Photo of Stephen McConnell

We’ll get to today’s case in a moment, but first, a few words about SCOTUS and expiration dates.

 
One hundred and one years ago tomorrow saw the birth of Lewis Powell, who served as a United States Supreme Court Justice from 1972 to 1987.  Powell succeeded Hugo Black.  More interesting, considering current events, is that Powell was succeeded by Anthony Kennedy. Whether Judge Brett Kavanaugh succeeds Justice Kennedy is a matter of some some controversy.  One reason for that controversy is that Justice Kennedy was often a swing vote.  In a prior post, we recounted our one close encounter with Anthony Kennedy.  He impressed us a smart jurist who was determined to do the right thing.  Still, it must have seemed somewhat vexing to SCOTUS litigants that everything likely turned on the predilections of one Justice.  The other eight Justices often seemed predictable, almost a done deal.  But Justice Kennedy, at least on some issues, was the wild card.  We have no evidence that Justice Kennedy purposely positioned himself as the swing vote, or that he reveled in his inflated importance, but his importance as a swing vote was undeniable.
 
We have also seen no evidence that Justice Kennedy patterned himself after his predecessor, but it is remarkable how similar they were in locating themselves right at the center of the Court.  Justice Powell was often a swing vote.  If our affirmative action jurisprudence is a bit of a mess, some of the blame for that must go to Justice Powell, whose controlling opinion in the 4-1-4 landmark Bakke decision created a slippery standard that sprung from Powell’s idea of the perfect academic affirmative action program – the Harvard College admissions system.  Even back in 1978, it was pretty obvious that the Harvard system was not quite the holistic, individual-respecting scheme that Powell portrayed. (The legal defense of U.Cal Davis Medical School’s affirmative action program was entrusted to the great Archibald Cox.  During oral argument, Justice Blackmun asked whether the set-aside seats could be compared to athletic scholarships.  Cox replied, “Well, I’m from Harvard … “ – laughter intervened – “I don’t know whether that’s our aim, but we don’t do it very well.”)  Given the current lawsuit challenging Harvard admission policies, the Bakke compromise and its progeny seem even more fragile.  

The story of how Powell came to be appointed to the High Court was told in Bob Woodward’s book, The Brethren. (We hear Woodward has another book out.)  President Nixon was politically hobbled in 1972.  In trying to fill an earlier SCOTUS vacancy, Nixon had two of his selections rejected by the Senate.  Powell was an interesting choice.  He was from Virginia, which fit in with Nixon’s southern strategy.  But Powell would not fit into what we now consider the usual mold.  He had never been a judge. (Black had been a senator, not a judge.  Chief Justice Warren had also been a politician.  Douglas headed the SEC. It used to be acceptable for Justices not have to have a judicial track record.  Why the change?). Powell was a corporate lawyer. He represented the tobacco industry. He was a leader in the ABA.  He wrote a famous memo about how corporate America should deal with a hostile media.  There were plenty of reasons why Nixon would have liked Powell.  But there was one important reason why Powell would be acceptable to Senators who weren’t enamored with Nixon: Powell was 64 years old.  Woodward reported that a Senator waved a cigar and told Powell why he would be confirmed: “We think you’re going to die.”  (Powell himself was not all that fired up to join SCOTUS.  He had turned down an earlier offer.  He did not think he had the constitutional law chops of a Douglas, Black, or Brennan.  Plus, he was not eager for the huge pay cut.)

Recently John Oliver’s Last Week Tonight show argued for eliminating life tenure for judges.   Oliver supported a proposal for staggered 18 year terms.  (Powell served 15 years on SCOTUS.)  Every four year presidential term would include an opportunity to appoint at least two SCOTUS justices.  The system would permit reasonable turnover.  It would avoid the dangers of a gerontocracy.  It might somewhat reduce the temperature of SCOTUS confirmation hearings, since there wouldn’t be a multigenerational impact at stake.  Such a change would require a constitutional amendment.  Spoiler alert: it won’t happen.  But while we’re just dreaming, we have another reason for cuddling up to this idea.  When presidents harbor the hope of appointing a Justice who will support certain policies/rules for thirty years, that means they will select relatively young people.  That elevate-them-when-they-are-young approach also offers the advantage of proffering someone with a limited paper record and a limited target area for skeptical senators. Thus, instead of a SCOTUS appointment being the capstone of a long, distinguished career, it is more and more conferred on jurists in mid-career.  As we slouch toward dotage, we less and less like the idea of such important jobs going to juveniles.  Frankly, we hate seeing presidents and Supreme Court Justices younger than ourselves.  It is an annoyance almost as painful as being forced by some website to enter our birth year in a drop down menu, and scrolling down and down.  And down. 
[Quick quiz: Which Supreme Court Justice served the longest term?  Answer below.]

Why are we pondering these issues at this moment?  Obviously, the ongoing Kavanaugh kerfuffle is top of mind.  We also find ourselves ruing life tenure when we read a judicial decision that seems gruesomely wrong-headed.

And now we get to today’s case.  
 
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In Sumpter v. Allergan Inc., 2018 WL 4335519 (E.D. Mo. Sept. 11, 2018), the plaintiff brought suit over ruptured silicone breast implants.  The implants were premarket approval (PMA) medical devices.  As the Sumpter court acknowledges, the Medical Device Amendments Act “preempts claims challenging the safety and effectiveness of … PMA devices.”  Federal law dislodges any state laws (including via jury verdicts) that are “different from, or in addition to, any requirement applicable under [federal law].”  In the face of this rather clear preemption, the plaintiff in Sumpter ditched her design defect and failure to warn claims.  All that was left was the claim for manufacturing defect.  And here begins the Sumpter court’s descent into sheer awfulness.  As a preliminary matter, the Sumpter court tells us that, “[g]enerally, manufacturing defect claims that allege the ‘manufacturer failed to adhere to the specifications imposed by a device’s PMA’ are not preempted at the pleading stage.”  That quote is from the 2009 Hofts decision out of the Southern District of Indiana.  More than once, this blog has derided Hofts for its mangling of Riegel and Twombly and Iqbal.  Hofts made our list of the ten worst decisions of 2009.  Most courts that have considered Hofts have rejected it.  But not the Sumpter court.  If anything, Sumpter manages to multiply Hoft’s errors.  First, the plaintiff, as is all too typical, never comes close to specifying what the manufacturing defect was.  Second, the Sumpter court’s standard for assessing what constitutes a manufacturing defect is altogether wrongheaded.  A manufacturing defect happens when the product is out of spec from its design,  Something about the particular product is different from a product that is manufactured correctly.  Maybe something is in there that shouldn’t be, or something is missing.  Ot a component was flawed.  But that is not the Sumpter court’s test.  No, the Sumpter court concludes that a claim for manufacturing defect will lie when plaintiffs say that the products differed from the “intended result.”  What does that mean?  Presumably, a case was brought because someone was injured.  That is never the “intended result.”  Does “intended result” end up requiring a perfection that exists nowhere in the law, on any assembly line, in any product portfolio, or, indeed, on our planet? Moreover, the mere existence of a malfunction cannot, by itself, give rise to an inference that the manufacturer violated the FDCA.  Where is there any basis to invoke the infernal Riegel “parallel violation”?  Through the Sumpter looking-glass, every product liability case contains a manufacturing defect claim destined for a jury.  
 
The closest the plaintiff came to articulating a semi-specific manufacturing defect claim was an allegation of “material fatigue.”  Was there any hint in the case that the materials in the implants at issue were in any way out of spec, or different from the norm?  Nope.  Rather, the plaintiff “extrapolated from the injuries” that “there must have been a manufacturing defect.”  Goodbye TwIqbal.  Goodbye whatever is the relevant state law on manufacturing defect.  Hello, new-fangled res ipsa loquitur theory, even though the Sumpter court never uses those magic Latin words.  Under the Sumpter court’s reasoning, once one claims injury from a product, there’s a manufacturing defect that is immune from a motion to dismiss.  (Unless, one supposes, one is in an outlier case where the product was intended to inflict injury.  And then, surely, there is another legal claim at hand.)  The Sumpter court has defectively manufactured a tort claim that, by all rights, should be dismissed based on well-established, clear SCOTUS precedent.
 
