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If you want to insult and annoy someone, consider suing them under the Racketeering Influenced and Corrupt Organizations Act, 18 U.S.C. section 1964.  That law is charmingly known as RICO, in an allusion to the big bad in the great 1931 gangster film Little Caesar, played by Edward G. Robinson at his most snarly.  It’s one thing to accuse someone of fraud, but to accuse them of racketeering is a bit over the top.  But there is, unfortunately, ample precedent out there supporting the abuse of RICO, extending it to ordinary business disputes.  Plaintiffs dazzled by the prospects of treble damages have not been terribly shy  about filing RICO claims against companies that do their best to dot all the i’s and cross all the t’s – those companies simply committed the offense of being “organizations” in a society where plaintiff lawyers know no bounds of judgment or taste.   Promiscuous use of RICO is often counterproductive because, while the plaintiff lawyers are usually trolling for a settlement, good luck settling with someone who is justifiably outraged that you called them a racketeer.

 

 RICO is yet another instance of the American system of jurisprudence taking a wild wrong turn, so it’s nice to see a court rein it in.  It’s especially nice to see that the judge who did the reining in was once one of our favorite law professors in a far away place (okay – Chicago isn’t that far away) long ago.   Last week the Seventh Circuit issued its opinion in Sidney Hillman Health Center v. Abbott Laboratories, 2017 WL 4544834 (7th Cir. Oct. 12, 2017), a Third Party Payor (TPP) action coming out of the Depakote MDL in N.D. Illinois.   The action by the TPPs was, as is typical, completely parasitic, opportunistically seizing upon the existence or conclusion of other litigation.  The TPPs filed their RICO action after a 2012 guilty plea and settlement of a False Claim Act lawsuit.  Judge Easterbrook wrote the Seventh Circuit’s opinion.  It is pithy and compelling and might very well make it onto our top ten list at the end of the year. 

 

Two welfare-benefit plans that paid for some of Depakote’s off-label uses filed this suit seeking treble damages under civil RICO.  The plaintiffs alleged that the off-label uses of Depakote were harmful and/or not effective. The alleged injuries were that the TPPs paid for (1) off-label uses that would not have been paid but for the company’s alleged misrepresentations, and (2) additional medical harm caused by the drug.  The TPPs asked the district court to certify a class comprising all third-party payors of drug expenses. The district judge dismissed the complaint on the ground that the plaintiffs could not show proximate causation.  The district judge reasoned that the allegedly improper marketing was directed, not at the plaintiffs, but at physicians, and concluded that tracing loss through the steps between promotion and payment would be too complex.  We wrote about the district court’s ruling here. The Seventh Circuit affirmed the dismissal of the case, and did so without footnotes or reservations.    

 

The headline is that Sidney Hillman rejected the type of attenuated causal chain typically asserted by TPPs:  “improper representations made to physicians do not support a RICO claim by Payors, several levels removed in the causal sequence.”  Sidney Hillman, 2017 WL 4544834 at *4.  As the Seventh Circuit recognized, under RICO, the initially injured parties are not payors, but rather the patients, who “suffer if they take [a drug] even though it is useless to them and may be harmful.”   Id. at *2.  Because TPPs are not initially injured parties, determining their alleged injuries would be difficult.  First, some off-label uses of Depakote may be beneficial, so how does any alleged injury arise from such uses?  Second, some doctors would have prescribed the drug regardless of any off-label promotion.  Third, other doctors may not have changed their prescribing practices at all, or they might have changed them but done so in response to information that the company did not influence.  How can the ‘injury” caused by the off-label promotions be calculated?

 

The plaintiffs’ lawyers  suggested that they could gin up a “regression analysis” to “determine the volume of off-label prescriptions that would have occurred in the absence” of the promotional activity.  We have seen this sort of thing before.  Maybe you have, too.  Yes, there are travelling econometricians who can regress their way to any conclusion you might want.  Luckily, the Seventh Circuit did not accept this suggestion, because the data such an analysis would require simply did not exist.  The wished-for regression analysis also “would not address the question whether patients suffered medical losses or out-of-pocket costs via co-pays, or whether physicians lost business by prescribing an ineffective or harmful drug, or what to do about patients whose off-label use of Depakote made them healthier.”  Id. at *3.  Moreover, it would not be proper to assume that TPPs would not have paid for anything, as they likely would have paid for some drug other than Depakote, which might have been more costly.  Importantly, the “absence of data leaves a serious problem in showing plausible causation, which is required even at the complaint stage.”  Id.  Thank you, TwIqbal

 

The Seventh Circuit acknowledged that five other courts of appeals have considered the extent to which TPPs can recover under RICO for wrongs committed while marketing pharmaceuticals.  The Second Circuit, in Sergeants Benevolent Ass’n Health & Welfare Fund v. Sanofi-Aventis, 806 F.3d 71 (2d Cir. 2015), held that the causal chain in TPP cases was too long to satisfy SCOTUS requirements.  (Sergeants Benevolent Ass’n made our 2015 Top Ten list.) The Ninth and Eleventh Circuits agreed with the Second, “and deem this so straightforward that they have issued nonprecedential decisions.”  Sidney Hillman, 2017 WL 4544834 at *3.  Those are the good decisions.  Spoiler alert: the Seventh Circuit agrees with them.  On the not-so-good-side of the ledger, the Seventh Circuit observed that In re Avandia Marketing, Sales Practices & Product Liability Litigation, 804 F.3d 633 (3d Cir. 2015), the Third Circuit “held that recovery under RICO is possible when misrepresentations are made directly to Payors, leading them to add certain drugs to their formularies, which means that they pay more per prescription than they would otherwise.”  (Honestly, despite this terrible result in Avandia, and despite the Fosamax legal-butchery that we’ve analyzed to a fare-thee-well, our hometown Circuit is usually wise and wonderful.)  Finally, in the Neurontin litigation the First Circuit kind-of-sort-of had been in the same place as the Third Circuit, while implying disagreement “with the other four circuits about the possibility of Payors’ recovery for misrepresentations made to physicians.”  Id. at *4.  It’s not clear exactly what the First Circuit held in Neurontin,  but don’t fret about it too much, because “to the extent there is a conflict the Second Circuit has this right.”  Id

 

And, almost needless to say, we think the Seventh Circuit has this right.   

And, with a Circuit split teed up for SCOTUS, we’re willing to bet that the efforts by Second, Ninth, Eleventh, and now Seventh Circuits to cabin RICO somewhat will prevail.   

Look what just fell into our lap. Our blogging about the favorable California Risperdal preemption decision last week shook loose from that same case a subsequent denial of reconsideration of a summary judgment motion in favor of the defendant based on preemption. Risperdal and Invega Prod. Liab. Cases, 2017 WL 4479317 (Cal. Super. July 24, 2017). So what, you say? Old news, you say? Permit us to explain.

As we recounted last week, a California judge granted summary judgment to the defendant based on Wyeth v. Levine “clear evidence” preemption. Six days after that sound and wise ruling, the very unsound and unwise Third Circuit Fosamax decision stumbled into the world. Not surprisingly, the plaintiffs in the Risperdal/Invega litigation cited Fosamax as a basis for the California judge to reconsider the preemption ruling. And while we refer to “California” you should know it was the Los Angeles County Superior Court that ultimately rejected the Third Circuit’s silliness, and, to be even more specific, you should know that the reconsideration-denying judge sits in the Los Angeles Central Civil West Courthouse, not-so-affectionately known by defense hacks as “The Bank.” Plaintiffs often do very well in The Bank. But not this time. So while we’re writing about an Order from almost three months ago, it’s new to us, and it makes for a nice exclamation mark after our recent discussions of the certiorari petition and amicus brief urging SCOTUS to reverse the Third Circuit. Even woefully inattentive readers of this blog will recall how the Third Circuit held that it was up to the jury whether or not a defendant had come up with “clear evidence” (transmogrified into “clear and convincing evidence”) that the FDA would have rejected the warning suggested by the ever-helpful plaintiff lawyers. We hated to call an opinion by our hometown circuit pure hogwash, but that’s what it was. The fact that a judge from The Bank also pronounced the Third Circuit’s ruling to be hogwash is nothing short of remarkable.

