Regular blog readers may recall that, every year, we eagerly await a Monday and Tuesday right around February 14th.  This has nothing to do with Valentine’s Day (though we like a dozen roses and a box of chocolates as much as the next person.)  No, at this time every year (for the past eighteen or so) we cross our fingers that there is no blizzard, beg everyone in our work life to cover any emergencies, and head to New York for the Westminster Kennel Club Dog Show.  This year was the 141st annual show, and, as always, it was a mecca for all things dog.  As we ate breakfast in our hotel, we were visited by Mobius, a red Doberman so tall he had to lean down to attempt to taste our complimentary make-it-ourselves waffle.  To board the shuttle from the Hotel Pennsylvania (worthy of its own post) to Piers 92 and 94 for the daytime breed judging, we had to step over “Sky,” a 140-pound Greater Swiss Mountain Dog sprawled in the aisle of the bus, calmly oblivious to accidental bumps and kicks and happily kissing anyone who asked.  We live for this stuff, even if our chosen favorite almost never wins.

For the atmosphere is rarified. A few years ago, the show stopped being “champions only” and admitted “class dogs” – dogs still working their way through point-earning breed classes to achieve their championships – for the first time.  But, save for the infrequent upset, the group competition (the televised portion, in which the single winner of each breed competes against the winners from the other breeds in its “group” – sporting, herding, toy, etc.) is dominated by the very top-winning show dogs in the country.  Last year, we fell in love with a gorgeous German Shepherd Dog named Rumor.  She was a heavy favorite to win it all (“Best in Show”), but was upset by C.J. the German Shorthaired Pointer and settled for Reserve Best – second place.  And she retired, to raise beautiful puppies and live the life of a cherished house pet.

But, alas, said puppies did not get made on the first attempt. And, come January, Rumor’s owner/handler decided to give her one more shot at the big one.  So she “came back out,” showed at ten shows in January, and took one more run at the Garden.  And, this time, after upsetting the favorite, Preston the Puli, to take the Herding Group, she won it all.  It was very, very cool to witness.  And we already can’t wait ‘til next year.

And there was a blog-worthy lesson to be gleaned from it all (at least if you stretch a little): if you haven’t achieved everything you want, think about taking another shot.  And H.R. 985, a bill that passed the House Judiciary Committee this week, would pick up where CAFA left off (and then some) to correct still-rampant abuse of the system by class action and MDL plaintiff lawyers, to the detriment of our clients, the judicial system as a whole, and all too often, to the plaintiffs the lawyers ostensibly represent.

Under “Purposes,” the bill states: “The purposes of this act are to – (1) assure fair and prompt recoveries for class members and multidistrict litigation plaintiffs with legitimate claims; (2) diminish abuses in class action and mass tort litigation that are undermining the integrity of the U.S. legal system; and (3) restore the intent of the framers of the United States Constitution by ensuring Federal court consideration of interstate controversies of national importance consistent with diversity jurisdiction principles.”  Worthy goals all, if a trifle ambitious. The bill’s key points read like a set of nesting boxes – just when you think you’ve opened the last, there is another present inside.  Here are some highlights:

Class Actions

  • Injury allegations: this provision requires a court to deny certification unless “the party seeking to maintain such a class action affirmatively demonstrates that each proposed class member suffered the same type and scope of injury as the named class representative.” This is ascertainability something for which we’ve advocated, and also something that our side tried unsuccessfully to get fixed through the Federal Rules Committee. Thus, the judiciary had its chance to fix this. Nothing happened, so now Congress is poised to step in. About time.
  • Conflicts of interest: this provision requires class counsel to state, in the body of the complaint, “whether any proposed class representative or named plaintiff in the complaint is a relative of, is a present or former employee of, is a present or former client of (other than with respect to the class action) or has any contractual relationship with . . . class counsel” and shall “describe the circumstances under which each class representative or named plaintiff agreed to be included in the complaint and shall identify any other class action in which any proposed class representative or named plaintiff has a similar role.”
  • Attorneys’ fees: “[N]o attorneys’ fees may be . . . paid . . . until the distribution of any monetary recovery to class members has been completed,” and “[u]nless otherwise specified by Federal statute, . . . the portion of any attorneys’ fee award to class counsel . . . shall be limited to a reasonable percentage of any payments directly distributed to and received by class members [and in] no event shall the attorneys’ fee award exceed the total amount of money distributed to and received by all class members.” We particularly like this because it would effectively put an end to cy pres, against which we’ve railed for years. By limiting the denominator for fee awards to “payments directly distributed to and received by class members” it prevents cy pres sums from being used to inflate fee awards.