The only consolation is that, as we have pointed out many times before, manufacturing defect claims are hard to win.  The odds are long against the likelihood that the plaintiff will ever demonstrate a true manufacturing defect.  Then again, erroneous jury instructions could wreak havoc in favor of even an empty claim, and how can we predict that won’t happen?
 
Justice Powell once said that history “teaches us tolerance for the human shortcomings and imperfections which are not uniquely of our generation, but of all time.”  Tolerance, indeed.  Plus, unlike with SCOTUS, the Sumpter court might some day get reviewed by a higher court.  And then there is the highest authority of all: the DDL blog ten-worst list at the end of this year.  
[Answer to question:  William O. Douglas sat on the High Court for 36 years and 211 days.  He was confirmed at the age of 40.  The judge we clerked for had clerked for Douglas, and could never utter WOD’s name without a growly follow-up along the lines of “…that bastard.”  Apparently Douglas, while being brilliant and charismatic, was not always very nice.]

This isn’t the first time we’ve written about the Hyde case in the Bard IVC Filters MDL.  Back in July we reported on some pretrial rulings in that bellwether case.  Get ready for more.  The decision on tap for today, Hyde v. C.R. Bard, Inc., 2018 WL 4215028 (D. Arizona Sept. 4, 2018), is sort of a man-bites-dog item, as it involves a motion in limine by the plaintiffs to exclude warnings information.  Generally, we on the defense side are the ones arguing to keep prejudicial information out, so the posture of Hyde is interesting.  Just in case you haven’t committed the facts of Hyde to memory, here’s a refresher:  Mrs. Hyde received an IVC filter implant in 2011.  Three years later, she learned that the filter had tilted, perforated the IVC wall, and fractured.  The plaintiffs brought a lawsuit sounding in various theories.

[Interlude for discovery.  Interlude for motion practice.]

Applying Wisconsin law, the Court granted summary judgment on the failure to warn claims. (As we reported back in July, the plaintiffs proffered no evidence that a different warning would have inspired the doctor to employ a different device or do anything differently.)  That ruling left claims for strict liability design defect, negligent design, negligence per se, loss of consortium, and punitive damages.  In advance of trial, the plaintiffs filed a motion to exclude the device’s instructions for use (“IFU”) and certain guidelines published by the Society of Interventional Radiologists (“SIR”).  Usually, plaintiffs love to trot out the IFU and point out offending lacunae. What’s different here?

The plaintiffs argued that because the failure to warn claims had been dismissed, the instructions and warnings set forth in the IFU were no longer relevant to any issue in the case and should therefore be excluded.  Similarly, the plaintiffs argued that the SIR guidelines, which evinced the knowledge of IVC filter complications in the medical community, were no longer relevant in the wake of dismissal of the failure to warn claims.  According to the plaintiffs, design defect must be tested against consumer expectations, and the IFU and SIR guidelines play no role with respect to such consumer expectations.   Plainly, the plaintiffs wanted the IFU and SIR guidelines out.  The defendants wanted them in.   We’re guessing the IFU warnings must be quite clear and that the SIR guidelines must be quite helpful for the defense.

Luckily for the defendants, Wisconsin law was quite clear and quite helpful for them.  In 2011, the same year as the plaintiff’s implant, the Wisconsin legislature enacted tort reform that included adoption of  section 2 of the Restatement (Third) of Torts (1998).  (We wrote about the cheesehead tort reform here.)  Section 2 employs a risk-utility balancing test and consideration of a broad range of factors, including the instructions and warnings accompanying the product.  Consumer expectations are in that broad range of factors, but no longer make up the whole ballgame. They definitely are not a basis for excluding information otherwise relevant to safety.

Under post-2011 Wisconsin law, a jury must consider not only whether there was a reasonable alternative design, but also whether a failure to adopt that design rendered the filter “not reasonably safe.”  Can the IFU and the SIR guidelines help a jury answer that question?  Almost certainly, yes.  The SIR guidelines lay out the acceptable rates of risk in IVC filters. Thus, they are relevant to the jury’s determination of whether the filter was reasonably safe.  The IFU tells physicians about risks of the filters and how to mitigate them.  That information, too, is relevant in determining whether the filter was reasonably safe.  The defendants are free to argue to a jury that the warnings provided with the filter “disclosed the risks of complications, that the medical community was aware of those risks and found them to be acceptable, and that the omission of an alternative design therefore did not render the filter ‘not reasonably safe.’”

Moreover, the IFU and SIR guidelines are relevant to the plaintiffs’ punitive damages claims.  The plaintiffs will surely try to persuade the jury that the defendants acted with “malice.”  But what the defendants, via the IFU,  told physicians about the device’s risks is relevant to whether the defendants acted with “intentional disregard for patient safety.”   The SIR guidelines are relevant to the defendants’ “awareness of filter complication rates and the extent of harm posed by filter complications, and can also inform the jury of risk levels found acceptable by interventional radiologists – a relevant fact for deciding whether Defendants ‘acted with a disregard for patient safety.”

We began this post by remarking how odd it seemed that it was the defense that wanted warnings information in, and the plaintiffs that wanted it out.  It also seems a bit odd to us that it is the plaintiffs who are insisting on a strict line of demarcation between different tort theories (failure to warn vs. design defect), and the defense who treat the line as kind of fuzzy.  But we’ve seen something like this before.  You needn’t strain your memory too much to recall how in the Bartlett case the plaintiff tried to evade preemption by arguing that the case was only about design defect and that failure to warn was out of bounds.  The defense demonstrated that there were aspects of the design defect claim that were implicated by preemption principles.  The result was a resounding defense SCOTUS victory that many of us are trading heavily on today and expect to do so for a good long while.

“Thinking out of the box” has become a hackneyed phrase, but sometimes it is perfectly accurate.

 

 

Recently Rudy Giuliani was broiled for saying that the truth isn’t the truth.  Denying a tautology won’t typically earn one high marks for logic.  Add in the callback to Pontius Pilate’s “What is truth” question, and it sounds like bad epistemology in service of bad morality.  But we’re not here to talk politics.  Nor are we here to try to answer Pilate’s question.  Maybe the Drug and Device Law Daughter, who is just starting her second year at Harvard Divinity School, can field such questions.  We cannot.

As a former prosecutor of mail frauds and wire frauds and as a current defender of companies accused of consumer fraud, the question we have faced is usually more along the lines of “what is a lie.” It is not merely the opposite side of the street, though it surely is in the same neighborhood.  Liars are everywhere.  They overstate their income when applying for a loan.  They understate their income when reporting to the IRS.  They use sucker lists to lure retirees into investing in nonexistent oil wells.   They loot companies via creative accounting.  They tell us our table will be ready in “just a few minutes.”  They tell us our flight is “On Time.”  They check the box saying they have read and they accept the terms and conditions.  They pretend not to want the last slice of pizza.

What makes something a lie that leads to liability?    Even putting aside the difficult issue of discerning a defendant’s intention to prevaricate, how does the law tackle claims that someone did wrong by uttering something at odds with the truth?  The police are not the truth police, and civic dockets could not bear the strain if every lie led to a lawsuit.  So the law has introduced concepts of materiality and detrimental reliance.  A lie is actionable only if it made a difference. It had to have fooled someone who is not a fool.  It had to have caused harm.

