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There is a reason the one-two punch – a jab followed by a cross – is one of the most common sequences in boxing.  It’s effective.  The boxer uses his lead hand to throw a jab which has two objectives – to assess the distance between the fighters and if done correctly to lift his opponent’s chin leaving it vulnerable to the more powerful cross.  First you expose the weakness, then you capitalize.  It’s a fairly effective strategy in litigation too.  Like defeating a motion to remand based on fraudulent joinder followed by a complete PMA preemption dismissal.  That combo took out the plaintiff in Laucella v. Medtronic, Inc., 2025 U.S. Dist. LEXIS 65078 (C.D. Cal. Apr. 4, 2025).

Plaintiff’s implantable cardioverter defibrillator (ICD) was implanted in 2014.  In 2023 it allegedly failed to deliver a full shock to correct plaintiff’s ventricular fibrillation, and he died.  Investigation allegedly revealed the device had material failures including delamination and cracks.  Id. at *2-4.  Plaintiff, a California resident, sued the ICD manufacturer and a California cardiologist, Dr. Meade, who served on the manufacturer’s “Independent Physician Quality Panel for cardiac rhythm products.”  Id. at*4.  The sole reason for naming Dr. Meade was to destroy diversity jurisdiction.  The manufacturer removed alleging fraudulent joinder.

Before turning to the substantive legal question, the court looked at plaintiff’s subjective intentions in naming Dr. Meade as a defendant.  Notably, the manufacturer’s Panel consisted of eight or nine doctors, only two of whom were California residents.  Plaintiff did not sue the other California doctor because he was retired.  But that does not explain why plaintiff did not sue any of the non-California doctors.  They all had similar expertise and involvement.  The only distinguishing factor was their state of residence.  Leading the court to conclude:

Accordingly, while the Court’s fraudulent joinder analysis focuses on the possibility of recovery against Dr. Mead rather than on Plaintiffs’ reasons for selectively suing him, Plaintiffs’ argument that they did not name Dr. Mead merely to defeat diversity are unpersuasive.

Id. at *10.

The question on fraudulent joinder is whether there is a possibility that a state court would find a cause of action against the non-diverse defendant.  Seeking remand, plaintiff alleged a claim could be made against the cardiologist based on his “integral role in [defendant’s] decision-making regarding . . . the specific [ ] ICD device implanted in Plaintiff.”  Id. at *8.   The facts paint a rather different story.  Dr. Meade has served as an independent consultant to the manufacturing defendant since 2007.  He has never been employed by the manufacturer and has never designed, manufactured or marketed any ICDs.  Rather, Dr. Meade is one of a group of doctors who reviews product performance and provides advice regarding communications to patients and the medical community.  Id. at *10-11.  Dr. Meade does not control or direct any of the activities of the manufacturer.  Neither did he provide any medical care or consultation specific to plaintiff.  Id. at *12. 

Plaintiff offered six documents in response.  Two were letters sent to physicians containing recommendations provided “after consultation” with the manufacturer’s Panel.  Two were notices posted on the manufacturer’s website again referencing consultation with the Panel.  None of those documents mentioned Dr. Meade by name.  The final two documents were product performance reports.  Here each member of the Panel was listed among the “Editorial Staff,” but the reports do not state what role any Panel member played in their preparation.  Id. at *13-15.  Since plaintiff, by not suing all members of the Panel, implicitly admitted that “mere membership on the Panel is insufficient to establish liability,” a cause of action against Dr. Meade necessarily “requires a more active role in the challenged decisions.”  Id. at *16.  Plaintiff’s evidence did not demonstrate such a role, so the court dismissed Dr. Meade. 

Having established federal diversity jurisdiction, the court turned to the manufacturer’s motion to dismiss all claims as preempted.  The ICD is a PMA device and therefore to survive, plaintiff’s manufacturing defect and failure to warn claims would have to steer clear of both direct and implied preemption.  They did not.

Plaintiff’s manufacturing defect claim was entirely premised on res ipsa loquitur.  The device was cracked and delaminated in 2023 therefore it was defective when it was manufactured nine years earlier in 2014.  But plaintiff alleged no facts to support that assumption, nor did he identify which of the numerous PMA requirements defendant allegedly violated or explain how the implanted device deviated from its blueprint.  Id. at *21-22.  Simply listing FDA requirements and pointing to a defect at the time of failure is not enough for the court to leap to the conclusion that defendant must have failed to comply with those requirements at the time of manufacture.  Id. at *23.

Plaintiff’s failure to warn claim was based on a failure to report adverse events to the FDA.  But here again plaintiff failed to allege any specific adverse events that defendant failed to report.  “[A]llegations on information and belief of unspecified events” do not state a plausible claim.  Id. at *24.

Because plaintiff did not allege how defendant deviated from any specific FDA requirements in manufacturing the device implanted in plaintiff or any specific adverse events that defendant failed to report, let alone that would have caused the FDA to act in a way that would have prevented plaintiff’s death, plaintiff did not allege any state law claims that parallel federal requirements.  All claims were dismissed as preempted. 

