Class Action

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Two of our favorite themes in the drug and device world intersected a few weeks ago in the Third Circuit—class actions and “no injury” lawsuits.  We don’t see many drug and device class actions these days, which we view as one of the more notable accomplishments of the drug and device defense bar over the last 20 years.  In fact, it is difficult to understand why anyone ever thought that personal injury class actions would be a good idea in the first place.  Personal injury cases are different—everything from the patients, to the doctors, to the information available, to the products used, and the injuries alleged.  Those facts leave you with a Hobson’s choice:  Either you take all the individual factors into account, in which case you have defeated the whole point of a class action; or you gloss over it all and pretend everyone is the same, which violates the rules and is downright unfair to everyone involved.  Either way, class actions don’t work.

“No injury” lawsuits are similarly vexing.  They generally come in two forms—medical monitoring lawsuits, where the plaintiff has experienced no drug or device complication but wants the defendant to pay for future medical care anyway, and lawsuits alleging only some form of economic loss. At the risk of oversimplifying, we generally view these cases with a “no harm, no foul” attitude.  It particularly grabs our attention when “no injury” claims are brought as class actions.  You might call it a mashup of bad ideas, which adds up to a really bad idea.  Sort of like Kim Kardashian marrying Kanye West.  Or Donald Trump using Twitter.  Or the upcoming Superman v. Batman movie.  (Actually, that would be two good ideas adding up to a really bad idea, but we digress.)Continue Reading Third Circuit Shuts Down “No Injury” Pharma Class Action

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In addition to being on the warpath about cy pres class action settlements, we try to keep an eye on various other issues related to the much-abused Fed. R. Civ. P. 23.  First, we’re pleased as punch to let you know that all the really awful things that the Federal Judicial Conference’s Rule 23 Subcommittee was contemplating doing (rejecting/watering down ascertainability, recognizing issue classes, writing cy pres into Rule 23, and eliminating offers of judgment) have all been dropped.  You can read about it here.  Only comparatively minor settlement-related issues (opt-outs, notice, objectors, approval) remain on the Subcommittee’s agenda.

There are also two recent, and pending, petitions for certiorari of note raising class action-related issues.  One of them, Wal-Mart Stores, Inc. v. Phipps, No. 15-597 (U.S., filed Nov. 6, 2015), is a spin-off of the employment-related litigation that produced Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011).  Having lost Dukes, plaintiffs have tried to regroup by filing separate, smaller class actions.  Given how long the Dukes litigation was pending, the statute of limitations becomes a serious problem for these newer, still quite large class actions.  Hence the issue of “stacking” the tolling effect of successive class actions under American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974), is a major issue.  We’ve been aware of stacking attempts for some time, but the courts had largely gotten it right – until now.  The Phipps petition is from the first court of appeals decision ever to allow stacking as a general rule.  Hence, the question presented is:

Whether the Sixth Circuit erred in concluding, in conflict with the decisions of seven other Circuits, that statutory limitations periods applicable to the claims of absent and unknown persons can be extended indefinitely by filing successive (or “stacked”) class actions.

More information, including links to all filed documents, is available on SCOTUSBlog, here.  Full disclosure – Bexis and his firm are filing an amicus brief for the Product Liability Advisory Council (“PLAC”)  in the Phipps matter.Continue Reading Class Action Issues at the Supreme Court (and Elsewhere)

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This post comes only from the Cozen O’Connor side of the blog.

For years, many courts have treated RICO as a sprawling monster, awkwardly extending its civil reach into areas and transactions for which RICO was seemingly never intended, including healthcare litigation.  For over fifteen years, the Third Circuit resisted this trend.  Until now.  With its decision in In re Avandia Marketing, Sales Practices & Prod. Liab. Litig., 2015 U.S. App. LEXIS 18633 (3d Cir. Oct. 26, 2015), the Third Circuit scuttled its previous good work and stretched RICO’s arms all the way out to reach consumer disputes with pharmaceutical manufacturers.

