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The defendants in the Eliquis MDL have turned somewhat of a preemption hat trick. The latest order is In re Eliquis (Apixaban) Prods. Liab. Litig., No 17-md-2754 (S.D.N.Y. Nov. 29, 2017), where the district court dismissed twenty-four cases newly transferred into that MDL.  We will explain why in a moment, but first a little background.  The defendants scored their first goal in a case called Utts—which resulted in pair of orders (one before the MDL was formed and one after) ruling that federal law impliedly preempted the plaintiffs’ failure-to-warn and design defect claims.  These were important orders.  As we explained in detail here, the district court very clearly explicated the three Supreme Court opinions that mainly shape implied preemption in the prescription drug space—Wyeth v. Levine, Mensing, and Bartlett.

We all understand that Wyeth v. Levine opened the anti-preemption door by recognizing that an innovator drug manufacturer could sometimes change its label without the FDA’s pre-approval through the Changed Being Effected (or “CBE”) process.  Because that allowed the manufacturer, under some circumstances, to change its label to accommodate state law without running afoul of federal law, implied preemption did not necessarily apply.  Then came Mensing, which held that federal law impliedly preempted failure-to-warn claims against generic drug manufactures because generic manufacturers cannot use the CBE process, and therefore cannot change their labels without pre-approval.  That leaves generic manufacturers between a federal rock and a state-law hard place, which equals preemption.

Finally, Bartlett.  There, the Supreme Court held that federal law impliedly preempted state-law design defect claims for similar reasons, i.e., a generic drug manufacturer cannot change a drug’s design without pre-approval either, thus again triggering implied preemption.  We have said multiple times in this space that Bartlett’s rationale is not limited to generic manufacturers because an innovator drug manufacturer also cannot change its product’s design without pre-approval.

That is where Utts came in.  Although dealing with an innovator drug, the district court applied Bartlett to dismiss the design defect claims.  In the part that we like the most, the court also applied Wyeth and Mensing to dismiss the warnings claims because the plaintiffs did not present any “newly acquired information.”  Because “newly acquired information” is required to invoke the CBE process, the defendants could not change the Eliquis label without federal pre-approval.  Under those circumstances, a state-law tort claim would conflict with federal law, thus preemption.  The district court granted the plaintiffs leave to amend, but they again failed to plead any “newly acquired information.”  Moreover, because the labeling already warned stridently about the risk at issue (bleeding) the warnings were adequate as a matter of law, too.  Case dismissed without leave, as we explained here.

The defendants scored their second goal when the district court applied Utts to other cases in the MDL.  The order that caught our eye was Fortner, which we covered here.  In Fortner, other plaintiffs attempted to plead state-law claims that were not preempted.  But try as they might, these plaintiffs also could not plead any “newly acquired information.”  The CBE process there was still unavailable; the defendants still could not alter the labeling without pre-approval; and federal law still preempted their claims.  And, by the way, the warnings were still adequate as a matter of state law.  (Careful readers have figured out by now that we have oversimplified these orders for brevity, but you get the idea.  You can read our prior posts here, here, and here to get the gory details.)

Which brings us to the defendants’ third goal scored—application of Utts to cases newly transferred into the Eliquis MDL.  To start, we admire the district court’s process.  The district court used Utts as a vehicle to decide preemption in the first instance, and once it set the rules, it ordered any plaintiff assigned or transferred to the MDL to show cause within 14 days why his or her case should not be dismissed.  Slip op. at 2.

These twenty-four plaintiffs, newly transferred from the District of Delaware, complied with the court’s order and made three arguments, none of them successful. They argued first that Utts did not apply because they omitted from their amended complaints some of the material that appeared in the Utts amended complaint.  Slip op. at 4.  In other words, their claims should survive because they were more vague and less complete in asserting their claims.

The plaintiffs in Fortner tried this tactic too—we’ll call it pleading by obfuscation.  But it did not work there, and it did not work here either:  “Even without reference to the documents on which the amended complaint in Utts relied, the complaints ‘simply do[ ] not provide sufficient factual content to support a plausible inference that there exists newly acquired information such that the defendants could unilaterally have changed the Eliquis label to include additional warnings.’”  Slip op. at 5 (quoting Fortner).

Plaintiffs also argued that the warnings were inadequate under their various states’ laws, but they did not explain why. Nor did they “even cite the statutes or case law that pertain to the adequacy of a label’s warnings for any jurisdiction.”  Slip op. at 5.  Thus, “[i]n the absence of citation to any authority, it is unnecessary to address the argument further.”  Slip op at 5.  Finally, the plaintiffs asked to be remanded to the District of Delaware.  That’s right.  If you can’t win, get out of Dodge.  But they again failed to “explain a basis” for granting that relief.

We mused in our last post on Eliquis that this MDL may not last long, and we seem to have been correct. Moreover, given the sound basis for the district court’s preemption rulings, we doubt the plaintiffs will do any better elsewhere.

We wrote a few months ago about what you will see from the plaintiffs’ side as they try to evade the Supreme Court’s opinion in BMS v. Superior Court.  That opinion has combined with Bauman to reset personal jurisdiction and restore fairness to a system that had gotten out of whack, particularly in the mass tort world in which we often dwell.  Plaintiffs have resisted this reset, even though there is no rational reason why they should.  A more disciplined approach to personal jurisdiction imposes absolutely no burden on plaintiffs, who remain free to sue where the defendants are “at home” or (if different) where the operative facts occurred with regard to those defendants.  The resistance comes from their attorneys, who would prefer to concentrate masses of case in fewer jurisdictions of their choosing so they can make more money with less effort.  We are not judging; they are merely exploiting the incentives built into our civil litigation system.

So what is in their personal jurisdiction playbook? We reported before that plaintiffs will try to stretch even the most tenuous forum contacts into specific personal jurisdiction.  Or they will assert that defendants “consented” to jurisdiction in a particular state through such routine activities as registering to do business.  If those do not work, the fallback position will always be to request “jurisdictional discovery,” even when the facts relevant to forum contacts are either undisputed or are already within the plaintiffs’ control.

Plaintiffs recently added to those tactics in a hernia mesh MDL in New Hampshire, In re Atrium Medical Corp. C-Qur Mesh Products Liability Litigation, No. 16-md-2753, 2017 WL 5514193 (D.N.H. Nov. 14, 2017), where the issue was whether the court had personal jurisdiction over a holding company based in Sweden.  The company did not make or sell the products in question, and it was undisputed that the company had no direct contacts with the United States.  Of course, the plaintiffs sued the device manufacturers too, and those companies did not contest jurisdiction in New Hampshire.  But wanting deeper pockets in which to reach, or simply to increase their nuisance value through harassment, the plaintiffs opposed the holding company’s motion to dismiss on multiple grounds.

First, the plaintiffs argued that the Swedish company waived its personal jurisdiction defense by participating in the MDL and complying with the court’s initial case management orders.  That argument was obviously frivolous.  The Swedish company asserted the lack of personal jurisdiction as an affirmative defense in its answer and simultaneously filed a motion to dismiss on that basis.  It is certainly possible for a defendant to waive its personal jurisdiction defense, but the Federal Rules allow a defendant to preserve a personal jurisdiction defense by way of answer (unlike some states).  The Swedish company did that, and it also moved to dismiss as soon as it answered.  That is not a waiver.  Id. at *2.

