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The PREP Act is having a moment.  Congress enacted the Public Readiness & Emergency Preparedness Act (“PREP Act”) in 2005 to ensure the availability of effective countermeasures in the event of public health emergencies.  The declaration of COVID-19 as an “emergency” has thus thrust the PREP Act into the limelight.  Heck, when you’re a federal statute and Bexis has started a scorecard to track your progress, you know you’ve arrived! 

Despite the PREP Act’s remarkably straightforward rules, some courts insist on getting it wrong.  That is what happened recently in Coleman v. Sharp Memorial Hospital, No. 37-2023-00033307-CU-PO-CTL, 2024 Cal. Super. LEXIS 10893 (Cal. Sup. Ct. Mar. 29, 2024), where a California trial court refused to apply the PREP Act to claims arising from the use the antiviral medication Remdesivir to treat COVID-19. 

To review, when the Secretary of the Department of Health and Human Services declares a public health emergency (such as COVID-19), the Act provides that a “covered person” shall be immune from liability under state and federal law with respect to all claims relating to “covered countermeasures.”  Rather than allowing such claims, the Act establishes a fund to compensate “eligible individuals for covered injuries” through an administrative remedy.  There is only one exception:  The PREP Act provides “an exclusive Federal cause of action against a covered person for death or serious physical injury proximately caused by willful misconduct.”  See 42 U.S.C. § 247d-6d(d)(1)) (emphasis added).  The Act also expressly preempts contrary state law, so long as the Secretary’s emergency declaration is in place.  See 42 U.S.C. § 247d-6d(b)(8).

The Prep Act should have shut down the state-court claims in Coleman.  The hospital and physician defendants were covered persons under the Act, and Remdesivir is a covered countermeasure.  The plaintiff therefore had two options:  File an administrative claim for compensation, or file a lawsuit for willful misconduct under federal law in federal court. 

This plaintiff chose neither, and instead pressed a state-law fraud claim in California state court.  To avoid the PREP Act, the plaintiff argued that her claims did not pertain to a covered countermeasure, but instead alleged that the defendants fraudulently concealed “other treatments that could have been available.”  Coleman, at *3. 

The order does not disclose what those “other treatments” would have been, but it doesn’t matter.  The plaintiff was claiming compensation for harm (death) caused by administration of a covered countermeasure (Remdesivir) prescribed by a covered person (a physician in a hospital).  That is the exact scenario that the PREP Act was enacted to address, no matter how many alternate treatments “could have been available.”  The exclusive civil action under the Act is a federal action for willful misconduct, and the Act expressly preempts contrary state law.  This action therefore was boxed out, without regard to how many other ways the defendants “could have” treated this plaintiff’s decedent. 

The trial court, however, bought the plaintiff’s argument and allowed the claim, reasoning that “[t]he complaint may reasonably be read to allege a claim not based on the countermeasure, but rather on the alleged concealment of facts.”  Id. at *4.  This outcome might reflect more on California’s liberal pleading standards than on the underlying substantive law, but that does not make it any more palatable. 

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Those of us who took Con Law as first year law students may recall Marbury v. Madison as an early test of the Supreme Court’s place in our nascent republic.  Alliteration being a mnemonic device, some may recall that Madison was Secretary of State James Madison and the decision was written by Chief Justice John Marshall, both Founding Fathers and fairly famous fellows.  The other M was petitioner William Marbury, an erstwhile Justice of the Peace in recently created D.C.  Fewer will remember that the Supreme Court helped cement its role as an independent branch of government by denying jurisdiction through application of the political question doctrine in this seminal case.  Fewer still will actually remember the details of the case and decision.  We need not delve into those details for the purposes of this post, but we will pose one not-so-rhetorical question:  Isn’t just about everything at issue in just about every lawsuit a political question to some extent?

This reminds us of a scene from Fiddler on the Roof, a musical turned movie based on a collection of short stories by Shalom Aleichem that was set in a fictional town in what is now part of Ukraine (and is now the name of a real town founded to house refugees from the Russian invasion of Ukraine).  We will set aside discussion of the relevance of this tale in light of current events, but there is another connection to Marbury v. Madison:  the Ukrainian embassy in Washington, D.C., is located in a building once owed by William Marbury.  In any event, in the scene, an ardent socialist proposes to one of the titular character’s daughters:

Perchik:  There’s a question … A certain question I want to discuss with you.

