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

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

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

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

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

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

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

Bexis has lots of opinions on what’s wrong with mass-tort (especially drug/device) MDLs.  Heck, Bexis has even proposed amendments to the MDL statutes to correct the many severe problems that exist.  Now, Congress has before it possible statutory changes (not holding our breath) and Civil Rules Committee is looking into the same problems.  Maybe something will happen, although rules changes are notoriously protracted, and the cadre of MDL judges (15 judges control 18 MDLs that account for some 47% of the entire federal civil docket) and their plaintiff-side enablers will fight any attempts to curb MDL discretionary excesses.

In the midst of all this, the Duke Law School’s ongoing MDL best practices project held an invitation-only meeting recently, and Bexis was invited as one of the defense-oriented participants. This meeting was conducted under so-called “Chatham House” rules that preclude attributing particular statements to particular persons, so this post summarizing the meeting will not be of the “he said, she said” variety.

Early Dismissal of Meritless Cases

Defense-side participants produced a plethora of statistics that, in MDL after MDL, anywhere between 20% and 45% (eliminating outliers both ways) of all filed MDL cases are ultimately dismissed because the plaintiffs do not have evidence of the most basic information imaginable:  (a) that they actually encountered the product of the defendant being sued; (b) that they suffered one of the injuries that the MDL was about; and (c) that that the timing and amount of the plaintiff’s exposure was plausible under the plaintiffs’ own causation theories.  The missing information that was discussed was not anything expert-related, just product identification, injury, and plaintiffs fitting within whatever might be the plaintiffs’ own asserted parameters of causation.

Somewhat surprisingly, the plaintiff-side participants did not dispute the basic point – that meritless plaintiffs are widespread, running into the thousands of bogus plaintiffs in the larger MDLs.  Indeed, most of the plaintiff-side speakers professed not just their recognition of the meritless claim problem, but their own annoyance at this phenomenon.  The presence of large numbers of meritless cases artificially skewed who had what say on plaintiff steering committees, which partially depend on numbers of cases.  At the back end, meritless cases produced a bunch of left-over plaintiffs, abandoned by their counsel (who never intended to try cases), bumbling around pro se.

Not one plaintiff-side speaker denied that numerous meritless cases existed in MDLs, or that the absence of effective Rule 8/12/TwIqbal procedures encouraged meritless filings.  Evidently, the “park and ride” plaintiff-side lawyers who pump and dump cases into MDLs don’t attend conferences like this, or if they do, they keep quiet.  At most, the plaintiff-side speakers tolerated bad cases because they would “all work out in the end.”

The defense side vehemently rejected that no-harm, no-foul approach.  Defense participants argued that meritless cases weren’t harmless, but rather skewed MDL litigation from beginning to end – driving up discovery costs, forcing defendants to vet cases that plaintiffs should have done before filing, complicating random plaintiff selection for bellwether trials (more about such trials, below), and inflating settlement demands.  Artificially inflated plaintiff numbers increase the psychological impact of MDLs, given how those numbers find their way into press descriptions and plaintiff solicitations.  Masses of bogus plaintiffs also prevent proper resolution of “proportionality” issues in discovery, since they inflate P-side discovery arguments.

Further, FDA regulations do not contain any “bogus” case exception that would give defendants leeway not to report such cases in their adverse event filings.  Phony cases lead to phony “signals,” since even though adverse event reporting is (according to the FDA) not supposed to establish causation, plaintiff-side experts routinely try to misuse them − and sometimes get away with doing so.  When that happens, it’s garbage in, garbage out.  Inflated plaintiff numbers lead directly to inflated reports, so that meritless cases end up supporting junk science.  This effect is magnified by pleading that would be barred by TwIqbal in non-MDL cases that, such as use of “and/or,” that purport to sue multiple defendants when they could only have used one product, so that each defendant is obligated to report the “adverse event” to the FDA.

Matters livened up a bit further, with that morning’s report from 360 on the extreme position taken by plaintiffs in the Zofran MDL were taking on discovery – that discovery rules in MDLs only apply to defendants.  They were demanding that only 8 of over 400 plaintiffs should submit to any discovery at all – giving bogus Zofran cases a free ride all the way to remand.  The Zofran plaintiffs were so over the top that they even claimed an MDL judge lacked jurisdiction to order discovery.  That’s what Joe Biden would call “malarkey,” and not a single plaintiff-side speaker defended, let alone took, that position.

The problem of widespread filing of bogus cases received the most support for (or the least opposition to) a rules change to facilitate early dismissal of meritless cases.  A rules amendment would have to be simple – not a “Lone Pine” order, but rather something much more basic.  A plausible version could be along the lines of mandatory initial discovery, which exists in “pilot project” form in both the District of Arizona and the Northern District of Illinois.  The local rules could be adapted easily enough to require production of all evidence of product identification/exposure, diagnosis of an injury, and their relative timing within a relatively short fixed period (60-90 days would seem reasonable) after filing of a complaint.  If a plaintiff couldn’t produce any facts or records that plausibly establish a claim, then the meritless action would be dismissed with prejudice.  Maybe a mandatory initial disclosure rule would be limited to MDLs above a certain threshold (100? 500? 1000?) number of plaintiffs.

Defendants might have to compromise – giving something to get something.  MDLs are notorious for imposing onerous discovery obligations on defendants, anyway, so frankly our side wouldn’t be giving up much, except for possibly timing.  One possibility, discussed at the conference in a different context, could involve early technology-assisted review of some categories of electronic documents.  We like predictive coding anyway, so as long as the timing is doable, there might be the basis of a workable compromise here.

