Still more Zantac MDL dismissal orders.

Today’s installment grants dismissal of the plaintiffs’ medical monitoring claims, and also sheds some light on the questionable factual basis of everything being asserted in this MDL.  As we’ve pointed out in our prior posts (such as this one), plaintiffs allege that the active ingredient in this drug could break down into an alleged carcinogen, particularly in warm or moist environments.  However, N-Nitrosodimethylamine (“NDMA”), the allegedly harmful breakdown product at issue, is ubiquitous, and anyone who consumes bacon, beer, or cheese has likely been exposed over the years to higher doses from these other sources.

That matters for medical monitoring claims, as In re Zantac (Ranitidine) Products Liability Litigation, 2021 WL 2682659 (S.D. Fla. June 30, 2021), demonstrates.  This Zantac decision booted most of a “master” class action complaint seeking medical monitoring and other purported economic losses.  Plaintiffs sought to create a litigation castle in the sky (no less than 638 counts) with a great many would-be classes (divided up by state and by defendant) in five general categories:  medical monitoring against branded manufacturers of prescription products; medical monitoring against branded manufacturers of over-the-counter (“OTC”) products; medical monitoring against generic manufacturers; medical monitoring against “store brand” sellers; and medical monitoring against “store brand” manufacturers.  Id. at *3.

Since many members of these putative classes undoubtedly took more than one of these products, some going back more than two decades, and many were without prescription, how plaintiffs would prove their respective exposures to each – an essential element of any medical monitoring claim − strikes us as entirely speculative.

Secondarily, plaintiffs filed a “consolidated, amended consumer economic loss class action” described as an action by 180 named plaintiffs:

in their individual capacities and on behalf of numerous classes . . . under various state laws stemming from the Defendants’ sale of prescription-strength ranitidine for approximately forty states.  Additionally, the Plaintiffs bring state class actions under approximately forty-three states’ laws for the Defendants’ sale of OTC ranitidine.

Id. at *4 (footnote omitted).  Another castle in the clouds.  We addressed the RICO aspects of this complaint here.

The preliminary skirmish on medical monitoring was whether two of the states as to which plaintiffs chose to bring claims – Indiana and Montana – would recognize a medical monitoring recovery by otherwise uninjured plaintiffs.  Unfortunately, a nearly 30-year-old intermediate appellate court in Indiana had allowed such a claim, Gray v. Westinghouse Electric. Corp., 624 N.E.2d 49 (Ind. App. 1993), so the defendants lost on Indiana.  2021 WL 2682659, at *8.  There being no equivalent support for medical monitoring in Montana, the court went with Erie conservatism and dismissed all the Montana monitoring claims with prejudice for failure to state a claim.  Id. at *9 (refusing to “expand[] Montana law in the manner that the Plaintiffs suggest”; “On no interpretation of Erie of which we are aware may a decision by a state trial court be credited as determining the law of the state”) (citation and quotation marks omitted).

The real fun begins with consideration of the “plausibility” of plaintiffs’ medical monitoring claims.

Although “[t]he law of medical monitoring varies across jurisdictions,” id. at *10, such “non-traditional torts” share several essential elements in common:  (1) exposure to a hazardous substance above normal levels; (2) in a threshold amount; (3) sufficient to create a significant increase in risk of a serious health condition; (4) for which medical monitoring exists that would facilitate early exposure; (5) which is different than routine medical testing anyone should get.  “[S]ome states require that testing procedures exist to detect diseases early, while others do not.”  Id. (discussing, inter alia, Florida law).

Plaintiffs’ claims failed, first, on the issue of “significantly increased risk.”  Id. at *11-12.  The “significant risk” analysis “raises two distinct questions.”  Id. at *12.  “First, . . . how much NMDA must a Plaintiff be exposed to before the Plaintiff has a significantly increased risk of cancer? Second, how much NDMA exposure have the Plaintiffs alleged?”  Id.  Plaintiffs’ verbose and Brobdingnagian complaint botched both prongs.  “Plaintiffs have failed to clearly plead just how much exposure the Plaintiffs received and how much exposure is needed to warrant the remedy of medical monitoring.”  Id.

The basic question is how much exposure to NDMA is allegedly the threshold exposure for “significant” increased risks of “cancer.”  Plaintiffs’ opposition papers used 3,000 nanograms (“ng”), but they did not clearly allege that as the threshold exposure for a “significant” cancer risks in the complaint itself.  Id.  Instead, they “alleged that the consuming of 96 ng each day, for seventy years, results in a .001% increase in the risk of cancer.”  Id. (emphasis added).

.001%?  Give us a break.  That’s entirely trivial.  1% is one in a hundred – so .1% is one in a thousand; .01% is one in ten thousand, and .001% is one in one-hundred thousand.  These plaintiffs are seeking test 100,000 people on the off-chance of detecting one early cancer, with no assurance that such testing would actually improve anyone’s prognosis.  And seventy years?  Zantac didn’t come on the market until 1981, and not one of the now over 20 Zantac MDL opinions mentions anything about pediatric use.

Nor do plaintiffs’ allegations account for “cancer” being anything but monolithic, but rather a catch-all term for a variety of metastatic conditions having different etiologies and tests for detection.

Only in an MDL would plaintiffs even think about making such absurdly overbroad allegations.  We offer, in contrast, our post, here, on punitive damages, requiring a “substantially certain” risk of harm.  The Zantac claims aren’t even in the same ballpark.

Fortunately this MDL judge doesn’t seem to be drinking the plaintiffs’ Kool-Aid.  Understandably the Zantac court required that “if the Plaintiffs equate a .001% increased risk with a significantly increased risk, then the Plaintiffs should clearly make that argument.”  Id.

The next point was how much NDMA exposure was actually alleged − from background consumption and allegedly from taking Zantac or generic ranitidine.  Once again, plaintiffs’ complaint fell short.  Like we’ve pointed out in our posts, “every human being consumes NDMA through eating, drinking, and even breathing.”  Id.  According to studies plaintiffs themselves cited, the background rate – “daily NDMA consumption levels” on the high end, was 510 ng/day in one study, 191 ng/day in another, and 179 ng in a third.  Id.  That’s from nearly two, to over five, times as much as the 96 ng/day rate that plaintiffs impliedly asserted could cause “significant” cancer risk (if taken daily for a lifetime).  Id.  In other words, background NDMA exposure significantly exceeds exposure allegedly caused by defendants’ products, according to plaintiffs’ own studies.

And it gets worse.

Plaintiffs’ argued for a purported “3,000 ng of NDMA per-dose” – that is, per Zantac/ranitidine pill – but that allegation was nowhere to be found in their 2,192-page complaint.  Id. at *4.

And it gets worse.

The chief study cited in plaintiffs’ complaint about alleged per-pill amounts of NDMA simply is no more.  “[A] red retraction notice appears on the top of the study.”  Id. (emphasis added).  As the opinion dryly puts it, “[i]f the Plaintiffs’ position is that the Court may conclude that the Plaintiffs have plausibly alleged a claim for medical monitoring based upon a retracted study, the Plaintiffs should clearly argue and explain that position.”  Id.

A second, even wilder, estimate – that each pill contained over 2,000,000 ng of MDMA – also bore no relationship to reality:

[T]he Court has been able to locate an allegation that each [drug] dose contained over 2,000,000 ng of NDMA. That number [was . . . arrived at . . . by heating [the drug] to 266 degrees Fahrenheit.  Pursuant to the Plaintiffs’ allegations, however, the temperature of the human body is 98.6 degrees, not 266 degrees.

Id. (emphasis added).  Even during the hottest day in the hottest place (Death Valley) in the recent record heat waves, the temperatures did not get within 100° of that temperature.  For obvious reasons, “the Court does not conclude that a test utilizing 266 degrees of heat plausibly establishes a significantly increased risk of cancer.”  Id.

Another hypothesis was that the drug breaks down in the stomach at body temperature (≈98.6°F) in the presence of food containing sodium nitrite.  Is that biologically plausible?  In a word, no.

In the absence of an explanation or context from the Plaintiffs, the Court endeavored to understand what, mathematically and scientifically, [the necessary amount] of sodium nitrite means.  The Court attempted to perform its own mathematical calculations to discern the amount of bacon necessary to collect [that amount] of sodium nitrite in the human stomach.  The Court’s own calculations estimated the amount of bacon to be necessary at around 25 pounds.

Id. at *15 (footnote omitted).  That’s another purported per dose calculation.  So, to reach the threshold exposure, all a putative class member would have to do is take each pill with food – 25 pounds of bacon per pill – and repeat each day for 70 years.

Although this scientific discussion takes place in Zantac in connection with estimating increased risk in the context of medical monitoring, the larger picture is also emerging – the plaintiffs’ increased risk calculations are generally unrealistic and wildly inflated.  It will be very difficult for them to get out of that hole.  The court suggested that they begin that attempt by “provid[ing[ context and explanation” for their numbers in any amended complaint that they subsequently file.  Id.

Good luck (not).

Because “[f]ourth and finally, the Court has been able to locate allegations about the amount of NDMA in [the drug] from tests performed by the FDA.”  Id. at *15.  The FDA’s unbiased testing once again severely undercuts plaintiffs’ numbers while simultaneously demonstrating variability that should be fatal to any putative class action:

The amount of NDMA found in the [the drug] was not equal across the Manufacturing Defendants. . . .  One Defendant’s [product] tested as having zero. . . .  Even if the Court were to utilize the highest amount of NDMA found by the FDA (360 ng) and assume that every Defendant’s ranitidine had that much NDMA, that number is still an order of magnitude lower than the 3,000 ng number argued in the Plaintiffs’ response.

The Court addresses one final point about the FDA’s findings.  In the FDA’s own words, the “NDMA levels FDA found are similar to the levels a consumer would expect to be exposed to when eating common foods like grilled and smoked meats.”

Id. (citations omitted) (emphasis added).  As mentioned above, medical monitoring in any state requires significant exposure above background levels.

And we’ve only covered the problems with plaintiff’s allegations concerning exposure per pill.

Plaintiffs likewise fail to allege plausibly the “frequency” of their exposures – that is, how often they took pills.  The Zantac complaint vaguely references “therapeutic doses.”  Id. at *16.  What’s that?  Plaintiffs’ pleading ensures that nobody knows.  They allege only that individual “[p]laintiffs “ingested [the drug] at various times as part of their treatment.”  Id.

Very enlightening.  That their 2,000+ page complaint lacks such basic information strongly suggests they can’t plead it – at least not in any form that could conceivably support class-wide proof.

There is no allegation as to the frequency of use, nor is there a reference to “therapeutic dosages.”  The Plaintiffs’ alleged class definitions similarly do not assist the Court, because the Plaintiffs define the class as being anyone “who used” ranitidine without qualification.

Id. at *16.  This is why we headlined this post with the “wheels coming off” the Zantac litigation – a combination of self-evidently fabulist general dosage calculations and utterly absent individual information concerning frequency of use.  Plaintiffs’ allegations wouldn’t even pass muster in asbestos litigation.

