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Science and law share a common goal—getting at the truth; but their relationship can be shaky.  In areas like medicine and products liability, courts need to rely on science, but courts should not make science or get ahead of science.  Science is a methodical process that relies on testing, peer review, and replication. When science remains unproven, it needs to remain out of the legal system.  Prematurely adopting scientific findings into legal standards—before they have been thoroughly validated—can lead to institutionalizing unverified science and the creation of legal precedents that are difficult to overturn. Science has to lead and the law has to follow.  We have written about the consequences of the reverse.  Today, we talk about a case that put things in the right order.

Plaintiff in Davey v. Safeway Inc., 2025 Cal. Super. LEXIS 5572 (May 5, 2025), ingested over-the-counter acetaminophen while pregnant with her son.  Her son was later diagnosed with autism spectrum disorder (ASD) which plaintiff blames on the prenatal exposure to acetaminophen.  The drug’s label included an FDA-required warning that: “if pregnant or breast-feeding, ask a health professional before use.”  Plaintiff brought warning, negligence, and implied warranty claims alleging that defendants should have included a warning that “prenatal ingestion of acetaminophen may cause ASD.”  Id. at *1-2.  But there was no science to support that warning at the time of plaintiff’s ingestion, and there remains none today. 

The court summarized the issue:

This case raises the question of when a duty to warn of a specific health concern arises – above and beyond a general warning to discuss the matter with a medical professional — where the underlying science relating to the concern was (and remains) highly uncertain despite ongoing and extensive review by government regulators and independent medical entities alike.

Id. at *1.  The answer is there is no such duty.

The case thoroughly sets out the “state of the science,” which not surprisingly was described differently by the parties.  But rather than try to resolve those differences, the court looked to “a series of literature reviews conducted by federal regulators and independent medical entities.”  Id. at *10.  The upshot of which was that the available scientific evidence regarding the potential relationship between acetaminophen and ASD was “too limited to make any recommendations and did not warrant any changes to the FDA’s [required warning].”  Id. at *11.  As recently as 2023, the FDA’s continued review of the evolving science found that the “outcomes remain mixed” and do not alter its prior conclusions.  Id. at *17-18.

Under California law, a drug manufacturer is required to warn about “known or reasonably scientifically knowable dangerous propensities of its product.”  Id. at *24.  The concept of what is a knowable risk is inherently tied to the state of the science:

Consequently, “[t]he strength of the causal link . . . is relevant both to the issue of whether a warning should be given at all, and, if one is required, what form it should take.”   

Id. at *26 (quoting Finn v. G.D. Searle & Co., 35 Cal.3d 691, 701 (Ca. Sup. Ct. 1984). 

Both the FDA and courts recognize that over-warning poses its own risks.  It can lead to dilution of important warnings, consumer disregard, or could dissuade a consumer from using a needed product. 

Based on the state of the science, which was “profoundly uncertain and conflicting,” the court concluded as a matter of law that the “existence of any causal link [between acetaminophen and ASD] was neither known or scientifically knowable.”  Id. at *28.

The court was not persuaded that internal company analyses that included some “expressions of concern,” changed the legal conclusion:

That a company that makes pharmaceuticals regularly reviews the literature potentially relevant to the safety of its products and supports candid internal discussion, however, is positive corporate behavior.  While these discussions show awareness of the science, they do not change the state of that science.

Id. at *28-29.  And the state of the science warranted summary judgment.

We will acknowledge that there is another ruling in this opinion—rejecting defendants’ preemption defense.  But we are not going to talk about that because the case reached the right conclusion anyway.  And, with the court’s heavy reliance on the FDA’s review of the literature, the state of the science functions essentially the same as a preemption ruling that no “newly acquired information” existed to support a label change.   

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In a series of what we entitled “reports from the front,” we discussed how the federal government asserted, and eventually won, the right to intervene in ongoing False Claims Act suits to seek their dismissal notwithstanding the objections of the “relators” who were ostensibly pursuing these actions in the government’s name.  Basically, the relators claimed that, unless the government exercised its initial right to take over an FCA suit early on, the government lost all control over the relators, and they could essentially run wild using the government’s name.  The Supreme Court rightfully rejected that view.  United States ex rel. Polansky v. Executive Health Resources, Inc., 599 U.S. 419, 437-38 (2023) (government entitled to intervene and obtain dismissal of FCA action at any time on the basis of any “reasonable argument” regardless of the relator’s position).

However, three justices had more to add – they challenged that entire FCA private-attorney-general system as unconstitutional.  Justice Thomas stated in dissent:

The FCA’s qui tam provisions have long inhabited something of a constitutional twilight zone.  There are substantial arguments that the qui tam device is inconsistent with Article II and that private relators may not represent the interests of the United States in litigation. . . .  [T]he Court has held that conducting civil litigation for vindicating public rights of the United States is an executive function that may be discharged only by persons who are Officers of the United States under the Appointments Clause.  A private relator under the FCA, however, is not appointed as an officer of the United States under Article II.  It thus appears to follow that Congress cannot authorize a private relator to wield executive authority to represent the United States’ interests in civil litigation.  The potential inconsistency of qui tam suits with Article II has been noticed for decades.

