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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.

Stephen Hawking may have been the smartest guy in the world, even though he believed that “People who boast about their I.Q. are losers.”  Hawking is best known for his work on black holes.  As used in physics, a black hole describes a point-sized mass (called a “singularity”) so dense that its escape velocity exceeds the speed of light.  That effectively cuts it off from the rest of the universe, so that nothing emanates from it – hence the “black hole” terminology.  Hawking’s study (more than “study,” really since he thought most of these things up) applied the black hole concept to the entire universe, thus providing a theoretical underpinning for “Big Bang” cosmology.  Beyond that, Hawking developed laws of black hole mechanics.  He dealt with rotating black holes, and determined that contrary to their initial definition (and Hawking’s own prior work) black holes could under some circumstances emit radiation due to annihilation of particles near the event horizon (it’s complicated – you can access Hawking’s many and varied ideas here).  That radiation is now called “Hawking radiation,” and over cosmological time (trillions of years or longer) can cause black holes to evaporate and eventually explode.

He will be missed.

The massive gravity of black holes sucks in everything surrounding them and crushed it into effectively nothing but mass and spin.  We immediately thought of black holes in the legal context when we learned on Friday that the Massachusetts high court (called the “Supreme Judicial Court”) decided to recognize a form of innovator liability – imposing liability for injuries caused by generic drugs on their branded competitors. See Rafferty v. Merck & Co., ___ N.E.3d ___, 2018 WL 1354064 (Mass. March 16, 2018).

As we had feared, California did this first, adopting an extreme – even more extreme than usual − version of innovator liability in T.H. v. Novartis Pharmaceuticals Corp., 407 P.3d 18 (Cal. 2017).  In Hawking’s parlance, that would make the state a “supermassive” legal black hole.  Massachusetts isn’t as big a state, and its innovator liability theory isn’t as downright bizarre as California’s, so Rafferty probably created an intermediate-mass legal black hole.  But liability for injuries caused by products that the defendant never even made (and thus made no money from) is potentially crushing to innovator drug companies no matter what.

So what exactly did Rafferty hold?

For one thing, much more than in T.H. the Massachusetts court was quite frank that it was only doing this because preemption prevented plaintiffs purportedly injured by generic drugs from suing generic manufacturers.  There was none of this bullhockey that we got from California about innovator liability stemming from well-established negligence principles.  Before ever getting to state-law issues (or even to the facts of the case) Rafferty identified generic preemption as the problem:

This allocation of labeling responsibilities under Federal law has proved difficult to reconcile with the duties required of generic drug manufacturers under State tort law. . . .  Under Federal regulations . . . manufacturers of generic drugs − because they lack the power to change the warning labels on their products unilaterally − cannot independently fulfil these State law duties. . . .  The practical consequence is that a consumer who suffers injury arising from an inaccurate or inadequate drug warning label can sue the manufacturer for damages caused by his or her injury only if the consumer ingested a brand-name version of the drug — but not if the consumer ingested the generic version.

2018 WL 1354064, at *2 (citations omitted).  For this reason, innovator liability could not exist as a product liability claim as “product liability” is normally understood:

[U]nder our prevailing law, . . . [defendant] owes [plaintiff] no duty to warn under the law of products liability.  As noted by the judge, a manufacturer may be found liable for a failure to warn only where the product that caused the injury was made by that manufacturer; its duty of care extends only to users of its own product.

Id. at *3 (discussion of several prior Massachusetts product liability cases omitted).  Unlike California, Rafferty held that there was no basis for innovator liability in product liability (including ordinary negligence), or the Massachusetts consumer fraud statute.  See also Id. at *13 (discussing consumer protection).

But in today’s day and age, at least in Massachusetts or California, a result that produces no liability against anyone is apparently intolerable.  Thus, the court in Rafferty, using its common-law powers, made something up – product liability for “recklessness.”  Rafferty turned to “a general principle of tort law,” hitherto unknown in product liability, that “[e]very actor has a duty to exercise reasonable care to avoid physical harm to . . . all persons who are foreseeably endangered by his conduct, with respect to all risks which make the conduct unreasonably dangerous.”  Id. at *5 (quoting Jupin v. Kask, 849 N.E.2d 829, 835 (Mass. 2006)).  And what did Jupin quote for this broad, vague declaration of anyone potentially liable to everyone for anything?   Not any Massachusetts case, but rather Tarasoff v. Regents, 551 P.2d 334, 344 (Cal. 1976).  Argh‼  Even though we’re in Massachusetts, the principles of crazy California tort law are still around, expanding liability.

However, unlike the California Supreme Court, Rafferty was at least willing to “recognize[] . . . that, even where the requirements of negligence are satisfied, there may nevertheless be a public policy justification for declining to impose a duty of care where “the imposition of a precautionary duty is deemed to be either inadvisable or unworkable.”  2018 WL 1354064, at *5 (citation and quotation marks omitted).  But while “in the vast majority of . . . cases, the duty to warn would be limited to the manufacturer of the product − even if the plaintiff were to bring a general negligence claim − because the risk of harm arising from an inadequate warning would be foreseeable to a manufacturer only with respect to users of its own product,” id. at *6, prescription drugs were different, because to comply with the FDCA, innovator manufacturers are required to let generic manufacturers use their labels verbatim.

With generic drugs, it is not merely foreseeable but certain that the warning label provided by the brand-name manufacturer will be identical to the warning label provided by the generic manufacturer, and moreover that it will be relied on, not only by users of its own product, but also by users of the generic product.

Id. at *6 (emphasis original).  Innovator liability thus exists to make innovator manufacturers pay for having complied with the “require[ments]” of the regulatory scheme imposed by the “Hatch-Waxman amendments,” and for no other reason. Id.

Where a brand-name drug manufacturer provides an inadequate warning for its own product, it knows or should know that it puts at risk not only the users of its own product, but also the users of the generic product.  Consequently, this is the rare (perhaps the only) type of case involving a manufactured product where the requirements of general negligence may be satisfied even where the requirements of products liability are not.

Id. at *6 (emphasis added).

“Perhaps the only” – there it is, a unique, expansive duty imposed on a non-manufacturing innovator pharmaceutical company because its FDA-approved warning is deemed inadequate under state law, with the duty expanded to include generic drug users because the defendant is forced by Hatch Waxman to let generic manufacturers (who are equally subject to the federal requirement) use its labeling verbatim.  Under Rafferty, innovator liability is a consequence of a branded drug company’s compliance with the FDCA, and nothing else.  In and of itself, this massive transfer of liability based on conformity with the requirements of federal law raises serious preemption issues.

Back to Rafferty’s rationale.

Unlike California, the Massachusetts court in Rafferty at least had the good sense to recognize that there were countervailing public policy considerations implicated by making a drug manufacturer liable for injuries caused by competing products:

[I]f consumers of generic drugs were allowed to recover damages for a brand-name manufacturer’s negligent failure to warn, it would be far more difficult for the manufacturer to shoulder these costs, for three reasons.

First, these costs would not be incurred until after the brand-name manufacturer’s patent monopoly expires and generic competitors enter the market, at which point the brand-name manufacturer will have suffered a precipitous decline in sales of its product. . . .

Second, because prices drop with generic drug competition, the sales of generic drugs may exceed the sales generated during the patent monopoly period, and may even continue indefinitely, long after the brand-name manufacturer has moved on to focus on other patented products. . . .

Third, because . . . [f]ederal preemption bars any generic drug consumer from bringing a failure to warn claim against any generic manufacturer, all such claims would be brought only against the brand-name manufacturer . . ., leaving the brand-name manufacturer without any ability to share the costs of litigation, or of a damage award or settlement, with the generic manufacturer.

Rafferty, 2018 WL 1354064, at *7-8 (citations and quotation marks omitted).  Innovator manufacturers are thus “not in the best position to bear its [innovator liability’s] costs.”  Id. at *8.  Such liability “impose[s] on brand-name manufacturers an additional ‘cost of production’ for products that, in reality, they no longer produce.”  Id.

What is a “cost of production” for a “product[] that, in reality [is] no longer produce[d]”?  Quite frankly, it is a cost that must inevitably be inequitably recouped, because the only way a drug manufacturer will pass along that cost is to consumers of other, non-defective products.  With all the brouhaha lately about reducing the price of prescription drugs, innovator liability is a recipe for increasing those costs substantially.

[A]s a matter of public policy . . . allowing a generic drug consumer to bring a general negligence claim for failure to warn against a brand-name manufacturer poses too great a risk of chilling drug innovation, contrary to the public policy goals embodied in the Hatch-Waxman amendments.

Id. at *10.

Nonetheless, liability uber alles prevailed.  Precedent be damned.  Id. at *11 (“we find ourselves in the minority of courts that have decided this issue” – see our scorecard).  “The widespread use of generic drugs means that, if we decline to impose any liability on brand-name manufacturers, countless consumers would be left without a remedy.”  Rafferty, 2018 WL 1354064, at *9.  Rather than letting the state legislature (let alone Congress, which enacted Hatch-Waxman) balance large-scale public policy concerns, Rafferty created innovator liability for “reckless” conduct:

In other types of cases where we have circumscribed liability for public policy reasons, we have nevertheless consistently recognized that there is a certain core duty − a certain irreducible minimum duty of care, owed to all persons − that as a matter of public policy cannot be abrogated: that is, the duty not to intentionally or recklessly cause harm to others.

Id.  Thus, Rafferty professed to “tolerate[] ordinary negligence but draw[] the line at recklessness.  Id.

But did it really?  There are two types of “reckless” conduct, as explained in Restatement (Second) of Torts §500 (1965) (defining “reckless disregard”).  One is where the “actor knows, or has reason to know, . . . of facts which create a high degree of risk of physical harm to another, and deliberately proceeds to act, or to fail to act, in conscious disregard of, or indifference to, that risk.”  The second is where the “actor has such knowledge, or reason to know, of the facts, but does not realize or appreciate the high degree of risk involved, although a reasonable man in his position would do so.”  Id. comment a.  The second of these is really just a glorified type of negligence.  “An objective standard is applied . . ., and [the actor] is held to the realization of the aggravated risk which a reasonable man . . . would have, although he does not himself have it.”  Id.

Rafferty chose the second, dumbed-down version of “reckless disregard,” using the Restatement’s weak alternative definition of recklessness:

[H]e does an act or intentionally fails to do an act which it is his duty to the other to do, knowing or having reason to know of facts which would lead a reasonable man to realize, not only that his conduct creates an unreasonable risk of physical harm to another, but also that such risk is substantially greater than that which is necessary to make his conduct negligent.

Rafferty, 2018 WL 1354064, at *10 (quoting a case that quotes from Restatement §500) (emphasis added).

Under this standard, a brand-name manufacturer that intentionally fails to update the label on its drug to warn of an unreasonable risk of death or grave bodily injury, where the manufacturer knows of this risk or knows of facts that would disclose this risk to any reasonable person, will be held responsible for the resulting harm.

Id. at *11 (emphasis added).  At least the “fails to update” language seems to limit liability to current NDA holders, which is some improvement on the even more malignant California style of innovator liability.

Is Rafferty’s “recklessness” standard really going to contain the evil genii of innovator liability that has been let out of the bottle?  We aren’t holding our breath.  Our brethren on the other side of the “v.” have proven time and time again to be willing and able to allege whatever is necessary to state whatever cause of action they have to, whether or not the facts support it.  Then they file hundreds or thousands of cases until the defendant settles rather than risks catastrophic liability – the legal “black hole” we mentioned at the outset of this post.  Thus, we are skeptical, to say the least, of Rafferty’s assurances that this novel form of liability “will not materially chill innovation or increase drug prices.”  Id. at *12.  While Congress “in enacting the Hatch-Waxman amendments . . . expected that its Federal regulatory scheme would be supplemented with traditional State law remedies,” id., innovator liability, is anything but “traditional,” as indeed Rafferty itself recognized in the course of reaching its admittedly “minority” result.

