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Today’s case is not our usual fare.  But we’ve never seen this kind of appeal succeed before, so we’re going to spare a few minutes for something a little odd but important.

First of all, the patient and the medical device manufacturer are on the same side – they’re both plaintiffs in Alcresta Therapeutics, Inc. v. Azar, 2018 U.S. App. LEXIS 33961 (D.C. App. Dec. 3, 2018).  Because in this suit, the medical device manufacturer and the patient are aligned in their desire to get the patient access to the device.  Defendant is the Secretary of Health and Human Services.  And the issue is the billing code, or lack thereof, assigned by HHS to the device.

The device, Relizorb, is a cartridge containing an enzyme that predigests fats in enteral formula.  So the device is designed to be used with enteral feeding via a stomach tube for people with illnesses who have difficulty digesting and absorbing essential fats.  Id. at *2.  Relizorb is expensive and is not needed by all enteral feeding patients.  Id. at *6-7.  Feeding tube systems consist of many different parts that are not pre-packaged together, but that are coded and priced together by the HHS as an “enteral feeding supply kit.”  Id. at *2.  Many other products used for enteral feeding are priced and coded separately.  HHS determined, however, that Relizorb should be coded as part of the supply kit rather than separately.  Id.  That decision has led Medicare and private insurers to deny reimbursement for Relizorb which in turn has prevented the patient from getting Relizorb and the manufacturer from selling it.  So, they sought a preliminary injunction ordering HHS to assign the device a temporary billing code that doesn’t treat Relizorb as a component of the enteral feeding supply kit allowing it be separately priced.

The district court denied the injunction and the only issue on appeal was whether plaintiffs had demonstrated irreparable injury.  Id. at *5.  That, and of course, whether they had standing to challenge HHS’s coding determinations.  HHS argued that coding decisions are not determinations of the reimbursement rates and that the only way plaintiffs should be allowed to proceed is to challenge a specific reimbursement denial through the Medicare appeals process.  Id. at *7.  But, in this instance, the coding decision dictated the reimbursement rate.  HHS had no evidence that it made any separate pricing determination separate from the coding decision.  Therefore, both the patient and the manufacturer had standing because they demonstrated “they are harmed by a lack of opportunity to obtain reimbursement that is caused at least in significant part by HHS’s coding determination” and a new, independent billing code would redress that harm.  Id. at *8.  The new billing code wouldn’t set the reimbursement rate, but it would allow the agency to set a reimbursement rate for the device.

A similar argument prevailed on irreparable harm.  The patient-plaintiff cannot afford to buy Relizorb without insurance reimbursement and the manufacturer-plaintiff can’t sell Relizorb because patients cannot get insurance reimbursement.  Id. at *10.  The detriment to the manufacturer threatened to put it out of business.  For the reasons noted above on standing, plaintiffs demonstrated a sufficient connection between the HHS coding decision and their irreparable harm “that success on the merits would meaningfully redress those injuries.”  Id. at *11.

This may be a rare situation, but important for our clients, and therefore us, to be aware of.

 

Geographical pride.  A feeling of community.  Belonging.  Being one of the locals.  We all experience it to some degree.  Sometimes you take it with you.  Like wearing your favorite Roll Tide t-shirt while listening to jazz in New Orleans.  While Pennsylvanians may not take kindly to out-of-state sports jerseys, they welcome Maine lobster and Delaware Dogfish Head 90-Minute IPA.  And if you’re driving a Little Red Corvette on the Jersey Turnpike, you better be prepared to move over for Pink Cadillacs.  That’s just how it is.  We defend our homes, our traditions, our customs.  We’re all different.  And, the differences hardly stop with food, music, and sports.  Sometimes, it’s those little differences that make all the difference in the world.

Like, whether a state recognizes the discovery rule for triggering the running of a statute of limitations.  For instance, both Alabama and Oregon have two-year statutes of limitations for products liability actions, but the statute starts to run in Alabama once a plaintiff is injured.  Ala. Code §6-2-38.  Whereas, in Oregon, the clock doesn’t start ticking until “the plaintiff first discovers or, in the exercise of reasonable care, should have discovered that the injury or other damage complained of exists and was the result of a product defect.”  Or. Rev. Stat. Ann. §30.905 (emphasis added).  The difference can be considerable.  Pulling an example completely at random, take a hip implant.  It’s implanted; plaintiff suffers a side effect; the implant is removed.  In Alabama, the explant surgery was the trigger for the statute of limitations.  In Oregon, we need to know a whole lot more before we can decide whether plaintiff has made it to the starting line yet.  That’s pretty much how the court decided the issue in In re Smith & Nephew Birmingham Hip Resurfacing (BHR) Hip Implant Products Liability Litigation, 2018 WL 606705 (D. MD. November 19, 2018).  So, maybe our example wasn’t completely randomly selected.

It’s an MDL, so it involves plaintiffs from all over the country.  Lebron jerseys mixing with Curry jerseys.  Bourbon mixing with Sam Adams Lager.  Cats and Dogs living together.  You get the point.  Defendant filed a motion to dismiss 50-plus cases on statute of limitations grounds, primarily arguing that regardless of the whether a state has a discovery rule, the statute started running at the time of the revision surgery.  Plaintiff countered similarly to the contrary – that the revision surgery never started the statute running.

The court drew a fairly bright line distinction down the middle – and right along the discovery rule.  The reason the discovery rule was so important to the court was that applying the discovery rule requires a factual inquiry beyond the face of the complaint and therefore beyond the confines of a motion to dismiss.