Polansky, 599 U.S. at 449-50 (Thomas, J., dissenting) (citations and quotation marks omitted).  Concurring Justices Kavanaugh and Barrett agreed.  “I add only that I agree with Justice Thomas that “[t]here are substantial arguments that the qui tam device is inconsistent with Article II and that private relators may not represent the interests of the United States in litigation.”  Id. at 442 (concurring opinion).

Thus, we commented that “another front opens.”

Continue Reading FCA Frontal Assault in Eleventh Circuit
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Today’s post is a little different, in that it involves not an order, but a Motion for Relief from Judgment and to File an Amended Complaint (the “Motion”) filed by Pecos River Talc (“Plaintiff”) against Dr. Jacqueline Miriam Moline (“Dr. Moline”). Pecos River Talc LLC v. Moline, 3:23-cv-02990, Doc. No. 47-1 (D.N.J. Apr. 29, 2025).  Dr. Moline is a serial expert on behalf of plaintiffs in the cosmetic talcum powder litigation, and she was the lead author on a paper entitled “Mesothelioma Associated with the Use of Cosmetic Talc” (the “Article”).  The article was faked, as we originally discussed, here, in our “Stupid Expert Tricks Redux” post. That’s even clearer now, as the Motion we discuss here identifies bombshell, newly discovered evidence that undercuts the foundation of the Article and Dr. Moline’s opinions. This is a true “smoking gun.”

Continue Reading The Perils of Moline, Part II – Persistence Prevails in Re-Identifying Plaintiffs in Cosmetic Talc Article
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We really cannot say whether chicken by any other name would smell as sweet or even as chickeny.  While we do not compare ourselves to the Bard, we can say that cultivated chicken meat cannot be sold in Florida to allow any such olfactory comparison there.  The manufacturer of just such a product challenged the Florida law banning it in Upside Foods, Inc. v. Simpson, No. 4:24cv316-MW/MAF (N.D. Fla.).  The original complaint in Upside actually raised express preemption affirmatively, contending that the Florida law ran afoul—afowl?—of the federal Poultry Product Inspection Act (“PPIA”).  The court balked—bawked?—at that in denying plaintiff’s motion for summary judgment last fall, both on lack of standing and lack of likelihood of success on the merits.  2024 WL 5274483 (N.D. Fla. Oct. 11, 2024).  Following that decision, the plaintiff amended its complaint to assert claims under § 1983 and the court’s inherent equitable powers.  The defendants moved to dismiss, which resulted in a decision with a few nuggets that we think may have implications for the drug and device cases typically on our plate.  (We will stop with the pathetic poultry puns now.) [Note: this case now has a non-slip opinion citation, 2025 U.S. Dist. Lexis 85699].

Although the defendants did not challenge plaintiff’s standing to raise the claims in the amended complaint, the Upside court addressed standing sua sponte and found plaintiff had standing, in part because it “plausibly alleged that it would be subject to a ‘real and immediate threat of criminal enforcement’ for arguably engaging in ‘solicitation’ to violate Florida’s cultivated meat ban.”  Slip op. at 6.  We will not say much about that issue given that we have discussed standing plenty in connection with a different animal and even a monster puppet.  Suffice it to say that there are various challenges to state laws and actions directed at FDA-approved drugs that are percolating through the courts where the plaintiffs’ claimed standing looks a lot like in Upside.

The next issue in Upside was like double preemption.  To challenge a state law as being preempted, the plaintiff has to have a “proper cause of action to proceed in federal court.”  Slip op. at 8.  Claims cannot be brought under § 1983 if they have been specifically foreclosed by statute or impliedly foreclosed “by creating a comprehensive enforcement scheme that is incompatible with individual enforcement.”  Id. at 9 (citation omitted).  That sounds similar to looking at express and implied preemption, and, sure enough, the PPIA does have a provision that vests the U.S. with sole authority to enforce the act or restrain violations of it.  Id. at 10-11.  Upside even cited Buckman’s interpretation of equivalent language in the FDCA as precluding causes of actions by private litigants.  So, § 1983 was unavailable to the plaintiff to assert that the PPIA preempted Florida’s ban on cultivated meat.

Buckman also got some air play in Upside’s analysis of whether a call to the court’s equitable powers could get around the statutory grant of exclusive authority to the U.S. to enforce the PPIA.  “Plaintiff cannot circumvent the congressional foreclosure of private enforcement of the PPIA by attempting to invoke this Court’s equitable powers.”  Id. at 13-14 (citation omitted).  We do not often see product liability plaintiffs asserting claims in equity to try to sidestep Buckman, but we would expect a similar result if they did.

Next, Upside analyzed whether the state law imposed any requirements on the plaintiff, a putative seller in Florida with USDA’s stamp of approval of its facility as a PPIA-compliant establishment in hand.  Much like tasting “food produced from cultured animal cells,” we will decline for now to dive right into the, well, meat of that analysis.  Basically, the court found that the Florida law did not impose any requirements that led to express preemption based on the PPIA. 