Back when we first encountered mass torts in the prescription medical product context we realized that, as plaintiffs created new theories of liability, it was up to us to create new defenses to counter them.  That’s how Buckman Co. v. Plaintiffs Legal Committee, 531 U.S. 341 (2001), came to be.  We’ll see what we can come up with this time.  After all, as Stephen Hawking himself said, “[i]ntelligence is the ability to adapt to change.”

Several decisions since the beginning of the year, and two appellate rulings in the last couple of weeks, highlight another aspect of Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017) (“BMS”), that should be valuable to defendants.  BMS – which dealt with what the Court called “case-linked” (also known as “specific”) personal jurisdiction, had some choice things to say about what kind of forum-related contacts suffice to confer jurisdiction.

Under BMS, case-linked jurisdiction “must “arise out of or relate to the defendant’s contacts with the forum.”  Id. at 1780 (internal quotes omitted) (emphasis original).  Where the “relevant conduct occurred entirely” out of state, “the mere fact that this conduct affected plaintiffs with connections to the forum state did not suffice to authorize jurisdiction.”  Id. (internal quotes omitted) (emphasis original).  Without a plaintiff/case-specific factual hook, “specific jurisdiction is lacking regardless of the extent of a defendant’s unconnected activities in the State.”  Id.

Finally, the BMS court reiterated that a defendant’s distributing a product through independent third parties doesn’t create case-linked jurisdiction either.

A defendant’s relationship with a third party, standing alone, is an insufficient basis for jurisdiction.  In this case, it is not alleged that [defendant] engaged in relevant acts together with [its distributor] in [the forum]. . . .  The bare fact that [the defendant] contracted with a [forum] distributor is not enough to establish personal jurisdiction in the State.

Id. at 1783 (various citations and quotation marks omitted).  BMS also cited (many times) and followed World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980), which BMS described as holding that an “isolated occurrence” is not capable of supporting jurisdiction where “the defendant carried on no activity” in the state “whatsoever” and one of its products, in a “fortuitous circumstance,” caused injury when it “happened to suffer an accident while passing through” the state.  BMS, 137 S. Ct. at 1782.

And, of course, as we’ve mentioned before, there is also the federalism aspect of BMS:

[T]he primary concern is the burden on the defendant. . . .  [E]ven if the defendant would suffer minimal or no inconvenience from being forced to litigate before the tribunals of another State; even if the forum State has a strong interest in applying its law to the controversy; even if the forum State is the most convenient location for litigation, the Due Process Clause, acting as an instrument of interstate federalism, may sometimes act to divest the State of its power to render a valid judgment.

Id. at 1780-81 (several internal quotation marks from World-Wide Volkswagen omitted).

The discussion in BMS – particularly given that it was authored by Justice Alito – suggested to us that so-called “stream of commerce” (“SoC”) jurisdiction is also likely on its way out.  SoC jurisdiction, for those of you who don’t live with this stuff day in and day out, doesn’t involve litigation tourists.  Rather, it is s theory that plaintiffs advance when they claim to be injured in the forum by the product of a defendant that has nothing to do with that forum, except that in Tinker to Evers to Chance to Steinfeldt to Kling to Sheckard to Slagle to Schulte fashion, its product wound up in the state due to the independent actions of others.  The product causing harm in the jurisdiction, without more, is purportedly enough to create case-linked personal jurisdiction under this theory.  The defendant need not have intended, or even be aware, that its products were present in the forum state.

As we discussed here, in connection with the last time the United States Supreme Court addressed this variant of case-linked jurisdiction directly, SoC jurisdiction, particularly in its more extreme forms, does not depend the defendant having deliberately acted to market its products in the forum state.  Instead “stream of commerce” is just what it sounds like.  The only connection between the defendant and the jurisdiction is happenstance, in that random acts of intermediate product distributors-owners-sellers-whoever happened that brought the particular injury-causing product into the jurisdiction.

SoC jurisdiction has never commanded a majority on the Supreme Court. The best it ever did was four justices in Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102 (1987), which not surprisingly arose from California.  In Asahi, Justice Brennan, speaking for four justices, stated:

As long as a participant in this process is aware that the final product is being marketed in the forum State, the possibility of a lawsuit there cannot come as a surprise.  Nor will the litigation present a burden for which there is no corresponding benefit.  A defendant who has placed goods in the stream of commerce benefits economically from the retail sale of the final product in the forum State, and indirectly benefits from the State’s laws that regulate and facilitate commercial activity.  These benefits accrue regardless of whether that participant directly conducts business in the forum State, or engages in additional conduct directed toward that State.

480 U.S. at 117.  This passage was dictum (no jurisdiction existed on the facts of Asahi) in a concurring opinion, but the concept of SoC jurisdiction in the absence of any forum-directed conduct by the defendant has persisted for decades.

In 2011, the Supreme Court held that SoC jurisdiction could not be asserted as a form of general jurisdiction in Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 929 (2011).  However, due to a concurring opinion by Justice Alito, the Court was unable to administer the coup de grâce in J. McIntyre Machinery, Ltd. v. Nicastro, 564 U.S. 873 (2011).  Four justices “conclu[ded] that the authority to subject a defendant to judgment depends on purposeful availment,” thus rejecting “the undesirable consequences of Justice Brennan’s approach” in Asahi.  Id. at 885.  This Nicastro plurality held:  (1) “jurisdiction is in the first instance a question of authority rather than fairness”; (2) “personal jurisdiction requires a forum-by-forum, or sovereign-by-sovereign, analysis”; and (3) “a defendant may in principle be subject to the jurisdiction of the courts of the United States but not of any particular State.”  Id. at 883-84.

However, Justice Alito, joined by Justice Breyer, refused “to announce a rule of broad applicability” that would have consigned SoC jurisdiction to the dustbin of history.  Id. at 887.  Instead, they agreed only that “a single sale of a product in a State does not constitute an adequate basis for asserting jurisdiction over an out-of-state defendant, even if that defendant places his goods in the stream of commerce, fully aware (and hoping) that such a sale will take place.”  Id. at 888-89.

We’ve thought, ever since BMS, that Justice Alito’s enunciation (discussed above), of the federalist model of jurisdiction in BMS should be the deathblow to the kind of SoC jurisdiction without purposeful availment that has bedeviled product liability defendants for decades.  He’s now on-board with what he wasn’t willing to join in Nicastro.  But our thoughts and a dime will get us a cup of coffee.  Now, however, several recent post-BMS decisions suggest that we’re right.

First, the Oklahoma Supreme Court the other day decided Montgomery v. Airbus Helicopters, Inc., ___ P.3d ___, 2018 WL 1164671 (Okla. March 6, 2018), and held that BMS eliminated the remaining jurisdictional underpinnings of SoC jurisdiction.  “[S]ubsequent, to [BMS] we must conclude that any ‘stream of commerce’ test applied to [defendants’] products . . . cannot establish Oklahoma jurisdiction”:

[BMS] requires an affiliation between the forum and the underlying controversy, an activity or an occurrence that takes place in the forum State, which subjects the cause to the State’s regulation.  The adjudication of issues must derive from, or be connected with, the very controversy that establishes jurisdiction.  Accordingly, a “sliding scale” approach, or “totality of the contacts” or “stream of commerce” approach is insufficient to establish specific personal jurisdiction.

Id. 2018 WL 1164671, at *9.  While Oklahoma had “an interest in adjudicating this case,” since “most of the harm” occurred there, “these facts alone, without [defendants] having further direct and specific conduct with this State directly related to the incident giving rise to the injuries, is insufficient for asserting specific personal jurisdiction over them” after BMS.  Id. at *10.  Montgomery thus wipes out a pro-plaintiff decision on SoC jurisdiction handed down within weeks of BMS.  See Tarver v. Ford Motor Co., 2017 WL 3527710 (W.D. Okla. Aug. 16, 2017).

Second, as discussed last week, Shuker v. Smith & Nephew, PLC, ___ F.3d ___, 2018 WL 1096185 (3d Cir. March 1, 2018), disposed of a SoC–based jurisdiction claim against the target defendant’s parent.  The Third Circuit had for decades avoided taking a position on Asahi-style SoC jurisdiction, neither adopting nor definitively rejecting it.  See, e.g., D’Jamoos v. Pilatus Aircraft Ltd., 566 F.3d 94, 105-06 (3d Cir. 2009) (avoiding SoC issue by holding that airplane crashing in state did not “enter” the stream of commerce “as that term is generally understood”).  But, with BMS on the books, the court flatly rejected SoC jurisdiction in Shuker.  “We perceive no merit in [plaintiffs’] stream-of-commerce theory of personal jurisdiction.”  2018 WL 1096185, at *14.  Observing that “[a] plurality of Supreme Court Justices has twice rejected the stream-of-commerce theory,” Shuker took notice of (as did we) of the relevant language in BMS:

Indeed, the Supreme Court has recently held that “[t]he bare fact that [a non-resident defendant] contracted with a [resident] distributor is not enough to establish personal jurisdiction in the State.”  [citing BMS]  We thus have no cause to revisit our Court’s precedent on this issue, and we decline to adopt [plaintiffs’] stream-of-commerce theory of specific personal jurisdiction.

2018 WL 1096185, at *14 (affirming rejection of SoC jurisdiction without any discovery).  The Third Circuit’s precedential rejection of broad SoC jurisdiction in Shuker calls into question some backward-looking district court decisions that we came across in writing this post, those being Antonini v. Ford Motor Co., 2017 WL 3633287 (M.D. Pa. Aug. 23, 2017), and Lindsley v. American Honda Motor Co., Inc., 2017 WL 3217140 (E.D. Pa. July 28, 2017).

Third, Venuti v. Continental Motors, Inc., ___ P.3d ___, 2018 WL 312532 (Utah App. Jan. 5, 2018), similarly rejected SoC jurisdiction in another plane crash case.  Beyond selling the product generally, “there [wa]s no evidence that [defendant] took any additional steps to target [the forum state] for the sale of the product.”  Id. at *4.  “[A] series of third-party sales” rather than “any deliberate action on the part of” the defendant brought the product into the state.  Id. at *5.  “[M]erely placing a product into the stream of commerce knowing that it could be swept into the forum state does not subject a manufacturer to personal jurisdiction.”  Id.  Without some “target[ing]” of the forum, that the defendant sold a lot of products generally doesn’t create jurisdiction, particularly after BMS:

When there is no connection between the forum and the underlying controversy, “specific jurisdiction is lacking regardless of the extent of a defendant’s unconnected activities in the State.”

Id. at *6 (quoting BMS, 1347 S. Ct. at 1781).

Fourth, also in 2018, Moseley v. Suzuki Motor, Inc., 2018 WL 539330 (D. Idaho Jan. 24, 2018), reached the same conclusion.  The plaintiff in Moseley asserted SoC jurisdiction over a foreign product manufacturer without even bothering to allege how the product, which had been sold by a now-defunct independent distributor in Utah in 2008, made its way to Idaho by 2015, where it was involved in a fatal accident.  Id. at *1; see id. at *2 (“Plaintiffs have failed to explain how the motorcycle even ended up in Idaho”).

In the absence of any evidence that the defendant manufacturer ever “specifically targeted” the forum state, id. at *2, the Moseley court rejected SoC jurisdiction.  Where “only the distributor, but not the manufacturer, purposefully availed itself of the benefits of doing business” in a state, personal jurisdiction over the manufacturer does not exist, even if the distributor, in this particular case, was a corporate subsidiary of the defendant.  Id. at *3.