Fifteen years ago, the Third Circuit looked at things very differently.  In Maio v. Aetna, Inc., 221 F.3d 472 (3d Cir. 2000), it upheld the dismissal of a class action complaint in which HMO members tried to turn allegations that Aetna’s HMO didn’t provide the promised quality of healthcare into RICO claims seeking financial damages.  Plaintiffs claimed that Aetna restricted doctors’ ability to provide quality care, in fact offering them financial incentives to withhold quality service, even though Aetna had represented to plaintiff that it would provide high quality care from HMO doctors incentivized to do so.  Id. at 475.  Plaintiffs made clear, however, that they were not claiming injuries suffered through a denial of benefits or subpar treatment.  Id.  They were alleging only financial losses—that is, the difference in worth between the plan that they got and the one they were promised.  But this created a disconnect.  By failing to allege denial of or substandard care, plaintiffs had alleged no concrete financial injury.  They got what they paid for.  Id. at 483, 490.  RICO’s requirement of a concrete financial injury is intended to prevent plaintiffs from converting every ordinary tort claim into a RICO claim for the purpose of trying to win treble damages.  The Third Circuit focused on that requirement and upheld dismissal of plaintiffs’ RICO claim.Continue Reading The Third Circuit Does an About-Face on RICO Claims

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Albert Einstein famously defined insanity as “doing the same thing over and over again and expecting different results.”  We thought of that definition when we read Shepherd v. Vintage Pharmaceuticals, LLC, ___ F. Supp.3d ___, 2015 WL 6956767 (N.D. Ga. Nov. 4, 2015).  Shepherd is – was – a personal injury class action.  No personal injury class action has survived a contested appeal anywhere in the federal court system since the Supreme Court put the kibosh on such things with its decisions in Amchem Products, Inc. v. Windsor, 521 U.S. 591 (1997), and Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999).  That includes several dozen decisions involving prescription medical products, which are listed in our federal class action denial cheat sheet.

Shepherd was decided a month ago – an eternity in blog time – but whatever reason, the decision fell through the cracks and was not picked up by the services. In fact, we first learned about it from a story in the Legal Intelligencer (local Philly legal newspaper; behind a paywall) about a bunch of these plaintiffs abandoning ship following denial of class certification and becoming litigation tourists in Philadelphia. We have a PACER account and know how to use it, so before the day was out we had located the opinion and sent it to Westlaw.

As a class action, the pleaded facts were rather (or perhaps typically) overreaching.  The manufacturer defendant, exercising extreme caution, recalled “eight different oral contraceptive products” all packaged by the same entity, after one improperly packaged blister pack was returned by a pharmacist in Iowa.  2015 WL 6956767, at *1.  “Of the 507,966 blister packs that were returned in the recall, only 53 were improperly packaged in the reverse order.”  Id. at *2.  Plaintiffs claimed that 113 women became pregnant because of the error, but never proved a single case.  Id. at *2.  As the court pointedly observed, “[t]he Iowa package is the only known defective package received by a consumer.”  Id. at *1.Continue Reading Definition of Insanity – Expecting Certification of a Personal Injury Class Action

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This being the week of Thanksgiving, we would be remiss to fail to weave in something about the great American (or ‘merican) holiday of giving thanks, eating turkey, watching football, and pondering the influence of the Pilgrims on our culture (beyond the obvious lasting fashion impact).  In the past, we offered our readers a “fun” word search for food and drink terms in a post on express preemption.  (Yes, the terms “fun” and “express preemption” are rarely linked in a single sentence, although “Today was no fun because I had to write a brief on express preemption” has probably been uttered.) We have offered other posts at this time of year that featured food to different degrees, like this and this.  We have talked about reasons for being thankful, how football analogizes to law, and even how shopping has become a big part of this particular holiday.  Surely, we have given our readers many reasons to ponder deeply on important issues in their lives.  Why is stuffing called dressing in the South?  Why did some combination of the Civil War, Restoration, and carpetbaggers not force a gastro-linguistic solidarity?  Do elementary school depictions of Native Americans (f/k/a Indians; a/k/a indigenous peoples of North America, pre-Colombians, Amerinds, descendants of those who migrated across Beringia) send the right message?  Should second graders learn about smallpox blankets?  Was the choking risk with that third plate of food, after more than a few adult beverages, an acceptable one?  We would like to think that we have contributed to such meaningful introspection with our purportedly clever posts during this week every year since the blog started being purportedly clever.