That was not the end of it, though, as plaintiff also asserted that the Florida ban violated the dormant Commerce Clause, on which we have also spilled some cyber-ink.  Although the Florida statute is facially neutral as to the location of any wannabe seller of cultivated meat, the plaintiff is based in California and, apparently, all manufacturers of cultivated meats are outside of Florida.  Those facts allowed the plaintiff to argue that the law “discriminates in effect against the out-of-state cultivated meat industry to the benefit [of] Florida’s conventional meat industry.”  Id. at 21.  If this reminds you of the winning argument in McDermott v. Wisconsin, 228 U.S. 115 (1913), then you might need a new hobby or you really like the Blog.  The plaintiff in Upside had the advantage that Florida officials had described the purpose of the ban as protecting Florida’s domestic conventional meat and agricultural producers.  At the motion to dismiss stage, the court had enough to let the dormant Commerce Clause claim survive.  Slip op. at 24-25.  For us, we continue to wonder if a challenge to a state law or action that limits the availability of a particular FDA regulated product, or class of FDA regulated products, could make similar use of the dormant Commerce Clause.  It is certainly plausible that all companies that make a certain targeted drug would be from somewhere other than the state that seeks to ban the use of the drug within its territorial limits.  However, there may not be a record of state officials supporting a discriminatory intent or an in-state market that would benefit from removing out of state competition.  Then again, there may be no downside to trying Upside to make the dormant Commerce Clause argument.

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Today’s guest post comes from our Reed Smith colleague Jamie Lanphear on a topic near and dear to the Blog’s heart: The new EU Product Liability Directive. As always, our guest posters deserve 100% of the credit, and any blame, for their posts. But, also as usual, our guest posters deliver the goods, so we expect there will be none of the latter to be had. Take it away, Jamie.

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While the Blog previously covered the new EU Product Liability Directive (PLD), formally known as Directive (EU) 2024/2853 of the European Parliament and of the Council of 23 October 2024 on liability for defective products and repealing Council Directive 85/374/EEC (Nov. 18, 2024), the prior posts, which can be found here and here, discussed the PLD’s overhaul of product liability law. This post zeroes in on aspects of the Directive related to software, cybersecurity, and digital products.

Passage of the PLD marks a watershed moment for technology companies, software developers, and any business placing digital products on the European market, including medical device companies whose products include software functionality.

Software as a Product: A Paradigm Shift

One of the most significant changes in the new PLD is the explicit inclusion of software—whether embedded, stand-alone, or delivered as a service—within the definition of a “product”:

Products in the digital age can be tangible or intangible. Software, such as operating systems, firmware, computer programs, applications or AI systems, is increasingly common on the market and plays an increasingly important role for product safety. Software is capable of being placed on the market as a standalone product or can subsequently be integrated into other products as a component, and it is capable of causing damage through its execution. In the interest of legal certainty, it should be clarified in this Directive that software is a product for the purposes of applying no-fault liability, irrespective of the mode of its supply or usage, and therefore irrespective of whether the software is stored on a device, accessed through a communication network or cloud technologies, or supplied through a software-as-a-service model. (Emphasis added)

This means that software, firmware, applications, AI systems, and even digital manufacturing files are now subject to the same strict liability regime as traditional physical goods. The Directive also covers integrated and interconnected digital services, such as “a health monitoring service that relies on a physical product’s sensors to track the user’s physical activity or health metrics.”

This expanded scope is intended to reflect the reality that software is now integral to product safety and performance. For companies, this means that, after the date the PLD goes into effect (December 9, 2026) any defect in software, potentially including vulnerabilities or failures in digital services, may trigger liability under in the EU, if it leads to harm.

Cybersecurity Vulnerabilities as Product Defects

The PLD’s new approach to cybersecurity is closely intertwined with the EU’s broader regulatory framework for digital product security. One important piece of legislation in this area is the EU Cyber Resilience Act (CRA), which, together with the NIS2 Directive and sector-specific rules, sets out mandatory cybersecurity requirements for a wide range of digital products and services.

• Mandatory Security Requirements as a Benchmark Defect: Under the new PLD, non-compliance with “safety-relevant cybersecurity requirements” can form the basis of product defectiveness. For example, the CRA requires manufacturers to implement security-by-design, conduct risk assessments, provide security updates, and ensure secure default configurations for products with digital elements. If a company fails to meet these requirements, and a vulnerability leads to harm, non-compliance with the CRA may, in turn, be used to establish defectiveness under the PLD.

• Failure to Provide Security Updates: Both the PLD and the CRA impose ongoing obligations to provide software security updates throughout a product’s lifecycle. Under the PLD, a product is defective if the manufacturer fails to supply necessary updates or patches to address vulnerabilities, providing such updates are within the manufacturer’s control. The CRA similarly requires manufacturers to monitor for vulnerabilities and issue timely updates. If a cyberattack exploits an unpatched vulnerability and causes injury or property damage, the failure to update may provide the basis for strict liability under the PLD.

• Disclosure and Incident Response: The NIS2 Directive and the CRA require companies to have processes for vulnerability management, coordinated disclosure, and incident reporting. The PLD’s new rules on evidence and presumptions mean that if a company cannot demonstrate compliance with these processes, courts may presume defectiveness or causation in favor of the claimant under the PLD—especially in technically complex cases, as we discussed previously

Burden of Proof and Disclosure: Lowering the Bar for Claimants

The new directive also introduces procedural changes intended to make it easier for claimants to bring and succeed in product liability claims, including those involving software and cybersecurity:

• Rebuttable Presumptions: If a claimant faces “excessive difficulties” in proving defectiveness or causation due to technical or scientific complexity (as is often the case with software or AI), courts can presume defectiveness and/or causation if the claimant can show it is likely that the product was defective or that there is a causal link.