Hodel: Yes?

Perchik:  It’s a political question.

Hodel:  What is it?

Perchik:  The question of … marriage.

Hodel:  Is that a … political question?

Perchik:  Well, yes. Yes, everything’s political. Like everything else, the relationship between a man and a woman has a socioeconomic base. Marriage must be founded on mutual beliefs. A common attitude and philosophy towards society…

Hodel:  And affection?

Perchik:  Well, yes, of course. That is also necessary. Such a relationship can have positive social values. When two people face the world with unity and solidarity …

Hodel:  And affection?

Perchik:  Yes, that is an important element! At any rate, I … I personally am in favor of such a socioeconomic relationship.

In a sense, a proposal of marriage is not a political question.  In another, it sure is, especially if you consider the number of state laws governing and referencing marriage.  Among the line of Supreme Court decisions on substantive due process that the overturning of Roe by Dobbs cast in doubt, multiple relate to state laws on marriage that undoubtedly reflected legislative answers to political questions.  Griswold related to Connecticut laws on the use of hormonal contraception by a married woman.  Loving related to Virginia’s laws on interracial marriage.  Bowers v. Hardwick related to Georgia’s disparate application of sodomy laws to married heterosexual and unmarried homosexual couples.  We could go on.

What about product liability claims?  Clearly, many political decisions are inherent in the laws that affect product liability claims.  For the sort of litigation involving medical products that we do, and this Blog discusses, decisions made by FDA are often at issue.  Similarly, decisions of other agencies feature prominently in litigation involving other kinds of products, such as decisions by EPA in connection with pesticides and herbicides.  The reality is that, shifting back to our kind of cases, one side—usually the plaintiff—is typically second-guessing some decisions made by FDA, whether product-specific or broader.  If those agency decisions involve answers to political questions, then should not the federal court apply Marbury v. Madison to refuse to allow a party to premise its relief on second-guessing the correctness of the agency’s answer to a political question, as doing so would deprive the court of subject matter jurisdiction?  If, as Perchik maintained, “everything is political,” then this should come up all the time.  But it does not.  Indeed, the decision in Caston v. F. Hoffman-La Roche, Inc., No. 23-cv-0092-TLT, 2024 WL 1548649 (N.D. Cal. Apr. 8, 2024), is the only decision we can recall that applied the doctrine to kick a product liability claim as to a prescription drug.  So why did the court in Caston decline jurisdiction over certain asserted product liability claims and how broadly applicable will this decision be?

As a preliminary matter, Caston was essentially the re-filing of a prior case called Nelson (which we discussed here).  The details of the claims asserted by the different plaintiffs and against the different defendants in Nelson and Caston would require some serious unpacking, which we will not do here.  Beyond the political question analysis, Caston is commendable for getting it right on personal jurisdiction and the preemption of warnings and misrepresentations claims against generic manufacturers.  On the former, there was no general jurisdiction over New Jersey entities because a related California entity’s contacts could not be imputed and there was no specific jurisdiction based on entering a distribution agreement with the Department of Defense that covered California bases along with all other U.S. military locations everywhere else.  Id. at *9-12.  On the latter, the plaintiffs who took generic drugs could not plead their way around the duty of sameness for labeling and the resultant impossibility conflict preemption.  Id. at *12.  For design defect claims, as to both the branded and generic drugs, the court did not analyze preemption.

Boiled down, those design claims were that mefloquine, whether branded or generic, allegedly had undue risks of a wide range of neurotoxic and psychiatric problems and that the use by plaintiffs in the 1990s or 2000s allegedly caused them to develop a wide range of neurotoxic and psychiatric problems.  (Statute of limitations would seem to be another huge issue for the plaintiffs because their alleged injuries were long before they initiated suit and the risks of this class of drugs was allegedly well-known for decades before they used the drugs.)  The commonality is that the mefloquine was prescribed to each plaintiff as an anti-malarial agent by military providers in connection with deployments to areas with high risks of malaria, pursuant to established military policy.