This year, we highlight a truly American tradition:  trying to make as much money as possible by suing a deep pocket defendant with as little proof as possible.  Recently, this has often involved combining three things.  First, use remedial federal or state statutes that are really for another purpose entirely, but allow for big damages and even fines (e.g., the False Claims Act was enacted against war profiteering, RICO was enacted to combat organized crime).  Second, seek to proceed on behalf of a class and/or some subset of the “public” to maximize the claims at issue.  Third, use only generalized proof of injury, causation, and damages, which is required for a class but does not require a class.  We could add in piggybacking on an issue with a product that has gotten attention because of other litigation or regulatory actions and outsource the work to contingency lawyers.  Such cases have been the subject of many posts, often addressing how generalized proof of causation makes no sense in the context of drugs prescribed to specific patients by specific doctors based on, hopefully, individualized clinical judgment.  High on the list of opinions that got it wrong are Kaiser Foundation Health Plan, Inc. v. Pfizer, Inc., 712 F.3d 21 (1st Cir. 2013), and the rest of the First Circuit’s Neurontin trilogy, which took the top spot in our list of worst decisions of 2013. High on the list of opinions that got it right is the Second Circuit’s Zyprexa decision, UFCW Local 1776 & Participating Health & Welfare Fund v. Eli Lilly & Co., 620 F.3d 121 (2d Cir. 2010), which took home best decision in 2010 by reversing the second worst decision of 2008.  The Second Circuit’s in Sergeants Benevolent Assoc. Health & Welfare Fund v. Sanofi-Aventis U.S. LLP, No. 14-2319-cv, 2015 U.S. App. LEXIS 19797 (2d Cir. Nov. 13, 2015), adds to the weight of the good cases rejecting the misuse of generalized proof of causation by affirming class certification denial and summary judgment in a RICO (and state consumer protection) case over the antibiotic Ketek.Continue Reading Largely Thankful For The Second Circuit Striking A Blow Against Generalized Proof of Causation

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We understand that not everyone shares our view of class actions, but we hold certain truths to be self-evident:  The government, including its courts, cannot order someone to give money to someone else without due process of law, in most cases a jury trial.  In addition, in order to win a judgment ordering a defendant to pay money, a plaintiff generally bears the burden of proof on each element of his or her claims, with very rare exceptions.  These principles are cornerstones of the protection that our laws offer to defendants who are haled into court, or at least ought to offer.

Class actions are an exception to these rules.  A limited exception, but an exception nonetheless.  With a class action, a defendant can become legally obligated to pay money to people who never proved their claims, or even had to try.  Instead, class representatives are allowed to stand in as proxies, and proof of their claims is deemed sufficient proof to force defendants to pay the other class members, possibly thousands of them, without any individualized proof.  On the other side of the coin, absent class members can be bound by a judgment that awards them nothing, even though they did not participate in the proceeding.  How can this be?  The potential for abuse is obvious, and that is why there are strict requirements for certifying class actions—Federal Rule 23 and its state-law analogs—and why courts should certify classes only after a “rigorous analysis” demonstrates that the proposed class meets all applicable requirements.  See Wal-Mart Stores v. Dukes, 131 S. Ct. 2541, 2551 (2011).