They get to try again, but this will be their third round of pleadings.  We hope “strike three” means “yer out”:

Plaintiffs may, of course, plead a substantial increase in the risk of cancer in whatever way they deem best, including through avenues other than NDMA exposure and NDMA frequency.  The Court’s ruling is merely that, as pled, the Court cannot conclude that the Plaintiffs have plausibly alleged a substantial increase in the risk of cancer.

Id. at *17.

On top of all this, plaintiffs’ allegations as to the current existence of a “diagnostic testing regime” that supposedly would help the plaintiff class get early cancer detection screenings was not plausibly factually alleged and thus got TwIqballed.  “The Plaintiffs’ allegation amounts to a ‘naked assertion devoid of further factual enhancement.’”  Id. (quoting Iqbal itself).  “[T]he Plaintiffs’ allegations are merely a recitation of the required elements.”  Id. at *18.

One wonders what plaintiffs did plead in all of these 2,000+ pages, since it certainly wasn’t the necessary elements of medical monitoring.

Beyond medical monitoring, plaintiffs re-raised their failure-to-report allegations involving the FDA, which the court had already indicated were preempted in an opinion we discussed previously.  We are reminded of a quote attributed (probably falsely) to Einstein:  “The definition of insanity is doing the same thing over and over again and expecting different results.”

In the Court’s Order Granting in Part and Denying in Part the Branded Defendants’ Rule 12 Partial Motion to Dismiss Plaintiffs’ Three Master Complaints as Preempted by Federal Law, the Court concluded that the Plaintiffs’ claims for failure to warn consumers through the FDA are pre-empted under Buckman Co. v. Plaintiffs’ Legal Committee, 531 U.S. 341 (2001), for the reasons that the Eleventh Circuit Court of Appeals outlined in Mink v. Smith & Nephew, Inc., 860 F.3d 1319, 1330 (11th Cir. 2017).  The Court dismisses the claims with prejudice for that reason.  In light of this ruling, the Court need not address arguments directed to the viability of the claims under state law and pleading deficiencies.

Zantac, 2021 WL 2682659, at *21.

As to the economic loss claims, plaintiffs were held to have Article III standing by reason of claimed economic injury.  Id. at *25-28.  Bexis, being a veteran of the Engle wars, has generally mixed feelings about standing arguments of this sort, because success in denying constitutional standing in federal court has led plaintiffs in some cases to try again in state court, without the defendant having any way to remove (there being no standing) to federal court.

Significantly, the court required plaintiffs asserting claims concerning prescription (as opposed to OTC) products to plead facts satisfying the elements of the learned intermediary rule.  That should be fatal to any class action, since learned intermediary rule issues are inherently individualized.

The Defendants argue that the Plaintiffs’ failure-to-warn claims concerning prescription [products] fail as a matter of law under the learned intermediary doctrine. This is so because Plaintiffs do not allege that their physicians were inadequately warned about the alleged cancer risk associated with [the drug], or that their physicians would have made different prescribing decisions if they had been warned.

Id. at *28 (citations and quotation marks omitted).  Once again, the plaintiffs’ already massive complaint was inadequate.

[T]he Court dismisses the Plaintiffs’ prescription-based claims [some 700 separate counts] without prejudice, and with leave to plead allegations that are specifically relevant to the learned intermediary doctrine.  This scope of leave is not broad, but rather extremely narrow and specific as to this discrete issue.

Id.

Finally, the court clears the way for the defendants to challenge other aspects of the plaintiffs’ economic loss complaint, specifically the applicability of “safe harbor provisions” in the consumer protection statutes of 24 states, and “[r]elatedly, [that] the Plaintiffs’ consumer protection, implied warranty, and unjust enrichment claims are barred, since the Defendants’ FDA-approved labels were presumptively lawful and not false or misleading.”  Id. at *29.  Also defendants may challenge plaintiffs’ unjust enrichment claims on the next go-round on various state-law grounds.  Id.

Defendants will have to “seek leave of Court” to do this at some “later stage of the litigation,” id., and we wonder if it will ever be necessary.  That’s because we’re not at all sure how many “later stages” of litigation there will be.  As discussed, the biggest takeaway from this edition of the Zantac chronicles is the evident scientific bankruptcy of the plaintiffs’ risk and causation positions.

It has been a while since we saw a movie in a theater.  That is one aspect of the oft-discussed return to normality that appeals to us.  When we saw a trailer recently for The Many Saints of Newark, a prequel to old HBO mainstay The Sopranos, it piqued our interest.  It even made us return to the original series, which began more than twenty years ago, something we knew but still have a little trouble grasping.  The mobsters who are the focus of the show are constantly looking for new schemes to make money with the specter of RICO and FBI wiretaps, subpoenas, and informants never far from their minds.  When Junior Soprano is arrested in season 1, Tony is aware of the RICO predicates charged in the indictment.  As various criminal plans are hatched, the hatchers look for intermediaries, civilian and otherwise, to keep the higher ups further away from the actual crime if things go south.  You get the idea.

We are not saying plaintiff lawyers are like mobsters, but they do tend to come up with creative claims and theories in attempts to impose liability on as many defendants as possible even when they might have strong claims against one or more logical defendants.  We see this dynamic in one of the recent orders from the Zantac MDL, where plaintiffs have asserted many claims against many defendants in what seems to be at its core a litigation over alleged injuries from an alleged carcinogen, NMDA, in prescription and over-the-counter medications.  We have discussed a number of decisions, mostly good, from this MDL over the last several months.  In In re Zantac (Ranitidine) Products Liability Litigation, MDL No. 2924, 2021 WL 2685640 (S.D. Fla. June 30, 2021), the court addressed the OTC manufacturer defendants’ motion to dismiss the civil RICO claims asserted against them in the current complaint.  Why RICO when traditional product liability theories might do?  Well, the statute does provide a winning plaintiff with “threefold the damages he sustains and the cost of the suit, including a reasonable attorney’s fee.”  That would be why.  A more interesting question might be “how RICO.”  That is what the court addressed in what seems to us like a strong decision.

The specifics of the claims are that a bunch of purported class representatives claim to have purchased OTC Zantac and allege that the OTC manufacturers violated 18 U.S.C. § 1962(c) by “engag[ing] in . . . a pattern of racketeering activity or collection of unlawful debt” and/or conspired with each other to do so under §1962(d).  Id. at *3.  The alleged “racketeering activity” consisted of “an enterprise to deliberately and unlawfully misrepresent the safety risks” of the drug though a “decades-long marketing and promotional campaign to mislead the public,” “misleading communications with federal regulators,” and “efforts to manipulate key opinion leaders and industry groups.”  Id.  Defendants raised a number of arguments about plaintiffs’ failure to plead the elements of a RICO claim, but the court only had to decide one:  whether plaintiffs could sue as indirect purchasers of defendants’ medication given that they did not allege any direct purchases from defendants.

Unlike some of the really bad decisions in the third party payor context that have allowed RICO claims to proceed (see here and internal links), the plaintiffs here all claimed to have paid third party retailers like pharmacies and grocery stores for the drugs they purchased.  Defendants’ argument was fairly straightforward and grounded in multiple Supreme Court decisions.  They contended RICO prohibits recovery by indirect purchasers because its language focuses on direct purchasers and that language was modeled on federal antitrust law, which clearly prohibits recovery by indirect purchasers.  Id. at *4.

The rationales for barring indirect purchaser suits are:  (1) facilitating more effective enforcement of antitrust laws; (2) avoiding complicated damages calculations; and (3) eliminating duplicative damages against antitrust defendants.

Id. at *5 (internal citation omitted).  The majority of federal courts to consider the application of the indirect purchaser rule to civil RICO claims, including three circuit courts and a decision from the Southern District of Florida earlier this year, followed the same rationale.  Id. at *6.

Plaintiffs did not accede to the majority position without a fight.  They argued that a 1985 Supreme Court decision somehow trumped the 1992 Supreme Court decision endorsing antitrust principles for the interpretation of RICO’s language.  They also argued that language in an Eleventh Circuit decision from 1988 that there are “perils in relying too closely on the analogy of the antitrust laws” weighed against adopting the indirect purchaser rule.  Id. at *7.  Neither worked.  Then they claimed that RICO standing could be established based solely on allegations of proximate cause, citing another 1988 Eleventh Circuit case that involved direct purchasers.  “Because the Supreme Court’s message in Holmes [the 1992 case] was clear, the Court is persuaded to join the prevailing view that the indirect purchaser rule applies to RICO claims.”  Id.

Because plaintiffs “were not the first, nor even the second, purchasers in the OTC distribution chain,” the dismissal of their claims in the face of the adoption of the indirect purchaser rule was clear.  Id.at *8.  Yet, they offered a creative argument for the creation of an exception to the indirect purchaser rule for those who allegedly suffered “direct harm” or were the “first victims” of the alleged RICO scheme.  Although creative, this too had been addressed and rejected by a circuit court.  Id. at **8-9 (citing Warren Gen. Hosp. v. Amgen Inc., 643 F.3d 77, 92 (3d Cir. 2011)).  Thus, the indirect purchaser rule was an “unsurmountable hurdle for Plaintiffs” and their RICO claims were dismissed with prejudice.  Id. at *9.  With that, we will resist the urge to make any analogies to real or fictional mobsters and simply say that the ruling seems to us like another step in eliminating frivolous, but dangerous, civil RICO claims from product liability litigation against drug manufacturers.

The first three significant Zantac MDL decisions, which we chronicled here, here, and here, were all issued on December 31, 2020.  Today’s installment, In re Zantac (Ranitidine) Products Liability Litigation, ___ F. Supp.3d ___, 2021 WL 76433 (S.D. Fla. Jan. 8, 2021), was issued this year.  For those of you who have not read those prior posts, Zantac is a drug that has been around, in branded or generic form, since 1983.  After more than 30 years, it was discovered that the active ingredient could break down into an alleged carcinogen – nitrosamines, the same type of substance anyone who consumes bacon, beer, or cheese has already been exposed to for many years (pills being a lot smaller).  Litigation ensued, against both branded and generic-affiliated defendants.  Id. at *1-2.

We’ve mentioned that, as longtime readers of judicial opinions, the Zantac opinions are well organized with the court’s rulings at the beginning – so we don’t have to waste time searching for through the chaff to find the wheat.  The summary here was quite to our liking:

Design-defect claims based on the FDA-approved formulation of [the drug] products are pre-empted, regardless of the Plaintiffs’ allegations that the products were misbranded. . . .  [C]laims against Defendants based on allegations of failure to make changes to the FDA-approved design that the Defendants could not have made independently while remaining in compliance with federal law are dismissed with prejudice as pre-empted. . . .  The Court grants the Plaintiffs leave to replead design-defect claims that are based on labeling defects and to plead pre-approval design-defect claims.  The Plaintiffs’ claims that seek a refund and are not premised upon a personal injury to a plaintiff’s person or property are not saved from express pre-emption under 21 U.S.C. § 379r(e).

