Multidistrict Litigation

It’s been a long road.  Well after product liability litigation over Accutane and inflammatory bowel disease (“IBD”) had been thoroughly debunked everywhere else in the nation, such litigation lived on in New Jersey – for year after interminable year.  First, a number of trials occurred, but literally every verdict for the plaintiffs was reversed on appeal.  Here are some of our posts on that phase of the litigation.  Then, once the trial court had had enough and began dismissing large numbers of cases, the intermediate appellate court reversed those decisions, too.  Here are some of our posts on that phase of the litigation.

Ultimately, it was up to the New Jersey Supreme Court to step in and figure everything out.  We blogged recently about it reversing the Appellate Division and entering a landmark decision on the admissibility of expert testimony in New Jersey.  See In re Accutane Litigation, ___ A.3d ___, 2018 WL 3636867 (N.J. Aug. 1, 2018).  Well, the defendant went back to the well on the adequacy of the drug’s warnings, and yesterday it rang the bell again.  In In re Accutane Litigation, ___ A.3d ___, 2018 WL 4761403, slip op. (N.J. Oct. 3, 2018), the court unanimously reversed the Appellate Division and affirmed the grant of summary judgment against another 532 cases brought mostly by litigation tourists.  “Of the 532 plaintiffs, 18 are New Jersey residents and 514 are residents of 44 other jurisdictions.”  Id. at *5.

The trial court had told the tourist plaintiffs that they were stuck with the consequences of choosing to descend on New Jersey like a plague of locusts – New Jersey law applied, including the presumption of adequacy that the state’s Product Liability Act (“PLA”) gives to FDA-approved warnings.  The warnings were adequate as a matter of law because “plaintiffs failed to overcome the presumption of adequacy.”  2018 WL 4761403 at *5.  The Appellate Division held that the law of each of the plaintiffs’ home states, 45 states altogether, governed, and reversed summary judgment under the laws of most of those states (all but eight).  Id.

Choice of Law

The New Jersey Supreme Court first said “you’ve got to be kidding” to the Appellate Division’s multifarious choice of law result.  The plaintiffs made their bed and thus had to sleep in it:

[W]e hold that New Jersey has the most significant interests, given the consolidation of the 532 cases for MCL [multi-county litigation] purposes. . . .  The aggregation of hundreds of cases under MCL allows the resolution of common issues of law.   A trial judge cannot be expected to gain a mastery of the law of forty-five different jurisdictions.  Construing New Jersey’s PLA is challenging enough.  New Jersey’s interest in consistent, fair, and reliable outcomes cannot be achieved by applying a diverse quilt of laws to so many cases that share common issues of fact.

Accutane, 2018 WL 4761403 at *6 (summarizing ruling).  See Id. at *15-20 (lengthy discussion of rationale for applying New Jersey law to all cases).

The court “proceed[ed] under the assumption” that true conflicts existed – that “application of New Jersey’s PLA may lead to an outcome different from the application of the laws of those other jurisdictions.”  Id. at *17 (citation and quotation marks omitted).  Even so, the most “significant relationship” for choice of law purposes in all cases was New Jersey.  First, as to alleged failures to warn, the corporation’s principal place of business “is where the alleged conduct causing the injury occurred − the manufacturing and labeling of [the product].”  Id. at *18 (citation and quotation marks omitted).

Second, in mass torts, “ordinary choice-of-law practices should yield in suits consolidating large numbers of claims and that courts should apply a single law in such cases.”  Id. at *17 (citation and quotation marks omitted).

The two most significant Restatement factors in this MCL matter are . . . “certainty, predictability and uniformity of result” and . . . “ease in the determination and application of the law to be applied”.  Applying a single standard to govern the adequacy of the label warnings in the 532 individual cases will ensure predictable and uniform results − rather than disparate outcomes among similarly situated plaintiffs.

Id. at *20 (discussing factors under Restatement (Second) of Conflict of Laws §6 (1971)).  Litigants cannot expect “[a] single judge . . . to gain a mastery of the laws of forty-five jurisdictions.”  Id.  If mass tort plaintiffs don’t want New Jersey law to apply they should “bring suit in the state where they reside.”  Id.  Under this new, mass-tort-specific application of choice of law, the plaintiffs in Accutane were stuck with New Jersey substantive law, which “is not as beneficial to their cause as the laws of other jurisdictions.”  Id.

We recommend that defense counsel study the court’s choice of law rationale.  It is no accident that, in its discussion of choice of law, the court cited Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017).  Accutane, 2018 WL 4761403 at *20.  Save for Delaware, more major pharmaceutical manufacturers are probably “at home” in New Jersey than anywhere else.  Thus, if the other side in the future chooses to congregate in New Jersey, they’ll have to put up with New Jersey substantive law, at least if the defendant makes motions in the aggregate.  Query, however, if the practicality rationale still applies in a single “bellwether” case where the alternative is application of one other state’s law, rather than the multi-state muddle the court faced in Accutane.  We think defendants have another opportunity to exercise some strategic discretion here.

Presumption of Adequacy

On the merits, the Supreme Court agreed with the trial court, that the defendant’s warnings were adequate as a matter of law under the PLA’s presumption of adequacy of FDA-approved labeling.  Initially, we get another shout out for the learned intermediary rule from the court:

[T]he PLA codifies what is commonly referred to as the learned intermediary doctrine – . . . that the physician acts as the intermediary between the manufacturer and the patient.  The prescribing physician − as a learned intermediary − generally is in the best position to advise the patient of the benefits and risks of taking a particular drug to treat a medical condition.  Under the learned intermediary doctrine, a pharmaceutical manufacturer generally discharges its duty to warn the ultimate user of prescription drugs by supplying physicians with information about the drug’s dangerous propensities.

Accutane, 2018 WL 4761403 at *21 (citations and quotation marks omitted).  We’re always on the lookout for high court reaffirmations of the learned intermediary rule.

As to the statutory presumption of the adequacy of FDA warnings, the court reached the right result, but not before a lengthy detour based on a questionable source (a law review article written by plaintiff-side professional expert David Kessler) and the infamous decision in Wyeth v. Levine, 555 U.S. 555 (2009).  2018 WL 4761403 at *21-24.  The upshot is a ruling on how the PLA’s “rebuttable” presumption of adequacy can be rebutted:

[T]he rebuttable presumption of adequacy attaching to an FDA-approved drug label is overcome when a plaintiff presents clear and convincing evidence that a manufacturer knew or should have known, based on newly acquired information, of a causal association between the use of the drug and “a clinically significant hazard” and that the manufacturer failed to update the label accordingly.

Id. at 26.  Notably, the substantive aspects of this rebuttal standard are based on federal regulations, including the notorious Levine “CBE regulation,” 21 C.F.R. §314.70.  This result leaves little daylight between the PLA presumption and implied preemption under Levine, except for the burden of proof.  Preemption is also based on “newly acquired information” – specifically the lack of it.  So any claim that would be preempted in other jurisdictions because plaintiffs can’t point to anything new that the FDA hadn’t already considered is independently barred in New Jersey by the PLA presumption.  However, while defendants bear the burden of proving preemption, in New Jersey the PLA presumption means that plaintiffs bear the burden of proving the presence of the necessary “new” information, and must do with clear and convincing evidence, which Accutane defined as “evidence so clear, direct, weighty in terms of quality, and convincing as to cause one to come to a clear conviction of the truth of the precise facts in issue.”  Id. at *26 (citation and quotation marks omitted).

The Accutane court added “one caveat” – regardless of anything else:

A manufacturer that acts in a reasonable and timely way to update its label warnings with the FDA, in accordance with its federal regulatory responsibilities, will receive the protection of the rebuttable presumption.

Id.

The Accutane court acknowledged that this “is a standard protective of responsible drug manufacturers.”  Id.

The PLA’s rebuttable presumption of adequacy that attaches to label warnings gives pharmaceutical companies the protection necessary to research and develop the drugs that will improve and extend the lives of people around the world.  The presumption of adequacy protects manufacturers from unmeritorious lawsuits.

Id.

Plaintiffs’ Failure of Proof

Finally, Accutane applied the law to the facts, and found that none of the 532 plaintiffs came close to overcoming the statutory presumption of adequate warnings.  “[M]ultiple warning tools,” the package insert, the patient package insert, the medication guide and “blister packaging,” all warned about the possibility of IBD.  Id. at *27.  “Association” was the proper description of the drug’s relationship to the plaintiffs’ injuries; “cause” would have been too strong.  Defendant “had reports that some patients, after taking [the drug], developed symptoms of IBD.  That one followed the other does not prove cause and effect.”  Id. (citing Accutane, 2018 WL 3636867, at *8-10).  Plaintiffs offered only “isolated examples” that had been “culled from the voluminous discovery.”  Id. at *27-28.  “To be sure,” that evidence “is not clear and convincing evidence that [defendant] knew or should have known that the use of the word ‘associated’ was inadequate.”  Id. at *28.

Nor is there any evidence that [defendant] avoided necessary label changes for economic reasons.  [Defendant’s] marketing personnel certainly expressed an interest in Accutane’s financial success; it would have been surprising if it were otherwise.  However, there is no evidence that [defendant’s] financial interest in Accutane’s success led it to withhold necessary IBD-related warnings.

Id.

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This latest Accutane decision is a great result and should finally drive a stake through this vampire of a litigation.  Still, a couple aspects of this ruling give us pause.  As for choice of law, the application of multiple states’ laws was one means of defending against class actions, since doing so defeated both proportionality and manageability.  Many other reasons for rejecting class actions in personal injury litigation remain, but like practically everything else about choice of law, this could be a two-edged sword.  Second, the continued willingness of New Jersey courts to craft extra-statutory “exceptions” to the New Jersey legislature’s presumption of adequacy of FDA warnings bothers us doctrinally.  The statute says what it says, and we think that – as with all other statutory provisions (including preemption clauses) – courts should enforce statutes as written, and not use subsequent developments to change what the legislature did.  Short of a constitutional issue, courts should not encroach on the legislature’s prerogative to draft legislation.

