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JAMES M. BECK is Counsel resident in the Philadelphia office of ReedSmith. He is the author of, among other things, Drug and Medical Device Product Liability Handbook (2004) (with Anthony Vale). He wrote the seminal law review article on off-label use cited by the Supreme Court in Buckman v. Plaintiffs Legal Committee. He has written more amicus briefs for the Product Liability Advisory Council than anyone else in the history of the organization, and in 2011 won PLAC's highest honor, the John P. Raleigh award. He has been a member of the American Law Institute (ALI) since 2005. He is the long-time editor of the newsletter of the ABA's Mass Torts Committee.  He is vice chair of the Class Actions and Multi-Plaintiff Litigation SLG of DRI's Drug and Device Committee.  He can be reached at  His LiinkedIn page is here.

On March 5, FDA Commissioner Dr. Scott Gottlieb abruptly announced his resignation, effective in a month.  Since then, it has been announced that Dr. Ned Sharpless, currently head of the National Cancer Institute, will replace Dr. Gottlieb on an “acting” basis.  This is disturbing generally, as Dr. Gottlieb has stood out as a demonstrably competent appointee.  It is also disturbing, to us, as Dr. Gottlieb leaves with a grade of “incomplete” in the area we most cared about when he was originally appointed – moving the FDA’s hidebound policy towards truthful manufacturer communications about off-label uses of FDA-regulated products into the Twenty-First Century.

Since the beginning of the Blog, we have chronicled the crumbling of the FDA’s 1950s-era ban against all truthful off-label communications in the courts, under pressure from the First Amendment.  See, e.g., Sorrell v. IMS Health Inc., 564 U.S. 552 (2011); Thompson v. Western States Medical Center, 535 U.S. 357 (2002); United States v. Caronia, 703 F.3d 149 (2d Cir. 2012); Amarin Pharma, Inc. v. FDA, 119 F. Supp.3d 196 (S.D.N.Y. 2015).

Dr. Gottlieb was on record (something we first noticed in 2007) as opposing this prohibition, which we discussed in some depth here.  Thus, we were hopeful that under Dr. Gottlieb’s leadership, the FDA would finally come around to a more nuanced – and thus more constitutional – approach to truthful off-label communications by regulated manufacturers.  After all, from a public health standpoint, the current muzzling of manufacturer communications makes no sense, since anybody else in the world can post nonsense on the Internet about off-label uses, but the manufacturers, who know more about their products than anybody else, are precluded from debunking the nonsense.

There has been some progress – most notably the recent (2018) FDA recognition that regulated manufacturers could communicate with third-party payors (“TPPs”) about off-label uses and potential new products nearing FDA approval.  There is now a Final FDA Guidance on this subject, “Drug and Device Manufacturer Communications With Payors, Formulary Committees, & Similar Entities − Questions & Answers, available here.  Another step forward was the Agency’s 2018 shelving of a proposal to revamp its archaic “intended use” regulations for drugs (21 C.F.R. §201.128) and devices 21 C.F.R. §801.4).  That proposal started out with some promise, but ended up worse than the original, when just before the change in administrations, the FDA baited and switched its stakeholders with a surprise “Final Rule” (never subjected to proper notice and comment) that would have made things worse. As we stated at the time:

The FDA’s January 9, 2017 proposal reversed course, retained knowledge of off-label use as evidence of intended use, clarified that any relevant source of evidence, whether circumstantial or direct could demonstrate intended use, and ultimately invoked the dreaded “totality of the evidence” standard.  A constitutionally frail regulatory regime looked like it was about to become even worse – even more vague, over broad, and chilling.

At least Dr. Gottlieb put the kibosh on that.

But that’s pretty much it.  The most critical step – recognizing that regulated manufacturers could truthfully discuss off-label uses with health care professionals (usually, but not always, doctors) at least as freely as with TPPs, hasn’t happened yet, at least with the FDA.  We note that industry groups are getting tired of FDA foot-dragging on its unconstitutional position, and that truthful off-label communications with such providers have been declared “ethical” by AdvaMed, the medical device industry’s primary trade association.  The pharmaceutical industry did something similar with its 2016 “Principles on Responsible Sharing of Truthful & Non-Misleading Information about Medicines with Health Care Professionals and Payers.”  If the FDA itself stalls out again, we’d expect the pharmaceutical industry to press forward through its “Medical Information Working Group” and support additional court challenges to FDA restrictions on truthful off-label communications.

We were hoping that Dr. Gottlieb would, as FDA Commissioner, broker a rational, constitutional, solution out of the corner into which the Agency has painted itself.  Now, unfortunately, that is not to be.  Whether one views the off-label communication glass as half-full or half-empty, we’re still only halfway (if that) to an acceptable endpoint.  Still, his incomplete legacy leaves the FDA off-label communication ban, if it can still be called a “ban,” in a very awkward position.  Having declared that it is legal for regulated entities to provide a great deal of truthful information about off-label uses to one professional audience – third party payors – it will now be almost impossible for the FDA to justify under the First Amendment a prohibition against providing the same information in the same manner to the other equivalent audience – physicians and other professional health care providers.

We don’t know much about Dr. Sharpless.  He does not have the favorable public paper trail that Dr. Gottlieb had on off-label communication issues.  We are, however, pleased to read that he comes from the oncology space, and has an entrepreneurial background that includes founding a company involved in cancer treatment.  We say that because, with the possible exception of pediatrics, off-label use has always been more widespread in cancer treatment than in any other area of medicine.  E.g. M. Saiyed, et al., “Off‐Label Drug Use in Oncology: A Systematic Review of Literature,” 42(3) J. Clin. Pharm. & Therapeutics 251 (June 2017); M. Soares, “’Off-Label’ Indications for Oncology Drug Use & Drug Compendia: History & Current Status,” 1(3): J Oncol. Pract. 102 (Sept. 2005); J. Beck & E. Azari, “FDA, Off-Label Use, & Informed Consent: Debunking Myths & Misconceptions,” 53 Food & Drug L.J. 71, 80 (1998).

So Dr. Sharpless has been affiliated with FDA-regulated entrepreneurship in an area of medicine where off-label use has particular importance.  Thus, we remain hopeful, until it is proven otherwise, that Dr. Sharpless appreciates the problems that the FDA’s attempt to prohibit truthful off-label communications cause both manufacturers trying to disseminate such off-label information and medical professionals seeking to access it.  As such, we currently expect that he will follow-through and expand upon Dr. Gottlieb’s initiatives concerning off-label communications.

Every time we think about addressing ghostwriting as a recurrent plaintiff-side jury distraction in drug/device product liability litigation, we get earwormed by “Ghost Riders in the Sky.”  Whether one prefers the Johnny Cash or Outlaws version of the song – or one of who knows how many other covers of the song (originally written by Stan Jones in 1948), it’s hard to stop thinking about it once you start.

The most inveterate ghostwriters are, of course, lawyers themselves. Give us a chance (and a fee) and we’ll ghostwrite anything:  opinions for judges, reports for expert witnesses (e.g., McClellan v. I-Flow Corp., 710 F. Supp.2d 1092, 1118 (D. Or. 2010)), and (most annoyingly) pleadings for supposedly “pro se” parties.  But let a drug/device company provide authorship assistance to a busy doctor or a scientist, and the same plaintiffs’ lawyers who routinely massage (if not outright create) their experts’ opinions start screaming and yelling that something terrible is happening.  And yet, there’s no proof (and often not even an allegation) that any of the actual science in the “ghostwritten” article was misstated.

So-called “ghostwriting” is “a fairly common, but little known practice, with a pejorative name would distract the jury and needlessly consume time.”  Okuda v. Wyeth, 2012 WL 12337860, at *1 (D. Utah July 24, 2012).  Plaintiffs regularly attempt to convince juries that routine “ghostwriting” is something nefarious.  Defendants, just as often, try to keep this smoke-and-mirrors type evidence out.  We haven’t blogged about this issue before, so we thought we’d take a look at decisions excluding ghostwriting allegations.

Perhaps the most notorious ghostwriting testimony was the inflammatory rhetoric initially admitted in In re Prempro Products Liability Litigation, 554 F. Supp.2d 871, 885 (E.D. Ark. 2008), to support punitive damages.  There aren’t many judges – especially MDL judges in bellwether cases – willing to admit they were wrong and reverse a verdict, but this was one.  In Prempro “Dr. Parisian testified that the FDA would not be aware of ghostwriting” but “provided no testimony linking FDA regulations and ghostwriting.”  Id. at 885.  Plaintiffs used these (and other) allegations to bamboozle a jury into awarding punitive damages.  Id. at 889, 893, 897 (“Plaintiff asserted that ghostwriting is ‘exactly the type of conduct that necessitates punitive damages.’”) (footnote omitted).  Holding that ghostwriting testimony should never have been admitted, the court granted a new trial:

[T]here is no evidence that this practice is inappropriate or that [defendant] supported articles that it knew were false or misrepresented the science.  Rather, the articles supported [defendant’s] position on the state of the science.  Additionally, there was evidence that ghostwriting was a common practice in the industry.

Id. at 888 (footnotes omitted).  On appeal, the Court of Appeals affirmed.  In re Prempro Products Liability Litigation, 586 F.3d 547, 571 (8th Cir. 2009) (“we cannot say that the district court abused its discretion”).

The same fact pattern was addressed in Cross v. Wyeth Pharmaceuticals, Inc., 2011 WL 2517211 (M.D. Fla. June 23, 2011).  Cross “exclude[d] as irrelevant evidence of ‘ghostwritten’ articles” because “neither [plaintiff] nor her physician relied on a ‘ghostwritten’ article.”  Id. at *4.  Further, “evidence of “ghostwriting’ carries a substantial risk of misleading the jury.”  Id.  See Okuda, 2012 WL 12337860, at *1 (plaintiff could “not produce[] sufficient evidence that she or her prescribing physicians relied on any ghostwritten article in taking or prescribing the . . . drugs at issue or that the information in the articles is false”); Skibniewski v. American Home Products Corp., 2004 WL 5628157, at *1 (W.D. Mo. April 1, 2004) (evidence of ghostwriting also excluded).

Ghostwriting allegations similarly bit the dust in Bailey v. Wyeth Inc., 37 A.3d 549, 574-75 (N.J. Super. L.D. July 11, 2008). That wasn’t really surprising, since plaintiffs’ own expert “admit[ted] the beneficial contribution of the information contained in at least one article” that was allegedly ghostwritten, characterizing the information “provided to the doctor [a]s essential.”  Id. at 574.  Bailey therefore held:

There is no dispute that the articles were subject to a rigorous peer review process and were factually and medically sound.  The identified articles were published after 1994 and would not have “polluted” the information regarding [the drug] already available to the FDA.  There is no proof that these corporate-initiated articles in any way delayed the implementation of what the FDA requested be in the [drug] labeling or diluted the warnings on these drugs.

Id. at 574-75 (granting summary judgment).  Bailey was affirmed on appeal “substantially on the basis of the well-considered and exhaustive opinion . . . in the Bailey matter, which we have determined to be well supported by the evidence and legally unassailable.”  DeBoard v. Wyeth, Inc., 28 A.3d 1245, 1246 (N.J. Super. A.D. 2011).