Or, in the words of the PLD: “National courts should presume the defectiveness of a product or the causal link between the damage and the defectiveness, or both, where, notwithstanding the defendant’s disclosure of information, it would be excessively difficulty for the claimant, in particular due to the technical or scientific complexity of the case, to prove the effectiveness of the causal link, or both.”

Notably, the Directive instructs courts, when evaluating technical or scientific complexity, to consider certain factors, including “the complex nature of the product, such as an innovative medical device; the complex nature of the technology used, such as machine learning; the complex nature of the information and data to be analysed by the claimant; and the complex nature of the causal link.”

• Disclosure of Evidence: Courts can require companies to disclose relevant evidence in their possession if the claimant makes a plausible case. Additionally, courts may also require that evidence be presented in an easily accessible and easily understandable manner.” The Directive explicitly calls out digital products as those embodying the sort of complexity envisioned: “Taking into consideration the complexity of certain types of evidence, for example evidence relating to digital products, it should be possible for national courts to require such evidence to be presented in an easily accessible and easily understandable manner, subject to certain conditions.”

• No Liability Waivers: Companies cannot contractually exclude or limit their liability under the directive and disclaimers for software defects or security vulnerabilities are not valid: “Member States shall ensure that the liability of an economic operator pursuant to this Directive is not, in relation to the injured person, limited or excluded by a contractual provision or by national law.”

In short, the new EU PLD signals the start of a new era in which software quality, cybersecurity, and ongoing product support are not just best practices—they are legal obligations. Companies placing digital products on the EU market may wish to evaluate their compliance, engineering, and risk management strategies with the Directive in mind.

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Almost 15 years ago to the day, we posted the following question: why do third party payers and not patients bring RICO claims against drug and device companies for behavior that supposedly makes products cost too much?  We were reporting on a case that dismissed the RICO claims of patients because they were indirect purchasers of their knee implants.  The indirect purchaser rule is a standing doctrine employed most notably in Illinois Brick Co. v. Illinois, 431 U.S. 720, 744 (1977), to bar Illinois, an indirect purchaser of concrete blocks, from bringing an antitrust claim under the Clayton Act against the concrete block manufacturers. Rejecting the argument that Illinois—two levels down the distribution chain from the manufacturers—should be allowed to recover the fraction of the overcharge “passed on” to them, the Supreme Court noted:

Permitting the use of pass-on theories … essentially would transform treble-damages actions into massive efforts to apportion the recovery among all potential plaintiffs that could have absorbed part of the overcharge from direct purchasers to middlemen to ultimate consumers. However appealing this attempt to allocate the overcharge might seem in theory, it would add whole new dimensions of complexity to treble-damages suits and seriously undermine their effectiveness.

Id. at 737.

But we said this post was about RICO claims.  And so it is.  Fifteen years ago, the District of New Jersey found that the rationale for the indirect purchaser rule in antitrust cases applied equally to bar the claims of patient-plaintiffs in RICO claims (the Third Circuit held the same 29 years ago, see McCarthy v. Recordex Serv. Inc., 80 F.3d 842 (3d Cir. 1996)).  Now, the Middle District of Florida reaches the same conclusion in Humana Inc. v. Teva Pharmaceuticals USA, Inc., 2025 U.S. Dist. LEXIS 258748 (M.D. Fla. Apr. 28, 2025), to bar an insurer’s RICO claims.

Defendants include the manufacturer of a drug to treat multiple sclerosis and two “specialty pharmacies” that dispense that drug to plaintiff’s insureds, among others.  Id. at *2.  Plaintiff alleges that the manufacturer drove up the price of the drug through charitable copay-assistance funding.  There are no allegations that the drug did not do what it was supposed to do, only that plaintiff-insurer had to pay the inflated prices.  Plaintiff brought RICO and conspiracy to violate RICO claims as well as a host of state law fraud and consumer claims.  Id. at *3-4.  Defendants’ motion to dismiss asked the court to “extend the Supreme Court’s indirect purchaser bar from Clayton Act cases to civil RICO cases.”  Id. at *7. 

While neither the Supreme Court nor the Eleventh Circuit have addressed the issue, every circuit court to have considered the question has held that the rule applies to civil RICO cases.  Id. (citing cases from 3rd, 6th, 7th, and 8th Circuits).  As have other district courts within the Eleventh Circuit.  Id. at *7-8.  While not binding, the weight of authority is “exceedingly persuasive.”  Id. at *8. 

 First, the RICO statute’s civil remedy provision is modeled after the civil-action provision of the Clayton Act.  Applying the same meaning to similar statutory language is a “well-known canon of statutory interpretation.”  Id.  This is especially true when the comparable provisions share the same purpose—as they do here.  Plaintiff offered and the court found no compelling reason to deviate from the Supreme Court’s interpretation of the same language in the Clayton Act. 

Second, the rationale of Illinois Brick applies to RICO cases.  RICO cases have the same “complicated web of damages at multiple levels,” as antitrust cases.  Id. at *9-10.  Further, Illinois Brick, directly advised lower courts in individual cases not to engage in “an unwarranted and counterproductive exercise to litigate a series of exceptions.”  Id. at *10.  Direction that the Middle District of Florida took to heart.