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A month or so ago, we castigated some extremely poorly reasoned expert exclusion decisions in the Bulox v. Coopersurgical litigation.  The end results weren’t horrible (p-side motions were denied), but th0se Rule 702 opinions completely ignored the changes wrought by the 2023 amendments to that Rule.  It was so striking that we went on PACER to see whether defense counsel was to blame for any of that – they weren’t.

Well, today we’re cheering the latest decision(s) in the same litigation.  Bulox v. Coopersurgical, Inc., 2025 U.S. Dist. Lexis 56370 (Mag. S.D. Tex. March 6, 2005) (“Bulox I”), adopted, 2025 U.S. Dist. Lexis 54755 (S.D. Tex. March 25, 2025) (“Bulox II”), is as good a PMA medical device preemption decision as a defendant has a right to expect.  This Bulox decision should go a long way towards defeating the other side’s latest campaign to deprive women of contraceptive choice.

Continue Reading Clip, Clip Hooray
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At a recent seminar, one of the sessions was a nuts-and-bolts discussion of conducting Internet, mostly social media, research into prospective jurors for voir dire purposes.  It was quite interesting from a practical standpoint, but no law was cited that such research was even allowable (assuming courts could detect non-courtroom activities), and if so, what restrictions apply.

So we thought we’d take a look.

Continue Reading Avoid Getting Into Trouble over Internet Research about Prospective Jurors
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It is a truism in product liability matters that plaintiffs love state courts, whereas defense lawyers and our clients much prefer federal court.  There are reasons for this.  Twombly and Iqbal pleading standards are more rigorous than the pleading standards in many state courts.  Federal judges often have fewer cases and more clerks than state judges.  Federal preemption plays better in federal court.  Less chance the client or the defense lawyers will be hometowned in federal court.  And so, on this blog, we talk about removal a lot.

Plaintiffs always get the first move in the “which court will decide the case” chess match, as they get to choose where they file the lawsuit. 

Sometimes, if the complaint reveals the diversity jurisdiction requirements are (or arguably are met), defendants get a second move, and can remove the case to federal court.

Defendants don’t always get that second move in pharmaceutical and medical device product liability cases, however.  If the plaintiff adds medical malpractice claims against the prescribing physician or another health care provider, chances are that defendant is a citizen of the same state as the plaintiff and diversity is destroyed.

But sometimes, defendants can manufacture a second move for themselves nonetheless.  They might try a snap removal.  Or try to find a federal officer somewhere buried in the complaint.  Or they might argue fraudulent joinder.

Daniel v. Biomet Orthopedics, Inc., No. 24-444-SDD-EWD, 2025 U.S. Dist. LEXIS 53120 (M.D. La. Mar. 3, 2025), affirmed by 2025 U.S. Dist. LEXIS 50018 (M.D. La. Mar. 19, 2025), is a variation on the fraudulent joinder approach that we have written about before.

In the March 3rd Daniel opinion, a Magistrate Judge issued a report and recommendation on plaintiffs’ motion to remand a product liability case to Louisiana state court.  The plaintiff named a device manufacturer on product liability claims, and the non-diverse defendant was a Louisiana pathology group allegedly liable for spoliation of the medical device after explant.

The defendants removed the case to the Middle District of Louisiana on diversity grounds and argued that the pathology group was an improperly, or fraudulently, joined defendant and thus did not count in determining whether complete diversity existed.

In the Fifth Circuit, a district court can disregard the citizenship of a local defendant for purposes of deciding diversity jurisdiction pursuant to 28 U.S.C. § 1332(a) in two circumstances:

(1) actual fraud in the pleading of jurisdictional facts, or

(2) inability of the plaintiff to establish a cause of action against the non-diverse party in state court.

The question in Daniel was of the second type:  Whether plaintiff’s claim of intentional spoliation against the pathology group was governed by the Louisiana Medical Malpractice Act (LMMA) and if so, whether plaintiffs’ failure to follow the LMMA’s pre-lawsuit, medical review panel requirement prohibited their claim against it.

The Magistrate Judge properly dug in on the language of the LMMA (which applies to any “unintentional tort or breach of contract” involving a health care provider and patient) as well as plaintiffs’ allegations (seeing through the claim that the spoliation was “intentional”). 

She concluded that because the plaintiffs needed to comply with the LMMA’s medical review process in order to bring a spoliation claim against the pathology group but had not done so, they had failed to satisfy a procedural prerequisite and were unable to establish a cause of action against that non-diverse party. 

The Magistrate Judge thus recommended that the plaintiffs’ motion to remand be denied due to improper joinder, and that the non-diverse pathology group defendant be disregarded for diversity purposes and dismissed from the case to boot.

The Magistrate Judge’s Report and Recommendation then went to the district court judge for review, and resulted in the March 19th Daniel affirmance and order effectuating the recommendations. 