Allegations that “ghostwriting” was a form of academic impropriety were raised, and rejected, in United States ex rel. King v. Solvay S.A., 2015 WL 8732010 (S.D. Tex. Dec. 14, 2015), a False Claims Act case.  The court determined that “evidence that [defendant] directed progress and revised the final manuscript [of an article] is not probative.”  Id. at *6.  The ghostwriting allegations were simply a prejudicial sideshow:

Relators additionally contend that as part of [defendant’s] publication strategy it commissioned smaller “investigator initiated” studies and then found “thought leaders” willing to lend their names to articles actually written by the writers who worked for [defendant], known as ghostwriters. . . .  This testimony is not an admission that [an author] merely “lent his name” to an article wholly written by [defendant’s] medical writers.  Moreover, even if it were, [plaintiffs] do not link [the] allegedly ghost-written article to any DrugDex [a compendium of off-label research] entries.  While the court understands [plaintiffs’] theory that [defendant] had a strategy to publish articles on small studies with positive outcomes and even had its own staff members write the articles and that these non-authoritative studies ended up supporting off-label use in DrugDex and other compendia, at this stage [plaintiffs] must have evidence specifically linking [defendant’s] conduct to . . . off-label use.  Innuendo related to small articles that may have been partially ghost-written but did not even end up in DrugDex is not sufficient.

Id. at *6-7 (footnote omitted).  Ghostwriting allegations in the air – not relating to anything that influenced an prescriber’s treatment of the plaintiff – also failed in Romero v. Wyeth Pharmaceuticals, Inc., 2012 WL 13036355, at *4 (E.D. Tex. April 25, 2012) (“[f]or these reasons, . . . marketing practices testimony, including . . . ghostwriting, are excluded”).

Other decisions excluding evidence of ghostwriting allegations are:  Hill v. Novartis Pharmaceuticals Corp., 944 F. Supp.2d 943, 952 (E.D. Cal. 2013) (“[Defendant] moves to preclude [plaintiff] from ‘introduc[ing] testimony or evidence that some or many of the articles . . . were actually ghostwritten by drug companies. . . .’  Having reviewed . . . all competent and admissible evidence submitted, the Court agrees such evidence should be excluded.”); Mahaney v. Novartis Pharmaceuticals Corp., 835 F. Supp.2d 299, 318 (W.D. Ky. 2011) (granting in limine motion to exclude “[t]estimony or evidence that articles were ghostwritten by drug companies”), reconsideration granted on other grounds, 2012 WL 12996015 (W.D. Ky. Jan. 4, 2012).

Finally, accusations of ghostwriting have also been a stock-in-trade of notorious plaintiffs’ “expert” Suzanne Parisian, even though she has no relevant expertise in such matters.  Ironically, in at least one deposition, “Dr. Parisian conceded that she had done ghostwriting on behalf of [a major drug company].”  Prempro, 554 F. Supp.2d at 897.  Parisian’s ghostwriting charges were excluded in a lot of Aredia/Zometa cases.  For instance, in Deutsch v. Novartis Pharmaceuticals Corp., 768 F. Supp. 2d 420, 468 (E.D.N.Y. 2011).

[T]he Court grants [defendant’s] motion to exclude Dr. Parisian’s opinions on the use of ghostwriters. . . .  The Plaintiffs argues [sic] that this testimony is relevant because it goes to [defendant’s] “communication of [relevant] risks to health care providers and the public,” which are required to be “fair and balanced” under 21 C.F.R. § 202.1. . . .  Dr. Parisian does not provided [sic] any foundation beyond her personal opinion that the use of ghostwriters . . . does not provide “fair and balanced” information.

Id. at 468.  Accord Kruszka v. Novartis Pharmaceuticals Corp., 28 F. Supp.3d 920, 935 (D. Minn. 2014) (“opinions that [defendant] convinced doctors to write publications favoring [its drugs] under the guise of independent reporting, or ‘ghostwriting,’ are outside the realm of Dr. Parisian’s expertise”); Lemons v. Novartis Pharmaceuticals Corp., 849 F. Supp.2d 608, 615 (W.D.N.C. 2012) (“the Court is not allowing Dr. Parisian to offer testimony regarding . . . ghostwriting”); In re Fosamax Products Liability Litigation, 645 F. Supp.2d 164, 191 (S.D.N.Y. 2009) (Parisian ghostwriting testimony excluded after “she could not name any standard that prohibits such a practice, as long as the information presented is accurate”); Bartoli v. Novartis Pharmaceuticals Corp., 2014 WL 1515870, at *6 (M.D. Pa. April 17, 2014) (“her testimony regarding ghostwriting . . . is inadmissible because she opines, without foundation, that employing such practices does not provide ‘fair and balanced’ information and that it must be disclosed); Earp v. Novartis Pharmaceuticals Corp., 2013 WL 4854488, at *4 (E.D.N.C. Sept. 11, 2013) (“[t]o the extent she also seeks to opine on . . . industry ghostwriting . . . that would unduly prejudicial, irrelevant, or outside the scope of her expertise, [and] the court will not allow her to do so”); Hill v. Novartis Pharmaceuticals Corp., 2012 WL 5451809, at *2 (E.D. Cal. Nov. 7, 2012) (“Defendant’s motion to exclude Dr. Parisian’s testimony regarding ghostwriting . . . is GRANTED”); Georges v. Novartis Pharmaceuticals Corp., 2012 WL 9064768, at *14 (C.D. Cal. Nov. 2, 2012) (“exclud[ing] Dr. Parisian’s testimony regarding ghostwriting”); Zimmerman v. Novartis Pharmaceuticals Corp., 2012 WL 13009101, at *1 (D. Md. Sept. 25, 2012) (“Dr. Parisian may not offer opinion testimony on . . . Ghostwriting”); Winter v. Novartis Pharmaceuticals Corp., 2012 WL 827245, at *3 (W.D. Mo. March 8, 2012) (“Motion to exclude evidence that articles concerning [the class of drugs] in medical journals were actually ‘ghostwritten’ by companies, including [defendant], is granted consistent with prior rulings”); Mahaney v. Novartis Pharmaceuticals Corp., 2011 WL 13209814, at *2 (W.D. Ky. Nov. 15, 2011) (“exclud[ing] Parisian’s testimony on ghostwriting”).

Sharp-eyed readers will note that all of these decisions, except for the King False Claims Act ruling, were issued in the decade between 2004 and 2014 – which we are wont to call the “coprolitic age” of ghostwriting allegations, powered mainly by the aforementioned Suzanne Parisian.  We hope that the other side drew back a nub enough times on this issue that it’s no longer worth the candle to develop.  After all, who knows how many of those expert opinions were ghostwritten by plaintiffs’ counsel?  We’d like the issue to stay dead, so for the good of the order we have compiled all of the favorable precedent here.

Bexis recently filed a personal jurisdiction amicus brief in Pennsylvania – ground zero in the battle over general jurisdiction by “consent” due to a foreign corporation’s registration to do business in the state (technically, commonwealth).  As is readily apparent from our 50-state survey on general jurisdiction by consent, most states reject such an expansive reading of corporate domestication statutes.  But those states that don’t rely on a hoary United States Supreme Court decision, Pennsylvania Fire Insurance Co. v. Gold Issue Mining & Milling Co., 243 U.S. 93 (1917), from deep within the old “territorial” age of personal jurisdiction, an age that ended over 70 year ago when International Shoe Co. v. Washington, 326 U.S. 310 (1945), supplanted Pennoyer v. Neff, 95 U.S. 714 (1877).

In Pennsylvania, where Bexis filed, that reliance has a Tinker to Evers to Chance flavor to it.  Webb-Benjamin, LLC v. International Rug Group, LLC, 192 A.3d 1133 (Pa. Super. 2018), followed Bors v. Johnson & Johnson, 208 F. Supp.3d 648 (E.D. Pa. 2016), which we blogged about here.  Bors, in turn, refused to “ignore” (208 F. Supp.3d at 652) the pre-Bauman Third Circuit decision in Bane v. Netlink, Inc., 925 F.2d 637 (3d Cir. 1991).  Bane had this to say about general jurisdiction by consent back in 1991:

[Defendant’s] application for a certificate of authority can be viewed as its consent to be sued in Pennsylvania under section 5301(a)(2)(ii), which explicitly lists “consent” as a basis for assertion of jurisdiction over corporations. Consent is a traditional basis for assertion of jurisdiction long upheld as constitutional.  See Hess v. Pawloski, 274 U.S. 352, 356-57 (1927).

Id. at 641 (other citation omitted).  Those three sentences are the entirety of the discussion of “consent” in Bane.  Right now, you could say those three sentences are the bane of our existence.

Hess, finally, relied on Pennsylvania Fire:

The mere transaction of business in a state by nonresident natural persons does not imply consent to be bound by the process of its courts.  The power of a state to exclude foreign corporations, although not absolute, but qualified, is the ground on which such an implication is supported as to them.  Pennsylvania Fire Insurance Co. v. Gold Issue Mining Co., 243 U. S. 93 [(1917)].

274 U.S. at 355 (other citation omitted).  See also Knowlton v. Allied Van Lines, Inc., 900 F.2d 1196, 1198 (8th Cir. 1990) (also relying on Hess for the proposition “[t]:he doing of various acts within the State . . . was equated, by statute, with consent or submission to the jurisdiction, even by nonresidents”).

Other courts in the post-Bauman minority rely on Pennsylvania Fire much more directly.  For example, take a look at the only other post-Bauman appellate decision allowing general jurisdiction by consent:

In this appeal, we consider whether [defendant] consented to general personal jurisdiction in New Mexico courts when it registered to do business here.  To answer this question, we must determine whether the United States Supreme Court’s decision in Pennsylvania Fire Insurance Co. of Philadelphia v. Gold Issue Mining & Milling Co., 243 U.S. 93 (1917) . . . remain binding precedent in light of the evolution of general jurisdiction jurisprudence. . . .  We recognize the tension between the two lines of cases.  Nevertheless, because we conclude that . . . Pennsylvania Fire . . . [is] are still binding, we conclude that [defendant] consented to general jurisdiction in New Mexico.

Rodriguez v. Ford Motor Co., ___ P.3d ___, 2018 WL 6716038, at *1 (N.M. App. Dec. 20, 2018).

The rigor of briefing an issue – rather than writing blogposts – required Bexis to go back and actually read a number of the foundational Supreme Court personal jurisdiction decisions for the first time, probably, since law school.  It was a useful exercise, one that led him to conclude that, not only is Pennsylvania Fire no longer good law in light of Bauman, as so many recent decisions in our 50-state survey have concluded, but that Pennsylvania Fire has already been expressly overruled – more than 40 years ago.  The United States Supreme Court just didn’t overrule it by name.

We start with International Shoe Co. v. Washington, 326 U.S. 310 (1945), which discussed the demise of the “fictional” concept of corporate “presence” in a state under the new non-territorial version of Due Process.

Since the corporate personality is a fiction . . . it is clear that unlike an individual its “presence” without, as well as within, the state of its origin can be manifested only by activities carried on in its behalf by those who are authorized to act for it.  To say that the corporation is so far “present” there as to satisfy due process requirements . . . is to beg the question to be decided.  For the terms “present” or “presence” are used merely to symbolize those activities of the corporation’s agent within the state which courts will deem to be sufficient to satisfy the demands of due process.  Those demands may be met by such contacts of the corporation with the state of the forum as make it reasonable, in the context of our federal system of government, to require the corporation to defend the particular suit which is brought there. . . .