We had occasion not long ago to reread closely Lexecon v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998), the Supreme Court decision that clipped the wings of transferee judges in multi-district (“MDL”) litigation by reminding them that the MDL statute, 28 U.S.C. §1407, conferred no authority to try cases.  Except for one justice on one section, Lexecon was unanimous.  While the result came as something of a shock to the MDL insider community, to the Supreme Court, Lexecon was not a hard case.

While the facts of Lexecon (more accurately, the procedural history, since the issue was wholly procedural) involved a MDL judge’s so-called “self-transfer” of a case originally filed in another state, it’s important to examine what the Lexecon court actually held.

First, the MDL statute “authorizes the Judicial Panel on Multidistrict Litigation to transfer civil actions with common issues of fact ‘to any district for coordinated or consolidated pretrial proceedings,’ but imposes a duty on the Panel to remand any such action to the original district ‘at or before the conclusion of such pretrial proceedings.’”  523 U.S. at 28.

Second, at the time the JPMDL had a rule that, despite the explicit language of the MDL statute of coordination being for “pretrial purposes,” allowed self-transfer for trial.  Id. at 32-33.  While appellee (which had won at trial – Lexecon is also a poster child for why the MDL system needs interlocutory appeals as of right, see id. at 31) tried to argue that rule as a basis for authority to self-transfer, the Supreme Court held that the JPMDL lacked authority to authorize by rule an action that was ultra vires under its organic statute.  The import of such arguments “is simply to ignore the necessary consequence of self-assignment by a transferee court: it conclusively thwarts the Panel’s capacity to obey the unconditional command of §1407(a).  Id. at 36 (emphasis added).  “[T]he statute places an obligation on the Panel to remand no later than the conclusion of pretrial proceedings in the transferee court, and no exercise in rulemaking can read that obligation out of the statute.”  Id. at 36-37.

Thus, once §1407 is used to transfer a case, not even a formal JPMDL rule can oust the statutory requirement to remand back to the original court at the end of coordinated pre-trial proceedings.  The Court was clearly in no mood to tolerate gamesmanship in derogation of express statutory language – not even by the JPMDL.

Third, appellees also argued that nothing in the MDL statute precluded the MDL judge from subsequently re-transferring an action to himself under the general transfer statute, 21 U.S.C. §1404.  523 U.S. at 34.  The Court relied on the restrictive, and mandatory, language of §1407 to deep-six that argument:

§1407 not only authorizes the Panel to transfer for coordinated or consolidated pretrial proceedings, but obligates the Panel to remand any pending case to its originating court when, at the latest, those pretrial proceedings have run their course.

“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.”  §1407(a) (proviso without application here omitted).

The Panel’s instruction comes in terms of the mandatory “shall,” which normally creates an obligation impervious to judicial discretion.

Id. at 34-35 (citation omitted) (emphasis added).  In short, there is only one place a case can go after being initially transferred pursuant to the MDL statute – back to the “originating court.”

Fourth, appellees argued that, once a self-transfer for trial occurred, the §1407 obligation to re-transfer the case to its original court magically vanished, “because the self-assignment ‘terminates’ the case insofar as its venue depends on §1407.”  Id. at 37. The Court was having none of that too-cute-by-a-half argument either:

The trouble with this creative argument, though, is that the statute manifests no such subtlety.  Section 1407(a) speaks not in terms of imbuing transferred actions with some new and distinctive venue character, but simply in terms of “civil actions” or “actions.”  It says that such an action, not its acquired personality, must be terminated before the Panel is excused from ordering remand.  The language is straightforward, and with a straightforward application ready to hand, statutory interpretation has no business getting metaphysical.

523 U.S. at 37 (emphasis added).

Last and least, appellees argued that because §1407 allowed one type of action (Clayton Act antitrust cases) to be transferred for trial as well as pretrial purposes, power was implicitly conferred to do the same for all MDL cases.  No dice.  That special exception actually cut the other way, because it “demonstrate[d] that Congress knew how to distinguish between trial assignments and pretrial proceedings in cases subject to §1407,” id. at 38 – and did not allow transfers for trial purposes to any other type of case.

Lexecon also examined the legislative history of §1407 (which is why Justice Scalia, the scourge of legislative history, did not join that section).  That history reinforced that §1404 general-purpose transfers were not available as long as the case involved was part of an MDL proceeding:

But the question is not whether a change of venue may be ordered in a case consolidated under §1407(a); on any view of §1407(a), if an order may be made under §1404(a), it may be made after remand of the case to the originating district court.  The relevant question for our purposes is whether a transferee court, and not a transferor court, may grant such a motion.

523 U.S. at 39 (footnote omitted) (emphasis added).  And even such a post-remand §1404 transfer would have to comply with general venue requirements.  Id. at 39 n.2. Among other things, as we pointed out here, that would require personal jurisdiction in the district where the MDL judge sat, which depending on where the MDL was situated, might not be the case.

Beyond that, §1407’s “legislative history tends to confirm that self-assignment is beyond the scope of the transferee court’s authority.”  Id. at 39.  “The bill does not, therefore, include the trial of cases in the consolidated proceedings.” Id. at 40 (quoting House Report at 3-4).

The Court concluded in Lexecon that the statute meant what it said, and that if trials in MDL actions were “desirable,” Congress would have to amend the MDL statute to allow them:

In sum, none of the arguments raised can unsettle the straightforward language imposing the Panel’s responsibility to remand, which bars recognizing any self-assignment power in a transferee court and consequently entails the invalidity of the Panel’s Rule. . . .  [Appellee] may or may not be correct that permitting transferee courts to make self-assignments would be more desirable than preserving a plaintiff’s choice of venue . . ., but the proper venue for resolving that issue remains the floor of Congress.

Id. at 40 (emphasis added).

We have engaged in this detailed exegesis on Lexecon as much to demonstrate what the Court didn’t say, as what it did.  What is absent from Lexecon’s absolutist reading of §1407 is any mention of state boundaries.  Rather the Lexecon court focused entirely on what was allowable in any MDL case initially transferred under §1407, whether that case was first filed in another state or not.

We think that’s critically important.  In their zeal to use the threat of trials to bludgeon defendants into settling, some MDL judges have relied upon territorial distinctions that are wholly absent from Lexecon itself.  They have sought to create a pool of “bellwether” trial cases from actions originally filed in the same state, or the same judicial district, as the MDL itself.

We think that this questionable practice could be the next Lexecon.  Frankly, we don’t think Lexecon allows that.

The basis for the Court’s unanimous holding in Lexecon is what the MDL statute “straightforward[ly]” requires – cases that come to the MDL through to §1407 remain subject to the statute’s absolute remand requirement.  There is no exception in Lexecon for trial (as opposed to remand) of cases transferred under §1407 from other district courts in the same state, or even from other judges in the same judicial district.  Unless the MDL judge happens to have received such a case through ordinary random assignment, s/he can’t try it – unless it’s first transferred out of the MDL and then retransferred back, if that is possible, under §1404.

No gimmicks allowed; the Court came down hard on gimmickry in derogation of §1407’s express limits in Lexecon.

And even if an MDL judge were able to cajole, or pressure, another judge to retransfer a case back to it for a “bellwether” trial, that case would no longer be part of the MDL.  MDL case management orders, MDL scheduling orders, MDL lead counsel (on both sides) would no longer be applicable – otherwise the transfer starts to look like another gimmick to get around the express limitations on allowable MDL activity that Congress wrote into the statute.  In particular, we don’t think that the plaintiff’s counsel in such a bellwether-after-retransfer trial can be compensated from MDL common benefit funds.  The MDL statute straightforwardly limits MDL proceedings to “pre-trial.”

Along these lines, the Lawyers for Civil Justice has a proposal to condition the conduct of “bellwether” trials in MDLs upon the voluntary – and confidential – consent of all parties.  That’s what prompted us to reread Lexecon in the first place.  Since a voluntary consent/waiver appears to be the only way to conduct MDL trials (whether called “bellwether” or anything else) consistently with what Lexecon actually held, we recommend that proposal as a possible way to avoid the next Lexecon.

Otherwise we wouldn’t be surprised to see the Supreme Court, when presented with the opportunity, to make MDL “bellwether” trials go the way of the dinosaurs.

So you’re sitting next to one of your client’s senior executives. You’re at a large table in a larger conference room. There’s a lawyer for every seat at the table. There’s a court reporter in the room. A videographer too. The lawyer across the table from you slides a document to your client and gives you a copy. And then she starts asking questions. You look at the document. It dawns on you. This is a privileged document. It’s an email attaching a power point that was used in a presentation by your client’s legal department to its employees. The videotape is rolling. The court reporter is typing. Uh-oh. Bad thing.

What to do? Well, whatever you do, don’t panic. It’s not over. You probably have a chance to fix this, to claw it back. And, if you do it right—which in part involves speaking up—and you’ve done the preparation, the court will likely back you.

This precise predicament happened to the defendant in In re Abilify (Aripiprazole) Prods. Liab. Litig., 2018 WL 44440707 (N.D. Fla. Sept. 17, 2018). Bristol-Myer Squibb’s lawyer objected to a plaintiffs’ attorney’s use of a document at a deposition, asserting that it was privileged and had been inadvertently produced. The BMS lawyer sent a follow-up email that night further asserting the privilege. Three business days later, the lawyer sent another written notification, this time accompanied by a privilege log. As it turned out, taken together, these actions weren’t perfect. But they were enough.

The plaintiffs filed a motion asking the court to confirm that the documents should remain produced material. They argued that (1) the defendant did not follow the claw-back procedure set out in a protective order addressing inadvertent disclosures and (2) regardless, the document was not privileged. Neither argument won.

