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Earlier this month we explained that a “wrinkle removal,” was one that capitalized on a “wrinkle” in the language of 28 U.S.C. § 1441(b)(2), which provides that a case cannot be removed on the basis of diversity if any “properly joined and served” defendant is a citizen of the forum state.  But if the forum defendant has not yet been served, that “wrinkle” doesn’t apply.  Defendants, in our never-ending quest to get cases into federal court, argue that such pre-service removal is consistent with the plain language of the statute.  Plaintiffs counter that this interpretation leads to an “absurd result” that refutes the plain language rule.  Just last year, the Third Circuit held that in this battle of “plain meaning” versus “absurd result” – plain meaning wins.  Encompass Ins. Co. v. Stone Mansion Rest. Inc., 902 F.3d 147 (3d Cir. 2018).

That was in important decision because since remand is unappealable (28 U.S.C. §1447(d)), appellate review is rare in remand situations.  It also meant that it was a foregone conclusion that Encompass Ins. would be applied in the District of New Jersey cases we discussed a few weeks ago.  When we see it cited and relied upon in the Central District of California, we think that’s important enough to warrant another pre-service removal post this month.

The case is Dechow v. Gilead Sciences, Inc., 2019 WL 517624 (C.D. Cal. Feb. 8, 2019).  Plaintiffs from four different states sued defendant, a resident of California and Delaware, in state court.  Two weeks after the complaint was filed, but before it was served, defendant removed the case to federal court.  Id. at *1.  As the court noted, the issue is “primarily an exercise in statutory interpretation.”  Id. at *2.  And in this instance, the statutory text is “unambiguous. Its plain meaning precludes removal on the basis of in-state citizenship only when the defendant has been properly joined and served.”  Id. at *3.  With no Ninth Circuit decision on point, the court looked to Encompass Ins.

Plaintiffs did try to argue that this literal interpretation of the statute should be rejected because it would lead to absurd results.  For this, they relied on a single case – Vallejo v. Amgen, Inc., 2013 WL 12147584 (C.D. Cal. Aug. 30, 2013).  But Vallejo involved a situation where defendants removed the case before the state court issued the summons to plaintiff.  In other words, removal occurred before it was possible for plaintiff to effectuate service.  Allowing removal in that situation, “would effectively circumvent Congress’s entire statutory scheme and render § 1441(b)(2) superfluous. Such an application could not have been intended by Congress.”  Id. That was not the situation in Dechow where service could have been made but was not.

The district court found additional support in the Ninth Circuit’s interpretation of 28 U.S.C. § 1446(b)(2)(A) which provides that “all defendants who have been properly joined and served must join in or consent to the removal of the action.”  Another removal provision with the same “properly served and joined” language.  To this provision the Ninth Circuit has applied the plain meaning interpretation.  Id. at *4.  What’s good for one, is good for the other.  And plain meaning interpretation is good for the defendants.

MDLs are complicated.  MDLs are chaotic, messy, and ugly unless they have structure and order.  Bringing order to chaos.  Something this blogger has championed for what’s starting to be more years than she wants to readily discuss.  But without order, think of The Blob (the original 1958, Steve McQueen flick).  It creeps.  It crawls.  It eats you alive.  Same can be said of MDLs.  They have a way of growing at an alarming pace.  The number of plaintiffs.  The number of defendants.  The number of depositions.  The number of documents produced.  Just oozing out in every direction.  Eating up time, money, resources.  And, most of the creeping and crawling is directed at defendants.  Plaintiffs want to depose dozens of company witnesses (hundreds if you get into sales representatives).  Plaintiffs want millions of pages of documents, along with native productions of large databases.  And what do the individual plaintiffs have to do?  Usually no more than fill out a Short Form Complaint, a Plaintiff Fact Sheet, and sign some medical release authorizations.  And while they do that, very little is done to curb the mounting mass of lawsuits.

