Today, we chronicle two more decisions from the Zantac MDL. Once again, kudos to this MDL transferee judge for outstanding willingness to tackle legal issues, and decide them, at an early stage of the litigation. Because we’ve gone through these issues before, here and here, we discuss these latest rulings in one post.
In In re: Zantac (Ranitidine) Products Liability Litigation, ___ F. Supp.3d ___, 2021 WL 2682602 (S.D. Fla. June 30, 2021), most innovator liability claims are once again dismissed. In the interim, since the first Zantac innovator liability decision, the United States Supreme Court decided the somewhat expansive specific personal jurisdiction decision in Ford Motor Co. v. Montana Eighth Judicial District Court, ___ U.S. ___, 141 S.Ct. 1017 (2021), so to that extent the Zantac plaintiffs at least had something to argue about.
Ford Motor didn’t do them any good.
First, the plaintiffs did not bother to reallege innovator liability under any of the 35 states that the earlier Zantac decision predicted would not adopt such liability. 2021 WL 2682602, at *3-4. Instead, they made their last stand under the laws of California and Massachusetts, the only two states in the nation that currently allow innovator liability. Id.
Plaintiffs’ main argument was that Ford Motor somehow (it was never really quite clear) allowed residents of California and Massachusetts to assert “related to” specific jurisdiction over defendants whose products they never ingested, based on regulatory facts that had no nexus to these two states. Plaintiffs, in an argument redolent of the losing side in Bristol-Myers Squibb Co. v. Superior Court, ___ U.S. ___, 137 S.Ct. 1773 (2017), asserted that “Defendants ‘targeted the California and Massachusetts markets’” through certain general activities. 2021 WL 2682602, at *5 (referencing physician education, market research, social media, medical education and studies, advertising, contracts with in-state intermediate sellers). Glaringly, that list of activities did not include any defendant selling any product that any California or Massachusetts plaintiff ever allegedly ingested. Those allegations formed the basis for negligent misrepresentation (California) and reckless misrepresentation (Massachusetts) causes of action. Id.
None of these amended allegations sufficed to establish personal jurisdiction, notwithstanding the new Ford Motor decision. Critically, all of the in-forum activity that the Supreme Court found supportive of specific personal jurisdiction in Ford involved that defendant’s own products, and its own products injured the plaintiffs. Innovator liability was just the opposite – it solely involved liability for different manufacturers’ products, because those manufacturers were required by federal law to use identical warnings. Id. at *9-11. Thus “Plaintiffs have not met their burden to show that their claims arise out of or relate to Defendants’ activities in California or Massachusetts.” Id. at *12.
The innovator-liability theory adds a layer of uniqueness and complexity to the traditional specific personal jurisdiction analysis because it seeks to hold brand-name product manufacturers liable for injuries caused by products that they did not manufacture, distribute, or sell. Under this theory, the nexus between the brand-name product manufacturer’s conduct and the generic product consumer’s claims is more tenuous than had the claims been based on consumption of the brand-name manufactures’ products.
Id. (citation omitted).
The defendants’ alleged in-state activities, while satisfying the first jurisdictional prong of purposeful availment, id., went no further. They were like the generalized allegations of in-state conduct found insufficient in BMS. Id. Activities related to the development and marketing of the innovators’ own products – as opposed to the generic products the plaintiff alleged they had actually used − do not “relate to” the conduct allegedly creating innovator liability:
Plaintiffs have not sufficiently alleged that Defendants’ contacts “relate to” Plaintiffs’ claims. . . . [T]he specific allegations about Defendants’ sales and marketing activities in California and Massachusetts do not relate to the core conduct that constitutes the rationale for holding brand-name manufacturers liable for claims brought by consumers of generic bioequivalent products based on the theory of innovator-liability, . . . a brand-name manufacturer’s labeling decisions regarding its own product.
Id. Those labeling decisions were not made within the states in question. For purposes of the only claim plaintiffs were asserting – innovator liability – the “only conduct that gives rise to Plaintiffs’ claims is Defendants’ alleged failure to update the warning label for brand-name ranitidine products, not the alleged misrepresentations . . . made in the course [defendant’s]of sales and marketing activities.” Id. at *14. None of plaintiffs’ conduct allegations was “jurisdictionally relevant.” Id.
Thus, by divorcing liability from the defendants’ sale of their own products, innovator liability necessarily divorced the defendants’ alleged liability-producing conduct from their own products as well – and all of plaintiffs’ allegations of in-state conduct involved defendants’ activities relating to their own products. Otherwise “related to” jurisdiction would not have “real limits,” contrary to Ford Motor.