Id. at 316-17 (citations omitted) (emphasis added).  Indeed, the concept of “consent” was no longer needed for the exercise of what becomes known as “general” personal jurisdiction.

“Presence” in the state in this sense has never been doubted when the activities of the corporation there have not only been continuous and systematic, but also give rise to the liabilities sued on, even though no consent to be sued or authorization to an agent to accept service of process has been given.

Id. at 317 (citation omitted) (emphasis added).  Likewise, “consent” is not essential to what becomes known as “specific jurisdiction.  As to “the commission of some single or occasional acts of the corporate agent in a state”:

True, some of the decisions holding the corporation amenable to suit have been supported by resort to the legal fiction that it has given its consent to service and suit. . . .  But more realistically it may be said that those authorized acts were of such a nature as to justify the fiction. . . .  Whether due process is satisfied must depend rather upon the quality and nature of the activity in relation to the fair and orderly administration of the laws which it was the purpose of the due process clause to insure.

Id. at 318-19 (citations omitted) (emphasis added).  “Consent” in the context of corporate activity, was thus repeatedly denounced in International Shoe as a “fiction,” while what was henceforth determinative was the “quality and nature of the [corporation’s] activity.”

The Court returned to the “fiction” of corporate “consent” in Shaffer v. Heitner, 433 U.S. 186 (1977), rejecting “statutory presence” of intangible property (corporate securities) as a basis for personal jurisdiction.  The Court expressly abandoned “the fiction[] of implied consent to service on the part of a foreign corporation” in favor of “ascertain[ing] what dealings make it just to subject a foreign corporation to local suit.”  Id. at 202-03

Shaffer also observed that Pennoyer had “approved the practice of considering a foreign corporation doing business in a State to have consented to being sued in that State.”  433 U.S. at 201 (citing 95 U.S. at 735-36).  However, this “consent” theory was difficult to administer in practice:

[B]oth the fictions of implied consent to service on the part of a foreign corporation and of corporate presence required a finding that the corporation was “doing business” in the forum State.  Defining the criteria for making that finding and deciding whether they were met absorbed much judicial energy.

Id. at 202 (citations omitted).

International Shoe drastically changed all that:

Thus, the inquiry into the State’s jurisdiction over a foreign corporation appropriately focused not on whether the corporation was “present” but on whether there have been “such contacts of the corporation with the state of the forum as make it reasonable, in the context of our federal system of government, to require the corporation to defend the particular suit which is brought there.”  Mechanical or quantitative evaluations of the defendant’s activities in the forum could not resolve the question of reasonableness.

Id. at 203-04 (quoting International Shoe, 326 U.S. at 317).

Now we get to the good part.  Shaffer went on to bring the jurisdictional rules for in rem actions into line with International Shoe’s dramatic change[s],” id. at 205, to in personam personal jurisdiction.  Id. at 205-10.  The state statute before the court had “the express purpose . . . to compel the defendant to enter a personal appearance.”  As such, it was unconstitutional:

In such cases, if a direct assertion of personal jurisdiction over the defendant would violate the Constitution, it would seem that an indirect assertion of that jurisdiction should be equally impermissible.  The primary rationale for treating the presence of property as a sufficient basis for jurisdiction to adjudicate claims over which the State would not have jurisdiction if International Shoe applied. . . .

Id. at 209.

With that, the Court in Shaffer held that a state statute that sought to create a jurisdictional basis “to adjudicate claims over which the state would not have jurisdiction” under International Shoe Due Process was unconstitutional.  That’s exactly what the “general jurisdiction” language in the Pennsylvania Long Arm Statute does.  Critically, Shaffer reinforced its point by expressly overruling all contrary Pennoyer-era precedent:

We therefore conclude that all assertions of state-court jurisdiction must be evaluated according to the standards set forth in International Shoe and its progeny.39

39 It would not be fruitful for us to re-examine the facts of cases decided on the rationale[] of Pennoyer . . . to determine whether jurisdiction might have been sustained under the standard we adopt today.  To the extent that prior decisions are inconsistent with this standard, they are overruled.

Id. at 212 & n. 39 (emphasis added).  That’s the 40+ years ago.  And we think “all” does mean all.

Given what the Court had already held in Shaffer about:  (1) the “fiction” of corporate “consent”; (2) its origins in Pennoyer; (3) that state statutes couldn’t gin up jurisdiction that doesn’t exist under International Shoe; and (4) that “all assertions” of personal jurisdiction must accord with International Shoe, there should be no doubt that Pennsylvania Fire (and its lesser-known adjunct Neirbo Co. v. Bethlehem Shipbuilding Corp., Ltd., 308 U.S. 165 (1939)), is among the prior “inconsistent” decisions that Shaffer expressly overruled.

We could end this post here, but we didn’t stop reading there, either.  So we find the overruling of Pennsylvania Fire is further bolstered by what the Supreme Court has done since.  We start with the admonition in Bauman itself that Pennoyer-era cases “should not attract heavy reliance today.”  Daimler AG v. Bauman, 571 U.S. 117, 138 n.18 (2014).  But the Supreme Court has said considerably more related specifically to general jurisdiction by consent.  That includes Perkins v. Benguet Consolidated Mining Co., 342 U.S. 437, 445 (1952), which has since became Bauman’s “exceptional” case.  Perkins also rejected ipso facto personal jurisdiction based on a corporation’s “secur[ing] a license and [] designat[ing] a statutory agent upon whom process may be served” – those actions only “provide[] a helpful but not a conclusive test” for specific jurisdiction.  Id. at 445.  Ditto for McGee v. International Life Insurance Co., 355 U.S. 220 (1957):

[W]here this line of limitation falls has been the subject of prolific controversy, particularly with respect to foreign corporations.  In a continuing process of evolution this Court accepted and then abandoned ‘consent,’ ‘doing business,’ and ‘presence’ as the standard for measuring the extent of state judicial power over such corporations.

Id. at 222 (citations and quotation marks omitted) (emphasis added).

The Court’s most comprehensive, relatively recent, analysis of consent jurisdiction took place in Insurance Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694 (1982) (“ICI”).  Each and every one of the “variety of legal arrangements” recognized as “consent” in ICI were grounds for case specific – not general − jurisdiction:

  • “[S]ubmi[ssion] to the jurisdiction of the court by appearance”;
  • “[P]arties to a contract may agree in advance”;
  • “[A] stipulation entered into by the defendant”;
  • “[C]onsent [is] implicit in agreements to arbitrate”;
  • “[C]onstructive consent to the personal jurisdiction of the state court [inheres] in the voluntary use of certain state procedures;”
  • “[W]aive[r] if not timely raised”; and
  • “[F]ail[ure] to comply with a pretrial discovery order.”

Id. at 704-06 (citations and quotation marks omitted).  These are all actions that take place on a one-off basis in particular cases.

The only item on the ICI list that could possibly encompass general jurisdiction by consent – “constructive consent” due to “voluntary use of certain state procedures – really doesn’t.  The ICI Court gave two examples of what it was describing, both of which were likewise specific to individual cases.  See Adam v. Saenger, 303 U.S. 59, 67-68 (1938) (non-resident plaintiff consents to counterclaims); Chicago Life Insurance Co. v. Cherry, 244 U.S. 25, 30 (1917) (“filing a plea in abatement, or taking the question to a higher court”).  Those are the kind of things that parties decide to do (or not) on a case-by-case basis.  Thus, while there is reason to believe that Adams and Chicago Life are not victims of Shaffer’s global overruling of Pennoyer-era precedent, conversely, there is no basis for saving Pennsylvania Fire.  In accordance with Shaffer, ICI did not even recognize corporate registration as a modern form of “consent.”

Then, in Burnham v. Superior Court, 495 U.S. 604 (1990), similarly to Shaffer, the Court again expressly “cast aside” “consent” arguments for general jurisdiction as “purely fictional”:

We initially upheld [corporate registration] laws under the Due Process Clause on grounds that they complied with Pennoyer’s rigid requirement of either “consent,” or “presence.”  As many observed, however, the consent and presence were purely fictional.  Our opinion in International Shoe cast those fictions aside. . . .

Id. at 617-18 (citations omitted) (plurality opinion).

Finally, the fate of general jurisdiction by consent is also discussed in the “stream of commerce” case, J. McIntyre Machinery, Ltd. v. Nicastro, 564 U.S. 873 (2011).  The plurality listed “consent” as one of four possible bases of jurisdiction.  Id. at 880-81.  Absent consent, “those who live or operate primarily outside a State have a due process right not to be subjected to judgment in its courts.”  Id. at 881.  “Purposeful availment” was a basis for the “more limited form,” specific jurisdiction, only.  Id.  Interestingly, in Nicastro, the more pro-jurisdiction dissenters were even less kind to notions of “consent”:

Finally, in International Shoe itself, and decisions thereafter, the Court has made plain that legal fictions, notably “presence” and “implied consent,” should be discarded, for they conceal the actual bases on which jurisdiction rests. “[T]he relationship among the defendant, the forum, and the litigation” determines whether due process permits the exercise of personal jurisdiction . . ., and “fictions of implied consent” or “corporate presence” do not advance the proper inquiry. . . .  [C]onsent [a]s the animating concept draws no support from controlling decisions of this Court. Quite the contrary, the Court has explained, a forum can exercise jurisdiction when its contacts with the controversy are sufficient; invocation of a fictitious consent, the Court has repeatedly said, is unnecessary and unhelpful.

Id. at 900-01 (citations omitted) (Ginsburg +2, dissenting). Thus, even the justices who were inclined to interpret personal jurisdiction more expansively in Nicastro weren’t willing to endorse the “consent” notions that animated Pennsylvania Fire.

Based on the above analysis, we think it is entirely proper, not only for defendants in general-jurisdiction-by-consent cases to argue that Pennsylvania Fire should not be followed because it is obsolete and inherently inconsistent with Bauman, but to go further and argue that Pennsylvania Fire – and thus the entire concept of general jurisdiction by consent – was already expressly overruled on its jurisdictional holding in Shaffer.  Overruling Pennsylvania Fire 40+ years ago is entirely consistent with how the United States Supreme Court has since treated that decision and the “consent” concept.  First, International Shoe and Shaffer thoroughly trashed the notion of “consent” as a basis for general jurisdiction.  Second, Pennsylvania Fire has not been cited for any jurisdictional proposition whatever since Shaffer (as opposed to its holding about the Full Faith and Credit clause, 243 U.S. at 96-97, which appears to remain valid).  Third, every Supreme Court case since Shaffer has treated “consent” jurisdiction generally as a factor for resolving specific jurisdiction, not general jurisdiction.

Finally, we’d also recommend that our readers share this post with anyone in their firms who is engaged in asbestos litigation.  While defeating general jurisdiction by consent is important to our drug/device clients, it is absolutely critical in asbestos litigation.  Asbestos plaintiffs typically sue dozens of corporate defendants, so that litigation requires a general, not specific, jurisdiction theory to continue aggregating cases in plaintiff-friendly places where plaintiffs don’t reside.  Defeating general jurisdiction by consent in asbestos cases will force asbestos plaintiffs to stay home, where they can assert specific jurisdiction over most (if not all) of their defendants.  Otherwise, asbestos litigation tourists should stand to lose 95% or so of the defendants they sue to personal jurisdiction defenses.