Courts are thus starting to get it.  While BMS was not a SoC jurisdiction case, it did authoritatively delineate the standards for case-linked personal jurisdiction, which under Goodyear is the only possible basis for SoC jurisdiction.  The holding in BMS that merely having in-state distributors is not enough for case-linked jurisdiction should therefore be fatal to non-purposeful availment versions of SoC jurisdiction, which rest on “contacts” (if they can even be called that) that are less significant..  In that respect, it should not matter that – unlike BMS – the plaintiffs in SoC jurisdiction cases are not litigation tourists, but rather resident plaintiffs.  If, and only if, “purposeful availment” rather than the “fortuitous” conduct of third persons brought the product into the jurisdiction, can there be personal jurisdiction under any sort of SoC jurisdiction theory after BMS – as courts now appear to be recognizing.

The DRI’s Drug and Medical Device Committee will present its annual seminar on May 10-11 at the New York Marriott Marquis. The presentations will include the latest mass tort trends, including litigation funding; the current status of the expanding opioid litigation; the internet of things and the increasing cyber security risk of new technology and medical devices; the importance of the power of persuasion in jury trials with a unique look at millennials; and current themes to expect during plaintiffs’ counsels’ closing arguments. These presentations will be made by in-house counsel, outside attorneys, law school academicians, experienced trial counsel and a jury consultant. For more information on the seminar, you may refer to the attached brochure and you may register here.

We have another guest post today, from Reed Smith‘s own Erica Yen.  This one is about a recent, interesting decision concerning the interaction between the Health Insurance Portability and Accountability Act (“HIPAA”) and the common law – with a good result this time.  As always, our guest bloggers are 100% responsible for their posts, and Erica deserves all the credit (and any blame) for what follows.


As noted in our post last month, the fact that HIPAA does not provide for a private right of action has not stopped some state courts from allowing negligence claims using HIPAA to define a standard of care. That post discussed the Connecticut Supreme Court’s questionable creation of a new tort of “unauthorized disclosure of confidential medical information” by a healthcare provider.

When the plaintiff in the recent case of Haywood v. Novartis Pharmaceuticals Corp., No. 2:15-CV-373, 2018 WL 437562 (N.D. Ill. Jan. 16, 2018), first filed her complaint in state court, she probably was hoping that the same expansive reasoning used in the Connecticut case would extend to the alleged disclosure by a pharmaceutical company of her private medical information to her employer. In federal court, however, her unusual negligence claims were not allowed to proceed, under HIPAA or otherwise.

In Haywood, the plaintiff had applied for a co-pay assistance program administered by the defendant to help offset the cost of purchasing that defendant’s prescription medications. Id. at *1. Despite an alleged written request that no information be sent to her workplace, the defendant allegedly faxed information that became available to the plaintiff’s co-workers. The information allegedly included her social security number, date of birth, income, Medicare number, disease, treatment, and medical providers. Id. The relevant (amended) complaint alleged negligence and negligent training and supervision in violating duties owed to her under (1) the defendant’s Privacy Notice and Privacy Statement, (2) Indiana state law, and (3) HIPAA. Id. She also claimed punitive damages based on supposed reckless indifference by disclosing the information against her written request not to do so. Id.

The end result? The court held that the defendant drug manufacturer did not owe the plaintiff any duty for the following reasons, and the plaintiff was not entitled to any punitive damages.

First, the court was not persuaded by the plaintiff’s argument that the defendant’s Privacy Notice and Privacy Statement, posted on its website, created a duty of privacy to her as a customer. Id. at *4. The privacy policies posted online concerned dissemination of information to business partners who were prohibited from using customers’ personal data for marketing purposes. Dissemination to plaintiff’s place of employment had nothing to do with third-party marketing. The defendant’s privacy policies did not set forth any obligations with respect to general non-disclosure, and the court found that the plaintiff’s unilateral request not to send information to her workplace could not, by itself, create a legal duty. Id.

Second, the section of the Indiana Code the plaintiff cited, Ind. C. §25-26-13-15(b), failed to create a duty either. While facially applicable to the defendant, as the specific statute applied to “any ‘person’ with patient information,” the court held that as a whole it regulated “Pharmacists, Pharmacies, and Drug Stores.” The defendant was not any of those, nor did the statute purport to regulate the manufacture of pharmaceuticals or the administration of co-payment assistance programs. That the defendant was a “provider of pharmaceuticals” was not enough to bring it within the purview of a statute addressed to other types of entities and conduct. Therefore, no statutory duty could be owed to the plaintiff. Id.

Third, the court dismissed the plaintiff’s attempt to allege a negligence per se theory that the defendant violated HIPAA standards. Id. at *7. Given that HIPAA does not provide for a private right of action and enforcement was intended to be solely under the authority of the Department of Health and Human Services, allowing state law claims that rely on HIPAA would allow plaintiffs to sidestep those enforcement mechanisms. Id. That sounds a lot like how the FDCA works.

Lastly, the court noted that there was no precedent in the jurisdiction to suggest that a pharmaceutical company has a general duty to safeguard an individual’s personal information from disclosure. Id. at *8. The court could have stopped there but went further to explain the reasons why it concluded a duty should not be imposed at common law, after examining (1) the relationship between the parties, (2) the reasonable foreseeability of harm, and (3) public policy concerns:

    • The relationship between a potential customer and co-pay assistance company, as in the case here, was not similar to the relationship between a pharmacist and consumer “mainly because the direct contact, expertise, reliance, and counseling aspects of the relationship are wholly lacking.” Id.


  • Given that much of an employee’s personal information was likely already available to his or her employer anyway and was unlikely to cause adverse consequences, the foreseeability of legally actionable harm was minimal. Id. at *8-9.
  • Given the growing amount of sensitive personal information generally being made available to third parties in today’s digital society, even if a pharmaceutical company could theoretically bear the liability from inadvertent disclosures, “[a]ssigning significant moral blame to a pharmaceutical corporation in this situation is disproportionate to the actual acts performed (i.e., negligently disclosing information to an employer during a routine application process) . . . Imposing a duty to safeguard information from all possible disclosures upon any party or entity who happens to be in possession of the personal information of another would expand liability in a way that has the potential to stifle the collection of data and the routine processing of information.” Id. at *9. A Seventh Circuit decision analyzing the Indiana data disclosure statute had found no private right of action against a database owner for negligently disclosing information; rather the database owner only had to disclose the breach to customers and let the state attorney general handle enforcement. Id. (citing Pisciotta v. Old Nat. Bancorp, 499 F.3d 629, 636-637 (7th Cir. 2007)).

Based on this reasoning, and exercising appropriate restraint under the Erie doctrine, Haywood concluded that the plaintiff failed to state any viable claim for negligence, negligent training and supervision, or punitive damages. Notwithstanding the importance of protecting health information, and even assuming the defendant’s handling of the plaintiff’s information was done in error, the court acted reasonably in not opening the gates to the kind of expansive duty and liability the plaintiff sought. The unsatisfied plaintiff filed an appeal to the Seventh Circuit just a few weeks ago. See Case No. 18-1328 (filed February 24, 2018). It would be surprising if the Seventh Circuit did not agree with the district court’s analysis and conclusion.

Claims predicating prescription medical product liability claims on purported failure to report adverse events to the FDA – á la Stengel v. Medtronic Inc., 704 F.3d 1224 (9th Cir., 2013) (en banc), Hughes v. Boston Scientific Corp., 631 F.3d 762 (5th Cir. 2011), and Coleman v. Medtronic, Inc., 167 Cal. Rptr.3d 300 (App. 2014), were almost unheard of prior to the recognition of preemption in medical device cases in Riegel v. Medtronic, Inc., 552 U.S. 312 (2008).  We know of only one decision, a prescription drug case at that, Axen v. American Home Products Corp., 974 P.2d 224, 235 (Or. App. 1999), that addressed such claims pre-Riegel.

Because failure-to-report claims are transparent attempts at common-law enforcement of FDA reporting requirements, our first reaction to such claims is that they should be impliedly preempted under Buckman Co. v. Plaintiffs Legal Committee, 531 U.S. 341 (2001), and 21 U.S.C. § 337(a), as purely FDCA-based claims.  Some courts have agreed, others (like the three cases cited above) – have been reluctant to put plaintiffs totally out of court on preemption grounds – so they have distorted the law by jamming the square peg of failure-to-report claims into the round hole of plain vanilla failure-to-warn product liability claims.

But what about that square peg?  We’ve never (and we haven’t seen it anywhere else, either) taken a look at the purely state-law issue of whether, in contexts beyond prescription medical products, the common law has ever given thumbs up – or thumbs down – to state-law tort claims actually predicated on failure to report something to some governmental body (excluding the FDA for these purposes).

Such laws do exist in a variety of areas.  The most significant example are so-called “mandated reporting statutes” that obligate differing groups of statutorily designated persons to report child abuse (and more recently, elder abuse) to state or local authorities.  The details differ, but from what we can tell, practically every state has a mandated reporting statute.

With plaintiffs being always on the lookout for extra deep pockets, no matter how bizarre the liability theory, surely somebody out there has tried to predicate liability on a purely state-law failure to report.

So we did some research that validated that gut feeling.  Indeed, it turns out that state-law failure-to-report claims have been asserted fairly often.

Fortunately for the good guys, most states have rejected those claims, and even the minority of adverse decisions are mostly distinguishable.

Here goes.

Perhaps the leading case is Perry v. S.N., 973 S.W.2d 301 (Tex. 1998).  In Perry, “[t]he sole issue [was] whether plaintiffs may maintain a cause of action for negligence per se based on the Family Code, which requires any person having cause to believe a child is being abused to report the abuse to state authorities.”  Id. at 302.  Before the Texas Supreme Court, that dog didn’t hunt.  “[W]e will not apply the doctrine of negligence per se if the criminal statute does not provide an appropriate basis for civil liability.”  Id. at 304 (footnote omitted).  That the injured plaintiff was a person within the scope of the statute’s protection was not enough.  Id. at 305.  The claim being asserted “corresponds to no common law duty.”  Id. at 306.

[W]e have considered the following factors regarding the application of negligence per se to the . . . child abuse reporting provision:  (1) whether the statute is the sole source of any tort duty from the defendant to the plaintiff or merely supplies a standard of conduct for an existing common law duty; (2) whether the statute puts the public on notice by clearly defining the required conduct; (3) whether the statute would impose liability without fault; (4) whether negligence per se would result in ruinous damages disproportionate to the seriousness of the statutory violation, particularly if the liability would fall on a broad and wide range of collateral wrongdoers; and (5) whether the plaintiff’s injury is a direct or indirect result of the violation of the statute.  Because a decision to impose negligence per se . . . would impose immense potential liability under an ill-defined standard on a broad class of individuals whose relationship to the abuse was extremely indirect, we hold that [liability] is not appropriate.

Id. at 309.

Another interesting case is Ward v. Greene, 839 A.2d 1259 (Conn. 2004), which held that, while a cause of action for failure to report might be brought on behalf of the “identified” abused child him or herself, the statute did not protect other “unidentified” abused children allegedly injured by the same pattern of failure to report child abuse:

[W]e conclude that the [statute] appears to be directed at the child, or children in the case of multiple children placed at risk in a singular incident, who should be the subject of a report of abuse or neglect under the statute and are, accordingly, in need of services.  The policy statement thus suggests that the legislature intended to focus on children who already have been exposed to conduct that amounts to a reportable event, and we do not find merit in the plaintiff’s argument that the statute creates a duty of care to every child who has been in the care of the defendant.

Id. at 1266-67.  The limited claim in Ward can’t translate to drug/device liability because a similar construction of the FDCA’s reporting requirements would not do plaintiffs any good.  Causation in product liability doesn’t work the same way.  In drug/device cases, every court to consider the issue has held that failure to report a plaintiff’s own adverse event cannot possibly be causal, since any failure to report necessarily happens after the plaintiff was injured.  See Johnson v. Hologic, Inc., 2015 WL 75240, at *4 (Mag. E.D. Cal. Jan. 5, 2015), adopted, 2015 WL 4745264 (E.D. Cal. March 6, 2015); Malonzo v. Mentor Worldwide, LLC, 2014 WL 2212235, at *3 (N.D. Cal. May 28, 2014); Simmons v. Boston Scientific. Corp., 2013 WL 1207421, at *5 (C.D. Cal. March 25, 2013).

