Photo of Stephen McConnell

Happy birthday, Christopher Plummer.   The great Canadian actor turns 88 today, and seems as vibrant as ever.  What a marvelous career Plummer has had.  He is a preeminent Shakespearean actor.  We saw him play Iago to James Earl Jones’s Othello on Broadway 35 years ago.  Of course, most people remember Plummer as Captain Von Trapp in The Sound of Music (1965), a film for which Plummer reserves enormous contempt, referring to it (if at all) as “The Sound of Mucus.” Much more recently, we enjoyed Plummer’s flinty interpretation of Ebenezer Scrooge in The Man Who Invented Christmas.  And there has been abundant publicity over Plummer’s replacement of Kevin Spacey in House of Cards.  It seems a thankless task to succeed someone in such scandalous circumstances.  But we’ll thank Plummer, if only because he supplied a (strained) segue into today’s post, which is about successor liability.

 

More specifically, we have a pro-defense decision on successor liability with respect to a bankrupt medical device manufacturer. The court holds that there is no liability for design and manufacturing claims under either NY or PA law – including PA’s peculiar product line liability theory. The court concludes as a matter of law that product line liability applies only to manufacturers, not to distributors. But there is a fly in the ointment: the court’s conclusion on the failure to warn claim is rather muddled – to the point where that cause of action is not concluded at all.

 

In Deluca v. Portland Orthopaedics Ltd., et al., 2017 U.S. Dist. LEXIS 198962 (E.D.N.Y. Dec. 2, 2017), a husband and wife sued for injuries relating to a failed hip implant. The husband and wife lived in New York. That is where the 2009 implant operation took place. That is also where the injury – the 2012 failure of the implant – took place. The implant was manufactured by Portland, an Australian company that had entered into receivership shortly before the plaintiff’s implant operation and that had sold off its assets before the implant failed three years later. The plaintiffs sued Portland, as well as the Singapore successor company and its manufacturing and distributing affiliates, which were incorporated in Pennsylvania (not something we’d ever recommend doing). The complaint included claims for strict liability (failure to warn, manufacturing defect, and design defect), negligence, and breach of warranty – the usual. Portland never appeared on the case and was dismissed. One presumes it would be judgment-proof. The remaining defendants moved for summary judgment, and their arguments centered around successor liability – or, to be precise, absence of successor liability. The court sensibly held that New York law governs because that is where the injury occurred, but the court also treats us to an analysis under Pennsylvania law, where it arrives at the same destination, albeit via a slightly more complicated route.

 

The successor corporation purchased certain assets of Portland. There was no purchase of stock or any formal merger. Under those circumstances, the successor typically does not acquire prior tort liabilities. That is the law in both New York and Pennsylvania. There are some exceptions to this general rule, but none applies here.

 

New York recognizes four possible exceptions, none of which saved the plaintiffs’ design or manufacturing defect claims:

 

First, the successor did not expressly or impliedly assume prior liabilities. In fact, those liabilities were expressly excluded.

Second, the de facto merger exception does not apply. There was no continuity of ownership, management, or physical locations. In addition, the seller continued to exist, even if only in gossamer form.

Third, the “mere continuation” exception does not apply. Again, the seller lingered, and there was no hint of overlapping owners or managers.

Fourth, there is no evidence that the asset sale was a fraudulent effort to evade liability.

 

Pennsylvania adds another factor – whether the transfer was made without adequate consideration and without provisions for creditors of the selling corporation. That factor also does not apply here. More significantly, or problematically, some Pennsylvania courts have announced a “product line” exception, an extreme pro-plaintiff doctrine left over from the 1980s. The Deluca court is not persuaded that this exception has been endorsed by the Pennsylvania Supreme Court. And remember that the Deluca court has chosen New York law to govern this case. Nevertheless, just in case some appellate court might get dodgy, the Deluca court goes through the motions of measuring the evidence in the case against the product line exception and concludes that it does not help the plaintiffs here. The factors animating the product line exception are pretty fuzzy: (1) whether the purchase of the product line caused the “virtual destruction of the plaintiff’s remedies against the original manufacturer,” (2) does the successor have the ability to assume the original manufacturer’s “risk-spreading role,” and (3) the fairness of requiring the successor to assume responsibility insofar as the successor was enjoying the original manufacturer’s good will.

 

The Deluca court easily dispensed with these factors by pointing to some important facts:

 

  1. Portland’s insolvency preceded the asset sale, and was certainly not caused by it.
  2. The asset sale was not prompted by any scheme to evade product liability claims. At the time of the sale, the problem of implant failures was not on the radar screen.
  3. The purchase agreement explicitly excluded goodwill as well as related liabilities.