We know that most of our clients, manufacturers of prescription medical products (for purposes of this post), if they have insurance at all, have coverage that is subject to large self-insured retentions (“SIRs”). While the Blog doesn’t usually follow insurance matters, the decision discussed in this guest post is very good news for insureds with SIRs, and appears to be a matter of first impression. Thus, we invited David Weiss, Cristina Shea, and Connor O’Carroll from Reed Smith’s Insurance Recovery Group (who were writing the case up anyway) to provide this guest post. If this case starts a trend, pharmaceutical and medical device insureds (like many other insureds) will be much better off.


In Deere & Co. v. Allstate Ins. Co., ___ Cal. Rptr.3d ___, 2019 WL 912151 (Cal. Ct. App. Feb. 25, 2019), a California Court of Appeal recently held that an insured’s SIR was considered part of the policy’s underlying limit of liability, and thus only had to be satisfied once.  SIRs are similar to deductibles, in that they represent a sum of money that the insured must pay before it is able to access its coverage.  The insurers’ rejected position in Deere was that the SIR had to be satisfied again and again to access each layer of excess insurance.  This case represents another example of the California appellate courts shooting down insurance companies’ attempts to overreach.  Deere is only binding in California, so insurance companies will continue to argue for multiple SIRS in other states to avoid providing the coverage they contracted to provide.  Policyholders must always be vigilant.

This particular dispute arose over insurance coverage for several asbestos personal injury claims made against manufacturer Deere & Company (“Deere”) arising from products it manufactured from 1958 through 1986.  For that period of time, Deere had coverage in place via a series of first-layer umbrella policies (providing primary coverage) for personal injury claims; above which were several layers of excess insurance that provided additional coverage.  In all, 49 policies were at issue representing $200 million in contracted for coverage.  Every one of Deere’s its first-layer umbrella polices required it to pay an SIR before the coverage would be available.  Deere’s excess policies “followed form” to the first-layer policies, except for the excess policies’ different limits of liability.

The excess insurers argued that “follow form” meant that their higher-layer excess coverage was also conditioned on Deere paying an additional SIR before each level of their excess coverage attached.  Thus, the excess insurers sought to treat Deere effectively as an underlying self-insurer or else to treat its SIR for the underlying policies as “insurance” that must be exhausted a second time to invoke coverage, even though Deere had already paid the full SIR to trigger the first-layer policies.  At trial, the excess insurers’ position prevailed.  The trial court reasoned that, although the SIR was not “limits of liability,” it could be considered a part of the underlying limit of liability such that it necessitated repayment to reach excess coverage.

The appellate court reversed.  It found the trial court’s reasoning “enigmatic.”  Instead, it held that SIRs are not insurance, but “the antithesis of insurance” because the essence of insurance is shifting risk away from the insured.  Further, after rejecting the trial court’s articulation of the issue, the reframed issue became:  to determine whether coverage under Deere’s higher-layer excess polices was triggered after the aggregate underlying limits have been satisfied—without Deere paying additional SIRs for all subsequent claims submitted.  The appellate court answered affirmatively.

Assum[ing] that a certain first-layer policy provides coverage to Deere in excess of $5,000 (SIR) and up to $200,000, with a $20,000 per occurrence limit; the second layer would kick in once the $200,000 had been expended.  Assume further, that numerous claims have been lodged against Deere.  For each claim, Deere pays $5,000, with the first layer paying $20,000 per occurrence.  After 10 claims, the first layer’s $200,000 aggregate limit would be exhausted, and the aggregate limits of the higher excess policies would be triggered.  The issue is whether for the eleventh claim Deere must pay another $5,000 before the higher levels are triggered.  The answer to this question is no.

Deere, 2019 WL 912151, at *8.

The appellate court reasoned that when Deere paid its SIR, it triggered coverage for its first-layer polices’ coverage.  The triggering event for the excess layers was not Deere’s payment of any SIR, but rather exhaustion of the first-layer policies.  The Court of Appeal held that, although the excess policies followed form to the first-layer policies, the excess policies had different limits of liability.  The court ruled that SIRs are written in terms of limits of liability, and therefore, they are not encompassed by the follow form provisions in the excess policies.  Deere cited analogous precedent from California and elsewhere in reaching this result, but none of these other cases involved excess insurance.  Thus, Deere appears to be a matter of first impression as to the type of insurance most commonly held by prescription medical product manufacturers.

In sum, Deere reaffirms that there is no basis in insurance contracts or insurance law to conclude that an insured’s SIR obligations survive the exhaustion of its first-layer of coverage to be incorporated into higher-layer policies.  Every company with an SIR and excess insurance stands to benefit from this decision by the Court of Appeal.

By now, the learned intermediary rule is so well established that new opinions addressing core learned intermediary issues, as opposed to applying the rule to specific fact patterns, are relatively uncommon. The last one of those we covered was the Seventh Circuit’s prediction that Wisconsin would adopt the learned intermediary rule, almost a year ago in In re Zimmer, NexGen Knee Implant Products Liability Litigation, 884 F.3d 746 (7th Cir. 2018).

We’ve got another.

In Ideus v. Teva Pharmaceuticals USA, Inc., ___ F. Supp.3d ___, 2019 WL 912121 (D. Neb. Feb. 19, 2019), the court, applying Nebraska law, held that the learned intermediary rule applied to a copper intra-uterine device (“IUD”).  The foundational learned intermediary question in Nebraska was decided in Freeman v. Hoffman-La Roche, Inc., 618 N.W.2d 827, 841 (Neb. 2000), adopting the rule as enunciated in Restatement (Third) of Torts, Products Liability §6(d) (1998), but the plaintiff in Ideus invoked purported “exceptions” in an attempt to avoid the rule.  The most on-point of those exceptions was “for prescription contraceptives.”  2019 WL 912121, at *2.

Ideus thoroughly trashed that supposed exception, pointing out that the Eighth Circuit got it wrong thirty years ago in Hill v. Searle Laboratories, 884 F.2d 1064, 1070 (8th Cir. 1989), when it predicted that Arkansas would adopt such an exception.  But in West v. Searle Co., 806 S.W.2d 608, 614 (Ark. 1991), the Arkansas Supreme Court rejected the West prediction and the purported contraceptive exception.  2019 WL 912121, at *3.  This discussion reminds us of what recently happened in Arizona, with the en banc Ninth Circuit getting “Spalding” embossed in its collective forehead from the Arizona Supreme Court’s forceful (and unanimous) rejection of its mythical tort “duty to report” to the FDA.

So, with West both non-binding (being a different state’s law) and discredited even in that state, Ideus followed the clear majority rule, and overwhelming recent trend, and rejected the idea of a “contraceptive exception” to the learned intermediary rule. First, “determining what contraceptive fits [a patient’s] particular criteria necessarily requires the knowledge and advice of a physician.” 2019 WL 912121, at *4. Therefore, there was “no reason to distinguish between a patient’s final choice to use a particular contraceptive and a patient’s final decision relating to any other course if treatment.” Id.

[T]he fact that the patient makes the final choice among suggested contraceptives (or decides not to use any at all) does not constitute a distinction which makes the [learned intermediary] rule inapplicable.  [The Court] can readily conceive of situations in which a physician gives the patient a choice of courses to follow.  There is, for example, a patient’s choice between continuing to endure a physical ailment or submitting to surgery or some other course of treatment; an obese person’s choice among diets suggested by the doctor; and a surgery patient’s choice of anesthesia. . . .

In any such situation which may come to mind, the patient is expected to look to the physician for guidance and not to the manufacturer of the products which he may use or prescribe in the course of treatment.

Id. (quoting Terhune v. A.H. Robins Co., 577 P.2d 975, 978 (Wash. 1978)).  Nothing inherent in contraceptives justified singling them out for an exception to the learned intermediary rule:

[W]hatever differences there may be between contraceptives and “typical” prescription drugs, they have one important thing in common:  both are always prescribed by a physician or through the services of a physician.  And when a patient relies on the skill and knowledge of a physician in any particular method of treatment, the learned intermediary doctrine ought to apply.  This is no less true for prescription contraceptives as for any other prescription medication.

Id. (citation omitted).

Finally, Ideus relied upon Nebraska’s adoption of the Third Restatement §6(d)’s version of the learned intermediary rule, which did not recognize any exception for contraceptives.

[T]hat section of the Restatement acknowledges circumstances under which the doctrine might not be applicable. . . .  [N]othing in the record or the parties’ arguments . . . suggest[s] with respect to contraceptives in general . . . that a health care provider is not in a position to reduce the risk of any foreseeable harm to the patient.  In other words, the Nebraska Supreme Court did acknowledge the possibility of exceptions to the learned intermediary doctrine, when it expressly adopted § 6(d) of the Restatement − but nothing suggests that such an exception should be recognized here.

2019 WL 912121, at *5 (citations and quotation marks omitted).

Thus, Ideus predicted that “the Nebraska Supreme Court would following the overwhelming majority of decisions that have applied the learned intermediary doctrine to cases involving contraceptives.”  Id.  The court followed with an impressive string citation to well over a dozen cases applying the learned intermediary rule to contraceptives of various types.  Id.  This being the DDLaw Blog, however, we will provide our own, even more extensive, list of such cases:

State Supreme Court Cases:

Martin v. Ortho Pharmaceutical Corp., 661 N.E.2d 352, 356-57 (Ill. 1996); Shanks v. Upjohn Co., 835 P.2d 1189, 1200 (Alaska 1992); West v. Searle & Co., 806 S.W.2d 608, 613-14 (Ark. 1991); Humes v. Clinton, 792 P.2d 1032, 1039-41 (Kan. 1990); Lacy v. G.D. Searle & Co., 567 A.2d 398, 400-01 (Del. 1989); Tetuan v. A.H. Robins Co., 738 P.2d 1210, 1228 (Kan. 1987); Wooderson v. Ortho Pharmaceutical Corp., 681 P.2d 1038, 1052 (Kan. 1984), McKee v. Moore, 648 P.2d 21, 25 (Okla. 1982); Seley v. G.D. Searle & Co., 423 N.E.2d 831, 839-40 (Ohio 1981); Terhune, 577 P.2d at 978; Vaughn v. G.D. Searle & Co., 536 P.2d 1247, 1248 (Or. 1975); McEwen v. Ortho Pharmaceutical Corp., 528 P.2d 522, 528 (Or. 1974).

Other State Cases:

Wyeth-Ayerst Laboratories Co. v. Medrano, 28 S.W.3d 87, 91 (Tex. App. 2000); Plenger v. Alza Corp., 13 Cal. Rptr.2d 811, 819 n.6 (Cal. App. 1992); Taurino v. Ellen, 579 A.2d 925, 928 (Pa. Super. 1990); Brecher v. Cutler, 578 A.2d 481, 485 (Pa. Super. 1990); Rhoto v. Ribando, 504 So.2d 1119, 1123 (La. App. 1987); Eiser v. Feldman, 507 N.Y.S.2d 386, 387-88 (N.Y. App. Div. 1986); Taylor v. Wyeth Laboratories, Inc., 362 N.W.2d 293, 297 & n.11 (Mich. App. 1984); Cobb v. Syntex Laboratories, 444 So.2d 203, 205 (La. App. 1983); Reeder v. Hammond, 336 N.W.2d 3, 5 (Mich. App. 1983); Ortho Pharmaceutical Corp. v. Chapman, 388 N.E.2d 541, 548-49, 553, 557 (Ind. App. 1979); Hamilton v. Hardy, 549 P.2d 1099, 1110 (Colo. App. 1976), overruled on other grounds, State Board of Medical Examiners v. McCroskey, 880 P.2d 1188 (Colo. 1994); Leibowitz v. Ortho Pharmaceutical Corp., 307 A.2d 449, 457 (Pa. Super. 1973); Carmichael v. Reitz, 95 Cal. Rptr. 381, 400-01 (Cal. App. 1971) (contraceptive prescribed for other purpose); Hayes-Jones v. Ortho-McNeil Pharmaceutical, 2012 WL 3164558 (N.J. Super. Law Div. Aug. 3, 2012) (applying Virginia law).