Perry and Ward are examples of the distinct majority of precedent addressing similar claims of injury due to somebody’s failure to report child abuse.  Most states do not recognize any purely common-law, or negligence per se state-law, duty to report child abuse.  “The vast majority of courts . . . have held that their reporting statutes do not create a civil cause of action.”  Becker v. Mayo Foundation, 737 N.W.2d 200, 208 (Minn. 2007).

Alabama: C.B. v. Bobo, 659 So.2d 98, 102 (Ala. 1995) (“there is no indication of any legislative intent to impose civil liability for failure to report”).

Connecticut: Ward, supra, 839 A.2d at 1266-67.

Delaware: Doe 30’s Mother v. Bradley, 58 A.3d 429, 452 (Del. Super. 2012) (“the statutory obligation to report [suspected child abuse] does not equate to a common law duty to act”).

Florida: Welker v. Southern Baptist Hospital, Inc., 864 So. 2d 1178, 1182 (Fla. App. 2004) (the statute that “address[es] the subject of penalties for failure to report known or suspected child abuse . . . says nothing about the availability of a cause of action for damages.  Moreover, those courts which have been presented with the same question regarding predecessor versions . . . have all concluded that no cause of action was created”), quashed on other grounds, 908 So. 2d 317 (Fla. 2005); Mora v. South Broward Hospital Dist., 710 So. 2d 633, 634 (Fla. App. 1998) (recognizing, while rejecting analogous cause of action for failure to report elder abuse; that “Florida courts have consistently refused to impose civil liability for the failure to report suspected child abuse”); Fischer v. Metcalf, 543 So.2d 785, 790-91 (Fla. App. 1989) (“To find a legislative intent to provide a private right of action against non-reporters, we would have to ignore . . . the plain purpose and language of the statutes”).

Georgia: McGarrah v. Posig, 635 S.E.2d 219, 222 (Ga. App. 2006) (“The legal duty to report, however, is imposed in Georgia by statute, and . . . this statute does not give rise to a private cause of action for damages”) (emphasis original); Vance v. T.R.C., 494 S.E.2d 714, 716 (Ga. App. 1997) (“nothing within the provision of the law purports to create, or indicates an intention to create, a private cause of action in tort in favor of a child whose abuse is not detected or reported”); Cechman v. Travis, 414 S.E.2d 282, 284 (Ga. App. 1991) (child abuse reporting requirements not enforced by private liability).  Cf. Govea v. City of Norcross, 608 S.E.2d 677, 683 (Ga. App. 2004) (no negligence per se claim based on failure to report reasons why police officer had been terminated).

Illinois: Varela v. St. Elizabeth’s Hospital, Inc., 867 N.E.2d 1, 8 (Ill. App. 2006) (“it would be illogical to argue that although the Illinois legislature has not expressly or impliedly created a private right of action for violation of the Reporting Act individuals may nevertheless assert a private right of action for violation of the Reporting Act, so long as those individuals allege they are proceeding at common law rather than on a statutory basis”); Doe v. North Central Behavioral Health System., Inc., 816 N.E.2d 4, 8 (Ill. App. 2004) (“no evidence that the statute was designed to provide monetary remedies for victims of abuse or to impose civil liability on those who fail to report”); Sheetz v. Norwood, 608 F. Appx. 401, 406 (7th Cir. 2015) (following Doe and Cuyler); Doe-2 v. McLean County Unit Dist. No. 5 Board of Directors, 593 F.3d 507, 514 (7th Cir. 2010) (a “mandate to report child abuse does not create any duty to the abused child enforceable under Illinois tort law”); Cuyler v. United States, 362 F.3d 949 (7th Cir. 2004) (“Illinois common law did not impose on [defendant’s] employees a tort duty” and “an imposing line of cases from other jurisdictions dealing with the private-right question . . . have held that a private right should not be implied”) (Posner, J.) (emphasis original); Willis v. Williams, 2010 WL 4683965, at *3 (Mag. C.D. Ill. Sept. 27, 2010) (“Illinois common law creates no legal duty to report suspected sexual abuse of a child”), adopted, 2010 WL 4683624 (C.D. Ill. Oct. 26, 2010); Doe v. White, 627 F. Supp. 2d 905, 920 (C.D. Ill. 2009) (“there is no underlying common law duty to report” and “there is no tort liability for [a statutory] violation”).

Indiana: Sprunger v. Egli, 44 N.E.3d 690, 693 (Ind. App. 2015) (“Indiana does not recognize a private right of action for failure to report abuse”); C.T. v. Gammon, 928 N.E.2d 847, 854 (Ind. App. 2010) (“our legislature has declined to codify a civil cause of action against an adult who knowingly fails to report alleged child abuse”); J.A.W. v. Roberts, 627 N.E.2d 802, 813 (Ind. App. 1994) (“Absent codification, we are not convinced that extending a civil remedy to a victim of abuse or neglect against all persons who know of child abuse and fail to report child abuse is good public policy.”), abrogated on other grounds, Holt v. Quality Motor Sales, Inc., 776 N.E.2d 361 (Ind. App. 2002); Borne v. Northwest Allen County School Corp., 532 N.E.2d 1196, 1202-03 (Ind. App. 1989) (“the legislature did not intend to confer a private right of action for any breach of the duty to report imposed by the statute”).

Kansas: Kansas State Bank & Trust Co. v. Specialized Transportation Services., Inc., 819 P.2d 587, 604 (Kan. 1991) “There is no express indication of legislative intent to impose any liability for failure to report.”); E.P. v. United States, 835 F. Supp.2d 1109, 1117 (D. Kan. 2011) (the “common law does not recognize a cause of action for medical negligence based on failure to report child abuse”), aff’d, 520 F. Appx. 707, 716 (10th Cir. 2013) (“Kansas law does not hold healthcare professionals liable for failing to report child abuse”).

Massachusetts: Doe v. D’Agostino, 367 F. Supp.2d 157 (D. Mass. 2005); (“it is implicit from the penalty imposed for failure to report that the legislature did not intend to create a private cause of action for a statutory violation”).

Minnesota: Becker, 737 N.W.2d at 208 (“The plain language of the statute indicates that the legislature chose to impose criminal, but not civil, penalties on mandatory reporters who fail to report.”); Meyer v. Lindala, 675 N.W.2d 635, 641 (Minn. App. 2004) (the statute “does not create a private cause of action for violation of its reporting requirements or create a duty which could be enforced through a common-law negligence action”); Kuelbs v. Williams, 609 N.W.2d 10, 155 (Minn. App. 2000) (“Minnesota courts have been reluctant to recognize private causes of action under reporting acts”); Valtakis v. Putnam, 504 N.W.2d 264, 266-67 (Minn. App. 1993) (“There is no mention of a civil cause of action for failure to report nor is a civil action implied by the language of the subdivision;” “there was no underlying civil cause of action for failure to report suspected child abuse”).

Missouri: Bradley v. Ray, 904 S.W.2d 302, 312-15 (Mo. App. 1995) (“no private cause of action can be implied under the Child Abuse Reporting Act, [so] the alleged breach of the Act also does not amount to negligence per se”; no prima facie tort for non-reporting); American Home Assurance Co. v. Pope, 360 F.3d 848, 851 n.7 (8th Cir. 2004) (Missouri “has prohibited” claims for failure to report child abuse); Letlow v. Evans, 857 F. Supp. 676, 678 (W.D. Mo. 1994) (“the vast majority of courts . . . have found that reporting statutes such as the one at issue here, do not create a private right of action”); Thelma D. v. Board of Education, 669 F. Supp. 947, 950 (E.D. Mo. 1987) (plaintiffs “cannot recover under the Statute which only creates a public duty”); Doe “A” v. Special School District, 637 F. Supp. 1138, 1148 (E.D. Mo. 1986) (the Statute “creates a duty owed to the general public, not to specific individuals”); Nelson v. Freeman, 537 F. Supp. 602, 611 (W.D. Mo. 1982) (“the applicable [reporting] provisions of the Missouri Child Abuse statute cannot be said to support a private cause of action in favor of individuals”).

New Hampshire: Marquay v. Eno, 662 A.2d 272, 278 (N.H. 1995) (“imposition of civil liability for all reporting violations would represent a sharp break from the common law and neither the statute nor the legislative history directly reveal any such intent, we are unwilling to say that violation of the child abuse reporting statute supports a private right of action”).  Cf. Gauthier v. Manchester School Dist., 123 A.3d 1016, 1021 (N.H. 2015) (“declin[ing] . . .  to create a duty to report bullying”).

New Jersey: J.S. v. R.T.H., 714 A.2d 924, 934 (N.J. 1998) (“we do not conclude that the Legislature intended that the child-abuse reporting statute constitute an independent basis for civil liability or that its violation constitute negligence per se”); Zelnick v. Morristown-Beard School, 137 A.3d 560, 568 (N.J. Super. Law. Div. 2015) (“Child abuse reporting statutes do not typically create a duty of care or a basis for civil liability.”).

Oklahoma: Paulson v. Sternlof, 15 P.3d 981, 984 (Okla. App. 2000) (“the child abuse reporting statutes do not create a private right of action.  Knowing and willful failure to report is a criminal misdemeanor.  There is no provision, however, for civil liability.”).

South Carolina: Doe v. Marion, 645 S.E.2d 245, 249 (S.C. 2007) (“the statute in question is concerned with the protection of the public and not with the protection of an individual’s private right”).

Tennessee: Ham v. Hospital of Morristown, Inc., 917 F. Supp. 531, 534 (E.D. Tenn. 1995) (“the common law of Tennessee does not impose a duty on a treating physician to either report suspected child abuse or to prevent any such child abuse”).  However, Ham allowed a statutory cause of action (see below).

Texas: Perry, supra; Childers v. A.S., 909 S.W.2d 282, 289-90 (Tex. App. 1995) (rejecting civil liability for failure to report child abuse before Perry); Doe v. S & S Consolidated I.S.D., 149 F. Supp.2d 274, 299 (E.D. Tex. 2001) (following Perry), aff’d, 309 F.3d 307 (5th Cir. 2002).

Utah: Owens v. Garfield, 784 P.2d 1187, 1191 (Utah 1989) (“Although the statute is intended to address the problem of child abuse, we are not persuaded that it can be read to create a legally enforceable duty on the part of the [mandated reporter] to protect all children from child abuse in all circumstances”).

West Virginia: Barbina v. Curry, 650 S.E.2d 140, 145-46 (W. Va. 2007) (Arbaugh rationale precludes common-law negligence action for failure to report); Arbaugh v. Board of Education, 591 S.E.2d 235, 241 (W. Va. 2003) (the law “does not give rise to an implied private civil cause of action . . . for failure to report suspected child abuse where an individual with a duty to report under the statute is alleged to have had reasonable cause to suspect that a child is being abused and has failed to report suspected abuse”).

Wisconsin: Isely v. Capuchin Province, 880 F. Supp. 1138, 1148 (D. Mich. 1995) (“find[ing] nothing to indicate that the Wisconsin legislature intended to authorize a private cause of action for failure to report”) (applying Wisconsin law).

There are a number of states where the mandated reporting statute expressly includes a statutory right of action for non-reporting (Arbaugh listed Arkansas, Colorado, Iowa, Michigan, Montana, New York and Rhode Island, 591 S.E.2d at 239 n.3).  While not all of those states appear to have considered the issue, those that have hold the there isn’t any common-law liability for failure to report beyond the scope of the statutory action.  See:

Arkansas: First Commercial Trust Co. v. Rank, 915 S.W.2d 262, 268 (Ark. 1996) (affirming defense verdict on statutory failure to report claim) (note:  private cause of action repealed in 2009, and there have been no further failure to report claims).