The California judge characterized the issue as “who decides” federal preemption. The Third Circuit’s folly in Fosamax was to give the decision to the jury. The California judge held that “Fosamax is not controlling and is wrongly decided.” He then reaffirmed the preemption decision. Unlike the Third Circuit’s decision, the California decision followed authority and was well-reasoned. The California judge looked to two other judges who rejected Fosamax. First, in a hearing earlier this year in the Xarelto litigation, Judge Fallon stated that the clear evidence preemption issue was “a question of law, not for the jury. I’m not even sure they know what preemption is.” In re Xarelto (Rivaroxaban) Prods. Liab. Litig., Dckt. No. 14-MD-2592 (E.D. La. May 1, 2017). We think when Judge Fallon said he wasn’t sure “they” know what preemption is, he was referring to the jury, not the Third Circuit. But we’re not certain. Either way …. Second, in Utts v. Bristol-Myers Squibb, Co.,   2017 U.S. Dist. LEXIS 70317 (S.D.N.Y. May 8, 2017), Judge Cote also declined to follow Fosamax. Judge Cote “cogently noted the importance of resolving these matters of federal supremacy as early as possible in the life of a case (which is only possible when the issue is properly considered a ‘question of law’ for judicial resolution without the jury).” Exactly right. And that is exactly what the Third Circuit missed. Under the Third Circuit’s rule, preemption wouldn’t be decided until a jury returns a verdict, perhaps one containing many zeroes and zero analysis.

The California judge went on to observe that the trial judge in Levine v. Wyeth and the SCOTUS justices in the same case “all simply assumed that the federal preemption question was a matter reserved for the judge and not a jury question.” The same can be said for a squadron of decisions applying Levine. Thus, “Fosamax stands out as an outlier under the circumstances.” In conclusion, the California judge stood by his earlier decision that clear evidence led to preemption, and that “[b]oth the questions of whether proposed label changes are based on ’newly acquired information’ and whether there is ‘clear evidence’ FDA would have not approved the proposed label changes are legal questions for the Court to decide.” The California judge is right about that.

The California judge also “does not see this as a close question but as the only correct ruling that could be made here.” He’s right about that, too.

We’ve come to expect top-flight work product from the Product Liability Advisory Council (PLAC), even when it isn’t Bexis pushing the pen or pecking at the keyboard (as he has done so many times on so many important issues). PLAC’s amicus brief in support of the petition for certiorari regarding the Third Circuit Fosamax case is no exception. See Merck Sharp & Dohme Corp. v. Albrecht, et al., 2017 WL 4310719 (Appellate Petition, Motion and Filing) (Supreme Court of the United States Sept. 25, 2017).  Three weeks ago, in our post entitled The Third Circuit Fosamax Preemption Error Has Got To Go,  we discussed the defendant’s excellent petition for certiorari. The petition articulated the pain we felt from the Third Circuit’s misinterpretation of the “clear evidence” preemption test.  That misinterpretation is clearly wrong and clearly pernicious. The Third Circuit took the already tough “clear evidence” language from the SCOTUS Wyeth v. Levine test, tweaked and twisted it, added a few words, and transformed it to make impossibility preemption virtually impossible. The Third Circuit held that a defendant could not invoke preemption without clear and convincing evidence to prove to a jury that the FDA would have rejected the plaintiff’s proposed warning. Because the clear and convincing evidence standard is so demanding, and because the court threw a quintessentially legal question to the jury, the Third Circuit made summary judgment on preemption a vanishingly slender hope.  Perhaps that was the idea. 

 

 

Well, it’s a bad idea.  It’s bad law and bad policy.  The certiorari petition made a strong case for SCOTUS to take the Fosamax case and clean up the mess made by the Third Circuit.  Now the PLAC brief makes a strong case for reversal even stronger.  The PLAC brief truly is brief.  We recently praised brevity, and the PLAC brief shows the power of concise clarity. PLAC begins by reminding SCOTUS that conflict preemption is grounded in the Supremacy Clause of the Constitution.  PLAC also reminds SCOTUS that the Third Circuit’s erasure of conflict preemption took place in the context of an MDL involving more than a thousand cases.  That means that, even aside from precedential toxicity, the Third Circuit’s decision had a huge effect on the federal docket.  A key plaintiff claim in those 1000+ cases is that the manufacturer should have provided a stronger warning regarding the risk of bone fractures.  After a bellwether trial, with full development of a complete regulatory record, the Fosamax district court concluded that preemption was warranted because the record was clear that the FDA would have rejected the suggested label change.  How clear?  The FDA did, in fact, reject a label change.  That apparently was not clear enough for the Third Circuit.  The Third Circuit vacated and remanded the district court’s carefully considered ruling, discounting undisputed evidence.  It got to that result by changing “clear evidence” to “clear and convincing evidence” and changing a legal question into a factual question.

 

PLAC argues that it is important for SCOTUS to get involved because the Third Circuit’s decision adds to lower court confusion on the meaning of “clear evidence.”  As we have discussed before in this space, one can find cases with similar records and diametrically opposed holdings.  Compare Robinson (7th Circuit)(Posner holds that clear evidence compelled preemption)(see our post herewith Reckis (Massachusetts)(reaching opposite holding based on crazy reasoning)(see our first post on Reckis here).  The Third Circuit’s reasoning is even crazier than Reckis, and what drove that reasoning was language from cases having nothing to do with preemption.  But if one follows the “clear evidence” trail back to SCOTUS cases such as Geier and English, the evidence is clear that SCOTUS meant “clear evidence” to mean evidence of an actual, not merely potential, conflict.  SCOTUS never hinted that “clear evidence” referred to a heightened, “exacting,” “stringent” standard of proof unique to drug labeling cases.  If SCOTUS intended to impose a “clear and convincing” evidence standard (something, by the way, which would seem to be a legislative determination) it would have done so … clearly.  Moreover, in Geier, SCOTUS explicitly rejected an argument that a defendant invoking preemption must shoulder a “special burden.”     

 

PLAC also demonstrates that the Third Circuit’s Fosamax decision ignores SCOTUS preemption teachings and will cause harmful consequences.  Preemption is such a powerful and important defense because it can cut off meritless litigation before parties incur enormous expenses.  But the Third Circuit’s Fosamax decision permits a plaintiff to keep the litigation meat-grinder going merely by speculating that the FDA ‘might’ have rejected a warning if the language or circumstances occupied a counterfactual scenario only a millimeter away from reality.  That outcome is not only wasteful, it is perverse given recent SCOTUS preemption decisions in Mensing and Bartlett rejecting speculations about what FDA might or might not have done.  The outcome is also wasteful because it invites companies to shower the FDA with proposed label changes that might produce the “clear evidence” that will hit the tiny bullseye maybe-possibly left open by the Third Circuit.  Finally, PLAC contends that stomping out the preemption defense means that drug companies will more and more be at the mercy of the varying tort laws and jury attitudes in 50 states.  That sort of exposure and uncertainty could make a difference at the margins.  If even one innovative drug goes undeveloped because an innovator is scared off by the litigation lottery, that is one drug too many. 