 

Further, the Deluca court held that the product line exception could not be used against the defendants who were never involved in manufacturing. Thus, even if someone wanted to shape the gooey product line factors so as to preserve claims against a successor, the distributor defendants would still be off the hook.

 

The plaintiffs requested additional discovery on the successor liability question. The Deluca court refused that request on both procedural and substantive grounds. The procedural problem for the plaintiffs was that they failed to submit a Rule 56(d) affidavit documenting what discovery would be sought and why it wasn’t obtained earlier. The substantive ground was futility. Even from the face of the plaintiff’s’ arguments, it was clear to the court that the request was a mere fishing expedition, with no justification for the delay and no expectation that anything reeled in would make a difference.

 

So far so good for the defense. But the court also kept the failure to warn claim alive, at least for now. New York law recognizes that successor corporations sometimes have an independent duty to warn. That duty arises not from succession of the prior manufacturer’s duties, but from the successors’ relationship with customers. Here, the plaintiffs alleged that a sales representative working for one of the defendants was in a position to provide additional warnings to the treating doctor. We do not know what those warnings would be, and are not sure how they would fit into the chronology of the case. The defendants pointed to the Instructions for Use as containing ample warnings. The Deluca court responded that it is unclear whether the physician received the IFU or whether the warnings were in fact adequate.

 

To our eyes, those questions should not be enough to stave off summary judgment. How could the doctor not have access to the IFU? Is there any suggestion that the defendants did something to make the IFU unavailable? Seems unlikely. How is the adequacy of the warning not an issue of law? And is there any open issue of warning causation? That is, did the plaintiffs proffer any evidence that a different warning – whatever that might be – would have changed the doctor’s mind in such a way as to avoid the alleged injury? On these points, the court’s reasoning is full of holes.  We suspect that the plaintiffs will ultimately be unable to fill those holes with evidence.  Then the defendants will be in a position to borrow a title from the Bard: all’s well that ends well.

 

Today Time Magazine announces its Person of the Year.  The publisher called us a week or so ago to say we were PROBABLY going to be named Man (Person) (Blog) of the Year, but we would have to agree to an interview and a major photo shoot.  We said “probably” is no good and took a pass. Thanks anyway!

[None of that actually happened.  You might even call it fake news.]

Still, we can see why this blog would receive a major award for its literary achievements.  We admit that we are not quite on the same level as, say, James Joyce’s Ulysses, which 84 years ago on this date was found by an SDNY judge not to be obscene.  We also must ruefully acknowledge that our case analyses are not as funny and transgressive as Lolita, which Vladimir Nabokov completed 64 years ago on this date.  But we have occasionally encountered preemption issues as mystifying as Ulysses and plaintiff pseudo-experts who made the unhinged Humbert Humbert character in Lolita seem rational.

If there is a product liability issue that lends itself to literary invention, it is the issue of warnings.  All that even a minimally creative plaintiff lawyer needs to do is parse an existing warning, then dream up some specification or adjective that would frighten doctors or patients just a tiny bit more.  Stephen King is a fine writer, and odds are that he could do a splendid job of boosting terror in both warning labels and failure to warn claims. Of course, let’s remember that we are talking about fiction.

It is not fictional that there are many assorted asinine warning labels out there based on fear of lawsuits.  A hairdryer bears a warning against use by folks “while sleeping.” A tag on an iron helpfully advises against ironing clothes while worn on the body.  A bag of peanuts cautions us that the product … contains nuts.  The instructions for a chainsaw counsel against trying to stop the chain with one’s hands. An over-the-counter bottle of sleeping pills lists possible side effects, including … drowsiness.

There is more than a little fiction at work in the failure to warn claim in Cerveny v. Aventis, Inc., 2017 U.S. Dist. LEXIS 197194 (D. Utah Nov. 29, 2017).  You may remember the name Cerveny.  This litigation has already produced one of the best decisions of 2017.  The crux of this latest Cerveny decision was the fiction that the plaintiffs’ proposed warning would pertain to the plaintiffs. The court ultimately arrives at a sensible ruling on inapplicability of a warning about a risk to a population group that did not contain the plaintiffs.  The court also makes clear that in fraud/negligent misrepresentation claims, a contraindication is not intended to induce reliance.

The plaintiffs in Cerveny were the parents and their child, who was born with certain physical defects.  The mother had taken a prescription fertility drug before pregnancy, but not during the pregnancy.  That rather obvious and fundamental temporal fact is central to the case. The FDA at one point proposed a warning of possible fetal harm when the drug is taken during pregnancy.  That warning was not on the medicine when taken by the mother in this case, and one of the claims was that it should have been.  The failure to warn claim was essentially that the future mother would not have taken the medicine before pregnancy if she knew that taking it during pregnancy could cause birth defects.