Michigan: Murdock v. Higgins, 559 N.W.2d 639, 647 (Mich. 1997) (predicates to statutory cause of action “serve as deliberate limits to the scope” of civil liability); Marcelletti v. Bathani, 500 N.W.2d 124, 127 (Mich. App. 1993) (“the Legislature intended that liability under the statute be limited to claims for damages” meeting statutory requirements); Brent v. Wenk, 555 F. Appx. 519, 537, 2014 WL 486192 (6th Cir. 2014) (no liability for failure to report except for what statute allows).

New York: Heidt v. Rome Memorial Hospital, 724 N.Y.S.2d 139, 787 (N.Y. App. Div. 2007) (“Plaintiff has cited no authority to support the proposition that a physician has a common-law duty to report actual child abuse, let alone suspected child abuse.  There are good reasons for the absence of such a duty.”); Diana G-D v. Bedford Central School Dist., 932 N.Y.S.2d 316, 329 (N.Y. Sup. 2011), aff’d, 961 N.Y.S.2d 305 (N.Y. App. Div. 2013) (“there is simply no evidence that defendants’ failure to make such a report was knowingly and willful,” which was required for civil liability under child abuse reporting statute).

A few states have allowed private persons (usually in distinguishable situations) to bring civil actions seeking damages for failure to report child abuse.  Most notable – no surprise for its receptivity to novel claims – is:

California.  In Landeros v. Flood, 551 P.2d 389 (Cal. 1976), the plaintiff sued a doctor who had treated her in the emergency room for negligently failing to diagnose, and thus to report, her medical condition as “battered child syndrome.” Id. at 405-06.  The court recognized a private cause of action exists for intentional violation of the reporting statute.

If plaintiff wishes to satisfy that requirement [violation of statute], it will be necessary for her to persuade the trier of fact that defendant . . . treating doctor[] actually observed her injuries and formed the opinion they were intentionally inflicted on her.

Id. at 397-98.  The statutory language in Landeros, however, was amended to express “the Legislature’s . . . intent to create an objective standard in order to broaden the circumstances under which reporting is required.”  People v. Davis, 25 Cal. Rptr. 3d 92, 100 (Cal. App. 2005).  Thus the private cause of action originally recognized in Landeros has also been broadened. Pipitone v. Williams, 198 Cal. Rptr.3d 900, 917 (Cal. App. 2016) (applying lesser standard of amended statute to civil action).  See Garcia v. Clovis Unified School Dist., 627 F. Supp. 2d 1187, 1205 (E.D. Cal. 2009) (mandated reporter statute “may form the basis of a negligence per se claim”).

Other states allowing private suits for failure to report child abuse are:

Kentucky: Vanhook v. Somerset Health Facilities, LP, 67 F. Supp. 3d 810, 826 (E.D. Ky. 2014) (finding liability for failure to report child abuse based on unique Kentucky statute codifying negligence per se).  Note:  As we discussed at length here, the same statute precludes negligence per se statute for violations of federal enactments, so no failure to report analogy can help drug/device plaintiffs.

Nebraska: Chapa v. United States, 2005 WL 2170090, at *5 (D. Neb. Sept. 7, 2005) (a medical malpractice claim incorporating a duty to report was allowed; “the Court finds that there is a genuine issue of material fact regarding whether the applicable standard of care required the Physicians to report suspected child abuse”).  This decision disregards Erie to create liability never recognized by any state court.

Ohio: Yates v. Mansfield Board. of Education, 808 N.E.2d 861, 871 (Ohio 2004) (“a board of education may be held liable when its failure to report the sexual abuse of a minor student by a teacher . . . proximately results in the sexual abuse”).  Yates is a holdover from the Ohio dark ages when a pro-plaintiff high court majority was recognizing novel liability theories right and left.  Whether Yates would be decided the same way today is doubtful.

Pennsylvania:  In K.H. v. Kumar, 122 A.3d 1080, 1095-96 (Pa. Super. 2015), the court allowed a medical malpractice claim predicated on a doctor’s failure to report child abuse.  In Doe v. Liberatore, 478 F. Supp.2d 742, 763-64 (M.D. Pa. 2007), a similar claim was allowed against the clergy.  Failure-to-report has not been recognized in Pennsylvania outside the context of professional liability.  Even there, a contrary line of Pennsylvania precedent exists with respect to the duty of doctors to report to the state their patients’ medical conditions that would disqualify the patients from driving.  No liability for failure report has been recognized in those circumstances.  See Estate of Witthoeft v. Kiskaddon, 733 A.2d 623, 630 (Pa. 1999); Hospodar v. Schick, 885 A.2d 986, 989-90 (Pa. Super. 2005); Crosby v. Sultz, 592 A.2d 1337, 1345 (Pa. Super. 1991).  See also Gabriel v. Giant Eagle, Inc., 2015 WL 13240267, at *7 (Pa. C.P. June 30, 2015) (“members of a group of people harmed by the diversion of controlled substances” could not sue drugstore for failure to report thefts of such substances because “these reporting requirements are intended to protect the interests of the general public”).

South Dakota: Aman v. Cabacar, 2007 WL 2684866, at *2-3 (D.S.D. Sept. 6, 2007) (violation of mandatory abuse reporting statute can be negligence per se).  As with Chapa, above, Aman is another episode of a federal court predicting liability well beyond what any state court has done.

Tennessee: Doe v. Coffee County Board of Education, 852 S.W.2d 899, 909 (Tenn. App. 1992) (“teachers . . . have a non-discretionary duty to report students’ complaints of child sexual abuse.  Their failure to do so can give rise to liability.”); Ham v. Hospital of Morristown, Inc., 917 F. Supp. 531, 537 (E.D. Tenn. 1995) (following Doe).

Washington: Kim v. Lakeside Adult Family Home, 374 P.3d 121, 126 (Wash. 2016) (applying Beggs rationale to reporting statute concerning vulnerable adults); Beggs v. State, Dept. of Social & Health Services, 247 P.3d 421, 424 (Wash. 2011) (“the mandatory child abuse reporting statute, implies a cause of action against a professional named in the statute who fails to report suspected abuse”); Doe v. Corp. of President of Church of Jesus Christ of Latter-Day Saints, 167 P.3d 1193, 1201 (Wash. App. Div. 1 2007) (“it is reasonable to imply an intended remedy for child victims of sexual abuse when those required to report the abuse fail to do so”).

That completes what we’ve found on failure-to-report claims under child abuse/elder abuse mandated reporting statutes.  But that’s not all that’s out there for counsel tasked with debunking failure-to-report claims.

Various other statutes exist that require persons to report things to government entities.  One that popped up fairly often recently is the federal Bank Secrecy Act, which requires that certain financial transactions be reported.  This statute, being federal, is analogous in that respect to the FDCA.  These banking cases are good place to look for favorable precedent rejecting alleged reporting violations of a federal statute when asserted as negligence per se, or otherwise actionable, under state law.  “[I]t is now well settled that the anti-money-laundering obligations of banks, as established by the Bank Secrecy Act, obligate banks to report certain customer activity to the government but do not create a private cause of action permitting third parties to sue for violations of the statute.” El Camino Resources, LTD. v. Huntington National Bank, 722 F. Supp. 2d 875, 923 (W.D. Mich. 2010), aff’d, 712 F.3d 917 (6th Cir. 2013) (applying Michigan law). Accord, e.g., Belle Meade Title & Escrow Corp. v. Fifth Third Bank, ___ F. Supp.3d ___, 2017 WL 4837474, at *4 (M.D. Tenn. Oct. 17, 2017) (applying Tennessee law); Towne Auto Sales, LLC v. Tobsal Corp., 2017 WL 5467012, at *2 (N.D. Ohio Nov. 14, 2017) (applying Ohio law); Lundstedt v. Deutsche Bank National Trust Co., 2016 WL 3101999, at *5 (D. Conn. June 2, 2016) (applying Connecticut law); Taylor & Co. v. Bank of America Corp., 2014 WL 3557672, at *3 (Mag. W.D.N.C. June 5, 2014), adopted, 2014 WL 3557679 (W.D.N.C. July 18, 2014) (applying North Carolina law); Shtutman v. TD Bank, N.A., 2014 WL 1464824, at *2 (D.N.J. April 15, 2014) (following child abuse reporting cases) (applying New Jersey law); Spitzer Management, Inc. v. Interactive Brokers, LLC, 2013 WL 6827945, at *2 (N.D. Ohio Dec. 20, 2013) (reporting duty “owed to the government of the United States,” not to injured third parties) (applying Ohio law); Public Service Co. v. A Plus, Inc., 2011 WL 3329181, at *7-8 (W.D. Okla. Aug. 2, 2011) (applying Oklahoma law); In re Agape Litigation, 681 F. Supp.2d 352, 360-61 (S.D.N.Y. 2010) (applying New York law); Armstrong v. American Pallet Leasing, Inc., 678 F .Supp.2d 827, 874-75 (N.D. Iowa 2009) (applying Iowa law); Marlin v. Moody National Bank, N.A., 2006 WL 2382325, at *7 (S.D. Tex. Aug. 16, 2006) (the “obligation under that statute is to the government rather than some remote victim”), aff’d, 248 F. Appx. 534 (5th Cir. 2007) (applying Texas law); Aiken v. Interglobal Mergers & Acquisitions, 2006 WL 1878323, at *2 (S.D.N.Y. July 5, 2006) (applying New York law).  Both Ohio and Tennessee state law thus reject failure to report under this federal statute as a basis for state-law liability, notwithstanding adverse precedent under state mandated reporting statutes.

Thus, the first takeaway from our look at state-law failure-to-report claims is that most states don’t allow them. The second takeaway is that, if one is looking for state-law precedent to oppose the existence of failure-to-report claims, there are multiple, potentially fruitful avenues.  Failure to report child (or elder) abuse cases are a good place to start, but there are lots of others, such as financial reporting statutes, the drivers license revocation cases litigated in Pennsylvania, and even requirements to report things such as drug diversion and bullying.  If at first we don’t succeed, we should keep looking.

Until very recently, the only state high court decisions (from VA and DE) on our ediscovery for defendants cheat sheet involved sanctions against plaintiffs for destroying social media evidence.

No longer.

In Forman v. Henkin, ___ N.E.3d ___, 2018 WL 828101 (N.Y. Feb. 13, 2018), the New York Court of Appeals reaffirmed that discovery of plaintiff social media is available to defendants on the same basis as any other discovery, and put the kibosh on plaintiff-friendly discovery restrictions that had lower New York courts had developed to hamstring defendants seeking access to plaintiffs’ social media.

Forman was about as far from prescription medical product liability as one can get and still involve personal injury.  The plaintiff fell off a horse, was badly injured, and sued the owner of the horse. Forman, 2018 WL 828101, at *1.  Plaintiff, who claimed to have become “reclusive” following the accident, was a heavy social media user:

At her deposition, plaintiff stated that she previously had a Facebook account on which she posted “a lot” of photographs showing her pre-accident active lifestyle but that she deactivated the account about six months after the accident and could not recall whether any post-accident photographs were posted.

Id.  She also claimed to “ha[ve] difficulty using a computer and composing coherent messages” after her accident.  Id.  Thus, the relevance of plaintiff’s social media activities was as plain as the nose on that horse’s face.  After plaintiff testified to these facts, social media information confirming or refuting them, at minimum, bears on credibility, and goes to damages, as well – right?

Well…. Not as the Appellate Division saw the issue (note: only plaintiff appealed, so the issues being considered are somewhat narrow).  It limited disclosure only “to photographs posted on Facebook that plaintiff intended to introduce at trial” and “eliminate[ed] the authorization permitting defendant to obtain data relating to post-accident messages.”  Forman, 2018 WL 828101, at *2.  Why?   The Appellate Division held that unless the defendant could find something in plaintiff’s public social media suggesting a specific basis for additional discovery, the defendant had no right to any discovery from the plaintiff’s private social media:

[T]he Appellate Division . . . employ[ed] a heightened threshold for production of social media records that depends on what the account holder has chosen to share on the public portion of the account. . . .  Several courts applying this rule appear to have conditioned discovery of material on the “private” portion of a [social media] account on whether the party seeking disclosure demonstrated there was material in the “public” portion that tended to contradict the injured party’s allegations in some respect.

