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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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In an earlier post, we discussed how the FDA, for over twenty years, from mid-1997 through mid-2019, created and operated an “alternative summary reporting (“ASR”) system for many (but not all) medical device-related adverse events.  In June 2019 the FDA “formally ended” the ASR program, “revoked all . . . exemptions,” and opened “all” ASR reporting data to the public through “legacy files.”

One quirk of ASR reports is that they could not be included on the FDA’s public “MAUDE” (Manufacturer and User Facility Device Experience) database of medical device adverse events, because the FDA required an incompatible format for ASR submissions.  Predictably, plaintiffs in any litigation where the defendant’s participation in the FDA ASR program was relevant started screaming about “coverups” despite the FDA itself receiving all the adverse report data that it wanted, in a form that made it easier for the Agency to use.  Plaintiffs doubled down on already suspect “failure to report” claims.  They’ve been claiming that, under state tort law, device manufacturers had a “duty” not only to comply with FDA reporting requirements, but to do so in the most public manner possible, even when the FDA preferred streamlined ASR reporting.

Continue Reading Cutting Through the FDA Alternative Summary Reporting Fog
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We have a couple of updates on the learned intermediary rule in California.  We reported to you three months ago on the California Supreme Court’s tweaking of the learned intermediary rule in Himes v. Somatics, and the tweaks were not good.  As we wrote back then, the Court did not make any fundamental change to the rule, which still holds that a prescription medical product manufacturer’s duty to warn runs to the prescribing physician, not the patient.  The California Supreme Court’s twist is on causation.  Under Himes, a plaintiff is not required to show in every case that a stronger warning would have altered the physician’s prescribing decision.  Instead, a plaintiff can establish causation by proving that the physician would have communicated the stronger warning to the patient and that an “objectively prudent person in the patient’s position would have thereafter declined the treatment.”  Himes v. Somatics, LLC, 16 Cal. 5th 209 (2024).

The first update is that plaintiffs are already trying to stretch the Himes opinion beyond bounds.  We recently reviewed an opposition to summary judgment stating that so long as a plaintiff can show that he or she would not have taken a prescription drug after reading a label with a stronger warning, then the question of warnings causation goes to the jury, citing Himes. 

That is completely wrong.  Again, the California Supreme Court held that a plaintiff can prove causation by showing that his or her physician would have communicated a stronger warning and that “an objectively prudent” patient would then have declined treatment.  The physician’s decisionmaking in treating patients and counseling with them about risks and benefits remains at the center of warnings causation.  Moreover, the potential impact of the physician’s warnings on a patient is judged under an objective standard.  Himes did not involve patients who themselves read drug labeling, and there is no scenario under Himes under which causation is established where the plaintiff “shows he or she would not have taken a drug.”  The California Supreme Court and the Ninth Circuit have both expressly rejected the idea that that plaintiffs can defeat summary judgment with subjective, post hoc statements that they would not have taken the drug had they received a stronger warning.  Himes, at 234.  There is really no other way, given that every patient who has actually experienced a drug side effect and is suing to recover damages will say that he or she would not have taken the drug had he or she known. 

Our second update is that a federal judge in California has now provided one of the first applications of Himes that we have seen, and the result is good.  In Canty v. Depuy Orthopaedics Inc., No. 14-cv-05407, 2024 WL 4149954 (N.D. Cal. Sept. 10, 2024), the district court granted summary judgment on the plaintiffs’ warnings-based claims because the prescribing surgeon did not rely on materials from the defendant manufacturer when he decided to treat his patient with the defendant’s orthopedic implant.  As a result, a stronger warning could not have impacted the physician’s prescribing decision, nor could it have impacted the physician’s counseling with the patient. 

