This guest post is by Reed Smith‘s Matt Jacobson.  Matt is interested in the intersection between 3D printing and product liability, and the article he discusses is just too much to pass up.  As always our guest posters are 100% responsible for their content, deserving of all the credit and any blame.

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Walter White, the high school chemistry teacher turned methamphetamine “manufacturer” and main protagonist in the TV show Breaking Bad, has been called a lot of things.  Drug king pin.  Villain.  Criminal mastermind.  Heisenberg.  Visionary?

For the handful of you who have not seen Breaking Bad or are not regular readers of this blog (Walter White appears in at least three prior posts), Walt was a depressed high school chemistry teacher diagnosed with stage III lung cancer. Wanting to ensure his family’s financial security after his death, he gets into the business of manufacturing methamphetamines and drug dealing.  Before he is pulled deeper into the illicit drug trade and his character evolves from teacher/family man into murderer/crime lord, Walt turns an RV into a rolling meth lab.

So visionary may not be the right word, at least not until now. Spoiler alert—it’s been almost seven years since Walter White’s death (yes we believe he really did die) and now a group is following in Walt’s footsteps, manufacturing drugs at home using a micro (not meth) lab—well that is not exactly what it is doing, but it provides good imagery.  So imagine, that instead of meth, Walt manufactures a drug for opiate overdose (might actually be good for his business) or to treat infections in HIV patients.  And instead of beakers in the RV, Walt uses a few mason jars and a 3D printer.  If this had been the story’s line, the show’s creators may have had to change the title to Breaking Good, which doesn’t seem to have as nice of a ring to it.

Ok, back to reality.  Recently, an article appeared in 3D Printing Industry about a group trying to do just that.  The group calls itself Four Thieves Vinegar Collective (taking the name from an alleged plague cure) and according to its website, its mission is “free medicine for everyone.”  Following the footsteps of 3D printed gun proselytizer Defense Distributed, Four Thieves recently released instructions for building an “Apothecary MicroLab,” a DIY kit claimed to be able to synthesize a variety of medications.

As they say on TV, do not try this at home. Beyond a glass of warm milk for insomnia and salted water to gargle when your throat is sore, making your own medicine at home is a really bad idea, with potentially adverse consequences.  For those, however, with a (morbid) curiosity, the article explains the kit’s makeup:

[A] small mason jar mounted inside a larger mason jar with a 3D printed lid. Furthermore, the kit contains a 3D printed stepper motor, syringe pump, coupler and shredded shaft which are connected using small plastic hoses.  A thermistor is then attached through the lid to circulate fluids to induce the chemical reactions necessary to manufacture various medicines.  The whole process is automated using a computer.

Apparently, “the 3D printed chemical reactor kit has successfully produced Naloxone (aka Narcan), a drug for opiate overdoses, Cabotegravir and Daraprim, drugs used to treat infections in people with HIV, and Mifepristone (aka RU486), and misoprostol,” two pharmaceuticals that can be used to terminate pregnancies.

Four Thieves Vinegar Collective is not selling the drugs itself—it is providing instructions on how to make the medications. The drugs themselves are also not 3D printed—although some of the parts in the kit are made using a 3D printer.  So maybe this is not a modern day Walter White situation after all.  But this article did raise questions.  There is already one pharmaceutical drug being (legally) manufactured using a 3D printer.  With an aging population and disease not going away anytime soon, 3D printing of medicines in our own homes might be in our future.  Some might even say it is only a matter of time.  Will the law—both regulatory and the product liability system—is ready for it?

Because this blog not only geeks out about good TV shows, but also about the law and 3D printing, consider some of the product liability implications that are raised by 3D printing drugs out of a person’s home.

Manufacturing defects

Injuries caused by an improperly manufactured or tainted 3D printed drug is an issue. This may be the result of an error in the instructions being used, problems with the 3D printer, quality control issues in the person’s home where the drug is “printed,” or how the person synthesizes the drug—in other words, any situation in which a mistake occurs at any point in the process used to print the drug can create a manufacturing defect.  Manufacturing defects are an infrequently litigated product liability claim where FDA-approved drugs are at issue.  However, in the case of 3D printing homemade drugs, it may very well be the main focus of litigation.  If a person makes a drug in his or her house using a 3D printer, who does that person blame if the drug causes injury?  Would the person making the drug be considered the manufacturer for strict liability purposes?  Under section 402A of the Restatement (Second) of Torts, the seller or manufacturer must be engaged in the business of selling the product. The home drug maker may or may not be in the business of drug manufacturing.  It would depend on whether the that person also distributes the basement drugs to others. So who would be liable?  A potential defendant may be the manufacturer of the 3D printer with a plaintiff claiming the “defect” arose because of some aspect of the printer. Another potential party may be the entity who provided the instructions for making the drug with a claim for “defective instructions.”  That could include the Four Thieves Vinegar Collective itself.  Product liability law may need to evolve to address these issues, but it is clear that printing drugs from your home will blur the distinctions between the user and the manufacturer of the drugs.