We wax on about these rules because a case in the Southern District of California recently departed from them in not only certifying, but expanding a class of women who allegedly purchased hormone replacement therapy products.  The case is Krueger v. Wyeth, Inc., No. 03-cv-2496, 2015 U.S. Dist. LEXIS 137548 (S.D. Cal. Oct. 7, 2015), and it has been around seemingly forever.  First filed in 2003, the case was transferred to the In re Prempro MDL, where the MDL judge denied the plaintiff’s motion to certify a class of California patients asserting claims for consumer fraud.  Id. at **5-6.  Not to be deterred, the plaintiff tried again with a different judge after the case was remanded back to California, and this time they found a more receptive audience.Continue Reading California Court Gets It Wrong On HRT Class Action

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Almost on this date in 1901 (tomorrow actually), Teddy Roosevelt for the first time uttered in public the immortal phrase, “Speak softly and carry a big stick”. It is hard to find people who do not admire that statement.  It is harder to find people who actually practice it. These days we are accustomed to wimpy parents and blowhard politicians who talk tough but do nothing.   As a result, you get teenagers gobbling up the cheese-of-the-month delivery and Russia gobbling up Crimea.  We also encounter some soft-hearted and -headed judges who speak loudly and wield no stick – at least when it comes to clamping down on bogus lawsuits.  Corporate defendants hauled/haled/but-definitely-not-hailed into court are held to ludicrously high standards, while plaintiffs dwell in a world of do-overs and feckless flexibility.

A couple of weeks ago we discussed CD Cal Judge Wilson, who is as demanding as he is smart.  One could say (and we have said) the same about Judges Posner, Boggs, Kozinski, and Rakoff.  One could also say that about D NJ Judge Irenas who sits in the Camden federal courthouse, which we can see out our window if we crane our heads just so.  If you read the Robing Room evaluations of Judge Irenas (which you must necessarily take with a grain of salt, since they are peppered with the comments of sore losers) a picture emerges of intelligence and rigor.

We can be an oath-helper on that fact.  After our first year of law school, we summered at McCarter & English in Newark, NJ. Irenas was a partner there, and was universally acknowledged to be the smartest lawyer in the building.  In our second or third week as a summer associate, we received an assignment from Irenas.  The other summer associates cackled with glee. That is because in addition to having a reputation for being smart, Irenas had a reputation for not suffering fools gladly.  And all of the summer associates were fools.  An Irenas assignment was an opportunity, but a frightening one.

The assignment involved the inevitable research memo.  After we turned it in to him and were grilled to a nice medium-well, we got on a conference call.  At one point, the party on the phone voiced some trepidation and reservations, whereupon Irenas thundered a withering critique of said reservations. Loud dysphemisms filled the air.  He must have seen us shaking with terror, because he smiled and gestured to show us that his finger, which was resting on the microphone (back then speakerphones were separate from the actual telephone, and were connected by a wire) was also pushing down on something we did not know existed – a mute button.  He then released the button and rendered a much more temperate, but still piercing, dissection of the reservations.  What he said was about a hundred times more insightful and felicitously expressed than our pathetic research memo.  Lesson learned.Continue Reading New Jersey Federal Baked Goods Fraud Class Actions Are Toast

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One of the most basic prerequisites to having court rules is that the rules aren’t supposed to change substantive law.  With class action rules, like Fed. R. Civ. P. 23 and its state-law analogs, courts seem to have a hard time remembering that.  No substantive effect means that, if a plaintiff couldn’t bring the claim…