 

Our original title, about how the Third Circuit Fosamax decision has “Got to Go,” came from The Sopranos. This time, the PLAC petition reminded us of a historical reference, one that came up in an odd way during the testimony of the previous director of the FBI:  will no one rid us of this meddlesome case?

 

We harbor a suspicion that half the drug/device tort cases we encounter are really medical malpractice cases in search of a deeper pocket (thank you medmal damage cap statutes).  We’ve said before (e.g., https://www.druganddevicelawblog.com/2008/10/everything-you-need-to-know-about-wyeth.html) that both Levine and Riegel were really med-mal cases.   That search for a deeper pocket is undertaken by the lawyer, not the client.  We say this because we can use up all the fingers on one hand counting cases over the last year or so where it became clear that the product liability plaintiffs were certain that it was actually their doctors who erred.  The plaintiffs said so themselves.  They said so in their testimony.  They said so in contemporaneous diaries.  This evidence was hard to align with the lawyers’ strategy of making the case all about the manufacturer and its documents.  But why let reality get in the way of a game plan?  The plaintiffs’ discovery, motions, and rhetoric pretty much ignored whether the doctor met the standard of care.  Indeed, the doctors often got dropped just before trial.  Sometimes, we are sorry to say, our cynical eyes espied a shady quid pro quo, as the same doctors show up as witnesses for the plaintiffs

 

 

Why does a med-mal case turn into a product liability case?  Perhaps we should add a qualifier here.  It is product liability lawyers, not all lawyers, who contrive to turn med-mal cases into product liability cases.  There are plenty of superb med-mal plaintiff lawyers out there who are perfectly happy to practice their craft, and would sooner set their hair on fire before steering a case into comment K, the learned intermediary doctrine, or an MDL.  But product liability lawyers are at home with these lovely little bits of business.  It’s like that old saw about how a hammer sees nails everywhere.  We had lunch earlier this week with a friend who formerly worked with us at a defense firm, but who has now become a plaintiff med-mal lawyer and is doing terrifically well.  He wracks up big verdicts all the time.  His name on a complaint must up the settlement value of a case by 20%.  But he acknowledges that suing doctors isn’t easy.  He estimated that 90-95% of med-mal trials in Pennsylvania end with a defense verdict.  Of course he files his cases in Philadelphia whenever possible, but even in that benighted jurisdiction the defense win rate hovers in the 80s.  We were astonished to hear this.  We were less astonished after our friend explained that the slam-dunk med-mal cases invariably settle.  The ones that go to trial tend to be a bit on the flimsy side, or at least there is a yawning weakness somewhere in the case.  And then there is the fact that most people are willing to give the benefit of the doubt to doctors.  Unless you get the kind of stunning insider testimony that dealt Paul Newman a winning hand in The Verdict, doctors win most med-mal cases.  In addition, there are often procedural hurdles or damages caps unique to med-mal cases.  It is a different playing field from a mass torts case.  Doctors get treated like the home team.  Drug or device companies get treated like a criminal syndicate – even when the trial really is on their home turf.   

 

How does a med-mal case morph into a product liability case?  Failure to warn and failure to train are usually the operative theories.  Mind you, we don’t think failure to train is a legitimate theory at all. We have a whole topic thread devoted to that issue.  https://www.druganddevicelawblog.com/tag/duty-to-train/  If there isn’t some specific law that requires such training, or that such training be carried out in a particular way, and if the company is going above and beyond what is legally required, it seems stupid and unfair to pin additional liability on a company for a voluntary undertaking or through some other specious legal theory.  In any event, at the doctor’s deposition the plaintiff’s lawyer will play the game of “wouldn’t you have liked to know x,” and whatever the x is, such as adverse event data, a footnote in a study, or the surprise ending of the new Harry Potter play, the doctor will likely say yes, because … well, because nobody with an advanced degree wants to come across as stubbornly ignorant.  Moreover, a plaintiff’s product liability case acquires enhanced sex appeal if it turns out that a company sales representative was in the operating room.  The plaintiff attorney will argue that the sales rep’s action or inaction was somehow a huge factor as to why the patient sustained the alleged injury.  Once or twice we have met sales reps who bragged about how they would use a laser pointer during an operation to ‘help’ the doctor, but most acknowledge that they would never render such ‘advice.’ Sales reps cannot and do not practice medicine.  More importantly, we have never met a doctor who said that a sales rep superseded seven-plus years of medical education.  Turning a med-mal case into a product liability case presupposes a willing suspension of disbelief, but upon that suspension of disbelief rests a huge chunk of the American tort industry. 

 

But here is a nifty New York County (that’s Manhattan) decision upholding the proposition that medical device manufacturers, even if they have representatives in attendance during the use of their products, are not liable for how the physician chooses to use them.  Gregory v. Tehrani, et al., 2017 N.Y. Misc. LEXIS 3491, 2017 N.Y. Slip. Op. 31963(U) (Supreme Ct. N.Y. County Sept. 15, 2017).  The Gregory case sheds light on the med-mal vs. product liability distinctions in an odd and unexpected way:  the plaintiff tried to make the manufacturer a defendant in a med-mal case.  The case wasn’t restyled as a product liability case – it was still travelling under a med-mal theory.  And therein lies the problem for the plaintiff. 

 

The plaintiff had undergone plastic surgery on his face.  The doctor used a facial filler during the procedure.  Representatives of the facial filler manufacturer were allegedly present during some of the treatments rendered by the doctor to the plaintiff.  Something apparently went wrong and the plaintiff sued the doctor, the facility, and the manufacturer of the facial filler for medical malpractice and lack of informed consent.  The manufacturer filed a motion to dismiss the claims against it.  The manufacturer won.

 

The medical malpractice claims simply did not fit against the manufacturer.  The court considered the second theory (lack of informed consent) first.  The plaintiff’s claim that the facial filler manufacturer failed to inform the patient was foreclosed by the learned intermediary rule.  The manufacturer had a duty to warn the doctor, not the manufacturer.  Put simply, informed consent is not a theory that lies against a manufacturer.  The medical malpractice claim made even less sense.  Rather than allege the classic product defect claim against the manufacturer, the plaintiff alleged that the manufacturer failed to ensure that the doctor used the device in “a safe, indicated manner … and according to their own product guidelines and the guidelines of administrative agencies and bodies including but not limited to the Food and Drug Administration.”   Gregory, 2017 N.Y. Misc. LEXIS 3491 at *5.  It sounds almost as if the plaintiff was complaining that the manufacturer had failed to practice medicine.  That is a weird theory.  It is also rare.  (Though it was alleged all the time in Bone Screw litigation.)  We have blogged about something like this before:  see https://www.druganddevicelawblog.com/2013/12/drugdevice-labels-are-not-required-to.html.  There’s a reason why the theory is rarely seen: it is fundamentally wrong.  It conflates product liability and med-mal law.  The Gregory court proceeds to un-conflate them:  “[W]hile the manufacturer of a medical device has a duty to warn a patient’s physician of the risks associated with the device, the manufacturer is not responsible for how the physician uses the device and renders the medical care.”  Id.  Further, the plaintiff didn’t allege anything wrong with the warnings themselves.  Further further, the plaintiff’s allegations did not connect any of the manufacturer’s actions or omissions to the alleged injuries.  In short, there was no reason for the manufacturer to be a defendant in this med-mal case, and after the court granted the motion to dismiss, it wasn’t.   