For their procedural argument, the plaintiffs pointed to the protective order’s requirement that the defendant provide the plaintiffs with written notification of the claw-back and an accompanying privilege log within two business days of the deposition, not three. The court agreed that the protective order required this. But the court found it more important that the BMS lawyer gave a detailed verbal notice of the privilege assertion at the deposition and followed-up that evening with a detailed email confirming it. In other words, speaking up quickly and clearly helped. Preparation helped to—that is, already having a protective order on inadvertent disclosures in place. The court held that the defendant’s clarity in immediately clawing the document back and stating the reasons won out over missing the two-day deadline by one day. Substance over form:

Although BMS might not have followed the precise terms of the Protective Order, in the Court’s view the one-day delay in sending the privilege log can charitably be described as a situation where the expression “no harm, no foul” applies. Plaintiffs cannot point to any prejudice they suffered or could have suffered as a result of the receipt of a privilege log one day late, which simply confirmed the privilege timely raised by BMS at the deposition and then confirmed in writing the same day. Consequently, Plaintiffs’ argument that BMS waived its ability to claw back the email and PowerPoint is due to be denied.

Id. at *2.

Plaintiffs argued that the power point wasn’t privileged because a non-lawyer assisted in preparing it and, regardless, it conveyed publicly known facts about a corporate integrity agreement (“CIA”). This argument lost too.

It did not matter that a non-lawyer assisted in preparing the power point. What mattered was that the power point’s content came from an attorney using it to advise a client:

While the final preparation of the PowerPoint slide deck may have been created by a paralegal or non-attorney, the information does not lose its privileged nature simply because the attorney did not perform the ministerial function of actually preparing the PowerPoint deck. Thus, the fact that the meta data reflects the deck was prepared by a non-attorney has little relevance to whether the PowerPoint is protected by the attorney-client privilege.

Id.

And the fact that the power point addressed a publicly available CIA didn’t destroy its privileged nature either. It contained counsel’s interpretation of the CIA and the obligations that it placed on defendants, and it was used in counsel’s presentation to senior management on those issues:

BMS not only asserts that the redacted portions of the PowerPoint dealing with the CIA were prepared by in-house counsel but importantly that the PowerPoint was part of a presentation by Regina Cavaliere, a Senior BMS counsel, made to BMS management employees. According to BMS, Ms. Cavaliere’s presentation was not simply a historical account of the CIA but instead was Ms. Cavaliere’s interpretation of the scope of BMS’ obligation under the CIA. The redacted portions of the PowerPoint specifically related to the presentation, which provided BMS employees with both factual background to the CIA and BMS counsel’s interpretation of BMS’ obligations under the CIA. The information in the slides in the PowerPoint therefore must be viewed in the context for which the slides were prepared and how the slides were used by BMS’ in-house counsel in her presentation.

Id. at *3. The court ordered that the email and attached power point were privileged and had been inadvertently disclosed.

Phew. Bad thing averted. So, if you’re at a deposition and your opposition hands a privileged document to your witness, ignore that shiver going down your spine. Just go to work, speak up and follow up.

Over 11 years ago the blog published a post called “Anatomy of a Mass Tort,” which endeavored to explain the life cycle of this type of litigation.  We’ve decided to revisit and update that post, given the changes that have taken place over the intervening years.

And change it has.   Our original post mentioned class actions several times. It didn’t mention personal jurisdiction, multi-plaintiff complaints, third-party litigation funding, or plaintiff fact sheets.

So here is anatomy of a mass tort 2.0.

*********

Today, we’re stepping back.  Instead of analyzing specific doctrines or new cases, we’re going to give you a run down of the whole enchilada:  a mass tort, start to finish.

With a mass tort, the entire process can be described without ever typing these words:  “the product was defective” or “someone was hurt.”  Unfortunately, those words have become unnecessary to describe the anatomy of a mass tort.

A mass tort hardly needs a trigger anymore.  At bottom, all that’s necessary is a drug or device with a decent sized market and something to attract the other side’s lawyers.  Look, for example, at the best-selling drugs of 2007, when we first wrote the post. They include Lipitor, Nexium, Plavix, Seroquel, and more.  Of the top 20, just looking at the names, 15 of them resulted in easily recognizable mass torts.  Unless you’re inclined to believe that the FDA erroneously approves drugs three quarters of the time, then it’s pretty clear that all that’s really essential to a mass tort is “mass.”

Still there is usually some sort of trigger.  A number of events can set off the avalanche.

First, the most significant would be adverse regulatory action – a mandatory recall or a label change adding a boxed warning or a significant new risk.  Mass torts commonly follow in the wake of regulatory action; the idea that they somehow induce regulatory action is plaintiff-side propaganda 95% of the time.

Second, even in the absence of regulatory action, plaintiffs try to stir up trouble.  Thus, they try to generate bad press – something nasty said on 60 Minutes, or a similar program will rev up the clanking machinery of the litigation industry.  In Bone Screw it was David Kessler’s hysterical response on “20/20” to off-label, yet standard of care, spinal surgery.

Third, short of that, a voluntary recall, even though no government agency demanded it, whereby a manufacturer took its product off the market, has also led to mass tort action.  That was one of the things that happened with Vioxx.

Fourth, a significant verdict in what was once a one-off case can provide the necessary spark − nothing catches the eye of the plaintiff’s’ bar like big money.

Fifth, although it may be as much of an excuse as a true cause, a critical article in the scientific literature can prompt the other side to do its thing. That’s what happened with hormone therapy – a much anticipated scientific article didn’t show the expected advantages, but rather a moderate increased risk (less than double) as to a single (the highest) age group that wasn’t even the principal target population for that product.  In the mass-tort frenzy that followed, all these distinctions got lost in the shuffle. Since tort “market” was large, and the risk relatively common, it was off to the races and damn the details.

Finally, these days the trigger doesn’t even have to involve the product.  An adverse event befalling another product in the same group of drugs or devices can lead to copycat mass tort litigation against the entire group.  Plaintiffs are currently suing over every second generation anticoagulant, every IVC filter, and every conceivable kind of surgical mesh. Think Vioxx and Cox II analgesics, or Baycol and statins, or AcroMed’s pedicle screw device, with litigation spreading to every other device on the market that used similar bone screws.  Close used to count only in horse shoes, hand grenades, and H-bombs − you can add mass torts to that list, particularly if you can find a synonym beginning with “h.”  (We can think of one easily enough, but the Blog, unlike ATRA, isn’t allowed to use it.)

How much (if any) of this is really good policy?  We have to think that the litigenic effects of FDA regulatory action, and of all recalls, mandatory or voluntary, cannot help but to deter actions that proper public health policy should encourage.  We’re afraid that fear of litigation may deter companies from voluntarily undertaking (or acquiescing in a regulatory agency’s request for) a product recall or a label change.  That doesn’t mean we agree with it, though, since delay in such situations usually makes things worse in the end.

Back when product liability was shiny and new, strict liability was justified because it supposedly would causes companies to internalize risks and thereby reduce those risks. These days fear of mass tort litigation can also influence corporate decision-making, in ways that are harmful to the public.

But we digress.  Back to our anatomy lesson.

Regardless of what is the triggering event, the creation of the mass tort itself follows – almost entirely extra-legally.

Advertisements.

Since the courts discovered that lawyers have a constitutional right to use advertisements to solicit clients, they have done so – with a frequency that would no doubt have shocked the Founding Fathers.  Anybody who watches TV knows what we’re talking about.

And it’s not just lawyers, either.  Media specialists and third-party litigation funders also combine to run (with apologies to Marlowe) the race that launched 100,000 TV (and internet) ads.  Anyone who responds – and many do – becomes “inventory,” their claims available for sale in bulk to enterprising lawyers hoping to cash in on the next mass tort.

Thus, within hours after the triggering event, “law firm” websites will invite product users to sign on as potential clients.  Similar solicits in other forms of media follow.

This early stage is usually the point of no return.  The lawyers involved will freely buy, sell, and trade the would-be clients that have signed up – to the point where those clients often don’t know who their lawyers actually are.  But once they have clients, no matter how attenuated the relationship, lawyers cannot ethically let them go.  Regardless of the facts, the mass-tort litigation process takes on a life of its own.

So, counsel who specialize in representing plaintiffs in mass torts strike first in their favorite venues.  Some of these are in state court.  There, they try to keep their chosen courts by filing multi-plaintiff complaints – in numbers less than 100 to avoid a federal statute called “CAFA” – with people from all over the country, but at least one in the home state of at least one defendant to prevent defendants from being able to take the cases to federal court.

The only thing the plaintiffs in these massive complaints have in common is that they claim some injury from the same product (although sometimes they sue multiple manufacturers of the same kind of product).  The only thing the complaint tells the defendant about the plaintiffs is their state of residence.  Try filing an adverse event report (which the FDA requires for every litigation complaint no matter how weak) with that.

Defendants counter with “snap” removals.  If the only thing preventing removal of a case to federal court is a defendant from the place where the plaintiff chose to file suit, then removal before service is a good idea for defendants.  Monitoring the state-court dockets and taking action before the plaintiff gets around to serving that defendant gets such cases to federal court. The statute allows it, and so do a lot of courts.

Other plaintiffs want to be in federal court so they can create multi-district (“MDL”) litigation.  Even in federal court – heck, especially in federal court – the race is also on.  The big money in MDL litigation, for those lawyers who want to work, is to be on the Plaintiffs’ Steering Committee.  That requires knowledge of the obscure ins and outs of MDL procedure, but it also requires a client base.  So candidates for the steering committee work in league with the media solicitors to scoop up lots of inventory to file in federal courts that they think would make a good home for an MDL proceeding.  These are usually the most competent plaintiffs’ lawyers. They’re itching to do some work, to try some cases, and to maintain or to establish their reputations in the field.

The final decision on where an MDL is located rests with a committee of judges, and competing lawyers will file lots of cases in various places (usually their home federal courts).  Defendants also have some say, and often prefer to be where their principal place of business is located.  Where an MDL is located can be important for other reasons besides the composition of the plaintiffs’ steering committee.  Federal issues, like preemption, differ between the circuits, and in MDLs the law of the circuit where the MDL is located will apply.