So, tuck Daniel away in your mental filing cabinet.  Someday, should you find yourself litigating in a state with medical malpractice pre-lawsuit requirements and facing a lawsuit in which the plaintiff has named a non-diverse health care provider, take a deeper look.  If the plaintiff has not complied with the medical malpractice pre-suit requirements and those requirements are mandatory and necessary prerequisites, a fraudulent joinder removal just may work.

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Covid-19 is not over. Per doctor advice (namely, that geezers whose primary form of exercise consists of removing Meursault corks should do their best to avoid Covid) we recently received yet another Covid-19 jab.  We’re not up to double digits yet, but cannot be far from it.    For those of you who would gleefully castigate us for not being a “pure blood,” our only response is: d’uh; there has never been anything pure about us.

Covid-19 litigation is not over, either.  Two weeks ago we dropped a post about a court permitting a plaintiff to circumvent immunity under the Public Readiness and Preparedness (PREP) Act by alleging a constitutional, rather than tort, claim.  Today’s case, DN v. Gilead Sciences, Inc., 2025 Mich. App. LEXIS 2672 (Mich. Ct. App. April 8, 2025), offers a very different result. DN is a PREP Act preemption win for the defendants in what would otherwise be a straight manufacturing defect case.  DN was an 83 year old man who had been diagnosed with Covid-19.  He received two doses of remdesivir.  He later suffered two strokes, had a leg amputated, became bed-ridden and required around-the-clock care.  It is a sad story. The claim was that glass particles in the remdesivir caused those injuries.  (Being Churchill fans, we cannot help but think of the old story about  Lady Astor telling Churchill that if she were his wife, she’d put glass in his coffee.  He responded that if she were his wife, he’d drink it.) (Yes, in most versions, it is poison, not glass.) (Being inveterate defense cranks, we also cannot help pointing out that there was no allegation of glass ever being found in DN’s body.)  The plaintiffs filed a complaint in Michigan state court on behalf of DN, asserting claims for breach of express warranty, negligence, gross negligence, intentional misrepresentation, and loss of consortium. 

The case was removed to federal court. That ended up being a detour. The federal court determined that the only claim over which it had original jurisdiction was the claim for intentional misrepresentation, but that even that claim must be dismissed because the plaintiff had not exhausted administrative remedies.  So the case bounced back to state court.  The defendants (the remdesivir manufacturer and the hospital) moved for summary judgment based on complete PREP Act preemption.  The trial court denied the motion for summary judgment.  It bought the plaintiffs’ batty theory that “because the FDA did not approve or license remdesivir in a form that contained glass particles, the allegedly contaminated remdesivir doses did not constitute covered countermeasure.” Put another way – and this really does seem to fit into the category of being too clever by half – the plaintiffs maintained “that it is the glass particles, and not the remdesivir itself, that caused DN’s lasting injuries.”

The defendants in DN then appealed the denial of their summary judgment motion.  That sort of thing is not appealable in most jurisdictions, but apparently it is available in Michigan.  Along with Motown, Barry Sanders, Sleeping Bear Dunes, the longest freshwater coastline in the country, the Mackinac Bridge, and the Joe Louis Fist sculpture, the ability to appeal denials of summary judgment has to be one of the best arguments for Michigan being America’s best state.   

The appellate court reversed the trial court’s decision in a decision that is solidly reasoned and artfully written.  The opinion begins with a discussion of the Spanish flu pandemic of 1918 and the Covid-19 pandemic of 2020-21 as “two devastating global health crises.”  (As Philadelphia lawyers, we feel duty-bound to mention that Philadelphia’s refusal to cancel a parade in 1918 resulted in the city being particularly hard-hit. Some of our old, old relatives talk about uncles, aunts, etc. who succumbed to the Spanish flu in Philly. Bad times.) The DN appellate court set about the task of de novo statutory interpretation.  Put plainly, the plain language of the PREP Act grants immunity to any “covered person” (and the manufacturer and hospital were clearly covered persons) against “any claim for loss that has a causal relationship with the administration to or use by an individual of a covered countermeasure, including a causal relationship with the design, development, clinical testing or investigation, manufacture, labeling distribution, formulation, packaging, marketing, promotion, sale, purchase, donation, dispensing, prescribing, administration, licensing, or use of such countermeasure.”  That is broad language.  Congress passed the PREP Act to prevent suits like this in the face of a serious public health emergency.  And there is the word “manufacture” sitting right in the middle of that broad language as a statutorily protected activity. 

The appellate court was won over by the defendant manufacturer’s argument that “Congress’ explicit extension of PREP Act immunity to claims involving a covered countermeasure’s ‘manufacture’ would be rendered meaningless if, as Plaintiffs suggest, the presence of a manufacturing defect prevented the product from being a covered countermeasure in the first place.” To accept the plaintiffs’ position that “manufacturing defects prevent products from being considered ‘covered countermeasures’ under the PREP Act,” the court “would have to render some of the language of the PREP Act nugatory, in violation of our principles of statutory interpretation.”