 

 

 

Like many of you, on Friday mornings we turn to the “Legal Lions and Lambs” section of Law360.  It is not only voyeurism.  We are constantly working on things in media res (the middle of things), building slowly and gradually to a climax that  hardly ever arrives.  Ninety percent of cases settle, and that is seldom the stuff of Lions or Lambs. Nope: the Lions vs Lambs dichotomy is about winning and losing.  Not in any subtle sense, either.  The Law360 column focuses on trial verdicts or dispositive motions.  Those outcomes furnish teaching moments, points of inspiration, object lessons, or cautionary tales.  We have never personally shown up on either side of the list as far as we know, mirabile dictu (wonder to say – surely mastery of Latin is a mark of a Legal Lion, no?), given that we played a minor role in that vast stain on Anglo-American jurisprudence not-so-fondly remembered as the Engle tobacco litigation in Miami).
We know this much: we’d rather be a Lion than a Lamb. The Lion is king of the jungle. MGM pictures start majestically with a roaring lion.  King Richard was lion-hearted.  The hero in the best Disney animated movie was a lion. So was Barry Sanders.  By contrast, Lambs get led to the slaughter.  We count them as we try to fall asleep.  Their silence is the central image to the creepiest movie we have ever seen.  Worst of all, we garnish lamb chops with mint jelly.
Over the last couple of weeks, we saw some entries in the “Lambs” section that caught our attention because they involved lawyers we know and respect.  These lawyers defended drug or device companies that got tagged by juries with eye-popping verdicts.  These defense lawyers are, to put it plainly, great lawyers.  We co-tried, and won, a case with one of them, and counted two others as colleagues in the US Attorney’s office a long time ago.  Their skills are extraordinary.  They possess exquisite judgment, work hard, and give their clients the best possible representation.
And they lost the cases that landed them in Law360.  (One of them, by the way, had won a similar case a couple of months before – the first defense lawyer to do so.  Before he was a Lamb, this lawyer was a Lion). Suddenly, we decided that we disliked the “Lambs” label.  Law360 surely does not mean to insult anyone in the Friday column, but there is something undeniably negative about the “Lambs” term, and undeniably unfair.  We bet those lawyers on the losing end went down, not meekly, but swinging.
The fact is that great lawyers occasionally lose cases.  Why?  To begin with, great lawyers are given the hardest and most important cases.  We know a very smart in-house lawyer (in fact his company was involved with one of the cases that caught our attention in the Lions and Lambs column) who likes to ask lawyers begging for business from him to name their worst loss.  Too many lawyers pretend they have never lost, or immediately show their insecurity by ladling on the excuses. But think of the two or three best trial lawyers you have ever encountered.  Maybe there is a plaintiff lawyer in Houston with a photographic memory and unsurpassable eloquence. Maybe there is a corporate defense lawyer in Chicago who possesses laser-like focus and terrifying tenacity.  They have both been brutalized by juries. That is true for just about every other trial lawyer who has earned a glistening national reputation. Some cases are simply too hard. Some judges are simply too biased.  Or, most often, some juries are simply too batty.
When we consider our worst loss, we usually reflect on a near miss. (Right – we are cheating.)  We tried a case against one of the most unpleasant lawyers we have ever met.  You couldn’t trust his word.  He said things in open court that the Judge had explicitly ruled out of bounds.  But before violating the ruling, this lawyer would keep challenging it.  Again and again.  Every day was a new day.  (The rotten thing was that half the time the judge would give him something, as if that mollification would buy peace instead of inviting additional rounds of revisitations and defiance). He wasn’t a Lion or a Lamb.  He was a Weasel. The case was hard-fought, but we were sure we gave a bit better than we got, and our closing argument echoed Pericles (so we thought) while our villainous opponent cribbed his best lines from one of his competitor Texas plaintiff lawyers. His appeals to prejudice were utterly unoriginal. And plagiarism was the least of this scoundrel’s sins.  Be that as it may, it was now time to wait for the jury.  Our client, who was doubtless the smartest person in the room, took the plaintiff lawyer aside. They huddled and talked intently. One or two perplexing questions came from the jury.  Those questions were so unsettling as to provoke settlement. The in-house lawyer struck a deal with our adversary.  It seemed to us like a lot of money.   But there it was.

 

We informed the Judge. The Judge then informed the jury.  We then talked to the jury.  What they told us made none of us happy.  It seems that the jury was leaning toward awarding a verdict about ten times higher than the settlement. One member of the jury had been a bit, um, stealthy.  In voir dire she had disclaimed any relevant prior history at all.  It turned out that she had a daughter who suffered from a condition pretty similar to what the plaintiff claimed.  This juror pushed hard to become foreperson, and then pushed even harder for a punishing verdict.  We (the defense) were stunned.  But perhaps we weren’t quite as stunned as the plaintiff lawyer, who had bargained away his next vacation home.
We were almost Lambs.

 

There are lots of reasons why cases are won or lost, or settled.  We hate it when judges are outcome-oriented, and we should beware of that fault in ourselves, too.  The best lawyers don’t always get the best results.  We can think of a case where one of the finest, smartest, smoothest two or three trial lawyers we ever saw lost to one of the two or three dopiest, clumsiest ones we ever saw. The jury was moved by undeniable facts and unavoidable sympathy.
Let’s have a little sympathy for those Legal Lambs.  They might very well be much better than the Lions, and they probably did a better  job than most of us would have done.  Heck, they probably don’t want our sympathy.  They are much too tough for that.  They are not Lambs at all.

Last week we were going through the regulatory record of a drug that is now the subject of mass tort litigation.  This effort is central to assembling, per the SCOTUS Wyeth v. Levine case, “clear evidence” that the FDA would not have approved whatever label change the plaintiffs are advocating.  Then we remembered something.  It was even worse than remembering that we left the stove on, or that we left the garage door open, or that we root for the Phillies. We remembered that our case would be governed by Third Circuit precedent, and that the Third Circuit had done its best in the Fosamax case to make it impossible to get summary judgment on preemption.

As we blogged back in March, the Third Circuit in Fosamax reversed summary judgment for the manufacturer and held that it is a question for the jury whether the manufacturer had proved with clear and convincing evidence that the FDA would have disapproved the exact warning suggested by the plaintiffs.  Throwing what was really a legal issue to the jury and wrapping said issue in a heightened evidentiary standard that neither the Supreme Court nor any other court of appeals has ever adopted was doubly wrong, wrecked the law on preemption, and presented the plaintiff bar with an undeserved gift that would ultimately decrease drug innovation and increase drug prices.  What was truly bizarre about the Fosamax decision was that the FDA had, in fact, rejected the warning.  That is about as “clear” a bit of evidence as one could imagine.  But that rejection was not good enough for the Third Circuit, which wondered whether the rejection might have turned on the particular wording of the warning.

The Fosamax decision is such an obvious, pernicious error that, in the words of Tony Soprano’s crew members when another gangster becomes much too troublesome, it “has got to go.”  (The Sopranos was set in North Jersey, which is, in fact, in the Third Circuit, so the analogy isn’t too overwrought.)

The petition for certiorari in the Fosamax abomination has been filed, and it is a beauty. You can read it here.  If it doesn’t catch the Supreme Court’s eye and alert it to lower court destruction of preemption precedent, it is hard to imagine what would. To begin with, the petition does a magnificent job of doing that thing we were all taught to do in law school: stating the issue in a way that seems to compel the right – and winning – answer.  Here is the question presented according to the petition:  “Is a state-law failure-to-warn claim preempted when the FDA rejected the drug manufacturer’s proposal to warn about the risk after being presented with the relevant scientific data; or must such a case go to a jury for conjecture as to why the FDA rejected the proposed warning?” Petition at i.  See what we mean? Asking a jury to conjecture about motives is plainly silly, especially in the face of an FDA rejection of a warning.

