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It could be a first-year civil procedure question:  The removability of a case to federal court is determined as of the moment of removal – nothing thereafter can defeat removal.  See, e.g., St. Paul Mercury Indemnity. Co. v. Red Cab Co., 303 U.S. 283, 292 (1938) (a plaintiff cannot “deprive the district court of jurisdiction” “after removal” “by amendment of his pleadings”); 14A C. Wright & A. Miller, Federal Practice & Procedure §3721, at 213 (2d ed. 1985) (once “a case has been properly removed . . . plaintiff[s] cannot successfully do anything to defeat federal jurisdiction and force a remand”).

That is precisely what the petitioner in a pending United States Supreme Court matter, Royal Canin U.S.A., Inc. v. Wullschleger, No. 23-677, is asking the Court to hold.  Oral argument in the Royal Canin case is occurring today.  For more details, including copies of all pleadings, see the SCOTUSblog page.

Continue Reading Under the Radar SCOTUS Removal Issue
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We receive emails from readers fairly regularly.  They are usually from other attorneys, sometimes friends or acquaintances sharing their points of view or expanding on things that we may have underplayed or overlooked.  Although we don’t spend much time (or really any time) trying to predict when we might hear from others, we have noticed a trend.  We are far more likely to hear from readers when we write on (1) vaccines and (2) particular geographic locations.  Anti-vaxxers have strong opinions, and they relish opportunities to express them, including in sometimes-not-very-nice emails to defense-hack bloggers.  To that, we can attest. 

With regard to particular geographic locations, readers seem to relate to stories more when they have familiar settings.  We recently wrote on a case from Montana, and while no one wrote to comment on the substance of the post, we received numerous emails informing us that Yellowstone National Park is mostly in Wyoming and that Joe Montana is, in fact, from Pennsylvania.  We have received multiple “I’m from [fill in the state here]” emails over the years, uniformly stated with a sense of community and with none of the vitriol that vaccine posts tend to provoke.

All this came to mind today because we were reading an interesting case from Kentucky.  We thought at first that we have never been to Kentucky.  Then we looked at a map.  There was that one time we drove from Florida to Chicago at the end of Spring Break in law school, and based on compelling cartographic evidence, we must have travelled through Kentucky.  Our lack of memory is our loss.  The Bluegrass State is famous for its natural beauty, and it is the birthplace of two of the most famous individuals in history—Abraham Lincoln and Muhammed Ali.  We might someday attend the Kentucky Derby, but probably not.  And, we can’t help but recall the old joke, “Is the capital of Kentucky pronounced Looee-ville or Lewis-ville?”  The correct answer is that the capital of Kentucky is pronounced “Frankfort.” 

This is a long warm up to the aforementioned interesting case from Kentucky, Cordle v. Enovis Corp., Civil Case No. 23-93, 2024 U.S. Dist. LEXIS 170100 (E.D. Ky. Sept. 20, 2024), where the district court dismissed the plaintiff’s complaint because she leveled allegations against the “defendants” collectively, without specifying which one allegedly caused her injury.  This is a twist on TwIqbal that we have not often seen.  (You can see our TwIqbal cheat sheet here.)  The plaintiff alleged that she was injured by a protective knee brace, but she alleged only that the brace “was designed, manufactured, assembled, distributed, and provided to . . . [her] by . . . Defendants.”  Id. at *10 (emphasis added). 

She did not specific which defendant (there were at least four).  That was a problem.  The Kentucky Product Liability Act requires proof of causation, i.e., that the defendant’s product is responsible for the alleged injury.  Under this rule, “[w]here a complaint names multiple defendants where only one could be responsible it ‘allows the court to infer only a mere possibility’ that a particular defendant caused the harm.”  Id. at *9. 

Here, the plaintiff provided “no information whatsoever” about what any particular defendant did or did not do.  Citing Twombly, the district court found this to be a fundamental pleadings failure because it failed to allege anything more than a mere possibility that each of the defendants caused the plaintiff’s injury.  Id. at *12-*13.  A mere possibility of causation is not sufficient.  Moreover, although this is a rare application of TwIqbal, we don’t see why it would not apply in other jurisdictions.  The district court tied the plaintiff’s burden to the Kentucky Product Liability Act, but that statute is not unique on causation.  Every state requires proof of causation in product liability actions, particularly those sounding in tort. 

There was another problem with this plaintiff’s pleadings.  The plaintiff dutifully alleged that her brace broke and malfunctioned and that it was “unreasonably dangerous” and defective in design and manufacturing.  She did not, however, allege how the device was defective.  Id. at *17-*18.  She alleged that she was using the device properly when it malfunctioned and bent.  But merely parroting the word “defective” does not state a claim, and this is just one of multiple cases holding that a device is not defective just because it failed.  All medical devices have risks. 

The plaintiff therefore alleged neither a product defect nor causation, which led the district court to dismiss her complaint and deny leave further to amend (she already had one opportunity to amend).  This Kentucky plaintiff may be singing the blues (or at least bluegrass), but this seems like the correct result. 

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When it comes to legal developments in the nation to our north, we are happy to defer to actual Canadian lawyers. Here, we present a guest post from Ashley Paterson and Gina Azer of Bennett Jones. This is Ashley’s second guest post, which means she is close to qualifying for the coveted FOB (friend of the Blog) designation. As always, our guest posters are 100% responsible for their content, and thus entitled to 100% of the credit or blame, as it may be. 

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The talc saga continues in the Great White North. A Canadian court (in British Columbia) accepted a plaintiff’s second attempt to show a workable causal link methodology between talc powder and ovarian cancer and certified a national class action in Ennis v. Johnson & Johnson, 2024 BCSC 1759.