Another possibility would be to amend Rule 20 to prohibit joinder of plaintiffs in the same complaint who have nothing in common except suing over the same product.  These multi-plaintiff, misjoined complaints are the primary way that the “park and ride” lawyers file their cases, with practically no factual information about any of the plaintiffs.  Not only do these improper plaintiffs cheat courts out of filing fees, but they burden defendants with the expense of vetting the plaintiffs’ cases.  In addition to forbidding the practice, each misjoined plaintiff could also be required to make a non-refundable deposit into the MDL plaintiffs’ common benefit fund.

Finally, the issue of statute of limitations tolling agreements came up.  There could be a legitimate problem, when a plaintiff’s lawyer finds him/herself up against the statute of limitations with a new client.  We don’t have problems with tolling agreements, as long as they’re one-off, and not an excuse for further abuse.  Tolling agreements cannot be an excuse for rampant failure to vet claims – the example given being “I have 2000 new cases, can I have a tolling agreement for two years.”  Tolling agreements are only appropriate for a short period of time.  We think that the same 60-90 day period mentioned above should be long enough to accommodate counsel who would otherwise have a legitimate need for a tolling agreement.

Interlocutory Appeal of Significant MDL Rulings

Another candidate for a rules change – one meeting with significantly more opposition from our colleagues on the other side of the “v.’ – is the interlocutory appeal of the resolution of certain “significant” motions typically made in MDLs.  Such appeals would correct an imbalance in current practice in that, if defendants win a dispositive motion, it’s an appealable final order, but if defendants lose the same motion, no appeal is available because the denial isn’t final.  Thus, the litigation continues, and the dispositive issue is appealed, if at all, years later – after a bellwether trial or a remand (in the rare event that happens).

That imbalanced access to appellate review is acceptable in an individual case, because delay caused by piecemeal appeals isn’t offset by the need to get things right, right away.  What’s acceptable in a single case, becomes a much bigger problem when the downside of an erroneous denial of a dispositive motion could dispose of hundreds or thousands of cases, particularly an appeal much further down the road adds extraneous pressure to affirm, or else a great deal of MDL activity, based on the resolution defendants contend is erroneous, goes down the drain.

Attorneys on the plaintiffs’ side – as was the case throughout the conference – were content with the status quo.  They pointed to existing certification procedures, but current procedures require the assent of the trial judge that denied the motion in the first place.  If denial is intended to force settlement, which is often the case, that assent won’t be forthcoming.  Plaintiffs pointed to the New Jersey Accutane litigation which has (in)famously been around for some fifteen years.  But that analogy is poor.  Most, if not all, of the delay in Accutane is not due interlocutory appeals, but rather from an prior judge’s extremely poor bellwether trial performance (almost every trial verdict was been reversed), or from appeals concerning the grant of dispositive motions – neither of which have any bearing on the current proposal for a Rule 23(f)-like equivalent permitting interlocutory appeals from motion denials in MDLs whether or not the MDL judge wants to allow it.

Ironically, the Rule 23(f) analogy was attacked by the plaintiff side as a bad analogy, because class actions were mostly “negative value” cases that, unlike mass torts, would go away without certification.  We think the analogy, while not perfect, is better than the other side will admit, for reasons discussed in more detail when we turn to bellwether trials.  Lawyers are, by nature, competitive, and the raised stakes of mass tort MDLs only exacerbates that tendency.  Thus, both sides – but in particular the plaintiffs – pour more money into bellwether trials than the individual cases could possibly be worth.  In that way, bellwethers become “negative value” cases, too.

Once again, a bit of serendipity strengthened the defense arguments.  Just the day before, the Fifth Circuit reversed the bellwether trial verdict in the first of several consolidated trials in the Pinnacle Hip MDL. See In re DePuy Orthopaedics, Inc., Pinnacle Hip Implant Product Liability Litigation, ___ F.3d ___, 2018 WL 1954759 (5th Cir. April 25, 2018).  This was the same MDL where the defendants had tried everything to obtain appellate review of the trial court’s erroneous rulings, including mandamus.  Now, something like seven years of MDL activity in Pinnacle Hip has come to just about naught, largely because no interlocutory appeals process existed to provide timely review of repeated erroneous rulings.

We have to admit, though, the other side has a point that it would be difficult to create a one-size-fits-all interlocutory appeal rule defining exactly what “significant” MDL rulings would be subject to its purview.  Preemption, for sure − nobody on either side disputed that a single preemption motion could be dispositive of so much (up to and including “all”) of an MDL to qualify.  Everything else was subject to considerable debate.  Some Daubert motions can have the same MDL-wide preclusive effect; our 2016 top ten cases post discusses two (Mirena and Lipitor) of these (three (Zoloft) if you count the honorable mentions), but lots of other Daubert motions in MDLs would not come close.

Then there’s everything else. Choice of law was mentioned, so were punitive damages.  The jurisdictional issue in Pinnacle Hip was critical, but most MDL judges aren’t that overreaching.  So defining “significant” for the purposes of a rules change could well pose complex problems.

Having thought about all that, however, se say, “why bother?” Let defense lawyers in the particular MDL decide.  Call it the “upon further review” rule if you want.  In the NFL, the rules allow coaches a set number of challenges to just about any on-field calls, and if the team wins a challenge they get another one, up to some absolute limit.  NFL coaches get to pick what calls they consider important enough to challenge.  Let counsel do the same for MDL interlocutory review.  Preemption orders should be appealable, and a set number (probably two or three) of other orders could be subject to interlocutory review at each separately represented defendant’s option.  If the defendant wins the appeal, it gets another challenge.