It turns out that the plaintiffs in DN did not attempt to bring the only claim that the PREP Act allows.  The DN court concluded that the plain language of the PREP Act clearly granted the defendants “immunity from all liability for injuries that were not caused by willful misconduct.”  That is hardly surprising.  “Willful misconduct” is defined in the PREP Act as “an act or omission that is taken – (i) intentionally to achieve a wrongful purpose; (ii) knowingly without legal or factual justification; and (iii) in disregard of a known or obvious risk that is so great as to make it highly probable that the harm will outweigh the benefit.” The court did not see how the defendants’ conduct, even assuming the presence of glass in the medicine, rose (sank?) to the level of willful misconduct.  We do not see it, either.  It looks like the plaintiffs did not, either. 

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No one can sell a new drug without prior approval from the FDA.  That rule is codified in the federal Food, Drug, and Cosmetic Act and is not controversial (or at least should not be controversial).  Less clear is whether a seller of an FDA-approved drug can sue a competitor under state unfair competition laws for selling unapproved versions of that same product. 

The Fifth Circuit has held that an approved drug’s seller can bring such a state-law claim, reversing a lower court’s decision that federal law and the FDA’s enforcement power preempted state-law claims based on the sale of an allegedly unapproved drug.  In Zyla Life Sciences, L.L.C. v. Wells Pharma, No 23.20533, 2025 U.S. App. LEXIS (5th Cir. Apr. 10, 2025) (to be published), the plaintiff drug manufacturer was the exclusive seller of FDA-approved indomethacin suppositories.  The dispute arose when a compounding pharmacy started selling indomethacin suppositories without FDA approval, thus competing with the plaintiff’s approved product. 

Compounding pharmacies are unique animals.  Compounding pharmacies are allowed to prepare and sell drugs, without FDA pre-approval, usually to meet the needs of individually identified patients.  A patient, for example, might be allergic to an inactive ingredient in a commercial drug or might need a customized dose.  Compounders can mix and sell that bespoke drug.  As the Fifth Circuit observed, “The goal of compounding is to provide ‘medication tailored to the needs of an individual patient.’”  Id. at *5. 

Sometimes compounders stray from this mission and produce and sell drugs in direct competition with FDA-approved products, which is not allowed except under particular circumstances.  That was the plaintiff drug manufacturer’s beef in Zyla Life Sciences:  Because the defendant compounder was selling a competing indomethacin suppository, the plaintiff sued under the unfair competition laws of the six states with laws mirroring the federal prohibition on selling new drugs without the FDA’s pre-approval. 

We have no idea whether this particular compounder violated any law, but we do know that there is no private right of action under the FDCA and that the federal government has the exclusive authority to enforce the statute.  21 U.S.C. § 337(a).  We also know that Buckman Co. v. Plaintiffs’ Legal Committee, 531 U.S. 341 (2001), held that federal law impliedly preempts private efforts to enforce the FDCA. 

How then is this private plaintiff allowed to maintain a lawsuit alleging the sale of a new drug without FDA approval?  We are talking here about implied conflict preemption, and more particularly the version of implied conflict preemption known as obstacles-and-purposes preemption.  That is to say, if state law stands as an obstacle “to the accomplishment and execution of the full purposes and objectives of Congress,” state law has to give way. Zyla Life Sciences, at *2.  

The key for the Fifth Circuit was that these six states enacted drug laws identical to federal law.  As a result, “there was ‘no conflict in terms, and no possibility of such conflict, for the state statute ma[de] federal law its own.’”  Id. at *9 (quoting California v. Zook, 336 U.S. 725, 735 (1949)).  The court also found that accepting preemption would raise a host of problems.  To start, states may have an interest in punishing or providing redress for wrongs, even if federal law already does so.  In addition, the Fifth Circuit concluded that applying preemption here would undermine legitimate state enforcement of criminal and tort laws.  We see the Fifth Circuit’s point, but the court slipping into hyperbole when making it.  According to the court, because federal law touches “nearly every facet of human existence,” preempting this lawsuit would deprive states “of just about any power to regulate any conduct at all.”  Zyla Life Sciences, at *16.  Federal preemption is of course more nuanced than that. 

The court further reasoned that states may generally regulate the same conduct as federal law, especially when state standards mimic federal ones, and that the mere possibility that federal enforcement priorities might be upset is not sufficient to support federal preemption.  Moreover, the court observed that it is fine when state law supplements the FDCA’s remedial scheme, especially in light of Wyeth v. Levine, which permits state-law regulation of drug safety concurrently with the FDA.  Id. at *17-*18.