The nature of an innovator-liability claim, therefore, compels the Court to establish those “real limits,” for purposes of specific personal jurisdiction, as only those activities that relate to the brand-name manufacturers’ labeling decisions regarding their own product. It follows that Defendants’ other activities do not relate to the claim and as such, allegations relating to those activities do not support specific personal jurisdiction of the brand-name manufacturers in California and Massachusetts.
Id. Fatally, plaintiffs “conceded . . . that they do not allege that Defendants made labeling decisions related to brand-name ranitidine products in California or Massachusetts.” Id.
Plaintiffs also invoked something called “legislative jurisdiction” in an attempt to override normal choice-of-law rules (while also ignoring plaintiffs’ own prior arguments about the laws of multiple states), and apply California and Massachusetts law extraterritorially to plaintiffs having nothing to do with those states. Since that would require a state-by-state choice-of-law analysis, Zantac postponed it until later. Id. at *15. Technically, plaintiffs won that round – but only in the sense that they didn’t lose outright. More about that, later.
Finally, one relatively minor defendant had the misfortune to be subject to general jurisdiction in Massachusetts. Based on plaintiffs’ allegations about the role of that defendant, innovator liability claims against it survived dismissal. Id. at *16.
In re Zantac (Ranitidine) Products Liability Litigation, 2021 WL 2685605 (S.D. Fla. June 30, 2021), TwIqballed all of the personal injury claims against the “retailer and pharmacy defendants” with prejudice. Id. at *1. Thus, the decision did not reach these defendants’ constitutional preemption motion (which we also thought was rock solid).
Following the first dismissal of their retailer/pharmacy claims, plaintiffs filed an amended complaint with only one claim: “negligent storage and transportation outside the labeled range” (which is 68º-77º F). Id. at *5. To avoid preemption, plaintiffs now alleged only failure to conform to the storage temperatures stated in the drug labeling – that it had been stored at excessively “hot” temperatures. Id. Since storage and transportation is inherently variable, plaintiffs sought to generalize these claims by attacking these defendants’ allegedly negligent “usage of common carriers (such as the postal service).” Id.
What should they have used? Carrier penguins?
The Zantac plaintiffs were once again making things up as they went along. All but one paragraph of purported factual support pleaded in their complaint was “on information and belief.” Id. at *6. However, like most courts, the Eleventh Circuit holds that unless the information is peculiarly in an opponent’s possession, “information and belief” allegations are to be disregarded in evaluating motions to dismiss. Mann v. Palmer, 713 F.3d 1306, 1315 (11th Cir. 2013). See also Zamfirova v. AMAG Pharmaceuticals, Inc., 2021 WL 2103287, at *8 (D.N.J. May 25, 2021); Teixeria v. St. Jude Medical S.C., Inc., 193 F. Supp.3d 218, 225-26, 231-32 (W.D.N.Y. 2016); Ali v. Allergan USA, Inc., 2012 WL 3692396, at *10 (E.D. Va. Aug. 23, 2012); Gelber v. Stryker Corp., 788 F. Supp.2d 145, 161 (S.D.N.Y. 2011); Funk v. Stryker Corp., 673 F. Supp.2d 522, 525 (S.D. Tex. 2009), aff’d, 631 F.3d 777 (5th Cir. 2011).
Even as to the common-carrier allegations, plaintiffs were simply making things up. Unfortunately for them federal regulations exist that govern drug transportation and storage, and they allowed “excursions” during storage and shipping of up to 86º F and “transient spikes” of up to 104º F. Zantac, 2021 WL 2685605, at *8 (quoting United States Pharmacopoeia (“USP”)). The existence of these regulations rendered plaintiff’s broad, vague indictment of common-carrier transportation and storage implausible:
The Court fails to see how this general allegation plausibly suggests a Defendant violated a duty of care because, pursuant to the FDCA through the USP, it is lawful for a room-temperature drug to be subjected to elevated temperatures, within certain limitations. Through their silence on the topic, the Plaintiffs have made no argument that the Defendants could somehow be found to have breached a state duty of care if they fully complied with the federal transportation requirements contained in the USP.
Id. Plaintiffs were thus no better off than before their amendments, alleging only “that from time to time, in certain locations, in certain weather, there may have been a rogue truck, a rogue warehouse, or a rogue store” where the product received excessive heat exposure. Id.