Warnings

Injuries could be caused by a failure to provide adequate or accurate warnings regarding a dangerous side effect or a failure to provide adequate instructions regarding the safe and appropriate use of the drug—or possibly the above-described “Micro Lab,” or even the 3D printer.  For FDA-regulated prescription drugs and medical devices, the learned intermediary doctrine provides that a manufacturer need only warn a prescribing doctor about known or knowable risks.  It is not obligated to warn the end user.  Because physicians are typically warned about drugs through medical literature and via manufacturer-created warning labels/disclosures that accompany the drugs, the learned intermediary doctrine will not apply to 3D printed homemade drugs.  Such drugs would need to be accompanied by adequate warnings directed to the consumers themselves.  These warnings should disclose the reasonably foreseeable risks of the medication (e.g., adverse reactions) and dosage requirements.  In the 3D printing context, if no traditional product “manufacturer” exists, it is likely that a duty to warn (perhaps only in negligence) will ultimately be imposed on some other entity involved in the supply chain.   But if a person is 3D printing drugs from home who would be responsible for providing the warnings? Would it be the person or company who is providing the instructions on how to synthesize the drug?  If the instructions are downloaded from a website, a plaintiff may find it virtually impossible to identify this person, let alone find them to effectuate a lawsuit.

FDA

As far as we can tell, the FDA has not yet issued any statements about the “Apothecary MicroLab” or 3D printing drugs from your home.  The FDA did issue a statement about Four Thieves Vinegar Collective’s other product, the EpiPencil (a homemade epinephrine autoinjector that can be built for $30), saying with remarkable understatement that it was a “potentially dangerous practice.” For the most part, the FDA has been silent on the 3D printing of drugs (no matter where it happens), with the exception of the one 3D printed drug that it approved.

As to 3D printing drugs at home, how the FDA intends to approach this subject is very unclear. A lot of questions are raised with no answers as of yet.  If manufacturing occurs at a non-traditional “manufacturing” site, such as a person’s home, how will or should the FDA regulate that site? Should the site be subject to all of the FDA’s requirements and standards and will the FDA take enforcement action because a 3D printed drug is technically adulterated when it is not manufactured under quality compliant conditions?  Will instructions to print drugs have to be FDA approved?  Will the FDA regulate the printer or just the finished product?  To resolve these and other issues, the FDA may need to modify its regulations, and in the short term issue a few guidance documents and exercise its enforcement discretion for some FDA rules and regulations.  FDA’s requirements will be key for safety, but also for preemption purposes, which may depend on the FDA imposing requirements on 3D printing of medications.

 

Quality Control

There likely would be no way to have quality control measures in place for every home that is 3D printing medications. Certainly, the FDA could not enforce its inspection procedures in every household that was 3D printing drugs. On its website, Four Thieves Vinegar Collective says that quality control issues are not the same when making small quantities of a drug as opposed to an industrial scale. That is doubtful, at best. While it may be easier to control quality if you are only making one pill, quality control is still a huge issue when it comes to medications. A person’s home is not nearly as clean as a drug lab. A person likely would not have records of the formulation of the product, synthesis of the substance, and the specifications of the products readily available to ensure all are met. Also each drug that is 3D printed, or even a sampling, would not be tested, let alone retested, before use. Each 3D printer would have to be calibrated before use. Microbiological factors may also come into play, such as evaluating the raw material for sterility, endotoxins, and environmental concerns. These same issues also effect recalls, and recalls probably would be limited to 3D printers and centrally manufactured products or become voluntary. There are good reasons why the FDA exists.

 

Like the fictional character Walter White, 3D printing drugs from your home is still not a reality. Four Thieves Vinegar Collective and other organizations like it are making it more likely that it could happen sometime in the future, whether legal or not. A lot of potential uses of 3D printing drugs exist, from helping soldiers on the battlefield to people in less developed countries.  Until the technology and legal issues are dealt with, there are still a lot of risks and dangers associated with 3D printing medications. Right this moment, making any kind of drug yourself is far from advisable. But for now, thinking about all these product liability issues is what get us high. And we can only wonder if Walter White’s lawyer Saul Goodman would have advised him of these risks? Certainly not.

 

 

We are on vacation this week.  The aim was to stay in this hemisphere, yet get the feel of being in an old European city.  Less air travel, but still with the overcharging and the hard stares in response to our dodgy foreign language skills.  So with that hint, guess away as to our present location.  As part of vacation prep, we downloaded a bunch of movies on our Netflix account for viewing on the plane and in case of a rainy day.  A couple of days ago, with gritted teeth, we hit the play button for a documentary film called “The Bleeding Edge.”  We deal all the time with claims of failure to warn, but in this instance we have no such claim.  We had been fully warned that the film was a thoroughly one-sided screed against the medical device industry.  Pity the poor defense lawyer picking a jury tainted by this particular work of art.  The case studies in the film involve hip implants, a contraceptive, vaginal mesh, and robotic surgery.  Rotten Tomatoes gives the film a score of 100%.  This film must be a banger, right?