At this point, our original post mentioned class actions.  They’re really not many of them in mass torts anymore – practically none in cases alleging personal injury.  Class actions still get filed in mass torts, mostly on behalf of insurance or government programs that supply drugs, but as our cheat sheets show, they are rarely certified and nowadays are the “tail” rather than the “dog” in mass torts.

These MDL specialist plaintiffs’ lawyers are very good at what they do, but because the written rules don’t apply, and the rules that do are esoteric and hidden, it’s mostly the same repeat players over and over again. That the resulting steering committees tend to be less diverse than the current crop of White House interns is an unfortunate consequence of the overall lack of rules and reliance on a good old boys network rather than the stringent competition conducted by our clients  Our clients actually care about this kind of thing, and unlike the inventory on the other side, our clients get to choose their lawyers, rather than vice versa.

But we digress again.

Most plaintiffs’ lawyers in mass torts, however, do not seek leadership positions, because that would require, well, work.  It’s far easier to collect some inventory from the advertisers, throw them in the judicial hopper, do nothing, watch how the litigation plays out, and then spring into action only after the parties announce a global settlement.  No muss; no fuss; just big bucks.

MDLs are perfect for these lawyers.  The federal rules largely don’t apply – at least to plaintiffs.  Defendants are precluded from challenging the adequacy of complaints that don’t contain basic information like whether the plaintiff actually used the product at issue or had the injury that is the subject of the MDL.  Defendants aren’t allowed to take so-called “case specific” discovery or to file “case-specific” motions.  With the rules becoming figments of the imagination, at most defendants get “fact sheets,” most of which contain incomplete or even downright false information.

So while defendants are spending tens of millions of dollars complying with the plaintiffs’ massive discovery (a mass tort largely eliminates “proportionality” from discovery directed at our clients), if they want any discovery at all from plaintiffs – they have to pay for that, too.  Defendants have to pay to check the accuracy of the fact sheets, and to collect the plaintiffs’ medical records.  Since this is information that, in non-mass-tort cases, plaintiffs would pay for in responding to discovery, it’s tailor-made for those plaintiffs’ attorneys who want a free ride until settlement.

And that’s just the core litigation.  Mass torts also spawn peripheral litigation. The target company (or industry) will probably be enmeshed in securities litigation, with shareholders seeking “stock drop” damages and alleging that the company knew all about what the product liability plaintiffs are suing over, but kept it hidden from investors.  If the company has insurance, the insurers will bail and seek to deny coverage.  State attorneys general, or even the federal government, might sue.  There could even be the odd False Claims Act case, or two.

It’s the American legal system in all its glory.  Mass torts are essentially a lawyer’s full employment act.  Mass torts are even counter-cyclical – they tend to rise when the economy doesn’t; when more people need money and more investors have underinvested funds lying around to underwrite litigation.

In any event, the mass tort proceeds.  Plaintiffs petition the MDL Panel to create a coordinated proceeding.  That gets sent somewhere, with or without the defendant’s acquiescence.  A significant number of MDL judges are also repeat players.  We’re sure that at least some of them enjoy the power and the notoriety – in addition to the relatively interesting work.

Non-MDL actions also proceed, to the extent that plaintiffs who want to be in state court are successful in staying there.  Personal jurisdiction developments are making this harder, as federal courts are less likely to tolerate the multi-plaintiff complaint jurisdictional dodge.  Several states are known for coordinated state-court mass tort proceedings, such as California, Pennsylvania, New Jersey, Missouri, and in some types of mass torts, New York, and Florida.

In the MDL proceeding, the target defendants search for a silver-bullet defense – one that can get rid of thousands of cases at once.  These are mostly preemption and Daubert expert witness exclusion, although occasionally other issues, such as warning adequacy as a matter of law, innovator liability, or even the statute of limitations, can serve that function in particular mass torts.  Preemption bars plaintiffs from recovering because federal law says “no.” It doesn’t matter how strong or weak a plaintiff’s state-law tort claim is on the merits.  A win on the (general causation) Daubert ground means that plaintiffs are barred from recovery because no legitimate scientific evidence links the defendant’s product to the plaintiffs’ alleged injury.  These are the kind of rulings that, when they happen, often wind up on our annual “best of” list.

In all-too-many mass torts, the defendant loses on the wholesale level, preemption doesn’t apply and at least one plaintiff-side causation expert gets through Daubert.  So the litigation continues.  The next bump comes just before the two-year mark. That is the statute of limitations for product liability claims in most states.  Plaintiffs’ lawyers who have been holding back cases, trying to determine whether the federal or state litigation will provide them the most recovery with the least work, have to fish or cut bait. If they don’t file complaints then, well, the strongest legal malpractice claims involve blown statutes of limitations.  So at two years, the rest of the inventory shows up.

At the two-year point defendants at last have a pretty good idea of the magnitude of the mass tort.  And, with most new cases time-barred, defendants can begin to think about what a global settlement might look like, now that news of settlement negotiations won’t just spark another round of advertising and still more litigation.  Defendants’ depressed stock prices may start to rebound.

But even now the tricks continue.  Litigation shifts to states with longer statutes of limitations, more lenient discovery rules, and no borrowing statutes.  New Jersey comes to mind.  Fights over conflict of laws arise.  Litigation tourists go to states where they think such arguments might win.  Defendants respond with personal jurisdiction challenges to cases filed in states where neither they nor the plaintiffs actually reside.  More side issues to keep lawyers busy.

Then what?  Maybe the parties try a few “bellwether” cases.  Here, plaintiffs open their bag of tricks wide.  MDL judges all-too-often view everything through the prism of settlement, and anything that puts pressure on defendants to fork over big bucks will be employed by at least some of them.  Repeat player MDL judges – especially lately – seem to get picked because they have a good settlement track record.  Settling judges tend to be what mass-tort plaintiffs like, and therefore these plaintiffs have forum shopped to get MDLs before them. It’s all about settlement leverage.  Settling MDL judges will routinely deny preemption, even where it’s widely recognized, look kindly on new and expansive causes of action, allow plaintiffs to manipulate the bellwether selection process so that only plaintiffs’ best cases get tried, make horrendous evidentiary rulings, and force defendants to try cases with multiple plaintiffs at the same time.

In most of these situations, if the defendant wins – presto – that’s a final judgment and the plaintiffs have an immediate right to appellate review.  If the plaintiffs win, well turnabout certainly isn’t fair play.  There’s no final order and no appeal.  Interlocutory appeals?  Rarer than hen’s teeth.  Why would an MDL judge pushing settlement do that?  In this one-way system, the only way a defendant ever gets to appeal a loss, is after losing a bellwether trial.  In that situation the appellate court has a Hobson’s choice, find a way to affirm or let “years of MDL time and effort go to waste.”

The actual safety of the product is largely irrelevant.  That the FDA reviewed the product and allowed it to be marketed is – if the plaintiffs have anything to say about it – is equally irrelevant. Plaintiff’s counsel, employing reptile litigation tactics, tells the jury in opening statement to, “Send a message to this company that put profits before safety!” or the other favorite, “This is the case of a company that stuck its head in the sand and refused to admit the truth!” Or perhaps. “In this case the defendant tried to hornswoggle the FDA.”  And it goes downhill from there.

Defense counsel responds:  “This is the case of Joe Blow, who:

Saw a doctor who knew everything about the risk at issue, and who didn’t need a warning to decide what to do.

Has expert witnesses who are liars and will say anything for money.

Didn’t [read][follow] the warnings.

Had so many prior risk factors that the injury was waiting to happen.

Recklessly misused the product, which was obtained illegally in any event.

Since we haven’t identified any particular product, we can’t be more specific about how a trial would look, so we picked a few of both sides’ greatest hits.   The jury – between six and twelve people from which any anybody with any relevant scientific background has been excluded − hears from (among many possibilities) neurosurgeons, epidemiologists, pharmacologists, pathologists, biostatisticians, and bioethicists.  Then the jury decides the critical issue:   Who is worse?  The evil defendant or the reckless plaintiff?

Then we start counting.  If the defendant wins most of the trials, the mass tort loses its value, the plaintiffs’ attorneys would rather litigate something else, and one way or another the mass tort goes away with a whimper rather than a bang.  If the plaintiffs ring the bell – often assisted by a punitive damages claim or a consolidation of multiple plaintiffs − the litigation continues for a while, until those awards are overturned on appeal (see Vioxx and testosterone, and we hope Pinnacle Hip) or the risk becomes too extreme for the defendant to continue (see Actos).

Eventually, everyone’s exhausted.  Counsel wrestle with inventories and the aggregate settlement rule, or perhaps cy pres and some sort of settlement class action that even more blatantly favors the plaintiffs’ lawyers over their clients than other forms of mass-tort settlements.  The steering committee gets paid for all the work it supposedly did on all plaintiffs’ behalf, even though they’re free to screw any plaintiffs that don’t settle − since they only owe fiduciary duties to their own clients.

Finally, everyone goes home and tries to figure what else to do for the first time in five years.  So they turn on the tube looking for bad news that’s good for them, or start googling product recalls.

Then the whole thing starts over again.

 

It has been said, with maybe a bit of sarcasm, that a company developing a drug hopes that its drug will become successful enough to attract frivolous lawsuits.  OK, so maybe only outside lawyers have offered such an aphorism, but bear with us.  Imagine that a drug is developed to treat a really common condition, like high cholesterol, it becomes accepted as a first-line treatment, and becomes one of the most widely used prescription drugs of the last few decades.  Imagine then that the patient population that would take this drug has lots of co-morbidities and that, while the drug is being used on a long-term basis, some predictable portion of the drug’s users will develop a new condition, like diabetes.  Imagine then that, because the drug has been widely used for so long, there are lots of studies, published and unpublished, that look at measures like blood glucose and new diagnosis of diabetes, among many other things.  It should not be hard to imagine that thousands of the patients taking the drug would develop diabetes on the drug in the absence of any relationship and that plaintiff lawyers would round many of them up to sue based on the expectation that the lawyers and their favorite experts could gin up proof of causation that would survive a Daubert challenge if the manufacture did not pay to get rid of the litigation first.  This is hardly fancy as we have posted on multiple orders from Lipitor MDL (here, here, and here) that excluded plaintiffs’ causation experts and then granted summary judgment for the manufacturer across the board.