Second, the plaintiffs argued that the Swedish company was judicially estopped from contesting jurisdiction because the company participated in product liability cases in New Hampshire and California and had itself sued someone in Delaware state court.  This argument borders on frivolous as well.  Judicial estoppel prevents litigants from taking a contested legal position in one case to gain an advantage then taking the opposite position in another case to gain an advantage there, too.  A common example is a plaintiff who discharges his debts in bankruptcy by representing that he has no product liability claims, but then turns around and represents to another court that he actually has a claim by filing a complaint.  You can’t do that.  Another example, which we wrote about here, is when a plaintiff defeats preemption by arguing that a drug manufacturer’s label change was voluntary, but then turns around and argues later that the label change was not a subsequent remedial measure because it was actually mandatory.  That’s wrong, too.  Here, the Swedish company was neither talking out of both sides of its mouth nor trying to gain an unfair advantage.  There are many reasons why a defendant would voluntarily submit to a court’s jurisdiction in one case but not in another, especially when the rules have recently changed.  Moreover, if the plaintiffs were correct, a defendant who voluntarily submitted to personal jurisdiction in any state would be permanently estopped from asserting the defense anywhere and everywhere.  Ridiculous.  The court did not think much of the argument either. Id. at *3.

Third, the plaintiffs argued that the other defendants’ forum contacts could be attributed to the Swedish company because the Swedish company assumed responsibility for the other companies’ liabilities and because the companies were alter egos or agents of each other.  This version of “piercing the corporate veil” is very difficult for plaintiffs to satisfy, and while the plaintiffs gained some traction with this argument, they are hardly out of the woods yet.  The rules as applied in an MDL are a little different, and because we have never seen them set forth quite so clearly, we will repeat them here:

In multi-district litigation cases . . . the [specific personal jurisdiction] inquiry is often more complicated. In multi-district litigation based on diversity jurisdiction, ordinarily personal jurisdiction in the transferee court is based on the jurisdiction of the transferor court.  The transferee court then separately applies the state law pertaining to personal jurisdiction applicable in each of the transferor courts.  The transferee court, however, conducts “this analysis according to the law not of the transferor circuit,” but rather according to the law of the circuit in which it sits.

2017 WL 5514193, at *4 (citations omitted).  In other words, an MDL court applies the long-arm statute of the state in which the case was initially filed, but ultimately determines personal jurisdiction under the precedent of the circuit in which it sits.  There are also issues around personal jurisdiction over out-of-state defendants when MDL judges permit “direct filing” into multidistrict litigation, which we discussed at some length here.  This is one reason why the venue of an MDL, as selected by the J.P.M.L., matters.

The court also set forth the various procedural approaches to deciding a personal jurisdiction challenge: The court can determine whether the plaintiff has made a mere prima facie showing that personal jurisdiction exists, or it can conduct a full-blown evidentiary hearing and decide personal jurisdiction on a preponderance-of-the-evidence standard.  A third option falls in between these two ends of the spectrum.  Under the “intermediate standard,” also known as the “likelihood standard,” the court can weigh evidence and find “whether the plaintiff has shown a likelihood of the existence of each fact necessary to support personal jurisdiction.” Id. at **4-5.

The district court decided it would apply the “intermediate standard,” but would do so only after allowing additional discovery. That’s right—jurisdictional discovery.  We have expressed our opinion on jurisdictional discovery—we don’t think that it will make any difference except in the most exceptional cases and should not be allowed.  We also think that jurisdictional discovery is an area appropriate for cost-shifting under Rule 26(c)(1)(B).  This court, however, is allowing it.  But not the oppressively overreaching discovery that, of course, the plaintiffs proposed, which the court rejected as “broader than necessary to address the jurisdictional issues that have arisen.” Id. at *9.  Instead, the court directed the plaintiffs to serve discovery “focused on the issues,” which presumably includes the agency and alter ego theories that the plaintiffs advanced. Id. The discovery many or may not make any difference.  Only time will tell, but either way, the DDL Blog will be monitoring.

We have always thought that the False Claims Act resides in some sort of alternate universe when it comes to pharmaceutical products. The central concept behind the FCA is easy:  The FCA penalizes anyone who presents, or causes to be presented, to the federal government “a false or fraudulent claim for payment or approval.”  31 U.S.C. § 3729(a)(1).  In other words, you can’t swindle the government.  That is the basic point you need to know to understand the Act, but if you want more detail you can review our recent FCA primer here.

It starts to get fuzzy when a plaintiff (or more accurately the “relator” under the FCA) tries to append the FCA to allegations of off-label promotion of prescription drugs. In the case of truthful off-label promotion, there is no falsity.  And, the defendant drug manufacturer has usually made no claim to the government for payment.  So where is the eponymous “false claim”?  Add to that the increasingly common practice of applying Rule 9(b)’s particularized pleading standard to FCA allegations across the board, and you see an increasing number of opinions holding that plaintiffs cannot use off-label promotion as the basis for their FCA claims.

That is what a divided Sixth Circuit panel decided in United States ex re. Ibanez v. Bristol-Myers Squibb Co., No. 16-3154, 2017 U.S. App. LEXIS 21328 (6th Cir. Oct. 27, 2017).  In Ibanez, two former sales representatives brought a qui tam action on behalf of the government alleging that the defendants “engaged in a complex, nationwide scheme” to improperly promote the prescription drug Abilify through off-label promotion and illegal kickbacks to physicians. Id. at *2.  Their claims failed, however, for the same reason that most FCA claims fail in this context:  The relators could not allege with particularity a connection between the manufacturers’ alleged conduct and a claim for payment made to the government.  The court’s synopsis of the pleading standard highlights how a relator has to allege facts linking it all together:

A claim under [the FCA] “requires proof that alleged false or fraudulent claim was ‘presented’ to the government.” At the pleading stage, this requirement is stringent:  “where a relator alleges a ‘complex and far-reaching fraudulent scheme,’ in violation of [the FCA] it is insufficient to simply plead the scheme; [s]he must also identify a representative false claim that was actually submitted to the government.”

. . . . Rule 9(b) requires relators to adequately allege the entire chain—from start to finish—to fairly show defendants caused false claims to be filed.

Id. at *9-*10 (citations omitted, emphasis added). When applied to alleged improper promotion of prescription drugs, the causal chain gets sketchy:

First, a physician to whom [the manufacturers] improperly promoted Abilify must have prescribed the medication for an off-label use or because of improper inducement. Next, that patient must fill the prescription.  Finally, the filling pharmacy must submit a claim to the government for reimbursement on the prescription.

Id. at *10. According to the Sixth Circuit, this chain “reveals just what an awkward vehicle the FCA is for punishing off-label promotion schemes.” Id.

“Awkward vehicle.” Those are the Sixth Circuit’s words, not ours, but the description is apropos.  These relators were unable to allege a single representative false claim, because they could not allege the causal chain from beginning to end.  Although they alleged that the defendants made false statements in order increase Abilify prescriptions, they could not allege any connection between the alleged statements and any claim to the government. Id. at *14.  They could not allege a conspiracy to violate the FCA either because having a plan to increase prescriptions through improper promotion “may be condemnable,” but it does not amount to an agreement “made in order to violate the FCA.” Id. at *16 (emphasis in original).  The court acknowledged an exception to this stringent pleading requirement—the so-called Prather exception—where a relator has personal knowledge directly related to billing practices, supporting a “strong inference that a false claim was submitted.” Id. at *11-*12.  But these relators were former sales representatives with no involvement in government billing.  The majority held that their lack of personal knowledge negated the Prather exception, although the dissenting judge disagreed. Id. at *13, *34-*37.