 

Well, it is certainly effective.  True to its title, it draws blood – emotionally, anyway. It conveys a series of stories, it makes you feel sorry for victims, and it makes you mad.  It feels very much like an extended 60 Minutes segment.  60 Minutes has been on the air for 50 years.  That’s 50 years of confronting corporate and government malefactors. 50 years of crooks scurrying away from cameras.  50 years of righteous indignation.  Many times over those 50 years, 60 Minutes worked its forensic magic on us.  We were just as swept up in the disillusionment and the urge to punish as any other viewer. 

 

And then, when we began our stint at a law firm, we worked on a case that received lots press coverage.  To our shock, the press got at least half the story wrong.  The account of who, what, where, when, why, and how was terribly tilted – more a morality play than factual reportage.  Eventually, it occurred to us that perhaps the press didn’t distort reality only for stories about our cases.  Maybe, just maybe, flaws riddle press stories fairly (or unfairly) often. 

 

We have worked on litigation involving only one of the products at issue in “The Bleeding Edge.” All of the stories are compelling, with human beings who earn sympathy.  Some suffered terrible physical injuries.  Even beyond that, some of their lives were ruined in other ways, with awful impacts on family members.  You’d have to have a heart of stone to be unmoved.  For the story dealing with the product we know a little something about, vaginal mesh, the story turns out to be a half-story.  The viewer will see nothing about the vast majority of patients who had their lives bettered by mesh – whose stress urinary continence, which had devastating, embarrassing consequences for quality of life, had been fixed. Instead, we hear from a plaintiff lawyer who delivers a mini-closing argument against mesh. He says that when the science conflicts with the marketing, “the marketing always wins out.”   That’s catchy, but that’s also a canard.  From what we have seen, medical device marketing claims must run the gauntlet of careful medical, regulatory, and legal scrutiny before any member of the public sees them.  We also hear from ubiquitous plaintiff expert David Kessler, a former head of the FDA, who rips into the 510(k) “loophole”.  You will not hear a hint of why that provision was deemed necessary and how there was at one time enormous discontent about undue delays in making beneficial medical devices available to patients.  If there is a legitimate, nuanced debate about whether the scope of the 510(k) process should be adjusted, or whether that regulatory pathway should be bolstered or adjusted when the underlying predicate devices are withdrawn, you won’t hear that nuanced debate here.  It’s all black and white, albeit in cinematic color.  Then we hear from another plaintiff expert who wields a rhetorical axe, not scalpel, against mesh.  Immediately afterward, we hear from a plaintiff. When she mouths a critique of vaginal mesh, she says she has heard it is like trying to remove rebar from concrete.  Guess where she heard that?  That is precisely the imagery used by the plaintiff medical expert in his trial testimony.  To our jaundiced eyes, these interviews were cleverly curated and assembled for maximum negative impact.  That is not documentary; it is choreography.

 

If “The Bleeding Edge” is one-sided – and it is – its defenders will say that is the fault of the companies.  At the end of the film, we get the typical screen notification that the filmmakers invited the companies to appear, but the invitation was declined.  Can you blame the companies?  First, it was clear that the filmmakers was dead set on putting scalps on the wall.  It was inevitable that the questioning and editing (more on the latter in a moment) would be deployed to make the companies look bad.  The filmmaker, not the interviewee, has final cut. Second, companies in litigation know that any public statement could be used against them.  By contrast, a plaintiff lawyer can say whatever he wants without worrying that an inaccurate statement might be used against one of his clients.  Thus, there is a structural reason why public reporting on matters in litigation usually favors plaintiffs.  There is also the same bias one sees in scientific journals in favor of finding significant results.  “Product Injures Thousands” will attract more eyeballs or clicks than “Company Responsibly Pursues Innovation.”  For good reason is the film entitled “The Bleeding Edge.”  If it bleeds, it leads.  

 

There is an appearance in the film by the CEO of AdvaMed, the medical device industry association.  We first see him making a presentation to the MedTech Conference.  In the excerpt selected by the Bleeding Edge filmmakers, the CEO says that medical device makers “have more power in this room than most governments around the world.”  End of excerpt.  As placed in the film, it sounds a wee bit sinister.  It is as if the documentary is trying to depict the CEO as a Bond villain.  Cue the terrifying henchmen, the white cat, the trap door, and the plan for world domination.  But context is all.  The speech was actually about the industry’s power to innovate.  Rather different, isn’t it?  Not that it makes a difference to the filmmakers.  After all, in more than one place in the film, the concept of innovation is belittled, even ridiculed. And yet, would anyone really prefer that the government stifle innovation?  We’ve read reviews of the film that conclude by advising viewers to question their doctors when innovative treatment is proposed.  It is good for patients to ask questions.  But it is not so good for them to be cynical.  Hello, vaccine-avoiders.  And it is not so good for patients or doctors to harbor preconceptions against innovation.  Later in the film, the AdvaMed representative submits to an interview by the filmmakers.  What he says is appropriate and above reproach.  But, again, something interesting happens with the editing.  After the AdvaMed rep answers the questions, the camera holds on him for an uncomfortable pause.  The fellow looks at the camera.  Then he looks around.  Then he lifts his paper cup of coffee.  Only after the camera plays its little trick of creating discomfort does it finally cut away. What is the purpose of that?  Whose bias is actually being exposed?  We are reminded of the scene in the Michael Moore movie where a government official is shown combing his hair before the interview.  Context can convey skepticism and derision.   

