 WL 673710, at *7 (Md. Feb. 26, 2013).

While we don’t like medical monitoring – period, if a jurisdiction has to go that route, terms like “quantifiable,” “reliable,” “individual,” and “particularized” are (relatively speaking) music to our ears.  One, or a few, medical monitoring claims don’t particularly bother us.  Chances are that the amount of recoverable expenses will be low.  We’re far more concerned about attempts to pursue medical monitoring through class actions.  That approach is not likely to succeed in Maryland under the Albright standard.

Check out how Albright sliced, diced, and pureed the plaintiffs’ evidence.

Initially, a bunch of plaintiffs were awarded medical monitoring damages although they had “no detected contamination.”  Those claims obviously failed.  2013 WL 673738, at *32.  An even larger number of plaintiffs had received monitoring awards despite evidence of only minor (less than government standards) contamination.

[I]ndividuals are exposed routinely in everyday life activities to [these products].  Thus, those [plaintiffs] with no demonstrated exposure exceeding the [governmental] action levels . . . are no more at risk of developing a latent disease from these contaminants than the average person − much less suffer a significantly increased risk of developing disease.

Id.  Sayonara.

More significantly, for our purposes anyway, even the plaintiffs who “tested at or above” government action levels failed – for lack of “quantified” evidence of risk:

[F]or any [plaintiff] to recover damages for medical monitoring, he or she must present expert testimony quantifying his or her risk of developing a latent disease.  Specifically, the expert must indicate a particularized, significantly-increased risk of developing a disease in comparison to the general public.  Here, [plaintiffs’ experts] testified, in effect, that if an individual is exposed to [the products] in any dosage or amount, he or she incurs an additional risk of developing cancer. . .

Such testimony is insufficient to establish that [plaintiffs] had a significantly increased risk. . . .  Neither [plaintiffs’ expert] attempted to quantify any individual [plaintiff’s] increased risk of developing cancer.  Rather, [they] testified under the assumption that any exposure to [the products]  is unacceptable from a public health standpoint and increases the risk of developing cancer, [and] offered no [plaintiff]-specific testimony. The level of generalization in this regard presented at trial is insufficient. . . .

Id. at *32-33.  Even if tf the court’s medical monitoring language test had left any wiggle room for class actions, this analysis of the evidence actually necessary to prove the claim killed that option.  Medical monitoring in Maryland can’t be proven with some garbage generalized opinion that was not based in individualized evidence of exposure, that is plaintiff-specific exposure testimony is required.

So, yes, Albright/Ford allowed medical monitoring claims, but only with proof requirements that ensure that such claims are little more than a litigation nuisance.

No Fraud On The FDA

What does the FDA have to do with anything?  Albright/Ford involved an underground gasoline spill.

Nothing – at least not directly.

Before Buckman (or, more precisely, while the case that became Buckman was wending its way through the lower courts), those of us in Bone Screw-land were forced to analyze such claims for other, non-preemption-related defenses.  One of those was that the common-law did not recognize third-party fraud claims, at least where direct reliance did not exist.

We haven’t thought about those defenses much lately, so we waxed nostalgic when we read Albright/Ford.  The fraud claim in those cases – on which the runaway $1 billion punitive award was based – was a third-party fraud claim predicated on alleged fraud on a government agency.

In short, the fraud claim in Albright/Ford is indistinguishable from fraud on the FDA.

Just like fraud on the FDA, the plaintiffs claimed that the defendant fraudulently misled a government agency (a local health department) to get construction of its service station approved.  Albright, 2013 WL 673738, at *1-2.  That’s functionally equivalent to getting a product approved.  Just like fraud on the FDA, none of the plaintiffs knew of or relied on the alleged fraud committed against the government agency years earlier.  Id. at *8.

Thus, the plaintiffs were seeking essentially third party “fraud on the public” similar to securities claims for fraud on the market:

In the absence of personal reliance, however, [plaintiffs] assert an attenuated third-party reliance theory under which they claim that they need not show any evidence of actual, personal reliance in order to establish fraud.  Rather, they claim, a cause of action for fraud may be successful under a theory of third-party reliance by demonstrating . . . a false statement to public officials . . . rather like fraud on the people’s government constitutes fraud on the people.


Would Maryland recognize “third party” fraud under such circumstances?

No.  More like hell, no.

[W]e have not permitted recovery without a demonstration that the plaintiff relied, either directly or indirectly, on the relevant misrepresentation. . . .  Reliance by [a government agency] is simply not enough . . . [plaintiffs] must also have relied personally, either directly or indirectly, on the allegedly false representations.

Id. at *8-9.  Like the Supreme Court pointed out in Buckman, the government is perfectly well equipped to prosecute fraud committed against it.  “Government is capable and empowered generally to take action in such instances to protect its interests and those of the public.”  Albright, 2013 WL 673738, at *9.  Broad allegations of agency fraud, neither witnessed or known by a plaintiff, do not state an actionable claim.  “[Plaintiffs], however, purely by virtue of being residents in the area, without more, cannot maintain an action for fraud based on false statements for which they have admitted no direct, indirect, or personal reliance.”  Id.  Bye-bye $1 billion in punitives.

Moreover, every word in Albright applies equally to a claim that a manufacturer somehow defrauded the FDA to obtain favorable agency action with respect to a product.  A plaintiff, later alleging injury from that product, will have no knowledge of the claimed fraud, nor will that plaintiff have personally relied, directly or indirectly, on any statement made to the FDA.  At most, like being a “resident of the area,” a plaintiff could claim attenuated reliance upon the regularity of governmental actions – “fraud on the people’s government” amounting to “fraud on the people.”  And that’s not enough.

Thus, it can now safely be said, all considerations of preemption aside, that a claim of fraud on the FDA would not state a valid cause of action under Maryland law.

We fully support Buckman, and thus  hope we never have to utilize this state-law argument.  But it’s nice to know that it’s there.