This is an important outcome because the California Supreme Court left open, in a footnote, whether the warnings causation chain is broken when the physician would not have read or otherwise been alerted to a stronger warning.  Himes, at n.1.  The district court in Canty ruled that, yes, the chain is broken.  The surgeon could “not recall a single statement” or a “single document” from the defendant on which he relied, so it really did not matter what those materials said or what the plaintiffs thought they should have said.  We frankly don’t know how anyone could come to a different conclusion, since a stronger warning cannot affect someone who did not read warnings in the first place.  Id. at *4

The surgeon had been a consultant for the defendant and participated on a “surgeon’s panel.”  According to the district court, however, although this “may suggest” that the surgeon gleaned additional information about the product, a “mere scintilla of evidence” is not sufficient to overcome summary judgment.  In addition, the fact that the surgeon stopped using the particular implant at some later point in time was irrelevant because that did not establish what he would have done at the time he treated the patient had he seen a stronger warning.  Id.

We expressed our concern that the Himes standard introduces unwarranted speculation into a standard that was and should be straightforward.  The order in Canty is encouraging. 

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This post is from the non-Butler Snow side of the blog.

When you represent medical device manufacturers in product liability litigation, you will deal with allegations that a device broke or failed because of what it was made from, and you will encounter both experts and “experts” (scare quotes intended) in materials science. 

Materials science is the interdisciplinary study and analysis of product composition with application to the design, development and manufacturing of real products.  It is something we have found weirdly interesting, ever since an amazing materials scientist explained that a favorite blazer with a nubbly texture never wrinkled because it had “predetermined collapse points.”  Because of those predetermined collapse points, the garment never took on additional collapse points (aka wrinkles), no matter how badly it was squished in a suitcase. 3D printing/additive manufacturing is another area of interest to the blog, and another area where materials science matters quite significantly. 

With that short detour over , turn with us now to Hill v. Medical Device Bus. Srvcs., Inc., No. 3:21-cv-0440, 2024 U.S. Dist. LEXIS 140272, 2024 WL 3696481 (M.D. Tenn Aug. 7, 2024), a case in which the plaintiff’s materials science expert was challenged and excluded, for good reason.

The plaintiff in Hill had two hip replacement surgeries.  A 2014 surgery was for the initial implant of his total hip replacement system, and a 2015 surgery was to replace certain components, although one component, the femoral stem, was left unchanged.  Five years later, the femoral stem component fractured, and the entire hip implant construct was explanted and replaced. 

According to the court, the parties seemingly agreed that the femoral stem component broke due to a small flaw in its metal, “but they disagree[d] as to how that flaw came to exist”:

Defendant’s experts assert that a flaw was introduced to the product during surgery from the use of electrocautery… [whereas] Plaintiffs assert that a flaw was introduced to the product during the manufacturing process.

Hill, 2024 U.S. Dist. LEXIS 140272 at *4.

As our readers know, expert testimony is measured against the standard in the updated Federal Rule of Evidence 702, which emphasizes the importance of the gatekeeping function of our courts:

A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if the proponent demonstrates to the court that it is more likely than not that:

(a) the expert’s scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence or to determine a fact in issue;

(b) the testimony is based on sufficient facts or data;

(c) the testimony is the product of reliable principles and methods; and

(d) the expert’s opinion reflects a reliable application of the principles and methods to the facts of the case.

To its credit, the Hill court recognized the changes to Rule 702 were meant to give it more teeth, and that courts “can exclude a conclusion if it is based on methods that are unreliable (and thus do not serve to reliably substantiate the conclusion[)]”.

The Hill court also realized that Sixth Circuit cases applying the pre-amendment version of Rule 702 might be amongst the “misguided cases” that led to rules Advisory Committee to update Rule 702.  But—in the only really confounding part of the opinion, footnote 9—the court believed that it had to follow Sixth Circuit authorities interpreting the previous version of Rule 702 even though Rule 702 itself has changed.  See here for contrary Supreme Court precedent recognizing that rules changes, like statutory changes, overturn prior judicial precedent.

The good news is, the court did not need to resolve any finer points of the pre- versus post-Rule 702 amendment test to conclude that the plaintiffs’ materials science experts’ opinions were inadmissible.