One summer, between our junior and senior years in college, we worked in the New Jersey legislature.  It was the summer of the FBI’s Abscam investigation (see American Hustle).  A couple of politicians, including a U.S. Senator, six members of the House of Representatives, a New Jersey State Senator, and the Mayor of Camden, did perp walks on their way to corruption convictions.   But the legislators and staffers we worked with were a competent and honorable group.  One of them focused on consumer fraud matters.  He told us that anytime a state investigator wanted to ring up some citations, all that was required was a visit to a nearby supermarket.  Weigh some packaged meat, compare to the stated weight, and – voila! – there would almost certainly be a discrepancy.  Evaporation and the passage of time produced a lie.   Thankfully, a rule of reason prevailed.   Nobody was really deceived or hurt.   Let’s be grownups about this.   There are plenty of real frauds to pursue.  It wasn’t cynicism; it was realism, aided by a set of reasonable priorities.

Years later, we found ourselves in Southern California.   It’s hard to say why it’s so, but it quickly became clear to us that folks on the west coast were a lot less tolerant of puffery or even the slightest deviation from their idea of truth and purity.  Is it a state of innocence?  Does life under perpetually sunny skies foster a heightened sense of entitlement?  Look at the lawsuits alleging that a company incorrectly called its product organic or natural.  They are not all filed in California, but it seems that most of them are.  Even so, most of those lawsuits don’t get much traction in the courts, because a regulatory agency had made a determination  of what could and could not be put on a product label.  In such cases, courts don’t need to engage in science, or semantics, or epistemology.  It turns out that sometimes Pontius Pilate’s question is preempted.

Today’s case originated in Southern California: Welk v. Nutraceutical Corp., 2018 U.S. Dist. LEXIS 135595, 2018 WL 3818033 (S.D. Cal. Aug. 10, 2018).  The plaintiff had purchased liquid vitamin B12 and complained that the packaging overstated its contents.  The claim centered on test results from a “reputable supplement analysis center located in California” showing that, once opened, the liquid vitamin B12 “undergoes degradation at an unknown rate.”  After only 11 days, a sample of the product weakened from 255 ug/ml to 213 ug/ml.  The plaintiff contended that the amount of B12 eventually “becomes negligible and ineffective.” Thus, the bottle’s label was “untrue, false, and misleading.”  The complaint included various actions for misrepresentation, and did so on behalf of a purported class of consumers.

Tell the truth: this claim does not exist unless it is a class action, right?  And what does that tell you?

Stepping back for a moment, doesn’t this claim remind you of the statement on cereal boxes about how the contents may have settled? When you are a child, this statement might possibly have arrived as unpleasant news.  Open a box of Cap’n Crunch, and one is greeted by almost as much air as nuggets of cavity-inducing goodness. But as adults, we read this statement with calm resignation.  Perhaps that is because we, too, our bodies and our minds, have settled over time.

The defendant in Welk moved to dismiss the claim for various reasons.  The best of those reasons was that the claim was preempted by the Food, Drug, and Cosmetic Act, as amended by the Nutrition Labeling and Education Act.  There is an express preemption provision barring state law food labeling requirements that are “Not identical” to federal regulations.  The FDA regulates the labeling of the “quantitative amount” of nutrient supplements such as vitamin B12, and decrees application of a specific testing methodology.  The defendant’s labeling complied with the FDA’s labeling and testing methodology.

How does the plaintiff endeavor to evade preemption?  The plaintiff argued that the defendant improperly failed to disclose the fact of degradation.  But that assertion of degradation rests upon a testing methodology that is certainly not “identical” to the one mandated by the FDA.  Accordingly, the court, in a very short, very to-the-point decision, held that the plaintiff’s misrepresentation claims were preempted and must be dismissed.  Was the vitamin label a lie?  Not really.  As with many of the cases we encounter, the alleged lie was one of omission.  Tell me more, says the plaintiff.  One can always think of more.   How to decide?  There’s a scientific test.  Who decides?  The FDA.

We cannot count ourselves surprised by the result in Welk.  It is consistent with several others we have seen in food and nutraceautical cases.   But we do count ourselves as envious.  Most of our cases involve drugs and medical devices.  (No surprise there; take a look at the title of this blog.  Please don’t accuse us of false advertising because today’s case involves neither a drug or device.  We’re about to tie it together, okay?  Okay.  Here goes.). The preemption language for medical devices is there, but it’s been unduly watered down by a couple of courts.  The logic for preemption of drug labeling is there, but it, too, was overly cabined in some regrettable judicial decisions that are starting to collapse from their contradictions. (Many of those decisions indulged in a presumption against preemption – a presumption that has since been discredited.) Imagine if food preemption rules applied to all the products regulated by the FDA. Think of the logic, consistency, clarity, and efficiency.  We could use a little more of that in the DDL world.

That is no lie.

It’s vacation time for many of our colleagues.  Bexis shrewdly commenced a hiking holiday in Kauai, just in time to greet a hurricane.  We were less adventurous.  For us, it was enough to knock back poutine and ice wine and walk the old city walls in Quebec.  There was one excursion to watch the Drug and Device Law Heirs zip-line over a 272 foot high waterfall.   We did not participate.  Our courage is weak, our girth is large, and our parenting skills are sub-par.  Meanwhile, a leading Philly litigator shared photos from his African safari, proving he got within a paw’s swipe of a leopard.  Yikes.  And then there was our cherished friend, an esteemed in-house lawyer, whose family cruise along Alaska included close encounters with whales, wilderness, and  eerie blue ice bergs.  It all looked marvelous. 

 

We’ve been to Alaska once ourselves, but it was only a business trip.  A couple of oil companies, one of which was our client, had a slight disagreement as to who owned how much of certain tracts.  A few inches here or there meant billions of dollars.  The stakes were high but the issues were dull.  We visited  Prudhoe Bay (mile marker zero of the Trans-Alaska pipeline) and the Captain Cook Hotel in Anchorage, where an enormous stuffed Kodiak bear stands guard.  A popular t-shirt said, “Split Alaska in Two and Make Texas the Third Largest State.”  Alaska is full of wild, wonderful things, but not so much litigation.  Our fossil fuel battle was in arbitration, not the court system.  What sane Fortune 100 executive would entrust complex geological issues to twelve jurors?   

 

Maybe there are some riveting cases from Alaska, but we are hard-pressed to think of many.  In any event, when we think of Alaska, we think of its stunning beauty and the rugged individualism of its residents.  (That last sentence is a bit of ham-handed foreshadowing.) 

 

Quick: name the greatest Alaska television show.  (Answer below.)

 

Today’s case, Cole v. Gene by Gene, Ltd., 2918 WL 3980308 (9th Cir. Aug. 21, 2018), originated in Alaska.  It’s pretty interesting, as it involves the intersection of two increasingly important issues: genetic testing and disclosure of private information.  It’s also pretty good, as it resulted in rejection of class certification.  But the issues must have seemed pretty obvious to the Ninth Circuit, as the panel members felt no need for oral argument and determined that the opinion was unworthy of publication in the West Reporter.  The plaintiff, suing on behalf of a putative class of 900 Alaskans, alleged that a company had disclosed DNA results without informed consent and in violation of the Alaska Genetic Privacy Act.  From the very short opinion, we cannot tell much about the nature of the genetic testing that occurred.  We don’t know whether it was of the broadly available spit-in-a-test-tube, mail-it-in, then learn-with-surprise-that-your-family-actually-hails-from-Transylvania sort, or whether it was of a higher order of complexity and significance.  No matter, because genetic testing is going to become more and more prevalent and more and more crucial.  Selection of future drug and device therapies are likely to become more targeted with the help of genetic testing.  Genetic information is valuable information.   But, like all information, it can fall into the wrong hands and be misused. 

 

Back to the case at hand.  In Cole, because there were too many differences among the class members on important issues, the district court declined to certify the class.  Common issues did not predominate over individual issues, and individual litigation looked to be the superior mechanism for resolving the claims.  The plaintiff appealed.   The plaintiff lost.