That is until it’s not just defendants who have to put up or shut up.  There is no doubt that requiring individual plaintiffs in an MDL to do something – anything – to justify his/her claim actually works to shrink the mass.  In the DDL biz, we call it Lone Pine, named for Lore v. Lone Pine Corp., 1986 WL 637507 (N.J. Sup. Ct. Nov. 18, 1986) in which a New Jersey state court judge ordered plaintiffs to offer proof connecting the defendant’s product to the plaintiff’s alleged injury.  We keep track of the entry of Lone Pine orders in our cheat sheet, here.  And it should be no surprise that we are strong proponents of the Lone Pine orders, especially when entered early on in litigation.  They help clean house; shake off free-riders hoping to hang in until a settlement.

A decision last week from the Abilify MDL shows just how effective Lone Pine can be.  In re Abilify (Aripiprazole) Products Liability Litigation, MDL 2734, was created in October 2016.  Almost two years later, the court entered an order requiring every plaintiff to complete a Supplemental Plaintiff Profile Form (“PPF”) and supporting documentation by October 31, 2018.  That order provided that failure to comply would result in sanctions, “up to and including dismissal of a case.”  In re Abilify, MDL 2734, Order, at p.1 (N.D. Fla. Jan. 31, 2019).  As of last week, “over 400 plaintiffs” had failed to submit a PPF or submitted an incomplete PPF.  Id. at p. 2.  So the court issued an order to show cause why these deficient plaintiffs should not be dismissed.  Plaintiffs were given one week to respond – and just submitting the PPF and supporting documents isn’t going to be enough.  Id.

So, how is this Lone Pine? It’s a matter of substance over form.  The court doesn’t call the PPF process Lone Pine, but if you look at what plaintiffs were being asked to do – it’s all there:

Proof of use:  Plaintiffs had to state whether they had records documenting use of the product.  If so, they had to produce them and if not, they had to explain why not.  Why not indeed.  No lawsuit should be filed without first obtaining proof of product usage.  Production of pharmacy/dispensation records should not be a hardship for any plaintiff 2 years into a litigation.

Proof of injury:  Plaintiffs had to state whether they had ever been diagnosed with their alleged injury.  If they were diagnosed, they had to produce the records confirming the diagnosis.  If they did not have such records, they had to produce a “physician certification attesting that you have been diagnosed with [your alleged injury] and that your symptoms began while on Abilify, and identifying all information and records on which the physician relied.”  In re Abilify, Order, MDL 2734, Dkt. 986-1 (N.D. Fla. Aug. 31, 2018).  Definitely Lone Pine territory.  If you claim you suffered your injury, you have to have proof.  Again, we think that’s something plaintiffs should have before they file suit, so it is completely reasonable to ask for it well after that point.

The PPF process is a common one in MDLs, but it has to have teeth and it has to have an enforcer.  If a PPF only requires plaintiffs to reiterate their allegations and not back them up with documentation, it really doesn’t do anything to weed out meritless claims.  Likewise, the court has to be willing to dismiss plaintiffs who don’t comply.  If you don’t do the work, you don’t get your case.  The next step is more difficult and one we wish more courts would take – diving into the ooze.  For the hundreds of plaintiffs who did complete the PPF, does the documentation support the allegation?  This starts to get too close to Daubert and summary judgment for many courts to feel comfortable, but from experience we know complete PPF/Lone Pine submissions are not the same as non-deficient submissions.  We also know assessing deficiencies is a lot of work.  Not fun work.  Not pretty work.  But the kind of work that brings order to chaos.  Lone Pine may just be to MDLs what a blast of cold air was to the The Blob.  It wasn’t dead, but at least it was stopped (“as long as the Arctic stays cold!”).

Having three experts couldn’t save plaintiff’s claims in Robinson v. Davol Inc., 2019 WL 275555 (7th Cir. Jan. 22, 2019).  Plaintiffs’ decedent underwent surgery involving a surgical mesh patch and approximately one year later, she developed an abdominal wall abscess that led to various infections that ultimately led to her death.  Id. at *2.  The model of the mesh patch used in the surgery was the subject of a recall a few months after the decedent’s surgery.  Id. The reason for the recall was that the design of the patch caused it to adhere to the bowel or to break and perforate organs.  Id. at *1.