Much like the Zoloft MDL affirmance we lauded last year, all of this went up on appeal to either revive or affirm the end of an entire litigation.  We are pleased to say that In re Lipitor (Atorvastatin Calcium) Mkt’g, Sales Pracs. & Prods. Liab. Litig. (No. II), MDL No. 2502, — F.3d —, 2018 WL 2927629 (3d Cir. June 12, 2018), did the latter.  Without repeating the history of all of the decisions below that we detailed previously, there were five basic issues on appeal, the admissibility of each of the three experts plaintiffs offered, whether plaintiffs could use other evidence to establish causation without experts, and whether plaintiffs’ responses to show cause orders were sufficient to avoid summary judgment.  Each deserves some attention.

Plaintiffs’ statistician was up first.  His approach was to re-analyze clinical trial data to suggest that there was an increase in blood glucose levels and infer that as proof of causation for diabetes.  The disconnect here is fairly obvious, but the statistician compounded the problem by including both patients with a single instances of elevated glucose levels during the trials and patients with elevated glucose levels before the study began. Id. at *4.  Plaintiffs, their statistician, and other experts had agreed that a single increased glucose level did not indicate diabetes. Id. The statistician also agreed, as the MDL court put it, that he “lacked the expertise to opine about any implications that single glucose readings might have about the possibility of new-onset diabetes.” Id. This might have been enough to exclude his opinions, but he also relied on one test of statistical significance after the standard test failed and presented calculations of average blood glucose increases in a misleading and result-driven fashion. Id. at **5-6.  He also re-analyzed a study that had found no increased in the rate of diabetes with the drug compared to placebo based on a applying a new definition of diabetes after the fact and by someone who lacked relevant expertise. Id. at **6-8.  The Fourth Circuit affirmed the exclusion of his opinion, noting that the MDL court “properly discharged its gatekeeping duty” by weighing “classic concerns regarding reliability and relevance.” Id. at *6.

Plaintiffs also offered an internist to interpret the medical literature and perform meta-analysis of select studies, which he attempted to dress up with a purported application of the Bradford Hill criteria.  Noting the importance of dose to these analyses, the MDL court asked the internist to provide an analysis specific to each commercially available dose of the drug.  The MDL court ultimately excluded his causation opinion as to all but the highest dose because he acknowledged there was not a statistically significant increased risk of diabetes for the other doses. Id. at *9.  On appeal, plaintiffs challenged that their internist could not just lump all the doses together and offer a single causation opinion.  Given the facts here—like a 10 mg low dose, a 80 mg high dose, and studies specific to each dose—we do not think this requirement should have been the least bit controversial.  The Fourth Circuit, however, while holding that the MDL court did not “abuse its discretion in asking the expert to produce a dose-by-dose analysis,” cautioned that this was not a new requirement for all cases. Id. at *10.  The more serious, and recurring, issue was whether statistical significance was required for a causation opinion based on epidemiologic evidence and the Bradford Hill criteria.  Again, we think the Fourth Circuit could have gone a little farther—like you always or almost always need epidemiologic evidence as a starting point for causation in a product liability case and epidemiologic evidence must be statistically significant (with multiple studies with an increased risk greater than 2.0) to count—but its conclusion that the MDL court had not abused its discretion on the record here was good enough.  Specifically, the internist’s purported application of the Bradford Hill criteria and failure to establish that reliance on non-statistically significant results was accepted by epidemiologists were enough for the court to find his causation opinions unreliable. Id. at *12.

Plaintiffs also offered another internist to opine on specific causation for one of the bellwether plaintiffs.  While the plaintiffs touted that this expert had used a differential diagnosis to come to her opinion, the expert herself did not say that she did and claimed to use a methodology for her opinion in litigation that she had never used in her own practice. Id. at *13.  She also could not rule out other causes like the plaintiff’s weight and weight gain and relied too heavily on the post hoc ergo prompter hac fallacy. Id. at *15.  Again, this exclusion was within the MDL judge’s discretion.

Like the MDL court, the Fourth Circuit did not a bright line rule on whether general medical causation for product liability cases involving a pharmaceutical could ever be established without any expert testimony from the plaintiff.  We think the better approach, as spelled out in some state’s law, is to require expert testimony on these issues.  However, the Fourth Circuit’s conclusion that the specific non-expert evidence offered by plaintiffs—principally snippets from U.S. and foreign labeling—was not enough to establish causation is fine by us.  The causation issues are “complex and manifold” and the non-expert evidence from plaintiffs “isn’t especially strong.” Id. at *17 (contraction in the original).  So, the bottom line was more than fine by us:  “To hand to the jury the evidence here and ask it to reach a conclusion as to causation with any amount of certainty would be farcical and would likely result in a verdict steeped in speculation.” Id. Put another way, if a court is supposed to be the gatekeeper for expert evidence on key issues, it cannot just allow dubious non-expert evidence to suffice on an issue that would require an expert under Rule 702.

The last issue for the Fourth Circuit to address was whether the MDL court could require the remaining plaintiffs to come forward with evidence showing they could prove specific causation after the Daubert and summary judgment orders.  Plaintiffs’ argument on this was essentially that the MDL should have remanded all the cases rather than fulfilling the mission of the MDL court to decide common pretrial issues.  This argument was a bit disingenuous, because the plaintiffs surely would have been comfortable with summary judgment or Daubert motions being denied across the board had the rulings on the bellwether cases gone their way.  “Here, it was the district court’s prerogative to determine whether it could dispose of the cases before it on the merits.” Id. at *18.  We may not always be a fan of the direction MDL courts have taken in the last decade or so, but they are supposed to do what the MDL court did here.  At the end of the day, this MDL court “discharged [its] duties meticulously and thoughtfully” an ended a litigation as it should have been – with the manufacturer winning without facing the uncertainty of jury trials or succumbing to the pressure of a large number of pending cases.

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.

Sure, it was enjoyable to read In re DePuy Orthopaedics, Inc., Pinnacle Hip Implant Product Liability Litigation, ___ F.3d ___, 2018 WL 1954759 (5th Cir. April 25, 2018) (“Pinnacle Hip”), to see plaintiffs’ counsel hoisted on their own petard of improper and prejudicial evidence and arguments.  But there’s more to Pinnacle Hip than “Lanier-on-a-spit,” as it has been described in these parts.  Indeed, blogging plaintiffs’ attorney Max Kennerly, dropped a comment to our first Pinnacle Hip post (which we published – we scrub only spam, not opposing views) asserting that “the rest of the opinion was a huge win for plaintiffs.”

We largely disagree with Max’s comment, and this post explains why.

Initially, we note that the defendant in Pinnacle Hip was swimming decidedly upstream in all of its legal arguments, since it was opposing a jury verdict entered against it and seeking entry of judgment as a matter of law in its favor.  2018 WL 1954759, at *2.  That means all the trial evidence is construed in the plaintiffs’ favor.  Id. at *3 (“JMOL is warranted only if a reasonable jury would not have a legally sufficient evidentiary basis to find for the nonmovant.”) (citations and quotation marks omitted).

Design Claims

The first claim addressed in Pinnacle Hip was design defect.  See 2018 WL 1954759, at *3-9.  The defendant raised several arguments, all unsuccessfully.  First, the defendant argued that plaintiff had failed to satisfy the Texas alternative design requirement because that alternative that the plaintiffs offered – a “metal on plastic” (“MoP”) hip implant – was really a “different product” from the defendants’ metal-on-metal design (“MoM”), and thus cannot serve as a design alternative.  This is an argument we have featured several times on the blog.  In Pinnacle Hip, the conclusion was that “based on the record, that MoP is a viable alternative design to MoM.”  Id. at *4.

While we would have liked to win this, on the facts, this distinction between alternative product and design is more difficult for the defense than in the cases we’ve discussed in our prior posts, which usually involve not using the product at all, or using some other product that is much less suited for the use in question.  Our classic example of alternative cause abuse is Theriot v. Danek Medical, Inc., 168 F.3d 253 (5th Cir. 1999), a Bone Screw case in which the supposed “alternative” was a different type of surgery not using the product at all.  That’s distinct from redesigning one part of a device system to use a different material, as indeed, Pinnacle Hip pointed out.  2018 WL 1954759, at *9.  Pinnacle Hip reaffirmed that similar-use products that “fail[] to perform the discrete kinds of functions for which the alleged defective was designed” or with a “wide disparity in price” cannot be considered alternative designs.  Id. at *4, *7.  However , the risk/utility defect test “contemplates that a proposed alternative design might reduce a product’s utility . . . without rendering the alternative an entirely different product.”  Id. at *5.  That means some variation has to exist without “moot[ing] the entire defect test.”  Id.

Construing the record to favor plaintiffs, Pinnacle Hip resulted in another point on the uncertain, “practically impossible to settle in the abstract,” id., at *4, line between different design and different product.  While we’d like to have won, Pinnacle Hip does not move the line itself in any lasting fashion prejudicial to the defense.  The ultimate holding was that a “cross-linked” MoP is not sufficiently different from the defendant’s MoP design to be considered a different product.  2018 WL 1954759, at *6 & n.13.  The underlying principle that the distinction between product and design seeks to protect is preventing automatic liability against whole classes of products – cigarettes, motorcycles, birth control pills, or pedicle screw fixation devices – for simply being what they are and having certain inherent risks.  That principle remains intact after Pinnacle Hip.

The defendants also lost a preemption argument – that design defect claims “’stand[] as an obstacle to the accomplishment and execution of the full purposes and objectives’ reflected in the MoM-related regulations of the FDA.”  2018 WL 1954759, at *7.  According to the defendants, because the plaintiffs were seeking “categorical” liability, that all MoMs should be “banned outright,” there should be preemption. Id. at *8.  But that’s not what the Fifth Circuit found was what happened:

[I]t is not the case that plaintiffs’ theory reached all possible MoMs.  All would agree that, despite the sweeping language with which plaintiffs presented their case, their claims were impliedly limited to presently available technologies and the adverse health effects they allegedly engender.