Courts all too often are all too tolerant of plaintiff failure to warn theories.  Those claims all contain a dose of speculation, but some are speculative to the point of implausibility. It might be tempting for the court to pass the question, no matter how absurd, to the jury.  Not the Cerveny court: “When a proposed warning does not apply to the plaintiff, she cannot prove defect or inadequacy.”  The Cerveny court quotes from Rivera v. Wyeth-Ayerst Labs, 283 F.3d 315, 321 (5th Cir. 2002), which rejected as “absurd,” and “too speculative to establish Article III standing” a claim based on an allegation that an “extra warning, though inapplicable to [the plaintiff] might have scared her and her doctor” from using the drug.  Cerveny and Rivera recognize that there must be a limitation to how speculative a  failure to warn theory can be, and that Article III standing must actually mean something.  Accordingly, the Cerveny plaintiffs cannot prevail on a cause of action based on a failure to warn about the risk of a medicine used during pregnancy when the use in the case was only prior to pregnancy.  That is a notable result.  We already have a post collecting opinions that likewise reject warning claims based on inapplicable risks.

There was another ground for rejecting the failure to warn claim.  The label for the drug might not have contained an express warning, but it did contain a contraindication vs. use during pregnancy.  So if that is what the plaintiffs claim needed to be said, it was said in the contraindication section, and that is enough.

What about the plaintiffs’ misrepresentation claims?  The contraindication discussed above also said that “no causative evidence of a deleterious effect” of the medicine on the human fetus had been seen. The plaintiffs contended that the “no causative evidence” language was false.  But even if that is so, the contraindication was not directed to the plaintiff, and it was not intended to induce her to take the medication.  The purpose of the contraindication was to inform doctors that their pregnant patients should not take the medicine.  The plaintiff was simply not in that category. The failure to warn theory conjured up by the plaintiff lawyers was clever and creative, but it was also wrong.

Today is the birthday of Gilbert O’Sullivan, who scored a hit back in 1972 with “Alone Again, Naturally,” the saddest song we can think of this side of Albinoni’s Adagio.  That is fitting, given our postscript.

 

December 1 is also the birthday of Sarah Silverman and Bette Midler, two women who consistently bring smiles, so we’ll discuss a good case out of the Eleventh Circuit, though probably not good enough to crack our upcoming top ten list.  In Tsavaris v. Pfizer, Inc., 2017 WL 5593488 (11th Cir. Nov. 21, 2017), the plaintiff claimed that she developed breast cancer after ingesting a generic version of a hormone replacement drug.  She sued both the brand and generic manufacturers.  We don’t know what happened regarding the brand manufacturer (they should certainly have secured a dismissal), but we know that the district court dismissed the claims against the generic manufacturer on preemption grounds well-established in the Mensing and Bartlett SCOTUS decisions and the Guarino Eleventh Circuit decision.  The district court entered final judgment for the defendant.

 

The plaintiff filed an amended complaint against the generic manufacturer, asserting that she would not have been harmed had the manufacturer not “failed in its federally mandated duty” under 21 U.S.C. section 355 to notify the FDA of certain scientific studies relevant to the cancer risk.  The district court denied the amendment on both procedural and substantive grounds, and the Eleventh Circuit affirmed, holding that the district court had not abused its discretion.  The procedural grounds were enough to bar the amendment: the plaintiff identified no newly-discovered evidence or manifest error of law, as required by Federal Rule of Civil Procedure 59(e).  That is all well and good.

 

But it is the substantive decision that is more interesting to us.  The plaintiff was complaining of a violation of a federal reporting duty owed to a federal agency, not to her.  More specifically, she premised her complaint on a provision of the federal Drug Price Competition and Patent Term Restoration Act that requires companies to submit “data relating to clinical experience and other data or information … about the safety, effectiveness, or labeling of its drug” to the FDA.  Because the plaintiff was seeking “to enforce a duty owed to a federal agency and her cause of action would not exist in the absence of that duty, her proposed second amended complaint is preempted.”

 

The Tsavaris decision was not selected by the Eleventh Circuit for publication in the Federal Reporter, perhaps because this was a pro se appeal.  But the proposed amended complaint was drafted “with the assistance of counsel,” and is fairly typical of the way some plaintiff lawyers seek to evade preemption.  Thus, the Eleventh Circuit’s finding that the amendment would have been futile provides some comfort to practitioners on the right side of the v.

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We mourn the passing earlier this week of beloved Reed Smith colleague Chuck Pagliotti.  Chuck was what all of us in the legal profession should aspire to be – a problem solver.  Chuck was a genius when it came to fixing messes we made on our computers, iPhones, or anything else that could occasionally baffle us.  He always did so with patience and a smile.  We shared a love for anything relating to Star Wars.  Chuck was a sweet, gentle soul. Our grief exceeds our poor power of expression.