For states that recognize discovery rule tolling, the question of when the statute starts to run depends on “when the plaintiff knew or, with due diligence, reasonably should have known of the wrong.”  Id. at *3 (citation omitted).  In the case of a hip implant, the revision surgery identifies that there has been a complication, “but is silent as to the cause of that complication” – malpractice, a unique medical condition, or perhaps a product defect.  Id.  What the plaintiff did and whether he/she acted reasonably in learning the cause is the subject of a factual investigation that prevents a dismissal on the pleadings.   The court went on to examine and explain that concept in 12 states that recognize the discovery rule (Alaska, Arizona, Arkansas, California, Indiana, Massachusetts, New Jersey, Ohio, Oregon, Pennsylvania, Utah, and Wisconsin).  Id. at *3-10.

Only four claims in discovery rule states were exempt from the above ruling.  In each of those cases, the court used the latest possible date for plaintiffs to have discovered their cause of action – the date of the product recall – and found that even using that date, plaintiffs had filed outside the applicable statute of limitations period.  Those cases were dismissed.  Id. at *3.

That left cases in four states that do not recognize the discovery rule, at least in this context.   Alabama, Idaho, and Michigan have not adopted the rule and the cause of action accrues at the time of injury.  Id. at *10.  And New York’s discovery rule provides that the statute starts running “when a plaintiff first noticed symptoms, rather than when a physician first diagnosed those symptoms.”  Id. (citation omitted).  In each of these cases, the revision surgery would be the latest date that triggered the statute, time-barring the claims unless plaintiff sufficiently pleads fraudulent concealment or equitable tolling — which they didn’t.  Id. at *11.  While there are variations among the states, the basic concept is that if the defendant fraudulently conceals the existence of a cause of action, the limitations period is tolled.

Here plaintiffs argued that defendant failed to disclose that it had lost its PMA status and failed to warn that the device was defective and unsafe.  Id. But those allegations were either untrue or preempted:

But the plaintiffs’ arguments cannot support a claim of fraudulent concealment [because defendant] was not federally required to disclose adverse incidents concerning the [] device to any person or entity other than the FDA, and [defendant] never lost its PMA. And the decision as to whether [defendant] should have lost its PMA is left solely to the FDA. Thus, the plaintiffs’ arguments either misstate the facts or are expressly preempted because they would impose requirements different from, or in addition to, those imposed by the FDA.

Id.  Good old preemption.  It doesn’t matter if you bleed Michigan blue, if you Remember the Alamo, or if you live where a grizzly bear is your only neighbor, preemption unites us all.

When it comes to medical device preemption, having Pre-Market Approval (“PMA”) is like being dealt pocket aces in Texas Hold’Em Poker.  It’s the strongest starting hand you can have; a 4:1 favorite over any other two card combo.  It means you’re starting in the power position.  Since the Supreme Court’s decision in Riegel v. Medtronic, Inc., 552 U.S. 312 (2008), manufacturers of PMA medical devices are in the power position in products liability litigation.  Very little slips by the double-edge sword of express and implied preemption in PMA cases.  The same can, and should be said for IDE cases as well.  And that’s what the Kentucky Court of Appeals said in Russell v. Johnson & Johnson, — S.W.2d –, 2018 WL 5851101 (Ky. Ct. App. Nov. 9, 2018).

Defendant manufactures medical catheters.  The catheter was approved by the FDA via the PMA process in 2004.  Id. at *1.  In 2015, the FDA approved use of the catheter under the Investigational Device Exemption (“IDE”) to the MDA which allowed the catheter to be used in a clinical trial to evaluate its safety in certain cardiac ablation procedures.  Plaintiff underwent a cardiac ablation procedure as part of the clinical trial in which defendant’s catheter was used.  Id.  After plaintiff’s procedure the catheter did receive full pre-market approval.  Id. at *4.

Plaintiff suffered complications during the procedure and subsequently filed suit alleging defendant was liable for strict liability, negligence, lack of informed consent, failure to warn, breach of warranties, fraud, and unjust enrichment.  Id. at *2.  Defendant moved to dismiss all claims on the grounds of preemption and the trial court, relying on Riegel, granted the motion.  Id.  Plaintiff later asked the court to set aside its ruling based on defendant’s voluntary recall of other catheters, but not the one used on plaintiff.  The court denied that motion.  Plaintiff appealed both rulings.

Not surprisingly, plaintiff’s primary argument was that the court should discount Riegel because at the time of plaintiff’s surgery, the device had not yet received pre-market approval.    Id. at *4.  But the court found the argument contradicted by numerous courts to have considered the issue.  Some courts find that timing of the grant of PMA to be immaterial.  Id.  While others find IDE approval to be synonymous with PMA.  Id.  This certainly follows the logic of Riegel.  Riegel adopted a two-step test for preemption and the first step is whether the FDA has established requirements applicable to the device.  Riegel concludes that a PMA does in fact establish such requirements.  Well, so does an IDE.

[b]ecause IDE devices are subject to a level of FDA oversight and control that is, for the purpose of a preemption analysis, identical to that governing PMA devices, the body of preemption law governing PMA devices applies equally to the IDE device at issue in this case.

Id. (citing Martin v. Telectronics Pacing Sys., Inc., 105 F.3d 1090 (6th Cir. 1997).

Thwarted by authorities from other jurisdictions on the issue, plaintiff next urged the court to rely on a Kentucky Supreme Court case decided before RiegelNiehoff v. Surgidev Corp., 950 S.W.2d 816 (Ky. 1997).  Id.  Niehoff rejected preemption in an IDE case relying on Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996).  But as we all know, Lohr dealt with a device approved via the §510k “substantial equivalence” process.  As pointed out above, the IDE process is more analogous to the PMA process and therefore, in a post-Riegel world, Riegel is controlling.   In Niehoff, the manufacturer also stopped the clinical trial before the FDA considered its PMA application.  Id.  Whereas in Russell, the device was granted PMA just over one year after plaintiff’s procedure.  Id. at *5.