 

Needless to say, the film-makers employed no such editing maneuvers during the interviews of the plaintiff litigation team. 

 

Again, the film is effective at doing what it wants to do.  It makes a case.  But do not for a moment mistake it for what it is not – a balanced examination of the truth. 

 

[P.S.: Happy Birthday to the Drug and Device Law Son.  We will always be hopelessly biased in his favor.]

 

 

 

 

 

What follows is a rather involved guest post by Reed Smith‘s Kevin Hara.  Actually, Kevin has contributed enough to the Blog over the last couple of years that he’s more of a crypto-blogger than a guest.  Instead of the more common case-specific post, Kevin has put together his own 50-state survey on state statutes of repose.  A lot of states have a variety of different statutes of repose.  Some of these statutes (such as those based on useful life) can be useful in prescription medical product liability litigation, others (like those involving fixtures to real property) – not so much.  Anyway, in this guest post Kevin endeavors to sort things out on a nationwide basis.  As always our guest bloggers deserve 100% of the credit, and any blame, for their work.

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Although this relatively recent Law360 article discussed statutes of repose, this powerful affirmative defense remains underutilized, so this post revisits it and digs a little deeper.  This defense, where applicable, provides a potentially swift conclusion to an action with accompanying cost savings for the client.  Further, defense counsel may move to dismiss at the pleading stage, where the applicability of the defense is apparent from the complaint.  Many courts view statutes of repose as substantive, rather than procedural, unlike statutes of limitation – so the plaintiff cannot escape by becoming a litigation tourist.

The state of Tennessee’s statute of repose serves as a perfect example of a bright line application in a prescription product liability action, regardless of a plaintiff’s knowledge wherein “a delay, even without knowledge of the hazard involved in the delay, may preclude the bringing of an otherwise meritorious claim.”  Montgomery v. Wyeth, 580 F.3d 455, 463, 466 (6th Cir. 2009) (applying Tennessee law).  Tennessee courts have explained this rule succinctly:

A statute of limitations governs the time within which suit may be brought once a cause of action accrued. A statute of repose limits the time within which an action may be brought, but it is entirely unrelated to the accrual of a cause of action and can, in fact, bar a cause of action before it has accrued.

Jones v. Methodist Healthcare, 83 S.W. 3d 739, 744 (Tenn. App. 2001) (emphasis added).

The Texas Supreme Court provided a thoughtful analysis of that state’s clear-cut statute of repose:

Indeed, the key purpose of a repose statute is to eliminate uncertainties under the related statute of limitations and to create a final deadline for filing suit that is not subject to any exceptions, except perhaps those clear exceptions in the statute itself.  In recognizing the absolute nature of a statute of repose, we have explained that while statutes of limitations operate procedurally to bar the enforcement of a right, a statute of repose takes away the right altogether, creating a substantive right to be free of liability after a specified time.  The whole point of layering a statute of repose over the statute of limitations is to fix an outer limit beyond which no action can be maintained.  One practical upside of curbing open-ended exposure is to prevent defendants from answering claims where evidence may prove elusive due to unavailable witnesses (perhaps deceased), faded memories, lost or destroyed records, and institutions that no longer exist.

Methodist Healthcare Sys. of San Antonio v. Rankin, 307 S.W.3d 283, 286-87  (Tex. 2010 ) (internal citations and marks omitted) (emphasis added)

The Tennessee and Texas statutes of repose are elegant in their simplicity:  you are either in, or you’re out.  Period.  No ifs, ands, or buts.  Iowa, Connecticut, and North Carolina are a few of the states with similarly straightforward statutes of repose.  However, perhaps because they are so unyielding – and unlike statutes of limitation, the vast majority of which are subject to the discovery rule – statutes of repose are often more limited in scope, and therefore not uniformly applicable to manufacturers of prescription medical products.

That said, statutes of repose add a significant item to any defense practitioner’s toolbox because they can take a case, and simply “nip it in the bud,” a common expression that is illustrative here.  Indeed, it is a phrase that sometimes gets mixed up, such as with the malapropism “nip it in the butt,” which got us to thinking about something else that often leads to confusion: music.  All too often, people misapprehend the words to a song, and there are a multitude of websites with compilations of some of the more notable – and incidentally, most humorous – misheard song lyrics, including Mentalfloss , Huffington Post, and New Musical Express, but here are some of the best.  Perhaps the most famous example is the Jimi Hendrix classic “Purple Haze,” with famous phrase “Excuse me while I kiss the sky,” interpreted erroneously as: “Excuse me while I kiss this guy.”