An autopsy concluded that decedent’s death was caused by pneumonia and complications therefrom.  The autopsy report also reported abdominal adhesions but noted that the “small bowel and colon [were] intact without perforation.”  Id. at *2.  Despite that conclusion, plaintiffs filed suit under the Indiana Products Liability Act alleging that decedent’s injuries were caused by the mesh patch.  The district court granted summary judgment after excluding all three of plaintiffs’ experts and the Seventh Circuit affirmed.

Plaintiffs’ first expert was Dr. William Hyman, a biomedical engineer who opined that the device was “inherently dangerous” and then speculated that the device caused decedent’s injuries.  But Dr. Hyman had to concede that he had never examined the images of the mesh patch used in decedent’s surgery and that he wasn’t qualified to offer an opinion “on the microbiology of her infection.”  Id. at *3.  In other words, he wasn’t offering a causation opinion.  First strike.

Plaintiffs’ second expert was the coroner who had performed decedent’s autopsy.  He tried to distance himself from his original findings by testifying that “there could have been superficial breaches scarred over with additional inflammation” and the adhesions “suggested the possibility of a breach.”  Id.  As it turns out, plaintiffs neglected to disclose that they would be relying on the coroner as an expert and so his opinion was excluded on that ground.    Id.  Strike two.

That left only plaintiffs’ medical expert, Dr. Stephen Ferzoco.  Dr. Ferzoco had testified in other mesh cases where the device broke or adhered to the intestines.  But because those things didn’t happen to decedent, Dr. Ferzoco came up with a new suggestion of causation – that the device didn’t break, but “buckled,” rubbed up against the bowel, and caused a perforation that “sealed up” prior to the explantation of the device.  Id. at *2.

New theories may be OK, but they still have to pass Daubert.  Dr. Ferzoco’s causation theory had never been presented in any formal or professional setting and was not published in any medical literature.  His only support for his theory was that he had seen it in other patients, but he was unwilling to identify those patients or provide their medical records for corroboration.  He also admitted, there was no support for his conclusions in either the decedent’s medical records or the autopsy report.  Id. at *3.  So the district court excluded his opinion as failing to meet the reliability threshold of FRE 702.

On appeal, plaintiffs only challenged the court’s ruling as to Dr. Ferzoco without whom they could not establish medical causation, an essential element of their claim.  The Seventh Circuit agreed with the district court’s reasoning based on the facts identified but they also had one more to consider.  Plaintiffs argued for the first time on appeal that Dr. Ferzoco’s conclusion was the “equivalent of a differential diagnosis.”  Id. at *4.  Putting aside the procedural argument that you can’t raise issues for the first time on appeal, do we really need to bastardize differential diagnoses any further?  Doctors perform differential diagnoses to diagnose disease in their patients so they can eliminate possibilities and prescribe the most effective treatment. They do not use differential diagnoses in the regular course of clinical practice to determine substantial factor causation, which is a litigation-driven concept.  You can find plenty of our thoughts on differential diagnosis in prior posts.   We certainly don’t welcome any equivalents.

Fortunately, the court didn’t have open arms either.  An expert’s decision “to rule in or rule out potential causes must itself be scientifically valid.”  In other words, you can’t “rule in” an unsupported causation theory.  “Dr. Ferzoco needed to establish the reliability of his [buckling] theory in order to rule [it] in as a potential cause of [decedent’s] death.”  Id.  “Differential diagnosis” isn’t a magic incantation that gets a causation opinion over the Daubert hurdle.  All the standard scientific processes must be in place.

And with strike three . . . plaintiffs are out.

A complaint gets filed in California naming hundreds of plaintiffs, only 20 of whom reside in California, against out-of-state manufacturers.  Sound familiar?  Sound like something the Supreme Court rejected in Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017).  It should.  So, why are we here again?  I guess you can credit plaintiffs’ counsel with persistence.  But you what they say about the definition of insanity?  Well, it’s getting close to that point.