In deciding the preemption question in the current case, the court started its analysis with the clear cut statement that “there is no presumption against preemption” in an express preemption case.  Id.  After checking that box, the court looked at the device at issue and concluded that “approval after being subject to both the IDE and PMA processes, satisfies the first prong of Riegel.”  Id. at *6.  So, to survive preemption, plaintiff cannot be alleging a claim that is different or additional to FDA’s requirements regarding safety and effectiveness.  Id.  That means, plaintiff in his complaint must allege three things: “violation of a federal requirement; violation of an identical state violation; and a link between the federal violation and [plaintiff’s] injury.”  Id.  Plaintiff went 0 for 3.

The court could find no allegations of federal violations, or even a cite to a federal regulation.  No factual support for any alleged violation.  No allegations that his injury was caused by a federal violation.  All plaintiff did was allege the device was defective – “in other words, the FDA should have imposed more stringent requirements – an attack precisely prohibited by the MDA.”  Id. at *7.

Failure to allege a parallel violation required dismissal of plaintiff’s strict liability, negligence, failure to warn, and fraud claims.  Id. at *7, *8.    Plaintiff’s informed consent claim failed because plaintiff signed a detailed consent form that was approved by the FDA.  Any claim that the consent was inadequate would impose a different or additional requirement on the defendant.  Id. at *7.  Claims that the device breached warranties regarding safety and effectiveness “directly contradict the FDA’s conclusion that the catheter was safe and effective.”  Id. at *8. As would an unjust enrichment claim premised on a claim that plaintiff did not receive safe and effective medical care.  Id.  Finally, plaintiff failed to allege a parallel federal statute to the Kentucky Consumer Protection Act.  Id.  So, all of the claims were properly dismissed as preempted.  The appellate court also upheld the trial’s court’s decision that any attempt at amendment would be futile.  “Additional time would not have transformed [plaintiff’s] claims into parallel state claims.”  Id.

As for the motion to set aside the dismissal based on the recall, the court again upheld the trial court’s decision.  A final judgement can be set aside based on newly discovered evidence which could not have been learned via due diligence in time for a new trial.  Id. at *9.  But new evidence is not events that occur after entry of a final judgment – such as the recall here.  Id.  Moreover, the new evidence needs to be relevant.  The recall was of different catheters, not the one used in plaintiff’s procedure.  Id.  Next, the voluntary recall “negated neither federal preemption nor FDA approval.”  Id.  The FDA was aware of adverse events and of the recall, but did not withdraw its approval of the device.  And, a recall is not a presumption that FDA regulations have been violated.  A recall doesn’t turn a “preempted claim into a parallel cause of action.”  Id.

             No doubt defendant had pocket aces going into this appeal, but Jim Murdica and Kara Kapke from Barnes & Thornburg and Lori Hammond from Frost Brown Todd deserve a shout out for knowing when to go all in!

Back in May, 3M won the first MDL bellwether trial in In re: Bair Hugger Forced Air Warning Devices Prods. Liab. Litig. (D. Minn.). The case was Gareis v. 3M Company and at the time of trial, the only claim remaining in the case was for strict liability design defect under South Carolina law. 2018 WL 5307824 at *1 (D. Minn. Oct. 26, 2018). Plaintiff’s negligence, failure to warn, unfair and deceptive trade practices, misrepresentation, and unjust enrichment claims had all been dismissed on summary judgment. Following the defense verdict, plaintiff moved for a new trial based on dangerously thin grounds. The kind of grounds that simply crumble when even the slightest force is brought to bear. And that’s pretty much what happened. Plaintiff’s arguments just fell apart.

Plaintiff’s first argument was that the court improperly excluded evidence that would have helped him prove a design defect. Id. at *2. And the court’s first conclusion was that plaintiff “identif[ied] no prejudice” from the exclusion of the evidence. With no discussion of how the trial result would vary with the admission of the evidence, plaintiff’s motion had to be denied. Id. But the court also went on to explain why the evidence was properly excluded.

Plaintiff wanted to admit evidence of defendant’s “knowledge of risk-utility.” Id. But, “the manufacturer’s mental state is not an element of a strict liability claim for design defect.” Id. Under South Carolina law, the focus in a strict liability “centers upon the alleged defectively designed product,” not the manufacturer’s conduct. Id. Since the evidence wouldn’t go to an element of plaintiff’s claim, it was irrelevant and inadmissible. Plaintiff also argued that certain alternative design evidence was improperly excluded based solely on the argument that he should not have been limited to only alternative designs that “achieve the same function by the same mechanism.” Id. at *3. In other words, plaintiff wanted to introduce “alternatives” that were actually “different” products. That bare bones assertion didn’t move the court to go back and revisit its already correct in limine ruling on the issue.

Plaintiff then moved on to evidence it argued was improperly admitted. Testimony by defense experts that plaintiff alleged was not disclosed in the expert’s Rule 26 disclosures and therefore was inadmissible at trial. But, it you’re going to argue surprise – it really needs to be a surprise. For example, plaintiff argued that defendant’s expert did not disclose that he intended to use a video of a study used to validate his experiment and therefore plaintiff couldn’t effectively cross-examine the witness regarding the details of the experiment. Id. at *4. But, plaintiff saw the video during the MDL Science Day, referenced it in his motion to exclude defendant’s expert, knew that it was available on defendant’s website, and even question the expert about it at his deposition. Id. Not really a sneak attack. The court found no violation of the Rule 26’s disclosure requirements, but even if there had been, “the admission of the video was harmless.” Id. Plaintiff tried to make the same argument about defense expert’s testimony concerning a study cited by plaintiff’s expert. While defendant’s expert didn’t cite the study, his report did opine on the substance of the study. Id. Again, hard to be surprised about a study your own expert relied on. There are a few other similar examples in the opinion.