The relators therefore failed to state a claim, and the Sixth Circuit also rejected their proposed amended complaint because it had all the same problems as the former complaint: The relators alleged that various pharmacies submitted claims to Medicaid for Abilify prescriptions, but they could not identify the prescribing physicians or otherwise connect the claims to the defendants’ alleged conduct. Id. at *23-*24.  They alleged that certain physicians prescribed Abilify covered by Medi-Cal, but could not allege that the prescriptions were off label or resulted from any improper promotion. Id. at *24.  They alleged that a certain patient was prescribed Abilify off label, but they could not allege that the prescription was presented to the government for payment or was connected to the alleged improper promotion. Id. at *24-*26.

The proposed conspiracy claim in the amended complaint failed for similar reasons: The claims were not adequately tied to any allegedly false statements made by the defendants.  “Thus, the connection between the false statements and claims submitted to the government remains ‘too attenuated to establish liability.’” Id. at *27-*28.

There are other wrinkles in the opinion, but we have covered the essentials. If there is one takeaway from the opinion (and this blogpost), it is this:  An FCA claim based on improper promotion of prescription drugs will almost always fail because there are too many links in the causal chain leading from the alleged promotional activity to a claim for payment submitted to the government.  The first link may be the most difficult.  Physicians exercise their independent medical judgment in writing prescriptions every day, including prescribing drugs for off-label uses.  Who is say whether any one decision was actually influenced by off-label promotion?  When adding in the patient’s decision to fill the prescription and the pharmacy’s decision to submit a claim for government reimbursement, the connection becomes “too attenuated.”  Or, as the Sixth Circuit put it, awkward.

We are sure you all heard about the $417 million verdict returned recently against a talcum powder manufacturer in Los Angeles, and we are equally sure you heard about the trial court’s order setting the verdict aside a couple of weeks ago and entering judgment in favor of the defendants. See In re Johnson & Johnson Talcum Powder Cases, No. BC628228, 2017 WL 4780572 (Cal. Superior Ct. Oct. 20, 2017).  We will repeat that result because it’s really important:  The trial court did not just grant a new trial.  It found that there was no substantial evidence to support the verdict and entered judgment for the defendants.  Not another trial; a complete win on a post-trial motion, which is relatively rare under California procedure.

It is an important order for many reasons. In today’s world of mass litigation, we often see cases involving the same products and similar allegations result in verdicts that vary—and sometimes they vary substantially.  In cases alleging that talc products cause ovarian cancer, the results have been striking—ranging from a defense verdict in one case to the aforementioned nine-figure wreck in another.

What gives? Well, the trial court’s order vacating the verdict paints a pretty clear picture of what happened in Los Angeles:  The jury, goaded by improper argument from the plaintiff’s counsel, ignored its instructions and spun out of control.  We will explain the court’s order in some detail below, but consider these nuggets:

  • The jury assessed 97 percent responsibility and $408 million in damages against a holding company for negligent failure to warn even though the company never made or sold one of the two products at issue and had not made the other since 1967, if ever.
  • The jury awarded “compensatory” damages of $68 million against the holding company and $2 million against the product manufacturer—figures that are exactly proportional to each company’s net worth. Hmm.
  • It was undisputed that no study has ever shown that talc can cause ovarian cancer, and some studies on which the plaintiff’s expert relied showed a relative risk in the range of 1.3, which tends to disprove causation. Yet, the jury found the products caused the disease.
  • The plaintiff had one expert on specific causation—the plaintiff’s treating physician, who conducted a hopelessly inconsistent “differential etiology” designed to reach her desired conclusion.

There is much more to the order, but suffice it to say that this trial court exercised its duty to right a wrong. The plaintiff alleged that she used one of two talcum powder products daily from about 1965 to 2016 and that she developed high grade serous ovarian cancer as a result. Id. at *1.  She sued the manufacturer of the products and its holding company, which itself may have made one of the products before changes to the business in 1967 (the evidence is not definitive on this point, but you get the gist). Id. at **1, 5.  According to the court, there is an ongoing debate in the scientific community as to whether talc usage can cause ovarian cancer or whether the science supports only an association, which is a profound difference. Id. To resolve this issue, the parties presented the jury with evidence focusing largely on epidemiological studies, and when all was said and done, the case went to the jury on the theory that the defendants negligently failed to warn regarding a known or knowable risk. Id.

After the jury returned its verdict, both defendants moved for judgment notwithstanding the verdict and a new trial. We’re not going to cover everything, and because the middle of the order (addressing the reliability and sufficiency of the plaintiff’s specific causation case) is the most important part, we will start there.

The manufacturer’s motion for judgment notwithstanding the verdict.  It’s all about the experts, and that is where the plaintiff failed to prove her case.  Her only expert on specific causation was her treating physician, who conducted a “differential etiology” analysis and opined that it was more probable than not that the products caused the plaintiff’s high grade serous ovarian cancer. Id. at *3.  The opinion, however, unraveled from there.  We have at times criticized the “different diagnosis” or “differential etiology” as a method for determining causation.  The approach was developed as a diagnostic method, not a method for attributing cause.  And because it is a process of elimination, it can result in a causation opinion by default—the expert says she “ruled out” everything else, so it must have been the product.

Despite our reservations, we understand that courts have accepted causation opinions based differential diagnoses. The method, however, must be applied in a reliable way, and that is where the trial court here got it right, including by citing one of our favorite cases, Glastetter v. Novartis:

In performing a differential diagnosis, a physician begins by “ruling in” all scientifically plausible causes of the plaintiff’s injury. The physician then “rules out” the least plausible causes of injury until the most likely cause remains.

In re J&J Talcum Powder, at *13 (citing Glastetter v. Novartis Pharms. Corp., 252 F.3d 986 (8th Cir. 2001) and Cooper v. Takeda Pharm. Am. Inc., 239 Cal. App. 4th 555 (2015)).  The “rule in” part is the most important because unless the expert has a reasonable scientific basis for “ruling in” the potential cause, it does not matter what else is “ruled out.”  The potential cause is not on the differential to begin with.

The plaintiff’s specific causation expert did not properly “rule in” talc products as a cause of the plaintiff’s ovarian cancer. Her only basis was epidemiology and a general reference to inflammation, which the plaintiff did not have. Id. at *14.  But none of the four studies on which the expert was permitted to rely showed odds ratios in excess of 2.0 that a woman using talc would develop serous ovarian cancer.  (A relative risk exceeding 2.0 would indicate that a women has more than a 50 percent greater chance of developing cancer than women who did not use talc, i.e., more likely than not.)  Two of the studies did not break out serous ovarian cancer, and the two that did placed the relative risk at 1.7. Id. Other studies on which the expert relied showed relative risk ratios “in the range of 1.3,” which tends to disprove causation. Id. The most recent study showed a relative risk of 1.0—i.e., women like the plaintiff had no greater risk and no lower risk of developing serous ovarian cancer than women of the same age in the general population. Id.