In BMS, the Supreme Court held that California’s courts could not exercise specific personal jurisdiction over an out-of-state defendant unless there is “an affiliation between the forum and the underlying controversy, principally, [an] activity or an occurrence that takes place in the forum State.”  Id. at 1781 (2017).  That means there must be a causal link between the defendant’s forum contacts and the alleged injury to the plaintiff.  Contacts with other people do not count.  And while BMS primarily focused on the contacts of resident versus non-resident plaintiffs, it also says that the presence of a California distributor – equally uninvolved with the plaintiffs who brought the suit – does not change the result one iota.  “The bare fact that BMS contracted with a California distributor is not enough to establish personal jurisdiction in the State.”  Id. at 1783.

But plaintiffs in In re Amiodarone Cases, No. JCCP 4956, slip op. (Cal. Super. Jan. 10, 2019) may not have been paying close enough attention to that portion of the decision.  When defendant manufacturers challenged the lack of personal jurisdiction over the claims of non-residents, plaintiffs relied exclusively on the manufacturers’ relationship with an in-state distributor.  BMS wasn’t decided that long ago as to have been forgotten already?  No, the court remembered it quite accurately.

Plaintiffs, whose claims were premised on allegations of off-label use and failure to provide the Medication Guide, argued that the supply agreements entered into by the drug manufacturers and the California-based distributor conferred specific personal jurisdiction because they contained provisions agreeing the contracts were governed by California law.  But that didn’t amount to a contact related to plaintiffs’ lawsuit that would give rise to personal jurisdiction.  The choice of law provision applied to disputes over the contract, not plaintiffs’ products liability claims.  Id. at 7.  Additional provisions of the supply agreements provided that California law applied and California was the appropriate venue for disputes regarding the indemnification requirements of the agreements.  Those provisions even said that for such disputes, the parties agreed to waive personal jurisdiction and inconvenient forum arguments.  Id. at 7-8.  Despite the plain language of the agreements, plaintiffs tried to argue that those provisions should equally apply to the underlying claims that may trigger the indemnification provisions.  And once again the court reiterated that the contractual obligations between the manufacturers and distributor was “not evidence of a contact for jurisdictional purposes.”  Id. at 8.

But plaintiffs pressed on.  They also argued that they were third-party beneficiaries under the supply agreements and therefore could enforce the personal jurisdiction waiver.  Id.  But just because the supply agreements set up the chain of distribution that may have ultimately led to plaintiffs ingesting the drug did not make plaintiffs third-party beneficiaries.  Moreover, the waiver was “expressly limited” to indemnification disputes and so wouldn’t apply to products liability actions anyway.  Id.

Choice of law didn’t work.  Third-party beneficiary didn’t work.  What about compliance clauses?  The supply agreements contained compliance clauses that stated that the drugs shall comply with all governing laws and regulations, will not be adulterated or misbranded, and will comply with the Prescription Drug Marketing Act.  Id. at 8-9.  But again, the court found those clauses don’t run to plaintiffs or their claims and so can’t be used to establish specific personal jurisdiction.

If not the supply agreements, what about compliance with regulations?  Plaintiffs argued that manufacturers were required to provide the California distributor with the Medication Guide which it in turn was required to distribute to physicians and pharmacies.  This, they claimed, evidenced a sufficient connection between California and the non-resident plaintiffs’ claims.  Id. at 9.  But, going back to BMS, that a manufacturer has business transactions with third-parties isn’t sufficient.  To satisfy due process, a defendant must be “haled into court in a forum state based on its own affiliations with the State, not based on the ‘random, fortuitous, or attenuated’ contacts he makes by interacting with other persons affiliated with the State”  Id.  Here, plaintiffs have more than enough evidence to establish a relationship between the manufacturers and their supplier, but they’ve offered no evidence to take the leap of a connection to the non-resident plaintiffs.  There is no evidence that any non-resident plaintiff took Amiodarone distributed by any California-based distributor.  Id.

What about derivative liability?  Plaintiffs argued, but offered no authority to support, that the indemnification provisions in the supply agreement create derivative liability by manufacturers for conduct of McKesson.  Id. at 10.  The best plaintiffs could come up with here was to rely on California’s old sliding scale approach to personal jurisdiction.  But that was expressly rejected by BMS.

Finally, what about the fact that the manufacturers sold the drug to the distributor in California?  It’s irrelevant because it’s completely unconnected to the plaintiffs.