The defendants moved to dismiss on both the political question doctrine and the government contractor defense.  Looking at the motions to dismiss in Caston and Nelson, which was adopted by reference, the two arguments were paired together and the relief sought under the political question doctrine was the dismissal of the entire case for lack of subject matter jurisdiction.  The arguments were also focused on the issue of second-guessing the judgment of the U.S. military, with limited discussion of FDA decisions in connection with the government contractor defense only.  The Caston court, however, did not address the government contractor defense and focused its analysis of the political question doctrine on FDA more than on the U.S. military.  With assistance from our crack associate Avery Holloman, we checked to see if our instinct on the novelty of the conclusion reached in Caston was correct.  It seems to have been.  While the government contractor defense comes up relatively often in product liability and toxic tort cases, the few published decisions that analyzed the political question doctrine in product liability cases rejected it.  In In re Methyl Tertiary Butyl Ether (MBTE) Prods. Liab. Litig., 438 F. Supp. 2d 291, 300 (S.D.N.Y. 2006), the MDL court followed the general rule that “[e]ven when products are heavily regulated under federal law, tort suits involving those products may be brought absent a congressional injunction prohibiting such suits.” 

Defendants’ arguments boil down to the claim that holding manufacturers, refiners, and sellers responsible for MTBE contamination is highly controversial and thus should be left to the Congress, the EPA, and the President. But, the fact that the issues arise in a “politically charged context” does not convert this tort suit into a non-justiciable political question, given that there is no evidence that Congress has decided that it would resolve the issues. While regulation of the national fuel supply is surely not an issue for the judicial branch, these suits seek abatement and damages in addition to a ban on further contamination. Weighing the issues in a products liability claim is a quintessential judicial function.

Id. at 304.  In Lofgren v. Polaris Indus. Inc., 509 F. Supp. 3d 1009 (M.D. Tenn. 2020), which concerned product liability claims over an ATV accident in connection with Army training, the defendant raised the political question doctrine.  However, the record indicated that “the military was not controlling Defendant’s actions, but instead making mere suggestions and requests for certain design features. Defendant has repeatedly characterized the interactions with the military as a ‘collaboration,’ and the military as having ‘requests.’”  Id. at 1026.

Caston applied the same test from Baker v. Carr, 369 U.S. 186 (1962), as in Lofgren to reach a different conclusion.  It was also different than the same court had reached in Nelson.  As it explained, the difference was that the design defect claims in Caston “effectively challenge the safety and efficacy of active ingredients [and] implicate nonjusticiable political questions outside the scope of the Court’s Article III jurisdiction.”  2024 WL 1548649, *4 n.2.  Of course, FDA had made those decisions initially, even if military policy and individual prescribing decisions for each plaintiff agreed with them.

Pharmaceutical design defect claims challenging active ingredients necessarily implicate a nonjusticiable political question under the appropriate jurisdiction of the FDA because the FDA is a highly technical, scientific, and medical agency whose mission is to safeguard the public health by ensuring safety and efficacy of human drugs.

Id. at *8 (citing FDA mission statement).  The Caston court considered itself “unfit to review” FDA’s decisions on safety and efficacy because it “lacks the scientific and clinical expertise of the FDA.”  Id.  FDA’s decisions are “multifaceted,” considering things like public health and the “demand for a particular therapy at a given point in time,” rendering those decisions “heavily scientific, and indeed economic and political, but not judicial.”  Id. 

If adjudicated here, the Court would need to consult the broader scientific literature, and the content submitted to the FDA, and make its own determination of whether the studies submitted in the NDA were enough to warrant approval in 1989, a question designated for the FDA. The FDA has exclusive jurisdiction over the approval of New Drugs, including the designs of those drugs, pursuant to the FDCA.

Id.  “[A] contrary ruling would potentially call into question the FDA’s credibility. It would be inappropriate for the court to obfuscate a decision made more than thirty years ago by a federal government agency.”  Id. (citation omitted).