This is a long way of saying that the expert could not cite scientific evidence that talc caused the plaintiff’s disease. The plaintiff protested that epidemiology is not required to prove causation, but epidemiology is what the expert cited to “rule in” talc.  As the court said, “Although Yessaian testified that epidemiology was just one of the factors she looked at, she did not mention any others.” Id. The expert also did not “rule out” other causes, such as age and ovulatory cycles.  But the ruling that she could not “rule in” talc is the key take away from this order, along with the trial court’s very disciplined approach to the evidence and the law.

The holding company’s motion for judgment notwithstanding the verdict.  Although we are addressing this motion second, don’t underestimate how important it was that the trial court entered judgment for the holding company.  The lion’s share of the verdict was attributed to the holding company—no doubt because of its predictably robust net worth.  Call us jaded, but we are guessing the holding company’s net worth is the only reason the plaintiff sued that company to begin with.

The order granting judgment notwithstanding the verdict is the correct result. The holding company never made or sold one of the products at issue and it may have sold the other only until 1967.  There was no evidence that the company knew or should have known that talc probably would cause cancer during any time that it may have sold the product, and thus it had no duty to warn. Id. at **5-6.  Remember, failure to warn is the only theory upon which this case was tried.  The plaintiff tried to hold the holding company responsible for its subsidiary’s products through a hodgepodge of company documents, but they did not come close to showing that the companies shared an alter ego or agency relationship.  The court therefore granted JNOV for the holding company on the duty to warn, and also on punitive damages.  There simply was no clear and convincing evidence that a managing agent acted with malice either. Id. at *11.

Both defendants’ motion for new trial.  The court also granted the defendants’ motion for new trial.  You might wonder why the court granted a motion for new trial when it had already granted the motions for judgment notwithstanding the verdict and entered judgment in the defendants’ favor.  The reason is the inevitable appeal.  If the California Court of Appeal reverses the order granting JNOV for either defendant, it can still affirm the order granting a new trial and remand the parties to try the case again, rather than reinstate the original verdict.

Let’s hope it does not come to that, but regardless, the court accepted many (but not all) the proffered arguments for granting a new trial. First, because the plaintiff’s specific causation opinion was unreliable, the defendants’ motions to exclude or strike that opinion should have been granted. Id. at *20. Second, the court should not have allowed introduction of a newspaper article on condoms, which said that concern about talc and ovarian cancer “goes back 50 years” in the medical literature and that condom manufacturers removed talc from condoms in the 1990s for that reason.  It was rank hearsay, and although it came in through an expert, it should not have.  Compounding the error, the plaintiff’s counsel ignored the court’s limiting instruction and referred to the article several times in closing. Id. at **21-22.

Third, counsel ignored another limiting instruction by arguing to the jury that the defendants “prevented regulation” and prevented the government from listing talc as a carcinogen—so-called “lobbying.”  The “lobbying” evidence did not go so far, hence the limiting instruction, which counsel violated. Id. at **22-23. Fourth, two jurors executed declarations stating that the jury considered taxes and attorneys’ fees in reaching its verdict, which was contrary to instructions and improper. Id. at **23-24. Fifth, although the $2 million compensatory verdict against the product manufacturer was not so excessive as to require a new trial, the $68 million verdict against the holding company plainly was. Finally, because there was insufficient evidence to support punitive damages against either defendant, the punitive damages award was plainly excessive, too.

That is all you really need to know, maybe more. The trial court here gave every inference to the plaintiff, yet still found the evidence lacking, and now comes the appeal.  The parties will not get a result in 2017, so we will set our gaze to 2018 and wait and see.  Whatever the result, we have a feeling that this case will appear on one of our top ten lists for 2018.

“Legal conclusions, though, are not entitled to the assumption of truth.” If that were the only point we could take away from Wright v. Howmedica Osteonics Corp., No. 5:17-cv-459, 2017 U.S. Dist. LEXIS 168785 (M.D. Fla. Oct. 12, 2017), we would be satisfied.  We understand notice pleading and such, but we have seen all too many complaints—mainly in state court—where the allegations consist of little more than reciting the elements of the cause of action.  Thank you, we are aware that a product liability claim for the most part involves alleging a defect in the defendant’s product, an injury, and a causal connection between the two.  But merely saying it does not make it so, particularly in federal court where TwIqbal rules the day and demands factual content that allows the court actually to tell whether the defendant could be liable for the misconduct alleged.  (You can see our updated TwIqbal cheat sheet here.)

The Wright order therefore is a sight for sore eyes, in all ways but one.  (The title of this post may give you an idea of our one area of dissatisfaction, which we will get to, we promise.)  The plaintiff in Wright alleged that a prosthetic hip insert caused her injury, and she sought remedies under a number of theories—negligent manufacturing, strict liability for manufacturing defect, negligent labeling, strict liability for failure to warn, negligent recall procedures, and strict liability for recall procedures. Id. at **1-3.

The problem for the plaintiff was that she set forth the elements of these purported causes of action, but did not allege facts describing what the defendant did wrong or how it caused her any damage. The court therefore started its analysis pretty much the same way we started this blogpost—merely alleging legal conclusion will get you nowhere on the pleadings because they “are not entitled to the assumption to truth.” Id. at *3.

What did the court mean by that? The remark appears first to lead into the court’s criticism of the plaintiff’s counsel.  The plaintiff filed one complaint, then an amended complaint, which the defendant moved to dismiss.  The district court granted that motion with leave to amend on the basis that the plaintiff had “not identified the alleged defect or the unreasonably dangerous nature” of the device. Id. at *3.  The plaintiff then filed a second amended complaint—her third try at alleging claims against this defendant—so the defendant moved to dismiss again. Id. at **3-4.

In response, the plaintiff “had the audacity” to file the same unsuccessful response that she filed in response to the first motion to dismiss, changing only the title and date on the proof of service. Id. at **4-5 & n. 4.  The district court was not amused:  “While the Court does not expect perfection, it expects more of counsel who appear before it. . . than what Plaintiff’s Counsel has shown to date.” Id. at *5.

And it did not improve from there. On strict products liability for a manufacturing defect, the claim failed because the plaintiff

does not allege what is defective about the [device] or how that defect caused Plaintiff’s injuries. Instead Plaintiff alleges in ipse dixit conclusions that the [device] is defective because she had pain sometime after the [device] was implanted.  That is not enough.

Id. at *6. The district court also had these very helpful words on the plaintiff’s allegation that the device was recalled:

Plaintiff’s allegation that the [device] was recalled is not a substitute for identifying the [device’s] defect. That is because a recall is not an admission that a product is defective.

Id. (emphasis added, citing Hughes v. Stryker Corp., 423 F. App’x 878, 880 (11th Cir. 2011)).  We will bank away this clear and unambiguous statement on product recalls for future use.

The district court thought the failure-to-warn claim was came closer to stating a claim, but it still fell short: The plaintiff alleged neither why the labeling was inadequate, nor facts showing that the plaintiff was damaged by an alleged failure to warn adequately. Id. at **7-8.  The negligence claims merely recited the elements of a negligence action (and now that we have said that, you are reciting those elements in your head, aren’t you?), but they were supported “by nothing but conclusions.” Id. at *8.  Finally, the claims based on the product recall failed because Florida law does not recognize a duty of care in connection with a recall separate from a general duty to act with reasonable care, and Florida does not recognize a claim for strict liability for product recall at all. Id. at **9-10.

In all, it’s a strong order, as it dismissed claims because the plaintiff “provide[d] conclusions and parrot[ed] elements of the causes of action,” but did not allege facts in support. Id. at *9.  She did not even make a genuine effort to allege facts in support.