Id.  But the record showed that “[t]he FDA effectively withdrew all MoMs from the market . . . and left open a single door in the form of PMA.”  Id.  On this set of facts, it could not be said that banning something that the FDA had already essentially removed from the market, save for an alternative that has not yet produced an FDA-approved product, was an interference with “the FDA’s regulatory objectives.”  Id.

While losing a preemption argument is not something we would recommend, this particular type of preemption argument has never been successful that we are aware of, so it’s no great loss.  We’ve advocated at some length that the Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996), decision be overturned.  But that argument is predicated on changes to 510(k) clearance created by Congress in 1990.  In Pinnacle Hip, “MoMs were sold before 1976 and have traditionally been treated as pre-amendment class III devices.”  2018 WL 1954759, at *8.  So Pinnacle Hip doesn’t affect even the distinctions that we draw from Lohr.  The preemption argument rejected in Pinnacle Hip would require the complete reversal of Lohr, even on Lohr’s facts, to succeed.

By far the better preemption argument, based on current law, with respect to 510(k) design defect claims, is that they amount to “major changes” that require prior FDA review, and probably an entirely new supplemental submission, before they could be implemented.  That should put design defect claims at odds with the “independence principle” in PLIVA, Inc. v. Mensing, 564 U.S. 604 (2011), and Mutual Pharmaceutical Co. v. Bartlett, 570 U.S. 472 (2013), resulting in preemption of all design claims that could make a difference in a product liability action.  That argument, which does not depend on Lohr either way, was not addressed at all in Pinnacle Hip.

Finally, the defendants in Pinnacle Hip also lost on their Restatement (Second) of Torts §402A, comment k (1965), argument, which was that Texas law holds all prescription medical products, including medical devices, to be “unavoidably unsafe” within the meaning of comment k, so that those “unavoidable” risks can only be warned about and not treated as design defects.  Pinnacle Hip was unwilling to expand Texas’ application of comment k from prescription drugs to include prescription medical devices.  2018 WL 1954759, at *9.  That places Pinnacle Hip in a distinct minority position, since literally hundreds of cases, and the Third Restatement, apply limits on design defect claims equally to all types of prescription medical products.  Bexis’ book collects these cases.  Drug & Medical Device Product Liability Deskbook §2.02[2] at pp. 2.02-13 to -16 n.14 (for the proposition that “almost all courts have extended the unavoidably unsafe product exception to medical devices”).  However, as the Fifth Circuit correctly pointed out, not many of those opinions are under Texas law.

The further discussion of case-by-case versus across-the-board comment k application in Texas, 2018 WL 1954759, at *9, is more troubling, as the trend in Texas courts (in drug and vaccine prescription product cases) has favored the “blanket” approach.  Pinnacle Hip complained, in a footnote, that “Texas caselaw offers almost no guidance on how to go about that case-by-case inquiry.”  Id. at *9 n.22.  There is good reason for that lack of precedent – because Texas law has not employed tests that require such inquiry.  See Reyes v. Wyeth Laboratories, 498 F.2d 1264, 1273 (5th Cir. 1974) (applying comment k without case-by-case analysis to a vaccine; holding that the only viable claim was inadequate warning); Gonzalez v. Bayer Healthcare Pharmaceuticals, Inc., 930 F. Supp.2d 808, 817-18 (S.D. Tex. 2013) (applying comment k to prescription drug without case-by-case analysis); Woodhouse v. Sanofi-Aventis United States LLC, 2011 WL 3666595, at *3-4 (W.D. Tex. June 23, 2011) (holding, without further analysis, that “comment k applies to products such as [defendant’s prescription drug]”); Holland v. Hoffman-La Roche, Inc., 2007 WL 4042757, at *3 (N.D. Tex. Nov. 15, 2007) (“Prescription drugs are not susceptible to a design defect claim where, as here, the drug is ‘accompanied by proper directions and warning.’”) (quoting comment k); Carter v. Tap Pharmaceuticals, Inc., 2004 WL 2550593, at *2 (W.D. Tex. Nov. 2, 2004) (“Under Texas law, all FDA-approved prescription drugs are unavoidably unsafe as a matter of law”); Hackett v. G.D. Searle & Co., 246 F. Supp.2d 591, 595 (W.D. Tex. 2002) (“under Texas law and comment k of the Restatement, Defendants can only be held strictly liable if the drug was not properly prepared or marketed or accompanied by proper warnings”).  Contra: Adams v. Boston Scientific Corp., 177 F. Supp.3d 959, 965 (S.D.W. Va. 2016) (refusing to apply comment k across-the-board in medical device case) (applying Texas law).  The comment k portion of Pinnacle Hip is where we think that Max is on the firmest ground.  The decision made Texas law worse.  This issue will ultimately be won in Texas appellate courts or perhaps before the Texas legislature, where it would be quite simple to extend the warning related presumption of §82.007 to all medical devices approved or cleared by the FDA.

Warning Claims

As to warning claims (which Texas law calls “marketing defects”), the defendants lost on adequacy as a matter of law.  Pinnacle Hip, 2018 WL 1954759, at *10.  Unfortunately, defendants usually lose on this ground, so it’s big news – and trumpeted on this blog – when a defendant wins a judicial holding that its warning is adequate as a matter of law.  No surprise there.  In Pinnacle Hip, that discussion ended:

Not until after the FDA issued its proposed rule in 2013 did defendants specifically warn about the metallosis, pseudotumors, and tissue necrosis − the sorts of conditions that plaintiffs maintained caused their revision surgery.

Id. at 11.  As defense counsel, we interpret the Fifth Circuit’s observation as an invitation to seek an adequacy as a matter of law ruling as to post-2013 claims (if there are any) in the litigation.

In the causation discussion pertaining to the warning claims, Pinnacle Hip of course followed the learned intermediary rule.  It discussed the role of “objective” evidence of causation:

At the threshold, the parties debate the relevance, under Texas law, of “objective evidence” − that is, evidence “that a different warning would have affected the decision of a reasonable doctor.” . . . Here, plaintiffs proffered objective evidence in [expert] testimony that, if the full risks of MoM were known to physicians, “they would run to [a different product].”

2018 WL 1954759, at *11 (citations omitted).  As we’ve discussed before, “objective” expert testimony about what “reasonable physicians” would have done is usually disallowed in learned intermediary cases.

On this point, however, Fifth Circuit law, has not been as favorable as other courts.  In Thomas v. Hoffman-LaRoche, Inc., 949 F.2d 806, 812 (5th Cir. 1992), the court actually allowed expert testimony on what a “reasonable” physician might have done – but that case was under Mississippi law.  See Ackermann v. Wyeth Pharmaceuticals, Inc., 526 F.3d 203, 212 (5th Cir. 2008) (suggesting that Thomas would not apply to Texas law).  We’ve been aware of the brief Texas Supreme Court passing reference to “objective” evidence in Centocor, Inc. v. Hamilton, 372 S.W.3d 140, 171 (Tex. 2012) (plaintiffs “presented no objective evidence”), but felt no reason to let the other side know it was there.

Now it’s been discovered, however.  The Fifth Circuit allowed such evidence to be admissible, 2018 WL 1954759, at *12 (“objective evidence is at least relevant”), but did not find it decisive in situations where the plaintiff would otherwise have suffered dismissal.  Critically, Pinnacle Hip did not allow unsupported “expert” testimony about what an objectively “reasonable physician” would have done be enough to let plaintiffs survive when they didn’t have prescriber testimony – which would have been the equivalent of allowing a heeding presumption in Texas, something the Fifth Circuit rejected outright in Ackerman, 526 F.3d at 212-13.

Relevance, however, does not imply sufficiency.  In the [learned intermediary] context, causation entails two distinct factual predicates:  first, that the doctor would have read or encountered the adequate warning; and second that the adequate warning would have altered his treatment decision for, or risk-related disclosures to, the patient.  Centocor addressed only the latter, suggesting a jury might be allowed to presume a particular physician would respond “reasonably” to fuller disclosure.  But that presumption must yield to contrary subjective testimony by the treating physician, and Centocor fails to explain how objective evidence would apply to whether that doctor would have read or encountered the warning in the first instance.  When considered for the limited purpose intimated in Centocor, objective evidence would have little bearing on any of [these] plaintiffs’ claims.

Pinnacle Hip, 2018 WL 1954759, at *12 (footnotes omitted) (emphasis original).  Thus, where the plaintiffs had no testimony from their prescribing physicians, those claims continue to fail, and some “expert” claiming otherwise cannot change the result.  Id. (granting JMOL in no-prescriber testimony cases).  Likewise, any “objective” testimony “must yield to contrary subjective testimony by the treating physician.” Id.  So plaintiffs cannot create questions of fact with expert testimony where the prescriber has affirmatively testified that a different warning would not have changed what s/he did.

Only what the Fifth Circuit described as “mixed bag” prescriber testimony (the prescriber said different things in different parts of his testimony) cases got to the jury in Pinnacle Hip, id. at *13, and those have always been harder cases for the defense anyway.  At best, for plaintiffs, paying some expert to opine that a “reasonable” physician would have heeded a warning won’t save any plaintiff who lacked a plausible warning causation case in the first place.  At worst, Pinnacle Hip means more plaintiff-side noise at trial in cases already going to trial on warning causation.  All in all, the defense side is better off after Pinnacle Hip than where it had been in the Fifth Circuit with only the Thomas precedent.  We definitely don’t agree with Max here.