On first and perhaps second blush, the Caston court’s analysis of the nonjusticiability of design defect claims for an approved drug should apply broadly.  We have been saying for a long time that design claims for prescription drugs are almost always unsupportable and preempted, like here, here, and here, in part because of some of the same indisputable observations from Caston.  Yet, the political question doctrine has not been successfully applied to those claims before, at least in any published decision we could find.  The difference may rest on the timing.  The NDA held by one of the defendants was approved 1989 and the first ANDA was approved in 2002.  (It even appears that “U.S. Army Walter Reed” held the first NDA for the drug.  Dr. Reed earned his fame with yellow fever, but his namesake has apparently been working on malaria for quite some time.)  The plaintiffs’ use of the drug, which provides the relevant timeframe for analyzing design defect claims, was roughly 20-27 years ago.  Plaintiffs contended medical literature since the 1940s was relevant to the risks of the drug.  In short, proceeding with the case would involve quite a long look back in time.  Avoiding such a squinting look through the retrospectoscope is part of the reasoning for having statutes of limitations and repose, but the timing in Caston would clearly also make any second-guessing of FDA inherent in adjudicating plaintiffs’ design defect claims much more difficult and less reliable.  That may be why Caston was a good case to make new law.

The case is currently on appeal, so we expect to hear more on these issues, even if we do not see political question shots taken by other defendants with regulatory histories for their medical products going back decades and/or some military overlay in their fact pattern.  Litigation over those medical products certainly exists.  It will be interesting to see how this highest level of deference to governmental decision making–the court does not even have jurisdiction–plays out, especially at a time when the general issue of deference to governmental agencies is very much up in the air.

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We don’t get blood shield statute cases very often, but here is one involving a human tissue-based spinal bone graft.  In Sherrill v. Spinalgraft Technologies, LLC, et al., 2024 WL 1979452 (W.D.N.C May 3, 2024), the plaintiff had undergone spinal surgery. That surgery included the use of processed bone graft material, which is “made from human tissue consisting of cancellous bone particles with preserved living cells, combined with demineralized cortical fiber.”  The plaintiff alleged that the bone graft material was infected with tuberculosis, causing her to contract that disease plus other injuries. Not too long after the plaintiff’s surgery, the Food and Drug Association issued a voluntary recall of the bone graft material in response to reports of patients testing positive for tuberculosis and other post-surgical infections following surgical implantation of the bone material.  

The defendants filed a motion to dismiss the breach of warranty claims.  The issue was whether those claims were barred by the North Carolina Blood and Tissue Shield Statute (the Statute), which shields “every participating person or institution” involved in “the procurement, processing, distribution or use of whole blood, plasma, blood products, blood derivatives and other human tissues such as corneas, bones or organs for the purpose of injecting, transfusing or transplanting any of them into the human body” from warranty liability.  A warranty claim is the only form of strict liability in North Carolina, so application of the Statute would be a very big win for the defendants.

They got that big win.  The plaintiff’s main contention was that the Statute did not shield a “tissue-based product” like the bone graft material.  The court disagreed, finding that the bone graft material was processed human tissue (remember that the Statute explicitly reaches “processing”) and was covered by the Statute.  Nor did it matter that preservatives were used.  

There was another, perhaps more interesting, support for dismissal of the warranty claims.  The bone graft’s use was “incidental” to the surgery.  Accordingly, “North Carolina law categorizes the procurement, processing, distribution, or use of human tissue for injection or transplanting as a service, precluding warranty claims.”

The plaintiff endeavored to stave off dismissal by requesting discovery to ascertain “the true composition and makeup” of the bone graft material.  But the court found the plaintiff’s argument “unpersuasive given the detailed understanding” of the bone graft material found in the plaintiff’s papers.  

We’re not sure whether that last bit means that the plaintiff erred by inserting too much detail in its argument, or whether there was no other way for the plaintiff to argue its way out of the Statute.  Either way, the court dismissed the warranty claims.  

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Generally, there is no medical basis for most claims on homeopathic product labels.  But thousands if not millions of people use and find value in homeopathic products, apparently regardless of the fact that the science underpinning the products is shaky at best and possibly non-existent.  However, just because one of these pseudo-remedies doesn’t work for you doesn’t you mean have a consumer protection claim.