Third, intentionally mis-quoting an Eleventh Circuit decision, plaintiff argued that a civil RICO plaintiff has standing if his injuries were proximately caused by a RICO violation.  The quote actually reads:  “[A] plaintiff has RICO standing only if his injuries were proximately caused by the RICO violation.”  Id. at *11. The court viewed the omission of the word “only” as an attempt to change the meaning of the legal authority.  Standing and proximate cause are overlapping, but separate concepts.  The Eleventh Circuit case plaintiff attempted to use held that proximate cause is required to plead a civil RICO claim.  But it did not address standing or the indirect purchaser rule.  Id. at *11-12, & n.8.  Therefore, it is easily reconciled with Illinois Brick.  A civil RICO plaintiff “must be a direct purchaser and must demonstrate proximate cause to state a viable civil RICO claim.”  Id. at *11. 

Finally, plaintiff argued that it was a direct purchaser because it made payments to the pharmacies on behalf of its insureds who were prescribed the drug.  But insurance companies are “third-party payors” which by definition means they are not “end-payors” and therefore not direct purchasers.  Id. at *13. 

Plaintiff’s RICO and RICO conspiracy claims were dismissed with prejudice for lack of standing.  As those were the only federal question claims in the case, the court declined to exercise supplemental jurisdiction over the remaining state court claims and those claims were dismissed for lack of subject matter jurisdiction.              

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Recently, when putting together our “Staple Suit Cropped” blogpost about Kane v. Covidien LP, 2025 U.S. Dist. Lexis 25718 (E.D.N.Y. Feb. 12, 2025), we realized that, while we had a comprehensive 50-state survey on the questionable status of failure-to-report claims under state law, we did not have a similarly complete reference for preemption of the same reporting-based claims.

We’re rectifying that here.

Failure-to-report claims have been asserted against every product that has a preemption defense – branded drugs, generic drugs, and PMA medical devices.  Thus, there are different ways that failure-to-report claims end up preempted.

  • First, reporting-based claims against drugs or medical devices are impliedly preempted under Buckman Co. v. Plaintiffs Legal Committee, 531 U.S. 341 (2001), and 21 U.S.C. §337(a), because they would not exist without the FDA reporting obligations that they claim were violated.  Therefore, “the existence of these federal enactments is a critical element” of the cause of action, and implied preemption applies.  531 U.S. at 353.
  • Second, and relatedly, in the majority of states where no state-law claim exists for failure to make mandatory reports to a governmental agency (see the 50-state survey), Buckman further precludes such claims as purely private attempts to enforce the FDCA/FDA regulations concerning adverse event reporting.
  • Third, in cases involving pre-market approved medical devices, the same absence of any state-law reporting-based claims leads to express, as well as implied, preemption because there is no recognized “parallel” state-law theory of liability that could support a “parallel claim” exception to express preemption under 21 U.S.C. §360k(a).
  • Fourth, generic drugs enjoy their own implied preemption defenses under PLIVA, Inc. v. Mensing, 564 U.S. 604 (2011), and can take similar advantage of Buckman-based preemption precedent.

Obviously, there can be overlap between these three categories, and not all courts keep them separate.

Since the issue is preemption, a federal issue, our primary division of cases is by federal circuit rather than by state.  Of the circuits, the Second, Third, Sixth, Eighth, Tenth, and Eleventh all have precedential decisions holding failure-to-report claims preempted, although the Second has only dealt with express preemption.  The Second, Fifth and Ninth allow “parallel” failure to warn claims to escape preemption if state common law allows them, with the Second being stricter than the others.  The Seventh Circuit has been hostile generally to FDCA-based preemption, but hasn’t decided a reporting-based case.  The First, Fourth, and District of Columbia circuits have yet to decide the question.  We note that no precedential decision from any federal court of appeals has flatly denied preemption in a failure-to-report case since 2013, the 2013 decision was repudiated by the highest court of the state in question (see Ninth Circuit, below), and the United States Supreme Court abolished any “presumption against preemption” in express preemption cases in 2016.  See Commonwealth of Puerto Rico v. Franklin California Tax-free Trust, 579 U.S. 115, 125 (2016).  Thus, defendants have good grounds to seek reconsideration of what adverse appellate authority exists.

Finally, we don’t do the other side’s research for them, so be advised, that while we try to be comprehensive in collecting favorable cases, we aren’t including all adverse decisions. 

Continue Reading Preemption Round Up – Failure to Report
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The Ninth Circuit filed its anticipated en banc opinion on personal jurisdiction last week, and the result is the broadening of Internet-based personal jurisdiction in an age of ubiquitous online commerce.  The district court in Briskin v. Shopify, Inc., No. 22-15815, 2025 U.S. App. LEXIS 9410 (9th Cir. Apr. 21, 2025), had ruled that there was no personal jurisdiction in California over a Canada-based Internet payment service provider merely because a consumer in California made a purchase, and a three-judge panel affirmed.  An en banc panel, however, disagreed and published an opinion that holds the defendant to answer purportedly because it “expressly aimed” its services at California, allegedly through its use of “cookies.’ 

The defendant in Briskin is an e-commerce platform that facilitates online sales.  Merchants use the defendant’s software and infrastructure to set up and manage their online stores, and the defendant processes payments and, in some cases, ships products to purchasers.  Throughout the transactions, the defendant’s participation is invisible to consumers, who allegedly see only the online seller when making their purchases.  Id. at *14-*15.