There are other provisions, requiring stringent accounting provisions for settlement funds forbidding certification of issue classes unless all relevant Rule 23 prerequisites are satisfied (another thing our side tried first to fix through a change to Rule 23), and most significantly providing for severance of misjoined plaintiffs for purposes of jurisdictional determinations. This legislative elimination of fraudulent misjoinder is a key point, since it addresses the multi-plaintiff complaints we love to hate.

We note that since the “effective date” of this act provides for its application to all “pending” civil actions, cases currently in state court can be removed (or removed again) under the provision negating misjoinder as a means of preventing diversity-based removal to federal court.

Finally, in an issue close to our hearts as we daily encounter plaintiffs unwittingly victimized by so-called “litigation funders,” the bill provides, “In any class action, class counsel shall promptly disclose in writing to the court and all other parties the identity of any person or entity, other than a class member or class counsel of record, who has a contingent right to receive compensation from any settlement, judgment, or other relief obtained in the action.” A sunshine law for third-party funding is something else for which we’ve advocated.

Multidistrict Litigation:

  • Proof of exposure and injury: We were thrilled to see a “Lone Pine”-esque provision build into the MDL portion of the bill. It provides, in pertinent part, “In any coordinated or consolidated pretrial proceedings . . . , counsel for a plaintiff asserting a claim seeking redress for personal injury [in the MDL] shall make a submission sufficient to demonstrate that there is evidentiary support (including but not limited to medical records) for the factual contentions in the plaintiff’s complaint regarding the alleged injury, the exposure to the risk that allegedly caused the injury, and the alleged cause of the injury . . . within 45 days after the civil action is transferred to or directly filed in the proceedings. That deadline shall not be extended. Within 30 days after the submission deadline, the judge . . . shall [determine] whether the submission is sufficient and shall dismiss the action without prejudice if the submission is found to be insufficient.” Thirty days later, in the continued absence of a satisfactory submission, the action is to be dismissed with prejudice. Not long ago, we advocated for amending the MDL statute to require early factual disclosure, with dismissal as the sanction for not disclosing enough to satisfy Rule 8. This is the functional equivalent.
  • Trial Prohibition (“waiving Lexecon”): MDL judges “may not conduct any trial in any civil action transferred to or directly filed in the proceedings unless all parties to the civil action consent to trail of the specific case sought to be tried.” This provision would remove the threat of MDL trials as a tool to force defendants to settle. It is something else for which we have advocated.
  • Ensuring Proper Recovery for Plaintiffs: MDL plaintiffs “shall receive not less than 80 percent of any monetary recovery obtained in that action by settlement, judgment or otherwise.”

While most of the press coverage seems to focus on class actions, to us the removal and MDL provisions are at least as important. The vast bulk of our professional life is spent in the mass tort space – mostly MDLs these days, with the occasional class action thrown in. We have become accustomed (but never inured) to plaintiffs without injuries herded by counsel who are their friends or bosses into mass actions in which they don’t belong. On the other end of the spectrum, we encounter severely injured plaintiffs who will recover next to nothing because lawyers and litigation funders own most or all of the plaintiffs’ stakes in the inevitable settlements. And, at every turn, we sit across the table from tanned and affluent plaintiff attorneys who are the only ones apparently immune to the vagaries of the system and who are the sole beneficiaries of its inequities. H.R. 985, as drafted, attempts to address many of these issues. We do have questions. Who defines “the same type and scope of injury,” for example? And we have doubts: can a bill possibly survive the powerful plaintiff attorney lobby when it attempts to resurrect the integrity of mass litigation by hitting those attorneys squarely in their pocketbooks? But we heartily and excitedly support this bill, and we know that some of its provisions are way, way better than none. We will keep you posted.

We’ve addressed many times Texas Civil Practice & Remedies Code §82.007, a tort reform statute that, essentially, creates a presumption in drugs cases that a drug’s warning is adequate if the FDA approved it. See §82.007(a)(1). The statute gives plaintiffs with five ways to rebut that presumption, one of which is to show that the defendant withheld information from, or misrepresented information to, the FDA. §82.007(b)(1). That means of rebuttal, however, was held to be preempted by the Fifth Circuit under Buckman because it requires a plaintiff to prove fraud on the FDA. Lofton v. McNeil Consumer & Specialty Pharma., 672 F.3d 372 (5th Cir. 2012).