Plaintiffs’ first expert was a well-credentialed materials scientist who opined that the critical flaw in the implant’s femoral stem was introduced during manufacturing, and that she had ruled out all other potential causes for the flaw.  But, as the court recognized, she did not actually have any evidentiary basis for ruling out those other potential causes: 

For example, she ruled out that the failure was caused by the Implant being placed at the improper angle during surgery, but [Plaintiffs fail] to explain how she can give that opinion when (as Plaintiffs do not dispute) she does not know the proper angle at which the Implant should have been placed.  If she does not know what angle is improper, then she lacks a basis for saying that an improper angle did not cause the break.  Similarly, she lacks a basis to rule out “trauma and blunt force” during surgery . . . because she did not know anything about how the surgery was conducted.

Hill, 2024 U.S. Dist. LEXIS 140272 at *21.

Moreover, although this expert testified it was possible for the flaw to have been introduced during manufacturing, the expert did not examine whether the defendant had appropriate measures in place to control the size of flaws during manufacture of its metal implants.  Thus, she couldn’t actually tie the flaw in the plaintiff’s implant to the manufacturing process or to the reason the plaintiff’s implant broke.

With the plaintiffs’ first expert out, the second expert also had to be excluded:  part of his opinion merely parroted the first expert and thus was unreliable, and the rest of his opinion was predicated on statements that the first expert never expressed.

With both of plaintiffs’ experts out, the Court concluded (quite rightly) that the burden of proof meant it did not need to consider challenges to the defendant’s experts and instead could just move on to the defendant’s motion for summary judgment.  

Without experts to establish causation, summary judgment should have been—and was—a relatively easy grant.  But plaintiffs tried one last gambit, the res ipsa loquitur-like malfunction theory:  that the factfinder can infer defectiveness merely from the existence of an alleged malfunction and a negation of other causes. 

We don’t buy the malfunction theory, just as we look askance at other variations of res ipsa loquitur.  When the malfunction theory is accepted, it is supposed to be fairly rigorous:  If the plaintiff can show that the product malfunctioned, and if the plaintiff also can negate all other causes for the malfunction other than a product defect, then the malfunction theory is applicable and an inference of a product defect is permissible.

But we find it often is trotted out just because the plaintiffs’ counsel or experts haven’t done their homework and are missing key pieces of evidence.  The device must have had a defect, they will argue, because devices don’t just fail. 

But the reality is that medical devices, particularly implanted medical devices, do fail for unknown reasons—and plaintiff’s second expert admitted as much here.  And when the plaintiff has not actually negated all other causes of malfunction, then the malfunction theory just doesn’t apply:

[W]hen a device is known to fail for unknown reasons, it is pure speculation that a failure is attributable to a manufacturing defect and not some other unknown cause without evidence supporting one cause over another.

Hill, 2024 U.S. Dist. LEXIS 140272 at *49.

The plaintiff in Hill certainly did not negate all other potential causes of malfunction, and so the court came to the right conclusion:  The defense wins.

An appeal has been filed, so we shall see if the Sixth Circuit agrees.

Our thanks to Robyn Maguire and Sarah Jin of Barnes & Thornburg for sending the case and a congratulations as well for the nice win!

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Whoever said “you get what you pay for” never deposed a plaintiff expert.  Most plaintiff experts we’ve encountered acquired their expertise – if that’s what you want to call it – not in any substantive area but, rather, in slinging junk science hash at juries with a straight, and maybe even solemn, face.  As if to add insult to injury, some plaintiff experts ask us to pay ludicrous fees for the privilege of deposing them and enduring 3-7 hours of relentless testi-lying.  A couple of plaintiff experts even demanded that we pay them for their prep time.  (When we flat out refused that last bit, one expert showed up at the deposition and answered almost every question with an extended declamation about how he could not answer because he hadn’t been compensated by us to study for the deposition.) 

We get it that experts can be expensive. That applies to both sides. Long ago, we employed an expert in an antitrust case who had acquired notoriety in the Microsoft litigation for breaking the $1000 per hour barrier.  Here’s the thing: he was really, really smart, he did a lot of work, and he could explain things so that even simpletons such as ourselves could grasp complex concepts.  In another case, we helped prepare a Nobel Prize winning University of Chicago economist.  He was alarmingly brilliant.  Everything he said seemed original and insightful. During lunch at a Chicago pizzeria, he held forth about the comparative merits of deep dish vs NY pizza.  All we could think at the time was that this guy was a Nobel Prize winner, and everything he said was profound.  He was an oracle with a fee schedule.  And that fee schedule was mighty steep.  (The occasional former Surgeon General was about as impressive as anything we ever saw from the other side.  And then after deposing such experts, we became a lot less impressed with that title. It was disillusioning.)