Call it persistence.  Call it “E” for effort.  Call it insanity.  If the question of personal jurisdiction via third-party contacts wasn’t sufficiently answered in BMS (by the way, it was), In re Amiodarone should be viewed as shutting the door for good in California.

We did a search of the DDL Blog for “continuing violation” and found only one other reference and that was simply to note that the court rejected the theory without explanation.  So, it’s not the first time a plaintiff has tried to argue the continuing violation theory to avoid the statute of limitations in a pharmaceutical case, but this time the Eighth Circuit gave it just a little more attention and fortunately found it equally unpersuasive.

The continuing violations doctrine is an exception to the statute of limitations that allows a plaintiff to recover for acts which if treated individually would be time-barred by treating them as either a pattern of violations or a single violation.  At its core, the doctrine is fairly simple, where a defendant’s conduct is deemed to be continuing in nature, the court can toll the statute of limitations.  For instance, in the case of an environmental tort, the continuing violations doctrine considers each day an illegal dump site remains a new and separate act.  And as long as one of those related acts falls within the limitations period, plaintiff’s claim is not time barred.  The doctrine is also often used in employment discrimination cases where the discriminatory or harassing conduct occurs over a significant period of time.

But in a pharmaceutical products liability case?  That is what plaintiff argued in a case dismissed as barred by the statute of limitations in In re Mirapex Products Liability Litigation, 2019 U.S. App. LEXIS 849 (8th Cir. Jan. 10, 2019).  Mirapex is a drug used to treat Parkinson’s disease.  Plaintiff alleged that he suffered gambling and other financial losses as a result of developing obsessive compulsive disorder from taking the drug.  Id. at *1.  Plaintiff started taking Mirapex in January 2006 and started reporting compulsive behaviors to his prescriber in January and April 2008.  At which time, his prescriber discussed the association between Mirapex and such behaviors and recommended cutting back on plaintiff’s dosage, which plaintiff resisted.  Plaintiff continued taking the drug until July 2010.  Plaintiff filed suit in December 2010.  Id. at *2-3.

Plaintiff’s claims were governed by California’s two-year statute of limitations.  It was undisputed that plaintiff’s claims initially accrued no later than April 2008.  Id. at *4.  So, without a tolling or other exception, the claims would be time barred.  Plaintiff made two arguments to overcome the limitations period.  His first argument was that the limitations period was tolled due to insanity.  The argument is very fact sensitive and tied to the allegations that the drug caused behavior that caused plaintiff to be financially irresponsible and unable to understand the nature of his actions.  We aren’t going to go through the details of this argument, but suffice it to say that since at the time his claims accrued plaintiff was a full-time college professor and chair of his department who earned extra income from numerous speaking engagements, owned and operated two rental properties, and who had never been treated for mental illness or any psychological disorder – the court found he was not insane under California law.  Id. at *7-10.

That brings us to plaintiff’s continuing violation theory.  Plaintiff alleged that each ingestion of the drug was a separate and distinct claim.  In fact, 5,000 separate and distinct claims from January 2006 to July 2010.  Id. at *10.  Under plaintiff’s theory, he would be able to sue for damages caused by each ingestion within 2 years of December 2010 regardless of when his claim first accrued.  The court noted that under federal law, the “critical question” in determining whether there has been a continuing violation “is whether a present violation exists.”  Id. at *11 (citation omitted).  And there’s the rub.  Plaintiff’s claims are based on an alleged failure to adequately warn him of the side effects of Mirapex.  That failure to warn is a “single wrongdoing” that accrued when his prescriber advised him of the relationship between compulsive behavior and the medication.  Id. at *11-12.  A new failure to warn cause of action did not arise with every pill plaintiff took.  As the court noted, because the drug was FDA-approved for the treatment of Parkinson’s disease and prescribed for that purpose, “the wrongdoing isn’t taking the pill.”  Id. at *12.  While his alleged injuries continued as a result of his voluntarily continuing to take the drug, his earlier gambling losses were “appreciable and actual harm” that triggered the running of the statute of limitations.