 

 

We’ve got food on our mind.  Last Sunday, the CBS Sunday Morning show ran its food episode, with segments about, inter alia, a little restaurant in the north of England being rated the best in the world, the Martha Stewart and Snoop Dog cooking show, and the rolled ice cream fad (focusing on Sweet Charlie’s in Philly).  And tomorrow, of course, is Thanksgiving.  We’re looking forward to great food on the table and loved ones around it. We wish the same for you.

Today’s case is about food, and about a legal doctrine we like almost as much as turkey and cranberry sauce: primary jurisdiction.  The case is Rosillo v. Annie’s Homegrown Inc., 2017 U.S. Dist. LEXIS 190130 (N.D. Cal. Oct. 17, 2017).  It is yet another case alleging misuse of the term “Natural.”  Does anyone have a clear idea what that word means? Even if you do think you do know what it means, are you confident that your definition is the same as what resides in the head of the person sitting next to you?  Who knows what any given set of jurors will think about this issue?  We need order brought to this chaos.  That order is much more likely to come from the FDA than from random litigation experiments sprinkled around the country.

In Rosillo, the plaintiffs claimed that the defendant’s salad dressings were not natural because they contained xanthan gum, a thickening agent manufactured via fermentation and treated with a byproduct of isopropyl alcohol.  (One plaintiff bought her salad dressing at a Target store, while another bought hers at Whole Foods.  Now that’s varied distribution.). The plaintiffs brought causes of action under California and New York consumer and false advertising laws, as well as for breach of warranty, misrepresentation, and violation of the federal Magnuson-Moss Warranty Act.  The defendants moved to dismiss the actions on the merits and, in the alternative, to stay the action under the primary jurisdiction doctrine in order to permit the FDA to decide the scope of “natural.”  The court issued the stay, so it did not reach the merits.

Primary jurisdiction is a “prudential” doctrine, under which a court determines that an otherwise cognizable legal claim implicates technical policy questions that would benefit by first hearing from the regulatory authority.  The Rosillo defendants premised their stay request on the FDA’s establishment in November 2015 of a docket to consider the use of the term “natural” on food labels.  The FDA invited comments, and extended the period for taking such comments up through mid 2016.  No decision has yet issued.  Meanwhile, lots and lots of cases have been filed against food manufacturers around the country (though especially in California) alleging phony “natural” labels.

The plaintiffs argued against waiting for the FDA because (1) the issue in their cases is whether reasonable consumers were being deceived, which is supposedly separate from whatever the FDA will decide, and (2) it is unclear whether the FDA will ever actually resolve the “natural” issue, especially given the FDA’s “extended silence” since the closing of the comment period.  The Rosillo court disagreed with the plaintiffs.

First, the FDA’s guidance on whether and when companies can call their products “natural” will inevitably be relevant to how reasonable consumers understand the term.  Indeed, the plaintiffs’ complaint cites FDA regulations and pronouncements.  Second, the FDA’s food labeling regulatory framework undeniably is broad and comprehensive.  Third, the Ninth Circuit Astiana case held that the meaning of “natural” is a particularly complicated issue that Congress committed to the FDA.

What about the FDA’s “extended silence”?  The Rosillo court seized upon a recent Congressional appropriations bill report, which commended the FDA for wrestling with the “natural” issue and directing the FDA to report within 60 days “on the actions and timeframe for defining ‘natural’ so that there is a uniform national standard for the labeling claims and consumers and food producers have certainty about the meaning of the term.”  The appropriations bill is pending, so the 60 day clock has not yet commenced.  Nevertheless, the Rosillo court concluded that it is likely that the FDA will address the “natural” issue in a relatively short period of time.

The result is that the Rosillo case is stayed.  The logic of the Rosillo decision should also apply to the vast array of other cases with similar allegations.  Even more important, let’s hope that the FDA will for once and for all resolve the issue and make these disputes and the surrounding cacophony unnecessary.  That outcome would make us thankful.

It is not as if we are delighted to see efforts to resuscitate breast implant litigation, but we won’t groan when the rulings are as good as they are in Laux v. Mentor Worldwide, LLC, No. 2:16-cv-01026-ODW(AGR) (C.D. Cal. Nov. 8, 2017).  Here, we are talking about Daubert rulings.  (The court also issued good preemption rulings that might be the subject of a separate post.)  The Laux court’s Daubert order is not up on Westlaw or Lexis yet, but it will be, and that is good news for defendants and bad news for plaintiffs.