2021 WL 76433, at *5.

Once again, PLIVA, Inc. v. Mensing, 564 U.S. 604 (2011), and Mutual Pharmaceutical Co. v. Bartlett, 570 U.S. 472 (2013), control.  Changes in drug (and device) design must necessarily affect the safety of the product to be relevant in product liability litigation – but any alteration that does that is a “major” change that requires prior FDA approval.  2021 WL 76433, at *7.  However:

The [Mensing] Court stated that the “question for ‘impossibility’ is whether the private party could independently do under federal law what state law requires of it.” “[W]hen a party cannot satisfy its state duties without the Federal Government’s special permission and assistance, which is dependent on the exercise of judgment by a federal agency, that party cannot independently satisfy those state duties for preemption purposes.”

Zantac, 2020 WL 7864585, at *9 (citations to Mensing omitted).  Then, in Mutual Pharmaceutical Co. v. Bartlett, 570 U.S. 472 (2013), the court explicitly applied this holding to design defects, since “as a matter of both federal law and basic chemistry,” a “drug manufacturer was unable to change the drug’s composition” without such approval.  Zantac, 2021 WL 76433, at *9.

Design defect claim are thus “pre-empted because the Defendants could not change the design of [the] products without FDA approval while remaining in compliance with federal law, and therefore it was impossible for them to independently fulfill any duties under state design-defect causes of action.”  Id. at *10.  “A claim that a brand-name drug manufacturer should have changed a drug’s FDA-approved formulation is a pre-empted claim because the manufacturer cannot make such a change independently and while remaining in compliance with federal law.”  Id. at *11 (citations omitted).

Simply calling the drugs “misbranded” does not magically make preemption go away.  This decision referenced the extensive discussion of this fallacy in a prior Zantac opinion.  Id. at *12.  “[A] claim based on an allegation that a brand-name drug’s FDA-approved formulation renders the drug misbranded is a pre-empted claim because the drug’s manufacturer cannot independently and lawfully change a drug formulation that the FDA has approved.”  Id.

We call this the “Mensing independence principle,” and as this opinion demonstrates, properly utilized, it is quite powerful.

Displaying the same helter-skelter argument style that we have commented on in prior posts, the Zantac plaintiffs brought up the largely discredited distinction between “pre-approval” and “post-approval” design claims.  Id. at *11-12.  Once again, despite three different master complaints and over 7,000 paragraphs of allegations, plaintiffs jumped to a theory that they had failed to plead.  “Plaintiffs have not pled a pre-approval design-defect claim.”  Id. at *13.  Thus, the issue was not decided.  Cautioning plaintiffs that they “have not identified which, if any, states recognize a pre-approval duty that drug manufacturers owe to consumers,” this Zantac decision left the issue for later, “[s]hould the Plaintiffs raise a pre-approval design-defect claim or claims upon repleading.”  Id. at *13.

The second type of preemption that this Zantac opinion recognizes is express preemption under 21 U.S.C. §379r, which is limited to over-the-counter (“OTC”) drugs.  We’ve discussed this preemption clause before – it has quite broad language, but is largely ruined by a savings clause, exempting “products liability” actions from preemption.  That wasn’t a problem in Zantac – at least as to the economic loss claims.  As our posts point out, “product liability” requires either physical harm or property damage.  Thus, section 379r wiped out the economic loss claims against all OTC products. – no fewer than “320 state-law claims” alleged in this ridiculously over- (yet under-) pleaded litigation.  2021 WL 76433, at *13.

The Court agrees with the Defendants that, at least as a facial matter, caselaw establishes that all of the Plaintiffs’ state-law claims against the Defendants are pre-empted to the extent those claims are premised upon the adequacy of OTC ranitidine products’ design or label and are limited to injuries stemming from the purchase of [the drug].

Id. at *15.  Zantac then once again rejected plaintiffs’ magic word “misbranding” argument.  Id.

Plaintiffs’ last ditch attempt to avoid §379r was to claim, contrary to all precedent, that purely economic loss claims were nonetheless “product liability” and thus saved by the statute’s savings clause.  That argument was based on hair-splitting – they argued that “because the Defendants have not made a state-by-state argument that the Plaintiffs’ claims fail under state product liability law, the Motion to Dismiss must be denied.”  Id.  Defendants responded that “product liability” as used in a federal statute, was a term to be defined under federal law.  Id.

Only in an MDL….

In any event, there is plenty of general authority that “[f]ederal law generally governs terms used in federal statutes.”  Id. (citations omitted).  Once again, plaintiffs were simply making things up.  “[T]he Plaintiffs provide no authority for the proposition that the Court should consult state law to interpret phrases in federal statutes.”  Id. at *16.  Instead, they relied on a couple of cases where courts happened to refer to state law in discussing §379r.  Id.  Thus, plaintiffs lost the argument:

The Defendants have cited a plethora of authority for the proposition that federal law should be consulted to determine the meaning of phrases in federal statutes − authority that the Plaintiffs have not refuted.  The caselaw is binding.

Id. at *16 (citations omitted).

Sounding a bit like our post, “What is ‘Product Liability,’” Zantac finished off the plaintiffs’ claims by declaring that, whatever “product liability” may or may not mean in the abstract, Congress did not intend with this limited savings clause to allow purely economic loss claims:

[T]his Court need not define the precise boundaries of product liability law. . . .  What is before this Court is whether Congress intended to permit state-law causes of action when no plaintiff suffered a personal injury to their person or to their property − when a plaintiff’s damages are limited solely to the purchase of the product itself.  As to this specific boundary, as to this specific question, the Defendants have the more persuasive argument.  The Court concludes that Congress did not intend for any state to have the authority, under the §379r(e) savings clause, to classify a claim as a product liability claim when the plaintiff did not suffer a personal injury.

Id. at *17.

Another one – actually, another 320, to be precise − bites the dust.

In the third of the three significant decisions issued in the In re Zantac MDL, No. 2924, on New Year’s Eve, preemption prevailed again – this time barring claims asserted against drug retailers and pharmacists, both branded and generic.  In re Zantac (Ranitidine) Products Liability Litigation, ___ F. Supp.3d ___, 2020 WL 7864585 (S.D. Fla. Dec. 31, 2020).  For anyone who hasn’t read our prior “Zantac Chronicles” posts, the relevant facts are these:  the Zantac MDL involves, as a claimed product defect in a drug, the alleged tendency of the active ingredient to break down over time into a substance that “increase[s] the risk of cancer.”  Id. at *2.

This type of substance – nitrosamines − is something anyone who consumes bacon, beer, or cheese has already been exposed to for many years (pills being a lot smaller).  The alleged defect was not discovered until well after the relevant patents had expired and generic versions of the product had entered the market.  Id.  The Zantac plaintiffs sued everyone they could think of, including intermediate sellers, such as pharmacists and retailers.

One of the things we like, as readers, about the Zantac opinions is that the rulings are summarized right up front – so we don’t have to scroll to the end to find the result.  The summary here was short and sweet:

The Court concludes that all of the Plaintiffs’ state-law claims against the [retailer/pharmacy] Defendants are pre-empted by federal law and, as a result, are dismissed.  Without a state-law claim to support it, the Plaintiffs’ sole federal claim is dismissed as well.  The Court will permit the Plaintiffs to re-plead a general negligence claim, subject to certain rulings contained in this Order.

2020 WL 7864585, at *5.

Why?

Once again, we return to what the Supreme Court held in PLIVA, Inc. v. Mensing, 564 U.S. 604 (2011), and Mutual Pharmaceutical Co. v. Bartlett, 570 U.S. 472 (2013).

The [Mensing] Court stated that the “question for ‘impossibility’ is whether the private party could independently do under federal law what state law requires of it.” “[W]hen a party cannot satisfy its state duties without the Federal Government’s special permission and assistance, which is dependent on the exercise of judgment by a federal agency, that party cannot independently satisfy those state duties for preemption purposes.”

Zantac, 2020 WL 7864585, at *5 (citations to Mensing omitted).  Then, in Mutual Pharmaceutical Co. v. Bartlett, 570 U.S. 472 (2013), the court extended this holding to design defects.  Thus, “the Defendants’ second point − any claim based upon drug design is pre-empted − is also supported by a plain reading of Bartlett.”  Zantac, 2020 WL 7864585, at *5 (block quotation from Bartlett omitted).

The Zantac plaintiffs asserted numerous counts − Failure to Warn (Strict Liability), Design Defect (Strict Liability), Negligence—Failure to Warn, General Negligence, Breach of Express Warranties, Breach of Implied Warranties, Deceptive Acts, and Unjust Enrichment.  Id. at *12-13.  Zantac concluded that “all of the Plaintiffs’ state-law claims against the [retailer/pharmacist] Defendants are based upon [the drug’s] allegedly defective design and inadequate labels/warnings.”  Id. at *13.  Zantac then took the plaintiffs to task:

[C]ourts dismiss design and label-based claims against any defendant that is powerless to alter a design or alter a label.  The Plaintiffs have provided no citation to post-Bartlett authority where a court reached a different conclusion, nor have the Plaintiffs cited to a case where a court held that strict liability is equivalent to absolute liability − a proposition that Bartlett squarely rejected.  Instead, the Plaintiffs rely upon Section 402A of the Restatement of Torts, . . . [b]ut the Supreme Court in Bartlett utilized 402A in reaching its conclusion that strict liability is not equivalent to absolute liability. . . .  In summary, all of the caselaw weighs in favor of a conclusion that the Plaintiffs’ claims are pre-empted. . . .  The Court’s dismissal is with prejudice and without leave to amend.

2020 WL 7864585, at *13-14.  In short, these non-manufacturing defendants were entitled to dismissal because the claims against them were made up from whole cloth, and simply unsupportable post-Mensing/Bartlett.

Zantac then gave special attention to plaintiffs’ “misbranding” and “general negligence” claims, which were the only theories that they seriously attempted to defend.  As for misbranding, first, it amounted to a preempted stop-selling claim.  “[T]he Defendants could not correct the alleged misbranding” by “altering” either the drug’s “composition” or its “label.”  Therefore, even taking plaintiffs’ claim at face value, “[t]he Defendants would have no recourse but to stop selling the drug altogether.”  Id. at *15.  Nor could the misbranding allegations be taken seriously, since, second, they distorted the scope of the FDCA.  “By definition, however, such a claim could only be brought against a manufacturer − not a retailer or a distributor.”  Id.  Third, Zantac again rejected (as it did here) plaintiffs’ reliance on “misbranding” as a get-out-of-preemption-free card:

[A] finding that Plaintiffs can avoid pre-emption by alleging that defects in ranitidine products made the products misbranded under 21 U.S.C. §352 would render the vast body of pre-emption caselaw in the drug context, including binding Supreme Court decisions, meaningless.  If Plaintiffs’ position were accepted, a plaintiff could avoid pre-emption simply by asserting, for example, that a drug’s labeling was “false or misleading in any particular” or that the drug was “dangerous to health when used” as prescribed.  The Court cannot adopt a position that would render pre-emption caselaw meaningless.