If each ingestion was considered a separate act triggering a new limitations period, the continuing violations doctrine could essentially swallow the statute of limitations in prescription drug litigation.  And since we can’t conceive of any other outcome for this argument, we hope this is the second and last time we need to address this issue.

While 2019 is solidly under way, we’re still catching up on a sizable number of favorable decisions to have come down right before the new year.  That’s certainly not a complaint.  We love a full plate of defense wins.  So, for today’s post we’re reaching back a few weeks to tell you about a decision coming out of Middlesex County Superior Court in New Jersey in what we believe is the first ever decision on a motion to dismiss in a case alleging breast implant associated-anaplastic large cell lymphoma (BIA-ALCL).  BIA-ALCL has been receiving a decent amount of publicity recently as well as significant regulatory activity since 2011.  And this is one of several BIA-ALCL cases pending in New Jersey.  So, the decision is significant as a case of first impression with hopefully trend-setting implications.

The case is Cashen v. Johnson & Johnson, 2018 WL 6809093 (N.J. Super. Law Div. Dec. 24, 2018).  Plaintiff underwent surgery in 2008 during which defendant’s breast implants were implanted.  In 2016, plaintiff was diagnosed with ALCL requiring surgery to remove infected lymph nodes and chemotherapy.  Id. at *2.  The parties agreed that Ohio law governed plaintiff’s claims as that is where the alleged injury arose.  Plaintiff brought claims for fraudulent misrepresentation, fraudulent concealment, consumer protection, design/warning/manufacturing under the Ohio Products Liability Act (“OPLA”), and express warranty.  Defendant moved to dismiss all claims on both preemption and substantive state law grounds.  Id.

Because the breast implants are pre-market approved medical devices, they are subject to express preemption under Riegel v. Medtronic, 552 U.S. 312 (2008) if plaintiff’s claims seek to impose state law requirements that are different from or in addition to the federal requirements imposed as part of the PMA process.  Id. at *5.  The court found that was the case with respect to plaintiff’s fraudulent misrepresentation and concealment claims:

Inherent in the FDA’s approval of the product is its finding that the product and its label have met the federal requirements as a Class III medical device. Therefore, it stands that any claims of fraudulent misrepresentation and fraudulent concealment seek to either (1) impose different or additional requirements to those that the FDA has already determined to have been satisfied or (2) stand in the place of the FDA and enforce federal requirements. The former would make the claims expressly preempted while the latter would be impliedly preempted.

Id. at *7.  Plaintiff attempted to bypass preemption by arguing that her fraud claims were “not based on the safety or effectiveness of the implants.”  Id.  Which was belied by the allegations of the complaint that focus on “serious physical harm” and misrepresentations about “safety” of the product.

The court also found that under Ohio law, plaintiff’s fraudulent misrepresentation and fraudulent concealment claims were abrogated under the OPLA.  The text of the OPLA provides that it abrogates all common law products liability claims.  Id. at *8.  And Ohio courts have determined that fraud claims premised on a failure to warn or a duty to make additional warnings are products liability claims subsumed under the OPLA.  Again, plaintiff attempted to re-write her complaint and argued that her fraud claims were premised on a general duty not to deceive rather than on a duty to warn.  Id.  But the court again found that argument contradictory to the allegations of the complaint which were clearly focused on concealments regarding safety – like a failure to warn claim.

Next up was plaintiff’s claim for violation of the Ohio Consumer Sales Practices Act (”OCSPA”).  Here the court opted not to decide the federal preemption question, instead relying on the abrogation of the claim by the OPLA.  The court noted that under Ohio law, medical devices are not considered consumer goods under the OCSPA.   Id. at *9.

Which then brings us to the plaintiff’s OPLA claims for design, warning, and manufacturing defect.  Because the implants were PMA approved, they have “satisfied the FDA’s strictest requirements for medical devices.”  Id. at *10.  Therefore, any claim for design defect must be preempted “because any alternative design would violate the product’s PMA.”  Id.  As for plaintiff’s manufacturing defect claim, it was premised on “generic allegations” lacking the specificity required to overcome preemption.  Plaintiff’s warning claim likewise failed because the FDA had already approved the implant’s warnings, making any state law finding that the warning was inadequate a different requirement.  Id.