Who can forget the San Francisco Bay Area’s own all-time great rock band Creedence Clearwater Revival’s song “Bad Moon Rising,” with part of the chorus, “There’s a bad moon on the rise,” replaced with “There’s a bathroom on the right.”  (In fact, this error became prominent that front man John Fogerty was known to purposefully sing that rendition and gesture to the proverbial restroom.)  Another prime example is the upbeat Johnny Nash song “I Can See Clearly Now,” with the line from the refrain “I can see clearly now, the rain is gone,” somehow thought to be: “I can see clearly now, Lorraine is gone.”  It would be remiss not to mention The Monkees, and their hit “I’m A Believer,” with the eternally ecstatic line, “Then I saw her face, now I’m a believer!” instead substituted with the diametrically opposed – and frankly cruel, but evocative – “Then I saw her face, now I’m gonna leave her!”

Bexis pointed out that one could interpret the chorus of British band ELO’s chart topper “Evil Woman,” “Evil woman,” as “You need a woman.”  He also misunderstood for years (until the advent of lyrics services on the Internet) the line in Steppenwolf’sFrom Here To There Eventually” as “cause benign, rather than “caused by man.”

These faux pas are fitting metaphors for failing to comprehend the importance of statutes of repose.  While it is easy enough to have a chuckle when a friend butchers a line in a favorite song, failing to seize an opportunity to secure a dismissal with prejudice is no laughing matter.  Defense counsel should thoroughly consider and explore all possible options for resolving a case quickly in the name of expediency and client satisfaction.

To assist with those aims, here is a rundown of the applicable statutes of repose for all 50 jurisdictions, including discussions of which states apply the discovery rule, which utilize presumptions rather than complete defenses, and other subtle variations, beginning with those states whose statutes are most likely to apply to prescription product claims.

States With Statutes That Are Applicable To Prescription Product Liability Claims

 Alabama – Alabama applies a unique, common law, 20 year rule of repose which “arose within the context of property disputes,” but according to the Alabama Supreme Court “the rationale underlying the rule is not so limited and, accordingly, the rule has been applied in other contexts, including those alleging tort claims.”  Ex parte Liberty National Life Insurance Co., 825 So. 2d 758, 763-64 (Ala. 2002); see also Owens-Illinois, Inc. v. Wells, 50 So.3d 413, 420 (Ala. 2010) (ruling that “Alabama’s 20-year common-law rule of repose does not begin to run on a claim until all the essential elements of that claim, including an injury, coexist so that the plaintiff could validly file an action”).

Colorado – Col. Rev. Stat. § 13-21-403(3).  Applies a presumption of non-defectiveness more than “[t]en years after a product is first sold.”  See Mile Hi Concrete, Inc. v. Matz, 842 P.2d 198, 205 (Colo. 1992).

Connecticut – Conn. Gen. Stat. § 52-577a.  An action is foreclosed “more than 10 years after the manufacturer relinquished “possession or control of the product,” absent fraud or express warranty.

Florida – Fla. Stat. § 95.031(b).  A products liability action is barred “more than 12 years after delivery of the product,” with exceptions for latent disease or injury, and fraudulent concealment.

Georgia – O.C.G.A. § 51-1-11(b)(2).  Precludes any action “after ten years from the date of the first sale for use or consumption” of a product that causes injury.

Idaho – Idaho Code § 6-1403(b).  Rebuttable presumption that injury “caused more than ten (10) years after time of delivery” occurred after product’s safe life, rebuttable “by clear and convincing evidence.”

Illinois – 735 ILCS 5/13-213(b).  Forbids any “product liability action” on any theory after 12 years from the first sale or 10 years after the purchase by an initial consumer, unless brought within two years of discovery of alleged injuries.   Davis v. Toshiba Mach. Co., 710 N.E. 2d 399, 401 (Ill. 1999) (weakening statute of repose by allowing discovery rule in cases not involving latent injuries).

Indiana – Ind. Code § 34-20-3-1(b).  Action must commence within “10 years after delivery of the product to initial user,” but may be brought within two years after accrual. See, e.g., Land v. Yamaha Motor Corp., 272 F.3d 514, 515-516 (7th Cir.2001) (ruling that where it was “undisputed” that injury and filing suit occurred more than 10 years after product purchase by initial user, statute of repose barred product liability action.) (emphasis added).

Iowa – Iowa Code § 614.1(b). Bars product liability action on any theory 15 years after purchase of a product absent express warranty or concealment. See Albrecht v. GMC, 648 N.W.2d 87, 95 (Iowa 2002) (the “allegations of the petition establish[ed] that the present suit falls with the scope of section 614.1(2A)(a) and was brought more than fifteen years after the product in question was first purchased,” precluding plaintiff’s action); Cf. Merner v. Deere & Co., 176 F. Supp.2d 882, (E.D. Wis. December 18, 2001) (under Wisconsin’s borrowing statute that 15 year Iowa statute of repose barred plaintiff’s claims).