Federal Courts of Appeals:

Yates v. Ortho-McNeil-Janssen Pharmaceuticals, Inc., 808 F.3d 281, 292-93 (6th Cir. 2015) (applying New York law); In re Norplant Contraceptive Products Litigation, 165 F.3d 374, 379 (5th Cir. 1999) (applying Texas law); Odom v. G.D. Searle & Co., 979 F.2d 1001, 1003-04 (4th Cir. 1992) (applying South Carolina law); Beyette v. Ortho Pharmaceutical Corp., 823 F.2d 990, 992-93 (6th Cir. 1987) (applying Michigan law); Brochu v. Ortho Pharmaceutical Corp., 642 F.2d 652, 656 (1st Cir. 1981) (applying New Hampshire law); Lindsay v. Ortho Pharmaceutical Corp., 637 F.2d 87, 91 (2d Cir. 1980) (applying New York law).

Federal District Courts:

Lussan v. Merck Sharp & Dohme Corp., 2017 WL 2377504, at *3 (E.D. La. June 1, 2017); Gonzalez v. Bayer Healthcare Pharmaceuticals, Inc., 930 F. Supp.2d 808, 813 (S.D. Tex. 2013); Hanhan v. Johnson & Johnson, 2013 WL 5939720, at *3 (N.D. Ohio Nov. 5, 2013) (applying California law); James v. Ortho-McNeil Pharmaceutical, Inc., 2011 WL 3566844, at *3 (N.D. Ohio Aug, 12, 2011) (applying Louisiana law); In Re Yasmin & Yaz (Drospirenone) Marketing, Sales Practices & Products Liability Litigation, 692 F. Supp.2d 1025, 1033-34 (S.D. Ill. 2010), aff’d, 643 F.3d 994 (7th Cir. 2011); Mendez Montes De Oca v. Aventis Pharma, 579 F. Supp.2d 222, 228 (D.P.R. 2008); In re Norplant Contraceptive Products Liability Litigation, 215 F. Supp.2d 795, 809-10 (E.D. Tex. 2002) (applying law of all fifty states); Nelson v. Dalkon Shield Claimants Trust, 1994 WL 255392, at *4 (D.N.H. June 8, 1994); MacPherson v. Searle & Co., 775 F. Supp. 417, 424-25 (D.D.C. 1991); Reaves v. Ortho Pharmaceutical Corp., 765 F. Supp. 1287, 1291 (E.D. Mich. 1991); Zanzuri v. G.D. Searle & Co., 748 F. Supp. 1511, 1514-15 (S.D. Fla. 1990); Amore v. G.D. Searle & Co., 748 F. Supp. 845, 849-50 (S.D. Fla. 1990); Allen v. G.D. Searle & Co., 708 F. Supp. 1142, 1147-48 (D. Or. 1989); Spychala v. G.D. Searle & Co., 705 F. Supp. 1024, 1032 (D.N.J. 1988); Kociemba v. G.D. Searle & Co., 680 F. Supp. 1293, 1305-06 (D. Minn. 1988); Dupre v. G.D. Searle & Co., 1987 WL 158107, at *4 (D.N.H. April 28, 1987); Skill v. Martinez, 91 F.R.D. 498, 507 (D.N.J. 1981), aff’d per curiam, 677 F.2d 368 (3d Cir. 1982); Steinmetz v. A.H. Robins Co., 1981 U.S. Dist. Lexis 14314, at *3-5 (D. Or. Aug. 27, 1981); Goodson v. Searle Laboratories, 471 F. Supp. 546, 548 (D. Conn. 1978); Dunkin v. Syntex Labs, Inc., 443 F. Supp. 121, 123 (W.D. Tenn. 1977); Chambers v. G. D. Searle & Co., 441 F. Supp. 377, 381 (D. Md. 1975), aff’d per curiam, 567 F.2d 269 (4th Cir. 1977) (applying District of Columbia law).

Secondarily, the plaintiff in Ideus tried to assert the so-called “direct to consumer” advertising exception to the learned intermediary rule.  The decision disposed of that contention in a footnote:

For the same reason, to the extent that [plaintiff] claims the direct consumer marketing exception to the learned intermediary doctrine applies, that argument has no merit.  If anything, it further supports the Court’s conclusion the contraceptives and other prescription drugs are not actually distinguishable.

Ideus, 2019 WL 912121, at *4 n.3 (citations omitted).  We don’t have to provide a list of cases here, because we’ve thoroughly addressed the almost universal rejection of the direct-to-consumer exception before.  That post was in January, 2011. However, for the sake of completeness, here are more recent cases also rejecting any direct to consumer exception:

Watts v. Medicis Pharmaceutical Corp., 365 P.3d 944, 950-51 (Ariz. 2016); Centocor, Inc. v. Hamilton, 372 S.W.3d 140, 159-64 (Tex. 2012) (reversing lower court adoption); Shah v. Forest Laboratories, Inc., 2015 WL 3396813, at *6 (N.D. Ill. May 26, 2015); Thomas v. Abbott Laboratories, 2014 WL 4197494, at *6 (C.D. Cal. July 29, 2014); McKay v. Novartis Pharmaceuticals Corp., 934 F. Supp.2d 898, 910 (W.D. Tex. 2013), aff’d, 751 F.3d 694 (5th Cir. 2014); In re Avandia Marketing, Sales Practices & Products Liability Litigation, 2013 WL 3486907, at *2 (E.D. Pa. July 10, 2013); Calisi v Abbott Laboratories, 2013 WL 5462274, at *3 (D. Mass. Feb. 25, 2013); DiBartolo v. Abbott Laboratories, 914 F. Supp.2d 601, 614-15 (S.D.N.Y. 2012); Swoverland v. GlaxoSmithKline, 2011 WL 6001864, at *2 (D. Conn. Oct. 5, 2011); James, 2011 WL 3566844, at *3.

Why the plaintiff in Ideus was desperate to avoid the learned intermediary rule was obvious from the rest of the opinion – the defendant’s warning was adequate as a matter of law because it warned physicians of exactly the risk that plaintiff blamed for her injuries.  Her only hope was to require a manufacturer warning directly to her (which wasn’t given):

[Plaintiff] has not even named the physician who prescribed and placed her IUD − much less demonstrated that had that physician been given the proper warning, she would not have placed [the device]. . . .  [T]he package insert expressly warned about the possibility of breakage, embedment, and the difficulties of removing [device], making the warning adequate as a matter of law.  A warning is adequate if it accurately and unambiguously coveys the scope and nature of the risk to the prescribing physician.

2019 WL 912121, at *6 (citations omitted).

Astute readers will note that many of the cases in our (and Ideus’) string cites are pretty old – more from the 1970s to 1990s than afterwards.  It’s a stroll down memory lane, and we hope it will stay that way.  As Bexis’ book points out, concerning this erstwhile exception to the learned intermediary rule, “The trend of judicial decisions has shown little acceptance of this exception . . ., and several of the decisions that initially recognized it are now of questionable validity.”  Beck & Vale, “Drug and Medical Device Product Liability Deskbook” §2.03[3][e], at 2.03-70 (2018).  Indeed, subtracting the “questionable” jurisdictions, leaves only one – Massachusetts – definitely still following it.  So it’s no more widely accepted nowadays than the direct to consumer exception peculiar to New Jersey.

Today, Reed Smith is hosting a client roundtable in London, “Identifying and Mitigating Risk in a Changing Global Economy,” for life sciences clients.  In light of that, we thought it would be a good idea to have a blogpost that’s relevant to what’s hot in the UK.  Well, there’s nothing hotter on that side of the Pond right now than the increasingly shambollixed up approach to Brexit.  One thing we were wondering about, over here, is whether a crash out Brexit would at least get rid of, in the UK anyway, a couple of extremely unfavorable decisions from the European Court of Justice that we’d blogged about earlier.  We didn’t know, so we asked Simon Greer, a Reed Smith lawyer in our London office if he knew the answer.  He did, and below is his response.  As always our guest posters deserve all of the credit (and any blame) for their posts.


The timing and implications of Brexit in the UK are currently one of life’s great unknowns. The latest position is that Theresa May’s latest proposed Brexit deal will be voted on by MPs in Parliament by 12 March 2019. However, the Prime Minister has also indicated that if her latest deal is rejected, MPs will be offered two separate votes shortly thereafter:

  1. Whether or not MPs would support a ‘no-deal’ Brexit, meaning that the UK would only leave without a deal on 29 March 2019 if there was consent from the House of Commons for a ‘no-deal’ Brexit; and
  2. If the prospect of a ‘no-deal’ Brexit on 29 March 2019 is rejected by MPs, they will then be given a vote by 14 March 2019 as to whether the UK should request an extension to the 2 year Article 50 process, thereby delaying the UK’s withdrawal to a date beyond 29 March 2019 (the length of such a delay is, as yet, unknown).

In the pharmaceutical industry, the impact of a potential ‘no-deal’ Brexit on 29 March 2019 on the precedential value of the decisions of the Court of Justice of the European Union (“CJEU”), will be of significant interest. This is because the CJEU’s recent decisions in the pharmaceutical sector have had a significant impact on the law in the UK, adverse to pharmaceutical companies, two examples of which we have discussed in previous blog posts:

Causation or No Causation, That Is the Question.

Bad News from Europe for Makers of Life-Saving Medical Devices

So, would a ‘no-deal’ Brexit effectively re-set the clock and eliminate the consequences of CJEU’s decisions in the UK made prior to Brexit?  The answer, unfortunately, is: no, so a ‘no deal’ Brexit would not even have this silver lining.

Whilst Theresa May on 17 January 2017 stated that: “we will take back control of our laws and bring an end to the jurisdiction of the European Court of Justice in Britain. Leaving the European Union will mean that our laws will be made in Westminster, Edinburgh, Cardiff and Belfast.  And those laws will be interpreted by judges not in Luxembourg but in courts across this country.  Because we will not have truly left the European Union if we are not in control of our own laws”, that rhetoric was hollow.  Her comments were in fact forward looking only, rather than applying to adverse CJEU decisions made prior to Brexit.

This is clear from the provisions of the EU (Withdrawal) Act 2018 (“the Act”).

In terms of CJEU decisions made after Brexit, the courts of the UK will no longer be bound by them but they will still be permitted to have regard to [Ed. Note – that’s British English for ‘follow’] them, if they are relevant to an issue that is before them. Sections 6(1) and (2) of the EU (Withdrawal) Act 2018 provide:

6 Interpretation of retained EU law

(1) A court or tribunal—

(a) is not bound by any principles laid down, or any decisions made, on or after exit day by the European Court, and

(b) cannot refer any matter to the European Court on or after exit day.