For those unfamiliar with the Canadian class action regime, like in the U.S., proposed class actions must be certified in order to proceed. In British Columbia, the test for certification is as follows (and is relatively similar throughout Canada):

the court must certify a proceeding as a class proceeding if all of the following requirements are met:

a. the pleading discloses a cause of action;

b. there is an identifiable class of two or more persons;

c. the claims of the class members raise common issues, whether or not those common issues predominate over issues affecting only individual members;

d. a class proceeding would be the preferable procedure for the fair and efficient resolution of the common issues; and

e. there is a representative plaintiff who: (i) would fairly and adequately represent the interests of the class; (ii) has produced a plan for the proceeding that sets out a workable method of advancing the proceeding on behalf of the class and of notifying class members of the proceeding; and (iii) does not have, on the common issues, an interest that is in conflict with the interests of other class members.

First, a little background on the Ennis v. Johnson & Johnson action. The plaintiff first moved unsuccessfully to have the class action certified in February 2020. In November 2020, the British Columbia court released its decision [2020 BCSC 1746] refusing to certify the action due to insufficiency of the evidence linking the use of talc powder to ovarian cancer. The plaintiff had attempted to link talc powder use to all ovarian cancers. In their response, the defendants opposed certification in part on the basis that there was insufficient evidence of a common biological or causal mechanism for either epithelial or non-epithelial ovarian cancers. Though this point could have been fatal to the plaintiff’s certification application at the time, the court granted leave to the plaintiff to obtain more evidence and redefine the class definition accordingly.

With leave, the plaintiff returned to court years later with more evidence and an amended claim. In the plaintiff’s amended claim, the putative class was narrowed to all Canadian persons (excluding Quebec) that used talc powder and subsequently developed epithelial ovarian cancer. The amendment meant that the evidence at the return of the certification application would need to show a basis in fact for a causal link between exposure to talc powder and epithelial ovarian cancer. The court held that the plaintiff’s reliance on the new evidence of Dr. Cramer, an epidemiologist and gynecologist from Harvard (see here for where he got knocked out in similar U.S. litigation), was sufficient to bring them across the certification line. Of course, the merit of the evidence itself is not tested at the certification stage. And here, it was enough to meet, in the court’s words, “the very low bar of demonstrating a methodology that suggests Baby Powder is a contributing cause to the development of epithelial ovarian cancer in some individuals.”

In response to the evidence of Dr. Cramer, the defendants pointed to the evidence of their expert which indicated that five different types of epithelial ovarian cancers were at issue, all with different causal mechanisms, some of which are independent of talc powder. The defendants also argued that Dr. Cramer’s proposed methodology would not advance the class members’ claims since individual issues, such as personal histories, circumstances, histological factors, and characteristics would dominate resolution of the common issues. But the court refused to weigh the conflicting expert evidence at the certification stage and instructed the plaintiff to rephrase the common question to exclude epithelial ovarian cancers that are not linked to talc. As a result, putative class members will be required to determine whether they were diagnosed with a non-talc related epithelial ovarian cancer in order to know whether they are class members.

The defense further challenged Dr. Cramer’s methodology by noting that it failed to provide “some evidence” (another way of saying “some basis in fact,” the evidentiary standard for the certification criteria other than a pleaded cause of action) of a causal link between talc and any epithelial ovarian cancer and failed to conclude that one biological methodology can be linked to all types of epithelial cancers. The defendants highlighted that Dr. Cramer’s methodology failed to use the benchmark odds ratio of 2.0 to show the alleged causal link. Dr. Cramer acknowledged this deficiency and admitted to formulating his own odds ratio after accounting for a wide range of individual factors in his research study subjects. The defendants responded that a methodology reliant on individual assessments at each instance could not be applicable to the entire class. However, notwithstanding Dr. Cramer’s 1.29 odds ratio and his consideration of a multitude of individual factors, the court accepted his methodology because, in theory, it could establish a reliable measure of the general association between the use of talc powder and epithelial ovarian cancers. In other words, the combination of the odds ratio with other factors was enough to meet the standard for a workable methodology for class certification purposes.

With respect to the fourth branch of the certification test, whether a class proceeding is the preferable procedure to advance the action, the defendants argued that individual class members would need to show how the risk materialized in the context of their specific cancer, and that Dr. Cramer himself gave evidence that he would need to consider each individual class member’s medical history to show specific causation. Despite this, the court held that Dr. Cramer’s evidence showed the required general causal relationship and answering the question of whether talc powder causes epithelial ovarian cancer would advance the claims of all class members, whether affirmatively or negatively.

A significant moving piece in the background of all this was that unlike the FDA, Health Canada published its screening assessment of talc under the Chemicals Management Plan, finding that the latest scientific evidence supports that “inhaling loose talc powders and using certain products containing talc in the female genital area may be harmful to human health.”

To conclude, certification of this case (in particular, on the second try) reinforces the need for plaintiffs to show a plausible and credible methodology for establishing general causation on a class-wide basis. In this case, evidence of such a methodology was apparently enough to outweigh the clear evidence (from the plaintiff’s expert!) that individualized assessments would be required. The decision also reinforces the challenges faced by defendants in responding to such evidence without creating the dreaded “battle of the experts” that often leads Canadian courts to certify cases since conflicting expert evidence is not to be addressed at the certification stage.

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United States v. Cal. STEM Cell Treatment Cntr., Inc., 2024 U.S. App. LEXIS 24525 (9th Cir. 2024), is not, strictly speaking, a product liability case at all.  But it hits several of our personal sweet spots.  For example, it is from the Ninth Circuit, where we clerked for Judge Norris.  It involves another of our old employers, the United States Attorney’s Office in the Central District of California.  So the Cal. STEM case takes us on a trip down memory lane.  Further, the case turns on FDA enforcement of its regulations and whether the product at issue constitutes a drug.  We occasionally bump into that issue in our current work for paying clients.  The cherry on top is that the official opinion of the Ninth Circuit breaks down into different portions authored by different judges.  Plus, there are a lot of weird acronyms.  What’s not to love about this case?

