This week the Drug and Device Law Son turns 20. It is apparently an age of discontent, of gripes and snipes. When we asked the DDLS what he wanted for his birthday, he said he wanted to move “back” to California. Something about freedom and openness. Since he moved from LA to Philly when he was all of 18 months old, this idea of moving “back” to SoCal is more an expression of imagination rather than memory or experience. And we get that. California occupies a large place in the American psyche. It emanates glamorous possibility. Some of that comes from the fakery of the movies, but some also comes from the reality of 72 degree weekends in February. And yet the SoCal reality is more mundane. Indeed, the hot mess tv show that was season two of True Detective shined a crazy klieg light on LA freeway four-leaf clovers hugging smoke-belching factories. Odds are that if you have a trial in LA, few of your jurors will work in Hollywood or Santa Monica or Pacific Palisades, while many more will spend their days in the City of Industry, the City of Commerce, or the City of Vernon — the last being the real life inspiration for True Detective‘s setting of the City of Vinci. Vernon squats in the middle of LA County, just south of downtown LA. Its motto is “Exclusively Industry.” Indeed. It contains only about 100 residents, but lots of factories, refineries, and the Farmer John slaughterhouse. Those five square miles of ugliness are at least as representative of SoCal as Venice Beach or Melrose Place are. After Jimmy Rollins was traded from the Phillies to the Dodgers, he said that he felt freer to express himself in LA, whereas he felt somehow constrained in blue collar Philly. That is nonsense. Maybe he felt that way, but the fact is that LA has far more manufacturing and manual labor jobs than Philly has. Philly used to make things, like tools and Stetson hats. Not so much anymore. By contrast, the garment industry in LA is enormous. The defense aerospace industry might not be quite the same as it was during the post-WWII boom, but it is still all over SoCal. The glitzy image of California can obscure a much more complex quotidian reality. A lot of hard work gets done under those sunny skies. Even in the legal biz, we are all too prone to portray California as some vast Other, a place with fringe case law, lefty judges, and nullifying juries. Some of that is true. (It is also true in lots of other places.) It probably is right to say that California courts are the most likely to try new things out. Justice Traynor basically rewrote product liability law back in the middle of the last century. Today, the Ninth Circuit is the only Circuit that puts its oral arguments up on YouTube. And maybe the DDLS is correct that all that progress and innovation adds up to happiness. Just yesterday we read an article in Law360 about how LA lawyers are happier than their East Coast colleagues. Better work-life balance appears to be the chief reason. Our own most joyful years were spent as an AUSA in C.D. Cal., prosecuting bank robbers, drug kingpins, counterfeiters, and fraud artists. We usually won, but even the setbacks gave us stories that we dined out on for the next 20 years (and continuing). The federal agents were dedicated professionals. Some are still among our very best friends. Most of our opponents were competent, classy, and marched into court with a sense of perspective and humor. In our memory, it all glows. Maybe it is like Conrad’s story “Youth,” where the adventures of one’s salad days grab a big, jolly piece of the brain-pan and refuse to let go.
Most of what judges and juries do in California is quite normal. We were thinking about this truth when we read the recent case of Seedman v. Cochlear Americas, 2015 U.S. Dist. LEXIS 106305 (C.D. Cal. Aug. 10, 2015). In that case, the judge did the hard work of sorting through a hodgepodge of product liability claims and reasoning through an analysis that mostly seems to have gotten things right. At one point, that reasoning was hemmed in by the kind of nutty Ninth Circuit law that gets our teeth grinding, but the result is overall good enough. Like in Randy Newman’s song, you might be rolling down Santa Monica Boulevard toward the Pacific, or dodging the skid row residents on Sixth Street, but it’s still a pretty perfect day. In Seedman, the plaintiff had a cochlear device implanted in his left ear in June 2011. The implant at issue was subject to a global recall in September 2011. In March 2013, the plaintiff’s cochlear implant failed due to an electronic failure caused by a loss of hermeticity (failure of a moisture seal). The plaintiff filed a lawsuit in 2015, alleging claims for strict liability based on manufacturing defect, design defect, and failure to warn, as well as negligence, negligent misrepresentation, breach of express warranty, and breach of implied warranty of merchantability. The plaintiff sued both the parent company, which was based in Australia, and the American subsidiary.