 

The Ninth Circuit, applying an abuse of discretion standard or review, affirmed the district court.  It held that individualized determinations predominated with respect to the key issues of disclosure, consent, and damages.  For instance, whether a particular customer had private information disclosed varied depending on the terms of release signed by the customer, which of the thousands of genetic “projects” the customer may have joined, the terms of the specific project a customer joined, and what privacy settings the customer chose.  The district court was right that individual issues outnumbered the broad-brush general issue.  Moreover, the district court did not abuse its discretion by denying class certification on superiority grounds. The plaintiff had failed to carry his burden to show that “a class action is superior to other available methods for fairly and efficiently adjudicating the controversy.”  In particular, the damages available to aggrieved customers under Alaska law would be plaintiff-specific.  Couple that intractable fact with the “difficulties inherent in managing a class action featuring such distinct and individualized issues, the limited resources to be saved by certifying a class, and the absence of other pending or duplicative lawsuits in the Alaskan courts, “ and it becomes clear that “individual litigation is a superior mechanism for resolving” the case. 

 

(It is equally clear that Northern Exposure was the best tv show ever set in Alaska.  It was filled with original, sharply drawn characters.  Individuality certainly predominated.  The main character was a doctor from New York who made it through medical school on a loan funded by the state of Alaska.  To repay the loan, he had to practice medicine for a couple of years in a remote Alaska town.  Other characters included an ex-con who was the ultra-philosophical disc jockey in the town’s only radio station, a bush pilot whose former beaus all died gruesome deaths, a cantankerous ex-astronaut, and the owner of the town tavern who was at least 40 years older than his wife, but worried he would outlive her because the men in his family invariably lived past 100 and invariably spent a decade or so as lonely widowers.   The show ran on CBS from 1990 to 1995 and won many awards.  Among those were Emmy and Golden Globe awards for best drama.  The producers were grateful for the awards, but felt obligated to mention that they thought the show was actually a comedy.  In fact, Northern Exposure was one of the first “dramedies,” containing both comedic and dramatic tones.  After the first couple of seasons, a new producer-writer named David Chase joined the staff of Northern Exposure.  Perhaps you have heard of Chase.  Earlier in his career he had worked on The Rockford Files.  Later, he created another show with quirky characters.  It was called The Sopranos.)       

 

We are on vacation this week.  The aim was to stay in this hemisphere, yet get the feel of being in an old European city.  Less air travel, but still with the overcharging and the hard stares in response to our dodgy foreign language skills.  So with that hint, guess away as to our present location.  As part of vacation prep, we downloaded a bunch of movies on our Netflix account for viewing on the plane and in case of a rainy day.  A couple of days ago, with gritted teeth, we hit the play button for a documentary film called “The Bleeding Edge.”  We deal all the time with claims of failure to warn, but in this instance we have no such claim.  We had been fully warned that the film was a thoroughly one-sided screed against the medical device industry.  Pity the poor defense lawyer picking a jury tainted by this particular work of art.  The case studies in the film involve hip implants, a contraceptive, vaginal mesh, and robotic surgery.  Rotten Tomatoes gives the film a score of 100%.  This film must be a banger, right?

 

Well, it is certainly effective.  True to its title, it draws blood – emotionally, anyway. It conveys a series of stories, it makes you feel sorry for victims, and it makes you mad.  It feels very much like an extended 60 Minutes segment.  60 Minutes has been on the air for 50 years.  That’s 50 years of confronting corporate and government malefactors. 50 years of crooks scurrying away from cameras.  50 years of righteous indignation.  Many times over those 50 years, 60 Minutes worked its forensic magic on us.  We were just as swept up in the disillusionment and the urge to punish as any other viewer. 

 

And then, when we began our stint at a law firm, we worked on a case that received lots press coverage.  To our shock, the press got at least half the story wrong.  The account of who, what, where, when, why, and how was terribly tilted – more a morality play than factual reportage.  Eventually, it occurred to us that perhaps the press didn’t distort reality only for stories about our cases.  Maybe, just maybe, flaws riddle press stories fairly (or unfairly) often. 

 

We have worked on litigation involving only one of the products at issue in “The Bleeding Edge.” All of the stories are compelling, with human beings who earn sympathy.  Some suffered terrible physical injuries.  Even beyond that, some of their lives were ruined in other ways, with awful impacts on family members.  You’d have to have a heart of stone to be unmoved.  For the story dealing with the product we know a little something about, vaginal mesh, the story turns out to be a half-story.  The viewer will see nothing about the vast majority of patients who had their lives bettered by mesh – whose stress urinary continence, which had devastating, embarrassing consequences for quality of life, had been fixed. Instead, we hear from a plaintiff lawyer who delivers a mini-closing argument against mesh. He says that when the science conflicts with the marketing, “the marketing always wins out.”   That’s catchy, but that’s also a canard.  From what we have seen, medical device marketing claims must run the gauntlet of careful medical, regulatory, and legal scrutiny before any member of the public sees them.  We also hear from ubiquitous plaintiff expert David Kessler, a former head of the FDA, who rips into the 510(k) “loophole”.  You will not hear a hint of why that provision was deemed necessary and how there was at one time enormous discontent about undue delays in making beneficial medical devices available to patients.  If there is a legitimate, nuanced debate about whether the scope of the 510(k) process should be adjusted, or whether that regulatory pathway should be bolstered or adjusted when the underlying predicate devices are withdrawn, you won’t hear that nuanced debate here.  It’s all black and white, albeit in cinematic color.  Then we hear from another plaintiff expert who wields a rhetorical axe, not scalpel, against mesh.  Immediately afterward, we hear from a plaintiff. When she mouths a critique of vaginal mesh, she says she has heard it is like trying to remove rebar from concrete.  Guess where she heard that?  That is precisely the imagery used by the plaintiff medical expert in his trial testimony.  To our jaundiced eyes, these interviews were cleverly curated and assembled for maximum negative impact.  That is not documentary; it is choreography.

 

If “The Bleeding Edge” is one-sided – and it is – its defenders will say that is the fault of the companies.  At the end of the film, we get the typical screen notification that the filmmakers invited the companies to appear, but the invitation was declined.  Can you blame the companies?  First, it was clear that the filmmakers was dead set on putting scalps on the wall.  It was inevitable that the questioning and editing (more on the latter in a moment) would be deployed to make the companies look bad.  The filmmaker, not the interviewee, has final cut. Second, companies in litigation know that any public statement could be used against them.  By contrast, a plaintiff lawyer can say whatever he wants without worrying that an inaccurate statement might be used against one of his clients.  Thus, there is a structural reason why public reporting on matters in litigation usually favors plaintiffs.  There is also the same bias one sees in scientific journals in favor of finding significant results.  “Product Injures Thousands” will attract more eyeballs or clicks than “Company Responsibly Pursues Innovation.”  For good reason is the film entitled “The Bleeding Edge.”  If it bleeds, it leads.  

 

There is an appearance in the film by the CEO of AdvaMed, the medical device industry association.  We first see him making a presentation to the MedTech Conference.  In the excerpt selected by the Bleeding Edge filmmakers, the CEO says that medical device makers “have more power in this room than most governments around the world.”  End of excerpt.  As placed in the film, it sounds a wee bit sinister.  It is as if the documentary is trying to depict the CEO as a Bond villain.  Cue the terrifying henchmen, the white cat, the trap door, and the plan for world domination.  But context is all.  The speech was actually about the industry’s power to innovate.  Rather different, isn’t it?  Not that it makes a difference to the filmmakers.  After all, in more than one place in the film, the concept of innovation is belittled, even ridiculed. And yet, would anyone really prefer that the government stifle innovation?  We’ve read reviews of the film that conclude by advising viewers to question their doctors when innovative treatment is proposed.  It is good for patients to ask questions.  But it is not so good for them to be cynical.  Hello, vaccine-avoiders.  And it is not so good for patients or doctors to harbor preconceptions against innovation.  Later in the film, the AdvaMed representative submits to an interview by the filmmakers.  What he says is appropriate and above reproach.  But, again, something interesting happens with the editing.  After the AdvaMed rep answers the questions, the camera holds on him for an uncomfortable pause.  The fellow looks at the camera.  Then he looks around.  Then he lifts his paper cup of coffee.  Only after the camera plays its little trick of creating discomfort does it finally cut away. What is the purpose of that?  Whose bias is actually being exposed?  We are reminded of the scene in the Michael Moore movie where a government official is shown combing his hair before the interview.  Context can convey skepticism and derision.   