We don’t think that approach will result in an undue number of appeals – especially since the Supreme Court just reduced the appellate courts’ workload by throwing out Alien Torts Claims Act cases against corporations, creating some give.  Delay might be a more serious concern, but as with Rule 23(f), the MDL isn’t being stayed, so discovery and other activity would continue in the meantime.

Another issue raised, which would be beyond the control of the federal rules, is whether interlocutory appeals would sufficiently delay MDLs so as to encourage plaintiffs to file in state court.  News flash – plaintiffs have been avoiding federal court for as long as we can remember.  In one of Bexis’ first MDLs, some 1500 Bone Screw plaintiffs tried to hide out in state court in Tennessee (where the target defendant was “at home” jurisdictionally).  They might even have gotten away with that, had Tennessee not had an unusually short one-year personal injury statute of limitations, which tripped up plaintiffs after they agreed to a universal discovery date that was more than a year before they filed all those multi-plaintiff complaints.  See Maestas v. Sofamor Danek Group, Inc., 33 S.W.3d 805 (Tenn. 2000) (plaintiffs lose on cross-jurisdictional class action tolling; all 1500 cases dismissed).  One more reason for plaintiffs to stay out of federal court doesn’t mean anything.  If anything, avoiding federal court is harder now than before because the Supreme Court decided to enforce constitutional limits on personal jurisdiction.

Bellwether Trials

There was considerable discussion of bellwether trials, but we have doubts that rules could solve the problems that were mentioned.  Our view is to interpret the MDL statute as written, and restrict MDLs to “coordinated or consolidated pretrial proceedings.”  28 U.S.C. §1407(a) (emphasis added).  A textualist approach to the MDL statute would, and we think should, mean no trials, “bellwether” or otherwise, in the MDL transferee court.  Simple.  No rules change needed.

But totally contrary to decades of MDL practice.  Don’t hold your breath – although if someone wants to preserve it for appeal, this issue could be the next Lexecon.

There was some discussion of how bellwether plaintiffs are selected.  The Manual for Complex Litigation favors random selection.  MCL §22.315.  We also lean towards random selection, although we recognize that the other side can game even a random system by either filing, or not filing, certain types of cases in the MDL.  So even random selection needs to be policed to prevent plaintiffs from attempting to skew the result.

We also think that, if the rules were changed to facilitate the early dismissal of facially meritless claims, that would go a long way to solving the problems with random selection.  Right now, any random selection process necessarily exposes the prevalence of meritless cases, so that plaintiffs are loathe to agree to what, abstractly, is the most statistically valid method of yielding a representative selection of cases.

Ensuring “representativeness” was also discussed, but we frankly think that’s futile.  As someone pointed out, “random does not necessarily mean representative.”  Even what might at the beginning be the most representative of cases ceases to be representative once both sides pour more resources into preparing and trying that case than it could possibly be worth if being tried outside of the MDL.  We agree with the comment of one of the plaintiff-side speakers that “spending a million to win $500,000 is not an economic business model.”  Both sides committing extraordinary resources to a bellwether trial is a sure way to ensure that the case for that reason alone ceases to have any representative value.

On the plaintiff side, keeping the business model economic, under MDL circumstances, only encourages the reduction of representativeness.  Instead, we see plaintiffs focused on “ringing the bell” – adding punitive damages or consolidated plaintiffs to the mix to make the case harder to defend.  That’s the practical (as opposed to the textual) reason we oppose bellwether trials.  At minimum, as we’ve discussed before, defendants should take care to craft any Lexecon waivers to exclude punitive damages or consolidations.  We didn’t hear any proposed rules changes that would meaningfully improve the bellwether trial system.

Third-Party Litigation Funding

The group discussed a proposal, pending in Congress, requiring automatic disclosure of third-party funding agreements.  Interestingly, plaintiff-side speakers admitted that they demand disclosure of that kind of information themselves when setting up their steering committees, because their membership must be able to “take the heat,” and lawyers controlled by a “hedge fund” can’t be shaping their strategy.  To at least some plaintiffs’ speakers, third-party funding meant “a dummy in the room and a ventriloquist outside.”  One of the judges in attendance likewise thought that disclosure of third-party funding was a good idea to prevent conflicts.  If both plaintiffs and the judiciary favor disclosure is necessary to prevent conflicts, then it is hard to justify not routinely disclosing it to all sides, as insurance is disclosed.

Proponents of such funding stated that it was only a “professionalization” of activities that had long gone on the plaintiff side of litigation.  Perhaps, but that justification brings the response of “what, then, do you have to hide?”  If third party litigation funding is truly professionalized, then again, it resembles insurance, which is subject to automatic disclosure.  To be considered “mainstream,” third-party litigation funders need to act the part.

Proponents also raised the issue of disclosure of confidential work product if funding agreements are discoverable.  This concern seems like a red herring to us, as the contracts are easily drafted to omit any attorney evaluations of litigation.

Proponents also distinguished two uses of litigation funding. The first, which is more similar to corporate litigation funding arrangements, involves loans to plaintiff-side law firms, secured either by their interests in specific litigation or by interests in their entire pending litigation inventory.  These tend to have lower interest rates and involve less influence over litigation strategies or settlement decisions.  Disclosure of such funding is, however, essential to gauging the relative resources of both sides in determining who is going to pay for what discovery in MDL situations.  Plaintiffs should not be able to play at being David when their funding lines of credit are actually Goliath-sized.