Id. (citation omitted).  Fourth, “there is no private right of action to enforce federal misbranding law − a statute that imposes criminal penalties” and “Plaintiffs cannot create a private right of action to enforce federal misbranding rules by disguising it as a state-law strict-liability claim.”  Id. at *16.  Thus, in addition to Mensing and Bartlett, all misbranding clams are also barred by Buckman Co. v. Plaintiffs Legal Committee, 531 U.S. 341 (2001).  Zantac, 2020 WL 7864585, at *16.

Nor could plaintiffs use “general negligence” as a “very broad” dumping ground for otherwise preempted allegations.  Id.  In this count, “Plaintiffs allege[d] that every Defendant in this MDL engaged in every possible action” during “every possible timeframe,” “regardless of the individual Defendant’s role or purpose in this case.”  Id.  Most of this confusing mess was just another preempted attack on the design and labeling of the product.  Id. at *17.  Mixed in, however, were novel allegations about purported duties relating to post-manufacture drug storage and transportation.  Id.  Zantac referred to as a “temperature-based negligence theory.”  Id.  Of course, nothing of the sort was actually pleaded in plaintiffs’ sprawling “shotgun-style pleading,” id. at *16, so as to this one item plaintiffs were granted leave to amend their complaint, but this leave came with a warning that plaintiffs had better “address the Court’s concerns” if they elect to proceed with temperature based negligence.  Those “concerns” were:

  • “Can the Plaintiffs plead in good faith that any Defendant had a policy to store [these] products at temperatures above those approved by the FDA?”
  • “If individual stores negligently stored [the drug] at unsafe, heated temperatures, how is that a global, MDL-based issue?” “[I]ndividualized and fact-specific” storage/transportation issues “have little, if any, bearing on the broader, more global questions in this MDL.”
  • Are “causation questions inherent in a high-temperature allegation” also individualized?  “Investigation where, in a supply chain, overheating occurred appears to the Court to be an individualized, fact-intensive discovery challenge.”
  • “[H]ow are high-temperature allegations to be squared with the Plaintiffs’ theory of the case,” which has been “that the Plaintiffs’ harm was caused at the very moment [the drug] was manufactured?”  “Plaintiffs must explain how that specific theory of liability is compatible with the Plaintiffs’ global theory of liability.”

2020 WL 7864585, at *18-19 (emphasis original).  As we observed in a prior Zantac post, in their desperation to avoid preemption, plaintiffs’ counsel have let their considerable imaginations run wild, and dreamed up non-FDA regulated scenarios with little concern for consistency or existing law.  “Plaintiffs have provided no authority for the proposition that [retailer/pharmacy] Defendants had a duty under state law to hire independent scientists to determine where, in a federally-approved temperature range, a drug should be stored.”  Id. at *19.  There certainly is no federal duty that they do so.  Id. (citing 21 C.F.R. §211.166(a)).  Plainly, the “concerns” discussed at length in Zantac are an attempt to avoid a reprise of Plaintiffs’ previous failed attempt (discussed here) to use the MDL to create novel tort duties that the states themselves have not recognized.

In addition to implied preemption, the Zantac plaintiffs also purported to make claims against the retailer/pharmacy defendants that impinge on matters governed by the Drug Supply Chain Security Act, 21 U.S.C. §§360eee to 360eee-4.  2020 WL 7864585, at *20.  But as discussed in a previous post, this statute contains an express preemption clause that is even more emphatic than the one that supports broad medical device preemption.  See §360eee-4(a) (preempting state law “inconsistent with, more stringent than, or in addition to, any requirements applicable” under the statute).  Plaintiffs attempted to limit the scope of express preemption to “tracing products through the distribution system,” which does not appear to be an issue in the Zantac litigation.  2020 WL 7864585, at *21.  They got spanked again, for “ignor[ing] . . . additional text in the statute” that included “verification, investigation, disposition, notification, or recordkeeping” within this act’s preemptive scope.  Id. (quoting §360eee-4(a)).

The Zantac plaintiffs’ claims that the defendants should not have accepted these drugs because they were defectively designed as a reason “in addition to − not contained in − the Act.”  Id. at *21.  Zantac did not accept the anti-preemption rationale concerning the same statute in In re Valsartan, Losartan, & Irbesartan Products Liability Litigation, 2020 WL 7418006 (D.N.J. Dec. 17, 2020), a decision we lambasted here, because the alleged contamination in Zantac arose “within” the drug supply chain.  Id. at *22.  Ultimately, Zantac did not resolve the issue because, once again this was an unpleaded theory made up by plaintiffs’ counsel “at the Hearing.”  Id.

Finally, the Zantac plaintiffs’ Magnuson-Moss warranty claims were dismissed for the same reasons we detailed in our previous post – they require a valid state-law warranty claim a predicate, and plaintiffs have none.  2020 WL 7864585, at *2.

So once again, almost all of the Zantac plaintiffs’ claims against the moving defendants have been held preempted.  What remains are novel and problematic claims that plaintiffs didn’t actually plead, and as to which the MDL judge expressed significant “concerns.”  Will the Zantac plaintiffs continue to lead with their chins?  Stay tuned.

Another of the recent significant decisions from the In re Zantac MDL, No. 2924, addressed preemption – mostly but not entirely involving defendants who manufactured generic versions of the drug.  In re Zantac (Ranitidine) Products Liability Litigation, ___ F. Supp.3d ___, 2020 WL 7864213 (S.D. Fla. Dec. 31, 2020).  For those who have not read our prior post, the Zantac MDL involves a claimed product defect in the nature of a design defect (an active ingredient that allegedly breaks down over time into a different chemical that “increase[s] the risk of cancer,” id. at *2).

The type of substance involved – nitrosamines − is something anyone who consumes bacon, beer, or cheese has already been exposed to for many years (pills being a lot smaller).  This purported defect was not discovered until well after the relevant patents had expired and generic versions of the product had entered the market.  Id.  The Zantac plaintiffs sued everyone they could think of, including the generic manufacturers and certain repackagers of the drug.

These defendants responded with preemption motions.  The motion filed by the generics was based on the by-now quite familiar PLIVA, Inc. v. Mensing, 564 U.S. 604 (2011), and Mutual Pharmaceutical Co. v. Bartlett, 570 U.S. 472 (2013), decisions, which hold that since generic labels and designs must be “the same” as the original branded drug on which their Abbreviated New Drug Applications rest, it is impossible for them to comply with immediate state tort duties without the FDA first having to take action.  Zantac, 2020 WL 7864213 at *7-8 (describing rationale of Mensing and Bartlett).  Zantac also discusses the three types of drug-related “changes”:

  • Major, which “include[s] certain labeling changes, changes in the qualitative or quantitative formulation of the drug product . . . and changes in the synthesis or manufacture of the drug substance that may affect the impurity profile and/or the physical, chemical, or biological properties of the drug substance. A major change requires a supplement submission and [FDA] approval prior to distribution of the product made using the change.
  • Moderate, which is “any change in the drug substance, drug product, production process, quality controls, equipment, or facilities that has a moderate potential to have an adverse effect on the . . . safety or effectiveness of the drug product.. . . . A moderate change generally requires a “supplement submission at least 30 days prior to distribution of the drug product made using the change.”  However, some “moderate changes that may be made upon the FDA’s receipt of the supplement and need not await the passage of 30 days,” such as the label-strengthening “Changes Being Effected supplement.”
  • Minor, which “is a change in the drug substance, drug product, production process, quality controls, equipment, or facilities that has a minimal potential to have an adverse effect on the . . . safety or effectiveness of the drug product.” Minor changes may simply be “described in an annual report,” and do not require FDA pre-approval

Id. at *5-6 (regulatory citations and quotation marks omitted).

The plaintiffs in Zantac, of course, knew that they would be faced with preemption.  So rather than bring types of product liability claims (design, warning, Dear Doctor letter, testing, fraud, misrepresentation, express and implied warranty) that have already have been held preempted, id. at *9, they alleged novel, FDCA-related claims through which they hoped to make an end run around preemption.

For the most part, it didn’t work.  Plaintiffs’ primary effort to dodge preemption was to sprinkle in “misbranding” allegations to their complaints, and claim that – given the very broad language of the FDCA’s misbranding provision, 21 U.S.C. §352 – Mensing, Bartlett, and all forms of impossibility conflict thereby disappeared.  Since “misbranding” under the FDCA exists when a drug’s “labeling is false or misleading in any particular” or when “it is dangerous to health when used in the dosage or manner, or with the frequency or duration prescribed, recommended, or suggested in the labeling thereof,” every common-law tort claim can be recast in this fashion.

First, a version of that argument had been asserted by the FDA in Mensing itself, and was held insufficient to prevent preemption.  2020 WL 7864213 at *11 (discussing Mensing, 564 U.S. at 616-17).  Second, every other court to consider “misbranding” allegations post-Mensing had nonetheless ruled in favor of preemption.  Id. at *12-13.

Third, the Zantac plaintiffs’ “misbranding” argument proved too much.  “No court has adopted Plaintiffs’ theory that impossibility pre-emption can be avoided by showing that a drug is misbranded.”  Id. at *13.  Nor can plaintiffs enforce the misbranding provisions of the FDCA.

It does not follow that, because a drug manufacturer that introduces a misbranded drug into interstate commerce is subject to criminal liability, a civil remedy must also be available.  There is no private cause of action to enforce the federal misbranding statutes.

Id. (citations omitted).  Finally, “misbranding” is not some form of anti-preemption kryptonite:

A finding that Plaintiffs can avoid pre-emption by alleging that defects in . . . products made the products misbranded . . . would render the vast body of pre-emption caselaw in the drug context, including binding Supreme Court decisions, meaningless.  If Plaintiffs’ position were accepted, a plaintiff could avoid pre-emption simply by asserting, for example, that a drug’s labeling was “false or misleading in any particular” or that the drug was “dangerous to health when used” as prescribed.  The Court cannot adopt a position that would render pre-emption caselaw meaningless.

Id. (citations omitted).

Zantac also held that the repackager defendants were entitled to the same relief as the generic manufacturers:

Plaintiffs do not contend that Repackager Defendants could lawfully make product or labeling changes that Generic Manufacturer Defendants could not lawfully make.  The same pre-empted claims against Generic Manufacturer Defendants are likewise pre-empted as against Repackager Defendants.

Id. at *14.

Besides misbranding, the Zantac plaintiffs had a fallback argument based on the expiration dates and testing.  The purported rationale of these allegations was that, since the deterioration that supposedly created the cancer risk was gradual, a shorter expiration date would reduce the claimed risk.  2020 WL 7864213, at *14.  The testing claim was related – if defendants had done more testing, they would have known to shorten the expiration date.  Id. at *14-15.  This argument was completely novel.  “None of the parties have pointed to any case where a claim based on failure to shorten the expiration date for a drug has been presented to a court.”  Id. at *15.