Finally, the Fifth Circuit distinguished Buckman, which did not involve state law that mirrored federal requirements, but instead applied preemption to ordinary fraud.  The problem in Buckman was that the alleged fraud was against a federal agency—fraud on the FDA, which inherently conflicts with federal law by saying a state can ignore the FDA action at issue as “fraudulent.”  Here, the defendant compounder was not competing against the FDA, and the plaintiff was not policing any relationship between the compounder and the FDA.  As a result, there is no threat that this lawsuit will interfere with any federal program. 

This drug manufacturer’s unfair competition lawsuit therefore can proceed.  We don’t know the outcome, but if the defendant compounding pharmacy is illegally selling drugs, that should stop.  It is not only against the law, but as a long-retired and much-admired former mentor used to say, it also violates the “you can’t do that” rule. 

From our product liability perspective, the key point is that the state laws in Zyla Life Sciences mirrored the FDA’s approval, and nothing else, so no chance of conflict existed.  That is completely unlike product liability litigation, where plaintiffs almost always are challenging, as unsafe, something that the FDA has permitted. 

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Back in 2020, we encountered Gustafson v. Springfield, Inc., 2020 Pa. Super. Lexis  843 (Pa. Super. Sept. 20, 2020), a decision so bizarre that it reminded us of a Monty Python movie.  That decision “employ[ed] a rationale, at once both paleolithically conservative and pro-plaintiffly radical, that would render any federal “tort reform” statute unconstitutional.”  Gustafson involved a federal statute that preempted most tort litigation involving firearms, the Protection of Lawful Commerce in Arms Act of 2005, 15 U.S.C. §§7901, et seq., (“PLCAA”), and declared that the PLCAA violated the Tenth Amendment.

Since it did not involve prescription medical product liability litigation, the Blog did not follow Gustafson all that closely – our last mention of it was in 2021, noting that en banc reargument had been granted and the singular panel opinion had been withdrawn.  However, the decision that resulted from the reargument was a mess.  Gustafson v. Springfield, Inc., 282 A.3d 739 (Pa. Super. 2022) (en banc), produced no majority and five different opinions from the nine judges.  Moreover, the overall result, which was to reverse the trial court’s dismissal of the suit, was contrary to the majority votes of the individual judges.  How could that be?  Here’s a brief description from a Pennsylvania appellate procedure article Bexis wrote about Gustafson:

The outcome in Gustafson thus differed dramatically from the votes of the nine en banc judges on the merits of the two issues.  The outcome was 5-4 in favor of reversal, as four judges would reverse on constitutional grounds, and one judge would reverse solely on statutory grounds.  On both of the two issues, however, the position advocated by the defendants was in the majority.  Seven justices agreed that, factually, the Arms Act was applicable to the Gustafson plaintiffs’ claims.  By a slimmer margin of 5-4, a majority of the Gustafson judges agreed that the Arms Act was constitutional.

J. Beck, “What Happens When Precedent Splinters? A Look at Gustafson,” Law.com (Nov. 17, 2022).

This bizarre result had one beneficial effect, it virtually forced the Pennsylvania Supreme Court to take the inevitable appeal in order to clean up the mess.  Which it did.  See Gustafson v. Springfield, Inc., 296 A.3d 560 (Pa. 2023) (granting review).

And last month, the Pennsylvania Supreme Court did indeed clean up the mess.  See Gustafson v. Springfield, Inc., 2025 Pa. Lexis 442 (Pa. March 31, 2025).

Continue Reading At Least Pennsylvania Is Not That Completely Different
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Bad fact patterns sometimes make bad law. And sympathetic plaintiffs who experience unfortunate outcomes can lead to decisions that stray from established precedent. Today’s decision from the Northern District of Oklahoma addresses a sad fact pattern, but the court conducted a rigorous Erie analysis and concluded that the Oklahoma Supreme Court would not recognize a duty that pharmacies must fill prescriptions.  Scholl v. Walgreens Specialty Pharm., LLC, 2025 WL 950866 (N.D. Okla. Mar. 28, 2025). 

Continue Reading Federal Court’s Erie Analysis Concludes That Pharmacies Do Not Have a Duty to Fill Prescriptions in Oklahoma
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We often say here that we try not to do the other side’s homework for them or give them ideas about new ways to sue our clients.  When the Supreme Court takes a well-known statute and says, essentially, that it can now be applied in personal injury cases that also have economic damages, we do not think we are letting any felines out of sacs.  For 55 years, the civil RICO statute has been broadly understood not to apply to personal injury claims such as those advanced against the manufacturers of drugs and medical devices.  The Supreme Court seemed pretty clear about this less than nine years ago in RJR Nabisco, Inc. v. European Cmty., 579 U.S. 325, 350 (2016).  More generally, we have detailed how rarely RICO claims have survived motions to dismiss in the context of cases that focused on consumer protection claims against medical product manufacturers.  Admittedly, we have not had to spill much virtual ink on the “antecedent-personal-injury bar” in our posts because the plaintiff lawyers had apparently understood RICO’s authorization of a civil claim for someone “injured in his business or property by reason of a [criminal RICO] violation” as not applying to personal injuries.  In fact, while plaintiff lawyers are not exactly known for restraint in pleading, we have seen many cases where the plaintiffs made clear that they did not have personal injuries in the mix as they sought a route to RICO’s treble damages.  That all appears to have gone out the window because of a strange case with an unusual procedural history and an interesting alignment of justices on the Supreme Court.  We will not belabor why we think the dissenting opinion from Justice Kavanaugh, joined by Chief Justice Roberts and Justice Alito, was more persuasive than the majority decision authored by Justice Barrett, joined by Justices Sotomayor, Kagan, Gorsuch, and Jackson.  (Justice Jackson also wrote a short concurrence, and Justice Thomas wrote a dissent focused on justiciability.)  Instead, we will mostly address where things might go from here in drug and device product liability actions.