Personal Jurisdiction

In Pinnacle Hip, the manufacturer’s parent corporation was held potentially liable because of the amount of guidance and control permitted by an inference from the facts (based on a “clear error” standard).  2018 WL 1954759, at *15.  Those facts allowed the court to conclude that more than a “passive parent-subsidiary relationship” existed as to this product.  Id. at *16.  To us that’s “big whoop” for two reasons.  First, the “clear error” standard does not apply at the district court level where jurisdictional motions are initially decided.  Second, and more important going forward, the plaintiffs proceeded under a “stream of commerce” theory where the Fifth Circuit had previously “embraced [the] more expansive” (Brennan) side of the 4-4 split in Asahi Metal Industry Co. v. Superior Court, 480 U.S. 102 (1987).  Pinnacle Hip, 2018 WL 1954759, at *15.  As we’ve discussed, that broad “stream of commerce” jurisdictional theory is probably toast after Bristol-Myers Squibb Co. v. Superior Court, 137 S. Ct. 1773 (2017).  Pinnacle Hip did not even cite BMS in its discussion of personal jurisdiction, so we guess that this argument wasn’t raised.  In light of the BMS precedent, the Pinnacle Hip jurisdictional holding should be treated as something of a “one-off” applicable to this MDL, but not to future litigation where BMS will stand front and center.

Miscellaneous Claims

Pinnacle Hip includes the Fifth Circuit’s full-throated reaffirmance of our favorite Erie principle:

[T]hat debate [about what a Texas court might do] is beside the point.  When sitting in diversity, a federal court exceeds the bounds of its legitimacy in fashioning novel causes of action not yet recognized by the state courts.  Here, despite ample warning, the district court exceeded its circumscribed institutional role and expanded Texas law beyond its presently existing boundary.

2018 WL 1954759, at *17 (footnote, citations, and quotation marks omitted) (emphasis added).  The court therefore threw out the spurious invention of an “aiding and abetting” cause of action that had no reasonable predicate in Texas law.  Id.

The court did allow two arguably weird theories against the parent corporation – all product liability theories imposing liability against a non-manufacturing parent under a theory not also cognizable against the manufacturing subsidiary are likely to be weird − to survive.  One of those, so-called “nonmanufacturer seller” was tied to statutory exceptions to immunity for nonmanufacturers.  Id. at*18.  The court held, instead, that the parent was only held liable for old-fashioned design or warning liability, after the record (again, construed in favor of plaintiffs as verdict winners) established one of statutory exceptions from nonmanufacturer immunity.  Id. That’s a little peculiar to non-Texas lawyers, but since Texas has this statute, it must mean something.

The other oddball claim that survived is one of those “last refuge of a scoundrel” theories, negligent undertaking” (a/k/a “Good Samaritan”) liability.

Texas caselaw reveals no precise control threshold a parent must cross before undertaking a duty to its subsidiary’s customers.  Texas courts have made clear that mere possession of “the authority to compel” a subsidiary is not enough − the parent “must actually” exercise that authority in a manner relevant to the undertaking inquiry.

Pinnacle Hip, 2018 WL 1954759, at *19 (footnote omitted).  Based on the stringent standard for interpreting record evidence, the court let this one slide.  Id.  Not good, but not likely to arise very often.

But there’s more afoot than just these three theories. Two years ago, we awarded In re DePuy Orthopaedics, Inc., 2016 WL 6268090 (N.D. Tex. Jan. 5, 2016), our ranking as the number six worst decision of that year, chiefly because of the large number of unprecedented theories under Texas law that this opinion permitted:

(1) extending negligent misrepresentation beyond “business transactions” to product liability, unprecedented in Texas; (2) ignoring multiple US Supreme Court decisions that express and implied preemption operate independently (as discussed here) to dismiss implied preemption with nothing more than a cite to the Medtronic v. Lohr express preemption decision; (3) inventing some sort of state-law tort to second-guess the defendant following one FDA marketing approach (§510k clearance) over another (pre-market approval), unprecedented anywhere; (4) holding that the learned intermediary rule does not apply whenever a defendant “compensates” or “incentivizes” physicians to use its products, absent any Texas state or appellate authority; (5) imposing strict liability on an entity not in the product’s chain of sale, contrary to Texas statute (§82.001(2)); (6) creating a claim for “tortious interference” with the physician-patient relationship, again utterly unprecedented; (7) creating “vicarious” breach of fiduciary duty for engaging doctors to serve as expert witnesses in mass tort litigation also involving their patients, ditto; and (8) construing a consulting agreement with a physician as “commercial bribery” to avoid the Texas cap on punitive damages, jaw-droppingly unprecedented.

While only item (5) was at issue in Pinnacle Hip, the Fifth Circuit’s invocation of Erie conservatism bears ill for all of the other judicial flights of fancy that have been allowed during the course of the Pinnacle Hip litigation.

Constitutionality of Punitive Damages Cap

For completeness, plaintiffs also lost their constitutional challenge to the Texas statute capping punitive damages at twice compensatory damages.  “Plaintiffs’ cross-appeal is meritless, and we dispose of it by footnote.”  Pinnacle Hip, 2018 WL 1954759, at *1 n.4.  That footnote went further, and characterized those constitutional claims as “frivolous.”  Id. at *23 n.72.  No matter what the constitutional challenge, a punitive damages cap “need only survive rational-basis review,” which it did in Pinnacle Hip “by injecting predictability into exemplary damages awards and preempting potentially unconstitutional awards.”  Id. (citations omitted).

Conclusion

When all is said and done, we view Max’s characterization of Pinnacle Hip as a “huge win for plaintiffs” as mostly overblown hyperbole, perhaps worthy of inclusion in the closing arguments that the Fifth Circuit held warranted a new trial.  The Fifth Circuit did some damage to comment k, but all the rest of the legal holdings were trivial, fact-bound, not likely to be useful in future cases, or some combination of those.  The forceful reiteration of conservative principles of Erie predictions of state law leave us hopeful that the Pinnacle Hip MDL will see some Fifth Circuit-mandated clean up – or, if not, perhaps the appellate court’s not-so-veiled Parthian, parting shot may have to be fired in earnest:

[D]efendants, despite their serious critiques of the district judge’s actions in this case and related MDL proceedings, see In re DePuy Orthopaedics, Inc., 870 F.3d 345, 351 (5th Cir. 2017) (finding “grave error”), have not asked us to require these cases to be reassigned to a different judge under “this court’s supervisory power to reassign,” United States v. Stanford, 883 F.3d 500, 516 (5th Cir. 2018).  We express no view on the issue but note that reassignment is both “extraordinary” and “rarely invoked.”  Id. (citation and internal quotation marks omitted).

Pinnacle Hip, 2018 WL 1954759, at *27, n.83.  Obviously, the Fifth Circuit in Pinnacle Hip was uncomfortable with the prospect of overruling the JPMDL’s assignment of this MDL, but this final footnote stands as a clear warning that, if further provoked (such as by continuing consolidated trials, or resort to other prejudicial evidence that the court noted but did not rule on), it will consider doing so.

On Wednesday, the Fifth Circuit was finally able speak to what’s been going on in a Dallas courtroom that has racked up over $1.7 billion—that’s billion—in jury verdicts over the last two years in the Pinnacle Hip Implant MDL. And the Fifth Circuit entered the room loudly. It ordered a new trial of the plaintiff’s very first victory, the one that produced a half-billion dollar verdict. The court did not hold back, making it perfectly clear that it vacated the judgment due to “the district court’s evidentiary errors and [plaintiffs’ attorney Mark] Lanier’s deception.” Slip Op. at 6.

The “evidentiary errors” have been a controversial part of these MDL trials since the time of our first post about them two years ago. Even then, we were struck by the “number and nature” of these evidentiary rulings, which in the aggregate suggested “an almost uninterrupted flow of unduly prejudicial and irrelevant information to the jury.”  The Fifth Circuit now agrees, highlighting two of them as the basis to order a new trial.

First, the Saddam Hussein evidence. Slip Op. at 43-46. That’s right. The court allowed evidence concerning Saddam Hussein into a hip implant trial. Its decision was based on a deferred prosecution agreement, one in which J&J took responsibility for the actions of affiliates who had bribed officials in the Iraqi government. These affiliates had nothing to do with the Pinnacle Hip Implant device. Regardless, after defendants elicited testimony on their own positive internal culture and marketing, the district court ruled that the defendants had thereby “opened the door” to Saddam Hussein, the deferred prosecution agreement and all sorts of other stuff. With light now green, the plaintiffs’ attorney thereafter featured Saddam Hussein and bribes and prosecution in his questioning of witnesses and closing argument. Mind you, this was a hip implant medical device trial.

The Fifth Circuit rejected the trial court’s “open door” ruling. It held that “the rules of evidence do not simply evaporate when one party opens the door on an issue.” Id. at 44. Prior bad acts cannot be used to convince a jury that defendants acted as wrongdoers in the case before it. Id. The Fifth Circuit held, however, that the plaintiffs’ attorney asked the jury to do just that. To illustrate this, the Fifth Circuit quoted the paragraph below from plaintiffs’ closing argument. Note that the italicized emphasis in the paragraph was placed there by the Fifth Circuit, as was the single word “Indeed” after that paragraph:

If you go back and look at the DPA, that’s the deferred prosecution agreement where the company paid money one time because of kickbacks to doctors in America, the other time because of the bribes to Saddam Hussein’s government, the bribes in Greece, Romania, Poland and other places where they were bribing people to put in . . . their products. The DPA has [J&J] admitting its responsibility in it. J&J is admitting that they’re responsible. They have already taken this issue out of your hands realistically. That alone is a winner. . . . [J&J] has admitted their responsibility for this. That ought to be enough.

Indeed.

Id. at 45. The Fifth Circuit wrote that this closing argument and the earlier questioning “tainted the result by inviting the jury to infer guilt based on no more than prior bad acts . . . . That alone provides grounds for a new trial.” Id.

The second evidentiary ruling rejected by the Fifth Circuit was the trial court’s decision to allow plaintiffs to use hearsay in a resignation letter from a DePuy employee alleging racism within the company. Slip Op. 46-48. Again, this was a hip implant trial. Calling it a “spectacle,” the Fifth Circuit ruled that reading this letter to the jury “refocused its attention on serious, and seriously distracting, claims of racial discrimination that defendants had no meaningful opportunity to rebut via cross-examination. This spectacle fortifies that a new trial is required.”