We recently uncovered a case in which a plaintiff actually tried to expand the Fifth Circuit’s ruling as a way around §82.007’s presumption of warning adequacy. See T.R.M. v. GlaxoSmithKline LLC, 2015 U.S. Dist. LEXIS 183272, (S.D. Tex. Aug. 21, 2015). In particular, the plaintiff argued that, if Buckman preemption applies at all, it must invalidate all of §82.007, not just its fraud-on-the-FDA based rebuttal. In short, even though the statute created a presumption of adequacy and five ways to rebut it, the plaintiff asked the court to scrap the entire presumption regime because one means of rebuttal was preempted.

Uh, no.

Rules of statutory construction require courts to give effect to as much of a statute as possible while maintaining its original purpose, severing only as little as necessary. Preempting only the fraud-on-the-FDA rebuttal provision of §82.007 accomplishes that. Plaintiffs still have the potential options of four other means of rebuttal and, in fact, might even be able to use the fraud-on-the-FDA rebuttal if the FDA itself made such a finding.

Continue Reading Texas Federal Court Rejects Attempt to Misapply Buckman to Invalidate Statutory Rebuttable Presumption of Warning Adequacy

It’s hard to believe that, with over half of all cases pending in the federal courts now docketed in multi-district litigations (“MDLs”), the statutory basis for all this litigation is but one section of the United States Code:

(a) When civil actions involving one or more common questions of fact are pending in different districts, such actions may be transferred to any district for coordinated or consolidated pretrial proceedings. Such transfers shall be made by the judicial panel on multidistrict litigation authorized by this section upon its determination that transfers for such proceedings will be for the convenience of parties and witnesses and will promote the just and efficient conduct of such actions.  Each action so transferred shall be remanded by the panel at or before the conclusion of such pretrial proceedings to the district from which it was transferred unless it shall have been previously terminated:  Provided, however, That the panel may separate any claim, cross-claim, counter-claim, or third-party claim and remand any of such claims before the remainder of the action is remanded.

(b) Such coordinated or consolidated pretrial proceedings shall be conducted by a judge or judges to whom such actions are assigned by the judicial panel on multidistrict litigation. For this purpose, upon request of the panel, a circuit judge or a district judge may be designated and assigned temporarily for service in the transferee district  . . .  The judge or judges to whom such actions are assigned, the members of the judicial panel on multidistrict litigation, and other circuit and district judges designated when needed by the panel may exercise the powers of a district judge in any district for the purpose of conducting pretrial depositions in such coordinated or consolidated pretrial proceedings.

(c) Proceedings for the transfer of an action under this section may be initiated by −

(i) the judicial panel on multidistrict litigation upon its own initiative, or

(ii) motion filed with the panel by a party in any action in which transfer for coordinated or consolidated pretrial proceedings under this section may be appropriate. A copy of such motion shall be filed in the district court in which the moving party’s action is pending.

[Procedures for the JPML deliberations on creating MDLs, notice, and filing of transfer orders]

(d) [Composition of JPML]

(e) [Restrictions on appealability of JPML orders]

(f) The panel may prescribe rules for the conduct of its business not inconsistent with Acts of Congress and the Federal Rules of Civil Procedure.

(g) [Peculiar to antitrust]

(h) [Peculiar to antitrust]

28 U.S.C.A. §1407.

That’s it. There are as many subsections of the MDL statute (2) peculiar to antitrust as there are governing the substance of what MDLs are intended to accomplish.

Continue Reading The Multi-District Litigation Statute Needs Rewriting

We blogged about possibly interesting nuggets in the 21st Century Cures Act (“21CCA”) back in February, 2015 – when it was only 400 pages long.  In true congressional fashion, it’s now twice as long and loaded up with enough goodies (mostly of the $$$ variety) that it just passed the House of Representatives by a 392 to 26 margin.  It thus seems poised to become law.  Given the prospects for imminent passage, we decided to revisit this monster and see if there’s anything more of interest to product liability defendants.  We aren’t interested in the spending-related aspects of this bill, which are what’s really greasing its skids.

So here goes.

Preemption

The first thing we wanted to see is if there is any preemption of civil lawsuits, so we searched the text of the bill for the word “state.” More than 100 matches.