Id. at *4 (citations omitted).

The defendant argued that its right to discover relevant evidence under the control of an opposing party is not predicated on the legal equivalent of a snipe hunt.  Id.  Thankfully, the Court of Appeals “agree[d],” id., and threw out the Appellate Division’s made up impediment to ediscovery for defendants.  First, discovery is discovery, no matter who seeks it:

Disclosure in civil actions is generally governed by CPLR 3101(a), which directs: “[t]here shall be full disclosure of all matter material and necessary to the prosecution or defense of an action, regardless of the burden of proof.”  We have emphasized that the words material and necessary are to be interpreted liberally to require disclosure, upon request, of any facts bearing on the controversy.

Id. at *2 (citation and quotation marks omitted).  New York recognizes only “three categories of protected materials” – “privileged matter,” “attorney[] work product,” and “trial preparation materials.”  Id.  A plaintiff’s (or defendant’s, for that matter) social media doesn’t fit in any of these categories.

Beyond the three categories, discovery may be limited if unduly “onerous.”  Id. at *3.  Discovery of photos actually posted by the plaintiff (with an exception for “nudity or romantic encounters” specified by the trial court) wasn’t “onerous” either, and plaintiff did not argue otherwise.  Id.

The Court of Appeals in Forman flatly rejected the plaintiff’s supposed precondition to social media discovery, recognizing that it would let plaintiffs hide the ball:

[A] threshold rule requiring that party [seeking discovery] to “identify relevant information in [the social media] account” effectively permits disclosure only in limited circumstances, allowing the account holder to unilaterally obstruct disclosure merely by manipulating “privacy” settings or curating the materials on the public portion of the account.  Under such an approach, disclosure turns on the extent to which some of the information sought is already accessible − and not, as it should, on whether it is “material and necessary to the prosecution or defense of an action.”

Forman, 2018 WL 828101, at *4 (citation, quotation marks and footnote omitted) (emphasis added).  Hear, hear.

Rather, the principle circumscribing social media discovery is the same as for all discovery – relevance to the theories and defenses of the particular case.  While blanket discovery of everything in every case, whether social media or otherwise, would be “onerous,” id., discovery tailored to the plaintiff’s claims and the defendant’s defenses is normal and proper:

[T]here is no need for a specialized or heightened factual predicate to avoid improper “fishing expeditions.”  In the event that judicial intervention becomes necessary, courts should first consider the nature of the event giving rise to the litigation and the injuries claimed, as well as any other information specific to the case, to assess whether relevant material is likely to be found on the [social media] account.

Id. at *5.  Plaintiffs would have a chance to assert “any specific ‘privacy’ or other concerns” about the social media discovery being sought.  Id.  In “a personal injury case . . . it is appropriate to consider the nature of the underlying incident and the injuries claimed.”  “Temporal limitations may also be appropriate” so that social media “posted years before an accident” may not “be germane.”  Id.

The Court of Appeals also rejected the plaintiff’s argument that social media discovery “necessarily constitutes an unjustified invasion of privacy.”  No it doesn’t.  A plaintiff who brings a lawsuit necessarily waives privacy with respect to evidence relevant to that action.

We assume . . . that some materials on a [social media] account may fairly be characterized as private.  But even private materials may be subject to discovery if they are relevant.  For example, medical records enjoy protection in many contexts under the physician-patient privilege.  But when a party commences an action, affirmatively placing a mental or physical condition in issue, certain privacy interests relating to relevant medical records − including the physician-patient privilege − are waived.  For purposes of disclosure, the threshold inquiry is not whether the materials sought are private but whether they are reasonably calculated to contain relevant information.

Forman, 2018 WL 828101, at *5 (citation omitted) (emphasis added).  We note that one of the omitted citations is to Arons v. Jutkowitz, 880 N.E.2d 831 (N.Y. 2007), the decision confirming defendants’ right to informal interviews with treating physicians in New York, which we blogged about, here).

In short, plaintiffs who don’t want to produce their social media shouldn’t be plaintiffs.  If you can’t stand the heat, get out of the courtroom.

Thus, it was “err[or]” to condition discovery of “private” social media on what a plaintiff might, or might not, have done on public social media.  The Appellate Division had “effectively denied disclosure of any evidence potentially relevant to the defense.”  Id. at *5 n.6.  Rather, plaintiff’s testimony about her social media activities “more than met [any] threshold burden of showing that plaintiff’s Facebook account was reasonably likely to yield relevant evidence.”  Id. at *5.  Any photos of plaintiff’s activities “might be reflective of her post-accident activities and/or limitations.”  Id.  Further, “data revealing the timing and number of characters in posted messages would be relevant to plaintiffs’ claim that she suffered cognitive injuries that caused her to have difficulty writing and using the computer.”  Id. at *6.

Forman thus confirms what we have always thought – anything a plaintiff puts on social media is fair game for discovery, to the same extent as any other information under the plaintiff’s custody and control.  Decisions that seek to impose additional limitations on social media discovery, because social media is somehow different or more private, are wrongly decided.

Today’s guest post is by friend of the blog Dick Dean, of Tucker Ellis.  He had an interesting idea the last time he posted about personal jurisdiction, and he’s following up with another one – this time rousing the previously dormant Commerce Clause.  As always, our guest posters are 100% responsible (all credit and any blame) for the contents of their posts.


Bexis and Kevin Hara recently posted a 50-state survey on consent by registration statues – specifically, analyzing which states have concluded that Daimler AG v. Bauman’s due process holdings “trump” such consent statutes.  See Dec 18, 2017 post.  But besides due process, there is another argument to attack such statutes- the Dormant Commerce Clause. In Re Syngenta AG MIR 162 Corn Litigation, MDL No. 2591, 2016 WL 2866166, (D. Kan. May 17, 2016) (invalidating Kansas registration statute based on the Dormant Commerce Clause); see also my prior guest post, “Corn, Justice Brandeis, Litigation Tourism and the Dormant Commerce Clause.” (July 5, 2016).

There is now a comprehensive article discussing these issues and, within that context, assessing whether registration statutes are constitutional under the Dormant Clause: J. Preis, “The Dormant Commerce Clause as a Limit on Personal Jurisdiction,” 102 Iowa L. Rev. 121 (Nov. 2016).  It is a must-read for those briefing the validity of consent statutes. The introduction  comments on the interplay between Due Process and the Dormant Commerce Clause:

After standing in the background for so long, it is high time for the Dormant Commerce Clause to step forward. In recent years, the Supreme Court has issued a spate of major personal jurisdiction decisions. These decisions have set off a wave of commentary in the legal academy, but the questions raised by these new cases are not simply academic. At present, jurists across the country are wrestling with a new and vexing issue of personal jurisdiction: whether a company’s registration to do business in a state amounts to consent to personal jurisdiction in that state. What no scholar or jurist has recognized, however, is that the Dormant Commerce Clause clarifies modern personal jurisdiction law in a way that the Due Process Clause, on its own, cannot.

Id. at 123-124

Briefly, the Dormant Commerce Clause provides that states may not interfere with commerce in other states.  This is the flip side of the constitutional provision which says the Congress has the power to regulate commerce between the states.  When it comes to general jurisdiction, out-of-state companies have an advantage over in-state companies – the ability to avoid suits unrelated to its activities in the State.  The article examines various scenarios of citizenship and states of injury and whether they pass muster under the Dormant Commerce Clause.  It concludes:

. . . [J]urisdiction-via-registration will be unconstitutional in suits brought by non-residents injured out of state.  In those cases, the local benefit is completely absent and the burden on interstate commerce will be “clearly excessive in relation to the putative local benefits.”  In cases where the plaintiff is a resident or was injured in the state, however, a local benefit exists and jurisdiction-via-registration will be constitutional.

Id. at 147.

Not only does the Dormant Commerce Clause present serious obstacles for registration statutes which impact general jurisdiction, but it may offer an argument to bar cases where specific jurisdiction has been found based on very tenuous “connections” between plaintiff’s injury and the forum state, such as the single-claim situation discussed in my (and Nick Janizeh’s) prior post.  If the Iowa Law Review article’s conclusion that the Dormant Commerce Clause bars claims by non-residents not injured in the state holds true, then that premise transcends issues of general or specific jurisdiction.  Put another way, even if there is general or specific jurisdiction over a defendant, there may still be a defense on the merits based on the Dormant Commerce Clause. The Dormant Commerce Clause is a separate concept from jurisdiction and must be evaluated separately. Comptroller of Treasury of Maryland v. Wynne, 135 S.Ct 1787, 1798-99 (2015).  And of course, that is the clear holding of In re Syngenta, which found a consent-by-registration statute passed due process muster but not Dormant Commerce Clause muster.  Thus, even though the Beck & Hara blog suggested that Kansas was a “murky” state on where it stood on the due process issue, it remains clear that consent-by-registration fails in Kansas because the federal court rejected the statute on Dormant Commerce Clause grounds. This is an important argument available in the continuing saga of litigation tourism.

[Editor’s note:  This dormant commerce clause argument could be particularly useful in Pennsylvania, not just because of the peculiar challenge of the Commonwealth’s registration statute, but also because of yesterday’s “let anybody sue” decision from the Pennsylvania Supreme Court allowing litigation tourists from anywhere to assert the Pennsylvania consumer protection statute against Pennsylvania companies no matter where the transaction occurred.]

We’ll be hitting all the Presidents’ Day sales today, but something tells me we’ll be disappointed because we won’t be able to buy, beg, borrow, or steal a new one.  So we keep trying.

With plaintiffs desperate to find some way to continue pursuing aggravated, aggregated product liability litigation in their favorite venues after Daimler AG v. Bauman, 134 S. Ct. 746 (2014) (“Bauman”), and Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017) (“BMS”), we thought we’d look at one likely target that we haven’t spent much time on before.  At the tail end of the BMS decision, the Court left open a caveat:

[W]e leave open the question whether the Fifth Amendment imposes the same restrictions on the exercise of personal jurisdiction by a federal court.  See Omni Capital International, Ltd. v. Rudolf Wolff & Co., 484 U.S. 97, 102, n.5 (1987).

BMS, 137 S. Ct. at 1784.  We have offered our opinion that we don’t think there will turn out to be a dime’s worth of practical difference between the two, due to the extent that BMS, a Fourteenth Amendment case relied on Walden v. Fiore, 134 S. Ct. 1115 (2014), which was as federal a cause of action as they come, being a constitutional Bivens action filed in federal court.  We still believe that’s right, but it’s a bit more complicated than we thought at first, a later on in this post.

Let’s start with what “federal court” means.  While we’ve always thought that cases in federal court based on diversity jurisdiction were on the Fourteenth Amendment side of the personal jurisdiction line, we’d never researched it.  It wasn’t hard.  Looking for cases with “diversity,” “Fourteenth Amendment,” and “personal jurisdiction” in the same paragraph was enough.  Too much, actually – since that search produced over two thousand cases – but it didn’t take long to get the answer.  From the first case:

The United States District Court for the Southern District of Florida, sitting in diversity, relied on [a state longarm statute] in exercising personal jurisdiction over a [non-]resident. . . .  The question presented is whether this exercise of long-arm jurisdiction offended “traditional conception[s] of fair play and substantial justice” embodied in the Due Process Clause of the Fourteenth Amendment.