Plaintiff’s breach of express warranty claim suffered the same fate.  The claim would ask the jury to find that the product was not safe and effective as labeled – which would be in direct conflict with the FDA’s PMA conclusions.  Id. at *11.

As if that wasn’t enough – the icing on this cake is that the dismissals were with prejudice.  Plaintiffs had sought leave to amend but it appears the court concluded that amendment would be futile given the preemption analysis.

Congratulations to Dustin Rawlins, Peter Choate, Monee Hanne, and Rachel Byrnes at Tucker Ellis and Michael Zogby and Jessica Brennan at Drinker Biddle on this excellent decision.

You can waive remand.  That’s Lexecon, Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998).  But, if you agree to remand, you’re going back whence you came.  So said the Judicial Panel on Multidistrict Litigation earlier this month in In re: Biomet M2A Magnum Hip Implant Products Liability Litigation, 2018 WL 6426830 (JPML Dec. 6, 2018).

That’s pretty much all the 4-paragraph opinion says on this issue of first impression.  The JPML cannot “redirect the remand” to a non-originating court.  What the opinion doesn’t tell is why the request was being made in the first place.  So, we did a little digging.  At issue were three cases selected for remand from this MDL.  The Chadwick case had been originally filed in state court in New Jersey and subsequently removed to federal court.  Plaintiffs included as a defendant a company whose sole role in relation to the device at issue was to supply raw materials.  That company, a New Jersey company, was the only thing establishing venue in New Jersey.  Memo. Of Law in Support of Motion of Defs. To Vacate Conditional Remand Order, No. TXS/4:14-cv-00232, Dkt. No. 12-1 (JPML), at 2-3.  Plaintiff is a resident of Wyoming and Biomet is an Indiana company.  The New Jersey defendant filed a motion to dismiss based on the immunity afforded raw material suppliers under the Biomaterials Access Assurance Act (“BAAA”).  Feels like the New Jersey company was present simply to allow some forum shopping by plaintiff.  Prior to remand, however, plaintiff agreed to dismiss the raw material supplier and with that dismissed the only link to New Jersey.  Id.

The second case, Carter, was filed in the Southern District of New York before being transferred to the MDL.    Plaintiff Carter, however, lived in Virginia and had surgeries in Virginia and North Carolina.  Her complaint does not include any allegation why venue would be appropriate in New York.  Id. at 3-4.  Similarly, the plaintiff in the Richards case filed suit in the Southern District of Texas, but she resides and had surgery in cities that fall in the Northern District of Texas.  Id. at 4.

At the time of remand, the MDL judge was willing to grant the parties’ request that these three cases be transferred to appropriate venues that were not their originating courts.  However, in the suggestion of remand, the judge concluded that he had no authority to grant the relief requested by the parties and listed the remand jurisdiction for each case as the original transferor courts.  Id. at 5.

Defendants argued that the logic of Lexecon should apply.  In effect, that there was no difference between waiving remand to the transferor court to allow trial to take place in the MDL and waiving remand to the transferor court to allow trial to take place in a different, but appropriate venue.  Id. at 6.  Defendants also made the points that denying the request now was simply inefficient because they would file change of venue motions post-remand that were highly likely to succeed and that at least as to New Jersey and New York there were also personal jurisdiction issues.  Residents of Wyoming and Virginia were suing Indiana companies in New Jersey and New York.  And that hasn’t been allowed since Daimler AG v. Bauman, 571 U.S. 117 (2014).

But the JPML was unpersuaded finding that the statute, 28 U.S.C. § 1407(a), afforded it “no discretion.”  The only remand destination allowed is the original transferor court, even if the parties agree that jurisdiction is improper.  In re: Biomet, at *1. 

So, other than this now being the rule of law, to us it is also indicative that Congress did not contemplate the current forum shopping practices.  Cases should be remanded from where they came because they should have been filed in appropriate jurisdictions from the outset.  But, we know that’s not the reality.  We are optimistic that the issue will be resolved correctly post-remand, but where venue is so clearly not present, we don’t see the harm in arming the JPML with the tools to get the job done.

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!