Which leads to the one significant problem with the order—the district court granted leave to amend, even though the plaintiff had already had three opportunities to state a claim and could not do it. Three opportunities seem quite enough, and amending will be futile in any event for claims that do not exist under the controlling law in the first place.  So what gives?  We are not sure, but perhaps counsel will make a genuine attempt to state a claim, or maybe he will again recycle his already-rejected opposition when responding to the defendant’s next motion to dismiss.  It could turn out to be a sad retelling of the movie Groundhog Day, with the same events relentlessly playing out over and over again, except with a slightly different ending.  The district court here presumably has extraordinary patience, but perhaps not the patience of a saint.  We expect the next order to dismiss will be without leave to amend.

The California Supreme Court heard oral argument in T.H. v. Novartis on Monday.  That is the case where the California Court of Appeal held that a prescription drug manufacturer could be held liable for injuries allegedly caused by a product that it did not make and did not sell.  This situation usually presents itself when plaintiffs sue an innovator drug manufacturer for injuries allegedly caused by generic products. T.H. v. Novartis has an added twist—the innovator manufacturer that the plaintiff sued had not made or sold the product for six years.  It sold the product line to another manufacturer, who made and sold the product that the plaintiff allegedly used.

How then can the innovator manufacturer owe a duty to this plaintiff, when it did not sell the product that allegedly harmed her and had not sold the product for anyone’s use for six years?  We set forth our views on this question here and here, where we listed the Court of Appeal’s opinion in T.H. v. Novartis the fifth worst decision of 2016.

The argument before the California Supreme Court lasted well more than the one hour allotted, and it featured questions from all seven justices. We’re not going to give you a blow-by-blow account.  Our stenographic skills are not up to that task, and it would take too long anyway.  We will start, however, the same way counsel for the defendant did:  The case presents not one, but two issues of duty.  For the plaintiff’s case to proceed, the California Supreme Court would have to recognize two unique legal duties:  (1) the duty of an innovator drug manufacturer to users of its competitors’ generic products, widely called “innovator liability”, and (2) the duty of a product’s former manufacturer to users of products made and sold by subsequent manufacturers, which we will call “perpetual liability.”

Perhaps the Court already knows what it wants to do with innovator liability, because nearly all the questioning was on perpetual liability, and the answers did not completely satisfy all the justices. To start, both sides attempted to seize the status quo—the defendant argued that no court anywhere has ever held a former manufacturer liable for a injuries allegedly caused by a subsequent manufacturer’s product, and the plaintiff argued that everyone owes a duty to everyone else to refrain from negligence.

The argument, however, dwelled on the limits of duty and how/where the Court should draw the line. Only one thing was clear:  The Court was troubled by the prospect of liability in perpetuity for a manufacturer that no longer sells a product.  The plaintiff tried to minimize the issue, arguing more than once that the prospect of perpetual liability was overblown and that perpetual liability cases would be rare.  Counsel even suggested once that the Court’s questions were “stacking a rare hypothetical upon a rare hypothetical.”  Despite these efforts, the Court directly confronted the issue, with a couple of justices noting that the situation would not necessarily be rare.

Now, whether the Court will recognize a new duty for former manufacturers and, if so, how the Court will limit such a duty is anyone’s guess. Of course, the best and obvious solution is to adopt the bright-line rule urged by the defense, that a former manufacturer owes no duty at all to users of a subsequent manufacturer’s products.  This is what every court to consider perpetual liability has decided, and it follows California Supreme Court precedent holding that a manufacturer owes no duty to warn regarding hazards in another manufacturer’s product, most recently in O’Neil v. Crane Co., 53 Cal. 4th 335, 360 (2012) (“An interpretation of [the law] that would require a manufacturer to warn about all potentially hazardous conditions surrounding the use of a product, even when those hazards arise entirely from the product of another manufacturer, reaches too far.”).  It is likewise faithful to decades of product liability law in California and elsewhere, which places the duty to warn on a product’s manufacturers and sellers.

The Court questioned counsel on other potential limits, for example by asking repeatedly how long a former manufacturer’s duty should persist. One justice noted that the lapse of time was the most difficult question.  In this case, six years passed between the defendant’s sale of the product line and the plaintiff’s use of the product manufactured by another company, so how long is too long?  Plaintiff had no answer to these concerns, and counsel finally acknowledged after nearly an hour of argument that there was no way to “scrub” perpetual liability from the case.

The Court also asked whether concepts of breach of duty and causation would adequately protect the defendant. In other words, if the Court created the duties, could the defendant move for summary judgment or defend itself at trial on the basis that it neither breached a duty nor caused any injury?  At least one justice was relatively open in supporting this idea.  Others preferred to focus on the threshold question presented—whether the defendant owed a duty in the first place.  In this regard, the expense of litigation and the ability (or inability) of a defendant to spread the cost when it no longer sells the product are particularly relevant considerations.

There were other suggested limits. The plaintiff argued that a former manufacturer could protect itself by updating its label before transferring a product line.  But as the defendant pointed out in response, that solution offers false assurance because plaintiffs would just claim the updated label was inadequate, too.  One plaintiff’s attorney suggested that the Court set a time limit for suing the former defendant, but another retracted that suggestion, noting that statutes of repose were the business of the legislature.

The plaintiff also suggested that a former manufacturer could protect itself by bargaining for indemnity, which led to questions about the whether the identity and reputability of the purchaser of the product line would make a difference. At least one justice thought that it might.  One plaintiff’s attorney argued that a former manufacturer’s duty should depend on how much a more robust warning would have affected the sale price of the product line.  We did not follow counsel’s reasoning, and we would be surprised if the Court did either.

In rebuttal, the defendant reiterated that the issue is duty, that it is the role of the Court to define duties and set limits, and that the plaintiff had offered no viable protection against perpetual liability. We agree.  These are not jury questions.  In the end, it will be a split decision, but we know how we would vote.  The law cannot justify creating an unprecedented duty of care for a company that did not sell the product that allegedly harmed the plaintiff and no longer sells the subject product at all.  The plaintiff’s remedy is against the manufacturer and seller of the product that she allegedly used and that allegedly resulting in an injury, just as it always has been under California product liability law.  We understand that this will not always give the plaintiff a complete remedy.  The manufacturer could be bankrupt or outside the jurisdiction of the court, and in some cases federal regulation of prescription drugs will preemption state-law claims.  But California has guidelines on when duties exist and when they do not.  We call them the Rowland factors, and they do not predict that a plaintiff will have the right to full recovery in every case.  So it should be here.  The opinion should be out in about 90 days.

The district court’s order dismissing claims in Ebrahimi v. Mentor Worldwide LLC, No. CV 16-7316, 2017 WL 4128976 (C.D. Cal. Sept. 15, 2017), is a good antidote to the Ninth Circuit’s wrongly decided opinion in Stengel v. Medtronic. Stengel is where the Ninth Circuit held that the plaintiff avoided express preemption by alleging that a pre-market approved medical device manufacturer failed to report adverse events to the FDA, thus violating FDCA regulations and a “parallel” state-law duty to warn.  We have criticized Stengel any number of times, but you can read this and this to get the gist. The most obviously questionable aspect of Stengel is its application of a California state-law duty to warn the FDA, which we are not convinced exists in the first place.