Burger King Corp. v. Rudzewicz, 471 U.S. 462, 464 (1985).  Lots of other appellate cases stand for the proposition that cases in federal court on diversity jurisdiction are governed directly by the Fourteenth Amendment.  E.g., Cossart v. United Excel Corp., 804 F.3d 13, 18 (1st Cir. 2015); Philos Technologies, Inc. v. Philos & D, Inc., 802 F.3d 905, 912 (7th Cir. 2015); Creative Calling Solutions, Inc. v. LF Beauty Ltd., 799 F.3d 975, 979 (8th Cir. 2015); Carmouche v. Tamborlee Management, Inc., 789 F.3d 1201, 1203 (11th Cir. 2015); SFS Check, LLC v. First Bank, 774 F.3d 351, 355-56 (6th Cir. 2014); ClearOne Commications, Inc. v. Bowers, 643 F.3d 735, 763 (10th Cir. 2011); Metcalfe v. Renaissance Marine, Inc., 566 F.3d 324, 330 (3d Cir. 2009); Mullins v. TestAmerica, Inc., 564 F.3d 386, 398 (5th Cir. 2009); Bank Brussels Lambert v. Fiddler Gonzalez & Rodriguez, 305 F.3d 120, 124 (2d Cir. 2002); Chung v. NANA Development Corp., 783 F.2d 1124, 1125 (4th Cir. 1986); Steinberg v. International Criminal Police Org., 672 F.2d 927, 930 (D.C. Cir. 1981).

Thus, we think it’s a lock that for the types of cases we typically discuss on this blog, which sound in diversity if they’re in federal court, that Bauman/BMS applies to all personal jurisdiction issues.  Indeed, some of the cases we read indicate (like we think) that there is no difference between the Fifth and Fourteenth Amendments’ Due Process clauses when it comes to personal jurisdiction. See Republic of Panama v. BCCI Holdings (Luxembourg) S.A., 119 F.3d 935, 943 n.12 (11th Cir. 1997); Akro Corp. v. Luker, 45 F.3d 1541, 1545 (Fed. Cir. 1995).

This means that, to get around Bauman/BMS, and to assert personal jurisdiction against non-resident defendants, litigation-tourist plaintiffs would have to do the opposite of what they have normally done for decades and instead plead some sort of federal claim if they have any hope of arguing that some hypothetical lesser standard of Due Process applies under the Fifth Amendment.  Even assuming plaintiffs desperate enough to jettison decades of prior practice, there aren’t many of these statutes around.  The False Claims Act is a federal statute that authorizes nationwide service of process, see 31 U.S.C. §3732(a), but by no stretch of the imagination could it apply to the sorts of product liability/consumer fraud claims that are our opponent’s stock in trade.

RICO also provides for nationwide service of process. 18 U.S.C. §1965(d).  RICO has a major limitation – from the standpoint of a product liability plaintiff – in that the statute does not allow recovery of personal injury damages.  Reiter v. Sonotone Corp., 442 U.S. 330, 339 (1979); see, e.g., Safe Streets Alliance v. Hickenlooper, 859 F.3d 865, 886 (10th Cir. 2017); Blevins v. Aksut, 849 F.3d 1016, 1021 (11th Cir. 2017); Williams v. BASF Catalysts LLC, 765 F.3d 306, 323 (3d Cir. 2014); Fiala v. B & B Enterprises, 738 F.3d 847, 853 (7th Cir. 2013); Jackson v. Sedgwick Claims Management Services, Inc., 731 F.3d 556, 565 (6th Cir. 2013) (en banc); Ironworkers Local Union 68 v. AstraZeneca Pharmaceuticals, LP, 634 F.3d 1352, 1364 (11th Cir. 2011); Upper Deck Co., LLC v. Federal Insurance Co., 358 F.3d 608 (9th Cir. 2004); Hughes v. Tobacco Institute, Inc., 278 F.3d 417, 422 (5th Cir. 2001); Hamm v. Rhone-Poulenc Rorer Pharmaceuticals, Inc., 187 F.3d 941, 954 (8th Cir. 1999); Bast v. Cohen, Dunn & Sinclair, PC, 59 F.3d 492, 495 (4th Cir. 1995); Laborers Local 17 Health & Benefit Fund v. Philip Morris, Inc., 191 F.3d 229, 241 (2d Cir. 1999).  Even more of a drawback for purveyors of nationwide class actions, is the statute’s causation requirements almost always having precluded reliance on classwide statistical evidence, as we discussed here.

Another possibility would be the Magnuson-Moss Warranty Act, although MMWA also has a number of substantive drawbacks for plaintiffs, not the least of which is prescription medical products not being “consumer” goods.  Kanter v. Warner-Lambert Co., 122 Cal. Rptr.2d 72, 86 (Cal. App. 2002); MHA, LLC v. Siemens Healthcare Diagnostics, Inc., 2017 WL 838797, at *2 (D.N.J. March 2, 2017); In re Minnesota Breast Implant Litigation, 36 F. Supp.2d 863, 876 (D. Minn. 1998); Goldsmith v. Mentor Corp., 913 F. Supp. 56, 63 (D.N.H. 1995); Kemp v. Pfizer, Inc., 835 F. Supp. 1015, 1024 (E.D. Mich. 1993).

In this regard, however, the citation BMS gives to the Omni Capital case is particularly ominous for MMWA plaintiffs.  Omni Capital was a federal question case, alleging violations of several federal securities statutes.  498 U.S. at 99.  The Court held that, even if the Fifth Amendment Due Process Clause did allow Congress to expand personal jurisdiction with a statute providing for nationwide service of process (the footnote cited in BMS was itself a caveat that the Court had “no occasion to consider the constitutional issues raised by this theory”), no jurisdiction existed because Congress had not in fact done so.  “[U]nder Rule 4(e), a federal court normally looks either to a federal statute or to the long-arm statute of the State in which it sits” to determine personal jurisdiction.  Id. at 105.  An “implied” cause of action did not include implied nationwide service of process.  “[W]e would not automatically graft nationwide service onto the implied private right of action.”  484 U.S. at 107.  Nor would the Court in Omni Capital go beyond the limits to service of process expressly provided in Rule 4:

We would consider it unwise for a court to make its own rule authorizing service of summons.  It seems likely that Congress has been acting on the assumption that federal courts cannot add to the scope of service of summons Congress has authorized.  This Court in the past repeatedly has stated that a legislative grant of authority is necessary. . . .

The strength of this longstanding assumption, and the network of statutory enactments and judicial decisions tied to it, argue strongly against devising common-law service of process provisions at this late date for at least two reasons.  First, since Congress concededly has the power to limit service of process, circumspection is called for in going beyond what Congress has authorized.  Second, as statutes and rules have always provided the measures for service, courts are inappropriate forums for deciding whether to extend them.  Legislative rulemaking better ensures proper consideration of a service rule’s ramifications within the pre-existing structure and is more likely to lead to consistent application.

Id. at 109-10 (citations and footnotes omitted).

Thus, unlike the FCA or RICO, MMWA falls into the same category as the securities statutes in Omni Capital – it contains no provision for expanded service of process of any sort.  Alisoglu v. Central States Thermo King of Oklahoma, Inc., 2012 WL 1666426, at *3-4 (E.D. Mich. May 11, 2012); Bluewater Trading LLC v. Fountaine Pajot, S.A., 2008 WL 2705432, at *2-3 (S.D. Fla. July 9, 2008), aff’d, 335 F. Appx. 905, (11th Cir. 2009); Weinstein v. Todd Marine Enterprises, Inc., 115 F. Supp. 2d 668, 671 (E.D. Va. 2000); see Walsh v. Ford Motor Co., 807 F.2d 1000, 1012, 1018-19 (D.C. Cir. 1986) (reversing decision that “veered off course” by “regard[ing] Magnuson-Moss as an Act intended to facilitate nationwide class actions”).  What that means for Magnuson-Moss plaintiffs is:

The end result of Omni is to require a court to apply in federal question cases such as this case where there is no provision authorizing nationwide service of process a personal jurisdiction test very similar to that used in diversity cases:  Where a federal court’s subject matter jurisdiction over a case stems from the existence of a federal question, personal jurisdiction over a defendant exists if the defendant is amenable to service of process under the forum state’s long-arm statute and if the exercise of personal jurisdiction would not deny the defendant due process.

Alisoglu, 2012 WL 1666426, at *4 (citations and quotation marks omitted) (emphasis added).

While the current version of Rule 4 was amended to address the specific situation presented in Omni Capital – an overseas defendant ostensibly not amenable to service of process in any state (see Rule 4(k)(2)) – plaintiffs who sue defendants (like our clients) that are amenable to suit in some states are subject to state-law limitations on service of process unless a federal statute expressly allows otherwise:

(k) Territorial Limits of Effective Service.

(1) In General. Serving a summons or filing a waiver of service establishes personal jurisdiction over a defendant:

(A) who is subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located;

(B) [special rules for third party practice − not relevant to personal injury plaintiffs – and indispensable parties – ditto]; or

(C) when authorized by a federal statute.

(Emphasis added).

Thus, under both controlling precedent and the language of Rule 4, our opponents should not be able to utilize federal causes of action to evade Bauman/BMS – unless they can plead into some statute (like the FCA or RICO) that provides nationwide service of process – and those other statutes have attributes that preclude their use in product liability.  Getting back to Walden v. Fiore, this interplay between personal jurisdiction and Rule 4 is what ultimately led to the application of Fourteenth Amendment personal jurisdiction principles in what was a federal question case.  Bivens is an implied right of action (similar to Omni Capital in that respect), thus no statutory expansion of personal jurisdiction was available, and a state long-arm statute subject to the Fourteenth Amendment was the only other option for the plaintiff, even with a federal cause of action involved:

Federal courts ordinarily follow state law in determining the bounds of their jurisdiction over persons.  This is because a federal district court’s authority to assert personal jurisdiction in most cases is linked to service of process on a defendant “who is subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located.”  Fed. Rule of Civ. Proc. 4(k)(1)(A).  Here, Nevada has authorized its courts to exercise jurisdiction over persons “on any basis not inconsistent with … the Constitution of the United States.”  Thus, in order to determine whether the Federal District Court in this case was authorized to exercise jurisdiction over petitioner, we ask whether the exercise of jurisdiction comports with the limits imposed by federal due process on the State of Nevada.

Walden, 134 S. Ct. at 1121 (citations and quotation marks to Bauman omitted).  Walden is Supreme Court precedent demonstrating that Rule 4(k)(1)(A) imports the Fourteenth Amendment’s – and thus Bauman/BMS – Due Process analysis into federal causes of action unless a federal statute expressly provides otherwise.  Thus, plaintiffs can’t get away from Bauman/BMS even by raising federal statutory causes of action like MMWA that don’t authorize nationwide service of process.

Finally, even if plaintiffs somehow grab the BMS-caveat brass ring, and find some federal statute that provides for expanded service (and thus expanded personal jurisdiction), they would run squarely into the principle discussed in Dick Dean’s prescient guest post of a few weeks back – “[j]ust because there is specific jurisdiction over one claim . . ., that is insufficient to find specific jurisdiction over all claims.”  This guest post cites the relevant cases holding that personal jurisdiction must be determined on a claim-by-claim basis, so we won’t repeat them here.