Finally, plaintiff tried to argue that testimony that never happened should also have been excluded. Go ahead, you can re-read that sentence. It’s accurate. Evidence of FDA clearance of the device was excluded in limine. At trial, defense counsel started to ask a question about the FDA’s examination of the device to which plaintiff’s counsel immediately objected. The objection was sustained. The question was not answered. At sidebar, plaintiff asked that the testimony be stricken. The court denied the request because there was no testimony to strike. Plaintiff argued that the failure to strike testimony that didn’t exist was grounds for a new trial. The court didn’t agree. No new trial. Id. at *6. Bair Hugger score remains 1-0 defendant.

Failure to warn claims premised on a failure to report incidents to a federal governing agency are preempted in the Third Circuit. Sikkelee v. Precision Airmotive Corporation, — F.3d –, 2018 WL 5289702 (3d. Cir. Oct. 25, 2018). And this would be a DDL Blog drop the mic moment if the ruling had come in a prescription drug case instead of in an opinion involving airplanes. However, throughout the decision, the court analogizes to drug preemption decisions making us feel safe to say that Sikkelee’s Buckman-based rationale applies to all governmental agencies – FDA included. This isn’t the first time we’ve blogged about Sikkelee (see here and here). It’s bounced back and forth from the Middle District of Pennsylvania to the Third Circuit a couple of times with preemption at the forefront.

And, in the unanimous portion of the decision, the Third Circuit upheld the district court’s decision to grant defendant’s summary judgement motion dismissing plaintiff’s failure-to-notify-the-FAA claim. Id. at *11. FAA regulations require manufacturers to “report any failure, malfunction, or defect in any product . . . that it determines has results in any of the [listed] occurrences.” Id. Plaintiff argued that the alleged defect at issue was the type required to be reported, that defendant failed to report, and if it had reported, the FAA would have taken action. Id. Sound familiar? Replace “defect” with “adverse event” and “FAA” with “FDA” and you’ve got a Stengel claim. But unlike the Ninth Circuit, the Third Circuit found that what plaintiff was doing was trying “to use a federal duty and standard of care as the basis for this state-law negligence claim.” Id. Right. We say that all the time in pharmaceutical cases. Federal law does not require warnings to plaintiffs or their doctors. State law does not require warnings to the FDA. In the absence of a state-law duty to make reports to a government agency, a failure to report claim is an improper private attempt to enforce the FDCA (or FAA as the case may be). The Third Circuit based its decision primarily on Buckman as analogous to a fraud-on-the-FDA claim and rendering it impliedly preempted.

After Sikkelee, we also feel it’s safe to say that the horrendous decision a few months ago in Bull v. St. Jude Medical, Inc., 2018 WL 3397544 (E.D. Pa. Jul. 12, 2018) (recognizing failure-to-report-to-FDA claim), is now just bull. (Decision discussed here).

We can’t completely ignore that the Third Circuit also overturned, in a 2-1 decision, the district court’s decision finding plaintiff’s other claims were conflict preempted. The majority found the regulatory framework to be more like Wyeth v. Levine, 555 U.S. 555 (2009) – finding FAA regulations would have allowed defendant to make a change without prior FAA approval and therefore concluding that the claim was not preempted absent “clear evidence” that FAA would have rejected the change. Whereas the Middle District and dissenting Third Circuit opinions found PLIVA, Inc. v. Mensing, 564 U.S. 604 (2011) and Mutual Pharmaceutical Co. v. Bartlett, 570 U.S. 472 (2013) controlled interpreting FAA regulations as not allowing independent design changes. Since this discussion really turns on distinguishable FAA-based regulatory facts, we don’t think it has much impact on our drug and device world except the continued recognition of Mensing and Bartlett outside the generic drug arena. Also, the clear evidence aspects of the decision likely will be affected by the Supreme Court’s decision in the pending Fosamax appeal.

In a classic case of overreaching, plaintiffs in the In re Abilify MDL, sought sanctions against the defendant for not preserving emails dating between 2002 and 2006 – more than a decade before the start of the litigation. We have a hard time even contemplating what a duty to preserve that covered those emails would begin to look like. Fortunately, so did the court. Not for lack of argument by plaintiffs. They tried everything from industry-wide events to FDA requirements to alleged breach of a pharmacovigilance agreement between defendants. But this everything plus the kitchen sink approach couldn’t mask the lack of merit of any of their arguments.

Before 2007, defendant had a document retention policy of 60-days for emails. In re Abilify (Aripiprazole) Prods. Liab. Litig., 2018 U.S. Dist. LEXIS 172536 at *3 (N.D. Fla. Oct. 5, 2018).  Plaintiffs argued that destruction of email before that time constituted spoliation and warranted sanctions against defendant. A question that is governed by Federal Rule of Civil Procedure 37(e). Sanctions for failure to preserve electronically stored information (“ESI”) are permissible when ESI should have been preserved “in the anticipation or conduct of the litigation,” and the ESI was lost or destroyed due to the party’s failure to take reasonable steps to preserve and the ESI cannot be restored or replaced. All four of those conditions must be met. Making the only question for the court in this case – whether defendant had to duty to preserve emails from 2002-2006. It did not.

The court cites 11th Circuit precedent that the duty to preserve doesn’t arise until “litigation is pending or reasonably foreseeable.” Id. at *5. So plaintiffs’ first argument was that defendant should have reasonably anticipated the litigation long before the first lawsuit was filed in 2016. Plaintiffs’ argument was that the duty to preserve can be triggered by “industry-wide events, regardless of the status of individual litigation.” Id. at *7. But this theory is too outward focused. The industry-wide events plaintiffs rely on are scientific literature, other lawsuits, and adverse event reports. The early literature pertains to other drugs in the same class as Abilify and the question of whether that literature was sufficient to place defendant on notice of the risk of compulsive gambling is a “hotly contested issue in the case.” Id. at *10. Making it a

quantum leap to conclude that [defendant] had a duty to preserve all of its emails . . . simply because there may have been some scientific literature published in the late 1990’s and early 2000’s that addressed [the class of] drugs and a possible link to compulsive gambling.