The defendant in the case purported to treat folks with a stem cell slurry mixture called stromal vascular fraction (SVF). SVF is a liquefied mixture of cells and cell debris derived from fat tissue. Under a microscope, it looks a bit like honeycomb. But that is where the resemblance ends.  SVF does not seem in the least bit sweet or yummy. The SVF was created by extracting (via liposuction) fat tissue from a patient and breaking it down (centrifuge, etc.) to concentrate the portion containing stem cells. The resulting SVF was then administered to the patient.  For example, the defendant injected SVF directly into a patient’s knee to treat osteoarthritis.  This sort of procedure goes by the rubric of regenerative medicine. As you might imagine, such treatment is hardly free from controversy with respect to safety and efficacy.

The FDA filed a civil lawsuit against the defendant, alleging that the defendant’s SVF treatments were human cells, tissues, and cellular based products (HCT/Ps).  Such products, according to the FDA, constituted drugs that had not been approved, were improperly manufactured, and were inadequately labeled.  The FDA sought injunctive relief. The same buzzwords that plaintiffs in product liability cases now seem to find irresistible — adulteration and misbranding — reared their ugly heads in the Cal. STEM case.  After a bench trial, the district judge found for the defendant, concluding that the SVF treatments were not drugs and, even if they were, the “same surgical procedure” (SSP) regulatory exception applied because the defendant removed HCT/Ps from a patient and then implants them into the same patient during the same surgical procedure. That was a dream result for the defendant.   

But the Ninth Circuit is where defendant dreams go to die, and that is what happened here. The appellate court held that under the plain words of the regulations, the SVF treatment was a drug. The definition of “drugs” is quite broad: “articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease.” The defendant did not really dispute that a literal reading of such broad language put them in the soup (or slurry?), but argued that such breadth could lead to absurd results. That may be so, said the Ninth Circuit, but there are plenty of cases applying the broad definition of “drugs,” and there was nothing particularly absurd about including SVF treatments as drugs.  Even if SVF was a biologic, a product can be both a drug and a biologic under the regulation. 

In a last effort to fend off the FDA’s interpretation of SVF as a drug, the defendant invoked the major questions doctrine, which, when applicable, requires an agency to point to clear congressional authorization for the power claimed by the agency.  But the Ninth Circuit held that the major question doctrine was inapplicable here, because this case did not present a matter of extreme economic and political significance, nor did it represent a sudden assertion or transformative expansion of agency authority.  In any event, some recent legislation suggests that Congress does, indeed, presuppose that FDA regulates stem cell therapies.

The Ninth Circuit held that the SSP exception did not apply because the removed HCT/P is the fat tissue, not the cells implanted for implantation.  They are not “the same.” There was a lot of processing in between the extraction and the injection. The fat tissue was significantly altered. Believe it or not, the court’s interpretation of sameness – or in this case, not sameness – revolves around the word “such.”  The regulation’s exception includes the word “such” when discussing the same surgery scenario.  Looking to Black’s Law Dictionary, the court reasoned that “such” refers back to something already mentioned – an antecedent.  What was removed was fat tissue.  What was later injected was something different.  The court concluded that “a surgical procedure cannot qualify for the SSP exception if it involves more than minimal manipulation of HCT/Ps.” Such was the case here. Goodbye exception.

The judge who wrote the court’s opinion holding that SVF was a drug wrote a concurrence, on different grounds, as to why the SSP exception did not apply.  After examining the text, structure, purpose, and history of the regulation, she would hold that the SSP exception was ambiguous.  Faced with such ambiguity, the court owed Auer deference to the FDA’s reasonable interpretation of the SSP exception as not applying to the defendant’s treatments.  (For those of you who have imperfect recollection of your old Administrative Law class, Auer deference applies when an agency interprets its regulations, whereas the recently overruled Chevron deference applied when an agency interpreted statutes.) 

The case was reversed and remanded for further proceedings. 

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Plaintiffs naming local sales representatives—or doctors, or pharmacies, or distributors, or retailers—as defendants to try to destroy diversity and avoid federal court is nothing new.  Unfortunately, defendants bear a “heavy burden” proving fraudulently joinder.  In fact, our last post on the topic was in February 2023, demonstrating that successes on this issue are few and far between.  But sometimes plaintiffs simply reach too far, as in the case of Porta v. Exactech, Inc., 2024 WL 4276490 (E.D.N.Y. Sep. 24, 2024).           

To establish fraudulent joinder, a defendant must show that “there is no possibility” that plaintiff can state a claim against the non-diverse defendant.  Even a slim chance of recovery defeats fraudulent joinder; but where a defendant can meet its burden, the non-diverse defendant is dismissed and remand is denied.  Id. at *3. 

Plaintiff in Porta underwent knee replacement surgery in 2020.  The implanted device was later recalled requiring plaintiff to undergo revision surgery.   Id. at *1.  Plaintiff filed suit against the manufacturer of the device and several of its corporate affiliates alleging products liability in violation of the Connecticut Product Liability Act (“CPLA”).  All products liability claims in Connecticut are subsumed under the CPLA—negligence, strict liability, and warranty.  To be liable under the CPLA, a defendant must be a “product seller,” defined as:

any person or entity, including a manufacturer, wholesaler, distributor or retailer who is engaged in the business of selling such products whether the sale is for resale or for use or consumption.      

Id. at *4 (quoting Conn. Gen. Stat. § 52-572m(a)). 

Plaintiff also brought CPLA products liability claims against one of the manufacturer’s sales representatives alleging that representatives are product sellers because they market and advertise to physicians and hospitals and that “sales reps such as [defendant]” are present during surgeries involving the knee implant system.  Id. at *2 (emphasis added). 

Connecticut has not directly addressed the question of whether medical device sales representatives qualify as product sellers under the CPLA.  But looking at analogous cases, the court found the critical factor in determining whether a defendant was a product seller was the extent of the defendant’s “involvement in the stream of commerce that brought the particular product to the particular plaintiff at issue.”  Id. at *4 (emphasis added).   