The Third Circuit’s decision turns on dithering over whether the FDA might have approved the warning if it had been phrased slightly differently. The petition places this speculative misadventure in the context of a larger trend of lower courts erecting substantive and procedural hurdles to the preemption defense because lots of judges simply don’t like preemption.  The Fosamax decision is especially crazy because it invites “a lay jury’s psychoanalysis of why the agency had blocked compliance with local law.”  Petition at 2.  There are two key aspects of the Fosamax preemption test. First, the panel took the “clear evidence” language from Levine and twisted it into a requirement that a defendant prove it is “highly probable” that the FDA would have rejected the label change.  That bit is hard enough. But the second step really builds in the impossibility of establishing impossibility preemption: because the issue of whether the FDA would have rejected a proposed change is “counterfactual,” the question must go to the jury unless there is a “smoking gun” rejection letter from the FDA that would leave the jury no choice but to find the state-law claim preempted. Petition at 12.

This sort of manifest error needs correction, and SCOTUS has demonstrated a proclivity for granting review to correct lower court decision that limited or circumvented (or, as the petition says on page 15, “defied”) preemption. See Mensing and Bartlett.  The petition also takes us on a tour of rotten preemption decisions, such as Reckis (Mass. 2015), Mason (7th Cir. 2010), In re Prempro (8th Cir. 2009), and Hutto (La. Ct. App. 2011).  We are unsurprised to see a decision from our own Commonwealth represented in this preemption Hall of Shame:  Gurley (Pa. Super. Ct. 2015). But the Fosamax error reaches a high-water mark because it makes it virtually impossible for a brand name drug manufacturer to establish preemption, as plaintiff lawyers and their paid experts “can always dream up some ‘hypothetical’ reason why the FDA might have rejected a proposed warning – and under the decision below, that suffices to reach a lay jury.  The jury would then be asked (case-by-case) to guess as to why the federal regulator blocked the manufacturer’s state-law compliance.” Petition at 14. The way in which the rule was concretely applied in Fosamax highlights its absurdity: “[E]ven though the FDA did reject Merck’s warning, the jury could conjecture about the FDA’s reasoning and thereby conclude that the agency would not have rejected the warning had Merck improved its draftsmanship.”  Petition at 25.

The Fosamax transformation of Levine’s “clear evidence” language into a heightened “clear and convincing evidence” standard abrogates the strong default rule in civil litigation that matters are to be proved by a preponderance of the evidence. Petition at 26.  Typically, courts await direction from the legislature before raising the evidentiary burden.  But the much-abused presumption against preemption, coupled with judicial hostility to preemption, apparently works doctrinal wonders  Moreover, the requirement that the clear and convincing evidence eliminate any possibility that the FDA might have arrived at a different decision from some theoretical change in circumstances or warning language is at odds with the teaching of Mensing and Bartlett that theoretical possibilities should not dislodge preemption. (Further, as we pointed out in an earlier post, the Fosamax determination that clear evidence preemption is a matter of fact for the jury is fully at odds with Third Circuit precedent that preemption is a question of law for the court.)

The petition concludes with an incisive discussion as to how the Fosamax erosion of preemption “threatens the pharmaceutical industry and the FDA’s regulatory role.” Petition at 31.  The manufacturer in the Fosamax case voluntarily disclosed risk information to the FDA, and the FDA rejected an enhanced warning.  To be found liable under such circumstances is ridiculously unjust, and places companies in a quandary. Meanwhile, the FDA’s rejection would be merrily second-guessed by juries around the country – a veritable nationwide festival of cynical counterfactualism.

The petition is so well reasoned, and the Third Circuit’s error is so egregious, that we harbor optimism that SCOTUS will take the case and, once again, clean up the law of preemption.  Two relatively minor references in the petition caught our eye.  First, we are told that it was Justice Alito who extended the time to file the petition for certiorari.  Petition at 3. Second, there is a quote from Justice Alito’s prescient dissent in Levine, where he warned against allowing “juries in all 50 states … to contradict the FDA’s expert determinations.”  Petition at 31, quoting Levine, 555 U.S. at 626. Justice Alito comes from the Third Circuit.  We are hoping he has a keen interest in ridding the law of an error created by his home Circuit.

It is also possible that the petition will induce SCOTUS to invite the FDA, now under a more pro-defense (and, we hope, pro-preemption) commissioner, for its views.

Back in 2010 we started titling some of our posts “There’ll Always Be Posner,” in mimicry of the “There’ll Always Be an England” squibs in The New Yorker.  Just as there is something uniquely charming, majestic and, occasionally, flat-out weird about news from the quirky island that formerly ruled over us, there is something uniquely charming, majestic, and, occasionally, flat-out weird in legal opinions authored by Seventh Circuit Judge Richard Posner.  Or, we should say, former judge, as he stepped down from the bench this past weekend.

When we arrived at the University of Chicago Law School 35 years ago this month, Posner had recently vacated his full-time professorship at U of C in favor of an Article III position.  Nevertheless, he continued to teach classes in Hyde Park.  His influence on campus remained ubiquitous. Some professors (e.g., William Landes and Frank Easterbrook) continued to develop Posner’s law and economics analysis.  Even professors who parted company with Posner’s bottom line positions, such as Richard Epstein and Cass Sunstein, recognized the force of Posner’s breakthroughs and incorporated them, or at least took them into account, in their own scholarship.

While Posner’s work in integrating law and economics is an enormous achievement, there is so much more to his contributions to legal studies.  To begin with, his sheer output has been staggering.  Posner has authored over 50 books and 500 articles.  The Journal of Legal Studies counted over 7981 cites of Posner and rated him the most cited legal scholar in the 20th Century.  Not all of Posner’s books and articles were about law and economics.  In fact, most were not.  Nor have his writings been predictable.  If you had told us back in 1982 that Posner would later author a book titled The Failure of Capitalism, we might have stumbled into the Law School fountain.

Judge Posner has written over 3300 opinions.  They, too, are capable of surprise.  He has changed his mind more than once.  His positions on controversial subjects such as voter identification requirements or gay marriage have somersaulted. At one time Posner was routinely lumped in as a judicial “conservative.”  That is not only simplistic, but largely wrong.  The same Posner who, along with Aaron Director, Robert Bork, Frank Easterbrook, and others insisted that antitrust law be tethered to economic reality and consumer welfare, also clerked for Justice William Brennan, worked under Solicitor General Thurgood Marshall, and jousted fiercely with Justice Scalia over whether originalism was a correct mode of constitutional interpretation or a fool’s errand.  When the judge for whom we clerked, Ninth Circuit Judge William Norris, retired, he said that he would “reclaim [his] First Amendment rights.” That is, Norris planned on speaking out on political issues in a way he felt he could not while he wore judicial robes.  Posner has apparently never felt so constrained.  He has written or spoken quite pointedly on political and economic issues over the last several years.  Type “Posner” onto Youtube, sit back, and enjoy.  He has picked fights. He has named names. Our cultural discourse has been much the better for it.

As you might expect, the best summary of Posner’s method comes from Posner himself.  In his retirement note, he emphasized his pride in taking a “pragmatic” approach to judging, in writing opinions that are easy to understand, and in focusing on issues of right and wrong in every case.  Economic reality is one part of that pragmatic approach, but there is more.  Posner paid at least as much attention to how parties act in the real world as to what judges had written regarding vaguely similar fact-scenarios in old, and sometimes not clearly thought-out, opinions. Posner’s opinions were always clearly thought out, and, just as important, they were clearly expressed. The clarity of Posner’s opinions is no accident.  We know some people who clerked for Posner, and they confirm that Posner wrote every word of his opinions himself.  While it must have been an enriching experience to have worked closely with the great man, we also get the sense that Posner’s clerks had fewer responsibilities, almost reduced to the point of merely fetching him books, than other clerks.  Based on Posner’s criticisms of what he perceived as judicial over-reliance on clerks, that is not surprising.