Id. Relying on adverse events in clinical trials was similarly insufficient to place defendant on notice of possible litigation. Id. at *12. Other litigation about different drugs was also insufficient to put defendant on notice that it too would be sued a decade later.

The Court is not aware of any case law, which requires a drug manufacturer to preserve all of its documents where the manufacturer has not received any notice of the potential threat of litigation other than simply knowledge that there was other litigation involving a different drug prescribed for different conditions that may fall within the very broad category of dopaminergic drugs. Such an overly broad view of the duty of preservation would impose on every drug manufacturer a duty to preserve all of its documents, without regard to subject matter or time frame. That is at odds with the requirement that a party must preserve documents when it reasonably anticipates litigation.

Id. at *11 (“reasonable anticipation” is more than “mere possibility”).

Plaintiffs’ last industry-wide argument was that defendant should have put a legal hold in place based on a subpoena from the DOJ in an investigation concerning off-label promotion of Abilify. The court quickly pointed out that that investigation did not involve the safety or compulsive gambling information at issue in the MDL, but more importantly a demand from the DOJ at best triggers a duty to preserve that runs to the DOJ. That duty cannot be shifted to be owed to these plaintiffs in a separate action. Id. at *13-14.

Disregarding all of these external events to focus on the case specifics, plaintiffs’ counsel didn’t start advertising for plaintiffs until 2013 and didn’t threaten litigation until 2014. Id. at *8. So, in looking at the action of these plaintiffs, the earliest defendant could have anticipated litigation was 2014. Id.

We’re not done yet. Plaintiffs tried another duty-shifting argument, this time with the FDA.  Drug manufacturers are required to preserve adverse event data, including correspondence, for 10 years. Plaintiffs latched on to the “correspondence” language to argue that there must have been AE-related emails that were deleted. But even if true, “failure to comply with a regulatory obligation does not create a duty to preserve for purposes of a spoliation motion.” Id. at *15-16. The “obligation . . . runs to the FDA and not the plaintiffs in this case.” Id. at *16. The emails at issue were gone a decade before the defendant owed an obligation to the plaintiffs as opposed to the FDA.

Plaintiffs’ last attempt to find an earlier trigger was to point to the pharmacovigilance agreement between defendant and another manufacturer. The agreement required both parties to keep and make available to each other all of their adverse event information, and the language once again included correspondence. Id. at *19. There was no allegation that any manufacturer did not properly maintain their adverse event data, only that if the agreement included correspondence then there “must have been” relevant correspondence in the deleted emails. But putting aside plaintiffs’ obvious twisting of the true meaning of the agreement:

The more fundamental problem with Plaintiff’s argument is that Plaintiffs as non-parties to the Pharmacovigilance Agreement cannot enforce the obligations in the agreement to their benefit.

Id. Plaintiffs attempt to rely on state-law to make their case, but (1) Rule 37(e) prohibits reliance on state law to create a basis for discovery sanctions and (2) even under Florida law, the plaintiff has to be a party to the contract to use its breach as a basis for spoliation. Id. at *21.

Because defendant had “no inkling” in 2004 that potential claimants like plaintiffs even existed, there is no evidence that the auto-delete document policy in effect at that time was anything other than an ordinary business policy. Simply stated, defendants were not acting in bad faith. Id. at *23-24. Even more simply stated, defendants can’t be held to the standard of Carnac the Magnificent.

 

If a court acknowledges that no state or federal appellate courts in the jurisdiction have addressed the question before it, we think at a minimum there also should be an acknowledgement of the Erie doctrine. Yet, in the case of Fogel v. Sorin Group USA, Inc., 2018 WL 4680022 (S.D.N.Y. Sep. 28, 2018) you get the former without the latter. Fogel is one of our least favorite types of decisions, one that claims to be a prediction of state law but instead over reaches to create new liability where it did not previously exist. That is not the job of federal courts interpreting state law.

Under the Erie doctrine, in the words of the Supreme Court:

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

Day & Zimmerman, Inc. v. Challoner, 423 U.S. 3, 4 (1975). And, not surprisingly, the Second Circuit agrees. See Runner v. New York Stock Exchange, Inc., 568 F.3d 383 (2d Cir. 2009) (“our role as a federal court sitting in diversity is not to adopt innovative theories that may distort established state law”). But Fogel disregarded Erie and then disregarded that New York has not recognized a failure to warn claim based on failure to report adverse events to the FDA.

Here are the facts. Defendant manufacturers a heart valve that underwent pre-market approval by the FDA. Fogel at *1. Plaintiff’s child underwent surgery in which her pulmonary heart valve was replaced with defendant’s valve. Two years later, the valve failed and plaintiff’s child had to undergo revision surgery during which complications occurred that caused permanent injuries. Id. at *2.

In deciding defendant’s motion to dismiss, the court found several of plaintiff’s claims were preempted. A fraud allegation that defendant concealed information from the FDA during the PMA process was preempted under Buckman as fraud-on-the-FDA. Id. at *4. Design defect was preempted under Riegel because the valve’s design was approved by the FDA and any challenge to that design would impose state law requirements that are “different from or in addition to” FDA requirements. Id. Manufacturing defect failed because plaintiff “failed to plausibly allege a manufacturing defect that violated FDA requirements.” Id. at *5. A conclusory allegation of a deviation was insufficient.