The flip side is what was sometimes referred to as “payday lending” litigation funding − where the plaintiff is receiving what amounts to an advance on possible recoveries.  A lengthy discussion was had of claimed abuses – covering the NFL concussion litigation and the recent New York Times exposé of what has gone on in the Pelvic Mesh litigation.  In either case, immediate disclosure of litigation funding agreements would have prevented, or at least reduced, improper conduct, as transparency in funding would have raised red flags about the terms and timing of the agreements in question.  Suspicious agreements could then have brought to the court’s attention, or been the subject of additional discovery into their provenance.

Additional discovery was another aspect of the third party litigation funding debate.  Proponents argued, with some force, that disclosure of agreements would not be the end of matters.  They raised potential use of discovery into litigation funding as a means of opening yet “another front” in MDL litigation and attempting to disrupt the opposing side’s ability to finance itself.  We think that concern could be valid, but is easily addressed.  Disclosure of insurance hasn’t (except in Louisiana) led to insurance companies being sued directly by opponents of their insureds.  The work product issue raised above provides a useful analogy with, anything beyond the contract subject to a similar “good cause shown” and “otherwise unavailable” standard.  There is no inherent reason that such funding should be the source of additional discovery, but requiring prior court approval serves as another check.

Finally, just as plaintiffs want a look at their opponent’s insurance to know how much defendants have available for settlement, or whether the other side has sufficiently deep pockets, defendants should be able to make similar judgments based on plaintiffs’ third-party litigation funding.  A plaintiff who has to satisfy a funder is unlikely to take in settlement an amount that the defendant believes is reasonable if that means zero dollars in the plaintiff’s pocket.  In this respect, discovery of litigation funding is justifiable for the same reason as third-party litigation liens.  Very few plaintiffs would argue that insurance, health care, and other liens can be kept secret from the other side.  Anyone who has a piece of the potential recovery is, in practice a real party in interest who should be at the table and whose identity should be known to all.  All sides should know who is the ventriloquist and who is the dummy.

*          *         *         *

Several other topics were also discussed at the Duke conference, but they overwhelmingly involved the plaintiff side − composition of a plaintiff-side steering committee, judicial efforts to increase diversity on such steering committees, and common fund assessments.  But this post is already quite long, and these other topics are of less interest to our defense-oriented audience.

Anyone interested in what’s wrong with mass torts in today’s litigation landscape should read the recent article in the New York Times, “How Profiteers Lure Women Into Often-Unneeded Surgery,” which ran in the paper on April 14, 2018, and is available online here.  Briefly, the article exposes litigation (and pre-litigation) conduct that amounts, at best, to unnecessary surgery, and, at worst, to certain doctors, lawyers, and litigation funders conniving to bring about harmful surgeries that caused additional injury to their own supposed clients.  Here are some excerpts from the article – there’s lots more, but we have to limit ourselves to fair use:

  • “[A] growing industry that makes money by coaxing women into having surgery − sometimes unnecessarily − so that they are more lucrative plaintiffs in lawsuits against medical device manufacturers.”
  • “Lawyers building [vaginal mesh] cases . . . turn[ing] to marketing firms to drum up clients.”
  • “Women with mesh implants . . . receiving torrents of unsolicited phone calls, some originating overseas” from telemarketers who “seemed to know their medical histories.”
  • “[M]arketers turn[ing] to finance companies to provide high-interest loans to the [women] that have to be repaid only if the [women] receive money from the case.”
  • “Those loans are then used to pay for surgery performed by doctors who are often lined up by the marketers.”
  • Promises that “all [a woman’s] expenses would be covered and that she would be set up with a lawyer to help her sue the mesh manufacturer.”
  • “[M]iddlemen” arranging for surgery in “walk-up clinics” in “shopping malls.”
  • Doctors performing “four or five removals in a day” and pocketing as much as $14,000 a day.
  • “The women generally didn’t meet the doctors who would be operating on them until shortly before the procedure.”
  • Women charged $21,000 per surgery, “at a double-digit interest rate,” to be paid for from “lawsuits brought by women against the mesh manufacturers.”
  • “[H]undreds, perhaps thousands, of women . . . sucked into this assembly-line-like system. . . .  The profits are immense.”
  • “[P]laintiffs who do collect settlements see much of the money go to the financing firms.  Another large slice goes to their lawyers.”

Other than what’s obviously disturbing about reports of such dubious goings on, the Times article leads us to two observations:

First, the conduct described in the Times article provides further support, in the form of a compelling example, for the increasing calls for some sort of mandatory disclosure of litigation financing, at least in mass torts.  The abuses described in the article show how both the integrity of the mass tort litigation process, and the reputation of litigation financing generally, can be harmed by litigation solicitation and financing arrangements not being transparent, particularly where the litigation itself is largely solicitation-driven, as in most mass torts.

As the Times article demonstrates, solicitation, while constitutional under the First Amendment, is rife with potential for abuse.  Our colleagues on the other side might counter that so is pharmaceutical detailing.  Well, precisely to prevent abuse, the sales practices of our clients are regulated in multiple ways − including disclosure of financial arrangements between them and physicians that prescribe/use their products.  Those on the P-side with nothing to hide have nothing to fear from disclosure.  Thus, if litigation financing wants to be considered as legitimate as, say, insurance, that supports the case for routine disclosure of such arrangements in the same fashion as insurance, as Wisconsin recently decided to do:

Except as otherwise stipulated or ordered by the court, a party shall, without awaiting a discovery request, provide to the other parties any agreement under which any person, other than an attorney permitted to charge a contingent fee representing a party, has a right to receive compensation that is contingent on and sourced from any proceeds of the civil action, by settlement, judgment, or otherwise.