This time the Zantac plaintiffs’ primary problem was that they were making up things as they went along.  The master complaints ran to over 7,000 paragraphs.  Id. at *14 (7,236, to be exact).  But none of them pleaded claims about either expiration dates or testing.  Id. at *16 (“the Master Complaints do not state claims based on expiration dates and testing upon which relief can be granted”).  While that might be correctable by repleading, they have a serious consistency problem – their new argument that the products become more unsafe over time conflict conflicts with their existing allegations “that the products were dangerous upon being manufactured.”  Id.  Oops.  That’s what happens when you change course on the fly.  “Plaintiffs’ incorporation of inconsistent factual allegations into their counts is improper.”  Id.

And there’s more.  “Plaintiffs have not identified in the Master Complaints the state-law duty or duties for each of the 52 jurisdictions that they maintain Defendants did not fulfill when they did not shorten expiration dates for ranitidine products.”  Id.  Most states do not recognize an independent common-law claim for “negligent testing.”  See our duty to test cheat sheet.  Moreover, the only contrary “authority” cited in Zantac, 2020 WL 7864213, at *16 − Atkinson v. Luitpold Pharms., Inc., 448 F. Supp.3d 441, 453-54 (E.D. Pa. 2020) – is a Pennsylvania court misapplying Texas law, as we pointed out here.  If plaintiffs intend to pursue an expiration date claim, they are going to have to plead them separately, and on a state-by-basis.  Id.  Then they will have to defend these novel claims under state law in a new round of motions to dismiss.  Id.  This portion of Zantac closes with one of the finest reiterations of the Mensing independence principle that we’ve yet seen, combined with a warning to plaintiffs:

The question for “impossibility” is whether the private party could independently do under federal law what state law requires of it.”  If a defendant cannot, independently and while remaining in compliance with federal law, do what needs to be done to avoid liability under a state cause of action, the cause of action is pre-empted.  Upon any repleading, Plaintiffs should consider, as to each cause of action, the elements under each state’s law and what state law would require of Defendants to avoid liability.

2020 WL 7864213, at *17.  While we have our doubts about how deterrable MDL plaintiffs are, this time, they cannot say that they weren’t warned.

Another novel plaintiff fallback position was dismissed with prejudice in this Zantac opinion.  They tried to gin up a claim based upon allegations that product labeling lacked proper “storage and transportation” instructions.  Id. at *18-19.  Sorry, but the FDCA’s sameness requirements contains no exemption for these types of instructions:

The Court similarly is not aware of any authority providing that generic drug manufacturers or repackagers can change storage and transportation information on labeling without FDA pre-approval while remaining in compliance with federal law. . . .  Because claims based on labeling defects that a defendant cannot independently change while remaining in compliance with federal law are pre-empted, Plaintiffs’ claims based on allegations that Defendants should have placed different or additional storage and transportation information on their ranitidine products’ labeling are dismissed with prejudice as pre-empted.

Id.  “Testing” claims that would lead to the same result met the same fate.  Id. at *19.  While plaintiffs were allowed to replead storage claims as well, they again face a major problem:

Plaintiffs should be prepared to provide the factual and legal basis for a proposition that, if FDA-approved labeling permits a party to store a drug under certain conditions, a state may nonetheless impose liability for storing the drug under those conditions.

Id.  This sounds like a Rule 11 warning.

Finally, the rest of this Zantac opinion addresses a number of other claims:

  • Failure to Report:  Once again, the plaintiffs failed to plead this claim.  Id. at *20.  One wonders what plaintiffs did in their 7,000+ paragraphs.  Given Eleventh Circuit law, however, this claim looks like a loser.  See Mink v. Smith & Nephew, Inc., 860 F.3d 1319, 1330 (11th Cir. 2017) (“[plaintiff’s] failure to report theory is impliedly preempted . . . [b]ecause this theory of liability is based on a duty to file a report with the FDA, it is very much like the ‘fraud-on-the FDA’ claim the Supreme Court held was impliedly preempted in Buckman”).
  • Manufacturing Defect: TwIqballed.  Plaintiffs “fail[ed] to plead any specific facts such as the identification of how any particular batch of ranitidine products departed from their intended design or of any particular manufacturing processes or procedures that should have been but were not followed.”  Zantac, 2020 WL 7864213, at *21.
  • Magnuson Moss Warranty Act: “[C]laims under the MMWA require a valid state-law warranty claim.”  Id. at *22.  Further, “[t]he MMWA is “inapplicable to any written warranty the making or content of which is otherwise governed by Federal law,” so it “is inapplicable to warranty claims based on language on drug labeling that the FDA governs.”  Id. at *23-24.  Plaintiffs are allowed to replead if they can.  Good luck.
  • Absolute Liability: Absolute liability does not exist.  Dismissed with prejudice.  Id. at *24.

Bottom line?  This Zantac decision is another big win for the moving defendants (here, generic drug manufacturers and repackagers).  While plaintiffs are allowed to replead some of their claims, most of those claims are unprecedented under state law, and thus subject to the Erie conservatism principle already recognized in this MDL.  Plaintiffs’ one traditional product liability claim, manufacturing defect, cannot be squared with the chemical breakdown premise that is at the heart of the MDL.

Several significant decisions have recently emerged from the In re Zantac MDL, No. 2924.  We gave you a “bare bones” rundown of the first four of them right away.  But now we’d like to discuss them in more detail.

We start with In re Zantac (Ranitidine) Products Liability Litigation, ___ F. Supp.3d ___, 2020 WL 7866660 (S.D. Fla. Dec. 31, 2020), which as our bare bones post mentioned, gave the boot to the plaintiffs’ innovator liability claims.  This opinion has us bloggers jumping for joy for several reasons.

Innovator liability is involved in the Zantac MDL because that claimed product defect (a breakdown product that allegedly “increase[s] the risk of cancer,” id. at *1) was not discovered until well after the relevant patents had expired and generic versions of the product had captured most of the market share.  Id.  This type of substance – nitrosamines − is something anyone who consumes bacon, beer, or cheese has already been exposed to for many years (pills being a lot smaller).

The Zantac plaintiffs sued everyone they could think of, including the original branded manufacturers on claims of “innovator” liability:

Under this theory of liability, the consumers of a generic drug product may hold a brand-name drug manufacturer liable for failing to warn of a defect in the product − a product that the brand-name drug manufacturer did not itself make, sell, or distribute.

Id. at *3.  As the Zantac opinion states, and our innovator liability scorecard confirms, only two states in the country allow any form of this benighted and dangerous form of liability – California, and to a somewhat lesser extent MassachusettsId.

That only two states allowed this novel form of liability did not stop the Zantac MDL plaintiffs from arguing that the MDL court could predict that virtually every other state would do so, too.  This is an MDL, and MDL are notorious for ignoring state limits to liability.  See, e.g., In re Fluoroquinolone Products Liability Litigation, 2021 WL 396819 (D. Minn. Feb. 4, 2021) (MDL abuse on this very issue).

Not this time.

First, plaintiffs’ claims were whittled down a bit.  Initially they conceded “that their theory of liability is not viable under the laws of Alabama, Iowa, West Virginia, or Florida.”  Id. at *4 n.5.  After supplemental briefing was ordered, plaintiffs backtracked some more and decided not to contest Georgia, Idaho, Indiana, Kansas, Kentucky, Louisiana, New Jersey, Ohio, Tennessee, Texas, and Washington.  Id.  That still left the Zantac plaintiffs arguing that innovator liability should be allowed in 35 jurisdictions:  Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, the District of Columbia, Hawaii, Illinois, Maine, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, South Dakota, Utah, Vermont, Virginia, Wisconsin, and Wyoming.  Id. at *6 n.6.

Since almost the day it was founded, the Blog has argued that it is improper under Erie Railway Co. v. Tompkins, 304 U.S. 64 (1938), for federal courts sitting only in diversity jurisdiction (which is the case in almost every drug/device MDL) from predicting that states would adopt novel theories of tort liability.  See our Erie Doctrine postsZantac backed that position to the hilt:

[W]hen a federal court is called upon to recognize a cause of action under a state’s laws that the state itself has yet to recognize, “considerations of comity and federalism counsel that [the federal court] proceed gingerly when venturing into uncharted waters of state substantive law.”  Guarino v. Wyeth, LLC, 719 F.3d 1245, 1251 (11th Cir. 2013) (declining to “manufacture” a law making brand-name manufacturers liable for the injuries of generic consumers “out of whole cloth,” in part, because no Florida state court had adopted such law); see also City of Miami v. Bank of America Corp., 800 F.3d 1262, 1289 (11th Cir. 2015) (declining “to invent a novel basis for unjust enrichment under Florida law” because the Florida Supreme Court had not yet ruled on whether such law existed and because of “the complete lack of supporting Florida caselaw”). . . .  The Court has the task of making an Erie prediction as to whether the highest courts of 35 jurisdictions would recognize Plaintiffs’ theory of liability.  In making its Erie predictions, the Court follows the Erie analysis steps set forth by the Eleventh Circuit.

2020 WL 7866660, at *6 (footnote omitted).

Thus, Zantac ruled that none of the 35 jurisdictions would dispense with the fundamental product liability requirement that the defendant have made that allegedly injurious product in order to impose on branded manufacturers liability for injuries caused by competing generic products.  An “overwhelming national consensus” has rejected innovator liability.  Id.  The most directly on point case was Guarino, in which the Eleventh Circuit had drawn this conclusion for Florida.  The most analogous case was In re Darvocet, Darvon & Propoxyphene Products Liability Litigation, 756 F.3d 917, 941–54 (6th Cir. 2014) – another MDL in which the plaintiffs had tried the same thing on a slightly smaller scale, and had been shot down under the laws of 22 states.  Zantac, 2020 WL 7866660, at *6.

If innovator liability is “construed” as a product liability claim, “then for those claims to be viable under the laws of jurisdictions that require product identification, Plaintiffs must allege that the drugs that caused their injuries were made, sold, or distributed by Defendants.”  Id. at *7 (citation omitted).  If such claims are construed as some sort of separate negligence/misrepresentation claim, then “Plaintiffs must establish that Defendants owed Plaintiffs a duty sufficient to trigger liability.”  Id.

Plaintiffs lost both ways.  “]T]he highest courts of all 35 jurisdictions examined would hold that it is settled law that product identification must exist for a products liability claim to succeed.”  Id.  Seven states with product liability statutes, Arizona, Arkansas, Colorado, Connecticut, Mississippi, North Carolina, and Oregon, “would hold that Plaintiffs’ negligence-based claims are, in reality, products liability claims because all of Plaintiffs’ claims stem from an injury caused by a product.”  Id.  So plaintiffs in those states lost without the need to examine negligence/misrepresentation separately.  Zantac examined the negligence and misrepresentation precedents of the remaining 28 states separately and:

predict[ed] that the highest courts of each of these jurisdictions would determine that Defendants do not owe a duty to Plaintiffs.  This prediction comports with the principles of comity and federalism, which counsel federal courts to proceed gingerly when venturing into uncharted waters of state substantive law.  Furthermore, this prediction is consistent with the majority view and is appropriate given the absence of any strong evidence that these jurisdictions would join the minority view.  Plaintiffs’ claims of general negligence . . . and negligent misrepresentation . . . against Defendants fail under the laws of these jurisdictions.  In conclusion, the Court predicts that none of the highest courts of the 35 jurisdictions would recognize Plaintiffs’ theory of liability.