That leaves failure to warn – where the decision goes astray. As with Stengel v. Medtronic Inc., 704 F.3d 1224 (9th Cir., 2013) (en banc) and Hughes v. Boston Scientific Corp., 631 F.3d 762 (5th Cir. 2011), the Fogel court recognizes that a traditional state law failure to warn claim must be preempted under Riegel. “To the extent Plaintiff[] claim[s] that the [device’s] warning label was inadequate . . ., like the design-defect claim, must fail because the warning was approved by the FDA.” Fogel at *5. That should be the end of the story. Because “any attempt to predicate the [] claim on an alleged state law duty to warn doctors directly would have been expressly preempted.” Stengel, 704 F.3d at 1234. So let’s call failure-to-report claims what they really are – a sidestep around preemption. Frankly, they shouldn’t even get that far because what they really are are attempts at private enforcement of FDA reporting requirements which should be impliedly preempted under Buckman and 21 U.S.C. § 337(a).

That’s certainly the case in New York where a failure-to-report claim has not been recognized under state law. In fact, had the district court engaged in an Erie analysis it would have found that in other contexts New York has actually rejected state-law tort claims predicated on failure to report something to a governmental body. See 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); In re Agape Litigation, 681 F. Supp.2d 352, 360-61 (S.D.N.Y. 2010) (rejecting private cause of action premised on federal reporting requirements in Bank Secrecy Act). A more fulsome discussion of these analogous cases in other states can be found in our post here.

District courts faced with an undecided state law question are not allowed to create liability where it did not previously exist. It was not the district court’s job to expand New York’s duty to warn the medical community to include the FDA.

The federal requirements require that adverse events and other reports be made to the FDA. While New York law may require manufacturers to warn the medical profession, that is not the same as a duty to report to the FDA.

Pearsall v. Medtronics, Inc., 147 F. Supp.3d 188, 201 (E.D.N.Y. 2015)(rejecting failure-to-report claims as preempted and not valid under NY law). So, under existing New York law, failure to warn physicians imposes an obligation different from and in addition to the FDA’s requirement to report adverse events. Making the claim both preempted as non-parallel and as purely FDCA-based.

 

We have written a lot about personal jurisdiction. We certainly haven’t lacked for defense favorable decisions since Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017). Its impact has been felt in many contexts – class actions, innovator liability, litigation tourism. And, as we discussed in our post here, “stream of commerce” jurisdiction has also taken a significant hit post-BMS. Today we add another case to the growing precedent that “purposeful availment” rather than the “fortuitous” conduct of third persons is (i) a difficult standard to meet and (ii) is required to establish jurisdiction.

In Morgan v. Trokamed GmbH, 2018 WL 4388457, at *1 (W.D. Wis. Sep. 14, 2018), plaintiff, a citizen of Wisconsin, sued the German manufacturer and the North American distributor of a Class II medical device used in laparoscopic surgery. The manufacturer moved to dismiss for lack of personal jurisdiction and both the plaintiff and the distributor opposed. It was undisputed that the manufacturer had no offices or employees in Wisconsin, no representative of the manufacturer had ever visited Wisconsin, and the manufacturer doesn’t ship products to Wisconsin. Id. at *2. So, for plaintiff to make a prima facie showing of specific jurisdiction, she had to show that the German company had “purposefully availed” itself of conducting business in Wisconsin. The court analyzed each of plaintiff’s allegations of contact.

Exclusive distribution agreement: Plaintiff’s first argument was a straight-forward stream of commerce theory. The manufacturer gave the distributor exclusive rights to sell the manufacturer’s medical devices in the U.S., Canada, and Mexico. Based on that, the manufacturer should have reasonably expected its products to be sold in all 50 states. Id. But, as the court points out, that’s the same argument made by Justice Ginsburg in her dissent in J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873 (2011). But, the plurality (Kennedy, J.) and concurring (Breyer, J.) opinions found nationwide transmission insufficient to confer jurisdiction tethered only to a prediction that a defendant should have known its product would reach a specific state. Id. at *3.

Plaintiff tried to distinguish Nicastro by arguing that the manufacturer here exhibited more control over the distributor, but the court found nothing in the distribution agreement that showed targeting of Wisconsin particularly. The agreement covered the U.S. as a whole and did not direct the distributor to sell the devices in Wisconsin which is “the type of control that matters under a personal jurisdiction analysis.” Id. at *4.

Sales Volume: Plaintiff next tried to distance herself from Nicastro by pointing out that the plurality and the concurrence relied on the small number of sales of the product to New Jersey in deciding personal jurisdiction was lacking. Id. But, plaintiff here could only identify 2 sales of the manufacturer’s medical device in Wisconsin. Id. So, she focused on disposable components (blades and valves) of the device that she claims the distributor “regularly” sent to Wisconsin. This argument failed for several reasons, including that plaintiff neglected to produce any evidence that the components were manufactured by the German defendant. Id. at *5. Plaintiff also doesn’t allege that her injury had anything to do with the component parts, “so those sales would have a more tenuous connection with her claims.” Id. Finally, plaintiff still had no evidence that the manufacturer was aware it had customers in Wisconsin at the relevant time. Plaintiff alleged that the manufacturer became aware of its Wisconsin customers in 2015, but plaintiff “does not explain how knowledge that [the manufacturer] had in 2015 could serve as the basis for an exercise of jurisdiction for a claim arising out of 2014 injury ad a [device] sale made years earlier.” Id.

             Instructions for Use: Relying on Justice Breyer’s concurrence in Nicastro that offering “special state-related . . . advice” might be enough to confer jurisdiction, plaintiff alleged that the manufacturer “established channels of advice” via its warranty and Instructions for Use. Id. at *6. What plaintiff missed, however, is that the instructions “direct the customer to send the device to [the distributor] for repairs,” the instructions have the distributors contact information and logo, and state that the device is a product of the distributor. “No one reading the [instructions] would know that he or she should contact [the manufacturer] for any reason.” Id. at *7.