 

Needless to say, the film-makers employed no such editing maneuvers during the interviews of the plaintiff litigation team. 

 

Again, the film is effective at doing what it wants to do.  It makes a case.  But do not for a moment mistake it for what it is not – a balanced examination of the truth. 

 

[P.S.: Happy Birthday to the Drug and Device Law Son.  We will always be hopelessly biased in his favor.]

 

 

 

 

 

For at least forty years we’ve been hearing that soccer is going to supplant baseball, basketball, or football among America’s top three sports.  It hasn’t happened.  Maybe we heirs of Washington, Jefferson, Ruth, Rice, and Chamberlain have limited enthusiasm for one-nil scores and players diving and mimicking death throes in a cheap effort to extract a penalty kick.


Meanwhile, we have seen boxing subside in the country’s consciousness, bullied out of the way by mixed martial arts (MMA). It’s hard to believe one of those M’s does not stand for mayhem.  Forget about the Marquis of Queensbury’s niceties.  In MMA, the contestants are free to kick, choke, and elbow each other.  Hit a man when he’s down?  That’s not forbidden in MMA. Nope, that’s when the action is just getting started.  Pretty much anything goes in MMA.  
But you cannot use anabolic steroids.  If you test positive, you get suspended.  Rules are rules.  

The plaintiff in In re Lyman Good Dietary Supplements Litigation, 2018 U.S. Dist. LEXIS 131668 (SDNY Aug. 6, 2018), was an MMA fighter who was suspended because he tested positive for a banned substance.  The court employs the short-hand reference “andro” for the banned substance, and so shall we.  The plaintiff claimed that he had unknowingly ingested andro that was present in two dietary supplements that had been labeled to be free of any banned substances. The plaintiff alleged that the manufacturers and sellers of the dietary supplements promised that the products were “safe,” “without the use of banned substances,” “banned substance free,” and in compliance with “strict quality assurance procedures.”  The presence of andro broke such promises, and the plaintiff’s career had suffered a serious bruise. The plaintiff sued the manufacturers, high ranking executives at the manufacturers, and the retailer. The causes of action were interesting, including some you’d expect (breach of warranties, fraud, deceptive practices, false advertising, negligence, and strict liability) and some you wouldn’t (intentional infliction of emotional distress, assault and battery).  The defendants moved to dismiss and ended up winning more than they lost.

The court dismissed the claims for fraud, assault and battery, and intentional infliction of emotional distress.  Fraud claims are subject to heightened pleading requirements, which the complaint didn’t come within a puncher’s chance of satisfying. All we get are general allegations of fraudulent intent, along with generalized motive to earn profits.  That isn’t nearly enough.  The court applied a rear naked choke to the fraud claim and counted it out.  The assault and battery claim was a wild swing and miss.  The plaintiff’s theory was that putting a substance in someone’s body without consent is battery, but there was no case support for that, plus the plaintiff never alleged the requisite intention to inflict injury.  Here comes a reverse guillotine, and watch the court slice off the assault and battery claims.  Lack of intent is also what doomed the claim for intentional (or reckless) infliction of emotional distress.  The court also could identify no alleged outrageous conduct that went “beyond all possible bounds of decency.”  (To be sure, when one is dealing with MMA, it might seem difficult to meet that standard.) 

The court dismissed the claims against the executives, both on the merits and for want of personal jurisdiction.  Suing executives is fairly rare, and there are reasons for that.  Piercing the corporate veil requires a showing that the executives exercised compete domination and disregarded corporate formalities, including use of corporate funds for personal purposes.  At most, the complaint alleged that the individual defendants were high-level officers with wide-ranging authority, but an officer or director is not personally liable for the torts of a corporation merely by reason of occupying an important office.  The complaint utterly failed to allege that the executives used corporate domination to perpetrate a fraud.  In any event, there was no personal jurisdiction over the individuals.  They all had general authority over their corporations, but were not the primary drivers of the particular transactions in New York that gave rise to the litigation.  Hello sleeper hold, and good-bye claims against the individual defendants.  

The retailer prevailed on most of its motions to dismiss.  The claims for implied warranty of fitness for particular purpose, express warranty, and false advertising were carried out of the ring, but the claim of implied warranty of merchantability emerged unscathed.   The only express warranty by the retailer listed in the complaint was a statement in its 10-K annual report that the company used quality control procedures and that it refused to sell products that did not comply with law or were unsafe.  Those representations are pretty general, and the plaintiff did not even claim to have read them or relied upon them prior to purchase.  Nor did the annual report constitute a form of advertisement.  The court granted the plaintiff leave to amend the claim for implied warranty of fitness for particular purpose because, even though the complaint was bereft of any assertions that the plaintiff and the store had any conversations about how the plaintiff would use the supplements to prepare for MMA combat, the plaintiff wanted to add six paragraphs alleging precisely such conversations.  If such conversations did take place, it would not be “outside the realm of reasonable knowledge” that professional competitions require drug testing.   Thus, the particular purpose warranty claim might live to fight again.

The opinion in Lyman Good is solid and clear.  It goes through the different causes of action and defendants one-by one, jab by jab.  It reminds us that MMA is not the only place where rules are rules.

The whole business of discovery in civil litigation is dreary and depressing.  In a mass tort, a defendant can rack up defense verdicts yet still incur discovery costs that exceed the damage amounts sustained by defendants found liable in other torts. Little wonder that the mass of defense lawyers in mass torts lead lives of quiet desperation. At least, that’s true for the poor drudges who must review documents for responsiveness and privilege.

We’ve been thinking about Henry David Thoreau.  An anniversary is almost here.  Walden was published on August 9, 1854.  Thoreau built a cabin near the shore of Walden Pond and began living in it on July 4, 1845, “alone in the woods, a mile from any neighbor.” It was a declaration of independence.  He lived there for two years, two months, and two days.  The book took eight years to write, and there is much more artifice in it than straight nature reporting.  Whatever you think about American exceptionalism, Thoreau exemplified many traits that, for better or worse, seem at the core of the American ethos:  embrace of self-reliance and ecological preservation, and stand-offishness with respect to politics and society.  We wondered whether Thoreau wrote anything about discovery.   Our well-worn volume of Walden contains an index, but we found no reference to “discovery.”  Nor was there a word about document requests.  The best we could do was the famous passage in the “What I Lived For” chapter that explains the project at hand:  “I went to the woods because I wished to live deliberately, to front only the essential facts of life, and see if I could not learn what it had to teach, and not, when I came to die, discover that I had not lived.” There’s that word “discover,” but we suspect Henry had something else on his mind.

Thoreau never had the misfortune to encounter Federal Rules of Civil Procedure 26, etc.  Had he, he might have drafted an interrogatory about discovery:  “whether it is necessary that it be as bad as it is, whether it cannot be improved as well as not.” Most of what we do in civil litigation is discovery, and most of that is a waste of time.  Such time wasting would have mightily irked Henry:  “As if you could kill time without injuring eternity.”  From Thoreau’s revelatory prose we now turn to a judicial opinion that makes those of us who spend time opposing discovery want to retreat to the woods.