Here, plaintiff’s allegations were not sufficiently particularized to show that he could recover against the named sales representative.  While plaintiff alleged generally that the sales representative defendant visited doctors’ offices and hospitals in Connecticut and possibly New York City (where plaintiff had his surgery), he did not allege that the rep visited his surgeon.  Also, while it is correct that sales reps sometimes attend surgeries, plaintiff did not allege that the named rep attended his surgery, or any other surgery performed by his implanting surgeon.   Id. at *5-6.  So, even resolving all factual and legal issues in plaintiff’s favor, the sales rep “still has no real connection to this controversy.”  Id. at *6 (emphasis in original).  It is irrelevant to this case that the sales rep may have convinced another surgeon in some other hospital to implant the medical device when he did not do so with respect to plaintiff’s surgeon or plaintiff’s device.

Completely missing from plaintiff’s allegations are any showing the sales rep’s involvement in the stream of commerce for plaintiff’s particular knee replacement.  Absent that connection, there is “no possibility” that Connecticut would consider the rep a product seller and therefore no possibility that plaintiff can recover against him under the CPLA.  Id.  A contrary ruling would subject every sales representative to liability regardless of their connection to plaintiff’s injuries.  The court “was satisfied there is no possibility a Connecticut court would adopt this reading of the CPLA.”  Id. at *7. 

Because the sales rep was fraudulently joined, he was dismissed and plaintiff’s motion to remand based on a lack of diversity was denied.  But plaintiff did advance one additional argument.  When a defendant removes a case from state court, the remaining properly joined and served defendants must consent to the removal.  Here, the case was removed by the manufacturer who received consent from the other corporate defendants.  The day before consenting, those other defendants had told plaintiff that they would “not seek removal.” Plaintiff argued that was a waiver that prevented them from consenting and essentially nullified the removal.  The court did not agree.  Even if those defendants had waived their right to remove, they did not speak for the manufacturer nor did they promise not to consent to another defendant’s removal.  The consent was freely given and the removal was proper.  Id. at *8-9. 

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Anybody who has litigated a prescription medical product liability case knows about the learned intermediary rule, which is now followed in all fifty states.  Just as prescription medical product warnings are routed through prescribing physicians, so necessarily is the causation aspect of such warnings.  The details vary from state to state, but in all learned intermediary cases, correcting an allegedly inadequate warning must cause the learned intermediary physician to do something differently, and that “something” must prevent the plaintiff’s claimed injury.

At the same time, the Supreme Court’s TwIqbal decisions require that plaintiffs plead facts to support the elements of their causes of action.  From the defense perspective, that means that complaints against our clients should be required to plead (at minimum): (1) the identity of the relevant prescriber, (2) what that prescriber would have done differently with a “better” warning, and (3) how that difference would have prevented the claimed harm.  We don’t ask for a lot, but at least one fact supporting these essential causal elements should certainly be mandatory.

Continue Reading Using TwIqbal To Enforce Warning Causation in Learned Intermediary Cases
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We do not mean the German Renaissance painter and thinker Albrecht Dürer.  His work, while a poor cousin to that of some famous contemporaries to the south, remains as is.  We mean the Supreme Court’s decision in Merck Sharp & Dohme Corp. v. Albrecht, 587 U.S. 299 (2019), which has been touted for the last five years as revitalizing preemption as a defense to failure to warn claims for branded prescription drugs.  Albrecht stemmed from the Fosamax MDL created in 2011 to address plaintiffs’ pretty obviously preempted causes of action about the risk of atypical femoral fractures (“AFFs”) with a prescription osteoporosis medication.  (We have written so many posts on preemption and other issues in the litigation that the summary below is necessarily incomplete.  Feel free to click on the hyperlinks if you need a deeper dive.)  After a number of prior preemption decisions—see here, here, and here—in 2017, the MDL court knocked out all of the design claims and the warning claims for cases claiming injury before September 14, 2010, and granted summary judgment to the branded manufacturer defendant in hundreds of cases.  On the warnings part of it, the compelling regulatory record was enough to overcome the novel and fuzzy “clear evidence” standard articulated in Levine.  Later that year, in In re Fosamax (Alendronate Sodium) Prods. Liab. Litig.852 F.3d 268 (3d Cir. 2017) (“Fosamax I”), the Third Circuit reversed the warnings part in a quite sloppy decision that was most notable for making preemption a jury question.  See here for our detailed exposition on the decision and here for its place on our annual worst list.

In May 2019, the Supreme Court reversed the reversal and remanded the cases back to the MDL court.    As only the second Supreme Court decision on preemption specifically in the branded drug context, Albrecht was definitely notable. For us, it had the unusual distinction of making both our best and worst lists for the year.  The latter inclusion was largely because of Albrecht’s failure to undo the many mistakes in Levine, including the overemphasis on the actually limited availability of the Changes Being Effected (“CBE”) process for labeling changes that FDA can undo within weeks.  Indeed, Albrecht’s discussion of the role of CBE gave something to each side without providing much actual guidance.  587 U.S. at 315 (“Of course, the FDA reviews CBE submissions and can reject label changes even after the manufacturer has made them. See §§314.70(c)(6), (7). And manufacturers cannot propose a change that is not based on reasonable evidence. §314.70(c)(6)(iii)(A). But in the interim, the CBE regulation permits changes, so a drug manufacturer will not ordinarily be able to show that there is an actual conflict between state and federal law such that it was impossible to comply with both.”).

Albrecht did undo, however, the Third Circuit’s determination that preemption is always a question of fact:

The complexity of the preceding discussion of the law helps to illustrate why we answer this question by concluding that the question is a legal one for the judge, not a jury. The question often involves the use of legal skills to determine whether agency disapproval fits facts that are not in dispute.

Id. at 316.  It suggested that courts could “resolve subsidiary factual disputes that are part and parcel of the broader legal question” in deciding summary judgment.  Id.at 317 (internal citation omitted).  The standard to be applied could have been clearer had the Court jettisoned “clear evidence” completely:

We do not further define Wyeth’s use of the words “clear evidence” in terms of evidentiary standards, such as “preponderance of the evidence” or “clear and convincing evidence” and so forth, because . . . courts should treat the critical question not as a matter of fact for a jury but as a matter of law for the judge to decide. And where that is so, the judge must simply ask himself or herself whether the relevant federal and state laws “irreconcilably conflic[t].”