Moreover, when exposed to actual facts, the wheels once again fell off plaintiffs’ allegations. Their own complaint stated that the drug required five “continuous” days of exposure to temperatures of 158º F or more to exceed the FDA’s “unacceptable daily level” of exposure to the allegedly carcinogenic breakdown product (N-nitrosodimethylamine). Id. at *9. That made plaintiffs’ entire theory simply implausible:
[T]he Court finds it implausible to conclude, without any supporting factual allegations, that common carriers would expose the products in their care to 158-degree heat for a continuous period of 5 days before the ranitidine reached its ultimate destination.
Plaintiffs’ claims suffered from as second form of inherent implausibility. It’s simply not negligent to ship drugs by common carrier, such as the post office. Id. “The practice of providing pharmaceuticals by mail or other courier has existed for at least a century and was particularly prevalent in rural areas where distances between pharmacists often made in-person dispensing of medications impractical.” Id. (citation and quotation marks omitted). Indeed, the laws of “nearly four-fifths of the states . . . expressly permit such shipments.” Id. at *10 (citation and quotation marks omitted). Since “the shipment of drugs through a common carrier in the United States is such a routine, ubiquitous practice, [plaintiffs allegations] would mean that each day thousands of companies commit ordinary negligence.” Id.
That’s what happens when plaintiffs make things up as they go along and never stop to think about what they’re actually alleging. This implausible negligence allegation – “one allegation in one paragraph in a complaint spanning 3,268 paragraphs” – required dismissal of all plaintiffs’ negligence claim under TwIqbal. Id. at *10.
And, finally, the MDL court had enough of plaintiffs’ willingness to plead anything, no matter how fantastical, to avoid dismissal. It dismissed all claims against the pharmacy/retailer defendants with prejudice, rather than let plaintiffs make up something else:
The Defendants, over the course of the past sixteen months, have no doubt incurred substantial costs in the form of motion practice and discovery. . . . Notwithstanding the significant costs that the Defendants have incurred, at no time have the Plaintiffs stated a claim against the Defendants. The Court provided the Plaintiffs a fair and just opportunity to state a claim against the Defendants. . . . Were the Plaintiffs to file a third master pleading, any sustainable theory in that pleading against the Defendants would be a new, previously untested theory. The introduction of new legal theories at a later stage of proceedings amounts to undue prejudice.
Id. at *11 (citations omitted). Given “Plaintiffs’ desire . . . to hold all Defendants liable in a master pleading for all sales of ranitidine,” any further amendment would be futile. Id. (emphasis original).
Given the Zantac plaintiffs’ prolix and over-exuberant pleadings, suing everyone for everything, there are procedural difficulties regarding appeals from these orders. Enough legalistic flotsam and jetsam remains that there are questions about appealability – the finality of the orders as to all claims and all parties (such as the leftover claims, described above, after innovator liability was dismissed), and whether final judgment should be entered for some of the defendants. Plaintiffs moved for entry of a particular form of final judgment, but failed to get what they wanted. See In re Zantac (Ranitidine) Products Liability Litigation, 2021 WL 3473759 (S.D. Fla. Aug. 6, 2021). The Court stated that its orders as to the retailers and distributors were not final, and that while the Master Complaint allegations against them were dismissed, “[u]pon remand, the individual Plaintiffs should have the option to seek through amendment a negligence claim on case-specific facts, provided an individual Plaintiff has a factual basis to do so.” Id. at *3.
As to the generic defendants, the Court’s dismissal orders were final, but plaintiffs asked for entry of final judgment as to those parties without identifying which MDL member cases involved only generic manufacturer defendants. “Due to this lack of specificity from the Plaintiffs, the Court declines at this juncture to enter a final order of dismissal as to the Generic Defendants.” Id.
And as to innovator liability orders involving the brand manufacturer defendants, those were not final because: (1) plaintiffs were allowed to replead, if they could, that the branded defendants “made labeling decisions” in California or Massachusetts; (2) every plaintiff’s complaint joined the one, unfortunate defendant arguably subject to general jurisdiction in Massachusetts; and (3) plaintiffs “legislative jurisdiction” theory was left unresolved. Id. at *4. Although Plaintiffs had sought to manufacture finality by abandoning the claims the Court had allowed them to replead, or keep for now, they were hoist on their own pleading petard. Id. at *4. Here, as well, plaintiffs offered no authority that, “simply because they have now chosen not to pursue the[se] claim[s],” they can “convert the Court’s dismissal without prejudice of the innovator-liability claims brought in California and Massachusetts courts to a dismissal with prejudice.” Id.
They pleaded it; they own it.
So plaintiffs’ request for orders allowing immediate appeal was denied. Id. at *5.
But prolix is prolix: We also understand that plaintiffs were undeterred and already have filed more than 50 notices of appeal.