(2) Subject to this and subsections (3) to (6), a court or tribunal may have regard to anything done on or after exit day by the European Court, another EU entity or the EU so far as it is relevant to any matter before the court or tribunal.

As for CJEU decisions made before Brexit, these will form part of what is described as ‘retained’ EU law under the Act. The treatment of retained EU law after Brexit in the UK is explained in sections 6(3) to (6) of the Act (set out below). In short, whilst the Supreme Court in the UK and Scotland’s High Court of Justiciary (the supreme criminal court in Scotland) are not bound by any decisions of the CJEU made prior to Brexit, all other courts in the UK will be bound by CJEU decisions made prior to Brexit:

(3) Any question as to the validity, meaning or effect of any retained EU law is to be decided, so far as that law is unmodified on or after exit day and so far as they are relevant to it—

(a) in accordance with any retained case law and any retained general principles of EU law, and

(b) having regard (among other things) to the limits, immediately before exit day, of EU competences.

(4) But—

(a) the Supreme Court is not bound by any retained EU case law,

(b) the High Court of Justiciary is not bound by any retained EU case law when—

(i) sitting as a court of appeal otherwise than in relation to a compatibility issue (within the meaning given by section 288ZA(2) of the Criminal Procedure (Scotland) Act 1995) or a devolution issue (within the meaning given by paragraph 1 of Schedule 6 to the Scotland Act 1998), or

(ii) sitting on a reference under section 123(1) of the Criminal Procedure (Scotland) Act 1995, and

(c) no court or tribunal is bound by any retained domestic case law that it would not otherwise be bound by.

(5) In deciding whether to depart from any retained EU case law, the Supreme Court or the High Court of Justiciary must apply the same test as it would apply in deciding whether to depart from its own case law.

(6) Subsection (3) does not prevent the validity, meaning or effect of any retained EU law which has been modified on or after exit day from being decided as provided for in that subsection if doing so is consistent with the intention of the modifications.

In summary, pharmaceutical companies need to be mindful of the fact that existing CJEU decisions made prior to Brexit, even if it is a ‘no-deal’ Brexit, will be binding on courts in the UK, unless those decisions come before the Supreme Court and are overruled by a new, post-Brexit decision of the Supreme Court, which would then take primacy in the UK over the prior CJEU decision.

Our recent post on “wrinkle removal” – that is, removal before service – case got us thinking.  The opinion discussed in that post, Dechow v. Gilead Sciences, Inc., ___ F. Supp.3d ___, 2019 WL 5176243 (C.D. Cal. Feb. 8, 2019), was out of California, in the Ninth Circuit.  That didn’t keep Dechow from citing the Third Circuit case we blogged about last August, Encompass Insurance Co. v. Stone Mansion Restaurant, Inc., 902 F.3d 147 (3d Cir. 2018).  As we discussed last year, Encompass Insurance was the first appellate decision to address removal before service, and it was a resounding victory for the defense position that such removal is expressly allowed by statute and is a perfectly rational (and hardly absurd) response to the repeated gamesmanship that forum-shopping plaintiffs have resorted to, literally for decades.

So, how has removal before service fared since Encompass Insurance has been in the books?  Previously, we thought the defense “plain language” approach was the majority position, but the split was anything but overwhelming.  We’re pleased to report that the Third Circuit’s reasoning appears to have tipped the balance towards “overwhelming.”  First of all, we can run through new decisions by district courts (in Pennsylvania, New Jersey, Delaware, and the Virgin Islands) that are precedentially bound to follow Encompass Insurance.  These are: Anderson v. Merck & Co., 2019 WL 161512, at *1-2 (D.N.J. Jan. 10, 2019) (denying remand in 104 cases) (mentioned in this post), and Mendoza v. Ferro, 2019 WL 316727, at *2 (E.D. Pa. Jan. 24, 2019) (second removal, within 30 days of Encompass Insurance decision).  We can also, of course, subtract any adverse decisions (there were more than a handful) previously issued from district courts in the Third Circuit.

Outside the Third Circuit, courts have mostly found Encompass Insurance persuasive.  A second case from the Central District of California held:

[W]hen a natural reading of the statute leads to a rational, common-sense result, an alteration of meaning is not only unnecessary, but also extrajudicial.  As the Third Circuit explained, a plain meaning interpretation of the language “properly joined and served” in the Forum Defendant Rule “envisions a broader right of removal only in the narrow circumstances where a defendant is aware of an action prior to service of process with sufficient time to initiate removal.”  Stone Mansion, 902 F.3d at 153. . . .  While it is clear that courts in this district have found that permitting pre-service removal absurd, others have not, concluding that the plain language of Section 1441(b)(2) states that it only applies when the local defendants have been “properly joined and served.” Finally, and arguably most importantly − a Plaintiff in this very district, in a similar removal action unsuccessfully invoked [the absurd results argument] to support remand. [Citing Dechow]

Zirkin v. Shandy Media, Inc., 2019 WL 626138, at *3 (C.D. Cal. Feb. 14, 2019) (other citations and quotation marks omitted).  We are particularly gratified to see these two cases out of the Central District of California.  Our last research post on removal before service tallied up all the favorable decisions between 2011 and mid-2018 (it was written about a week before Encompass Insurance was decided).  It found twelve cases out of California, but only two from the Central District.  Encompass Insurance seems to have convinced the judges in that previously rather refractory district to be less refractory.

Another California decision, Monfort v. Adomani, Inc., 2019 WL 131842 (N.D. Cal. Jan. 8, 2019), expressly “agree[d] with the Third Circuit” and permitted removal before service.  Id. at *4.

[T]he more precise question is whether pre-service removal frustrates the purpose behind §1441(b)(2)’s “joined and served” language.  As the Third Circuit explained, the “joined and served” language reflects Congress’s intent to prevent a plaintiff from fraudulently joining a resident party in order to avoid removal to federal court.  Encompass, 902 F.3d at 153.  Interpreting “joined and served” to permit pre-service removal by an in-state defendant does not impair the provision’s anti-fraudulent joinder purpose, which focuses on what a plaintiff may or may not do to defeat diversity jurisdiction.  Id. (noting that a plain language interpretation of joined and served “protects the statute’s goal without rendering any of the language unnecessary”).  Moreover, . . . Congress amended the removal statute after decisions permitting pre-service removal, but did not alter the “joined and served” language.

Id. (non-Encompass Insurance citations omitted).  Encompass Insurance also proved persuasive in Texas Brine Co., LLC v. American Arbitration Ass’n, 2018 WL 4927640 (E.D. La. Oct. 11, 2018), which cited it for the propositions that “defendants may remove despite unserved resident defendants,” and that “[n]o exception for gamesmanship exists.”  Id. at *2.

Still, while there’s been a shift since Encompass Insurance, there remain courts that find gamesmanship by plaintiffs somehow less bothersome than gamesmanship by defendants, and still refuse to recognize removal before service as permitted by the express terms of the removal statute.  Such a case is Delaughder v. Colonial Pipeline Co., ___ F. Supp.3d ___, 2018 WL 6716047 (N.D. Ga. Dec. 21, 2018), which refused to follow Encompass Insurance on a record that revealed both sides engaging in procedural machinations – with plaintiffs determined to keep a personal injury suit in a plaintiff-friendly court, and a diverse defendant just as determined to be in federal court instead.

Here’s what happened in Delaughder.  Two out-of-state litigation tourists sued the target defendant (a Delaware corporation) in Atlanta over an Alabama accident, also joining a Georgia “forum defendant” that would have prevented removal.  Id. at *1-2 & nn 1-2.  The Delaware defendant successfully snap removed.  In response, plaintiffs moved for voluntary dismissed, fully intending to win the race to the courthouse on their second try.  Id.  The defendant was just ready.  On the same day the voluntary dismissal was effective, the defendant changed its Georgia registered agent.  Id.  Plaintiff refiled the next day and – loaded for bear – served the defendant’s former agent less than half an hour after refiling.  Id.  But service was ineffective because of the change in agents, and the defendant snap removed again.  Id.

Although non-residents suing in Georgia over an accident in Alabama seems, to us, a most blatant example of forum-shopping gamesmanship, the court in Delaughder focused solely on the defendant’s actions.  Although recognizing that “the Third Circuit has definitively come down on one side of the issue,” 2018 WL 6716047, at *3, that court nonetheless went with the “absurd result” argument and remanded.  “While [defendant] found a possible avenue to take away Plaintiffs’ power to decide the forum for this litigation, the Court cannot overlook the clear gamesmanship present in this case.”  Id. at *6.

In the words of another Georgia court, “[o]ne person’s ‘gamesmanship’ is strategy to another.”  Francis v. Great West Casualty Co., 2018 WL 999679, at *2 (M.D. Ga. Feb. 21, 2018).  As for Delaughder itself, there are other words Bexis picked up while living in the Peach State:

Forget, hell.

Here’s something we know about Georgia precedent:

Georgia’s registration statute, Ga. Code §14-2-1501, provides no indication that registration affects jurisdiction one way or another; nor are there relevant state cases. However, in Orafol Americas, Inc. v. DBi Services, LLC, 2017 WL 3473217 (N.D. Ga. July 20, 2017), the court held:

Plaintiff notes that [defendant] is registered to do business in Georgia, and has a registered agent in the State.  Additionally, [defendant] has actually engaged in business in Georgia. . . .  But these contacts are woefully insufficient to render [defendant] “at home” in Georgia.  Every company that does any business in Georgia must register with the State and maintain a registered agent.  Just because a company does some small amount of business in Georgia does not mean that due process will allow that company to be sued in Georgia for acts that occurred outside the State.

Id. at *3.

Out of the frying pan, into the fire.  Nothing in the Delaughder opinion gives us any reason to believe that there is any basis for personal jurisdiction in Georgia over the non-forum defendant.  And not only that, once those plaintiffs lose on jurisdiction, they’ll get no tolling of the statute of limitations in Alabama for their frolic and detour in the Georgia courts, since Alabama is one of “[s]ix states [with] no mechanism for preserving claims following a dismissal without prejudice.”

Game on.

Today’s guest post, by Luther Munford of Butler Snow, engages in one of our currently favorite activities, that being informed speculation on what might be the consequences of a favorable Supreme Court resolution of its currently pending preemption appeal in Merck Sharp & Dohme Corp. v. Albrecht.  We hope he’s right.  As always, our guest posters deserve 100% of the credit (and any blame) for their thoughts published here.  We only provide the forum.


In Merck Sharp & Dohme Corp. v. Albrecht, the Solicitor General as amicus curiae argues that judges, not juries, are best suited to evaluate the scope of an FDA determination. Brief of the United States as Amicus Curiae Supporting Petitioner, Merck Sharp & Dohme Corp. v. Albrecht, (No. 17-290), 2018 WL 4562163 (filed Sept. 20, 2018).  Judges, he says, “are trained and experienced in construing legal documents and are far better equipped to understand agency decisions in light of the governing statutory and regulatory context.”  Id. at *15.

To support his argument, he cites the Administrative Procedure Act’s statement that a reviewing court shall “determine the meaning or applicability of the terms of an agency action,” 5 U.S.C. § 706, and precedent that has looked to judges to interpret the meaning of prior adjudications.  See id. at 18-20.