A key fact for the Ninth Circuit majority was that, during the plaintiff’s transactions, the defendant installed tracking cookies on the plaintiff’s phone—software files that allegedly allowed the defendant to track the plaintiff’s behavior, including geolocation, payment information, IP address, etc.  In his class action complaint filed in California, the plaintiff alleged that the defendant gathered and shared private information in violation of California law.  Id. at *15-*18. 

The defendant was actually a group of defendants—a Canadian corporation based in Ottawa and two subsidiaries incorporated in Delaware with principal places of business in New York and Delaware.  So they moved to dismiss for lack of personal jurisdiction, arguing that their platform was agnostic to California (and every other state) and that the mere happenstance that a California consumer made a purchase was insufficient to support personal jurisdiction.  In other words, if they were subject to jurisdiction in California, they would be subject to jurisdiction everywhere.

An unsympathetic Ninth Circuit started with International Shoe and followed a “purposeful direction analysis,” which “focuses on the forum in which the defendant’s actions were felt, whether or not the actions themselves occurred within the forum.”  Id. at *20-*23.  That analysis, in turn, came down to whether the defendants “expressly aimed” an intentional act that causes harm that the defendant knows will be suffered in the forum state.  Think the old law school hypothetical of an archer who fires an arrow across state lines.  That is an intentional harmful act expressly aimed at another forum. 

So what do we do with that in a time when packets of data are traveling across borders (usually without any particular aim) and not arrows?  It is by now established that mere passive nationwide accessibility to cyberspace does not demonstrate “express aiming” at everyone everywhere.  There has to be “something more.”  Id. at *26.  It is not entirely clear to us what the “something more” has to be, other than it must be more than just a foreseeable effect in the forum state.

For the defendants in Briskin, the Ninth Circuit’s majority opinion found express aiming at California because the plaintiff alleged that the defendants “targeted” California consumers to collect and exploit payment information and other personal identifying information “that it extracts from the software it permanently installs on their devices.”  Id. at *34-*35.  According to the majority, it was not mere “happenstance” that California consumers chose to do business with online merchants who used the defendants’ platform. 

Instead, “it is clear that [Defendant] expressly aimed its conduct at California through its extraction, maintenance, and commercial distribution of the California consumers’ personal data in violation of California laws.”  Id. at *36.  We are not sure how clear that is, but for the Ninth Circuit majority, the analogy was to someone who physically entered a Californian’s home to take personal information for its own commercial gain.  In that case, there would be “no doubt” over specific personal jurisdiction in California.  Id. at *37. 

The obvious problem with the Ninth Circuit’s conclusion is that the defendants operate nationwide without differentiation and thus did not “target” California any more than they “targeted” anywhere else.  The Ninth Circuit was again unsympathetic and rejected the notion that a nationwide company can do business everywhere, but be jurisdictionally nowhere except its principal place of business and state of incorporation.  Id. at *37-*38.  The court also expressly overruled cases requiring some sort of differential treatment of the forum state before finding “express aiming” sufficient to support specific personal jurisdiction.”  Id. at *40-*41.  “Express aiming” thus seems not to require any aiming at all. 

The defendants justifiably protested that the Ninth Circuit’s ruling could lead to specific jurisdiction in all 50 states.  The majority’s response was blunt:  “That may be true, but not unfair.” 

There were two concurring opinions.  For one concurring judge, the majority did not go far enough.  When the alleged conduct is purely automated, the operation of the automated system is the relevant tortious conduct, which occurred in California.  That forum conduct is sufficient to support specific personal jurisdiction.  There is no need for “something more.”  Id. at *56-*64.  Another concurring judge looked to the Constitution and due process and searched for analogies to physical presence.  Through that lens, it does not matter whether a defendant targeted the forum state over others, so long as the defendant is sufficiently present in the forum state through its alleged business operations.  Id. at *66-*77.

Finally, there was one dissent, who condemned the majority’s reliance on the defendants’ knowledge of the plaintiff’s location when they installed cookies on his phone.  Personal jurisdiction turns on the defendant’s contacts with the forum state—and not the people who reside there.  The dissenter also roundly mocked the majority for pegging jurisdiction on something as transient as software files on a mobile device. What if the plaintiff made his purchase in California, then traveled to Nevada or Oregon, toting his phone and his cookies all along the way?  Is there personal jurisdiction now in those states, too (“traveling cookie” jurisdiction)?  If the defendants’ inroads in California are so strong, then why not general jurisdiction—a position that not even the plaintiff has advanced?  Id. at *77-*84.

It is easy to view the Briskin opinion as California’s latest attempt to make every controversy justiciable in California, and maybe that is what it is.  Regardless, “something more” is still required to establish specific personal jurisdiction based on e-commerce, and Briskin will not be the last word. 

Photo of Lisa Baird

Five years ago, the COVID-19 pandemic had the world twirling off its bearings, but “Zoom” became a verb and that helped some.  Video conferencing not only became a way to stay connected to friends and family, it became a lifeline that allowed lawyers to continue to take depositions, appear for oral arguments, and even conduct trials.

Remote appearances are so commonplace now, it is easy to assume that everyone knows the rules about what to do and what not to do.  That the days of a lawyer having to declare that “I am not a cat” are long behind us.