These evidentiary rulings alone were enough to upend the judgment. But there were more. As we laid out in our previous posts, the trial court made multiple other questionable evidentiary rulings that allowed questioning and argument on things like suicide, cancer, connections to the tobacco industry, transvaginal mesh suits, and so on. Having already overturned the judgment, the Fifth Circuit declined to address these other evidentiary rulings. But it did warn the trial court to “weigh carefully the application of Rule 403 and 404(b)” when considering these issues at future trials. Slip Op. at n. 71.

Next, the Fifth Circuit found additional grounds to overturn the judgment due to what it called “deception” by the plaintiffs’ attorney regarding plaintiffs’ experts, something we wrote about last year. Plaintiffs classified two of its experts as “non-retained,” meaning not paid. At trial, plaintiffs’ attorney contrasted this with what he called the “bought testimony” of the defendants’ expert. The problem is, however, that plaintiffs’ experts were “bought” too. Before trial, plaintiffs’ attorney donated $10,000 to St. Rita’s Catholic School, the favorite charity of one of the two experts. More blatantly, after trial, plaintiffs paid $65,000 in total to the two experts.

It would be difficult to overemphasize how hard the Fifth Circuit came down on this, labeling it “deception.” Slip Op. at 6. The court was clearly displeased. Its opinion (see pages 49-57) is littered with snide comments. Noting that Mr. Lanier mentioned to the jury that he had shared the “best apple pie in the world” with one of the two experts, the court wrote, “St. Rita’s and the $10,000 check went unmentioned.” Id. at 50. After quoting Mr. Lanier contrasting the supposedly “bought testimony” of the defendants’ experts with the supposed “real life” testimony of his two experts, the Fifth Circuit wrote: “As between ‘real life’ and ‘bought testimony,’ [the jury] chose the former by a margin of $502 million. But that choice was a false one, manufactured entirely by Lanier.” Id. at 52.

With the unmistakable intent to drive its point home, the Fifth Circuit clarified in just about every way possible that this type of maneuvering was improper:

This is the rare case in which counsel’s deceptions were sufficiently obvious, egregious, and impactful to penetrate the layers of deference that would ordinarily shield against reversal.

Lanier’s failure to disclose the donation, and his repeated insistence that Morrey Sr. had absolutely no pecuniary interest in testifying, were unequivocally deceptive.

Lawyers cannot engage with a favorable expert, pay him “for his time,” then invite him to testify as a purportedly “non-retained” neutral party. That is deception, plain and simple.

We find, by the “clear and convincing” evidence of common sense, that Lanier misled the jury in creating the impression that Morrey Jr. had neither pecuniary incentive nor motive in testifying. Neither our double deference nor counsel’s specious reasoning can alter that conclusion.

Calculated or not, falsehoods marred plaintiffs’ victory. The Verdict cannot stand.

Got it. This lambasting by the Fifth Circuit could change the game in the Pinnacle Hip Implant MDL. Proper boundaries may now be back in place, or at least some of them. There are more appeals to come, and they involve serious procedural and jurisdictional issues that were front and center in the two trials that followed this one. In fact, there may be more to come from this opinion, at least from us, as it also granted DePuy judgment on two plaintiffs’ failure to warn claims and J&J judgment on plaintiffs’ aiding and abetting claims—something for us to address another day.

One thing is already clear from this opinion, though. Two years of this MDL may have been wasted on defective jury trials. But, if a reset is needed, it must be done. The goal of an MDL is not to hammer defendants with every possible negative piece of evidence, relevant or not, so as to produce large verdicts. It is to establish a framework under which the parties can properly litigate and value the hundreds or thousands of cases within a complex mass tort. The Fifth Circuit’s opinion is an important step toward that proper construct.

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.

We wrote a post not too long ago recommending that MDL defendants seriously consider limiting so called “Lexecon (read the prior post if you don’t know what that means) waivers” to single plaintiff trials and to exclude punitive damages.  We included a caveat that “this idea wouldn’t have worked” in all situations, if the MDL judge is bound and determined to chase down a non-waiving defendant in the original transferor district.  See Eghnayem v. Boston Scientific Corp., 873 F.3d 1304 (11th Cir. 2017) (MDL judge trying out-of-district case as visiting judge).

We were assuming, of course, that the MDL court could engineer a temporary appointment as a visiting judge under 28 U.S.C. §292(d) – something we’d first brought up a long time ago.  Indeed, the Manual for Complex Litigation (4th) mentions this possibility.  See Id. §20.132, at 247 (Fed. Jud. Ctr. 2005).

We should have researched that assumption first, or at least gone back through our own old posts.  It turns out that the only appellate authority on MDL judges trying cases as visiting judges says you can’t do it.  See In re Motor Fuel Temperature Sales Practices Litigation, 711 F.3d 1050 (9th Cir. 2013) (“MFT”).  Not only that, we actually blogged about the MFT ruling when it was decided.  If we hadn’t been preparing an MDL best practices project for Duke Law School, our forgetful ignorance would have continued.

Anyway, we figure if we can forget something like that – although we actually wrote about it – you might, too.  So with the problem of multi-plaintiff consolidated punitive damages MDL show trials fresh in our minds, here’s a refresher:

MFT refused to approve a “temporary assignment” designation sought by an MDL judge to try a case that was otherwise precluded by Lexecon, even though Lexecon was not totally on point

Lexecon dealt with venue, not judicial case assignment.  The Lexecon Court held that a plaintiff is entitled to select the venue where the case will be tried, and this right can’t be undermined by having the case transferred for pre-trial proceedings under the MDL process.  Venue is important for a number of practical reasons, such as ease of access to the forum by plaintiffs and their lawyers and, perhaps most important, selection of the jury pool.  Venue does bear on which judge will be assigned to the case, as one of the judges of that district will normally preside, but there’s no guarantee of that.

711 F.3d at 1054.  Nonetheless there was “some force” to the argument “that allowing the MDL judge to follow the cases after the conclusion of pre-trial proceedings resuscitates the self-referral practice that the Supreme Court unanimously repudiated in Lexecon.”  Id.  Just not enough force to win the point on that basis, since Lexecon itself did not dictate the outcome.

Instead, MFT looked to the Guidelines for the Intercircuit Assignment of Article III Judges promulgated under the Chief Justice’s authority the year before.  These guidelines set out specific criteria for allowance of intercircuit transfers, and letting an MDL judge try cases s/he otherwise couldn’t wasn’t one of them.  Rather such transfers are permitted only under very specific circumstances.  “Only severe or unexpected over-burdening, as happens when a judge dies or retires, when the district is experiencing a judicial emergency or when all the judges are recused because of a conflict, will warrant bringing in a visiting judge.”  MFT, 711 F.3d at 1053.

While we would ordinarily include a link to the guidelines themselves, they’re not independently available either on the Internet or on the Federal Judicial Center’s website. Helpfully, they are attached as “Appendix A” to the MFT decision.  These guidelines do not provide any support for an MDL judge taking the initiative to ride shotgun on remanded cases:

  • The “primary source of intercircuit assignments should be senior judges.”
  • The first choice for designating a visiting judge is “from another court within the circuit.”
  • Assignments are not controlled by the would-be visiting judge, but rather selected by the chief justice and the Committee on Intercircuit Assignments, in order “to avoid the appearance of impropriety or conflict of interest.”
  • “The appropriate way to initiate a formal request for an intercircuit assignment is for the circuit chief judge to send a Certificate of Necessity to the Chair [of the Committee on Intercircuit Assignments].”

Thus MFT rejected the request of an MDL judge to retain authority over a remanded case:

[T]he process of transferring judges between circuits, as delimited by the Chief Justice’s Guidelines, is directed strictly toward meeting judicial necessities, whereas the transfer in this case would serve a different purpose. . . .  [H]aving the district judge who conducted MDL pre-trial proceedings also preside over the trial of the case can improve judicial efficiency, preserve scarce judicial resources and enhance MDL judges’ control over their proceedings.  These are worthy goals, to be sure, but not ones in any way reflected in the Guidelines.

MFT, 711 F.3d at 1054.  Allowing a transfer would effectively divest the judges of the transferor district of cases ordinarily assigned to them.  There is “no authority empowering the chief judge of the circuit to re-assign cases pending before other judges, or to remove cases from the district’s assignment wheel” in the absence of recusal.  Id. Short of amending the guidelines (which doesn’t seem to have happened since 2013) there wasn’t “any way” to “constru[e]” them to allow an MDL judge to engineer his or her own assignment to a specific post-remand case.  Id. at 1055.

Since it was decided in 2014, MFT hasn’t been cited except in the Ninth Circuit – as we suppose befits such an arcane decision.  It may well be, as a commentator has commented, that visiting judge “requests are often granted routinely by circuit chief judges” in MDL situations.  Sherman, “When Remand Is Appropriate in Multidistrict Litigation,” 75 La. L. R. 455, 460 (2014).  However, “intercircuit transfers based on efficiency could encroach on the authority of transferor judges to resume rightful control over their cases upon completion of pretrial proceedings.”  Id.  See MacFarlane, “The Danger of Nonrandom Case Assignment:  How the Southern District of New York’s ‘Related Cases’ Rule Shaped Stop-and-Frisk Rulings,” 19 Mich. J. Race & L. 199, 213 (2014) (“the visiting judge [under §292(d)] would be expected to help relieve that burden, rather than dictate what types and number of cases he or she is willing to hear”).

It may seem extreme that an MDL judge would react to Lexecon – and lack of an appropriate waiver − by seeking to chase the parties back to their home districts, but such an extreme situation is precisely when our clients may feel compelled to invoke MFT to try to end the chase.  We hope our clients never need it, but if they do, remember that the only actual precedent out there rejects letting MDL judges maintain control over cases after remand.