While that case has nothing to do with either medical devices in general or 510(k) clearance in particular, Supreme Court agreement with the Solicitor General on this point could radically alter the way courts view the admissibility of 510(k) clearance, at least where Class II devices are concerned.  To gain 510(k) clearance, unless the FDA decides that more is required, the manufacturer need only establish that a new device is as safe and effective as an existing lawfully marketed device.  No other evidence of safety and effectiveness is required in the absence of FDA action.

At present, courts have treated the meaning of 510(k) clearance as a subject for warring expert testimony as to its meaning, as discussed here on the blog (discussing In re Cook Medical, Inc. IVC Filters Mktg., Sales Practices and Prod. Liab. Litig., 2018 WL 6617375 (S.D. Ind. Dec. 18, 2018)).  In other cases evidence of clearance has been excluded, with one explanation being the mistaken theory that the evidence was of such slight probative value that the battle was best avoided.  In re C.R. Bard, Inc. MDL No. 2187, 810 F.3d 913, 922 (4th Cir. 2016). [Ed. note: Other cases, collected and discussed here, admit evidence of FDA device clearance.]

But if the United States Supreme Court decides that preemption issues are treated as purely legal, the courts will be forced to examine the statutory context that controls Class II clearance using 510(k).  That context shows that such a clearance is almost always an FDA “determination” that the device, with whatever special controls that the FDA ultimately imposes, does not present a potential unreasonable risk of illness or injury.  Nothing could be more relevant to a product liability claim.

To begin at the beginning, in 1976 Congress directed the FDA to engage in a sort of regulatory “triage.”  Triage sorts patients according to the seriousness of their injuries and gives them different levels of care.  The FDA’s statutory scheme sorts devices according to the seriousness of the risks they present and requires different levels of premarket review.

More precisely, Congress directed the FDA to engage medical panels to classify medical devices according to their need for regulation.  Congress specified the qualifications the panel members were to have. 21 USC § 360c(b).  The FDA methodically proceeded over the ensuing decades to classify device types into classes I, II or III according to the risk they present.  It convened the panels, held hearings, published panel recommendations, entertained comments from the public, and fixed the classifications.

Devices that present little risk, such as tongue depressors, were put in Class I and do not need FDA review before they are sold to the public.

Moderate risk devices, such as surgical suture, were put in Class II and, if not exempt, must be “cleared” by the FDA before they are marketed.  To gain Class II clearance, the manufacturer must show in a §510(k) submission that they are as safe and effective as an existing Class II legally marketed device that presents a moderate risk.

Finally, devices that may “present a potential unreasonable risk of illness or injury” or are for sustaining life, such as a pacemaker, were put in Class III and generally must be “approved” by the FDA based on extensive independent evidence of their safety and effectiveness.  21 U.S.C. § 360c(a)(1)(C).

On its face, this is a reasonable way to regulate medical devices.  In fact, Congress stated in the statute that it believed this system of classification and review provided “reasonable assurance” of safety and effectiveness for each class of medical device.  21 U.S.C. § 360c(a)(1)(A), (B), (C).

It is encouraging, but not necessary, to observe that the FDA’s sorting of devices seems to have worked.  Even though they receive less FDA scrutiny, “cleared” devices of moderate risk are less likely to result in a serious recall than “approved” devices that may present an unreasonable risk.  One study showed that while 510(k) cleared devices constitute 98% of all devices, they account for only 71% of serious recalls.  And the 2% of devices that are PMA-approved made up 19% of serious recalls.  Jeffrey Shapiro, Substantial Equivalence Premarket Review: The Right Approach for Medical Devices, 69 Food & Drug L.J. 365, 389-390 (2014).

But that is not all. According to the statute, placement in Class II is itself a determination of safety.  If a device is a Class II device, then, with special controls, it usually does not present “an unreasonable risk of illness or injury” that would require it to be in Class III.  21 U.S.C. §360c(a)(1)(C).  The FDA has made that determination based on the initial work of a medical panel and information in the §510(k) which confirmed that the specific device fell within the panel’s classification of the device type.  Otero v. Zeltiq Aesthetics, Inc., 2018 WL 3012942 *3 (C.D. Cal. June 11, 2018).  This can be confirmed when the decision classifying the device type expresses the opinion that there is no unreasonable risk, or uses words to that effect.

In other words, clearance of a moderate risk device using 510(k) is normally a sign of relative safety, even though the FDA review of more risky Class III devices is more rigorous.  That is what the statute says, and experience seems to bear that out.

If the Supreme Court should agree that the interpretation of an FDA decision is a matter of law for the court, then in any case involving a Class II device, the defendant should be entitled to an instruction on the meaning of that decision.

If the FDA decision classifying the device type rests on a finding of no unreasonable risk then, as a matter of law, the defendant should be entitled to an instruction that “The United States Food and Drug Administration has cleared this device for marketing as a Class II device.  That clearance is a determination that there is reasonable assurance of its safety and effectiveness and that, with whatever special controls may have been imposed, the device does not present a potential unreasonable risk of illness or injury.”

Such an instruction would, of course, be radically different from the treatment courts have recently given §510(k) clearance.  Those courts have not only mistakenly allowed juries to decide the meaning of §510(k) clearance, but they have done so in part because of fundamental legal error in the way they have examined §510(k) clearance.

The fundamental error of those courts has been to overlook the distinction between the normal use of §510(k) to clear devices of a type placed in Class II, and the increasingly rare transitional use of §510(k) to clear devices in Class III based on a pre-1976 predicate.

The use of pre-1976 predicates originated in an interim provision Congress adopted in 1976, when the statutory scheme was new. Congress put all implantable devices in Class III as presenting an unreasonable risk pending medical panel review to reclassify them.  Then, anticipating that it would take medical panels a long time to do their work – and has taken more than 40 years – it allowed these devices to be “cleared” using §510(k) if they could be shown to be equivalent to a device on the market in 1976.  This process, unlike the normal use of §510(k), did not involve any medical panel review and did not require equivalence to a classified device.

This increasingly rare scenario was what the Supreme Court addressed in Medtronic v. Lohr, 518 U.S. 470, 477 n.3 (1996), which, quite incorrectly, has been taken as being representative of all FDA clearance decisions.  But it is not. In fact, now that the medical panel reviews of devices with a potential high risk appear to have been almost completed, the scenario is not representative of practically anything that the FDA is still doing today.  See FDA, FDA Has Taken Steps to Strengthen The 510(k) Program 7 (November 2018).

Where a device has been placed in Class II in what is now the ordinary fashion − based on equivalence in safety and effectiveness to a predicate device placed by a medical panel in Class II because its risks are reasonable − that decision, as a matter of simple statutory interpretation, is a determination of safety.  Even if juries are free to disagree with it, they should not be allowed to ignore it. What the Supreme Court tells us in Merck Sharp & Dohme Corp. may have effects far beyond the resolution of the case at hand.

Last week, in Timbs v. Indiana, ___ S. Ct. ___, 2019 WL 691578 (U.S. Feb. 20, 2019), the Court unanimously held that the Excessive Fines Clause of the U.S. Constitution’s Eighth Amendment applies to the states:

Under the Eighth Amendment, “[e]xcessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.” Taken together, these Clauses place “parallel limitations” on “the power of those entrusted with the criminal-law function of government.” Directly at issue here is the phrase “nor excessive fines imposed,” which limits the government’s power to extract payments, whether in cash or in kind, as punishment for some offense. The Fourteenth Amendment, we hold, incorporates this protection.

Id. at *3 (citations and quotation marks omitted).

The historical and logical case for concluding that the Fourteenth Amendment incorporates the Excessive Fines Clause is overwhelming. Protection against excessive punitive economic sanctions secured by the Clause is, to repeat, both fundamental to our scheme of ordered liberty” and “deeply rooted in this Nation’s history and tradition.

Id. at *5 (citation and quotation marks omitted).

So why should readers of the DDLaw Blog care?  After all prescription medical product liability litigation is a far cry from Timbs, which involved whether a state can, through civil forfeiture, seize property worth four times what the maximum criminal fine could be.

We think, as the Court stated, “it makes sense to scrutinize governmental action more closely when the State stands to benefit.”  Id. at *4 (citation and quotation marks omitted).  We’ve complained several times before about states farming out claims against our clients to contingent fee lawyers who also “stand to benefit” if they can convince courts and juries to agree to expansive readings of consumer protection and other statutes and impose the same fine 10,000 times over for a single instance of purportedly “illegal” off-label promotion (to take one example). Interpreting such statutes to impose huge multiples of the maximum possible fine for the same conduct by treating every recipient of a message as a separate statutory violation seems to us to be the epitome of an “excessive fine” that bears strict scrutiny because “fines are a source of revenue, while other forms of punishment cost a State money.”  Id. at *4 (citation and quotation marks omitted).

Indeed, we specifically mentioned a discussion of the Excessive Fines Clause in In re Zyprexa Products Liability Litigation, 671 F. Supp.2d 397, 462-63 (E.D.N.Y. 2009), as a possible defense to an Attorney General action.  Another such case, State v. Ortho-McNeil-Janssen Pharmaceuticals, Inc., 777 S.E.2d 176 (S.C. 2015), made our “bottom ten” list in 2015.  In that case, the state recovered a verdict of $327 million (later somewhat reduced), representing thousands of letters, sample packs, and detailing visits, counted separately, because the FDA ordered a “correction” of a Dear Healthcare Provider letter.  Id. at 203 (“[t]he State argued, and the trial court agreed, that the distribution of each sample box containing the deceptive labeling, each DDL, and each follow-up sales call to the DDL . . . constituted a separate SCUTPA violation”).  The South Carolina Supreme Court rejected an excessive fines argument, but the argument at that point was supported only by cases over 50 years old.  Id. at 205.  Perhaps having a new, unanimous, definitive Supreme Court incorporation of the clause will convince lower courts to treat this part of the constitution with more respect.

After all, if a civil seizure around four times the maximum criminal fine plausible implicates the Excessive Fines Clause, then the kind of artificially inflated, contingent-fee-driven litigation that our clients have had to put up with certainly should.

At minimum, something to watch, and perhaps plead as a defense.


Our recent post about the First Amendment decision in American Beverage Ass’n v. City & County of San Francisco, ___ F.3d ___, 2019 WL 387114 (9th Cir. Jan. 31, 2019) (en banc) (“ABevA”), holding unconstitutional a purported product “safety warning” was more than enough to set the old First Amendment juices flowing.  Ninth Circuit en banc decisions involve the largest panels of judges in the country, and ABevA featured no less than four different interpretations of the recent United States Supreme Court decision, Nat’l Institute of Family & Life Advocates v. Becerra, 138 S. Ct. 2361 (2018) (“NIFLA”), so we thought we’d start by examining NIFLA, looking for First Amendment gold.

Briefly, NIFLA addressed the constitutionality under the First Amendment of a statute aimed at certain unlicensed “crisis pregnancy centers” run by anti-abortion activists who were more interested in interfering with their “client”s best interests than helping them.  138 S. Ct. at 2368. The State of California enacted a statute requiring those clinics to post notices containing information about the availability of competing entities offering real services that also included abortion as an option.  Id. at 2369.  The challenged law also compelled disclosure of these clinics’ unlicensed status.  Id. at 2370.