This was essentially what the court told plaintiff in Jordan v. CVS Pharm., Inc., 2024 U.S. Dist. LEXIS 84048 (W.D.N.Y. May 8, 2024), when it dismissed her claims.  Plaintiff purchased eye drops that were described as a “homeopathic formula that stimulates the body’s ability to relieve redness, burning, watery discharge, and sensations of grittiness.”  Id. at*2.  Plaintiff alleges that the product’s labeling was false and misleading, including causing consumers to believe the eyedrops were a “drug,” and that she paid a premium price as a result.  Id.  Plaintiff also alleges that the product did not work to relieve her symptoms and that the eyedrops contained an unsafe preservative.  Id. at *8. 

Because New York law recognizes claims for false and deceptive representations to consumers, plaintiff’s claim had an independent basis in state law and dd not depend on a violation of the FDCA.  Therefore, plaintiff’s claim was not implied preempted.  Id. at *8-9.  But in examining New York law, the court found plaintiff had not done enough to state a viable claim.

New York has established three requirements for a consumer protection claim:  the challenged practice/statement must be consumer-oriented; the act/statement must be materially misleading; and the plaintiff has to have suffered an injury.  Id. at *10.  The test for materially misleading is an objective one—“whether the misrepresentation or omission is likely to mislead a reasonable consumer.”  Id.  This is something more than the possibility that a label may be misunderstood by a “few consumers viewing it in an unreasonable manner.”  Id.  Importantly, FDA regulations do not factor into the reasonable-consumer analysis.  So, the court ignored plaintiff’s extensive reliance on an FDA warning letter as evidence of deception.

That left as plaintiff’s primary argument that the product’s statement that it would relieve certain symptoms was false and misleading because it did not relieve plaintiff’s symptoms.  However, plaintiff makes that allegation without offering any facts in support, such as what symptoms she had, what relief she expected, and what she experienced when she used the product.  Plaintiff’s unsupported allegation was made even more dubious by the fact that she used the product “over a three-year period.”  Id. at *11 (emphasis in original).  Fool me once, shame on you.  Fool for me three years, shame on me.  Similarly, whether one experiences “relief” is completely subjective.  Plaintiff offered no legal support for her “did-not-relieve” theory.  So, the court examined plaintiff’s claim in the context of the product’s label.

The front of the package said it was a homeopathic product.  The back of the package stated: “Claims based on traditional homeopathic practice, not accepted medical evidence.  Not FDA-evaluated.”  Id. at *13-14.  The court found that was enough to conclude that a reasonable consumer would not be misled into believing the product “carried an official regulatory imprimatur or guarantee.”  Id. at *14.  In other words, the label tells you this is not a drug or a medically accepted remedy, but rather pseudoscience that may provide some relief or may be the same thing as walking to your sink and splashing cold water on your face.  The choice is yours.

Finally, plaintiff tried to state a claim on not knowing the product contained the preservative silver sulfate.  But silver sulfate is listed right on the label as an inactive ingredient (preservative).  So, the court found this claim implausible. 

Overall, the opinion reads as sort of a buyer beware for homeopathic products.  If a homeopathic product, which by definition has no supporting evidence of efficacy (this one even said it on the label), doesn’t work for you—you haven’t been misled.  You got exactly what you paid for.

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Over the last month, Bexis attended both the Hollingsworth Firm’s annual toxic tort litigation defense seminar and the Lawyers for Civil Justice spring meeting.  Both meetings featured discussions on how the new amendments to Fed. R. Evid. 702 were faring in court.  We’ve also written several blogposts (links below) about favorable applications of the new rule, which became effective December 1, 2024.  The amendments having been in effect now for several months, we decided to see whether they were having the Rules Committee’s desired effect of toughening up judicial consideration of expert testimony under Rule 702.  So we’re taking a more systematic look at the judicial response to the 2023 amendments.

Continue Reading How Are the Recent Rule 702 Amendments Faring in Court?
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Last year Bexis was lead author on a law review article in the Food and Drug Law Journal titled Federal Preemption and the Post-Dobbs Reproductive Freedom Frontier.  The article expands on themes previously raised in this blog, including here, here and here.  It discusses the application of federal preemption under the Food Drug and Cosmetic Act (FDCA) to state-law medication abortion restrictions after Dobbs. The article recognized that, following Dobbs, it was inevitable that FDCA preemption would become embroiled in the abortion controversy. That prediction was accurate.  Today’s decision addresses the impact of preemption on a North Carolina law that imposed significant restrictions on an FDA approved medication taken to terminate a pregnancy.