Zantac, 2020 WL 7866660, at *8 (citations and quotation marks omitted).  Zantac included a lengthy appendix examining each state’s law separately.  We’ve added these state-specific discussions to our 50-state survey of innovator liability, so we’ll just provide the relevant citations here, so readers can check out the states that interest them most.  Alaska, 2020 WL 7866660, at *12-13; Arizona, 2020 WL 7866660, at *14; Arkansas, 2020 WL 7866660, at *15; Colorado, 2020 WL 7866660, at *15-16; Connecticut, 2020 WL 7866660, at *16-17; Delaware, 2020 WL 7866660, at *17; District of Columbia, 2020 WL 7866660, at *17-18; Hawaii, 2020 WL 7866660, at *18; Illinois, 2020 WL 7866660, at *18-20; Maine, 2020 WL 7866660, at *20; Maryland, 2020 WL 7866660, at *20-21; Michigan, 2020 WL 7866660, at *21-22; Minnesota, 2020 WL 7866660, at *22; Mississippi, 2020 WL 7866660, at *22-23; Missouri, 2020 WL 7866660, at *23-24; Montana, 2020 WL 7866660, at *24-25; Nebraska, 2020 WL 7866660, at *25-26; Nevada, 2020 WL 7866660, at *26; New Hampshire, 2020 WL 7866660, at *26-27; New Mexico, 2020 WL 7866660, at *27-28; New York, 2020 WL 7866660, at *28-29; North Carolina, 2020 WL 7866660, at *29; North Dakota, 2020 WL 7866660, at *30; Oklahoma, 2020 WL 7866660, at *30-31; Oregon, 2020 WL 7866660, at *31; Pennsylvania, 2020 WL 7866660, at *31-32; Puerto Rico, 2020 WL 7866660, at *32; Rhode Island, 2020 WL 7866660, at *32-33; South Carolina, 2020 WL 7866660, at *33-34; South Dakota, 2020 WL 7866660, at *34-35; Utah, 2020 WL 7866660, at *35; Vermont, 2020 WL 7866660, at *36-37; Virginia, 2020 WL 7866660, at *37; Wisconsin, 2020 WL 7866660, at *37-38; Wyoming, 2020 WL 7866660, at *38-39.

That alone is a significant victory, but Zantac wasn’t done yet.  Back in 2018, before any directly on point precedent existed, the Blog proposed that personal jurisdiction could be a good defense to innovator liability claims under Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017):

[W]e (well, Bexis) had been thinking about precisely that – the “suit-related conduct” in innovator liability cases does not take place in the plaintiff’s forum state (MA or CA) because the branded defendant didn’t sell the injurious product, so unless that defendant is unfortunate enough to be “at home” in those states, there shouldn’t be case-specific personal jurisdiction either.  Without a product sale there’s not even a stream of commerce argument.

Zantac adopted this argument as well, holding that plaintiffs from California and Massachusetts asserting innovator liability claims had to be dismissed for lack of personal jurisdiction.  The defendants were not “at home” (incorporated or with a principal place of business) in those states, and there was no specific forum-related conduct that those plaintiffs could assert.

Plaintiffs fail to allege specific, non-conclusory facts demonstrating that any of Defendants’ actions, including marketing and labeling decisions, took place in any state or territory, including California or Massachusetts, the only two states that recognize Plaintiffs’ theory of liability.  To establish specific personal jurisdiction based on Defendants’ activities in a particular state, Plaintiffs must allege that those activities were the “but-for” cause of Plaintiffs’ ingestion of generic ranitidine products and injuries.  Plaintiffs have failed to do so.  Additionally, Plaintiffs must allege that Defendants should have foreseen that their activities regarding their brand-name ranitidine products in that state could expose them to liability for injuries sustained from the ingestion of generic ranitidine products.  Again, Plaintiffs have failed to do so.

Zantac, 2020 WL 7866660, at *10 (citations omitted).  So, just as we thought they should, innovator liability claims brought under the laws of the only two states allowing such claims fail because, without a relevant sale or use of the defendant’s product, there was no forum-specific conduct allowing exercise of specific personal jurisdiction.

But, this is an MDL, so plaintiffs advanced yet another bizarre theory – this time that something called “legislative jurisdiction” allowed California and Massachusetts to assert innovator liability on an “extraterritorial” basis.  Id. at *11.  Nope.  Before a state can impose any form of liability, Due Process requires that it first be able to exercise personal jurisdiction.

“[F]or the same reasons that Plaintiffs failed to establish a prima facie case of specific personal jurisdiction over Defendants in any state or territory, the Court similarly holds that Plaintiffs have not established sufficient minimum contacts between Defendants and the states of Massachusetts or California, such that neither state may apply their substantive law extraterritorially in accordance with the Due Process Clause.”

Id. at *12.

A great win:  innovator liability, Erie conservatism, and personal jurisdiction all in the same decision.  Stay tuned for the next installment of the Zantac chronicles.

This post is from the non-Dechert side of the Blog.

There were four opinions issued in the Zantac MDL on New Years Eve.  We would like to tell you all about them, but we have to seek internal client approvals, and that will take time given the number of defendants.  They are important, and overwhelmingly favorable to the right side of the “v.”  So, pending approval, when we’ll have much more to say, here are the bare bones of these decisions.

First: “Order Granting Brand-Name Manufacturer Defendants’ Motion To Dismiss Plaintiffs’ Innovator-Liability Claims,” In re Zantac (Ranitidine) Products Liability Litigation, MDL No. 2924 (S.D. Fla. Dec. 31, 2020), available here.  It is what it says.  (1) Following Erie conservatism in predicting state law.  (2) Predicting that 35 states would reject innovator liability.  (3) Holding that the two states (CA and MA) that recognize innovator liability cannot assert personal jurisdiction over all but one defendant, as they are neither incorporated nor have a principal place of business in those two states.

Second:  “Order Granting Generic Manufacturers’ & Repackagers’ Rule 12 Motion To Dismiss On The Ground Of Preemption,” In re Zantac (Ranitidine) Products Liability Litigation, MDL No. 2924 (S.D. Fla. Dec. 31, 2020), available here.  Dismissing generic manufacturers and repackagers on impossibility preemption.  (1) Misbranding claims do not defeat generic preemption.  (2) Misbranding allegations do not make the vast body of preemption law meaningless.  (3) Plaintiffs failed to plead claims based on expiration dates and testing, transportation, and failure-to-report.  (4) Plaintiffs failed to plead manufacturing defects with allegation of identical defects in every unit of the product.  (5) Magnuson-Moss claims dismissed to the extent they rely on FDA-approved language.

Third:  “Order Granting Defendants’ Motion To Dismiss and/or Strike Master Personal Injury Complaint on Grounds of Impermissible Shotgun Pleading; Granting in Part & Denying in Part Defendants’ Amended Motion To Dismiss and/or Strike Consolidated Consumer & Third Party Class Action Complaints on Grounds Of Impermissible Shotgun Pleading & Lack Of Article III Standing; & Denying Generic Manufacturers’ & Repackagers’ Rule 12 Motion To Dismiss Consolidated Consumer & Third-Party Payor Class Action Complaints on the Ground of Failure To Allege an Injury,” In re Zantac (Ranitidine) Products Liability Litigation, MDL No. 2924 (S.D. Fla. Dec. 31, 2020), available here.  (1) Personal injury complaint dismissed as improper “shotgun” pleading.  (2) Juridical link doctrine does not apply.  (3) No standing to assert claims on behalf of putative class members in other states.  (4) Some medical monitoring properly pleaded, but most are not.  (5) Economic loss rule not decided.  (6) Injunctive claims allowed for the time being.

Fourth:  “Order Granting Retailer & Pharmacy Defendants’ Rule 12 Motion To

Dismiss on the Ground of Preemption, Granting Distributor Defendants’ Rule 12 Motion To Dismiss on the Ground of Preemption, Denying as Moot Retailer & Pharmacy Defendants’ Rule 12 Motion To Dismiss on State Law Grounds, & Denying as Moot Distributor Defendants’ Rule 12 Motion To Dismiss on Various Group-Specific Grounds, In re Zantac (Ranitidine) Products Liability Litigation, MDL No. 2924 (S.D. Fla. Dec. 31, 2020), available here.  (1) Absolute liability does not exist.  (2) All claims against pharmacies and retailers preempted by impossibility because such entities cannot cure defects in FDA-approved drugs.  (3) Misbranding claims preempted for these reasons and for the reasons stated in order #1.  (4) Storage claims inadequately pleaded.  (5) Drug Supply Chain Security Act preemption not decided.  (6) Magnuson-Moss claim fails with preemption of all state-law warranty claims.

We have been consistently critical of the MDL system for encouraging judges presiding over such massive aggregations to manipulate the applicable law to create settlement pressure on defendants.  We’ve seen that with federal preemption, willingness to create novel state-law causes of action, choice of law, and trial consolidation of multiple plaintiffs.  But perhaps none has been more blatant than the exclusion of all mention of FDA medical device clearance on the bogus rationale that, because it is not “rigorous” enough to be preemptive of state-law claims under the obsolete decision in Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996), it isn’t relevant enough to be admitted at all.

That wasn’t the law anywhere until the Pelvic Mesh MDLs, as we set forth here.  Then Pelvic Mesh cases decided that it would be a great settlement tool to deprive defendants of the jury knowing that their products had, in fact, received FDA’s permission to be marketed, and that FDA saw no reason to require clinical trials before that happened.  E.g., Kaiser v. Johnson & Johnson, 947 F.3d 996, 1018 (7th Cir. 2020); Campbell v. Boston Scientific Corp., 882 F.3d 70, 77 (4th Cir. 2018); Eghnayem v. Boston Scientific Corp., 873 F.3d 1304, 1318-19 (11th Cir. 2017); In re C.R. Bard, Inc., 810 F.3d 913, 922-23 (4th Cir. 2016); Sanchez v. Boston Scientific Corp., 38 F. Supp.3d 727, 744 (S.D.W. Va. 2014); Lewis v. Johnson & Johnson, 991 F. Supp. 2d 748, 755-56 (S.D. W. Va. 2014).  Of course, by the time that appellate courts were able to review this Pelvic Mesh FDA gag rule (years after the fact, another problem with MDLs) hydraulic pressure to affirm existed, since to restore the law to where it belonged would have resulted in throwing out years of MDL activity – and affirm they did.