The plaintiff in Laux alleged that she suffered pain and other injuries as a result of moldy silicone breast implants.  Her allegations depended upon opinions by a three experts:  Kolb, Blais, and Brawer.  At least two of these experts are repeat players. The other might be as well, but we confess to being a little out of touch with this litigation. One plaintiff expert (Kolb) explanted the implants and concluded that they were leaking bilaterally.  Another (Blais) examined the implants and concluded that they had defective valves, causing them to leak bilaterally. The moldy saline implant theory has persisted since the turn of the century, largely propped up by a book, The Naked Truth About Breast Implants, written by – ta da! – one of these experts.  Another one of the experts testified long ago at the FDA panel hearings and raised the theory back then that breast implants contained a manufacturing defect that either (1) allowed bi-directional flow of saline and bodily fluid in and out of the valves such that the saline became contaminated by “toxic mold” that then colonized and leached “biotoxins” into plaintiff’s body; or (2) allowed the silicone shell or toxins/metals to flake off in plaintiff’s tissue.  To our moldy eyes, this theory seems driven more by litigation than science.  Is our cynicism based at all on the fact that these selfsame experts seem to be actively working with plaintiffs’ counsel to resurrect breast implant litigation, claiming breast implants cause systemic autoimmune disease despite dozens of epidemiological studies to the contrary?  Yes.  Yes, it is.

In any event, these experts’ sparkling resumes did not dazzle the Laux court. Their methodologies were even weaker than their qualifications, which, as you will see, is really saying something.

By the way, this is hardly our favorite trio.  Here are just a few we prefer:

  • Harry, Hermione, and Ron
  • Kirk, Spock, and Bones
  • The Three Musketeers (literary or candy version)
  • The Three Fates
  • Three Dog Night
  • Three’s Company
  • The Three Amigos
  • Tinkers to Evers to Chance
  • The Good, the Bad, and the Ugly
  • The Dude, Walter, and Donny
  • Willie, Mickey, and The Duke
  • ZZ Top
  • Cream
  • Emerson, Lake, and Palmer
  • The Police
  • Destiny’s Child
  • The Three Tenors
  • Workaholics
  • Moe, Larry, and Curly.  (Heck, we also prefer Moe, Larry, and Shemp to any assortment of litigation/expert stooges.).

Anyway, here, in brief, is how the Laux court concluded that the three plaintiff expert (three blind mice?) opinions could not survive a Daubert challenge:

Kolb

The court deemed Kolb to be insufficiently qualified to provide the proposed testimony. Big surprise: a plastic surgeon is not competent to testify about immunology, mycology (the study of fungi), or infectious disease. Moreover, Kolb’s methodology, such as it was, was unreliable.  Yes, the “differential diagnosis” incantation was muttered by this expert, but to no effect. Kolb’s expert report stated that the plaintiff had developed biotoxin disease from defective implants, and that “Plaintiff had no other environmental mold exposure to account for these symptoms.”  Oops. That premise was directly contradicted by the plaintiff’s earlier statement that she was exposed to mold found in her bedroom closet and mother’s home. Further, Kolb’s failure to test for TGF beta 1 also prevented her from ruling out environmental exposure from an objective perspective.  The court decried Kolb’s “[u]nexplained selective use of the facts” which failed “to satisfy the scientific method.” None of Kolb’s theories had been tested, peer reviewed, or generally accepted by the scientific community.  Her “inferential leap” from the plaintiff’s symptoms to the conclusion that the plaintiff suffered from biotoxin disease was unsupported by any peer-reviewed scientific literature or research.  Adios, litigation expert amigo #1.

 

Blais

 

Blais is a chemist, not a microbiologist, pathologist, medical doctor, or engineer.  Blais has not published any of his theories on bacterial or fungal colonization of saline implants in peer-reviewed literature.  So much for qualifications.  Reliable methodology was also lacking.  Blais supplied a “Failure Analysis Report,” but the real failure was in the expert’s purported analysis, not the product. In developing his opinions for this case, Blais did not test the plaintiff’s breast implants, tissues, or blood, and did not establish a scientific basis for his conclusion that the plaintiff’s injuries were caused by the defendant’s breast implants.  The defendant argued that Blais’s “‘methodology’ essentially consists of looking at explanted breast implants, sometimes with the aid of a microscope, making a few notes and drawing pictures of what he claims to see.”  Not so impressive.  Blais took no measurements of the valves to support his opinion they contained manufacturing defects.  Rather, Blais stated that he “eyeball[ ed]” the valves to determine they were faulty.  Still not impressive. In addition (or subtraction?), Blais did not possess the defendant’s valve design specifications when he concluded that the valves on the plaintiff’s implants were defective. Instead, Blais utilized old documents and his own memory.  The Laux court concluded, as had other courts in earlier decisions, that Blais’s proffered testimony should never reach a juror’s ears. As Harry Potter might say, expulsus expertous hackus nonsensicus.