Continue Reading North Carolina and Post-Dobbs Regulation of Mifepristone
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We’ve written more than once that the recent (effective last December) amendment to Federal Rule of Evidence 702 qualifies as a Very Big Deal. An opinion in the J&J talc multidistrict litigation (MDL) proves that point.  

A little history is in order.  Many, many plaintiffs sued J&J, claiming that its talcum powder caused cancer. The science supporting this claim was pretty flimsy.  Once upon a time, a New Jersey state court judge wrote a lovely opinion taking a hammer and tongs to the plaintiffs’ junk talc science. (We applauded that opinion here.)

Things were a little less lovely in federal court. Judge Wolfson issued a Daubert opinion that did not perform as much junk science removal as the state court judge did. (Yes, yes – we know we’re not supposed to call them Daubert opinions anymore. We’re supposed to stick with Rule 702.  But we’re doing history right now, and the Daubert label works as a matter of history.) We didn’t like the MDL court’s opinion nearly as much as the state court opinion.  For now, we’ll leave it at this: it could have been better.  But we’ll let bygones be bygones, and now Judge Wolfson is gone. She retired. Judge Shipp took over the case. 

(Here is more history, but of a different nature. One of the plaintiff talc experts has been accused of doing utterly bogus research. J&J filed a lawsuit alleging business libel, and that case is pending. We wrote about that here.)

The defendants argued to Judge Shipp that the Daubert opinion authored by Judge Wolfson should be looked at again because (1) many years had gone by since that ruling and the restarting of the MDL (due to interim bankruptcy stays), (2) science had evolved, and (3) Rule 702 had changed. 

The plaintiffs’ must have enjoyed the original Daubert opinion, because they opposed any relook at it. The plaintiffs must have enjoyed rather less Judge Shipp’s reopening of the Rule 702 issue.  Judge Shipp was persuaded that new Rule 702 and new science made “a full refining of Daubert motions appropriate.”  The plaintiffs filed a motion to reconsider that text order. Judge Shipp denied the motion to reconsider. In re Johnson & Johnson Talcum Powder Products Marketing, Sales Practices and Products Liability Litigation, Civil Action No. 16-2738 (MAS) (D.N.J. April 20, 2024). 

In denying reconsideration, the court made clear that it was not throwing away Judge Wolfson’s prior Daubert ruling – yet. But fresh eyes, guided by new science and new Rule 702, were in order.  Indeed, Judge Wolfson’s original opinion contemplated “that her Daubert rulings may be subject to change as new scientific knowledge propagated over time.”  

The plaintiffs argued that the old Daubert rulings must be frozen in place because they were the “law of the case.”  But “interlocutory orders remain open to trial court reconsideration, and do not constitute the law of the case.”  The plaintiffs also argued that a full re-review of Rule 702 issues was unnecessary because the amendment “did not change evidentiary standards, but clarified them.”  The MDL court flipped the script, reasoning that the “fact that Rule 702 is not a change in the law but a clarification is precisely why it would be inappropriate for this Court to preclude Defendants from challenging this Court’s previous Daubert holdings.”  (Emphasis in original.) The amendment to Rule 702 clarified that the proponent of expert testimony bears the burden of showing that the expert opinions past muster. According to the MDL court, “[t]hese clarifications not only guide courts in the future, but outline a consistent and concerning misapplication of Rule 702 by courts in the past.”  Accordingly, the MDL court directed the parties to brief whether the previous Daubert opinion “demonstrably fails to adhere to Rule 702 as clarified by the 2023 amendments,” and whether “new science is shown to directly contradict or challenge Judge Wolfson’s previous findings.”  

John Adams said that “facts are stubborn things”. But courts needn’t be stubborn. Sometimes a redo is necessary. 

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If you have a good memory, the title of today’s post may seem familiar.  That’s because about sixteen months ago, we told you about the appellate court decision in Oregon that reached this conclusion.  Now it is official.  The Oregon Supreme Court has weighed in and agrees that under Oregon’s product liability statute, hospitals are sellers of the prescription drugs they administer and can be held strictly liable as such.  Providence Health System-Oregon v. Brown, 372 Or. 225, — P.3d – (2024).    