Today’s case is In re: Genentech Herceptin (Trastuzumab) Marketing and Sales Practices Litigation, 2017 WL 9939631 (N.D. Okla. May 8, 2018). The defendants wanted to argue preemption, and the plaintiffs engaged in what has become the typical response of insisting on wide-ranging discovery to test the preemption defense.  “Wide-ranging” is an understatement.  From the court’s description, it seems that the plaintiffs wanted pretty much everything.  The defendants countered with something less than everything.  And so we end up with cross discovery motions.  The plaintiffs filed a motion to compel while the defendants filed a motion for a protective order regarding all unanswered preemption discovery requested by the plaintiffs.  The court granted every one of the plaintiffs’ motions to compel discovery responses, and denied every one of the defendants’ motions for protective order.  The opinion is a sadness machine.  That machine is fueled by two all-too-common judicial impulses: (1) letting plaintiffs conduct any discovery they want, and (2) hostility to the preemption defense.  Why, it is almost as if the court was unhappy with the defendants for even raising the preemption defense.

At least the court was convinced that the preemption issue should be decided prior to class or merits discovery.  But the court entertained what it called “a more realistic view of the discovery required for resolution of the preemption motion.” “Realistic” turns out to mean exceedingly broad.  According to the court, the defendants’ preemption motion “relies upon evidence regarding its communications with FDA and its manufacturing process, both of which Plaintiffs are entitled to explore before responding to the motion.”  Consequently, the “preemption defense opened doors in discovery that may well have stayed closed if the only issue was breach of a state-law warranty.”  Open doors are bad.  They let in all sorts of unwanted things – traffic noises, heat, peddlers and, bugs, to name a few.  And bad ideas.

Here, the court opened the door very wide indeed.  For example, the plaintiffs wanted all correspondence between the manufacturer and the FDA relating to product labeling – both pre and post approval.  They also asked for all Establishment Inspection Reports, FDA Form 483s, and Warning Letters issued by the FDA relating to the labeling.  That scope might make sense if the defendants were raising Wyeth v. Levine “clear evidence” preemption.  But they weren’t.  Rather, the defendants argued that the proper inquiry is whether they could “independently do under federal law what state law requires” and whether they could, as a matter of law, “make a unilateral label change that would satisfy the state-law obligation alleged in Plaintiffs’ Complaint.”  That’s Mensing/Bartlett.  That’s different.  That’s straightforward.  That’s binary. The defendants quite logically argued that they were “not raising a Wyeth-type preemption defense and that Plaintiffs ‘have no need for discovery relating to an argument [they] will never make.’”   The defendants also argued that even under the Wyeth changes-being-effected analysis, the plaintiffs could not possibly unearth any “newly-discovered information” that would prompt a labeling change, because it was clear that the FDA knew the relevant information.  End of story.  End of inquiry.  End of discovery.

The defendants were being very Thoreauvian.  They wanted to “simplify, simplify.”  But the court, perversely, was having none of it.  Here is what the court said:  “This Court – and not Defendant – will ultimately decide how to apply Supreme Court law to the evidence presented. Plaintiffs are entitled to advocate for the Wyeth standard, and their requested discovery is relevant to the impossibility preemption analysis in Wyeth.”

And here we must digress.  We are reminded of a story about a legendary D.C. Circuit judge who had stayed on the bench a bit too long.  His practice for oral argument was to consult index cards filled with questions written up by his clerks.  By “ consult,” we mean that he would read off the questions, word for word.  At one argument, he read off a question and managed to stump a polished advocate.  Said polished advocate was stumped because the question had absolutely nothing to do with the case.  Awkward silence. Then the clerk ran up to the side of the bench and whispered frantically, “ That’s the next case, the next case.”  The elderly judge was having none of it.  He sputtered, “ We’re not getting to the next case until this lawyer answers my question!”

In the In re Herceptin case, it is as if the judge was listening to a different case – certainly a different argument.  No wonder, then, that the discovery analysis is so wrong.  Granting the discovery requests would require search of “an extensive regulatory database containing over four million documents.”  The defendants argued proportionality, but the court finds “this proportional to the needs of the case, considering the importance of the issues raised in this multi-district litigation action, the substantial amount in controversy, Defendant’s access to relevant information, Defendant’s resources, and the importance of the discovery in resolving the issues.” So now, in addition to the court’s laissez-faire (or is it les bon temps rouler?) attitude toward discovery, evident disaffection with preemption (at one point, the court bemoans how the plaintiffs “will be deprived of resolution of their state-law claims if the [preemption] defense is successful”), and misconstruction of the defense arguments, we get that other discovery bugaboo about how an MDL  can make even the most extravagant plaintiff discovery request seem proportional.  There is good authority to the contrary (see here, for example), but you won’t see it cited by this court.

Thus, the plaintiffs walk off with a clean sweep win.  They will get communications occurring prior to FDA approval relating to the “Chemistry, Manufacturing and Controls” because such information could be relevant to an obstacle preemption defense that the defendants are not raising.  The plaintiffs will get discovery on the approval process for the purpose of exploring whether FDA “weighed the competing interests relevant to the particular requirement in question, reached an unambiguous conclusion about how those competing interests should be resolved … and implemented a conclusion via a specific mandate …”  Hmm.  That “unambiguous” bit sounds like the Third Circuit’s Fosamax analysis that is sure to be trashed by SCOTUS next year.  To be clear, it is hard to blame the plaintiffs for their approach.  They smartly asked for as much as the court would give them, which turned out to be the whole kit and caboodle.

But wait.  There’s more.  The plaintiffs will not only get everything under the sun involving the product labeling, but will also get all documents and communications touching on the mass, volume or density of the medicine available in a vial.  Naturally, inevitably, ineluctably, the court rejected the defendants’ argument that, “even if additional documents exist, they would be cumulative and would not meaningfully alter the preemption analysis.”  Why?  Here is the court’s answer:  “If one document certainly exists saying ‘ x,’ – which is relevant to overcoming a preemption defense – it is not overly speculative that other similar documents exist in Defendant’s files.” Huh?  That’s like saying that no evidence could ever be cumulative. If there is some evidence of something, we must collect all such evidence.

The defendants even lost an argument that should have been a sure winner – that discovery on “the number of rejected lots is irrelevant because these batches never reached customers.”  Nobody bought those products.  But the court wasn’t buying the argument, because the preemption defense “is not devoted to the substantive claims.”  Well, if a defense is not devoted to substantive claims, it is not really a defense, is it?

The court’s opinion in In re Herceptin leaves us dissatisfied and puzzled.  Near the end of Walden, Thoreau tells us that he “left the woods for as good a reason as I went there.  Perhaps it seemed to me that I had several more lives to live, and could not spare any more time for that one.  It is remarkable how easily and insensibly we fall into a particular route, and make a beaten track for ourselves.”  To our mind, the court’s all-in approach to discovery in Herceptin is an overly-beaten track.  It is certainly insensible.

Greetings, August!  These are called the Dog Days of Summer, but a lot more gets done this month than you might think.  Sure, we usually take our vacation in August.  And yes, there are some especially silly official days in August, e.g. Wiggle Your Toes Day (6th), Sneak Some Zucchini onto Your Neighbor’s Porch Day (8th), Bad Poetry Day (18th), and Frankenstein Day (30th).  But for some reason, August has figured mightily in the history of intellectual property.  Copyrights were filed for The Wonderful Wizard of Oz on August 1, 1900, and for “Hey Jude” on August 30, 1968.  Philo Farnsworth patented the television on August 20, 1930 (and yet August is a month full of reruns). 

 

Who are we kidding?  You are probably on a beach as you read this, or at least wishing you were on a beach.  So we’ll keep today’s discussion short and light.  (Almost as short and light as the district court’s analysis that drew scorn from the Second Circuit in the case we review below.)  After you read this little post, feel free to stick it into a blender with tequila, Grand Marnier, lime juice, and ice, and press “puree.”