Wis. Eng. Asbly Bill 773 §12 (new §804.01 (2)).  Whatever the merits of the Wisconsin approach, or whether it’s necessary outside of the mass tort context, that approach has the advantage of being a simple, bright line standard.

Certainly, disclosure would be a sure and quick way to expose the kind of deals described in the Times article that women have been enticed into in the Vaginal Mesh litigation.  Existence of this kind of financing would be a red flag that the injury claims in such cases required careful investigation.

Which brings us to….

Second, the Times article strongly suggests that these abuses are widespread in the Vaginal Mesh MDL litigation.  Arrangements this elaborate are not worth the trouble for only a small number of cases.  According to the Times article, “perhaps thousands” of lawsuits have been tampered with in the ways that the article describes.

Without disclosure, the kind of aggravation of damages described in the Times article – ironically, the opposite of the accepted common-law duty to mitigate − is hard to unearth.  The Times article quotes “Magistrate Judge Cheryl Eifert in West Virginia”:

“People are claiming the Fifth [Amendment privilege against self-incrimination] and so on and so forth.  They don’t have to talk about necessarily how much money they make, per se, but if someone would just give them an idea of how the arrangement works.  But nobody’s willing to do that.”

Magistrate Judge Eifert has been overseeing aspects of the Vaginal Mesh MDLs.  E.g., In re American Medical Systems, Inc. Pelvic Repair Systems Products Liability Litigation, 946 F. Supp. 2d 512 (Mag. S.D.W. Va. 2013) (opinion by Eifert).

That’s concerning because, as we pointed out a couple of months ago, discovery in the remaining 23,000 cases in the Mesh MDLs has been ordered to be completed with:  (1) extreme haste, and (2) significant limitations on the number of interrogatories that can be propounded and witnesses deposed (see paragraph 2 of the four PTOs linked to in the prior post).  Since there may well be hundreds (if not more) of those 23,000 cases involving questionable surgeries conducted under questionable circumstances, the current rush to remand – combined with the obstructive tactics described in the Times article – creates a considerable risk of miscarriage of justice.  Defendants do not appear to have been given the time or the discovery tools needed to unearth plaintiff-side shenanigans on the scale described in the Times article.  There comes a point at which the efficiency objectives of multi-district litigation have to yield to the higher objectives of justice.

In the Diet Drug litigation – a mass tort of comparable scope – all kinds of problems arose with “the District Court [being] inundated with fraudulent benefits claims.”  In re Diet Drugs (Phentermine/Fenfluramine/Dexfenfluramine) Products Liability Litigation, 573 Fed. Appx. 184, 185 (3d Cir. 2014).  Unfortunately, the widespread fraud perpetrated in Diet Drug only became apparent after settlement – as would eventually be the case here, since contingent fee surgeries will almost surely be a topic of inquiry after the Times article.  The opportunity still exists in the Pelvic Mesh MDLs for diligent discovery to ferret out the false or inflated claims, but that can only happen if adequate discovery is permitted to occur.

On January 30, 2018, Judge Goodwin entered four case management orders in the Ethicon, Boston Scientific, Bard, and American Medical Systems mesh MDLS.  These CMOs establish discovery and briefing deadlines for 13200, 6174, 2876, and 952, cases respectively – a total of 23202 cases.

The discovery and briefing schedules are identical in all four orders. The deadlines are:

Plaintiff Fact Sheets.                                                              03/19/2018

Defendant Fact Sheets.                                                          04/19/2018

Deadline for written discovery requests.                                05/18/2018

Expert disclosure by plaintiffs.                                               06/04/2018

Expert disclosure by defendants.                                           07/05/2018

Expert disclosure for rebuttal purposes.                                 07/23/2018

Deposition deadline and close of discovery.                          09/04/2018

Deadline to file list of general causation experts.                   09/11/2018

Filing of Dispositive Motions.                                                09/21/2018

Response to Dispositive Motions.                                          10/05/2018

Reply to response to dispositive motions.                              10/12/2018

Filing of Daubert motions.                                                      10/05/2018

Responses to Daubert motions.                                              10/19/2018

Reply to response to Daubert motions.                                   10/26/2018

In addition to the plaintiff’s deposition, the parties may take up to 4 treating physician depositions. See Paragraph two of the orders.  Depositions of friends and family are not subject to these deadlines. Id. Depositions are limited to three hours (both sides), absent other agreement of the parties. Id.

Assuming that each plaintiff timely files a fact sheet by the March 19 deadline, that means that the defendants have 167 days thereafter in which to schedule depositions. Assuming an average of three treating physician depositions (at least one implanting surgeon, at least one post-injury treater, and an additional from either of those categories) per case, that means about four depositions in each of 23202 cases, for a total of some 92,808 depositions.  Spread equally across the 167 days after defendants learn the nature of each plaintiff’s case, and who the plaintiffs’ physicians are – the parties are being ordered to take approximately 556 depositions each day.

This 556 deposition per day figure does not count depositions of other witnesses, such as sales representatives, friends and family, and expert witnesses. Nor does it address preparation of each side’s fact sheets, and motion practice, all of which are now scheduled in the 23202 cases that are the subject of the four mesh CMOs.

Good luck to all – you’ll need it.