Id. at 315.  Given this guidance and the history of the case, it seemed quite likely that the MDL court would again find preemption of the pre-September 14, 2010, warnings claims on remand. After another two years, that is what happened.  Last week, however, a completely different panel of the Third Circuit reversed again, in a decision that that reads a bit like a judicial thumbing of the nose at the Supreme Court.  In re Fosamax (Alendronate Sodium) Prods. Liab. Litig., No. 22-3412, – F.4th –, 2024 WL 4247311 (3d Cir. Sept. 20, 2024) (“Fosamax II”).  Pending a reversal by the Third Circuit sitting en banc or by the Supreme Court, where does that leave the caselaw on preemption of warnings claims in cases like this?

Before we tackle that weighty question, please forgive us two detours.  First, in these days of highly partisan politics, where many judicial decisions can be predicted by which presidents appointed the judges deciding the issue, preemption of product liability claims defies easy categorization.  Four district judges have been in charge of the Fosamax MDL, two appointed by a president of each major party.  The third, appointed by the second President Bush, granted summary judgment on both occasions discussed above.  The first panel to reverse her had two circuit judges appointed by Democrats and one by a Republican.  The second has two circuit judges appointed by Republicans and one by a Democrats.  Albrecht was a unanimous decision, authored by a justice appointed by a Democrat on a Court with five justices appointed by Republicans.  Even fierce advocates for states’ rights and limiting federal authority joined in a pro-preemption decision.  Compare that to 2008 when three of the same nine had joined in a decidedly anti-preemption decision in Levine.  (Two of the nine had been in the minority in Levine.)  Not all issues break down along party or easy doctrinal lines.  Resistance to the preemption of product liability claims sure does not.

Second, a variant of proximate cause is inherent in the conflict preemption focus on what FDA would do if presented with a proposed labeling change, as seen in Albrecht and many cases since Levine.  If the defendant cannot independently take an action that will change the drug’s label in a way that will affect the prescription to a particular plaintiff claiming injury from the drug, then surely there can be no relationship between the defendant’s alleged failure to warn adequately and the plaintiff’s alleged injury.  Proximate cause in the context of state failure to warn claims should narrow the focus in the case from minor and tangential issues to risk information that could actually change the decision to prescribe if set out in the label in a realistic way.  If we assume that a physician’s prescription is based on the determination that it is in the plaintiff’s best interest to take a prescription drug for a diagnosed condition or need, the understanding of available options, and the choice of a drug she believes is safe and effective for that condition and appropriate for that patient, then there has to be a pretty high bar for which theoretical labeling changes are relevant to plaintiff’s state law warnings claim, having nothing to do with any consideration of preemption.  To change the risk-benefit decision, there would need to be a material risk of a complication not in the label, a materially greater risk of an important complication already in the label, or something like a contraindication or precaution applicable to the plaintiff as a member of a subgroup of potential drug recipients (e.g., an extra risk in people with a certain blood test result).  Again ignoring preemption, the information that arguably should have led to a labeling change would also have to have been available to the manufacturer before the plaintiff was prescribed the drug or before some critical duration threshold was crossed.  That is because state laws on failure to warn always require proximate cause and never set technical requirements for how a drug should be labeled (divorced from claimed injury and proximate cause) or how FDA should be informed about risk information and possible attendant labeling changes.  Remember, implied preemption is derived from the Supremacy Clause, so what state law requires independent of federal law (e.g., the FDCA) matters.

Fosamax II got it wrong again in part because it misunderstood this dynamic.  In the second sentence of the decision, the panel stated that plaintiffs accused the defendant “of failing to comply with drug labeling requirements under state law.”  2024 WL 4247311, *1.  Nope.  There are no “drug labeling requirements under state law” and the decision did not cite any state laws at all.  Although the term “state law” is used repeatedly, the only reference to specific states in Fosamax II comes from a list of amici.  The actual allegation of the plaintiffs was that each was injured because his or her prescribing physician was not adequately warned about the risk of AFF when prescribing the drug to the plaintiff.  The “because” part of the preceding statement brings in the impact on the prescriber’s decisions, as well as medical causation between the resultant use and the alleged injury.  If state law liability is predicated on failing to take an action to deliver an adequate warning, then the proper conflict preemption inquiry is whether defendant could have taken an action that would have mattered to the plaintiff’s alleged injury while still complying with very real federal law requirements for drug labeling.

This was far from the only basic mistake in Fosamax II.  For instance, it declares that Mensing was irrelevant to the issues on appeal because it involved a generic drug.  Id. at n.34.  Its resulting failure to consider the independence principle—something discussed in the Thomas concurrence in Albrecht that otherwise features prominently in Fosamax II—is pretty sloppy.  Predictably, Fosamax II repeated the reliance in Fosamax I on the inapplicable presumption against preemption, even though there was no hint of such a presumption in Albrecht.  Whereas the prior decision had cited only Levine on the purported presumption, which in turn relied solely on field preemption cases, Fosamax II relied exclusively on Bates v. Dow Agrosciences LLC, 544 U.S. 431, 449 (2005), a field preemption case that relied on Silkwood v. Kerr-McGee Corp., 464 U.S. 238, 251 (1984), another field preemption case.  The Supreme Court’s decisions in Geier v. American Honda Motor Co., 529 U.S. 861, 872-873 (2000), which rejected a presumption against implied preemption and any “special burden” on the implied preemption defense, or Puerto Rico v. Franklin-California Tax-Free Trust, 579 U.S. 115 (2016), which rejected a presumption against express preemption.  By this point, courts should understand that the presumption against preemption only applies to field preemption.  We could go on with basic problems.  Instead, we will note that the procedural history included the section heading “The Supreme Court Vacates our Fosamax I Decision.”  2024 WL 4247311, *11 (abnormal capitalization in original).  Thus, Fosamax II reads more like an attempt to justify Fosamax I than to follow Albrecht in ruling on the current appeal.