We’ll add only that this claim-by-claim precedent is incompatible with any novel expansion of “pendent jurisdiction” (which has been a subject matter jurisdiction concept) to allow courts to hear otherwise Bauman/BMS-barred claims because one claim somehow squeaks through.  Recent cases rejecting “pendent jurisdiction” as an end run around Bauman/BMS include:  Lexington Insurance Co. v. Zurich Insurance (Taiwan) Ltd., ___ F. Supp.3d ___, 2017 WL 6550480, at *3 (W.D. Wis. Dec. 21, 2017); Greene v. Mizuho Bank, Ltd., ___ F. Supp.3d ___, 2017 WL 7410565, at *4-5 (N.D. Ill. Dec. 11, 2017); Spratley v. FCA US LLC, 2017 WL 4023348, at *7 (N.D.N.Y. Sept. 12, 2017); Famular v. Whirlpool Corp., 2017 WL 2470844, at *6 (S.D.N.Y. June 7, 2017); MG Design Associates, Corp. v. Costar Realty Information, Inc., 224 F. Supp.3d 621, 629 (N.D. Ill. 2016), partially reconsidered on other grounds, 267 F. Supp.3d 1000 (N.D. Ill. 2017); In re Testosterone Replacement Therapy Products Liability Litigation, 164 F. Supp.3d 1040, 1048-49 (N.D. Ill. 2016); In re: Bard IVC, 2016 WL 6393596, at *4 n.4 (D. Ariz. Oct. 28, 2016); In re: Zofran (Ondansetron) Products Liability Litigation, 2016 WL 2349105, at *5 n.5 (D. Mass. May 4, 2016); Demaria v. Nissan, Inc., 2016 WL 374145, at *7-8 (N.D. Ill. Feb. 1, 2016); Tulsa Cancer Institute, PLLC v. Genentech Inc., 2016 WL 141859, at *4 (N.D. Okla. Jan. 12, 2016); Hill v. Eli Lilly & Co., 2015 WL 5714647, at *7 (S.D. Ind. Sept. 29, 2015); In re Plavix Related Cases, 2014 WL 3928240, at *9 (Ill. Cir. Aug. 11, 2014).

Notably, most of these rejections of pendent jurisdiction come in the context of unsuccessful attempts to maintain nationwide class actions after Bauman/BMS.  The jurisdictional noose is tightening around litigation tourists.  It is important that they not  be given any wiggle-room by virtue of the “federal court” caveat in BMS.

Disclaimer:  Any resemblance between the substance of this post and that of a certain recent, wrongly-decided case out of the Northern District of California is purely intentional.

If you’re not interested in Pennsylvania product liability law at the moment, come back tomorrow. This particular post is not limited to (or even primarily about) prescription medical products.

Back in 2014 the Pennsylvania Supreme Court worked a revolution in product liability when it decided Tincher v. Omega Flex, Inc., 104 A.3d 328 (Pa. 2014) (“Tincher I”).  We blogged about Tincher I here and here, and discussed its prescription medical product implications (or lack of same) here and here.

We detailed in our first post the harsh criticism that Tincher I directed against the strict liability jury instruction (from a case called Azzarello) that had previously been the law.  Here is some flavor from that post – there’s lots more where that came from.

After all that preface, Tincher overruled Azzarello.  “Azzarello articulates governing legal concepts which fail to reflect the realities of strict liability practice and to serve the interests of justice.”  Slip op. at 74.  It got rid of Azzarello’s relegation of the “unreasonably dangerous” prong of §402A to a preliminary question of law to be decided courts rather than juries.  It criticized Azzarello for “approv[ing], and thereby essentially requir[ing], instructions which informed the jury that, for the purposes of a supplier’s strict liability in tort, ‘the product must, therefore, be provided with every element necessary to make it safe for its intended use’.”  Id. at 75.  “Subsequent decisional law has applied Azzarello broadly, to the point of directing that negligence concepts have no place in Pennsylvania strict liability doctrine.” Id.     These errors, Tincher went on to explain, “led to puzzling trial directives that the bench and bar understandably have had difficulty following in practice, including in the present matter.” Id.

Thus, Tincher disapproves of three key aspects of prior Pennsylvania strict liability law:     (1) the “each and every element”/”guarantor” jury instruction; (2) taking “unreasonably dangerous” issues away from the jury and giving them to courts; and (3) the strict separation of negligence and strict liability concepts.

Thus, one thing that we always considered self-evident is that, after Tincher I, the Azzarello jury instruction – the one with the “any element” defect test and the “defendant as guarantor” of product safety language – was reversible error.

However, others seemed to have much more trouble with this self-evident proposition than we did. Because Tincher I did not reverse outright, but simply remanded for further proceedings, the plaintiffs’ side tried to throw smoke that maybe the Azzarello instruction was still OK (or at least not reversible error).  A couple of foolish, but fortunately uncitable, Superior Court memorandum decisions seemed to agree, at least in crashworthiness cases. See American Honda Motor Co. v. Martinez, 2017 WL 1400968, at *4 (Pa. Super. April 19, 2017); Cancelleri v. Ford Motor Co., 2016 WL 82449, at *2 (Pa. Super. Jan. 7, 2016).  Even more foolishly, a post-Tincher I update to the Pennsylvania Suggested Standard Jury Instructions, retained the Azzarello “any element” defect test, while omitting the “unreasonably dangerous” element of strict liability that Tincher I reaffirmed as part of Pennsylvania law. See Pa. SSJI (Civ.) §16.20(1).  At that point, this continuing denial of the obvious became too much for Pennsylvania defense practitioners to suffer in silence any longer.  Thus, last year the Pennsylvania Defense Institute, later joined by the Philadelphia Association of Defense Counsel, issued their own competing product liability suggested jury instructions.  Anyway, these plaintiff-side attempts to deny the obvious are now at an end.

As we mentioned, Tincher I remanded for further proceedings concerning the relief to which the defendant was entitled.  On remand, the trial judge also tried to deny the obvious, and denied any relief at all, finding the Azzarello instruction to be, at most, harmless error even after Tincher I.  But yesterday the Superior Court unanimously reversed that holding in a published opinion. See Tincher v. Omega Flex, Inc., ___ A.3d ___, No. 1285 EDA 2016 (Pa. Super. Feb. 16, 2018) (per Lazarus, J., with Platt, and Strassburger, JJ., joining) (“Tincher II”).

Here are the highlights. Tincher II held that the Pennsylvania Supreme Court meant what it said in Tincher I, so that a court commits “fundamental error” if it uses an Azzarello jury charge in a strict case. Tincher II, slip op. at 23.  What language was fundamental error?  This language:

The charge [that was given] contained all of the product liability law under Azzarello that the Supreme Court has now disapproved, including a definition equating a defective product with one that “leaves the suppliers’ control lacking any element necessary to make it safe for its intended use,” and a declaration that a manufacturer “is really a guarantor of [a product’s] safety” but not “an insurer of [that] safety.”

Id. at 18.  Tincher II did not consider this to be a difficult ruling.  “There is no question” that the Azzarello charge given during the trial was “incorrect.”  Id.  Indeed, as “the trial court gave a charge under law that the Supreme Court has explicitly overruled in this very case.  Such a charge would appear to be a paradigm example of fundamental error.”  Id. at 23 (emphasis added).  Likewise, on page 20 of the Tincher II slip opinion:  an Azzarello charge “fail[s] to conform to the applicable law, as stated in Tincher” and thus is “fundamental error.”

There’s lots more where that came from:

  •  “If an incorrect definition of ‘defect’ under Azzarello calls for a new trial, an incorrect definition of ‘defect’ under Tincher should call for the same result.”  Tincher II, slip op. at 22-23.
  •  “There is no question that the error was fundamental to the case. It dealt with the principal issue disputed by the parties − whether there was a defect.”  Id. at 25.
  • “[T]hat the jury may have heard evidence about risk and utility during the trial does not mean that it rendered a verdict based on the risk/utility standard adopted by the Supreme Court as one way to find a product defective.  In fact, the verdict could not mean that, because the jury was never instructed to make findings under such a standard.  Rather than being asked to balance risks and utilities, the jury was told only to find whether [product] “lacked any element necessary to make it safe” − regardless of whatever reasonable risk/utility considerations might have gone into the decision to market [product] without such an element.”  Id. at.26.
  • “[T]he trial court had no authority to deny a new trial on the basis of its own speculation about what the jury would do under the Supreme Court’s new formulation of the law.”  Id. at.27.
  •  “The trial court’s declaration that the new legal reformulation resulting from the Supreme Court’s thorough and extensive decision . . . can cause no change to the verdict undervalues the importance of the Supreme Court’s decision.” Id. at 27 (emphasis added).
  •  “The Supreme Court said nothing in Tincher[I] to suggest that mere proof of a ‘defect’ under post-Azzarello strict liability law would be sufficient to prove an “unreasonably dangerous defective condition” under Tincher[I]’s new formulation.”  Id. at 28.
  •  “[T]he Supreme Court’s statement that the ‘question of whether a party has met its burden of proof’ may properly be removed from a jury’s consideration” . . . was referring only to a trial court’s ability to decide ‘a dispositive motion.’” Id. at 29.

Thus, in a precedential opinion, Tincher II has at last answered the obvious question.  Yes, after Tincher I, charging a §402A strict liability jury in Pennsylvania with the old Azzarello “any element”/”guarantor” language is “disapproved,” “incorrect,” “fundamental error,” and in and of itself requires a new trial.  Go forth and sin no more.


We’ve seen the latest affirmance of largely identical verdicts in a consolidated MDL trial in Campbell v. Boston Scientific Corp., ___ F.3d ___, 2018 WL 732371 (4th Cir. Feb. 6, 2018).  We’re not discussing Campbell’s merits today.  For present purposes, suffice it to say that the consolidation- and punitive damages-related rulings aren’t that much different from Eghnayem v. Boston Scientific Corp., 873 F.3d 1304 (11th Cir. 2017), about which we blogged, here.

More generally, both of those cases, as well as the course of the Pinnacle Hip litigation described in several of our prior posts as well as in In re Depuy Orthopaedics, Inc., 870 F.3d 345 (5th Cir. 2017) (“Pinnacle Hip”) (which we discussed, here), illustrate an adverse trend in MDLs.  That trend is to replace the traditional (if anything in MDL practice can be called traditional) bellwether trials with consolidated multi-plaintiff trials including allegations of punitive damages.  We’ve already expressed our jaundiced view towards consolidated product liability trials as inherently prejudicial against defendants, for a variety of reasons discussed in that post.  For obvious reasons, facing punitive damages is likewise not favorable to a defendant in a trial.

As our prior consolidation post discussed at some length, defendants saddled with consolidated trials in personal injury cases used to have reason to expect appellate relief.  Identical or nearly identical verdicts were considered evidence that the jury was either unable to keep multiple individual cases straight or overwhelmed by all the factual evidence, or both.  However, the recent Campbell decision, added to other recent events, makes us believe that the ability to obtain such relief has never been more questionable.

Hence, we offer an idea that has been percolating here ever since the decision in Pinnacle Hip.  We mentioned it at last December’s ACI Drug and Medical Device Litigation conference, and it was received as a good idea by most defense counsel we talked to, so here goes….

Only you can prevent multi-plaintiff consolidated punitive damages trials.

We recognize that such trials cannot always be prevented – this idea wouldn’t have worked in Campbell, for example − but MDL defendants should seriously consider limiting their so-called “Lexecon waivers,” to the extent they are willing to give them at all.

What does that mean?

Basically, Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998), held that MDL judges can’t try cases transferred to them from another judicial district under the MDL statute, 28 U.S.C. §1407.  They can try cases properly filed in the same judicial district and then transferred to them as related cases (what happened in Campbell), but all other MDL trials require a Lexecon waiver of trial in the original transferor court.

The Fifth Circuit made clear in the Pinnacle Hip decision that a Lexecon waiver, like any other waiver, must be “clear and unambiguous” to be effective. Id. at 351.  Thus, we think it would be a good idea for MDL defendants to tailor any future Lexecon waivers so that they apply only to single-plaintiff trials, and exclude punitive damages.  As for consolidation, a Lexecon waiver excluding consolidation simply preserves the manner in which cases have been tried, including MDL bellwethers, for decades or longer.  As for punitive damages, bifurcating out such allegations has been commonplace in asbestos litigation, and has been employed in other mass torts as well, such as opt out cases in the Diet Drug litigation.

Even if courts seem less inclined to recognize it, everyone on the defense side knows how prejudicial multi-plaintiff consolidations and punitive damages allegations are during trials. To the extent possible, defendants should consider self-help, in the form of limited Lexecon waivers, to prevent such prejudicial procedures.