The decision is singularly focused on the text and context of ORS 39.920 – a 1979 Oregon statute that establishes strict products liability for “one who sells or leases any product in a defective condition unreasonably dangerous . . . if the seller or lessor is engaged in the business of selling or leasing such a product.”  Id. at 231.  ORS 39.290 further says that it should be construed in accordance with the Restatement (Second) of Torts §402A and its comments.  The court’s decision turned on the definition of “sells” and “engaged in the business of selling.”

As it turns out, there are a variety of both common and legal definitions of “sell” – all of which involve the “transfer of a product to another in exchange for money or other valuable consideration.”  Id. at 233.  The hospital defendant urged definitions from Black’s and Oregon’s UCC that include transfer of ownership or passing of title and argued that by supplying or administering a drug, it was not “selling” that drug.  Id. at 233-234.  The court concluded that defining a sale as the transfer of the “full panoply” of rights of ownership, which include the ability to transfer the product to someone else, is too limited.  Id. at 234-235.  In part this decision was based on the inclusion of “leases” in ORS 39.290 and in part on the fact that “ownership” and “title” are not concepts included in §402A.  Rather, applying an example from the comments to §402A, the court compared the hospital administering an intravenous drug to a beauty shop who can be sued in strict liability for application of a “permanent wave solution.” 

Having decided that administering the drug was a sale, the court turned to whether the hospital was “engaged in the business of selling” prescription drugs.  Here the court concluded that because the hospital’s business regularly involved transferring products to others in exchange for consideration, it was “engaged in the business of selling.”  Again, turning to §402A, the court points out that comment f states “it is not necessary that the seller be engaged solely in the business of selling such products.”  Id. at 238.  Meaning one can be in the business of selling even when the sale is ancillary to providing a service, such as a movie theater selling popcorn.  Rather, the primary limitation on being engaged in the business of selling is being an isolated seller, such as a homemaker who sells the occasional jar of jam to a neighbor.  Which may be an even more outdate example than the “permanent wave.” 

Moving beyond the text of the statute, the court looked to case law for context.  Considering that the vast majority of the national case law interprets §402A as not applying to hospitals, we would have expected this to be where the tide turned.  However, because ORS 39.290 was passed back in 1979, the court held that the great majority of all the nationwide precedent is irrelevant, since it post-dated 1979, and thus could not have a bearing on legislative intent.  Id. at 244.  And, as for the few older cases, the court ignored those because it had no evidence that the legislature was aware of them.  As a result of this selective use and non-use of the majority rule, the Oregon legislature was presumed to have “intended” to place Oregon in a distinct minority position when nothing in the record supported that “intent” either. 

In short, and for now, hospitals are subject to strict liability in prescription medical product litigation.  That is unless and until the legislature acts to protect them from this rather bizarrely pro-plaintiff result.

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We continue to be cautiously optimistic that the recent amendments to Fed. R. Evid. 702 – enacted because too many courts had been too flaccid for too long in admitting dubious “expert” testimony – will actually improve things in the courtroom.  Our latest data point is In re Paraquat Products Liability Litigation, ___ F. Supp.3d ___, 2024 WL 1659687 (S.D. Ill. April 17, 2024).  While Paraquat is not drug/device litigation (the substance is a widely used herbicide), the Rule 702 analysis has broad applicability – as demonstrated by the decision’s reliance (in part) on the Acetaminophen decision that we discussed here.

Continue Reading Amended Rule 702 – Eradicates Invasive Experts on Contact
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The California Supreme Court has granted review in Gilead Life Sciences v. Superior Court, the case in which the California Court of Appeal ruled that the defendant could be liable to users of one drug for alleged negligence in connection with a different drug, even while admitting that the drug they actually used was not defective.  As we explained here and here, the plaintiffs in Gilead used HIV drugs known as “TDF.”  But rather than allege that TDF drugs were defective, the plaintiffs asserted that that the defendant was negligent in failing to bring a different, but allegedly safer HIV drug (“TAF”) to market sooner. 