 

Earlier this week we mentioned Langan v. Johnson & Johnson Consumer Companies, Inc., – F.3d -, 2018 WL 3542624 (2d Cir. July 24, 2018), a case that said some very useful things about class certification when there are plaintiffs from multiple states.  It is not a drug or device case, but it makes the point that when the laws of many different states are implicated for many different plaintiffs, aggregated treatment might not be such a good idea.  The plaintiff in Langan alleged that baby products were labeled “natural” when they were not. The complaint claimed that this labeling was deceptive and violated the Connecticut Unfair Trade Practices Act (CUTPA) as well as the state consumer protection laws (charmingly referred to as “mini-FTC acts”) of twenty other states, and sought to certify a plaintiff class covering many states.  (Permit us a brief, but utterly characteristic moment of cynicism:  many states = many plaintiffs = huge attorneys’ fees.)     

 

The district court certified a class of consumers who purchased two baby bath products.  (For some reason, baby sunscreens were omitted from the class.)  The plaintiff petitioned for permission to appeal pursuant to Federal Rule of Civil Procedure 23(f), and the Second Circuit granted leave.  The appeal was directed against the district court’s conclusions that (1) the plaintiff had Article III standing to bring a class-action claim on behalf of consumers in states other than Connecticut, and (2) the state laws in the other states are sufficiently similar to support certifying the class. 

 

An appellate court will overturn class certification if the district court abused its discretion.  That is not an easy standard for an appellant to meet.  But it was met here.  The Second Circuit was not receptive to the standing argument, but did conclude that the district court did not adequately analyze whether the multiplicity of applicable laws meant that common legal issues did not predominate over individual legal issues.  The district court found predominance of common issues because the “minor differences” the defendant  identified among the various state consumer protection laws would not “overwhelm the questions common to the class” given that “[a]ll the states have a private right of action for consumer protection violations, allow class actions, and have various other important similarities.”  The district court’s discussion of this issue occupied a single paragraph.  Brevity can be the sole of wit.  But sometimes not. 

 

The Second Circuit held that the issue of the effect of the various state consumer laws on predominance rated a bit more analysis than that solitary paragraph. Under Rule 23(b)(3), the district court has a “duty,” before certifying a class, to “take a close look” at whether the common legal questions predominate over individual ones.  District courts “must do more than take the plaintiff’s word that no material differences exist.”  As you would expect, both parties had submitted “complicated and conflicting summaries of the state consumer protection laws in eighteen states” to the district court.  The district court’s resolution of this dispute wasn’t merely, er, concise (Cursory? Dismissive?).  Worse, in the view of the Second Circuit, the district court did not “sufficiently engage” with the defendant’s “arguments about reliance, instead concluding that ‘it appears’ that none of the states’ high courts have insisted on reliance.  The other identified differences – including whether intent to deceive is required, and whether causation can be presumed – were not discussed.”  The district court’s  opinion was not a “close look.”  It was more like a no look.    

 

Accordingly, the Second Circuit remanded the case to the district court “to conduct a more thorough analysis” and “to carefully analyze the relevant state laws, decide whether subclasses are appropriate, reconsider the predominance questions, and explain in greater detail its conclusion on that question.”  That is no small effort, and perhaps it will force the district court to confront the complexities of the variations among the state consumer laws, and realize that class certification would be a messy mistake. 

 

Just as we finished this post, the summer issue of the ABA section of Litigation publication, Litigation News, plopped on our desk.  There is an article in that issue that is pertinent to today’s post:  S. Carr, “Slamming the Brakes on Nationwide Class Actions,” 43 Litigation News No. 4, pp. 4-5  (Summer 2018).  More beach reading.      

 

Antitrust was our favorite course in law school.  That law school was located in the south side of Chicago, city of big shoulders and bigger minds (Posner, Easterbrook, et al.) who weren’t shy about subjecting antitrust law to flinty-eyed analysis.  It was exciting.  It was logical.  It focused on real world results.  Earlier Chicago School antitrust pioneers included Aaron Director, Ronald Coase, and Robert Bork.  You have probably heard of that last fellow.  His nomination to SCOTUS descended into a partisan circus resulting in his rejection, which was due as much to his beard and his lip-smacking over the SCOTUS case inventory “intellectual feast” as to his actual qualifications for the office.  His nomination also resulted in a new verb used for clobbering SCOTUS nominees: to “Bork” someone, especially someone who has a substantial written record.

 

We would hate to be Borked.

 

Applied correctly (i.e., Chicago-ly), antitrust law looks at how things really work and what really makes sense.  It is, in short, quite different from drug and device product liability law, where the realities of science, medical practice, and warnings are submerged in fanciful morality tales.  So it is with some exhilaration that we take this brief summer vacation away from Fosamax, Bausch, and the latest insane talc verdict to consider an antitrust case, Washington County Heath Care Auth., Inc. v. Baxter Int’l Inc., 2018 U.S. Dist. LEXIS 112064 (N.D. Ill. July 5, 2018).  That case is of interest to us because it turns on the real world realities of regulation and recalls.  Spoiler alert:  FDA regulation is extensive and voluntary recalls are not easy. (Nobody on the blog had anything to do with the case.  The opinions herein are wholly/only ours, not the parties’ or their lawyers’.)  

 

In Washington County Health Care Authority, the plaintiffs claimed that  the two largest producers of intravenous saline products violated the Sherman Antitrust Act by colluding to increase prices by initiating a series of bogus voluntary recalls that depleted the saline inventories of health care facilities throughout the nation.  The defendants filed a motion to dismiss, arguing that this theory is implausible.  They cited Twombly.  We on this blog often cite Twombly, but now we are reminded that Twombly was an antitrust case.  The defendants won their motion to dismiss, because the plaintiff’s theory that the defendants maneuvered their way into voluntary recalls was implausible.   Substitute the word “nutty” for “implausible” and you’d be a little closer to the truth.

 

Why was the plaintiffs’ theory nutty?  At different times, the two defendants issued voluntary recalls of IV saline due to leaks and the presence of particulate matter.  So, as an initial matter, you’ve got to believe that manufacturers would intentionally make up a story that their products were defective.  Who does that?  (As a DDL defense hack, we feel the Washington County Health Care Authority case pulling us through the looking-glass.  We’re used to hearing plaintiffs gripe that our clients should have recalled their products.  Can you spell damned-if-you-do-damned-if-you-don’t?) Further, to make out an antitrust case, there must be evidence that the two manufacturers agreed on this plan.  Was there any actual evidence of this agreement?  There was not.  The plaintiffs identified “parallel behaviors,” but those behaviors “are no more probative of an agreement than of independent self interested conduct.”  Moreover, the behaviors weren’t all that parallel. First, the timing was not quite consistent.  Second, one manufacturer recalled eight times as much product as the other.  Why would one conspirator confer such a benefit on its rival? 

 

There is another problem with the antitrust complaint.  Agreement or no agreement, the complaint contained no allegations suggesting that the reasons the manufacturers provided for the recalls were false.  The complaint did not say there weren’t leaks or there weren’t particulates.  Rather, the complaint characterized the defects as “inconsequential” or “technical,” thus permitting the defendants to engage in the recalls “without significant business or reputational risks.”  That contention is facially implausible, but it is also undercut by the FDA’s classification of the recalls as Class I or II, which are the two most serious recall designations.  A Class I recall occurs when “there is a reasonable probability that the use of, or exposure to, a volatile product will cause serious and adverse health consequences or death.”  21 C.F.R. § 7.3(m)(1).  A Class II recall “is a situation in which use of or exposure to, a violative product may cause temporary or medically reversible adverse health consequences or where  the probability of serious health consequences is remote.”  No rational manufacturer would willingly walk into those categories.  

 

Even more basically, and no matter what category is implicated, voluntary recalls “impose high upfront costs and invite FDA scrutiny of the very instrument of the unlawful agreement.”  FDA considers a removal of a product from the market to be a voluntary recall if it “regards the product as involving a violation that is subject to legal action e.g., seizure.” 21 C.F.R. § 7.46(a).  Thus, the court concluded that a complaint “premised on a theory that the defendants intentionally manufactured a public health crisis by orchestrating  bogus product recalls that would, despite the public health crisis and rigorous regulatory oversight of product recalls, escape the FDA’s attention, lacks facial plausibility.”   And then there is a consideration of the practicalities of recalls.  “Product recalls are expensive and draw attention from regulators, especially in the pharmaceutical industry.”  The recalling company must submit a detailed recall strategy for evaluation by the FDA, must actually implement recall notifications, and must vigilantly monitor the recall and provide periodic updates to the FDA (tracking the number of purchasers notified of the recall and their responses, among other things).  21 C.F.R. § 7.42; 21 C.F.R. § 7.53. None of that is cheap or easy. 