We have not run into any Nobel Prize winning plaintiff experts.  All we get from them is “Bradford-Hill, differential diagnosis, blah blah blah.”  There is bloviation and robotic “analysis.”   What there is not is any sense of embarrassment about their ridiculous fees.  Occasionally, these plaintiff experts demand deposition fees that are far north of what they get in their actual non-litigation practice (if that even exists). Is there anything that we defense hacks can do when a plaintiff expert quotes a deposition fee that is utterly disconnected from reality, regular fees, and good taste?

Yes, there is. And the recent case of Delrossi v. Morales-Ortiz, 2024 Conn. Super. LEXIS 1879 (Conn. Super. Ct. Sept. 24, 2024), furnishes a fine example.  This decision would have fit nicely into our Stupid Expert Fees post.  

In Delrossi, a plaintiff-side orthopedic surgeon expert who apparently frequents Connecticut litigation, demanded $5,000/hour for the first two hours of his deposition and $2,500 for every hour thereafter, in advance and effectively non-refundable. Wow. That doctor must have been nominated for a Nobel Prize, MacArthur Fellowship, or at least a Mass Torts Made Perfect Golden Bucket, right?  Wrong. The defendants in Delrossi unsurprisingly found the fee exorbitant.  The plaintiff stood on the expert’s fee schedule, without even a CV suggesting why such a fee was appropriate. 

Though the Delrossi case was in Connecticut state court, the judge followed criteria that courts typically apply pursuant to Fed. R. Civ. P. 26(b)(4)(C). Those criteria, according to the Delrossi court, include: (1) the witness’s area of expertise, (2) the education and training required, (3) the prevailing rates of other comparably respected available experts, (4) the nature, quality, and complexity of the discovery responses provided, (5) the fee actually charged to the party who retained the expert, (6) fees traditionally charged by an expert on related matters, and (7) any other factors likely to assist the court in balancing the interest implicated by Rule 26. Applying these factors (especially number 3), the Delrossi court knocked the plaintiff expert’s fee down to $750 an hour.  The opinion chiefly relies on two earlier cases involving orthopedic surgeons, which reduced the fee to $500 or $1000 an hour, and split the difference. 

The Delrossi decision looks like common sense to us.  It also suggests that if one is going to haggle over the fees for an expert deposition, both sides would be smart to consult the Rule 26 criteria listed by the Delrossi court and try to bolster the factual record.  As in real estate, think first and foremost of comps. (That is, unless you are dealing with a Nobel Prize winner.)

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Today’s guest post is from our Dechert LLP colleagues Doug Fleming and Noah Becker.  They examine the recently proposed Litigation Transparency Act.  As always our guest bloggers deserve all of the credit (and any of the blame) for their efforts.

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Consider the following scenario — it’s not an unusual one in this brave new world where third-party funding of mass tort litigation has exploded: After months of protracted settlement negotiations, including issues large and small, your client finally reaches an agreement with the opposing party.  You and your client think you have closure.  But before an agreement can be finalized, another figure emerges from the mist: a litigation funder who has different views and says its approval is required. This is not a hypothetical, but a result that third-party litigation funding can—and has—made a reality. Some members of Congress in both the House and the Senate have begun to take issue with this situation. 

The most recent proposal to deal with it was re-introduced this July by Congressman Darrell Issa, specifically the Litigation Transparency Act of 2024 (the “LTA”). The draft statute consists of two provisions relevant to this scenario: (1) Parties are required to disclose—to the court and all other named parties—“any commercial enterprise (other than counsel of record) that has a right to receive any payment that is contingent on the outcome of the civil action or a group of actions of which the civil action is a part” and (2) “produce to the court and each other named party . . . any agreement creating a contingent right referred to in paragraph (1).” Thus, the LTA intends to give parties answers to two questions that supporters believe would have been non-controversial to answer only a short while ago: (1) Who is actually bringing this litigation and (2) Who is financially staked in it?