We say Medical Marijuana, Inc. v. Horn, 604 U.S. __ (2025) (“MMI”) (discussed at prior stages here and here) is a strange case because the “injury”—we will return to that—was that the plaintiff was fired from his job for refusing to complete a substance abuse program after failing a drug test.  Assuming that there was no other possible reason for the failed drug test beyond his use of a “tincture infused with cannabidiol—more commonly known as CBD” that he apparently thought would not show up on a drug test, plaintiff could have done various things to try to keep his job.  Purchasing another bottle of the CBD tincture for testing for THC and then suing the manufacturer for costing him his job, asserting civil RICO and a range of other theories, was not one of them.  We also find it strange that the decision is silent on whether plaintiff had other possible THC exposures, whether the tincture’s manufacturer claimed it would not show up on a drug test, whether plaintiff researched drug tests—surely, everyone has heard the urban legend about poppy seed bagels—how plaintiff obtained the bottle of the tincture, how it affected him, the FDA’s regulatory treatment of CBD products, and the legality of this product with or without THC in it in New York [where plaintiff bought and used at least some of the product, although that is also not in the decision].  The closest to any of this in the decision are references to defendants advertising the product as “0% THC” and “legal to consume both here in the U.S. and in many countries abroad.”  This set of facts might offer a path to a false advertising claim where the alleged damages are the purchase price (of the first bottle, not the one purchased for testing), but no other physical or economic injury.  Without a physical injury—exposure to a recreational drug substance without more is not a cognizable physical injury anywhere—there is not even an arguable product liability claim.  A violation of the Racketeer Influenced and Corrupt Organizations Act?  Forget about it.  (Pronounce that as you see fit.)  Racketeering would include if the seller of the tincture had extorted plaintiff to pay it to keep quiet that he had purchased and used the product.  We have all seen enough shows about organized crime, fictional or otherwise, to know the difference between being the victim of a racket and believing implausible product claims.

We say the procedural history of MMI was unusual because the district court granted summary judgment on the basis that plaintiff’s loss of employment “‘flow[ed] from, and [was] derivative of, a personal injury he suffered’—the introduction of THC ‘into his system through the ingestion of Dixie X.’”  Other than THC ingestion not being a personal injury and plaintiff losing his job for an intervening decision he made, we understand this as a predicate for the correct conclusion that civil RICO provided for damages for injuries to business and property but not for physical injuries.  On appeal, the Second Circuit went a different route.  It concluded that plaintiff had been “injured in his business” by losing his job.  That would have been sufficient to reverse.  Without deciding if plaintiff’s case was based on a personal injury—something he denied—the Second Circuit also went ahead and found that, while RICO “implicitly excludes recovery for personal injuries,” it nonetheless allows for recovery of business losses that are causally connected to a prior personal injury.  Then the Supreme Court’s majority decision considered only the issue of “whether civil RICO bars recovery for all business or property harms that derive from a personal injury.”  That is a strange question to resolve in a case where plaintiff did not claim to have suffered a personal injury and did not have a personal injury that would have been cognizable under state law.  Even setting aside TwIqbal and the heightened pleading required for the fraud-based allegations in plaintiff’s complaint, the fact that the appeal was from summary judgment for the defendant should have obviated the need for the majority decision to rely on so many assumptions about the facts and allegations in the case.  The dissenting opinions spelled out a number of reasons why this history weighed against the decision the majority reached.  As the Thomas dissent stated, “I would not decide whether losses flowing from person injuries are injuries to business of property in a case where no one know whether the plaintiff suffered a personal injury.”

We trust that others will delve more deeply into the competing opinions within MMI, but we will point out some of what principal dissent said that may have implications for drug and device product liability litigation.  The legislative history on RICO made clear that it was “an act designed to prevent ‘known mobsters’ from infiltrating legitimate businesses.”  It was certainly not intended to federalize business torts, let alone personal injury and product liability claims.  See, e.g., Midwest Grinding Co. v. Spitz, 976 F.2d 1016, 1025 (7th Cir. 1992) (“RICO has not federalized every state common-law cause of action available to remedy business deals gone sour.”); Calcasieu Marine Nat. Bank v. Grant, 943 F.2d 1453, 1463 (5th Cir. 1991) (“[A]lthough Congress wrote RICO in broad, sweeping terms it did not intend to extend RICO to every fraudulent commercial transaction.”).  As the Kavanaugh dissent put it:

If the rule were otherwise, as plaintiff Horn advocates here, RICO would federalize many traditional personal-injury tort suits.  When enacting civil RICO in 1970, Congress did not purport to usher in such a massive change to the American tort system . . . . On the contrary, it excluded personal-injury suits.  And it is not remotely plausible to conclude that Congress excluded personal-injury suits under RICO and then turned around and somehow implicitly authorized most personal-injury suits under RICO.