Continue Reading Anything Worthwhile For Product Liability Defendants In The 21st Century Cures Act?

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!

No, we’re not here to muse about how our lack of contact with advanced extra-terrestrial civilizations might be due to an unfortunate proclivity for “intelligent” life to invent technology that destroys their home planets before developing technology that permits the colonization of other planets. We limit ourselves to the drug and medical device product liability space.

First, we reiterate our belief that under a Trump administration, the FDA’s proposed – and oft-postponed − final rule, the one that seeks to abolish generic preemption by enacting regulations that likely violate the FDCA’s “sameness” requirement for generic drugs, is kaput.  When we learned earlier this year that the FDA had postponed the finalization date until after the election, we immediately pronounced it dead.   We still believe that.  We find it difficult to believe that a Trump FDA would continue a controversial Obama FDA proposal that has always been pursued as a sop to the plaintiffs’ bar, a major supporter of the outgoing president.  If there’s one thing we know Donald Trump believes in, it is getting revenge.

Second, the odds of another pro-tort-preemption Supreme Court justice to fill the vacant seat created by Justice Scalia’s death have increased significantly. The stark fact is that tort preemption has become a distinctly partisan issue on the Supreme Court.  The two most recent drug/device Supreme Court decisions, PLIVA, Inc. v. Mensing, 564 U.S. 604 (2011), and Mutual Pharmaceutical Co. v. Bartlett, 133 S.Ct. 246 (2013), were both decided by five Republican appointees favoring preemption and four Democratic appointees opposing it.  Had the outcome been different, we would have considered the ultimate survival of Mensing/Bartlett unlikely.

Continue Reading How Might a Trump Administration Affect Our Sandbox?

Bexis recently attended the “Emerging Issues in Mass-Tort MDLs Conference” sponsored by Duke Law School (those of us from Philly remember Duke as part of “Black Saturday” back in 1979).  Several panels discussed various issues relating to MDLs including using early, issue-specific fact sheets, which Bexis advocated be considered amended pleadings subject to Rule 8 and TwIqbal, as a winnowing tool against the hordes of meritless plaintiffs that persist for years in MDLs involving prescription medical products.  Another discussion, about Lone Pine orders, produced (among other things) a great deal of disagreement as to what exactly a “Lone Pine order” actually requires.

By the end of it all, Bexis was moved to make a modest proposal. A lot of the problem – both with the use of plaintiff questionnaires/fact sheets and with Lone Pine orders – is definitional.  There is no set standard for either of these supplemental discovery procedures.  What’s really needed is the type of clarity that can only be brought about by an actual rule of civil procedure.  Thus, Bexis proposed (and proposes here) creation of a new Federal Rule of Civil Procedure governing “optional discovery methods” that allow judges to use defined procedures for party questionnaires/fact sheets (not necessarily plaintiffs in all cases) and Lone Pine orders would set standards, as well as several other discovery techniques that we think should be defined and allowed by a formal rule.

The other techniques Bexis would include in a new rule are: (1) authorizations for release and production of medical and other relevant records in the hands of third-parties; (2) informal interviews with treating physicians; (3) predictive coding in ediscovery; and (4) provision of blood or tissue sampling for genetic testing.  The first two are traditional discovery techniques that suffer (like Lone Pine and questionnaires) from wildly divergent standards and could benefit from the uniformity imposed by a rule – as well as a leveling of the plaintiff/defendant playing field.  The latter two are innovative discovery techniques that are driven by technological advances.  Predictive coding (as we discussed in the links above) could both cheapen and sharpen electronic discovery.  Genetic testing, reliant on DNA and other molecular sequencing techniques that have become dramatically cheaper and more accurate over the past decade, will become more and more necessary in toxic exposure cases of all kinds as causation of more and more medical conditions, such as mesothelioma and other cancers, is determined to vary by individualized genetic differences (also discussed in our prior link).

As illustrious as the attendees of the (invitation only) Duke Conference are, that is not the forum for actually amending the Federal Rules of Civil Procedure. That honor goes to Discovery Subcommittee of the Federal Judicial Conference’s Standing Committee on Rules of Practice and Procedure.  Having successfully completed its project on scope and sanctions that resulted in the amendments that became final in December, 2015, that Subcommittee might be looking for something else to do.  Maybe it could see fit to take up some or all of Bexis’ modest proposal.