FDA Approval: Perhaps the most significant part of the opinion is the court’s conclusion that “the process for FDA approval does not provide a basis for exercising jurisdiction in a particular state.” Id. We’ve talked about this in the context of innovator liability, where the innovator may be the NDA holder, but they didn’t sell or distribute the product used by plaintiff. If the brand defendant didn’t sell the product at issue, but rather a different product to different people, and FDA-approval isn’t enough – what’s left on which to base specific jurisdiction?

Plaintiff also tried to use post-approval FDA communications to establish purposeful contacts. In response to a request from the FDA, the manufacturer had its distributor update all the instructions and send them to all customers. During this process, the manufacturer received a list of all of the U.S. customers for its devices. Id. at *8. Not only did this process take place after plaintiff’s alleged injury (after the relevant time period), it still relates only to the manufacturer’s contacts with the U.S. as a whole, not with Wisconsin. Id.

The bottom line: The facts alleged by [plaintiff], may reveal an intent to serve the U.S. market, but they do not show that [the manufacturer] purposefully availed itself of the [Wisconsin] market. Id. at *9 (quoting Nicastro).

We’ve written about a lot of Risperdal summary judgment wins. No medical causation, no warnings causation (learned intermediaries aware of risks), no alternative design, no fraud. So, when we see an opinion that overturns a plaintiff’s verdict on the grounds of (1) impossibility preemption; (2) clear evidence preemption; and (3) no evidence of general causation, we can’t help but wonder how it got to trial in the first place. So we decided to do a little digging. From our review of the case, it appears these issues were all raised at the summary judgment stage but denied. What changed before and after trial? Not the facts that support these arguments. The regulatory history hasn’t changed. The experts’ opinions haven’t changed. Yet, defendant had to go through an amateur-hour trial (we’ll tell you more about that later) and then wait over a year for these post-trial rulings granting judgment as a matter of law. Sure, better a late win then no win at all – but it certainly feels like this could have been avoided.

The case is Byrd v. Janssen Pharm, Inc., No. 1:14-cv-0820, slip op. (N.D.N.Y. Sep. 21, 2018) and, as mentioned above, involved Risperdal, an antipsychotic drug prescribed to treat serious mental conditions – schizophrenia, manic depression, and autism. Plaintiff alleged that his use of Risperdal caused him to develop abnormal breast tissue growth. The two claims that went to trial were negligent design, manufacturing, and warning defect and strict liability design, warning, and misrepresentation. Id. at 3.

The opinion methodically sets out both defendant’s arguments and plaintiff’s responses, but we’re going to jump right to the conclusions. First up was preemption. Standard plaintiff argument: defendant unilaterally should have changed its warning to include gynecomastia and was able to do it via the Changes Being Effected (“CBE”) regulations. Standard impossibility preemption defense: federal law prohibited defendant from changing the FDA-approved labeling and/or there is “clear evidence” that the FDA would have rejected the proposed labeling change. Id. at 12. The court was persuaded as to both impossibility and clear evidence. Defendant presented “clear evidence” that the FDA had rejected its request to add safety and dosing information for pediatric use of Risperdal. Id.

But the court spent most of its analysis on whether a CBE label change even was permissible under federal law. A CBE labeling change can only be made on the basis of new information concerning a serious risk. “[H]ere, the relationship between antipsychotics and [abnormal breast development] was not new information because it had been discussed in basic psychiatry textbooks for decades, and the FDA does not consider gynecomastia a serious adverse event.” Id. at 9. A “serious” adverse event is defined by federal regulations to be an event that either “resulted in inpatient hospitalization or required surgical intervention to prevent inpatient hospitalization.” Id. at 15. And, both plaintiff’s and defendant’s regulatory experts agreed that gynecomastia “would not be a serious adverse event.” Id. at 16-17. Now, plaintiff’s expert was Dr. Plunkett and she was quick to voice her personal disagreement with the FDA on this point – but that’s irrelevant (both to us and to the court). Id. at 17.

The court didn’t stop there. Defendant also argued that plaintiff had failed to satisfy his burden of proof on causation. While defendant made arguments regarding both proximate and medical causation, the court focused its attention on the latter and specifically the lack of general causation evidence. Id. at 26. Starting with Dr. Plunkett who “admitted to not being a causation expert,” but opined on it anyway – the court found her opinion unsupported by the literature. Id. None of the three pieces of literature relied on by Dr. Plunkett included a control group, so at best they were evidence of an association, not a correlation. Dr. Plunkett’s reliance on this literature demonstrated a “disregard for the difference between an association between two things and a causal relationship between those two things.” Id. at 29; see id. at 30 (“a correlation between Risperdal and gynecomastia cannot be drawn without a control group”). The fact that these studies lack a control group was likely not “new” information at trial and again begs the question why this issue is only being properly addressed post-trial.

Plaintiff’s other causation expert likewise had no support for a general causation opinion. His conclusion was that plaintiff’s gynecomastia was “secondary at least in part to prolonged use of Risperdal.” Id. at 31. But, putting aside reliance on the same literature relied on by Plunkett, the only basis plaintiff’s second expert had for his general causation opinion was his differential diagnosis. A differential diagnosis, however, “generally does not prove general causation.” Id. at 33. It assumes general causation has already been proven. Without general causation, defendant was entitled to judgement as a matter of law.