Kansas – Kan. Stat. Ann. § 60-3303(a)(b)(1).  A presumption arises that a product’s “useful safe life,” expires 10 years after delivery, rebuttable by “clear and convincing” evidence; see also Kan. Stat. Ann. § 60-513(b), barring claims more than 10 years old.  The useful safe life statute of repose applies to prescription drugs.  Baughn v. Eli Lilly & Co., 356 F. Supp. 2d 1166, 1172 (D. Kan. 2005).  In Ehrenfelt v. Janssen Pharms., ___ F. Appx. ___, 2018 WL 2945911 (6th Cir. June 11, 2018), a prescription drug product liability case, the Court of Appeals for the Sixth Circuit held “that the exceptions in Kan. Stat. Ann. § 60-3303(b)(2)(D) [for latent injuries] appl[ied] even when the harm was caused less than ten years after delivery.”   Id. at *2.  Therefore, the plaintiff’s claims for alleged injuries from use of a drug was not barred under the general 10 year statute of repose, § 60-513(b).

Kentucky –  K.R.S § 411.310(1).  Presumption that a product was not defective for injury “more than five (5) years after the date of sale . . . or more than eight” years after manufacture, rebuttable by a preponderance of evidence.

Michigan – Mich. Comp. Laws § 600.5805(13).  Technically not a statute of repose, but after a product has “been in use for not less than 10 years,” the plaintiff is not entitled to any presumption improving his case.  But see Hall v. GMC, 582 N.W.2d 866, 867 (Mich. App. 1998) (“claim could be pursued under Michigan law, which has no statute of repose,” and where statute of limitations did not prevent claim).

Minnesota – Minn. Stat. § 604.03.  Provides an affirmative defense for injuries occurring after “the expiration of the ordinary useful life of the product,” which is a jury issue.   Hodder v. Goodyear Tire & Rubber Co., 426 N.W.2d 826, 830 (Minn. 1988) (“We hold, therefore, that … [product’s useful life] is a factor to be weighed by the jury in determining the fault of the manufacturer and the fault of the user.”).

Nebraska – Neb. Rev. Stat. § 25-225.  Bars claims filed more than 10 years after product manufactured in Nebraska, otherwise the statute of repose of the state of manufacture applies, not to exceed 10 years, or 4 years from date of injury if no statute exists, applicable to prescription products.  King v. Pfizer, Inc., 2016 U.S. Dist. Lexis 111456, 17-18 (D. Neb. Aug. 19, 2016) (fraud based claims for injuries allegedly resulting from prescription drug are “grounded in product liability,” such that the substantive right of the statute of repose cannot be removed “by court action,” whereby passage of the 10-year period, following  plaintiff’s first prescription “vested the Defendants with a substantive right under § 25-224(2),” barring the action).

North Carolina – N.C. Gen. Stat. § 1-46.1.  Prohibits product liability claims “more than 12 years after . . . initial purchase for use or consumption.”  See Willoughby v. Johnston Memorial Hosp. Authority, 2016 WL 4091370, at * 13-14, 791 S.E.2d 283 (table) (N.C. App. Aug. 2, 2016) (affirming summary judgment for manufacturer of surgical table, including indemnity claim, notwithstanding that alleged injuries occurred in 2009, and actual loss in 2015); In re Mentor Corp. Obtape Transobturator Sling Prods. Liab. Litig., 2016 WL 4385846, at *3 (M.D. Ga. Aug. 15, 2016) (applying North Carolina law) (plaintiff suffered alleged injuries when she experienced mesh erosion, which foreclosed claims per statute of repose).

Ohio – Ohio Rev. Code § 2305.10(C)(1).  Precludes claims more than 10 years after product delivery to first consumer, but applies discovery rule to prescription drugs, which reduces the provision’s utility.

Oregon – Or. Rev. Stat. § 30.905(2).  An action “must be commenced before the later of 10 years after” product’s purchase, or the expiration of the statute of repose in state of manufacture.  Wrongful death actions must be brought within 3 years after death or 10 years after product purchased, whichever occurs sooner.  O.R.S. § 30.905(3)-(4).  Dortch v. A. H. Robins Co., 650 P.2d 1046, 1052-53 (Or. App. 1982), overruled on other grounds, (IUD manufacturer properly dismissed; statute of repose limited “manufacturer’s liability to ten years and [gave] each plaintiff a full two years to commence an action after the cause of action accrue[d],” and finding that the claim was barred.); Philpott v. A.H. Robins Co., 710 F.2d 1422, 1425 (9th Cir. 1983) (plaintiff’s claims “barred by ORS 30.905,” where “she did not learn of a causal connection between her pelvic disorders and the Dalkon Shield until . . . nine years and eight months after she purchased and began using” the product).