It is an unprecedented theory of liability.  Product liability law in California (and most everywhere else) has always required proof of a product defect.  The Gilead Sciences opinion did away with that; and in its place, the Court of Appeal imposed a free-floating duty to innovate—a duty of reasonable care when a manufacturer has invented “what it knows is a safer, and at least equally effective, alternative to a prescription drug that it is currently selling and that is not shown to be defective.”  Gilead Sciences, Inc. v. Superior Court, No. A165558, 2024 Cal. App. LEXIS 14, at *14 (Cal. Ct. App. Jan. 9, 2024) (review granted). 

The grant of review is obviously a good development.  Although the Court of Appeal attempted to portray its newly created duty as “narrow,” we always had our doubts. 

Apparently, the California Supreme Court has its doubts too, and while the ultimate outcome remains to be seen, arguments in favor of rejecting the new duty and restoring the law are strong.  In our defense-biased view, the defendant’s Petition for Review was exceptionally persuasive. 

Equally telling was the extraordinary response by amici urging the California Supreme Court to grant review —twelve amicus letters that we know of, speaking for approximately 50 companies, non-profits, individuals, and trade groups.  Here are some snippets, the first from about 15 other drug and medical device manufacturers: 

Contrary to the Court of Appeal’s intent, its decision will likely harm innovation—and ultimately patients and consumers—by encouraging companies not to invest in research and development for fear of being liable for not more quickly bringing to market what may turn out to be an incremental improvement to an existing product. . . . [L]itigants will surely seek to extend the decision’s reasoning to other products; and regardless, the mere possibility that it might apply to other industries will immediately chill socially desirable, innovative behavior.

And this from multiple trade associations, such as PhRMA:

No jury, even with the benefit of hindsight, could reasonably discern when a manufacturer ‘knew’ its invention was ‘safer and at least equally as effective,’ triggering a duty. . . . [L]ife sciences companies often develop multiple medications in parallel, and companies must make complicated strategic decisions about where to devote resources based on limited information. . . .  A company does not know with any measure of clarity during early stages of the development process . . . that a medicine is ‘safer’ and ‘at least as equally effective,’ and thus cannot be fairly subject to liability for decisions made at that time.

Of course, the new duty could easily be extended beyond prescription drugs, as explained by the National Association of Manufacturers, the Alliance for Automotive Innovation, and other sellers of consumer products:    

Nothing in the decision below applies exclusively to the pharmaceutical context, nor would it be difficult for other plaintiffs to copy the theory . . . .  Innovation is a necessity in every business.  But now, discarded ideas and prototypes, rather than being stepping stones on the path to success, could become the basis of lawsuits.

One tech startup in the autonomous automobile space chimed in:    

The ruling will discourage continuous product improvement, deter bringing new products to market, and disrupt the ecosystem in which innovation in the technology sector develops.

Economists have a view on this, and it is not favorable, according to the International Center for Law & Economics:

If upheld, this new duty of care would significantly disincentivize pharmaceutical innovation by allowing juries to second-guess complex scientific and business decisions about which potential drugs to prioritize and when to bring them to market. . . .  Perversely, this would deprive the public of lifesaving and less costly new medicines.  And the prospective harm . . . is not limited only to the pharmaceutical industry. . . .  Although conventional wisdom has often held otherwise, economists generally dispute the notion that companies have an incentive to unilaterally suppress innovation for economic gain.

There was too much material in the amicus letters to share here.  We will finish, however, with the view of multiple advocates (other than contingency-fee plaintiffs’ lawyers) for patients and underserved communities, such as ALLvanza, the Global Coalition on Aging, and the HIV and Hepatitis Policy Institute.  These organizations and their co-amici bemoaned the opinion’s chilling effect on drug development and resulting harm to health:

This unprecedented legal theory stands to chill the development of a future generation of drugs, including much-needed potential treatments and cures for a wide range of diseases. . . .  In unprecedented fashion, this new litigation risk attaches to drugs that are concededly safe and effective.  In the vein of no good deed goes unpunished, a manufacturer could face potential liability for undertaking rigorous scientific research and pursuing expensive clinical trials aimed at developing the next generation of therapeutic treatments.

The plaintiffs’ response was that amici were bought and paid for by the industry and that the Court of Appeal’s new duty was nothing more than an ordinary duty to exercise reasonable care.  Again, we are not so sure.  We understand the breadth of tort duties, but there are limits. 

The appeal will now proceed to full-blown briefing.  We will keep you posted.