Fosamax II first had to decide the standard of review to apply in evaluating the MDL court’s decision finding preemption again.  It concluded that it would apply a “clearly erroneous” standard to factual findings and a de novo standard for legal issues.  Id. at *16.  As far as we can tell, however, Fosamax II did not always accord deference to the MDL court’s factual findings and, instead, substituted its own analysis of the facts on a critical issue.  While Fosamax II did not disturb the findings that Merck did not withhold material information from FDA or provide misleading information, it disturbed the finding that FDA would not have accepted the change to the label that plaintiffs urged.  Without doing our own de novo interpretation of the facts, which we have discussed in prior posts, it is clear the court overread the phrase from Albrecht about FDA not accepting “adding any and all warnings that would satisfy state law.”  As we said above, the state law warning issue is never just a question of adding or changing a word in the label; the warning change has to convert the warning from inadequate to adequate in a way that would make a prescribing physician no longer prescribe the drug to her patient.  In a situation where FDA rejects the proposed addition of language to the Precautions section, states information would be appropriate for the postmarketing experience portion of the Adverse Reactions section instead, and then requires much more substantial class labeling changes a month later, it is hard to imagine any interpretation that would support FDA previously accepting the sort of material labeling change that state law would have required.  A misplaced presumption and imagined ambiguity in how FDA wrote its letter rejecting the proposed change should not change that.

Instead, Fosamax II interpreted the record alluded to above as supporting a mere possibility of a conflict rather than a mere possibility that some immaterial change to the label that would not have changed any physician’s prescribing decisions could have been accepted.  As it explained in a meaty footnote,

As soon as one asks what the FDA would or would not do, one is confronted with figuring out just how much proof – regardless of whether a judge is making the assessment instead of a jury – is enough to persuade the decisionmaker of what that hypothetical future looks like. Thus, while the opinion in Albrecht declined to “further define Wyeth’s use of the words ‘clear evidence’ in terms of evidentiary standards, such as ‘preponderance of the evidence’ or ‘clear and convincing evidence’ and so forth,” id. at 315, it still asks courts to hold drug manufacturers to some standard of proof. It is not easy to get away from Wyeth’s statement, not disclaimed in Albrecht, that “clear evidence” is required. Wyeth, 555 U.S. at 571 (quoted in Albrecht, 587 U.S. at 313). As discussed, Albrecht defines “clear evidence” as “evidence that shows the court that the drug manufacturer fully informed the FDA of the justifications for the warning required by state law and that the FDA, in turn, informed the drug manufacturer that the FDA would not approve a change to the drug’s label to include that warning.” 587 U.S. at 303. That is the standard we are endeavoring to apply here.

Id. at n.28.  Remember that, in Fosamax I, when preemption was supposed to be a question of fact, the same court had held “state-law failure-to-warn claim will only be preempted if a jury concludes it is highly probable that the FDA would not have approved a label change.”  In addition, Fosamax II’s conclusion that Albrecht essentially blessed a “clear and convincing evidence” standard when it said that standard is irrelevant to the legal determination of “whether the relevant federal and state laws ‘irreconcilably conflic[t]’” is a stretch. 

So is the court’s distillation of why it found the warnings claims not preempted:

To support the conclusion that there was pre-emption, the FDA, acting with the force of law, must have clearly rejected Merck’s label in a manner that made it evident that no label about atypical femoral fractures would have been appropriate at the time of Merck’s Prior Approval Supplement. That did not happen here. For that reason, Merck has not shown that the FDA would have rejected any and all labels that would have satisfied state law.

Id. at *26.  In the more than one hundred collective years of experience of the Blog authors in defending product liability claims against prescription drug companies, we have never heard a plaintiff contend that a package insert would be adequate as long as it had some mention of the plaintiff’s alleged injury, no matter how placed or phrased.  State law of the sort that Fosamax II does not discuss requires an adequate warning, not just any old mention. The inability for the drug manufacturer to rule out any possibility of any labeling change that mentions the injury at issue should not rule out conflict preemption.  Indeed, at the end of the paragraph in Albrecht where Fosamax II got the “any and all warnings . . . that would satisfy state law” language—not “any and all labels” as misquoted above—the Supreme Court clarified that preemption of a warnings claim required a finding that “the FDA, in turn, informed the drug manufacturer that the FDA would not approve changing the drug’s label to include that warning,” specifically referring to “the warning required by state law.”  587 U.S. at 314 (emphasis added).  As such, Fosamax II does not square with Albrecht, which is certainly controlling law.

With that, we return to our initial question.  We expect that, until reversed by an en banc panel or the Supreme Court, in cases within the Third Circuit, winning warnings claims against the manufacturers of branded prescription drugs on conflict preemption will be harder.  The regulatory record in most litigation will not be as favorable to conflict preemption as it is with Fosamax.  However, it should be the case that, by wriggling around Albrecht, many plaintiffs will force themselves into having to prove proximate cause for failure to warn based on a proposed labeling change that prescribers will find inconsequential.  Manufacturers prefer broad strokes of preemption, of course.  Outside of the Third Circuit, it is hard to imagine that the ill-conceived Fosamax II will have much influence given that it basically tried to overrule the Supreme Court in Albrecht.  Inherently anti-preemption judges will point to snippets of it to justify decisions not to preempt warnings claims they would have reached anyway.  However, there are many decisions of circuit courts before and after Albrecht that find conflict preemption in branded prescription drug cases where the regulatory record is probably weaker than with Fosamax.  So, much like a labeling change pursuant to a CBE, the effect of Fosamax II may be only temporary and limited in scope.