A lot of time is spent in litigation on discovery. As tedious and non-exciting as it often is, cases can be won or lost depending on what happens during discovery. So, it’s not to be taken lightly. When we find ourselves arguing to the court about discovery, however, it is often without being able to point to much precedential case law. That’s because many courts simply rule from the bench perhaps entering only minute orders. And if case management orders are entered they often don’t rise to the level of being published, even electronically. We are then left scouring dockets looking for rulings or calling our colleagues hoping someone has an order that is helpful. So, we really appreciate when a helpful discovery ruling grabs our attention and we can in turn alert our readers to it.

One of the reasons that more routine discovery decisions don’t generate many opinions is that the rulings frequently turn on case specifics and common sense as opposed to more traditional legal analysis. That’s true of today’s decision. A lengthy order entered in the Abilify MDL setting forth essentially a list of decisions on multiple motions made by both plaintiffs and defendants. Certainly some are more case specific and not really worth much of a mention, so what follows is a list of the more general and most helpful rulings:

  • Confidentiality: The court allowed the parties to provisionally seal documents filed with their Daubert briefing and then at the conclusion of the briefing, the party who sealed the document had to show cause why the document should remain sealed. Defendants argued to keep certain very common categories of documents confidential:
    • Clinical case reports/adverse event reports: Defendants argued that these documents contain confidential patient identifying information and personal medical information. These aren’t plaintiffs – they are people who participated in studies or for whom an AER was prepared. They absolutely have a right to an expectation of privacy, not to mention the company has an obligation to protect that privacy. The court agreed – no public interest. In re Abilify Prods. Liab. Litig., 2017 U.S. Dist. LEXIS 161660, at *7-8 (N.D. Fla. Sep. 29, 2017).
    • Internal company documents: Defendants sought to maintain confidentiality of several categories of internal, non-public documents and the court agreed as to most. Specifically, the court found that all of the following should remain under seal: “standard operating procedures, non-public regulatory submissions, drafts of non-public regulatory submissions, or internal communications regarding the pharmacovigilance process.” Id. at *9. All things plaintiffs like to use to try the case in the media. As to SOPs, the court concluded they are proprietary and developed by the company at considerable expense. With respect to the rest, disclosure “would have a chilling effect on the pharmacovigilance process.” Id. Keeping the pharmacovigilance process confidential actually enables manufacturers to participate in the process in a “frank, open, and honest” way. Id.
    • Expert reports and testimony: Here the court was unwilling to seal expert reports and transcripts across the board. They have to be redacted to the extent they discuss any of the documents or information that the court said should remain confidential. Id. at *10-11.
  • Privilege: Plaintiffs complained that they were unable to assess defendants’ claims of privilege as to its documents because defendants were not producing privilege logs simultaneous with their document productions. Defendants correctly noted that simultaneous privilege logs would significantly slow production down – a production would have to wait the finalizing of the log before it could be produced. The court agreed.  Simultaneous production would be inefficient. Id. at *17-19.
  • Document Retention Policies: Plaintiffs want them, defendants objected. Court ruled: “in the absence of any suggestion of spoliation Defendants’ document retention policies are not relevant.” Id. at *24.
  • Other Drugs: Plaintiffs’ discovery requests included documents about other similar drugs, claiming the information would go to defendants’ knowledge. The court sustained defendants’ objection on the grounds of relevance and proportionality. Id. at *25. While other drugs in the same class may be similar, they were developed later in time, have different mechanisms, and different indications – making them marginally relevant. When you balance only marginal relevance against the issues involved in the litigation – and what we assume to be massive discovery already taking place as to the actual drug at issue — we think the court reached a sound conclusion regarding proportionality to the needs of the case.
  • Trial Pool Discovery: Plaintiffs requested many different types of information, including financial information relevant to sales representatives, physicians, and other consultants. Defendants sought to limit that discovery to just the individuals related to the cases being worked up as trial bellwethers. Again the court agreed. For example, plaintiffs’ request to know about payments and incentives to sales representatives and doctors should be narrowly tailored to those doctors who treated the bellwether plaintiffs and the sales representatives who called on those doctors. Id. at *26-27. The same applied to other categories of “liability” discovery that were more appropriately limited to the bellwether cases. “Expanding the scope to all Plaintiffs would be a Herculean task and impossible to complete in the time frame set by the Court.” Id. at *28.

All in all the rulings were very defense-friendly and provide some good cites for your next motion to compel or motion to quash.

As we publish this post, lawyers in the Pinnacle Hip Implant MDL are gathering in the Bob Casey Courthouse in Houston or in coffee shops, breakfast cafés or law offices nearby awaiting the argument to come.  At 10:00 a.m., the arguing starts.  The Fifth Circuit will officially begin to consider whether to issue a writ of mandamus telling the Pinnacle Hip Implant MDL Court in Dallas that it cannot exercise personal jurisdiction over the upcoming September bellwether trial involving eight New York plaintiffs. The Fifth Circuit will tackle the substance of the appeal—did defendants waive their personal jurisdiction defense as to those eight cases and, in fact, as to all cases in the MDL when they gave a waiver in connection with the first two bellwether trials? Maybe more important, the Fifth Circuit will tackle procedure—are these the type of rare circumstances that require it to issues a writ of mandamus?