Still, the opinion continues. The remainder of the decision addressed defendant’s alternative request for a new trial based on the inappropriate conduct of plaintiff’s counsel. The court did not need to decide this issue having already found two grounds to overturn the verdict and award judgement in defendant’s favor. Based on the description of plaintiff’s trial antics, however, we can only assume that the court wanted this opportunity to admonish plaintiff’s counsel. Defendant pointed out 23 separate incidences of plaintiff’s attorney’s misconduct in front of the jury. Id. at 34. In concluding that plaintiff’s counsel’s behavior did warrant a new trial, the court relied on:

(1) Plaintiff’s counsel’s self-deprecating tone of voice and posture when referring to his lack of professional skills and/or experience, (2) his helpless tone of voice and posture when referring to the fact that he was bullied as a child, (3) his alternating innocent and defensive tones of voice in response to an admonishment by the Court, (4) the sympathetic facial expressions of the jurors following the aforementioned acts and/or accompanying comments, (5) the credulous expressions of the jurors following Plaintiff’s counsel’s acts of asserting the truth of Plaintiff’s case and/or vouching for his witnesses, and (6) the jurors’ reactions following Plaintiff’s counsel’s acts of offering his personal opinions about the evidence and/or testifying when he could not otherwise introduce evidence.

Id. at 37-38. While this behavior more than justified a new trial – it wasn’t necessary because no childish antics could overcome the fact that plaintiff had failed to prove general causation and that defendant had clear evidence to support impossibility preemption. Both of those things were true a year ago too. But better late than never.

One of our primary goals is to bring you the latest and greatest news in the drug and device litigation world. But sometimes we don’t learn of a case at the time it’s decided. So, then we need to move on to another of our guiding principles – if it’s good for the defense, we talk about it. So, while today we happen to have come upon a case that was decided in 2017, it dovetails with our recent post Taking Out the Laundry With TwIqbal where we talked about plaintiffs’ attempts to bluff their way to a valid parallel violation claim. And that’s exactly what the plaintiff in Rand v. Smith & Nephew, Inc., 2017 WL 8229320 (C.D. Cal. Apr. 5, 2017) tried to do. Plaintiff put together a “laundry list” of allegations that the defendant’s device violated with no hint of what exactly the defendant did that was in violation. In our prior post we commented that “most courts are willing to use TwIqbal to call bull$%@&! on these types of allegations.” Fortunately, Rand can be added to that list.

The device at issue in Rand is a hip resurfacing prosthesis that underwent pre-market approval from the FDA. That’s why we are talking about parallel violation claims. Following a nice Riegel analysis, the court looked at plaintiff’s allegations for each cause of action.

Strict liability: Under California law, this is a claim for a design, manufacturing and warning defect. Because the FDA reviews “device design, manufacturing processes, and device labeling” as part of the PMA, “the MDA preempts state-law claims against these three aspects of PMA-compliant devices.” Id. at *4. So, plaintiff made 2 laundry lists – one of “various federal regulations” and another of defendant’s alleged misconducts. Double the nonsense.

First, plaintiff included regulations that go to the adequacy of defendant’s PMA application. “But FDA’s approval demonstrates the agency’s reasonable assurance of [the device’s] safety and effectiveness based on the application.” Id. So any claim premised on those regulations is preempted. Second, the court moved on to TwIqbal finding some allegations so poorly pleaded that it is “impossible to determine whether they add to federal requirements and hare hence preempted.” Id. Finally, some allegations were completely conclusory.

Plaintiff’s second list wasn’t much better. Not only did it include conclusory allegations – basically just speculation – but plaintiff also included alleged misconduct that was irrelevant. For example, plaintiff alleged wrongdoing regarding device components used in off-label combinations but plaintiff was implanted with such a combination. In other words, plaintiff was tossing pasta at the wall and just hoping something stuck. That’s not good enough under TwIqbal.

The only allegation that made the cut was failure to report adverse events. Id. This is California, so it’s to be expected.

Negligence: This largely mirrors plaintiff’s strict liability claim and suffers the same fate. The only new “misconduct” included in the negligence count was about defendant’s withdrawal of the device for “demographics groups” to which plaintiff didn’t belong. Irrelevant. Id. at *5. And, plaintiff surmised that defendant’s breach proximately caused his injury but provided no support for that allegation. Id. The entire negligence claim was dismissed.

Breach of express warranty: Again, most of plaintiff’s allegations are insufficient:

Without more details, the statements that [defendant’s] devices are of merchantable quality, safe, effective, and fit and proper for its intended use are no more than an affirmation merely of the value of the goods or a statement purporting to be merely the seller’s opinion or commendation of the goods. Such unspecific statements do not create a warranty.

Id. (citation and quotation marks omitted). The court did find that a press release cited by plaintiff created an express warranty but plaintiff failed to allege how the press release violated any PMA requirement. Without that, the claim was dismissed without prejudice.

Breach of implied warranty: This claim was preempted:

Both types of implied warranties involve an assertion that the goods are fit for then intended purpose. Implied warranty of merchantability further imposes labeling requirement and requires that the goods conform to the statements on the label. But these conditions are precisely what a PMA entails. Thus, unless the defendant violates these conditions under the PMA, § 360k(a) expressly preempts this claim.

Id. at *6 (citation omitted). Since plaintiff used the device for the purpose the FDA approved – no breach of implied warranty claim.

Fraudulent concealment: Here again plaintiff attempts to rely on a failure to report adverse events to state his claim. But essential to a fraud claim is that defendant had a duty to disclose the concealed fact to plaintiff. Id. We think this negates failure to report as a basis for strict liability as well and we’ve made our views on that clear many times. Here, plaintiff didn’t allege that federal regulations require defendant to report adverse events to plaintiff – nor can he because that’s not the law. That means that this would be an “additional requirement” which is preempted. Id..

The claim also failed for no allegation of intentional concealment by defendant and for not satisfying Rule 9(b)’s heightened pleading requirement for fraud. Id.

It may not be the latest and greatest, but it adds to the wealth of decisions tossing plaintiffs’ multi-paragraph list of violations which are a lot more bark than bite.