These cases turned FDA medical device regulation, particularly concerning design defect, into an all-or-nothing game.  Either, the FDA’s decision was preemptive, as with PMA medical devices, or such decisions weren’t admissible at all.  That’s a neat trick, from the plaintiffs’ perspective, because it also had the effect of repealing a dozen states’ pro-defendant compliance presumptions, since when FDA compliance was either preemptive or inadmissible, there was no situation in which such a presumption could ever come into play.  E.g., Adams v. Boston Scientific Corp., 177 F. Supp.3d 959, 963-64 (S.D.W. Va. 2016) (effectively nullifying Texas compliance statute); but see Ocasio v. C.R. Bard, Inc., 2020 WL 3288026, at *5-6 (M.D. Fla. June 18, 2020) (refusing to nullify Florida compliance statute) (discussed here).  These cases also created a “heads plaintiffs win; tails defendants lose” situation with the FDA – so that the FDA did not exist, except when a plaintiff wanted it to exist (when the FDA did something unfavorable to the defense), as we described here.

But particularly outside of the settlement uber alles context of the Pelvic Mesh MDL, there has been a fair amount of push-back against this blatantly pro-plaintiff manipulation of the rules of evidence.  We have discussed several such cases rejecting the Perlvic Mesh FDA gag rule, Keen v. C.R. Bard, Inc., 480 F. Supp.3d 646, 650-51 (E.D. Pa. 2020) (here); In re Cook Medical, Inc., IVC Filters Marketing, Sales Practices & Products Liability Litigation, 2018 WL 6617375, at *1-2 (S.D. Ind. Dec. 18, 2018) (here); In re Bard IVC Filters Products Liability Litigation, 289 F. Supp. 3d 1045, 1047-48 (D. Ariz. 2018) (here); Winebarger v. Boston Scientific Corp., 2015 WL 5567578, at *5-7 (W.D.N.C. Sept. 22, 2015) (here); McCracken v. DePuy Orthopaedics, Inc., 2013 WL 12141334, at *4-5 (N.D. Ohio July 26, 2013) (here).  See also In re Davol, Inc./C.R. Bard, Inc., Polypropylene Hernia Mesh Products Liability Litigation, 2020 WL 6603657, at *7-8 (S.D. Ohio Oct. 20, 2020); Retractable Technologies, Inc. v. Becton, Dickinson & Co., 2013 WL 4101810, at *2 (E.D. Tex. Aug. 12, 2013).

We’re pleased to report that the first state appellate court has agreed with us and refused to follow the same FDA gag rule even in Pelvic Mesh cases.  In Hrymoc v. Ethicon, Inc., ___ A.3d ___, 2021 WL 787039 (N.J. Super. App. Div. Mar. 2, 2021), a unanimous panel of the Appellate Division of New Jersey’s Superior Court recognized that exclusion of FDA device clearance was unduly prejudicial to defendants.  Refusing to bow to the inherent pressure to affirm, Hrymoc reversed two verdicts by juries deprived of FDA clearance information that had hit two different pelvic mesh manufacturers with multi-million dollar awards.  Hrymoc refused to inflate the no-preemption decision in Lohr to into a no-FDA-evidence-at-all gag rule:

[T]he absence of such a regulatory testing requirement does not preempt the ability of state law to impose liability upon manufacturers for selling a defective and unsafe product.  But that does not make a total ban on disclosure to the jury of the FDA’s actual involvement fair or appropriate.

Hrymoc, 2021 WL 787039, at *15 (Lohr citation omitted).  The FDA’s §510(k) process was different now.  “Following amendments to the MDA in 1990, [FDA] special controls could include . . . ‘the promulgation of performance standards as well as postmarket surveillance, patient registries, development and dissemination of guidelines,” and other actions deemed necessary by the FDA.’”  Id. at *7 (quoting FDA, “The 510(k) Program:  Evaluating Substantial Equivalence in Premarket Notifications; Guidance for Industry and Food and Drug Administration Staff,” at 2 (2014)) (for more on the 1990 amendments see our post, here).

Hrymoc found the Pelvic Mesh FDA gag rule unfair to defendants and misleading to juries.  Calling out the Pelvic Mesh MDL judge by name, 2021 WL 787039, at *12, Hrymoc disagreed with those cases, and held the same blanket exclusion of FDA device clearance evidence to be an abuse of discretion under New Jersey law.  A “complete ban on any disclosure of the 510(k) clearance process to the jurors” was reversible error because it “had the clear capacity to lead to possibly unjust results.”  Id. at *17 (footnote omitted).

While it is true that §510(k) clearance “is far less rigorous than the more elaborate and time-consuming process for obtaining the FDA’s premarket approval,” id. at *14, it is hardly a rubber stamp or unconcerned with safety.  As “it has evolved over the years”:

[T]he process for obtaining 510(k) clearance requires an applicant to address a lengthy checklist of filing requirements.  Among other things, the FDA’s review can encompass whether any differences in the submission device from the predicate device affect its safety and effectiveness, detailed information or data concerning adverse health effects, and, in some instances, clinical or scientific data, depending on if the applicant contends its device has the same technological characteristics as the predicate.

Id. (citations and footnote omitted).

That §510(k) clearance is “less rigorous,” does not make it irrelevant.  The FDA’s clearance nonetheless “provide[s] evidence that a device manufacturer obtained regulatory authorization to market the product at issue.”  Id.  That’s all that relevance requires.  “The bar for relevancy under N.J.R.E. 401 only requires a ‘tendency in reason’ for evidence to prove or disprove a fact of consequence to the case.”  Id.

Nor was there a valid argument that the obvious relevance of FDA device clearance was “substantially outweighed” by any “countervailing considerations” under Rule 403 (New Jersey’s evidence rules essentially reflect the federal rules in this area).  2021 WL 787039, at *15.  Many (if not most) jurors know about the FDA and would expect to hear about it in this type of case:

Many jurors in our present society would naturally expect that the FDA would have some involvement in the regulation of a new medical product being implanted in patients, and that the FDA would have had some oversight role concerning bringing a product to market.

Id.  Simply telling jurors “to ignore the possible role of the FDA” was neither a “fair” nor “adequate solution.”  Id.

Nor did “waste of time” or “jury confusion” justify an FDA gag rule.

[T]he judge could impose reasonable limits on the number of witnesses and the amount of trial time expended on the subject.  The judge could also explain to the jury − in a neutral manner − the basic and rather understandable conceptual difference between Class II “substantial equivalency” clearance and the more rigorous Class III premarket approval that evaluates a device’s safety and effectiveness in depth.

Hrymoc, 2021 WL 787039, at *16.  “It is wrong to presume the jury would not have been able to understand and follow a limiting instruction from the judge about the proper use of 510(k) evidence.” Id. at *17.

[W]e believe the revelation of the FDA’s 510(k) clearance of these devices can be conveyed to the jurors effectively and plainly without extensive elaboration.  The subject need not devolve into a “mini-trial” before the jury.  Prudent oversight measures by the court can assure that neither side goes too far in presenting evidence or making arguments to the jury about the 510(k) process.

Id.

We bloggers think the whole “mini trial” argument is ridiculously overblown in §510(k) cases anyway – since plaintiffs’ counsel in other MDLs have no compunction about raising absurdly complex FDA-based liability theories.  The Zantac MDL is but one recent example of the other side’s digging deeply into FDA regulatory workings whenever it suits their purposes.  Their regulatory experts are often walking, talking “mini trials” in their own right.  Thus, we agree that, as to FDA evidence, “[t]he playing field can be leveled without a dramatic alteration of the overall contest.”  Hrymoc, 2021 WL 787039, at *17.

And of course plaintiffs’ counsel at the two trials engaged in their usual hijinks once the FDA gag rule was in effect.  Their “undue tactical advantage,” id. at *17, included arguing that pre-marketing clinical trials were “needed” and “required” – as if these cases involved PMA devices – while the defendants were prohibited from telling the jury that the FDA did not require such costly and time-consuming testing.  Id. at *15.  Moreover, “[t]he inherent unfairness of the situation [was] perhaps most pronounced in connection with the punitive damages aspect of these cases.”  Id. at *16.  Plaintiffs’ counsel “exhorted the jury to impose punitive damages to punish’ defendants so they would ‘do clinical studies.’”  Id. at *15.

Plaintiffs’ trial conduct made it particularly egregious to exclude an FDA document in which “the FDA reviewer who recommended 510(k) clearance for [one] device noted on the clearance form that ‘clinical data’ was not ‘necessary to support the review.’”  Id. at *17.  Hymoc recognized that the defendants had been forced by the FDA gag rule to litigate with one hand tied behind their backs.  “[D]efendants should have been permitted to try to counter [those arguments] by allowing the jurors to at least know about the 510(k) clearance process and the fact that the FDA did not require such clinical studies.”  Id. at *15.

Thus, in future New Jersey trials involving §510(k) cleared medical devices, instead of “complete ban” on FDA evidence, Hrymoc encouraged trial judges to conduct preliminary proceedings under Rule 104 to consider such evidence judiciously.  Id. at *17.  Such hearings would allow:

a more in-depth exploration . . . of exactly what proofs and counterproofs about 510(k) clearance might be appropriately presented, what constraints on counsel might be sensible, and what the precise wording of a limiting instruction might contain.

Id.

There are various and sundry other rulings in Hrymoc that are not as helpful to defendants, see, id. at *18-23, but they are minor and case-specific compared to the court’s resounding rejection of the Pelvic Mesh FDA gag rule.  At least in New Jersey a serious, ongoing injustice has – albeit belatedly − been righted.

Full disclosure:  Reed Smith has been involved in this litigation representing both defendants.  Reed Smith has also been involved in Pelvic Mesh litigation generally.

We are not going to beat around the bush today.  When we see a “prediction” of an “expansion” of state law by a federal court, we have only one question.  What about Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78 (1938)?  That should have been a front and center question for the court in In re: Fluoroquinolone Products Liability Litigation, 2021 WL 396819 (Feb. 4, 2021).  We’ll give the court credit for not ignoring Erie completely.  Although perhaps the partial acknowledgement is worse than none at all.  Faced with a question of Illinois law that had not been addressed by that state’s highest court, the MDL court recognized that its role was to “predict” how that court would rule on the issue.  Id. at *5.  But the MDL court stopped short.  It neglected the rest of Erie doctrine which provides that

[a] federal court in diversity is not free to engraft onto those state rules exceptions or modifications which may commend themselves to the federal court, but which have not commended themselves to the State in which the federal court sits.

Day & Zimmerman, Inc. v. Challoner, 423 U.S. 3, 4 (1975).  In other words, a federal court sitting in diversity is not supposed to expand state law.  If a state has not recognized a cause of action, an MDL court should not be the first to do so.  Erie is a conservative doctrine aimed at ensuring that federal judges do not displace state law.  Where a state’s highest court has ruled on the issue, Erie means applying that rule.  Where a state’s highest court has not, “[t]he proper function” of a federal court “is to ascertain what the state law is, not what it ought to be.”  Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487, 497 (1941).  But that is precisely what the Cipro MDL court did when it predicted that Illinois would apply innovator liability, despite not a single Illinois state court ever having done so and contrary to Illinois Supreme Court decisions otherwise requiring product identification.  It decided what it thought Illinois law should be, rather than applying what it is.