 

Brawer

 

There were some technical problems with Brawer’s expert report.  It recited “a toxicology opinion with no data in support of that opinion whatsoever.” (emphasis in original)  Brawer opines that there was “breast implant toxicity,” but neglects to state what toxic substance was at issue.  That would seem to be a problematic gap in the analysis.  The Laux court could find no support for Brawer’s “because I said so” – in lawyerese, we sometimes call it ipse dixit — conclusion regarding breast implant toxicityThus, the court held that Brawer’s report “fails to satisfy several requirements of Rule 26, and his report is so lacking of scientific principles and methods that the Court cannot find his opinions reliable or helpful in this case.”

 

Three up, three down.  It reminds us of a typical inning thrown by the late Roy Halladay.

 

Meanwhile, three cheers to Dustin Rawlin and Monee Hanna of Tucker Ellis, who brought this ruling to our attention.

Just two days ago, Bexis lowered the boom on the Third Circuit’s recent decision in Cottrell v. Alcon Labs, ___ F.3d ___, 2017 WL 4657402 (3d Cir. Oct. 18, 2017).   In a 2-1 decision, the Cottrell court permitted the plaintiffs to proceed on the notion that making eye drop drips bigger than they have to be is a consumer protection violation.  To Bexis’s eyes, that decision was blind to the lack of standing, the absence of any “substantial economic injury,”  and the FDA’s non-approval of eye drop drips of the “smaller” size plaintiffs claim it is somehow illegal not to make under state law.  It turns out that there is someone else out there even more unhappy with the Cottrell decision than Bexis: the defendant.  Now we have the defendant’s Petition for Rehearing and Rehearing En Banc,  https://www.druganddevicelawblog.com/wp-content/uploads/sites/30/2017/11/Cottrell-rehearing-petition.pdf which makes an insightful and compelling case for undoing the panel’s decision.

 

Two preliminary matters are worthy of comment before we tell you what the Petition said. First, we have been so unkind about the Third Circuit’s error in the Fosamax case that we managed to attract the attention of the excellent CA3 blog.   In that blog, the author wondered whether our dissection of Fosamax was perhaps a bit more violent than necessary.  The author also wondered whether we were coming close to accusing the court of bad faith.  Yes to the former, but definitely No to the latter.  As we told the CA3 blog, we took issue with what we saw as bad reasoning, but never-ever thought there was any bad faith.  (The CA3 blog was generous enough to print our disclaimer.  Thanks for that.)  By and large, we are mighty proud of our home circuit.  We know several of the judges, and every one of them is honorable, hard-working, and much smarter than we are.  Sometimes we are not going to agree with the court’s decisions.  Luckily for us we work in a profession and live in a country where debate and criticism are allowed.  Second, succeeding on a petition for rehearing and rehearing en banc is not easy.  When we clerked for Ninth Circuit Judge William Norris, it seemed there was a presumption against such petitions.  Who wants to admit they were wrong?  And yet we remember one time our judge was on a panel where things strayed from the norm.  Another member of the panel (who will remain unnamed) loved to decide cases before oral argument and draft a memorandum disposition rather than a bench memorandum.  This judge prided himself on having almost no backlog.  He pushed for deciding a particular contract dispute via a mere memorandum disposition, not a published opinion, because he saw the issues as being too obvious and insignificant for the Federal Reporter.  And so a memo dispo issued.  But then the losing party filed a petition for rehearing that was not only insistent, but it made a lot of sense.  We met with our Judge in his chambers to talk it over.  The telephone rang.  It was the third member of the panel, who began by saying, “Bill, I think maybe we got one wrong.”  The two judges confabbed, and then set about persuading the third to change his mind and change the outcome.  It took some arm-twisting, but in the end, justice was done.  A mistake led to a proud moment.  By the way, the Ninth Circuit Judge who called our Judge was Anthony Kennedy.  He is now on the U.S. Supreme Court.  So whenever we hear criticisms of Justice Kennedy for fence-sitting, or for grounding some of his opinions in “the right to define one’s own concept of existence, of meaning, of the universe, and of the mystery of human life” or, much worse, international law, we recall his extraordinary integrity and modesty, and how he was supremely interested in getting things right.

 

Back to the Cottrell Petition. The main points in favor of revisiting the Third Circuit’s decision are that it is contrary to Finkelman v. National Football League, 810 F.3d 187 (3d Cir. 2016), it “radically expands Article III standing,” and that it directly conflicts with Eike v. Allergan, Inc., 850 F.3d 315 (7th Cir. 2017).  Moreover, the plaintiff’s inherently speculative theory of injury in fact was rejected by federal courts in Massachusetts and Missouri.  (When a court comes out with a more pro-plaintiffy position than courts in Massachusetts and Missouri, that’s really saying something.)  That theory was also rejected by the district court in Cottrell.  And then the Third Circuit reversed that rejection.  