We first posted on this petition to the Fifth Circuit on August 8.  Defendants’ petition argued—fairly convincingly—that the context of their waivers, and the language of the waivers themselves, made clear that they applied only to the cases selected for the previous bellwether trials that were upcoming at the time that the waivers were made, and not to all MDL cases.  (Here is a copy of the petition.)  The defendants’ petition challenged an order issued by the MDL trial holding that the waivers applied more broadly, encompassing all future MDL cases, even (seemingly) those that had not even been filed yet.  (Here is the trial court’s opinion.)

Since our first post, the plaintiffs’ filed an opposition brief, and the defendants have since filed a reply brief.

Plaintiffs’ response brief is confusing at times. It argues (at 19) that MDL courts can exercise the personal jurisdiction necessary to conduct bellwether trials with the consent of the parties. Well, yes. With the consent of the parties. But the existence of consent is the very issue being considered by the Fifth Circuit. Plaintiffs’ response also argues (at 18) that an MDL court’s “direct-file order”—an order that allows plaintiffs to file complaints directly in the MDL court even if the underlying claims have no connection to the state in which the MDL court sits—allows it to exercise personal jurisdiction over those directly-filed cases and to conduct trials. No it doesn’t. Courts can’t create personal jurisdiction that otherwise did not exist simply by issuing an administrative filing order. On “waiver,” at one point plaintiffs’ opposition states (at 5) that defendants had previously explained that their waiver for the second bellwether trial was “in order to allow the court to select the next round of bellwether cases.” Plaintiffs then just let that phrase lie there out in the open, essentially making defendants’ argument for them.

Defendant’s reply brief misses none of this, addressing all these seeming missteps. It also turns some of plaintiffs’ arguments in defendants’ favor. For instance, plaintiffs argue that only two cases address the states’ contacts that should be considered in a direct-file case, claiming that both cases were decided wrongly. Defendants highlight (at 1), however, that this is the precise type of lack of guidance that requires the Fifth Circuit to weigh in. Defendants’ reply brief (at 2) explains that such guidance would assist not only in the upcoming Pinnacle Hip Implant bellwether trials, but also in future Pinnacle bellwether trials and other future MDL proceedings in the Fifth Circuit, as well as dispose of a current Pinnacle appeal. Most important, defendants’ reply brief highlights (at 6) the strict standard for finding a waiver of personal jurisdiction: “a clear and unambiguous showing of a deliberate relinquishment of a known right.” Armstrong v. LaSalle Bank Nat. Assoc., 552 F.3d 613, 615 (7th Cir. 2009). Under this standard, it’s hard to see how the waivers by defendants could ever be reasonably interpreted to apply broadly to all MDL cases.

The Fifth Circuit will test and probe all of these issues and arguments later this morning. It will likely be a fascinating back-and-forth. Now, as with any writ of mandamus, this is a long shot. But personal jurisdiction is a hot button issue right now. And the Fifth Circuit’s decision could affect many cases, as this MDL trial court has a penchant for arranging incredibly large multi-plaintiff bellwether trials. Regardless, one thing that we are reasonably sure of is that the Fifth Circuit will rule quickly. The next bellwether trial is only a couple of weeks away. And so we expect to be posting on the Fifth Circuit’s decision soon.

We’ve talked a fair amount about forum shopping on this blog. Forum shopping is largely in the control of plaintiffs’ counsel because they, within reason, get to choose where to file their clients’ lawsuits. And since they do need some reason, there are several frequently used methods by plaintiffs’ counsel when they’ve narrowed in on the court they’ve decided would be most favorable for their clients – typically state court. If a plaintiff wants to stay in state court where he/she resides, he/she sues a non-diverse party. In drug and device cases, that’s usually a pharmacy, a sales representative, a doctor. Sometimes the joinder of such a defendant is fraudulent and the case becomes removal, sometimes not. Another option is to sue a defendant in state court where the defendant resides, a court from which the defendant cannot remove the case. While venue in that scenario may be proper, where the only connection to the jurisdiction is the presence of the defendant, defendants have met with mixed success in arguing forum non conveniens. Just think, if plaintiff lives in Nebraska, ingested the drug in Nebraska, suffered her injury in Nebraska, but files suit in New Jersey – where is most of the discovery that is needed located? Especially discovery from third-parties who will require subpoenas. What state’s law is likely to apply to the bulk of the claims?   Doesn’t make a lot of sense to be in New Jersey except for plaintiff’s preference to be in state court.

But what about when plaintiff’s choice of forum doesn’t turn out like he/she hoped? Should they get a do-over? A mulligan? A second chance? We don’t think so and neither did the court in Zarilli v. Johnson & Johnson, Docket No. ATL-L-1480-16, slip op. (N.J. Super. Law Div. Feb. 3, 2017). This case is one of several pending in New Jersey involving allegations of injury from the use of talc powder. The cases have been coordinated before a single judge for pre-trial proceedings. Plaintiff originally filed her suit in July 2016, and amended her complaint in September 2016. Defendants answered the complaint in October. Id. at 2.

Continue Reading Buyer Beware, No Buyer’s Remorse in New Jersey

Is the lesson learned by at least one plaintiff’s counsel in the In re Yasmin & Yaz Mktg. Sales Practices & Prod. Liab. Litig. We already know mass tort MDLs are a breeding ground for lax plaintiff-side representation. A handful of plaintiffs’ attorneys lead the charge, while the rest file their cases, and then lie in the weeds waiting for settlement. And in a system designed not to pay much attention to the individual cases, at least until the litigation is significantly advanced, missing due dates in an individual case also doesn’t garner much attention. That is until it does.