Tennessee – Tenn. Code Ann. § 29-28-103(a).  An action must be brought “within ten (10) years” from purchase, or “one (1) year after the expiration” of product life. See, e.g., Jenkins v. Novartis Pharmaceutical Corp., 2013 WL 1760762, at *3 (E.D. Tenn. Apr. 24, 2013) (implied warranty claim against prescription drug manufacturer was prohibited by statute of repose where motion to amend was filed more than 10 years post injury “by both the six-years-from-injury provision of § 29-28-103(a) and the ten-years-from-purchase provision of § 29-28-103(a)).” Tennessee case law bars any discovery rule or fraudulent concealment exception to the statute. Greene v. Brown & Williamson Tobacco Corp., 72 F. Supp.2d 882, 886 (W.D. Tenn. 1999) ( “[a]n equitable ‘discovery rule’ is not available to toll the statute of repose” and holding that “the Tennessee Supreme Court would decline to create an equitable exception for fraudulent concealment”).

Texas – Tex. Code Ann. § 16.102(b) cuts off actions 15 years “after the date of the sale of the product” with exceptions for latent disease and express warranty, but is not subject to tolling.  See Methodist Healthcare System v. Rankin, 307 S.W.3d 283, 290 (Tex. 2010) (“the essential function of all statutes of repose is to abrogate the discovery rule and similar exceptions to the statute of limitations” and a “statute of repose, by design, creates a right to repose where the applicable statute of limitations would be tolled or deferred”); Salgado v. Great Dane Trailers, 2012 WL 401484, at *2 (S.D. Tex. Feb. 6, 2012) (“[a] statute of repose … does not run from the time a cause of action arises, but from some other date or event selected by the Legislature,” and is “not subject to judicially crafted rules of tolling or deferral”) (internal citations and quotations omitted).

Washington – Wash. Rev. Code Ann. § 7.72.060(1)(b)(i-iii).  Rebuttable presumption that an injury “more than twelve years after . . . delivery,” occurred after expiration of a product’s useful life, with exceptions for express warranty, concealment, and latent injuries.

Wisconsin – Wis. Stat. § 895.047(5-6).  Precludes action for products manufactured “15 years . . . or more” before a claim with exceptions for negligence, latent disease, and express warranty, and asbestos actions).

States With Statutes That Are Not Applicable To Prescription Product Claims

By contrast, the following states have statutes of repose that are inapplicable to prescription product liability actions, generally because they have statutes that pertain only to real property improvements or the statutes contain exclusions for defective products.

Alaska – Alaska Stat. § 09.10.055(2).  Actions must be brought “within 10 years,” of the “last act alleged to have caused the personal injury,” property damage, or death, but expressly excludes defective products.

Arkansas – Ark. C. Ann. § 16-56-112.  Applicable to property actions only; Brown v. Overhead Door Corp., 843 F. Supp. 482, 490 (W.D. Ark. 1994) (ruling that statute of repose was limited to real property improvements, holding that “Arkansas courts when called upon to do so will hold that the manufacturers of mass produced fungible goods do not fall within the protection of the statute, particularly when the defendant manufacturer is not involved in the installation of the product and had nothing to do with the design of the improvement within which it is installed”).

California – Cal. Civ. Proc. Code § 337.15 (10 years for latent deficiencies).  See McCann v. Foster Wheeler LLC, 225 P.3d 516, 529 (Cal. 2010) (finding that California’s statute of repose was applicable to latent deficiencies in real property improvement, “not to personal injury actions.”).

Delaware – 10 Del. C. § 8127.  Applicable only to claims pertaining to real property improvements, within six years of substantial completion.

District of Columbia – D.C. Code § 12-310.  Real property claims only, within 10 years of substantial completion of project.

Hawaii – Haw. Rev. Stat. § 657-8.  Available only for claims within 10 years of substantial completion of improvement to real property, and two years after accrual.

Maine – 14 M.R.S.A. § 752-A.  Statute applicable only to real property, within 10 years of the project or services rendered, but no more than 4 years after discovery.

Maryland – Md. Code Ann. § 5-108.  Does not apply to product liability, but for property improvements within 20 years and 10 years against architect or engineer.

Massachusetts – Mass. Ann. Laws Ch. 260 § 2B.  Allows claims within 6 years of substantial completion of improvement, and owner taking possession.

Mississippi – M.C.A. § 15-1-41.  Claims must be brought within 6 years of acceptance or actual occupancy for real property improvement.

Missouri – Mo. Rev. Stat. § 516.097.  Applicable to real property improvement claims within 10 years of substantial completion.

Montana – Mont. Stat. § 27-2-208.  Statute allows claims within 10 years of improvement, including to damage caused by a defective product related to the improvement.

Nevada – N.R.S. § AB 125, § 2.  Applies to real property improvements, six-year statute of repose.

New Jersey – N.J.S.A. § 2A: 14-1.1.  Real property improvements only, within 10 years of substantial completion.

New Mexico – N.M.S.A. § 37-1-27.  Repose only for improvements to real property, 10 years of substantial completion.

New York – While New York has no true statute of repose, courts require notice of an action to any party responsible for professional performance, such as architects and engineers, after 10 years have elapsed.  Six year statute of limitations for construction defects, N.Y. C.P.L.R. § 214-d.

Oklahoma – 12 Okla. Stat. Ann. Tit. 12 § 109.  Claims for real property improvements must be brought within 10 years of substantial improvement.