A five-justice majority in NIFLA held the statute unconstitutional as mandating “compelled speech” – in the form of supposed health-related warnings.  Citing, inter alia, one of our favorite cases, Reed v. Town of Gilbert, 135 S. Ct. 2218 (2015), the majority found “[t]he licensed notice [to be] a content-based regulation of speech.  By compelling individuals to speak a particular message, such notices alter the content of their speech.”  138 S. Ct. at 2371.  The Court then rejected the idea of “professional speech” – that is, persons subject to state licensure − as a new category of less protected speech.  Id. at 2371-72.  “This Court’s precedents do not permit governments to impose content-based restrictions on speech without persuasive evidence of a long (if heretofore unrecognized) tradition,” and the concept of “professional speech” was not “such a tradition.”  Id. at 2372 (citations and quotation marks omitted).  Further, “[t]his Court has been reluctant to mark off new categories of speech for diminished constitutional protection.” Id. (citations and quotation marks omitted).

An exception had been made for compelled speech in attorney advertisements.  Id. (citing Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626 (1985).  For compelled speech to fall within that exception, however, requires four elements (and here’s where it gets interesting):  (1) “commercial advertising”; (2) a “purely factual” disclosure; (3) “uncontroversial information”; and (4) about the “terms for acquiring” services or (we presume) products.  138 S. Ct. at 2372.  Our usual interest in the First Amendment concerns off-label use, but we have little doubt that an FDA-mandated disclaimer, “this information concerns an off-label use,” would fall within the Zauderer exception.  Our interest here, is as product liability litigators faced with “warning” claims demanding the inclusion of information that is neither “purely factual” nor “uncontroversial.”  As we stated in an earlier post, “FDA Takes It on the Chin Again in First Amendment Case”:

[T]he court’s discussion of the Zauderer “purely factual and uncontroversial information” test for compelled speech leaves us with some interesting hypotheticals to consider.  Remember, after New York Times v. Sullivan, [376 U.S. 254 (1964),] private tort claims are on par with other forms of governmental restrictions on speech for purposes of the First Amendment. Query whether plaintiffs demanding warnings about supposed causal relationships that are anything but “uncontroversial” might be running afoul of the First Amendment.

For one thing, NIFLA makes clear that the Zauderer exception applies to compelled speech generally.  138 S. Ct. at 2372-73.  For another thing, NIFLA, held that Zauderer “does not apply” to compelled speech that “in no way relates to the services that [the speakers] provide.”  Id. at 2372.  That comes up fairly frequently in product liability litigation, when plaintiffs claim that a defendant has a “duty” imposed by (usually) state law to include information not only about its product, but about the supposedly “safer” attributes of some competing product or treatment option.  We’ve discussed before reasons why so-called “comparative” warning claims should fail, but since such compelled warnings don’t involve the attributes of the defendant’s own product, there may also be a constitutional angle to work with here.  Nor can compelled comparative warnings for prescription medical products be considered “traditional,” since the FDA does not allow them (much less mandate them) except under strict conditions.  See 21 C.F.R. §201.57(c)(3)(v).

Content-based regulations, such as compelled speech, “are presumptively unconstitutional and may be justified only if the government proves that they are narrowly tailored to serve compelling state interests.”  138 S. Ct. at 2371.  Although NIFLA did not “question the legality of health and safety warnings long considered permissible,” id. at 2376, the Court had a lot to say about governmental manipulation of medically-related information:

Throughout history, governments have manipulated the content of doctor-patient discourse to increase state power and suppress minorities. . . .  [W]hen the government polices the content of professional speech, it can fail to preserve an uninhibited marketplace of ideas in which truth will ultimately prevail.  Professionals might have a host of good-faith disagreements, both with each other and with the government, on many topics in their respective fields.

Id. at 2374-75 (citations and quotation marks omitted).  The “benefit” of products (NIFLA offered the example of “medical marijuana”) can be a constitutionally protected dispute.  Id. at 2375. “Speaker-based laws run the risk that ‘the State has left unburdened those speakers whose messages are in accord with its own views.’”  Id. at 2378 (quoting Sorrell v. IMS Health, Inc., 564 U.S. 552, 557 (2011)).

Thus, think about what may fail to qualify as “noncontroversial” or “strictly factual” information in our product liability sandbox – thereby triggering strict (or at least “heightened”) scrutiny.  Those elements of the Zauderer test weren’t really issues in NIFLA; “abortion [is] anything but an ‘uncontroversial’ topic.”  138 S.Ct. at 2372.  But what about product liability?  Well, we have the holding in the aforementioned Sorrell decision that “[s]peech in aid of pharmaceutical marketing, however, is a form of expression protected by the Free Speech Clause of the First Amendment.”  564 U.S. at 557.  We have long been of the view that one side of a scientific conflict should not be able, under the First Amendment, to sue the other side into silence through tort litigation.

Thus, we believe that under NIFLA, there may be a constitutional dimension to the kind of scientific controversies normally addressed these days by Daubert.  Simply looking through our recent “best of” lists, we’ve seen quite a few examples of plaintiffs pursuing, on a massive scale, warning claims about purported product “risks” that were ultimately debunked on scientific grounds.  See In re Lipitor (Atorvastatin Calcium) Marketing, Sales Practices & Products Liability Litigation (No II) MDL 2502, 892 F.3d 624 (4th Cir. 2018) (Lipitor and diabetes); In re Zoloft (Sertraline Hydrochloride) Products Liability Litigation, 858 F.3d 787 (3d Cir. 2017) (Zoloft and birth defects); In re Mirena IUS Levonorgestrel-Related Products Liability Litigation, 341 F. Supp.3d 213 (S.D.N.Y. 2018) (Mirena and a particular form of high blood pressure); In re Mirena IUD Products Liability Litigation, 169 F. Supp.3d 396 (S.D.N.Y. 2016) (Mirena and perforation); In re Accutane Litigation, 191 A.3d 560 (N.J. 2018) (Accutane and bowel problems). There are many more such examples in the law books.

While Daubert is a perfectly fine way of dealing with some litigation over scientifically (and sometimes generally) controversial claims of product risk, perhaps the post-NIFLA First Amendment protection of compelled scientific speech would be another.  Turning back to ABevA, at least three concurring judges would have decided the case on the grounds that the compelled speech about sugary drinks contributing to “diabetes” was not “purely factual” (such drinks have no effect on certain types of diabetes) and thus “controversial.”

This warning does not provide “purely factual and uncontroversial information about the terms under which services will be available.”  The factual accuracy of the warning is disputed in the record.  Among other things, the warning is contrary to statements by the FDA. . . .  Moreover, . . . the disclosure is literally false with respect to Type I diabetes. Although NIFLA did not define “uncontroversial,” the warning here requires the advertisers to convey [the government’s] one-sided policy views. . . .  The record shows this is a controversial topic, and therefore, the ordinance does not qualify as “uncontroversial information” under the third prong of NIFLA.

ABevA, 2019 WL 387114, at *8 (citations omitted) (concurring opinion); see, id. at *11 (“it cannot be doubted that the government’s proposed message is controversial:  it would require that manufacturers, retailers, and advertisers include in their ads, under a banner that begins “Warning,” the message that their product contributes to diabetes even though the causes of type 1 diabetes are not actually known”) (another concurring opinion).  Query: If the claimed link between diabetes and sugary drinks in ABevA is sufficiently “controversial” to require heightened First Amendment scrutiny of a compelled warning, how can the at least equally scientifically bogus demand for a diabetes warning on Zoloft not be equally unconstitutional?

The question then becomes, what is the threshold for “controversial” under NIFLA?  It may well be considerably less stringent than the Daubert standard for lack of valid scientific support.  After all, abortion is “controversial” despite – indeed because of – there being two vigorously asserted, conflicting points of view.  A lot of scientific disputes may well be “controversial” under NIFLA, and thus First Amendment protected against warnings purportedly compelled by state law, even though neither side could prevail over the other side on Daubert grounds.  Such examples might include Proposition 65 carcinogenic warnings concerning cola drinks, coffee, beer, and soy sauce, see Riva v. Pepsico, Inc., 82 F. Supp.3d 1045, 1062 (N.D. Cal. 2015), and similarly dubiously supported cancer claims involving herbicides.  See National Ass’n of Wheat Growers v. Zeise, 309 F. Supp.3d 842, 846 (E.D. Cal. 2018).  Perhaps the opinion of a single outlier group (as was alleged in Zeise) may be enough to survive Daubert, but is questionable whether, when viewed as governmentally compelled speech about a scientifically contested risk, demands for such warnings could survive First Amendment analysis of the sort mandated by NIFLA and conducted by ABevA.  Indeed, a demand that a product warning adhere to a outlier scientific viewpoint would seem to be the epitome of “controversial,” at least within the relevant scientific community.

It seems clear to us that after NIFLA and ABevA, the kind of claim that the California Supreme Court allowed to withstand First Amendment challenge in Kasky v. Nike, Inc., 45 P.3d 243, 251-52 (Cal. 2002), compelling disclosure of a defendant’s controversial labor practices, could not occur now.  Moreover, given availability of rapid First Amendment-based relief to defendants under so-called SLAPP statutes, it may be cheaper and easier to seek First Amendment dismissal of state-law-based demands for controversial, or even untrue, safety warnings.  See Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1109-1024 (9th Cir. 2003) (SLAPP relief appropriate against groundless tort suit alleging scientifically doubtful drug-related risks).

One thing that was not decided, either in NIFLA or ABevA, is what degree of scrutiny applies to cases where the Zauderer exception allowing rational basis analysis is unavailable.  Both cases resolved First Amendment claims without clarifying that point, NIFLA holding that the compelled speech statute “cannot survive even intermediate scrutiny,” 138 S. Ct. at 2375; and ABevA striking down the compelled warning as “unduly burdensome” even under Zauderer.  2019 WL 38711, at *5.

But that’s why the already discussed holding in NIFLA that compelled speech is inherently “content-based,” 138 S. Ct. at 2371, is key.  That holding brings compelled speech within the rubric of Reed and Sorrell, holding that strict scrutiny, or at minimum “heightened” scrutiny, is required.

In sum, we don’t think that “compelled speech” rationale of NIFLA or ABevA is likely to affect the FDA very much. The Agency’s “valid scientific evidence” standards, and similar requirements for scientific support of label changes would appear to provide the basis for meeting the elements Zauderer exception.  The FDA’s prohibition on off-label communication has its own well-known First Amendment problems, but they don’t involve compelled speech, nor would the kind of disclaimers and “balance “ that might be alternative approaches to the FDA’s ban probably be anything but factual and non-controversial.  Finally, compelled speech analysis would not have much impact on product liability litigation where the risk of a prescription medical (or other) product is well-established and the only question is whether the plaintiff did or did not encounter it.

Where First Amendment compelled speech principles could have significant impact – and where we urge our readers to consider whether a compelled speech defense is available − is in the kinds of cases described above, where the existence of the risk itself is scientifically controversial and would attract a Daubert challenge.  In those situations, the standards for First Amendment protections may be easier to meet than Daubert, so the impact of cases like NIFLA and ABevA is something that may be helpful in the long run.  The defense could also rely on arguments (including FDA statements) against overwarning to support the constitutional defense.  At the very least, they provide a basis for avoiding “a proliferation of warnings and disclosures compelled by local municipal authorities that have only a tenuous link to a more than trivial government interest.”  ABevA, 2019 WL 387114, at *13 (concurring opinion).