Today’s case isn’t about preemption, or expert opinions, or off-label use, or even about pleadings standards. What it is about is an individual plaintiff’s counsel being held accountable for not paying attention to MDL orders and for simply doing nothing. We’re just going to tell this one like it is, because we couldn’t even make up facts this absurd.

The individual case is Dzik v. Bayer Corp., 2017 U.S. App. LEXIS 684 (7th Cir. Jan. 13, 2017). Plaintiff filed her suit alleging that she suffered a blood clot from her use of Yasmin, a birth control pill. Id. at *2. Discovery, however, revealed that plaintiff had not filled a Yasmin prescription for 10 months before her alleged injury. Plaintiff’s counsel suggested that plaintiff had been given samples shortly before her injury. In May 2014, defense counsel requested plaintiff produced additional medical records or even an affidavit from the prescribing doctor to substantiate use at the time of injury. Id. That requested was ignored for 15 months.

During those many months, defendant began settling the pending cases. As for non-settling plaintiffs the court entered an order (sometime in the summer of 2015) splitting them into two groups – those likely to settle and those likely not to. Pursuant to the order, if a plaintiff thought her case was likely to settle with a little more negotiation, plaintiff should so notify defendant and if defendant agreed, the case was stayed for 60-90 days to facilitate settlement. Id. at *3. For all other cases, defendant had to notify plaintiff that her case was in the non-settling group and if plaintiff didn’t timely object to that classification, plaintiff had 120 days to serve a Plaintiff Fact Sheet and certain pharmacy and medical records, and a report from an expert on causation. Id. If a plaintiff failed to comply, defendant could move for dismissal and dismissal with prejudice was automatic for any plaintiff who did not respond to the motion to dismiss within 14 days.

Continue Reading You Can Hide But You Can’t Run

Even after having read it through twice, we find the result in Barron v. Abbott Laboratories, Inc., ___ S.W.3d ___, 2016 WL 6596091 (Mo. App. Nov. 8, 2016), hard to fathom, and even harder to stomach.  For several years after starting the blog, one of our aphorisms was “nothing good ever comes out of Missouri.”  Then legal developments caused us to retire that slogan.  Now we may have to bring it back – maybe.

Barron affirmed a $48 million verdict – concerning birth defects – against the maker of a drug that had a black box warning – about birth defects

[THE DRUG] CAN PRODUCE TERATOGENIC EFFECTS SUCH AS NEURAL TUBE DEFECTS (E.G., SPINA BIFIDA). ACCORDINGLY, THE USE OF [THE DRUG] IN WOMEN OF CHILDBEARING POTENTIAL REQUIRES THAT THE BENEFITS OF ITS USE BE WEIGHED AGAINST THE RISK OF INJURY TO THE FETUS.

Barron, 2016 WL 6596091, at *1.

Astonishingly, this boxed warning, which only the FDA can mandate, was a sufficiently inadequate advisory that the drug could cause birth defects that a St. Louis (City) jury awarded $23 million in punitive damages to the plaintiff, who was from Minnesota.

And those two places – St. Louis City and Minnesota – are as much the problem as the “Show-Me-The-Money State” verdict itself. Barron is a poster child for venue and joinder run amok.  First, the underlying action was filed by 24 plaintiffs from all over the country (13 different states), with nothing in common save claiming somewhat similar injuries to different persons from the same drug.  Id. at *4.  Of course, a couple of plaintiffs were from Missouri (and another presumably from the home state of a defendant), in order to defeat diversity.  Id. at *2.

Continue Reading Awful Missouri Venue/Joinder Ruling Offers Way Out – Take It!

This post comes from the non-Reed Smith side of the blog.

We’ve been posting for a few months about the procedural and evidentiary controversies that have arisen in the Pinnacle Hip Implant MDL bellwether process. The second bellwether trial involved significant evidentiary and procedural rulings that raised eyebrows across the defense bar (discussed here and here). After that trial unsurprisingly produced a ½ billion dollar jury verdict, the defense asked the MDL Court to stay further bellwether trials so that the Fifth Circuit could review those rulings. No luck. Instead, the MDL Court ordered that the next bellwether trial should happen—and quickly (discussed here). After all that, and with the third bellwether trial approaching fast, the defense must feel like the coyote lying flat on the ground staring up at the bottom of a plummeting anvil coming at him a second time.

Undaunted, however, the defense has now filed a motion to continue the third bellwether trial, a motion that raises serious concerns about the time allotted to “work-up” the plaintiffs’ cases that will be involved in the trial. The defense argues that the allotted time is simply too short, not providing enough time for the complex medical issues underlying each plaintiff’s case to be developed and understood so that a trial can produce the type of verdicts that can advance the MDL process. To illustrate this, the defense compared the discovery and pre-trial periods that led up to the second bellwether trial (Aoki) to those leading up to this trial:

  • In Aoki, there were 11 months between case selection and trial (2/27/2015-1/11/2016); here, by contrast, there are just 3 ½ months between case selection and trial (6/10/2016-9/26/2016).
  • In Aoki, there were more than seven months between case selection and the due dates for defendants’ expert reports (2/27/2015-10/9/2015); here, by contrast, there are just 2 ½ months between case selection and the due date for defendants’ expert reports (6/10/2016-8/26/2016).
  • The Aoki schedule afforded defendants eight weeks to respond to plaintiffs’ expert reports (8/14/2015-10/9/2015); here, by contrast, defendants are being given just two weeks to analyze and respond to plaintiffs’ expert reports.

(Defense Br. at 9.)

Continue Reading The Pinnacle Hip Implant MDL Continues—with a Motion for a Continuance