Another befuddling aspect of Stengel is causation:  How can a plaintiff plead and prove that an alleged failure to report events to the FDA actually affected his or her physician’s treating decisions or the treatment outcome?  The district court’s order in Ebrahimi v. Mentor dismissing claims against a breast implant manufacturer shows that most plaintiffs can’t do it.

Here is what happened. When the FDA approved the defendant’s silicone-gel breast implants through the pre-market approval process, it required six-post approval studies “to further assess the safety and effectiveness” of the implants.  This presumably was because of the ultimately unfounded concerns about silicone-gel breast implants that led to their absence from the U.S. market for a period of years.  The plaintiff in Ebrahimi was treated with the defendant’s silicone-gel implants and later experienced complications leading to the implants being removed.

Her lawsuit alleged failure to warn, strict liability manufacturing defect (presumably because California does not recognize strict liability for design defect), and negligence per se—all of which failed. On failure to warn, the district court distilled two theories from the complaint:  “a claim based on [the manufacturer’s] failure to report to the FDA ‘adverse events’ regarding certain dangers with the Implants’ use, and (2) a claim based on [the manufacturer’s] failure to issue sufficient warnings to consumers and doctors.” Id.

There are a number of issues here—express and implied preemption paramount among them—but the failure-to-warn claim failed at this juncture because of causation. The plaintiff opposed the manufacturer’s motion to dismiss by arguing that the manufacturer knew about “reported systemic ailments which can only be attributed to gel bleed . . . but failed to report that to the FDA.”  (emphasis supplied by court).  Those failure-to-report allegations were impossibly vague and failed to allege causation.  The following quote is kind of long, but it’s the core of the order:

The problem with Ebrahimi’s allegations concerning the flawed post-approval studies is that she has not sufficiently alleged facts to support her assertion that the unreported “systemic ailments” or negative health effects that patients experienced during the post-approval studies “can only be attributed to gel bleed” or some other actual “adverse event.” . . . . Ebrahimi fails to sufficiently allege what the “systemic ailments” are that the post-approval studies revealed and merely surmises, in conclusory fashion, that they “can only be attributed to gel bleed.”

Furthermore, Ebrahimi has not sufficiently alleged a causal nexus between her injuries and [the manufacturer’s] failure to report adverse events to the FDA.  She does not allege, for instance, how any “gel bleed” issue would have caused the FDA to require different labeling, especially given the FDA—and Ebrahimi herself for that matter—was aware of the risk of gel bleeding.  Ebrahimi states she suffered injuries “[a]s a direct and proximate results of [the manufacturer’s] foregoing acts and omissions.”  . . .  .  Yet, she fails to allege how any reporting by Mentor to the FDA would have caused her surgeon to stop using Implants or her to refrain from having the breast-implant surgery with the devices at issues, considering the potential health consequences of which she was already aware.

Id.  Let’s unpack that a little bit.  The plaintiff’s theory was the alleged failure to report events from post-approval studies caused her complications.  But in trying to get from point A to point B, the allegations fall apart.  It is awfully easy to allege “unreported systemic ailments,” but which ones?  What other actual “adverse events” did the defendant allegedly fail to report?  And how do any of them have anything to do with what the plaintiff allegedly experienced.  It is similarly easy to write on paper that such “ailments” can “only be attributed to gel bleed,” but how?  If there could be link, what else could cause the “ailments” and how can we exclude them?  We don’t know, and neither did the plaintiff, who “merely surmised” these facts, in conclusory fashion.

All that is before we even get directly to proximate causation. Sure, the plaintiff alleged injuries “as a direct and proximate result” of the defendant’s alleged conduct, as all plaintiffs do.  But when the FDA already knew about gel bleed, and the plaintiff’s doctor already knew about gel bleed, and the plaintiff herself already knew about gel bleed, how could the alleged failure to report adverse events (whatever those events were) possibly have made any difference.  Would the FDA have required a different warning?  Would the physician have reviewed the adverse reports?  If so, would anything have added to the physician’s knowledge, or to the plaintiff’s own knowledge?  Would it have changed anything?  Again we don’t know—and, again, neither did the plaintiff.

Recall what we said about Stengel at the outset.  That opinion’s Achilles heel is causation, owing to the Ninth Circuit’s result-oriented acrobatics to find a claim that avoided express preemption.  It purported to find one, but one that requires a causal chain that is extraordinarily attenuated.  We offer kudos to the district judge in Ebrahimi for recognizing the plaintiff’s burden to plead causation as part of her “parallel claim” and correctly finding that the plaintiff had not met it.  Of course, we would have preferred an order finding the failure-to-warn claims preempted, but this is not bad.

The district court also dismissed the strict liability manufacturing defect claim and the negligence per se claim.  The former was implied preempted under Buckman because “it hinges entirely on conduct [the plaintiff] claims violates the FDCA as well as the FDA’s Current Good Manufacturing Practices.” Id. In other words, she was suing because the alleged conduct violated the FDCA, which is the sine qua non of implied preemption.  The negligence per se claim fell because negligence per se is not a separate cause of action under California law. Id.

Alas, the district court granted leave to amend. But given that this plaintiff alleged a known and warned-of complication of a pre-market approved medical device, she has a tough row to hoe.

Hope springs eternal. At least that is what the optimists say, and while we would like to see the bright side of the Missouri Supreme Court’s split opinion on venue in Barron v. Abbott Laboratories, Inc., No. SC 96151, 2017 WL 4001487 (Mo. Sept. 12, 2017), we are having trouble this morning finding our rose-colored glasses.  The court’s ruling that a black box warning on the exact condition at issue is “irrelevant” does not help either.

Faithful readers will recognize Barron v. Abbott Laboratories from our list of worst opinions of 2016.  The Missouri Court of Appeals’ opinion in Barron affirming a $38 million verdict came in at #3 on that list.  What did that opinion do to warrant such distinction?  You might call it a twofer:  The court upheld an unfair application of Missouri’s unique and unexplainable venue rules, plus held that a black box warning that warned of the exact risk at issue was sufficiently inadequate to sustain a failure-to-warn verdict and punitive damages.  We discussed that opinion here.

The Missouri Supreme Court has now affirmed this result, and it is still unfair on multiple levels. Let’s start with venue.  The only claims at issue in this trial were those brought by a Minnesota plaintiff against an Illinois defendant under Minnesota law.  Of course, the Minnesota plaintiff found her way to the City of St. Louis by filing a complaint there with 24 plaintiffs from 13 different states, including four from Missouri. Barron, 2017 WL 4001487, at *1.  This is a tactic we often see and to which we object.  But the angle that seems to be unique under Missouri procedure is that venue is proper in the county where any plaintiff “was first injured.” Id. at *5 (concurring opinion).  That means that any plaintiff—including the Minnesotan who got her claims to trial—can piggyback his or her way into any Missouri county where any co-plaintiff “was first injured,” even though neither her claims nor the defendant have any identifiable relationship to that forum.

Even the Missouri Supreme Court in Barron could not defend this rule, but instead affirmed the plaintiff’s verdict on the basis that the trial court’s refusal to transfer venue caused the defendant no prejudice. Id. at *2.  Query how a verdict this size on these facts would not demonstrate prejudice.  Regardless, we find it interesting that a four-judge majority of the Missouri Supreme Court dodged the merits.