Defendant, the brand manufacturer, moved to dismiss the claims of a plaintiff who admitted to only using the generic drug which was not manufactured or sold by defendant.  Those claims included product liability failure to warn, negligence, breach of express and implied warranties, fraud, negligent misrepresentation, fraudulent concealment, and consumer protection.  In re: Fluoroquinolone Prods. Liab. Litig., at *2.

With no law on directly on point, defendant argued that the governing law in Illinois, as decided by the Illinois Supreme Court, was that “[e]ach manufacturer owes a duty to plaintiffs who will use its drug or be injured by it. However, the duty is not so broad as to extend to anyone who uses the type of drug manufactured by a defendant[.]” Id. at *6 (quoting Smith v. Eli Lilly, 560 N.E.2d 324,  343 (Ill. 1990)).  So, per the highest court in Illinois, a fundamental requirement of bringing suit for harm caused by a product is that you must sue the manufacturer of the product you used, not the manufacturer of a similar product.

Not only is this the controlling law of Illinois, the Cipro MDL court admitted that the concept of innovator liability, or what it calls “warning label liability,” is a minority view.  It decided to read into Illinois law something that was neither recognized by that state or even by a majority of courts to have reviewed the issue.  Rather, it relied on one decision by an Illinois federal court that also ran roughshod over Erie to predict this expansion of Illinois tort law. Id.  A decision that was recently rejected by In re Zantac (Ranitidine) Products Liability Litigation, MDL No. 2924 (S.D. Fla. Dec. 31, 2020)(predicting 35 states would reject innovator liability, including Illinois).  Also ignoring the Sixth Circuit’s prediction that innovator liability claims would fail under Illinois law.  See In re Darvocet, Darvon, and Propoxyphene Prods. Liab. Litig., 756 F.3d 917, 944 (6th Cir. 2014).

The sum total of all of this is that the question of whether a generics warning label claim could be brought against the brand manufacturer is far from settled in Illinois and the majority of courts to consider Illinois law on the issue have held the state would not recognize the claim.  Given this set of circumstances, the Cipro MDL court had no basis on which to create new Illinois law.  Even if at some time in the future the MDL court turns out to be correct, a notion we loathe to even suggest, the fact is – that is not the law now and that is the only law a federal court sitting in diversity can apply.

Ultimately, the Cipro MDL court placed plaintiff’s claims into two buckets – products liability claims and warning label claims.  While the MDL court was willing to find that the brand manufacturer owed a duty to the generic user, it determined that it was a “limited” liability that only extended to injuries caused by the label.  In re Fluoroquinolone, at *9.    As an aside, it is difficult to understand how an action called “warning label liability” is divorced from or independent of products liability.  The label and its contents are part of the product.  In a failure to warn context, it is the label that plaintiff alleges is defective.  Hence, it is products liability.  Calling a claim that a label is deficient anything else is the worst case of form over substance.  Here again the court chose to ignore the Sixth Circuit which held that warnings claims are in fact products claims.  See In re Darvocet.

This separation of warnings versus products claims gets even more difficult to understand in practice.  Dismissing the breach of warranty claims is straightforward.  They fail for lack of privity.  Id. at *10.  But what about failure to warn claims?  First, the court dismisses plaintiff’s strict liability failure to warn claim because strict liability can only be imposed against an entity in the distributive chain, which the brand manufacturer is not.  Id. at *9.  Then the court dismisses plaintiff’s negligent failure to warn claim because that claim requires “an analysis of the condition of the product.”  Id.  The product plaintiff used is not the one manufactured by the defendant, so that claim is not viable.

The MDL court’s analysis changes when it comes to plaintiff’s fraud and misrepresentation claims.  Here, the court found that plaintiff could pursue these claims against the brand manufacturer based on allegations that the brand label did not contain certain warnings.  But we are left wondering how that differs from plaintiff’s failure to warn claims.  Plaintiff is making the same allegations in each cause of action.  He was not properly warned and as a result he was injured by the drug.  Allowing failure to warn claims to masquerade as fraud and misrepresentation claims just so they can be brought against the brand defendant is a severe distortion of tort law, both generally and in Illinois.

 

 

In our personal jurisdiction posts, we’ve generally taken a dim view of plaintiffs who attempt to oppose Rule 12(b)(2) dismissal motions with requests for jurisdictional discovery.  Both our experience and our perspective leads us to view such requests as overwhelmingly likely to be fishing expeditions, designed more to delay and to increase the expense of jurisdictional motions than with any expectation of actually finding relevant jurisdictional facts.

But what about defendants?  Are they allowed to seek jurisdictional discovery from plaintiffs?  Remember what Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017), had to say about facts that mass tort plaintiffs’ needed to have in order to assert personal jurisdiction:

The State Supreme Court found that specific jurisdiction was present without identifying any adequate link between the State and the nonresidents’ claims.  As noted, the nonresidents were not prescribed [the product] in California, did not purchase [the product] in California, did not ingest [the product] in California, and were not injured by [the product] in California. . . .

Id. at at 1781.  Thus, mass tort plaintiffs are unlikely to be able to establish personal jurisdiction over a defendant if they:  (1) were not prescribed the defendant’s product; (2) did not purchase the defendant’s product; and/or (3) did not in fact use the defendant’s product.  BMS was concerned about allegations of non-forum use, but no use at all would be equally lacking in jurisdictional contacts.

That could help solve another problem.

Since one of the principal complaints the we (and virtually everyone representing defendants) have about MDLs is the lack of early vetting of plaintiffs for (among other things) not having the precise things that BMS listed, maybe personal jurisdiction can, at least sometimes, provide us a means of obtaining this information in a more timely fashion.  Not only do plaintiffs lacking these in-state contacts fail to state a claim, they also lack a basis for personal jurisdiction.  We’ve seen the jurisdictional aspect of BMS pursued in innovator liability cases, Henry v. Angelini Pharma, Inc., 2020 WL 1532174, at *4 (E.D. Cal. March 31, 2020); Stirling v. Novartis Pharmaceutical Corp., 2020 WL 4259035, at *3 (Idaho Dist. July 13, 2020), but it is just as true as a general matter.

“Where issues arise as to jurisdiction or venue, discovery is available to ascertain facts bearing on such issues.”  Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 351 n.13 (1978).  “[W]hen facts that go to the merits and the court’s jurisdiction are intertwined and genuinely in dispute, parties have a qualified right to jurisdictional discovery.”  ACLU of Fla., Inc. v. City of Sarasota, 859 F.3d 1337, 1341 (11th Cir. 2017).  “Jurisdictional discovery is not necessarily a one-way street.”  Mithril GP Employee Feeder LLC v. McKellar, 2020 WL 3206555, at *2 (D. Del. June 15, 2020) (granting jurisdictional discovery to the defendant orcs and ents).  Where “evidence may exist to refute Plaintiff’s jurisdictional allegations, and th[e] Defendant may not be in possession of such evidence[’  i]t is appropriate to permit Defendant the opportunity to discover and present such evidence.”   Young v. Bridgestone Americas Tire Operations, LLC, 2021 WL 50478, at *2 (D. Utah Jan. 6, 2021).

Thus, in One Bank & Trust NA v. Galea, 2011 WL 13141643 (E.D. Ark. Sept. 27, 2011), the plaintiff’s claim to personal jurisdiction rested on a forum selection clause that the defendant claimed was fraudulently induced, and the court held that the defendant’s request for “jurisdictional discovery on these types of issues seems appropriate under these circumstance.”  Id. at *2.  In Vai, Inc. v. Miller Energy Resources, Inc., 2012 WL 12897099, at *2 (E.D. Pa. Feb. 24, 2012), the defendant received jurisdictional discovery (of plaintiff’s business travel) to determine where plaintiff was when the relevant contract negotiations occurred.  Id. at *1 n.1.  Similarly, BMS has now recognized that the personal jurisdiction claims of litigation tourist product liability plaintiffs turns on where they obtained or used the product at issue.

Thus, no procedural basis exists to deny defendants their equal right to take jurisdictional discovery of mass tort plaintiffs concerning the jurisdictional facts recently identified in BMSSee Fed. R. Civ. P. 26(b)(1) (right to discovery belongs to “parties”).

To be sure, arguments challenging personal jurisdiction typically result in discovery where a plaintiff takes limited jurisdictional discovery of the defendant, to see whether the defendant’s activities fall within the long-arm statute, and, if so, whether the defendant has sufficient minimum contacts.  But Plaintiffs here have not called attention to any case law or other authority which would prevent limited discovery of a plaintiff . . . adopting the “what’s-sauce-for-the-goose-is-sauce-for-the-gander” maxim.

Vorbe v. Morisseau, 2014 WL 12637924, at *4 (S.D. Fla. Aug. 27, 2014) (emphasis original).  Just as plaintiffs are allowed to dispute a defendant’s jurisdictional assertions, defendants have the same right where they “provide[] some specific indication regarding what facts discovery would produce to affect the jurisdictional analysis.”  Wright & Miller, 8 Fed. Prac. & Proc. Civ. §2008.3, “Relevancy to the Subject Matter, Discovery About Jurisdictional Issues,” n.4 (3d ed.).

Indeed, in recent decision from the Zantac MDL suggests that a BMS-based motion for jurisdictional discovery against plaintiffs may well have succeeded.  In Zantac, as we discussed, certain overseas defendants were denied jurisdictional discovery only because the lack of any purchasers of their products was not in dispute – plaintiffs complaints “d[id] not contain any well-pled allegations that” such purchasers existed.  In re Zantac (Ranitidine) Products Liability Litigation, 2020 WL 6907056, at *9 (S.D. Fla. Nov. 24, 2020).  If there had actually been a factual dispute to which discovery was relevant, the defense motion for jurisdictional discovery in all probability would have been granted, since the Zantac court held:  (1) defendants sought jurisdictional discovery in good faith; and (2) “reject[ed] Plaintiffs’ argument that the request . . . is improper merits discovery and/or is subsumed within [other] motions.”  Id. at *8.  Indeed, in Zantac, the MDL “[p]laintiffs conceded . . . that, in appropriate circumstances, the Court has discretion to authorize a defendant to take jurisdictional discovery in support of a 12(b)(2) motion.”  Id.

Thus, another consequence of the BMS decision appears to be to provide a partial vehicle for obtaining early dismissals of, at least, litigation tourist MDL plaintiffs where they cannot produce evidence of use of a defendant’s product at the outset of the litigation.  We say “at least” because the innovator liability cases establish that even a plaintiff suing in his/her home state cannot establish personal jurisdiction without evidence of using the defendant’s product.