We blogged a couple of years ago about the beginnings of what has become a wave of state “Right to Try laws” – laws that purport to give terminal patients with no other medical options the right to seek investigational drugs for their conditions from manufacturers who have yet to obtain full FDA approval.  Mostly, these laws are motivated by the unwieldy nature of the FDA’s “compassionate use” regulations, which are directed at the same problems.  Given that these laws originated with a “states’ rights group” called the Goldwater Institute, we strongly suspect that a second motive of gratuitously poking the FDA in the eye was also at work.

Whatever their provenance, we were deeply skeptical of their practicality. Three large obstacles loomed.  Number one:

For one thing, there’s the FDA. States can pass all the laws they want, but unless the FDA gives its okay to programs more expansive than its compassionate use (“expanded access”) program, nothing’s going to happen.

Number two:

The reason, as is the case for so many things these days, is the threat of liability. . . . You won’t induce a manufacturer to participate in a voluntary program by painting a target on its back.

Number three:

There’s no upside. These statutes are for use by very ill people, and if (as is unfortunately likely) the statutory participant died, then there’s an adverse event that must be reported to the FDA.  Companies investigate drugs in the hope of obtaining approval.  Adverse events definitely don’t help get approval.

Indeed, despite a couple dozen Right to Try statutes enacted over the last few years, we are unaware of even a single instance in which anybody successfully obtained treatment with an investigational drug under any of these state laws.

Continue Reading Developments in Compassionate Use and Right To Try Laws

The West Virginia legislature has passed, and the governor signed today, S.B. 15, adopting the learned intermediary rule.  Here is a link to the legislative history of the bill. Here is the text of the bill:

[Passed February 17, 2016;  in effect 90 days from passage.]

AN ACT to amend the Code of West Virginia, 1931, as amended, by adding thereto a new section, designated §55-7-30, relating generally to manufacturers and sellers of prescription drugs and medical devices and liability of those entities for alleged inadequate warning or instruction; and adopting the learned intermediary doctrine as defense to civil action based upon inadequate warnings or instructions.

Be it enacted by the Legislature of West Virginia:

That the Code of West Virginia, 1931, as amended, be amended by adding thereto a new section, designated §55-7-30, to read as follows:

ARTICLE 7. ACTIONS FOR INJURIES.

§55-7-30. Adequate pharmaceutical warnings; limiting civil liability for manufacturers or sellers who provide warning to a learned intermediary.

(a) A manufacturer or seller of a prescription drug or device may not be held liable in a product liability action for a claim based upon inadequate warning or instruction unless the claimant proves, among other elements, that:

(1) The manufacturer or seller of a prescription drug or medical device acted unreasonably in failing to provide reasonable instructions or warnings regarding foreseeable risks of harm to prescribing or other health care providers who are in a position to reduce the risks of harm in accordance with the instructions or warnings; and

(2) Failure to provide reasonable instructions or warnings was a proximate cause of harm.

(b) It is the intention of the Legislature in enacting this section to adopt and allow the development of a learned intermediary doctrine as a defense in cases based upon claims of inadequate warning or instruction for prescription drugs or devices.

NOTE: The purpose of this bill is to adopt and codify the learned intermediary doctrine as a defense to a civil action against a manufacturer or seller of a prescription drug based upon inadequate warnings or instructions.

Continue Reading Breaking News – West Virginia Statute Adopts Learned Intermediary Rule

Here are a couple of non-litigation related matters that we thought our readers need to know about.

First, the FDA.  We’ve pointed out before that the FDA’s “intended use” regulations for drugs (21 C.F.R. §201.128) and devices 21 C.F.R. §801.4) both contain the following potentially disturbing language:

[I]f a manufacturer knows, or has knowledge of facts that would give him notice that a device introduced into interstate commerce by him is to be used for conditions, purposes, or uses other than the ones for which he offers it, he is required to provide adequate labeling for such a device which accords with such other uses to which the article is to be put.

This language has the potential, if the FDA wanted to, to allow the prosecution of a drug or device manufacturer for an “adulterated”/”misbranded” product (for not having “adequate labeling”), merely because that manufacturer KNEW ABOUT off-label use of its products – forget promotion (truthful or otherwise). Fortunately, the FDA generally has not read this language literally.  Instead it requires prior agency approval of warnings about risks peculiar to off-label uses (we discussed that here).

Continue Reading The FDA Tiptoes – and Congress Splashes Into – the 21st Century