Which leads to a ray of hope. Three judges filed a concurring opinion stating that once the trial court determined that each Plaintiff’s claims should be tried separately, it was error for the court not to sever and transfer claims for which venue was no longer proper. Id. at *7.  In other words, venue is not a static inquiry.  When the trial court determined that the claims should be tried separately, it “necessarily decided there are no further gains in efficiency of expeditiousness to be had from the joinder.” Id. at *6.  At that point, “the trial court has discretion to deny a subsequent or renewed motion to sever only in the rarest of circumstances” and “an abuse of discretion in denying such a motion will be patently prejudicial.” Id. The concurring opinion further faulted the majority for applying a “no prejudice” standard because a defendant

will never obtain relief without showing the elusive, undefined, and likely unprovable prejudice that the principal opinion demands. I am unwilling to countenance such an immediate, improper, and easily avoided outcome.

Id. at *7. Sure, it’s a concurring opinion, but it calls out the unworkable situation that Barron has reinforced.  We will take this four-to-three decision as endorsing efforts for reform.

Missouri-based defendants should take particular interest. The United States Supreme Court’s BMS opinion clamping down on personal jurisdiction should reduce the number of out-of-state plaintiffs suing non-Missouri defendants in Missouri.  But the joinder problem remains where personal jurisdiction is not an issue.  As the concurring opinion noted, “Even though the use of a Rule 52.05(a) joinder to combine multiple in-state and out-of-state plaintiffs in a single action largely will be prevented in the future by Bristol-Myers Squibb Co. v. Superior Court, [137 S. Ct. 1773 (2017)], . . . the use of Rule 52.05(a) to join the claims of multiple Missouri plaintiffs in a single petition will (and should) still occur.” Barron, at *4.  Missouri’s joinder rules therefore discriminate against Missouri defendants, who will remain subject to Missouri’s joinder rules while out-of-state defendants will less often be around.  This is another reason why reform should finally occur.

Now, how about the warnings? When a boxed warning—the strongest warning permitted under the FDCA—warns of the complication about which the plaintiff is complaining, it should be adequate as a matter of law.  Period.  You can read more on this here.  In Bannon, the Supreme Court did not set forth what the black box warning said, so we will:  “[THE DRUG] CAN PRODUCE TERTOGENIC EFFECTS SUCH AS NEURAL TUBE DEFECTS (E.G., SPINA BIFIDA).  ACCORDINGLY, THE USE OF [THE DRUG] IN WOMEN OF CHILDBEARING POTENTIAL REQUIRES THAT THE BENEFITS OF ITS USE BE WEIGHED AGAINST THE RISK OF INJURY TO THE FETUS.”  The plaintiff in Barron alleges she was born with spina bifida, which is right there in the warning—in all caps, and boldface, and surrounded by box.  To make matters worse, the Missouri Supreme Court held that the black box warning was “not relevant” to punitive damage. Id. at *4.  Quibble if you will over whether a black box warning is adequate as a matter of law.  But where the basis for liability is an alleged failure to warn, there is no way to explain how a clear and prominent warning on the exact complication at issue can be “not relevant.”  We will leave it at that.

So is there room for hope? As we observed in connection with another Missouri case a few weeks ago, time will tell.  Whatever the future holds, we are betting that Barron v. Abbott Laboratories will be in the running for the worst opinions of 2017.  Time (and Bexis) will tell.

“I am from Missouri. You have got to show me.” That quote attributed to Congressman Willard Duncan Vandiver in 1899 is reputedly the source of Missouri’s unofficial nickname, the “Show Me” state.  Or maybe it isn’t.  Whatever the slogan’s origin, a federal judge in Missouri recently said “show me” when 83 plaintiffs from 30 different states claimed personal jurisdiction in Missouri over a New Jersey-based talcum powder manufacturer.  These litigation tourists predictably could not meet the challenge, resulting in their claims being dismissed and the federal court retaining diversity jurisdiction over those who remained.

The case is Jinright v. Johnson & Johnson, Inc., No. 4:17-cv-01849, 2017 WL 3731317 (E.D. Mo. Aug. 30, 2017).  Sure, this is not a drug or medical device case, but the plaintiffs’ business model is the same as what we often see in the drug and medical device space—dozens of out-of-state plaintiffs joining in a lawsuit with one or two resident plaintiffs and one or two plaintiffs who defeat diversity, all as a ploy to forum shop their cases into a state court that their attorneys perceive as friendly.  The Jinright plaintiffs followed the playbook to a tee:  Eighty-three plaintiffs in one civil action with two Missourians and at least one plaintiff each from California and New Jersey—the latter to defeat diversity of citizenship with the California and New Jersey defendants.

If this configuration looks familiar to you, it should. Almost identical facts were before the U.S. Supreme Court in BMS v. Superior Court, where the Supreme Court held that a plaintiff cannot establish specific personal jurisdiction over his or her claims by reference to transactions involving other parties. See Bristol Myers Squibb v. Superior Court, 137 S. Ct. 1773, 1781-84 (2017).  With those ground rules, the outcome in Missouri was correct.  The defendants removed the 83-plaintiff petition to federal court and moved to dismiss the non-Missouri plaintiffs, who had no basis for asserting personal jurisdiction over the defendants in Missouri.  The plaintiffs moved to remand, citing the non-diverse parties.

The defendants won, and there are two interesting aspects of the court’s order to highlight.

First, the district court decided personal jurisdiction first, before it determined subject matter jurisdiction. Jinright, 2017 WL 3731317, at *2.  The plaintiffs argued, with some support, that the district court should decide whether it had subject matter jurisdiction as a threshold matter.  But the district court took a more pragmatic approach after BMS, observing that “there are circumstances in which a court may first address personal jurisdiction, such as where personal jurisdiction is straightforward while subject matter jurisdiction is ‘difficult, novel, or complex.’” Id. (emphasis added).

This nugget is extremely useful in today’s climate, where the Supreme Court in BMS and before that in Bauman has made the rules governing personal jurisdiction as clear and straightforward as they have been in decades.  As the district judge in Jinright found, “The personal jurisdiction question is straightforward.  Remanding this case for lack of complete diversity only to have the case removed again later once the non-Missouri plaintiffs are dismissed would be a waste of judicial resources.” Jinright, at *2 (emphasis added).  Perhaps the district judge saw our post from about six weeks ago presciently titled “Post-BMS Personal Jurisdiction is Pretty Straightforward.”  Regardless, when faced with complaints like these, we have three options to invoke federal jurisdiction:  (1) Move to dismiss the plaintiffs who can’t establish personal jurisdiction, then remove; (2) remove and ask the district court to sever and remand the non-diverse claims, or (3) remove and simultaneously move to dismiss the non-diverse plaintiffs.  These options won’t always work, depending on the case and the applicable deadlines.  The Jinright order squarely recommends option 3.  The Supreme Court’s opinion in Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 588 (1999), similarly supports adjudicating personal jurisdiction before establishing subject matter jurisdiction where the former is “a straightforward . . . issue presenting no complex question of state law.”