 

Remember that the Cottrell plaintiffs did not claim that the medications caused them physical harm or were ineffective in treating their eye conditions, or that the defendants misrepresented or omitted any information about the medications or the number of doses expected.  Rather, the plaintiffs simply insist that smaller eye drops would have cost them less.  How is that any different from the Third Circuit’s earlier, controlling Finkelman case, where the plaintiffs had purchased two Super Bowl tickets on the resale market for $2,000 each, and contended that the National Football League had violated New Jersey’s ticket law by not offering at least 95% of tickets to the general public and instead withholding most tickets for league insiders?  The plaintiff in Finkelman alleged that the NFL’s conduct had caused him injury by reducing the supply of tickets, thereby driving up the cost of tickets on the resale market.  The Third Circuit in Finkelman held that the plaintiff lacked standing because the injury was wholly speculative.  Sure, maybe the NFL’s withholding of tickets increased prices on the resale market, but “it might also be the case that it had no effect on the resale market,” and indeed tickets might even have been more expensive in plaintiff’s hypothetical resale market, as members of the general public may have greater incentives than league insiders to resell at high prices.  (We have to admit that, as residents of Philadelphia, where the local team has the best record in the entire NFL, the availability of Super Bowl tickets is a much, much bigger issue to us right now than the size of eye drops.)

The Petition makes the point that, just as in Finkelman, other market effects might have produced a result very different from what the plaintiffs theorized.  In Cottrell, the plaintiffs essentially presumed that the defendants price their products solely according to volume, such that “changing the eyedropper size would not change the price of the medicine, while extending the useful lifespan of each bottle, driving down [the plaintiffs’] aggregate costs.” But it is just as likely that use of smaller drops would prompt use of different sized containers, or that smaller drops would result in a higher price – because of more doses – for the same container.  Who knows?  All we do know is that the allegations of the complaint do not “affirmatively and plausibly” add up to an “injury” caused by the defendant’s conduct.  

The Petition nicely captures the absurdity of the Third Circuit’s analysis, under which consumers suffer Article III injury from “unfairness” whenever they “walk into a supermarket and buy a product — from toothpaste, to ketchup, to deodorant, to hairspray — so long as they can then conceive of a way that the product might be dispensed more efficiently.”  The Petition also nicely exposes the weakness in the Third Circuit’s effort to distinguish away the Seventh Circuit decision in Eike.  According to the Cottrell majority, Eike “seemed to begin its standing analysis with a determination that the plaintiffs had ‘no cause of action.’” But while it is true that the Seventh Circuit did (correctly) conclude that the plaintiffs had “no cause of action,” the Seventh Circuit also separately held that there was no Article III injury, without ever suggesting a causal connection between the two.  Eike, 850 F.3d at 318.  The Seventh Circuit got it fundamentally right when it held that the fact that a seller does not sell the product that you want, or at the price you’d like to pay, is not an actionable injury; “it is just a regret or disappointment.” 

As residents in, and fans of, the Third Circuit, the Cottrell decision certainly is cause for “regret and disappointment.” We called this post a “second look” at the eye-drop litigation.  It is the second look we have taken at the Cottrell case.  We hope that the Third Circuit takes a second look.      

 

 

We thought we were on a winning streak on medical monitoring.   In August, we blogged about plaintiff lawyers stumbling in their efforts to walk the not-quite-yet-injury line.  https://www.druganddevicelawblog.com/2017/08/monitoring-the-death-of-medical-monitoring.html   In September, we blogged about a denial of a medical monitoring class action because the issues were more specific than common. https://www.druganddevicelawblog.com/2017/09/medical-monitoring-class-certification-fails.html.  But with the falling leaves come falling defense fortunes in the area of medical monitoring, as Judge Jones (a smart and careful judge, which does not mean we always have to agree with him) in the Middle District of Pennsylvania refused to dismiss a rather frail medical monitoring case.  The case is Baker v. Deutschland GMBH et al., 2016 U.S. Dist. LEXIS 189429 (M.D. Pa. Oct. 11, 2016).  The court denied a motion to dismiss a medical monitoring/declaratory judgment case involving allegations that a medical device, a heater-cooler system used to regulate blood temperature during open heart surgeries, exposed surgical patients to potentially fatal bacterial infections.  The plaintiffs styled the case as a putative class action for medical monitoring that also sought a declaratory judgment of defect (which, to our jaundiced, baggy defense-hack eyes looks to be both an effort to create settlement leverage and a dodge around the issue of class certification) despite the fact that medical monitoring claims in Pennsylvania sound in negligence.