The first issue for the court was the parent company’s challenge to personal jurisdiction. Why do plaintiffs so often insist on bringing parent corporations into a lawsuit? It might make sense if there was some doubt about the solvency of the subsidiary, but that is seldom the case. Perhaps it is simply leverage. In our experience, our clients hate it when plaintiffs bring the parent company into the case. It is an enormous bother. Just as a matter of housekeeping, we are usually instructed to get the parent out of the case. Sometimes that can be done by stipulation, though plaintiff counsel will exact their pound of flesh in the way of a tolling agreement or an agreement not to remove the case to federal court if the parent’s exit creates diversity. There was apparently no agreement in Seedman, so the court had to walk through the Bauman personal jurisdiction analysis. There was clearly no general personal jurisdiction over the Australian parent. It had nothing approximating physical presence in California. The specific personal jurisdiction was a little closer, and a lot more interesting. The key inquiries are whether the defendant performed some transaction within the forum, whether the claim arose out of the defendant’s forum-related activities, and whether exercise of jurisdiction would be reasonable. The plaintiff bears the burden on the first two factors, and if the plaintiff carries that burden, the burden then shifts to the defendant to show that exercise of jurisdiction would not be reasonable. The plaintiff focused on the parent company’s website in an effort to establish specific personal jurisdiction. The court held that a mere web presence would not support personal jurisdiction, though an interactive website might do the trick. But in this case, the parent’s website offered no products for sale, so personal jurisdiction seemed out of reach. And then, just as the plaintiff saw personal jurisdiction over the parent company slipping away, it asked for “limited” jurisdictional discovery, and the court granted that request. Let’s hope that such discovery truly is limited and does not become yet another plaintiff-manufactured pressure point.
Now onto the substantive issues. The defendant argued that the claims were all preempted. The cochlear implant is a Class III medical device, so it enjoys full-blown federal preemption. Any state-imposed requirement different from the federal scheme would be preempted. But like a puerile potty joke in a Chuck Close sitcom, the court’s resort to the parallel claim exception was dreary and predictable. The court allowed the plaintiff’s strict liability manufacturing defect to live another day, on the theory that the manufacturing defect stemmed from “unintended variations in the brazing process” that contravened federally mandated good manufacturing practices. This plaintiff offered a little more specificity than most plaintiffs do when it came to reciting the manufacturing defects, and that seems to have been enough for this court.
The court reached a different result with respect to the strict liability claims for design defect and failure to warn. The design defect claim was purely preempted. The FDA had approved the design and no helpful suggestion by a plaintiff lawyer or a narcoleptic jury could result in a design change unless the FDA blessed it. But the strict liability failure to warn claim evaded preemption for reasons that remind us how the law Out There can get it so wrong. To the extent that the plaintiff said that the defendant failed to warn the plaintiff, doctors, or the public, the claim was preempted. So far so good. But to the extent that the plaintiff was alleging that the defendant failed to warn the FDA about adverse events, the court felt compelled by the wretched Ninth Circuit decision in Stengel to keep that claim in the case. Buckman, apparently, be damned. This blog has said a few things before about Stengel (here, for example), and we will leave it at that.
The court’s analysis of the negligence claim was predominantly , er, parallel to the strict liability claims. The plaintiff alleged negligent “design, formulation, testing, quality assurance, quality control, labeling, manufacture, marketing, promotion, sale and/or distribution of the Cochlear implant into the stream of commerce.” The negligent manufacturing claim survived for the same reason that it survived in its strict liability version. But the other negligence claims looked like the same sort of conduct that the Supreme Court held preempted in Riegel. Maybe the Seedman plaintiff used slightly different language, but “Seedman cannot plead around Riegel by using different words for the same type of behavior.” This ruling makes us think the Seedman judge was paying attention and almost makes us forgive the earlier fidelity to Stengel. Ah, who are we kidding – this judge was just as stuck with Stengel as we are. Yes, we know we said that we weren’t going to say anything more about Stengel, but ….
The negligent misrepresentation claim was preempted even though it smelled a bit like the strict liability failure to warn claim that the court saved per Stengel. The plaintiff once again argued that the defendant should have reported adverse events to the FDA. But this particular claim was premised on a duty owed to the plaintiff, not the FDA, “and such a duty would add to federal requirements.” Therefore, it was preempted. That surely is the right result, but the reasoning is necessarily muddied by the need to make a respectful nod to the Stengel error. And if the point is that the claim that survived per Stengel was premised on a duty not owed to the plaintiff, then how is it a valid claim by that plaintiff? Our head hurts. And, yes, this is honestly the last time we mention the Stengel abomination in this post.
The Seedman court wrapped things up by holding both warranty claims, express and implied, to be preempted. The representations that the defendant could make about the product were limited to those approved by the FDA. A state law warranty claim would rest on a requirement “different from, or in addition to” the FDA’s requirements. So the court ended up dismissing most of the claims – with prejudice, by the way – leaving only the manufacturing defect claims (which usually end up working not so well for plaintiffs when all the discovery comes in) and a failure to warn claim that lingers only because of a certain stain on drug and device law jurisprudence that we absolutely, positively will not mention again. Today.
In the meantime, Happy Birthday to the DDLS. Maybe you’ll get “back” to California. If so, keep the guest room ready for us.