We think that, like Judge Learned Hand, Posner will go down in history as being much more influential, and much more insightful, than all but a few Supreme Court Justices. As with Hand, it is a pity that Posner never ascended to our highest court.  He was simply too smart, too intellectually adventurous, too prolific, and too damned clear.  [Isn’t there something supremely silly about the way we currently pick Supreme Court Justices?  Instead of being a capstone to a long and distinguished legal career, positions on the Supreme Court are too often conferred on people who have a limited paper record, and whose birthdate promises a long term and maximum impact.]  Then again, remember that Hand believed in judicial modesty, and cautioned against being ruled by judicial philosopher-kings.  Posner’s pragmatism and attention to what he believes are right and wrong outcomes arguably makes him one of those dreaded judicial philosopher-kings.

When we encountered criticisms of Posner over the years, they usually centered on his lack of respect for precedent and for lack of predictability.  Posner seemed to delight in disposing of cases on jurisdictional grounds that none of the lawyers or the lower court had even considered.  That can be frustrating for advocates. Worse, Posner could be cruel to lawyers who seemed insufficiently smart or conversant with relevant precedent — and most lawyers, in Posner’s eyes, probably fell into that category.  Posner himself once acknowledged his similarity to his beloved pet cat, listing cruelty as one of their common traits.  Remember how we said that Posner’s opinions could be flat-out weird?  When Posner thought that a lawyer had been willfully blind to controlling precedent, he appended to his opinion a picture of an ostrich with its head in the sand.

Yesterday, we mentioned to one of our most trusted and admired colleagues that we were going to say a few words about Posner’s retirement.  He then told us a story that is so magnificently on point that we simply have to share it with you.  Our friend and some other folks, all tremendously smart and diligent, devoted many days to preparing another lawyer for a Seventh Circuit oral argument.  Posner was on the panel, so the preparation went the extra mile. When the very well-prepared lawyer approached the lectern, he didn’t even finish clearing his throat before Posner’s reedy voice cut in: wasn’t the case at hand on all fours with the case of X v. Y? (The case had actual names, but they have been lost in the mists of time.)  The preppers looked at each other in utter dismay. They had never discussed this case at all.  They had never heard of it. What a failure!  What an embarrassment! The poor fellow at the microphone admitted, as gracefully as he could, that he was unfamiliar with the case.  Through a thin smile, Posner supplied the citation. The case was from the House of Lords, and was over a hundred years old.  Was this gratuitous one-upmanship?  Well, the case really was a perfect precedent, and it demonstrated why our friend’s side should win.  And so they did.  Posner, as always, was the smartest guy in the room, and made sure to prove it.  But a win’s a win, so ….

In our own field of tort law, Posner’s batting average was exceedingly high.  We have almost always been dazzled by his opinions, whether on issues of statutes of limitations, forum non conveniens, plaintiff lawyer fees, off-label prescriptions, our beloved preemption, class certification (though we griped a couple of times when we thought he had gone soft on that issue), class action settlementscy pres, and many, many other topics.  It was Posner who penned our single favorite line about Daubert: “Law lags science; it does not lead it.”  Rosen v. Ciba-Geigy Corp., 78 F.3d 316, 319 (7th Cir. 1996).  It was Posner who best understood how post-Levine “clear evidence” preemption could eliminate failure to warn claims. Robinson v. McNeil Consumer Healthcare, 615 F.3d 861 (7th Cir. 2010). It was Posner who wrote eloquently about the danger of aggregated litigation prompting blackmail settlements. In re Rhone-Poulenc Rorer, Inc., 51 F.3d 1293, 1298-1300 (7th Cir. 1995).  It was Posner’s discussion of negligence versus strict liability in Indiana Harbor Belt R.R. Co. v. American Cyanamid Co., 916 F.2d 1174 (7th Cir. 1990), that has become one of those judicial chestnuts that turns up in virtually every casebook.  Posner usually got it right, and in getting that rightness, his writing was compelling, crystalline, and often entertaining.  Posner could even enliven discussion of standard of review, as when he wrote in the Nightingale Home Healthcare case that “it is an abuse of discretion not to exercise discretion.”

At this point, it might be customary to bid a respectful adieu to Richard Posner, wistfully acknowledging how much we’ll miss reading his opinions.  But Posner’s retirement announcement makes clear that we’ll keep hearing from him.  In the marketplace of ideas, Posner will continue to be one of our most active and valued participants.  For that, we are profoundly grateful.

Come visit us in our office whilst we are poring over a brief and, with minimal provocation, we will put aside the task at hand and start gabbing about our days as a prosecutor. Come sit next to us while we are pouring a brown adult beverage and we will get to that point even quicker. Once a prosecutor, always a prosecutor. Any lawyer who spent some part of his or her career in the criminal justice system will tell you that cases involving true force or fraud, with jail time in play, are much more emotionally gripping than any mass tort. Criminal cases came freighted with human tragedy, with bad decisions leading to ruined lives.  Yes, we can now hear some smooth plaintiff lawyer saying that precisely the same thing happens in personal injury cases, but the degree of passion and venality is not nearly the same.  At the same time, comedy crops up in criminal cases more often than you’d expect, usually as a weird contrapuntal note. In our day, many Assistant U.S. Attorney office doors were adorned with transcript inanities. We remember the late, great Jeff Rawitz (a fearless lawyer who left us way too soon) having an awkward moment with newly-enrobed Judge Lourdes Baird.  Judge Baird had been our boss only a few months before.  She was a splendid U.S. Attorney, and was a graceful, regal figure. You didn’t want to let her down – not ever, not even a little.  And you craved her respect.  Anyway, Rawitz was about to commence a cross-examination of an alibi witness.  He told Judge Baird that he needed a bathroom break.  Okay, said the Judge.  Then she asked Rawitz how long he’d be.  That is, she wanted to know how long the cross-examination was expected to be. That’s not how Rawitz heard it. Rawitz fidgeted, then said, “Not long, Your Honor.  [Pause]  Number one.”  When Judge Baird heard poor Rawitz stammer about the length of his bathroom break, she turned a bit red, then did her best to restore dignity to the trial. That exchange was taped on Rawitz’s door by some colleague/wag.

Once we start on these stories, it’s hard to stop. We remember one revocation of probation proceeding that supplied more mirth than usual.  The defendant had submitted to a drug test, and his urine had a super-high concentration of H2O. Clearly, the defendant had over-hydrated just before the test, a well-known way to avoid a positive drug test.  There was a contested evidentiary hearing.  The defendant denied any drug use, naturally.  The expert witness for the government, a septuagenarian who harbored no love for those he called “drug fiends,” was adamant that the defendant had gamed the system.  Now came time for the judge’s decision.  After uttering a few preliminary observations, the judge was suddenly interrupted by the defendant.  Though he was represented by an experienced public defender, the defendant, apparently unimpressed by the level of advocacy, grabbed the microphone and delivered a jumbled thesis on burden of proof.  Then, perhaps manifesting less than complete confidence in his position, the defendant purported to school the judge on possible sentences short of returning the defendant to the care of the Bureau of Prisons.  The judge cut in: “Hold on.  You really don’t need to explain all this to me.  I’ve been a judge for 15 years.”  The defendant’s riposte was swift:  “Okay, Judge, but I’ve been a criminal for 20.”  That also made it onto an AUSA’s door.