This reminds us of the confusion many courts seem to have when it comes to the presumption against preemption, which applies in the context of field preemption but not to express or implied preemption.  To comply with constitutional principles, federalizing an area that was traditionally the subject of state law needs to be the result of clear congressional intent.  Even though the majority decision in MMI expanded RICO without much support from the statute’s text or legislative history, we are curious whether the narrow purpose of RICO and its particular requirements will prevent a sea change when it comes to product liability cases against drug and device manufacturers.

The following is certainly not intended to be comprehensive, let alone from self-described experts in all things RICO.  There are many fine treatises and other sources out there.  Instead, for the questions we pose of how hard will it be for plaintiff lawyers to add treble-damages RICO claims to their complaints about allegedly defective drugs and devices and how hard will it be to beat those claims, we highlight a few issues.  First, standing is still a thing.  For a “regular” product liability case where plaintiff actually claims a direct physical injury from the use of the product, there tends not be much of a fight over standing.  Expansion into quasi-injuries to get to RICO, as with a class action, may lead to standing issues.  Second, RICO defendants are supposed to be part of an “enterprise,” and a parent company and its own subsidiary are not an enterprise.  So, in a typical case with the plaintiff using a specific company’s device or drug, it should be hard to find sufficiently separate defendants to paint an enterprise.  Although we have seen claims based on the idea that competing drug companies or drug companies and distributors conspire together to create a market or suppress a purported risk, actual factual allegations to support an actual enterprise should be harder to muster.  Third, for a civil statute, RICO requires a high level of intent:  actual knowledge of the criminality of the activities of the enterprise.  Knowledge can be alleged generally under Fed. R. Civ. P. 9(b) or this would be a tougher requirement at the pleadings stage.

Fourth, the core of RICO is that there have to be at least two predicate acts of racketeering activity sufficient to create a pattern of criminal activity by the enterprise.  The statute includes a list of crimes traditionally associated with organized crime, such as extortion and kidnapping, but also broader categories such as mail and wire fraud.  This should present something of a hurdle in the context of a product liability claim against a medical product manufacturer.  We have seen where a drug company’s alleged off-label promotion and kickbacks to physicians were rejected as RICO predicates.  This is where the purpose of the statute should continue to play a role in precluding basic product liability allegations like the inclusion of an inadequate warning on a product label or a webpage from being seen as RICO predicates.

Last, the Court in MMI emphasized that its expansion of the kind of injuries that can lead to civil liability under RICO would be limited by the purportedly stringent requirement of “some direct relation between the injury asserted and the injurious conduct alleged.”  That may prove to be the case, but MMI is itself a case with an admittedly indirect causation theory and it got to the Supreme Court.  This is hardly encouraging for potential RICO civil defendants.  Winning a motion to dismiss or even summary judgment on causation can be a tough sell, and courts are quite variable in distinguishing between direct and indirect relationships.  MMI also cautioned:

“business” may not encompass every aspect of employment, and “property” may not include every penny in the plaintiff’s pocketbook.  Accordingly, not every monetary harm—be it lost wages, medical expenses, or otherwise—necessarily implicates RICO.

Again, we do hope that recognizing the original purpose of RICO will help courts to limit which alleged indirect economic injuries count for RICO.  However, the MMI decision provides no bright lines for what does not count.  Given that the plaintiff in MMI did not even have a cognizable physical injury, we have reason to suspect that the lack of bright lines will not be so good for the defendants.

Photo of Stephen McConnell

These days there are two topics that dominate legal conferences, presentations, and CLEs: artificial intelligence (AI) and Loper Bright.  You will doubtless see us frequently bloviate about the former, but today’s case – American Clinical Laboratory Ass’n v. Food and Drug Administration, 2025 U.S. Dist. LEXIS 59869, 2025 WL 964236 (E.D. Tex. March 31, 2025 – is about the latter.  In fact, American Clinical is the first FDA-specific application of Loper Bright.  Spoiler alert: the FDA lost.  

The lawsuit was brought by various plaintiffs, including laboratory associations, challenging an FDA final rule that would regulate laboratory testing as medical devices.  (The court had no difficulty holding that these plaintiffs had standing to challenge the FDA’s proposed rule because compliance would cost them plenty.) The plaintiffs argued that the final rule exceeded the FDA’s authority, and that it must be vacated under the Administrative Procedure Act.  The parties filed cross motions for summary judgment. 