By way of recent background, this proposal follows another that was co-sponsored by a bipartisan quartet of senators, the Protecting Our Courts from Foreign Manipulation Act (the “FMA”), and is also still pending. The Senate bill requires somewhat similar disclosures but with respect to the particular concern that foreign nations are using “third-party litigation funding to support targeted lawsuits in the United States.”  The FMA was originally introduced in September 2023 by Senators John Kennedy and Joe Manchin, and in June, attracted co-sponsor support from John Cornyn and John Hickenlooper.

In addition to a focus on opacity and disclosure issues, underpinning the view of supporters of the LTA in particular is that mass tort litigations are not capital markets.  As Professor Donald Kochan explained, while testifying in June about litigation funding reform before the House Judiciary Subcommittee on Courts, Intellectual Property and the Internet, in order “to preserve the civil justice system as predictable, neutral, and accessible,” it must be “maintain[ed] . . . outside the market.” Kochan argues that “[w]hen litigants, or the investors propping them up can start using the court decisions as investment vehicles,” courts are changed into “something they are not intended to be, necessarily diluting their ability to serve their traditional role.”

Introduction of the LTA follows several litigations in which these issues have come into sharp focus. For example, in Nimitz Techs. LLC v. CNET Media, Inc., 2022 WL 17338396, at *26 (D. Del. Nov. 20, 2022), the parties were subject to a general standing order issued by Judge Colm Connolly that mandated that parties provide details about litigation funding somewhat similar to those proposed by the LTA. See Id  at *3. No such disclosure was made, but Judge Connolly ultimately discovered that litigation funders were involved to such an extent that the “plaintiffs” made none of their own decisions. Id. at 18 (“Q. And is it your understanding that all the litigation decisions are made by the lawyers and [the funder]? A. Correct.”). All of this caused Judge Connolly to muse about whether third-party litigation funders had “perpetrated a fraud on the court” “designed to shield” themselves “from the potential liability they would otherwise face . . . in litigation.” Judge Connolly ordered the parties to produce documents evincing the extent of the relationship between the funder and the ostensible plaintiffs and plaintiffs sought mandamus to the Federal Circuit. In re: Nimitz Techs. LLC, 2022 WL 1794845, at *3 (Fed. Cir. Dec. 8, 2022), which was denied. Judge Connolly then referred plaintiffs’ attorneys to their bar disciplinary counsel and certain attorneys for the undisclosed entities to the Texas Supreme Court’s Unauthorized Practice of Law Committee. Nimitz Techs. LLC v. CNET Media, Inc., 2023 WL 8187441 (D. Del. Nov. 27, 2023).

Another example was in antitrust litigation brought by Sysco against certain meat suppliers for alleged price-fixing violations. In late 2022, Sysco prepared to settle part of the litigation pending in the Northern District of Illinois and the District of Minnesota. However, unbeknownst to the settling defendant, the litigation funder had been funding the litigation since 2019 (in the amount about $140 million). The litigation funder did not approve the settlement and had it enjoined through arbitration. The funder and Sysco eventually worked to resolve their differences, in part by proposing to substitute the funder for Sysco in the relevant litigations.  The Court in the Northern District of Illinois permitted the substitution, reasoning that the funder’s presence “would facilitate the conduct of the litigation.” In re Broiler Chicken Antitrust Litig., 2024 WL 1214568, at *1 (N.D. Ill. Mar. 21, 2024). But the Court in the District of Minnesota took the opposite tack, explaining that the substitution “contravene[ed] public policy favoring party control over litigation and settlements.” In re Pork Antitrust Litig., 2024 WL 2819438, at *2 (D. Minn. June 3, 2024).

The LTA proposes to address these types of situations by mandating transparency, which in the view of its proponents, is essential to starting to bring order to litigation funding and facilitating the public policy goal of encouraging settlements. While the LTA is in a preliminary stage, it’s one to watch for those concerned about litigation funding and focused on the facilitation of settlements.

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