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Is there a tougher federal district judge than Stephen Wilson in Los Angeles?  By “tougher,” we do not mean in the usual sense when applied to judges: handing out long criminal sentences – though that certainly does apply to Judge Wilson.   No, we mean in the sense of not suffering fools gladly.  (To borrow a phrase from the movie Rounders, if you are in court for a case for more than a few minutes and you cannot spot the fool, odds are that it is you.)  Judge Wilson, like Judge Rakoff in SDNY or Judge Posner on the 7th Circuit or Judge Kozinski on the 9th Circuit, has a sharp mind and sharp pen (or keyboard).  If he thinks your theory is wrong, he will say so.  If he thinks you are dumb, he will say so.  Sometimes Judge Wilson can come across as a wee bit impatient. When we were a prosecutor in C.D. Cal. (as Judge Wilson had been several years before us), Judge Wilson was the first judge we encountered who imposed strict time limits during trial.  If he decided that a witness examination had gone on long enough, he would halt the examination on the spot.  We remember a guilty plea in front of Judge Wilson that took place the day before trial was scheduled.  Guilty pleas can be messy affairs.  Some people, no matter how overwhelming the evidence, have a hard time admitting that they did the crime.  And yet, such admission is an essential part of the guilty plea.  Often, the defendant stumbles over the admission.  It can take some goading, some reassuring whispers from defense counsel, and simply some time before the defendant can bring him or herself to utter the magic words.  In our case, the defendant hemmed and hawed a little too much.  Judge Wilson said that there was not enough there for a valid guilty plea, he rejected it, ordered the parties to show up the next day for jury selection, and then called the next case.  It seemed to happen in an instant.  There was panic.  We had already told our witnesses that the case would plead out and that they did not need to come to the federal courthouse the next day.  For all we knew, our case agent was already well outside the jurisdiction, on a protection detail or going undercover.  On the other side of the ledger, the defendant knew what the result at trial would be, and wanted at least to get a couple of points off the sentencing guidelines for acceptance of responsibility.  Somehow the defendant and his lawyer got their act together and returned to court near the end of the day and performed the requisite guilty plea allocution, and all was right with the world.   Judge Wilson’s demonstration of impatience had worked.
Continue Reading Cymbalta Class Certification Denied Again

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We will never forget our first removal under the Class Action Fairness Act.  It was circa 2006, shortly after President Bush signed CAFA into law, when we received word of a complaint against our client filed in California state court with more than 100 plaintiffs claiming injuries from the same prescription drug.  Aha!  A removable mass action, we thought.  And before we knew it, we had the case in federal court under CAFA jurisdiction, poised to be transferred into a distant MDL.  After all, the plaintiffs were almost all litigation tourists with no connection whatsoever to the Golden State.

Careful readers have already discerned the end to this story.  Mass actions removed under CAFA may not be transferred to an MDL under the MDL statute (28 U.S.C. § 1407) unless a majority of the plaintiffs request the transfer.  See 28 U.S.C. § 1332(d)(11)(C)(i).  No such a request was forthcoming in our case.  In the words of our favorite post-modern philosopher, Homer J. Simpson, “D’oh!”  We and our more-than-100 adversaries remained in California, a beautiful place to be for many reasons, but not the proper forum for these non-California plaintiffs and their lawyers.

Since those early days, we have come across two ways to transfer a CAFA mass action to an MDL, notwithstanding CAFA’s prohibition on section 1407 transfers.  The first is to state an alternate basis for removal jurisdiction, such as federal question jurisdiction or diversity jurisdiction based on fraudulent joinder or misjoinder.  The JPML has permitted transfer of CAFA mass actions to multidistrict litigation, so long as CAFA is not the only basis for removal jurisdiction.  The most-cited example comes from the Darvocet MDL.  See In re Darvocet, Darvon and Propoxyphene Prods. Liab. Litig., 939 F. Supp. 2d 1376 (J.P.M.L 2013) (“Section 1332(d)(11)(C)(i) does not prohibit Section 1407 transfer of an action removed pursuant to CAFA’s mass action provision so long as another ground for removal is asserted.”).

The second method is to seek transfer not under section 1407, but instead under 28 U.S.C § 1404, the general venue transfer statute.  This strategy also comes out of the Darvocet litigation, Romo v. McKesson Corp., No. ED 12-2036, 2015 WL 3622620 (C.D. Cal. June 9, 2015), and all we can say is that we wish we had thought of it ourselves.  We have written before
on Romo in connection with the Ninth Circuit’s opinion holding that hundreds of claims related to one prescription drug constituted a CAFA mass action, even though counsel tried strategically to evade federal jurisdiction by dividing the plaintiffs into multiple civil actions of slightly under 100 plaintiffs each.
Continue Reading How to Transfer a CAFA Mass Action to an MDL

Drug & Device Resources

Bexis’ Book

FDA-regulated products now account for an estimated one-fifth of overall economic activity in the U.S. They have also been the focus of a litigation explosion. This timely guide covers all aspects of litigation involving drugs, medical devices, vaccines and other FDA-regulated prescription products.
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