 

The hospitals involved in the surgeries had announced to the public that over 3500 patients had potentially been exposed to the bacteria during their heart surgeries.  The bacteria in question occur naturally in the environment and rarely cause illness, but they pose “a unique health risk to those with compromised immune systems, and in particular those who have undergone invasive surgical procedures.”  It can take anywhere between two weeks and four years for an infection to manifest itself in an exposed patient.  Even when manifested, the symptoms are non-specific and may present in the form of “fever, pain, redness, heat or pus around a surgical incision, night sweats, joint pain, muscle pain and fatigue.”  If diagnosed early, an infection from these bacteria may be successfully treated with antibiotics.  But late “diagnoses pose a significant risk of death for those with weakened immune systems.”  The recommended monitoring period after exposure to the bacteria is at least four years. The plaintiffs sought class certification for those who underwent open heart surgeries at certain hospitals during the respective time periods and who are currently asymptomatic for the bacterial infection.  In response to the risk of exposure, the hospitals created on-site, free clinics for patients to “obtain screening for and medical treatment associated with diagnosed infections.”  Later, the FDA issued a Class 2 recall of the blood heater-cooler system, citing to the potential for colonization of organisms when “proper disinfection and maintenance is not performed per instructions for use.”

 

The defendants moved to dismiss the medical monitoring claim.  Just to review, here are Pennsylvania’s elements of a medical monitoring claim:   (1) exposure greater than normal background levels; (2) to a proven hazardous substance; (3) caused by defendants’ negligence; (4) as a proximate result of the exposure, plaintiffs have a significantly increased risk of contracting a serous latent disease; (5) a monitoring program procedure exists that makes the early detection of the disease possible; (6) the prescribed monitoring regime is different from that normally recommended in the absence of exposure; (7) the prescribed monitoring regime is reasonably necessary according to contemporary scientific principles.  The defendant argued that (1) the plaintiffs could not allege a plausible claim that they were exposed to “more than the ‘mere possibility’ of exposure beyond what they would normally encounter,” (2) failed to allege a “significantly increased risk of contracting serious latent disease,” and (3) failed to allege that a “monitoring program will make early detection of disease possible.”

 

The Baker court rejected these arguments, pointing to allegations in the complaint that the hospitals had announced the exposures during surgery, that the heater-cooler system had aerosolized the bacteria and thereby exposed the plaintiffs to a greater amount of the bacteria than would normally be the case, that prompt detection of the bacterial infection could lead to successful treatment, and that the hospitals seemed to think that monitoring was beneficial inasmuch as they offered free clinics. Maybe some or all of these allegations would turn out to be bunk, but the court held that a motion to dismiss was not the vehicle for resolving that.  Further, the court held it significant that the plaintiffs had established plausibility by alleging that other patients similarly situated had contracted infections and suffered injuries – five of whom passed away. The court reasoned that requiring more from the plaintiffs at the pleading stage made little sense since “by its nature, a medical monitoring claim attracts Plaintiffs who have not yet shown symptoms of exposure.”

 

The defendants also moved to dismiss the declaratory judgment action on the defect issue.  The defense theory was that, because strict liability does not apply to medical devices in Pennsylvania, declaration of a defect is inappropriate.  We might even call it gratuitous. The defendants also argued that a declaration of defect is inconsistent with the plaintiffs’ lack of injuries, and that, in any event, such a declaratory judgment would be ill-suited for a case about negligence – i.e., a finding of defect would not conclude the entire controversy. Again, the court rejected these arguments, holding that product defect is legally relevant to product liability claims outside the realms of strict liability, including negligence based charges. The court said that a declaration of defect would “finally resolve an issue between the parties that will undoubtedly be part of this litigation and potentially future claims as well.”  Sorry, but that seems like a stretch to us.  (We looked for a discussion of the SCOPA Tincher case, but did not find it.)  It also seems like a waste of time.  Perhaps the court was on slightly less shaky ground when it ruled that absence of physical injury was not a necessary element to the plaintiffs’ claims. It all comes down to the court’s discretion whether to hear a declaratory judgment action.  The court exercised its discretion to hear the claim, or at least hear more of it, while some other courts (certainly a court helmed by an author of this blog) could and would go the other way.

 

This litigation appears very muddled, perhaps purposely so, as the plaintiffs, claiming only monitoring – meaning the plaintiffs were not yet injured —  tried to bolster their claims by repeatedly pointing to others who actually did suffer physical injury.  The Baker court found enough to get by Rule 12, but it is hard to believe there is enough here to establish a right to monitoring.  The real issue in this case will be whether, after the passage of time, there remains any elevated risk of infection.  We will be, ahem, monitoring this litigation for further developments.

 

 

 

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?