All of which is to explain why we will grab hold of any criminal case that has even the remotest connection to drug and device litigation, in this case the use (and misuse) of pharmocogenomic information.  Today’s case, Nebraska v. Robbins, 297 Neb. 503, 2017 Neb. LEXIS 148 (Neb. Aug. 18, 2017), is, indeed, fairly remote from our day-to-day doings, but is interesting nonetheless. Let’s begin with the fact that immediately distinguishes Robbins from the typical drug/device label nit-pickery littering our desk: the defendant in Robbins had strangled his girlfriend to death.  He was charged with first degree murder.  Just as almost all tort cases settle, the same is true with criminal cases.  The defendant in Robbins ultimately entered a plea of guilty to a reduced charge of second degree murder. The court sentenced the defendant to 40-60 years of incarceration. In an episode of Law & Order or Perry Mason (notice how there are no tv shows on mass torts?), that would be the end of the story.  Here, it is the beginning.  Prisons have good law libraries and some good jailhouse lawyers  As much as ex-prosecutors look back on their days in the criminal justice system with fondness, they will always report that the worst part of their job was responding to habeas petitions and other post-conviction flotsam and jetsam. Prisoner briefs are almost always nearly incomprehensible, so the first part of opposing such a motion is to translate it into something approaching rationality, and then refuting it.  It is a lot of work.  If you lose, all your fellow prosecutors up and down the hall will make fun of you.

The defendant in Robbins filed a motion for post-conviction relief, demanding a DNA test to determine whether he was a slow metabolizer of the anti-anxiety drug he had been taking. Huh?  Why? At the time of the murder, the defendant had been taking a standard dose of an anti-anxiety drug. Now he argued that the dose was too high for his metabolism, thereby rendering him homicidal.  To prove up this defense, if that’s what it was, the defendant sought relief under the state’s DNA Testing Act.  The lower court granted this relief, which must have driven the prosecutor crazy, but the Nebraska Supreme Court held this ruling to be plain error. The issue was whether pharmacogenomic DNC evidence that the defendant was a slow metabolizer would constitute exculpatory evidence. The defendant contended that evidence of his slow metabolism might function as mitigation for sentencing, and could also have established defenses at trial regarding inability to formulate the requisite intent, or could have established intoxication or insanity.  But remember, there was no trial.

The post-conviction use of DNA testing to get people out of prison is, by now, old hat.  You’ve no doubt read about such cases many times – perhaps enough to make you squirm about the imperfections of our justice system.  Fair enough.  But think about what was going on in those high-profile cases.  Those DNA tests truly exonerated the prisoner. They showed that the prisoner shouldn’t be in prison at all because he or she didn’t do the crime.  The court in Robbins reasoned that Nebraska’s DNA Testing Act was limited to proof of factual innocence, not the type of mitigation or excuse that the Robbins defendant was trying to demonstrate.  Semi-cleverly, the defendant argued that DNA testing would involve the same issue of identity afoot in the ‘classic’ DNA exoneration cases, on the theory that he was a “different person” while on the anti-anxiety drug.  The court did not buy it.  Here is the court’s bottom line:  “Because the Act is intended to assist in proving the innocence of a convicted person through establishing the person’s identity, it cannot be said that evidence from the DNA testing probably would have produced a substantially different result at trial.  As such, the evidence is not exculpatory under the Act.”  Fundamentally, the Robbins case is about statutory interpretation.  The court interpreted the DNA Testing Act narrowly, limiting it to issues of identity that might completely exculpate a defendant.
On behalf of prosecutors and taxpayers everywhere, we breathe a sigh of relief over the Robbins court decision.  To have granted the prisoner’s petition would have amplified what is already an imbecility in the law.  To our mind, the only mental state issue that should be relevant in criminal cases should be the classic mens rea: did the defendant intend the crime?  Here, did the defendant intend to strangle his girlfriend?  If he thought he was opening a pickle jar, then there really is an insanity defense.  But too many of the insanity tests that have had their moments over the centuries were detours into the ridiculous.  Why should it matter whether the defendant knew what he or she was doing was wrong? (The dreaded M’Naghten test.)  If someone thinks that murder is not wrong, that’s all the more reason to put them behind bars.  Sure, administer psychiatric treatment (the federal prison in Springfield, Missouri specializes in that sort of thing), but by all means keep amoral, psychopathic, sociopathic (or whatever) killers away from the rest of us.  The same is true of irresistible impulse, or any other species of craziness seized upon by silly academics or judges to excuse or even (gasp) exonerate a murderer.  Look, we can always come up with a reason for anything.  But reasons are not necessarily excuses.  Whether one’s metabolism is too fast, too slow, or just right, murder is murder.  Maybe you think that is a primitive view.  Like we told you, once a prosecutor, always a prosecutor.

It was over 32 years ago that we graduated from the University of Chicago Law School.  The three years in Hyde Park were a punishing experience.  There was one class in particular when Prof. Richard Epstein used the Socratic method to pummel our intellect and ego. By the end of the exercise, we were a puddle of incoherence.  The class was called Advanced Torts.  It is a bit funny that we today practice a form of Advanced Torts, even though Prof. Epstein long ago exposed our idiocy in the field.  But all is forgiven, if not quite forgotten, and we are grudgingly grateful for the hard lessons learned at his feet (from his vigorous kicking away at our preconceptions).  One of the things that Epstein did in that class was rip into the N.Y. Times v. Sullivan decision.  That case is usually thought of as one of the crown jewels of First Amendment jurisprudence, as it furnishes almost absolute protection to the press.  Basically, newspapers and other press media can skate past libel liability, no matter how false their publications, unless the press published with “actual malice” –  knowing the statement was false or acting in reckless disregard.   Epstein’s point was that while it was nice for the press that they would defend against most libel claims successfully, the state of mind inquiry was intrusive and complex, and the stakes involved, which could include punitive damages, were frighteningly high.  Such uncertainty and expense are not in society’s interest.  It sounds like heresy, but a simple standard of falsity, plus a cap on damages, would probably result in better outcomes and would certainly cabin discovery madness.

 

It occurs to us that punitive damages in mass tort cases suffer from the same, ahem, defect. Punitive damages require jurors to read the minds of corporate defendants, looking for bad intent or reckless disregard.  Conduct and documents that would otherwise be out of bounds for discovery and would never be paraded before the jury become fair game if punitive damages are available.  Moreover, due process considerations be damned, courts seem to permit jurors to flip around punitive damage figures in the tens or hundreds of millions of dollars as if they were nickels.  There is no consistency to the process.  One case might get halted by a judge who applies Daubert to preclude junk science, while another judge waves virtually the same case by and a jury socks the defendant with a $110 million verdict.  Or perhaps you have heard of jurors who conclude that the product did no real harm to a plaintiff, but are still sufficiently miffed at the company to award punitive damages.  It isn’t right. It makes no sense.  It probably won’t survive judicial scrutiny.  But the craziness happens.  No wonder our system of civil litigation looks like jackpot justice.  Pull the handle, watch wheels of inconsistent evidentiary rulings, inflammatory arguments, and jury lunacy spin, and see if the result is a shower of money.  If one pull comes up empty, never mind, keep pulling.  Whether or not you think the game is rigged, any rational defendant dragged into the courtroom casino knows it is a sucker’s game.  Better to pay a settlement and find the exit.