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If you’ve been practicing in mass torts for any length of time, you’ve probably dealt with MSP Recovery.  We’ve posted about this Medicare Secondary Payor Troll many times (most recently here).  One of MSP’s typical litigation approaches is to claim it has assignments of rights from certain Medicare Advantage Plans and then assert claims (usually in connection with existing MDLs) for reimbursement from drug and device manufacturers.  Today’s decision, MSP Recovery Claims Series, LLC v. Sanofi-Aventis U.S., LLC, 2024 WL 4100379 (D.N.J. Sept. 6, 2024), is a little different, in that MSP alleged that the defendants engaged in a pricing scheme to unlawfully raise the price of insulin. MSP sought recovery based on alleged assignments from 57 Medicare Advantage Plans that they contended made overpayments on behalf of the plans’ beneficiaries.  The decision addressed a discovery dispute where MSP refused to produce documents relating to (1) litigation funding, and (2) marketing materials aimed at its potential assignors. The Court affirmed a special master’s decision finding in favor of the defendants on both items.

As to litigation funding, plaintiffs initially took the position that they did not have to produce information in response to the District of New Jersey’s local rule requiring disclosure of certain litigation funding information (we’ve blogged about that local rule here). After losing a round with the special master, plaintiffs filed a certification stating that they had not received any litigation funding on a non-recourse basis. Despite that representation, the defendants argued that they were entitled to discovery on the topic because the websites of three entities involved with plaintiffs clearly indicated the entities’ core businesses were litigation funding and litigation finance.  Although plaintiffs asserted the entities were not litigation funders—despite all appearances otherwise—defendants sought to test that representation with discovery. The Court agreed with the defendants:

[Funding documents are] relevant in determining the real party in interest for this litigation and likewise are relevant to Defendants’ defenses of champerty and maintenance. Defendants have identified documents suggesting three entities—Virage Capital Management, RD Legal Finance, and Brickell Key Investments—have intimate involvement in Plaintiffs’ decision-making, and those entities’ websites indicate they are involved in litigation funding and/or litigation financing.

Id. at *6.  

Plaintiffs argued that their certification of no non-recourse funding should have shut down any discovery into litigation funding based on a decision in the Valsartan litigation holding that defendants must demonstrate good cause for litigation funding discovery—a decision that pre-dated the adoption of Local Rule 7.1.1.  In re: Valsartan NDMA Contamination Litigation, 405 F. Supp. 3d 612, 615 (D.N.J. 2019). But the Court noted that the Valsartan decision did not make litigation funding discovery “off limits.” Instead, the Valsartan court held that such discovery would be permissible if “good cause exists to show the discovery is relevant to claims and defenses in the case,” such as “where there is a sufficient showing that a non-party is making ultimate litigation or settlement decisions, the interests of plaintiffs or the class are sacrificed or not being protected, or conflicts of interest exist.” MSP Recovery Claims Series, 2024 WL 4100379 at *6.  The Court found that showing had been met:

Here, the Court finds good cause exists for Defendants to conduct limited discovery into litigation funding, particularly as it relates to the entities Virage Capital Management, RD Legal Finance, and/or Brickell Key Investments, to the extent any such documents exist, because Defendants have identified documents suggesting that these three entities have intimate involvement in Plaintiffs’ decision-making. Tellingly, Plaintiffs have not argued otherwise, nor have they argued that no such litigation funding documents exist.

Id.

With respect to marketing materials targeting potential assignors—which would seem to be integral to MSP’s business model and would expose how plaintiffs obtained the assignments that formed the bases of their claims—such documents would have been responsive to the defendants’ discovery requests but were absent from the productions.  MSP’s primary objections to production of these materials were that they were not relevant or captured by the agreed upon TAR (technology assisted review) ESI protocol. The Court rejected these arguments out of hand, finding that the materials were relevant and that the TAR protocol did not absolve the plaintiffs from producing responsive documents. 

The Court issued its decision granting the funding and marketing materials discovery from MSP on September 6, and the parties entered a stipulation of dismissal with prejudice of all claims on September 13. The defendants had a motion for sanctions pending, so it’s likely there were other factors impacting the dismissal. But the timing of the dismissal following the Court’s order requiring the production of marketing and litigation funding documentation is certainly worth noting.

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United States ex rel. Powell v. Medtronic, Inc., 2024 U.S. Dist. LEXIS 165116 (S.D.N.Y. Sept. 12, 2024), is an interesting defense win in a False Claims Act (FCA) case involving alleged off-label use – reuse of single use devices (actually a component of a device – and that ends up mattering). Much of the Powell decision (about pleading of false claims) is FCA specific and thus is more product liability adjacent rather than directly in our wheelhouse. But the sections of the opinion dismissing the case for failure to state a claim address issues commonly arising with off-label use.  

Powell was the relator (hence the “ex rel.”) in the case.  (Do not be thrown or overly impressed by the inclusion of “United States” in the case caption. In this case, the United States declined to intervene. We defense hacks typically interpret that to signal a certain fragility in the case.) The relator described herself as a “diabetes educator” and “clinician”. She underwent the defendant’s training program with respect to a glucose monitoring system. While that glucose monitoring system was designed for multiple patient use, one component of the system was an inserter device designed for single patient use.  The relator alleged that the defendant improperly encouraged multiple patient use of the inserter device.  The relator contended that such multiple patient use of the inserter device exposed patients “to an unnecessary risk of infection.”  Thus, so the argument goes, the reuse rendered the device “adulterated,” rendered the associated care not medically “reasonable and necessary” and – here we get to the literal payoff of this qui tam lawsuit – rendered usage of the glucose monitoring system “not reimbursable by federal healthcare programs.”  Accordingly, the relator asserted that the defendant “knowingly caused Medicare, and other federal healthcare programs, to pay millions of dollars in false claims” for the glucose monitoring system. 

The defendant moved to dismiss the Second Amended Complaint (SAC).  The essence of the motion was that the SAC failed to allege that (1) reuse of the inserters was not a falsehood material to government payment decisions, and (2) the defendant acted knowingly or with reckless disregard. 