 

Finally, it is hard to say that the non-agreement to cook up an expensive, self-inflicted reputational wound succeeded in raising prices.  The complaint acknowledged that in response to the saline solution shortage, the FDA permitted saline to be imported from foreign manufacturers – “another fact that illustrates the implausibility of the plaintiffs’ theory that the defendants colluded in a manner that convinced their regulator to allow imports from foreign competitors.” 

 

Hurray for the Windy City, where smart professors and smart judges are happy to blow away frail antitrust fables.  Now if only those winds could also clear the terrain of silly drug and device cases.   

 

 


Way back in law school we learned that a plaintiff suing for negligence must satisfy four elements:  (1) duty, (2) breach, (3) causation, and (4) injury.  Every one of these elements can be a battleground.  Even what seems like the simplest inquiry – whether the plaintiff was injured – can be controversial.  We have seen cases where a plaintiff alleged increased chance, and consequent  fear, of injury.  Is that enough?  Psychological injuries present a host of difficulties.  Remember the “zone of injury” cases?  Some injury issues manage to be at once both straightforward and intractable.  One of the all-time great movies about litigation, The Fortune Cookie, centered around that great bugaboo of small-time litigation – soft tissue injury.  Not everyone who dons a neck-brace is really hurt. 

 

The element of breach can also be knotty.  Was the defendant insufficiently careful?  How much care is reasonable?  What is the standard of reasonableness?  Reasonable person?  Reasonable riveter?  Reasonable podiatrist?  When we sat on a jury in a med-mal case a couple of months ago, pretty much the only issue in play was whether the doctor had paid close enough attention to his patient’s hemoglobin levels.   Some jurors wanted to throw up their hands, exasperated at the impossibility of knowing what a doctor should do.  Theoretically, the breach element drops out in strict liability cases.  Fault should not matter.  But when the claim is strict liability failure to warn, negligence principles creep back into the case.  It can be hard for a defendant to win summary judgment on breach.  Courts are quick to throw that issue to the jury.  And then, like the jury we sat on, some poor fact-finders will want to throw the issue right back.

 

More often, it is the causation element that constitutes summary judgment bait.  In this blog, we have spilled a lot of web-ink on the causation issue, whether it be medical causation (did this drug or device hurt the plaintiff?) or warning causation (would a different warning in the label have steered the doctor away from this product?).  If the doctor did not even read the label, our clients win.  Some commentators say that there are five, not four, elements, because causation actually involves separate questions of but-for causation and proximate causation.  That latter item has given rise to quasi-philosophical musings.  Maybe something played a role in the causal chain, but is it so remote or obscure that putting the defendant on the hook for damages would be unfair?  Maybe Donny was a dolt to leave a lit candle on the dresser in his rental apartment, but should he be on the hook if a burglar broke in, knocked the candle onto the rug, and set the place ablaze?  Proximate causation, in the views of some, can boil down to whether it was reasonably foreseeable that the breach of the duty of care would cause this particular harm.  But evaluating foreseeability can almost seem like an epistemological exercise.  Whose perspective counts?  What are the sources of foreseeability?  We’ve always thought that foreseeability was a fuzzy criterion, because it can be altered by so many things – including court opinions.  Now that we know how clumsy burglars can be, thanks to F. Supp. or Law360 or the Philly Inquirer or Eyewitness News, shouldn’t we be extra-careful about leaving lit candles behind?  (Similarly, in Fourth Amendment jurisprudence, the notion of reasonable expectation of privacy seems mercurial.  Don’t SCOTUS pronouncements themselves shape such expectations?  Once we read how cops can identify marijuana grow-rooms via thermal imaging, doesn’t our expectation of privacy somehow diminish?  But we digress.)   

 

If proximate cause turns, at least in part, on foreseeability, so does the first negligence element, duty.   Today’s case, Martinez v. Walgreen Co., 2018 WL 3241228 (S.D. Texas July 3, 2018),  is about the scope of duty.  Maybe the Martinez case will end up being one for the law books.  Even though the defendant in Martinez is not a drug or device company, we feel duty-bound to report on it.  The defendant was a pharmacy, and the claim was the pharmacy dispensed the wrong prescription to its customer.  The medication incorrectly given to the customer allegedly caused the customer to experience hypoglycemia, which adversely affected his ability to drive (blurry vision, dizziness, etc.), which resulted in a series of auto wrecks that killed the occupants of other vehicles.  Those other drivers/passengers happened to be in the wrong place at the wrong time.  The estates of those victims sued the pharmacy for dispensing the wrong drug.  Even assuming that the pharmacy was negligent and that such negligence caused the terrible injuries, and assuming that the pharmacy owed a duty to its own customer to get the prescription right, did the pharmacy owe a duty of care to the people in the cars struck by its customer?    

 

The federal court, applying Texas law, said No, and granted summary judgment to the pharmacy.  In Texas, pharmacists are considered health-care providers and owe their customers a duty of care.  That much is clear.  But Texas courts have not recognized a general common-law duty for health-care providers towards third parties for injuries that may be the result of the provider’s negligence to the patient.  So far, so bad for the plaintiff.  Nevertheless, Texas has recognized a duty for medical professionals towards third parties in very limited circumstances when the breach of a duty to the patient gives rise to a reasonably foreseeable harm to an identifiable person or class of persons as a consequence of that breach.  For example, if a medical facility housing a criminally insane patient – one who presented a clear danger to the public – failed to control that patient and permitted him to shoot someone, the facility could be liable for breach of the facility’s duty to control the patient.  Is that a good analogy to what happened in Martinez?  Perhaps the best case that plaintiffs cited was one in which a Texas court held that a doctor who failed to warn a patient who had a known history of drug abuse not to drive while under the influence of Quaaludes and the patient then drove and injured third party motorists.  Pretty close, right? 

 

But Texas courts over the years have considerably reined in the duty to third parties.  Thus, physicians have no duty to warn epileptic patients not to drive and mental health professionals have no duty to warn third parties about specific threats (the law might be different elsewhere).  Texas courts have also ruled that pharmacists have no duty to warn about the potential side-effects of medication.  Against this not entirely consistent or clear legal backdrop, the Martinez court asked the following question:  “Under Texas law does a pharmacist owe a duty to unconnected third parties for the negligent prescription of medication?”  The court answered that question in the negative because “In order for a third-party duty to arise, the breach of the health-care provider’s duty to the patient must create a reasonably foreseeable consequence to an identifiable party or class.  Here, Plaintiffs are not identifiable third parties.”  The defendant pharmacy had no duty to control its customer’s behavior or to warn him about side effects.  To find a duty to the plaintiffs, the court would have to find that “a pharmacist has a general duty to the public for negligent provision of medication.  The Texas Supreme Court has never held that such a duty exists, and thus, this Court, Erie-bound cannot so find now.”  Well, that sort of respect for Erie is eerily refreshing, isn’t it?

 

The plaintiffs still did not give up.  They argued that the pharmacy’s dispensation of the wrong medicine violated a statute and that, therefore, this was a case of negligence per se.  The negligence per se doctrine simply means that a defendant’s violation of a statute removes the need for a jury to assess whether the defendant was careless.  The statute itself sets the bar for due care.  But what that means is that negligence per se answers the breach question –  “negligence per se does not impose a duty.”  It is the absence of duty in the Martinez case that puts the plaintiff out of court.   It is the absence of duty in the Martinez case that puts that case in our blog.