Yet, people are people, and mishaps still occur.  Today’s case is a little old (January 2024), but cautionary tales remain evergreen.  Hernandez v. La Fortaleza, Inc., No. A-0367-22, 2024 WL 65217, 2024 N.J. Super. Unpub. LEXIS 22 (N.J. Super. Ct. App. Div. Jan. 5, 2024), involved testimony during the virtual trial of a slip-and-fall matter, but the mistakes just as easily could have occurred during a remote deposition (we hope, never a virtual trial) in a pharmaceutical or medical device lawsuit.

The plaintiff was called as the first witness, and on direct was asked to show on a photograph the location where she supposedly had fallen. 

She provided a vague verbal answer and fumbled a bit with her computer’s cursor, and that seems to have resulted in some off-camera prompting by her husband. The court admonished the husband to remain quiet and visible to the camera at all times. 

The trial then broke for lunch.  The court instructed plaintiff’s counsel that he could take the time to straighten out the exhibit and how to use the cursor, but warned the husband not to say anything.  Plaintiff’s counsel had agreed that he would not talk to plaintiff “about her testimony at any time during the testimony, even if” the court broke for lunch, and defense counsel also reminded everyone there should be “zero coaching” during the break.

You know what occurred next:  The plaintiff’s attorney proceeded to coach his witness − pretty blatantly.   

As overheard by the court’s clerk and captured by the court’s recording system:

[Attorney]: This is the important part of the case. You show this picture, okay? Okay? and I’m going to say, I don’t know if we got this far already but do you recognize this picture? Yes. This side of the restaurant? Does it show – does it fairly and accurately show the way the restaurant looked on the day that you fell? Yes. You must say that or the picture cannot be good. Okay? So, I want you – and the answer has to be, yes, because if you say, no, we can’t do it. But you will say the same thing, I’m going to ask you the same question later.

Anyway, okay. Do you see – do you see the bench that you were going to at the time you fell? You’re going to answer, yes, right. And I will say to you, I’m going to move the cursor – and I will say I’m going to move the cursor. You tell me where is the bench? So, when I get up here, just, right there. Okay? The bench, right next to the lady. Okay? Okay.

Now in this picture, do you see where you fell and I’m going to put it right where the – where the bench – from where the bench it, where did you fall?

I will move the map. It’s out of the (indiscernible). So, after we identify the bench, I’m going to put the [cursor] right here now and say, do you see the area where you fell? Yes. Okay. Now, how do I have to move the – you – because it has to be her voice. How do I move the cursor to find the place where you fell?

So you should —

[Husband]: Back.

[Attorney]: Okay. So, down, right, like that?

[Attorney]: So, you say, move down. So, I’m going to move it, move it, move it. You have to tell me when to stop. Right there, right? Okay. How about this distance from the curb? Would it be right this way or further here? It would be in the middle?

[Husband]: Yeah.

[Attorney]: Okay. So, we’re going to – first we find the bench. That’s the easy part. Then I’m going to say, okay, I’m going to put the cursor right in front of the bench. Now, tell me how to move the cursor to show how you fell and what you would have to say, you have to move – you could either say down or to the camera, okay, which you prefer.

[Plaintiff and husband speaking in Spanish].

[Attorney]: Okay. So, you’re saying down? So, I’ll say, okay, I’m going to start to move it down and tell me when to stop. I’m going to go down, down, down, down, down.

[Plaintiff]: Stop.

Not surprisingly, the judge concluded that a mistrial was required, and later dismissed the complaint with prejudice and ordered plaintiff’s counsel to pay the fees and costs of the trial and the motion to dismiss.

Because of the coaching, “[t]he well of information that could be presented to the jury has been forever poisoned. There is no way to sufficiently determine that [p]laintiff can testify, especially considering that [p]laintiff had no recollection of her own fall and her attorney invited her to perpetuate a falsity at his direction to create an issue of liability.”  Even worse, the coaching came immediately after admonitions to plaintiff’s counsel and her husband.

Not content to let a bad situation be, plaintiff and her counsel decided to make it worse:  They filed an appeal arguing that there had been “no fraud on the court” and that the sanction of dismissal was “too severe.”

Was there a fraud on the court?  Check. 

A fraud on the court occurs

“where it can be demonstrated, clearly and convincingly, that a party has sentiently set in motion some unconscionable scheme calculated to interfere with the judicial system’s ability impartially to adjudicate a matter by improperly influencing the trier or unfairly hampering the presentation of the opposing party’s claim or defense.”

2024 WL 65217 at *5. 

In this instance, both the plaintiff’s attorney and the husband “sentiently set in motion” a scheme by directing plaintiff to say where the accident had occurred when she had no independent recollection.

Was the dismissal sanction too severe?  Nope.

Although dismissals with prejudice are a drastic remedy to be used “only sparingly” the wrongfulness of the coaching was clear, the plaintiff and her husband were “willing participants” in the wrongful conduct, the coaching “poisoned” and “tainted” the judicial process, and no lesser sanction could undo the harm caused.

The ethical violations came to light in Hernandez due to a technology mishap, which makes us wonder how much other coaching goes on without notice.  To help guard against bad actors on the other side, our Remote Depositions in MDLs 2.0 post can help point you to some best practices.  For best practices concerning conversations with witnesses during breaks, see our Depositions – When Can You Talk To Your Own Witness? post.