As you might imagine, falsity is pretty important to a False Claims Act case. Here, the SAC did not adequately allege falsity because submitted claims for payment were not solely for the device but for the general costs of related treatment. That treatment was, in fact, provided. So where is the falsehood? At this point, the relator fell back on the “implied false certification theory,” which hinged on the alleged increased health risk of multiple use of the inserter, as well as the “adulterated” status of the device. 

The court rejected the implied false certification theory   First, merely because reuse poses an infection “risk,” that does not mean that the off-label use fails Medicare’s “reasonable and necessary” standard for reimbursement. A mere safety risk does not add up to a false claim.  That harm can occur does not demonstrate that a medical device used off-label actually caused such harm. The relator’s allegation of harm turns out to be too speculative to be “authoritative evidence” that the product is unsafe or ineffective.  No actual harm was alleged, nor any FDA enforcement action, nor adverse event reports, nor scientific literature supporting the relator’s allegation of harm. 

Second, there was no basis for considering the device adulterated.  The defendant’s alleged off-label promotion did not alter the “commodity itself,” but only addressed how it could be used by physicians.  The Powell court looked at the FDA’s definition of adulteration and found that it pertained to the product, not its potential misuse.  Moreover, the Powell court doubted that technical “adulteration” by itself could create a false claim.  Bare FDCA violations are not actionable under the FCA.  

So much for falsity. 

In addition, the Powell qui tam claims flunked the requirement of materiality. The relator failed to allege facts that could establish physician off-label use as material to the government’s payment of claims.  The relator did not allege that (1) “the government’s decision to pay was expressly conditioned on single-patient use” of the inserter, (2) the government routinely refused to pay claims in such instances, or (3) single-patient use of the inserter went to the “essence” of the providers’ “bargain” with government payors.  These failures made the SAC’s materiality claims “fatally deficient.”  

Materiality is a standard you probably first encountered in securities fraud cases.  But it does crop up in other areas, such as FCA cases.  Materiality is a useful concept.  It means that whatever falsehoods were alleged in a lawsuit, they simply did not make any difference.  That concept is also useful in product liability or consumer fraud cases.  It is often the case that a plaintiff’s lawsuit is much ado about nothing. 

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In golf, a mulligan is when a golfer hits a second shot if they’re not satisfied with their first shot.  We’ve used the term before to refer to the second chances given to plaintiffs to re-plead their claims.  So, we decided to look up the origin of the term and found conflicting stories.  The most widely accepted story is that the term comes from David Mulligan, a Canadian golfer in the 1920s who hit a long drive off the tee that wasn’t straight, so he re-teed and hit again. His partners thought the shot deserved a better name and called it a “mulligan”.  Another theory is that the term comes from John A. “Buddy” Mulligan, a locker room attendant at Essex Fells Country Club in New Jersey in the 1930s. When he was called away from his duties to play golf, he was given an extra chance at the first tee. A third, and seemingly less likely, theory is that the term comes from “Swat Mulligan”, a fictional baseball player in the New York Evening World in the 1910s. No matter its origins, we favor it more on the golf course and less in litigation.  Nevertheless, when it comes to pleading deficiencies, plaintiffs are often given a mulligan.  In Walden v. The Cooper Companies, Inc., Case No. 24-cv-00903-JST (N.D. Cal. Sep. 9, 2024), plaintiffs were given a second attempt to tee up joinder and personal jurisdiction via an alter ego theory.

Defendants are the manufacturer of a medical product used for in vitro fertilization and its parent company.  The lawsuit alleges strict liability and negligence causes of action following the recall of three lots of product that plaintiffs allege contained insufficient magnesium required for proper embryo development.  Id. at 1-2. Each defendant moved to dismiss the case. 

The parent company alleged that it was not properly joined because the allegations of the complaint were directed to defendants collectively and did not specify the actions of each defendant or allege any particular actions taken by the parent at all.  Id. at 6.  While this type of “group pleading” is not always fatal to a complaint, it is when it does not give defendants “fair notice” of the claims against them.  Id. The only allegation specific to the parent company is that it “[o]perates through [its subsidiary].”  Id. at 7.  That single, conclusory allegation is not enough.  The parent company is not on “notice as to what it allegedly did or how its conduct—as opposed to the conduct of [the manufacturing entity]—gives rise to liability.”  Id.  Plaintiffs argued that because the companies have a parent-subsidiary relationship, the court should infer that the allegations are directed to both companies.  The court declined that invitation but decided that “group pleading” was a curable deficiency and gave plaintiffs a chance to amend their complaint.

The subsidiary company challenged whether the court had personal jurisdiction over it. Plaintiffs conceded that they could not meet the requirements for specific jurisdiction.  That is, they could not demonstrate that the lawsuit arises out of or relates to the defendant’s contacts with the forum, California.  Id. at 4, 10.  Instead, plaintiffs argued that the court had general jurisdiction over the subsidiary.  The “paradigm basis” for general jurisdiction is a corporation’s place of business or place of incorporation.  Neither of those places is California for this defendant. Id. at 8.  Plaintiffs argued this was an exceptional case because defendant had employees in California, offices in California, a mailing address in California, an agent for service of process in California, and does “substantial” business in California.  Id. at 8-9. 

First, most of those allegations were not pled in plaintiffs’ complaint and therefore, could not be considered by the court on a motion to dismiss.  Id. at 9.  Second, the fact that the defendant does business in or operates in California, among many other states, is not an “exceptional” circumstance. If that was enough, “exceptional,” would simply mean “national,” which the Supreme Court has rejected.

But the story doesn’t end there.  Plaintiffs requested permission to conduct jurisdictional discovery, which they argue will establish general jurisdiction under an alter ego theory and specific jurisdiction under an agency theory.  While its current allegations regarding the relationship between the two defendants are not enough to establish either type of jurisdiction, the court found plaintiffs made a “colorable” showing which is enough to grant them jurisdictional discovery.  Id. at 11.   Plaintiffs have approximately three months to conduct said discovery and report back to the court.  At which point, the issues will be teed up again.  And whether the origin lies with David, or Buddy, or Swat—a mulligan is one free swing only and we hope the same is true for complaints.

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