Second, the district court rejected the plaintiffs’ argument that they needed discovery into personal jurisdiction. They claimed evidence that another defendant had talc-related dealings with a Missouri-based company, which “processed, bottled and labeled” product in Missouri. Id. at *4.  The district court, however, ruled that even if it considered these facts (which the plaintiffs did not allege in their petition), they did not establish specific personal jurisdiction over the talcum powder manufacturer because “it did not establish a connection between Plaintiffs’ injuries, the product which caused the harm in this matter, and Defendants’ contacts in Missouri.” Id. at *4.  This was similar to BMS, where the plaintiffs relied on the drug manufacturer defendant’s contacts with a California-based distributor.  It was not sufficient to establish specific personal jurisdiction in BMS, and it was not sufficient in Missouri either. Id. As such, no further discovery was needed or allowed because “[a]ll they have shown is a connection with a third party in Missouri.  This is not enough to create specific jurisdiction for nonresidents’ claims.” Id. at *5.

This last part is significant because these plaintiffs made a go at identifying talcum-related Missouri contacts, but the district court did not bite. We predicted that plaintiffs would try to stretch tenuous forum contacts into specific jurisdiction when confronted with motions to dismiss, but it does not always work.  It did not work here.  We also note that this is the second order that we know of rejecting “jurisdictional discovery” as futile.  There are likely others, but if two cases can be a trend, we like this trend.  It should lead to less talc-related litigation tourism in Missouri, but time will tell.

The result is that the claims of 79 plaintiffs with no articulable connection to Missouri were dismissed. The remaining claims are staying in federal court and will be transferred to multidistrict litigation in New Jersey.  Perhaps their dismissed cohorts will re-file there and join them, or maybe they will not re-file at all.  Either way, when this Missouri-based judge asked these litigation tourists if they knew their way to the door, they likely said “show me.”

This is our second post in three weeks on class actions, owing to the filing of two really interesting class action opinions within a couple of weeks of each other. We posted two weeks ago on the Eleventh Circuit’s rejection of a medical monitoring class action—a class action where the plaintiffs and putative class members have not experienced any injury, but still want the defendant to pay for their future medical care.

A recent order from the Eastern District of Pennsylvania rejecting another class action got us to thinking about class actions more generally. We used to see “personal injury” class actions, where the plaintiffs were claiming relief for an entire class of individuals claiming to be harmed by a product.  But a class action like that obviously cannot work because of the multiple individualized issues that need to be adjudicated.  Cases like Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997), pretty much put an end to them.  (You can see this for yourself in our state and federal class action denial cheat sheets, here and here.)  Then we saw the aforementioned “medical monitoring” class actions.  The plaintiffs’ hoped there that their affirmative allegations of no injury would avoid class-defeating individualized issues.  But that did not work either because proving an entitlement to “medical monitoring” invokes individualized factors too, such as whether any patient requires future medical care above and beyond what he or she otherwise would have required.  The Eighth Circuit’s opinion in In re Silzone Heart Valve Products Liability Litigation, 425 F.3d 1116 (8th Cir. 2005), is as good a place as any to start on why medical monitoring claims are not certifiable as class actions.

That leaves class actions like Center City Periodontists v. Dentsply International, Inc., No. 10-774, 2017 WL 3142119 (E.D. Pa. July 24, 2017).  You might call cases like this “economic loss” class actions, where a product’s user is claiming neither a particular injury nor a right to future benefits, but rather claims that the value of what he or she bought is impaired because of a product defect.  “Aha!”, say the plaintiffs.  We’ve done away with all those pesky individual issues, and it now boils down only to damages, which we can prove on a classwide basis with our experts.

Alas, it is not so easy. In Center City, the plaintiffs purported to represent a class of dentists and periodontists claiming that the “Cavitron ultrasonic scalers” that they purchased were defective because they were prone to biofilm growth and thus not worth what they paid for them.  The next time we go to the dentist, we will look around for a device labeled “scaler.”  We do not like the sound of it, and it reminds us of the time when we were law students in need of a cleaning, but with little cash to spare.  We went to the low-cost student clinic at our university’s dental school, which was conveniently located in the building next to the law school.  If you take one point away from this post, remember this—do not seek dental care at a student clinic.  It was like our own personal retelling of the Marathon Man, starring Dustin Hoffman in his post-The Graduate and pre-Kramer v. Kramer days.  (In Marathon Man, Hoffman plays a hapless soul who finds himself being tortured while bound to a stiff-back reclining chair by a . . . .  Well, you will have to see the film.  As an aside, people often remember Dustin Hoffman in this role, but fewer recall that the torturer was played by none other than Sir Laurence Olivier.  For our part, we prefer to remember Olivier as Henry V or as the warm-hearted doctor in A Bridge Too Far, which is a terrific movie but an even better book.  But we digress.)

The district court’s order denying class certification is interesting for two reasons. First, the court entertained full-blown Daubert challenges to the plaintiffs’ experts’ opinions.  The court excluded the opinions of the plaintiffs’ regulatory expert, not because his qualifications or opinions were lacking, but because his opinions did not “fit” the case.  In a case claiming economic loss and breach of warranties, the court did not see how opinions on the “regulatory regime” were helpful. Id. at **5-6.

More importantly, the court excluded the opinions of the plaintiffs’ accountant, who opined that the class could recover damages based on three remedies—reimbursement, retrofit, and replacement. Id. at *7.  The experts’ damages opinion was unreliable because he did not take into account the economic value that each class member derived from using his or her Cavitron scaler without incident.  The applicable laws (New Jersey and Pennsylvania) allow credits for “the value of the goods accepted.” Id.  Thus, according to the district court,

Hazel’s methodology fails to account for any revenue generated by class member from successfully using their allegedly non-conforming Cavitrons . . . . Failure to do so rendered his model unreliable and ill-fitting under the facts of this case.  Because individualized inquiries will be necessary to identify any value obtained by each class member from using the Cavitron as accepted, Hazel’s approach is also unhelpful for computing damages on a class-wide basis.

Id. The expert also could not link his model directly to the alleged breach of warranty, which is required under Comcast Corp. v. Behrend, 133 S. Ct. 1426 (2013).  Rather, he conceded that he could not distinguish between damages attributable to the alleged breach and those attributable to “something else.” Id. at *8.

Second, after excluding the plaintiffs’ experts, the court ruled that the plaintiffs had not met their burden of proving the class certification requirements under Rule 23. The plaintiffs’ claims were not typical because, for among other reasons, some of the product’s users were aware of the risk of biofilm formation and had even taken precautions.  None of the plaintiffs had read the product’s directions for use, which included relevant information. Id. at **10.  These issues—which are directly reminiscent of issues we deal with every day in product liability claims—are unique to each product user and require individualized inquiries. Id. at **10-11.

The plaintiffs were not adequate class representatives because their claims were arguably time barred, placing them in a conflict with class members whose claims would be timely and arguable more valuable. Id. at *11.  Oddly, the plaintiffs did not prove numerosity, an element that is usually uncontested.  Maybe the plaintiffs mistakenly thought it would be uncontested here too, because they submitted no evidence beyond speculation as to how many Cavitron devices were actually purchased and used. Id. at **12-13.

Finally, the proposed class did not meet the requirements of Rule 23(b)(3): Common questions did not predominate because whether certain representations were made and whether anyone relied on them are inherently individualized issues—again directly reminiscent of arguments we have made vigorously in product liability cases.  Proving damages on a classwide basis was impossible too because, as prefaced above, each user could have derived different value from the product as accepted.

This class action bit the dust, and it is significant to us because it highlights issues with “economic loss” class actions that make them as untenable in the drug and medical device space as other kinds of class actions that are now history. With the current prevalence of inventory-dominated mass tort proceedings, we may never see a class action again.  But if we do, we will drill down, don our lead vests, and expect to prevail.