Photo of Stephen McConnell

Late last year we said that almost every legal conference these days has a session on artificial intelligence. It is de rigeur. That is also true with respect to litigation funding. It is a hot issue. Our Inn of Court (University of Pennsylvania) did a presentation on litigation funding that, despite the fact that it is such a well-trodden topic, managed to show us a few things we had not seen before. For example, in some cases it turned out that the lawsuit was being funded by a competitor of the defendant.  When that competitor litigation funding comes from overseas, it seems even more menacing.  And, of course, most of you remember how a tech billionaire with a grudge against a media outlet funded a celebrity’s case against said media outlet. Hello, lawsuit. And, after a ruinous verdict, goodbye, defendant. 

But the issues surrounding litigation funding are usually of a more quotidian sort.  A recent example is Gilead Sciences, Inc. v. Khaim, 2025 U.S. Dist. LEXIS 75105, 2025 WL 1151412 (E.D.N.Y. April 21, 2025). In resisting discovery of third-party litigation funding, parties often make claims that the information is privileged.  This case holds that information about who is paying for a party’s lawyer and how is not necessarily privileged.  Quotidian or not, the case is still interesting.

Actually, maybe quotidian is the wrong word. Gilead is an unusual case, with a drug company as the plaintiff in civil litigation against defendants alleged to be involved in counterfeiting the plaintiff’s FDA-approved drugs.  The drugs were for the treatment or prevention of HIV. Following the receipt of multiple complaints from patients and pharmacies who had purchased counterfeit drugs bearing the plaintiff’s brand name, the plaintiff manufacturer filed a complaint against various defendants for trademark infringement, false descriptions, false advertising, and trademark dilution, all in violation of the Lanham Act, as well as deceptive business practices in violation of New York General Business law section 349, and common law unjust enrichment and unfair competition. If the plaintiff succeeded in its action against the defendants, one form of available damages would have been to recover the defendants’ “ill-gotten profits.” 

The plaintiff sought to test a representation by one of the defendants to the effect that she “earned almost no money from the multi-million dollar fraud for which she helped launder and conceal the profits, and that her legal fees are not paid out of those concealed profits but rather from generous benefactors.” (Any fan of American theater cannot help but think of Blanche Dubois’s last, sad statement in “A Streetcar Named Desire” that she had “always depended on the kindness of strangers.”) To determine that defendant’s ability to satisfy a judgment, the plaintiff sought discovery (Rule 45 requests for production) from the defendant’s counsel about who was paying the defendant’s fees and how.  The defendant claimed privilege and the court rejected the claim.  

There were extensive negotiations between the plaintiff and the defendant regarding the discovery. The defendant was facing a parallel criminal proceeding and wanted to postpone the discovery until the criminal proceeding terminated.  Her lawyers were good ones and, presumably, expensive. The defendant eventually entered a change of plea – changing from the initial not guilty plea to a guilty plea.  That guilty plea should have helped bring the discovery negotiations to some sort of compromise, but then the defendant wanted to postpone discovery until her sentencing – which still has not taken place.  The plaintiff manufacturer agreed to limit the time period for the fee payment information, but the parties were still at loggerheads.  Thus, the court needed to decide the discovery issue.

Here is what the Gilead court decided:

First, the court held that the requested discovery was not privileged.  Fee arrangements are not within the attorney-client privilege because “they are not the kinds of disclosures that would not have been made absent the privilege and their disclosure does not prevent the attorney from rendering legal advice.”  Thus, information that fees were paid by third persons may be sought to determine the identity of a benefactor.  If there is a headline to this case, that is it.

Under the relevant case law, there can be “special circumstances” that protect disclosure of such information, but they are limited to situations where disclosure really would reveal something privileged. But here, no special circumstances existed that could result in wrecking some privilege.  Information is not privileged merely because the party may strongly fear the effects of disclosure.  (Any ex-prosecutor cannot help but think of the old joke about how the most common objection by criminal defense attorneys is, “Objection, your Honor: prejudicial – tends to show guilt.”)  The defendant failed to show that complying with the discovery request would “inhibit the ordinary communication necessary for an attorney to act effectively, justly, and expeditiously.”  Moreover, the defendant had not shown that production of the information would “affect her ability to obtain informed legal advice in the instant case and in the Criminal Action.”

Second, the court held that the requested discovery was relevant and proportional.  As we all know, the standard for discovery under Fed. R. Civ. P. 26(b)(1) is broad.  A subpoena to a third party per Rule 45 is subject to the Rule 26(b)(1) standard.  The information “concerning Defendant’s financial status, including her ability to pay her legal fees” bears on the plaintiff’s claim for damages available under the Lanham Act.  The plaintiff’s agreement to narrow the time-frame of the request aided it in persuading the court that the information sought was “proportional to the needs of the case.” 

Accordingly, the Gilead court held that the plaintiff manufacturer was entitled to “all non-privileged documents and information sufficient to show (1) the source of all payments from or on behalf of Defendant to [her law firm] since the commencement of her representation in the Criminal Action; and (2) the dates and amounts of all payments from or on behalf of Defendant received by [her law firm] since commencement of her representation in the Criminal Action.”

The implications of the Gilead ruling are potentially far-ranging. You and your clients might like some and dislike others. At a minimum, the next time you are in a squabble over discovery of third-party litigation funding, the Gilead case might offer useful ammo.

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