 

It turns out that we are hardly the only ones to rue the unfairness of punitive damages in mass torts.  A recent paper from the Cornell Law School  Legal Studies Research Paper Series (No. 17-33) by Cornell Law Professor James A. Henderson, Jr., “The Impropriety of Punitive Damages in Mass Torts,” dissects the issue nicely.   Other academics (think of Kip Viscusi) have exposed the wrongheadedness of punitive damages in mass torts, but Patterson’s paper is particularly compelling and timely.  He shows that punitive damages in mass torts are capricious, unfair, and unpredictable.  The joint justifications for punitive damages are retribution and deterrence.  But the retribution for any limited case at issue loses all sense of scale, and there is zero evidence that mass tort punitive damages actually improve corporate conduct or make anyone safer.  The problem is that the triggers for punitive damages, vague words such as “outrageous” that are meant to suggest “different levels of heinousness,”  are unclear to the point where jurors can do pretty much whatever they want.  That latitude is especially pernicious in the context of mass torts, where aggregation of claims is not just procedural, but substantive.  That is, the mass-ification of torts almost always prejudices the defendant by eroding defenses that would typically make the difference in a one-on-one case.  For certain industries, or whenever the government is involved, the law cheerfully dispenses with such niceties as fault, reliance, and causation.

 

Henderson takes us through some of the newer, non-traditional mass torts, such as asbestos, tobacco, lead paint, firearms, and no-injury economic loss cases where corporate defendants have been stripped of procedural and substantive defenses.  We’ve worked on a couple of these species of cases, and can vouch for the accuracy of Henderson’s analysis.  We’re by no means asbestos lawyers, but we once handled a couple of asbestos cases as a favor to a client.  We still occasionally bolt upright in the middle of the night, sweating from our memories of the asbestos docket call.  The client never manufactured anything with asbestos, but some of its products were later taken by a downstream manufacturer that placed some asbestos into the product before unleashing the products upon the populace.  The downstream manufacturer had shallow pockets, so the asbestos plaintiff lawyers added our client to the latest wave of defendants.  We proved to the plaintiff lawyer that our client had nothing to do with the asbestos, and the plaintiff lawyer shrugged and named some ludicrous figure for us to settle and get out of the case.  Sure – and then we’d be added to the asbestos sucker lists and face never-ending litigation.  We wanted to file a motion, but the insanity of the asbestos litigation “program” was that no defense motions would be considered until trial was only 30 days away.  Who wants to face that kind of brinksmanship?  Have you ever heard of the abomination called “near beer”?  Well, asbestos litigation is “near law.”  In fact, it is hardly law at all.  Rather, it is a system of taxing an unloved industry.

 

Viewing corporate conduct with hindsight, and assuming that corporations know everything and dwell purely on the bottom line, jurors are quick to reach for the spanking paddle.  That spanking means millions of dollars.  Risk averse corporate managers, and insurers worried about bad faith liability for failing to settle within policy limits, more often than not succumb to settlement blackmail.  The possibility of stratospheric punitive damages is simply a risk not worth taking.

 

Here are some other points that Henderson makes about punitive damages in mass tort cases:

 

  • Multiple successive punitive damages awards for the same alleged conduct are unfair to defendants.   (Maybe you could tell the jury that your company was already punished by another jury – but do you really want to do that?)
  • Any retribution is typically suffered by innocent, powerless shareholders, not the faulty managers.  Big surprise: expressing moral outrage toward corporations is unrealistic.
  • Punitive damages can deplete assets to the prejudice of later-filing plaintiffs.
  • Punitive damages are utterly unnecessary.  Large compensatory awards are more predictable and internalize social costs better than random punitive awards.

 

To quote a historical figure who clearly and devilishly believed in punishment, what is to be done?  Henderson mentions some marginal changes.  One idea is to require more specific triggers for punitive damages, such as criminal conduct (with a higher burden of proof).  Another idea, already existing in rare enlightened jurisdictions, is to let judges decide the amount of punitive damages.  It is well past time for courts to limit evidence of harm to that which was actually visited upon the particular plaintiff.  Henderson also discusses the possibility of limiting punitive damages to one case, which then creates a trust fund out of which later plaintiffs take their share.  But all of this is nibbling around the edges.  Henderson alludes to legislative changes, but seems pessimistic that our elected solons will ever risk displeasing a plaintiffs’ bar that is clever and promiscuous when it comes to slinging cash contributions to their favorite candidates.  That leaves the problem in the hands of judges, who will need to toss some troublesome precedents in the dustbin of history and start emphasizing the justice over the jackpot.

 

Henderson’s paper is clearly written and well-argued, and replaces our crankiness with a surfeit of citations.  It is well worth reading.

 

 

Not even three weeks ago, back on July 28,  we discussed the court’s rigorous application of Daubert in excluding expert medical causation opinions in Smith v. Terumo Cardiovascular Sys. Corp., a federal case in the district of Utah.  The plaintiff had undergone a heart valve replacement surgery.  As is typical, the surgery required use of a perfusion heart/lung bypass machine.  At some point, the machine stopped working for 10-11 minutes.  The patient died of a heart attack 11 months later.    The decedent’s heirs brought suit against various defendants, including the manufacturer of the heart/lung bypass machine.

 

In the opinion we discussed on July 28, the court excluded most of the opinions of a cardiologist tendered by plaintiffs as an expert on causation.  That expert was refreshingly candid in acknowledging that he could not say for sure that the heart attack was caused by any machine malfunction, though he thought the malfunction probably played some role.  Because the cardiology expert himself acknowledged an “analytical gap,” because he was plainly unqualified to render opinions on neurologic issues, and because he relied on diagnostic methods that were not generally accepted, the court limited the cardiologist expert’s testimony to an opinion that the decedent’s heart was injured during the valve replacement surgery.  Not nothing, but not much, either. 

 

Today, we discuss the same litigation with the same Daubert issue with a different expert but a similar result.  Smith v. Terumo Cardiovascular Sys. Corp., 2017 U.S. Dist. LEXIS 124866 (D. Utah August 7, 2017), involves a different plaintiff expert proffered to opine on medical causation.  This expert was a licensed perfusionist.  No one disputed that this expert could opine on the standard of care applicable to perfusionists and facilities where perfusion services are offered.  What was disputed was whether the expert could testify about a potential defect in the heart/lung bypass machine that may or may not have exhibited during the surgery in question.  The expert was going to testify that a defect in the machine’s air bubble detection system led to the inadvertent 10-11 minute shutdown during the surgery.  The expert primarily relied upon a recall of the heart/lung bypass machine that occurred almost two years after the decedent’s surgery.

 

The court begins its analysis in the right place with Federal Rule of Evidence 702.  Then we get a paragraph on how the law favors admissibility of expert testimony.  We wince whenever we read about such a presumption, anticipating judicial abdication of the gatekeeping function.  But that was not the case here.  Rather, the court carefully assessed the expert’s qualifications and found them wanting.  The expert knew all about perfusion and how to operate the heart/lung bypass machine, but that does mean he possessed the requisite expertise to analyze the design and technical functionality of the machine.  The defense deposed the expert, and did a nice job of bringing out the expert’s lack of expertise in mechanical engineering or design.  The existence of the product recall might have been suggestive, but to explain why the recall was issued, and why the reason for the recall also accounted for the device’s stoppage during the surgery, required precisely the sort of engineering or design expertise that was lacking.

 

Even aside from the threshold issue of qualifications, the court concluded that the expert’s opinions were unreliable.  The expert’s report disclosed reliance on depositions, reports, system logs, and medical records.  That sounds pretty good.  But the expert never explained how the facts he reviewed, including the device recall, added up to a defect in the device that prompted the stoppage during the surgery. The expert theorized that the perfusion system might have issued a false alarm, which then resulted in the stoppage, but nothing concrete supported that theory.  Indeed, the expert admitted in deposition that no one could explain exactly how the alleged malfunction occurred.   (More refreshing candor!) The court seized upon something that plaintiffs usually emphasize: the failure to test.  The plaintiff’s expert had never attempted to test his defect theory.  Testing, of course, is one of the key Daubert factors.  In this case, the expert’s failure to test his theory kept him in the realm of speculation, and kept his opinions away from the jury.