We have heard a lot lately about the text-history-tradition method of constitutional and statutory interpretation.  In American Clinical, the court framed its analysis in terms of “text, structure, and history.”  The “tradition” component has always puzzled us a bit, and we are not sure how “structure” differs from text, but the American Clinical court’s approach ends up being fairly easy to follow.  

The court starts, as most do these days, with the text. Put simply, the court held that it could not stretch the statutory definition of “medical device” to include laboratory-developed tests.  The Food, Drug, and Cosmetic Act (FDCA) defines “device” as a “instrument, implement, machine, contrivance, implant, in vitro, or other similar related article, including any component, part, or accessory” that diagnoses or treats disease. By contrast, the lab tests at issue here constituted professional medical care, not the sort of “tangible, physical products” that the statute – applying “ordinary, contemporary, common meaning” – includes as medical devices.  Moreover – and maybe this is a “structure” point – several of the FDCA’s device regulations can be “understood to apply only to manufactured products.”

The history at issue involved FDA’s prior positions being inconsistent.  The court observed that “[a]lthough FDA’s view of its authority to regulate laboratory-developed test services as devices has been a moving target for decades, the relevant statutory framework has not changed since 1988.” The FDA’s inconsistency is normal – after all, new presidents mean new FDA people and policies – and was one of the things driving SCOTUS in Loper Bright to inter Chevron deference.  

Congress passed statutes regarding medical devices in 1938 and 1976, but the FDA did not endeavor to regulate laboratory services until 1992, and even then the FDA’s moves amounted to wavering gestures, some of which “were not well received by Congress.”  (But what did Congress actually do to set the FDA straight? Not much. Par for the course, right?  For a while now, Congress has been more performative than functional. The failure of Congress to do its job is part of the Chevron-Loper Bright story.)

After years of vague mutterings about regulating lab tests as devices, the FDA took concrete steps in 2023 when it announced “its intent to move forward with regulating virtually all laboratory-developed test services as medical devices.”  The “FDA acknowledged that the costs of the proposed rule would be significant.”  It also recognized that the rule would “impose major burdens on laboratories.” 

But the FDA’s effort to regulate lab services as devices ignored the Congressional assignment of oversight of such tests to a different agency (the Centers for Medicare and Medicaid Services) governed by a different statute (the Clinical Laboratory Improvement Act of 1967 (CLIA), which was expanded/amended in 1988). The sequence of legislative enactments reflected that “Congress viewed (1) ensuring medical device safety and effectiveness, and (2) ensuring laboratory-testing accuracy, as distinct problems requiring different regulatory solutions.”  And, after all, Congessional intent, rather than agency aspirations, is what matters when it comes to statutory interpretation.

When it issued its final rule in 2024, the FDA stated that the FDCA “has always classified laboratory test services as medical devices and that the entire history of the medical device requirements, FDA has declined to apply them to laboratory-developed tests simply as a matter of ‘enforcement discretion.’”

Pre Loper Bright, a court applying Chevron deference might well have felt constrained to adopt the FDA’s interpretation and assented to the assertion of regulatory power over lab tests. But Loper Bright is the new sheriff in town, and Chevron is on Boot Hill. Thus, the court in American Clinical concluded that the FDA could not rely on non-reviewable “enforcement discretion” to pound the square peg of therapeutic tests conducted by medical professionals into the round hole of medical device manufacturing requirements. The FDA’s “creative attempt to expand its jurisdiction under the FDCA” failed because it had no authority to expand the definition of “device,” and it contravened “the FDCA’s limits on FDA’s jurisdiction.”  Neither the CLIA’s “statutory text nor its legislative history make any reference to FDA’s allegedly preexisting authority to regulate laboratory-developed test services as ‘devices.’”

Under Fifth Circuit precedent, district courts should generally “nullify and revoke” illegal agency action. The American Clinical court concluded that, in light of the profound compliance burdens that the FDA’s proposed rule would have visited upon labs, the rule had to be vacated. The case was remanded to the FDA for “further consideration in light of this opinion.”  

As a practical matter, decisions such as American Clinical, which apply Loper Bright to curtail FDA authority, might not matter all that much in this moment. The current FDA, which seems to be, er, retrenching, does not appear to have the resources to expand into anything new.  We almost said that the current FDA also does not appear to have the ambitions to expand into anything new, but who can really say? Let’s face it: the executive branch is now through the looking glass.  Any talk about abench inconsistency right now sounds like a comical understatement. American Clinical reminds us that the judiciary – the “least dangerous branch” – appears to be the one branch of government that actually does its job with more logic than lunacy.  

Drug & Device Resources

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FDA-regulated products now account for an estimated one-fifth of overall economic activity in the U.S. They have also been the focus of a litigation explosion. This timely guide covers all aspects of litigation involving drugs, medical devices, vaccines and other FDA-regulated prescription products.
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