Pennsylvania – Although the statute of repose, 42 Pa. C.S.A. § 5536(a), is generally applicable only to real property improvements, it may apply to product manufacturers in certain cases, such as to manufacturers of asbestos.  See, e.g., Graver v. Foster Wheeler Corp., 96 A.3d 383, 386-87 (Pa. Super. 2014) (granting j.n.o.v., applying the 12 year statute of repose relating to real property improvements to 13 story boiler in asbestos action because statutes of repose are substantive, and may bar actions before they accrue).

South Carolina – S.C. Code Ann. § 15-3-640.  Must be brought within 8 years of substantial completion of improvement to real property.

South Dakota – S.D.C.L. § 15-2A-3.  Applicable to real property improvements only, within 10 years of substantial completion.

Utah – U.C.A. § 78B-2-225.  Actions for real property improvements may not be brought later than nine years after completion.

Vermont – Vt. Stat. Ann. Tit. 27A, § 4-116(a).  Applicable only to Common Interest Ownership claims within six years after the cause of action arose.

Virginia – Va. St. § 8.01-250.  Claims must be brought within five years for injuries resulting from improvements to real property, but does not apply to manufacturers of equipment.

West Virginia – W. Va. Code § 55-2-6a.  Applies to claims related to real property, construction or design within 10 years of occupancy or acceptance, but excludes product manufacturers.

Wyoming – Wyo. Stat. § 1-3-111.  Applicable only to real property improvements, if a claim is brought within 10 years of substantial improvement.

States In Which Courts Ruled That Statutes Of Repose Were Unconstitutional

New HampshireHeath v. Sears, Roebuck & Co., 464 A.2d 288, 296 (N.H. 1983) (statute of repose unconstitutional where plaintiffs were “deprived arbitrarily of a right” to sue).

North DakotaDickie v. Farmers Union Oil Co., 611 N.W. 2d 168, 173 (N.D. 2000) (product liability statute of repose violated equal protection clause).

Rhode IslandKennedy v. Cumberland Eng’g Co., 471 A.2d 195, 201 (R.I. 1984) (holding that state “Constitution forbids absolute bars to recovery” prior to accrual).

ArizonaHazine v. Montgomery Elevator Co., 861 P. 2d 625, 630 (Ariz. 1993) (holding statute of repose unconstitutional, ruling “A.R.S. § 12-551 abrogated that constitutional right [to bring action] by barring the action even before the injury occurred,” and that “the attempted statutory abrogation of their claim fails.”).

 

Statutes of repose can be a defense counsel’s best friend by providing an inexpensive and decisive avenue for disposal of an action, even before the claims have accrued in certain jurisdictions. However, each state is different, and practitioners need to research potentially relevant provisions thoroughly.  After all, a missed opportunity to end the case before it begins is no song and dance.

Your Reed Smith bloggers are part of their firm’s Life Sciences Health Industry Group — a collective that includes not only your bloggers’ compatriots in drug/device product liability defense, but esteemed colleagues assisting health and life sciences companies with issues and opportunities related to regulatory compliance, IP, tech, transactions, and many other areas.

We mention this because we recently received an invitation to a free CLE webinar that two of our regulatory colleagues – Celeste Letourneau and Katie Pawlitz – will be presenting on Wednesday, July 11. It’s on “Clinical Trial Contracts and Investigator-Initiated Study Grant Contracts.”

Typically, we try not to be overly shameless with our shameless plugs. We usually restrict ourselves to just letting our loyal readers know about their bloggers’ upcoming speaking engagements or key drug/device defense industry events.

But we found ourselves just so personally interested in this webinar that we couldn’t help but share it with you. Here’s the webinar description:

Understanding the regulatory underpinnings related to the conduct of clinical trials serves to support compliance with applicable laws and promote efficient negotiation. This program is intended to describe the standards, regulations and requirements that are, or should be, addressed in contracts for the conduct of clinical trials to support FDA applications. The speakers will also address the various FDA and health care laws commonly referenced in clinical trials contracts and discuss fraud and abuse considerations related to clinical trial contracts and investigator-initiated study grant contracts, including the Anti-Kickback Statute, as well as transparency laws related to the same, such as the federal Sunshine Act.

The webinar (and CLE credit) are free, but you do have to register, which you can do here.

Here’s another guest post on the Dormant Commerce Clause by our guest guru on that subject, Dick Dean over at Tucker Ellis.  He reports on another possible use for the Dormant Commerce Clause that could provide a win for the our side in an innovator liability situation.  As always our guest bloggers deserve 100% of the credit, and any blame, for their postings.

**********

On April 25, 2018 this blog advised “Don’t Sleep on the Dormant Commerce Clause.”  It was right.  That post discussed a Fourth Circuit case involving a drug pricing regulation attempt by the State of Maryland.  Since then, two other Circuit court decisions have followed; it’s the Dormant Commerce Clause gone wild.  And both decisions involve subject matter areas of direct interest to readers of this blog.

In Daniels Sharpsmart, Inc. v. Smith, 889 F.3d 608 (9th Cir. 2018), the Ninth Circuit upheld a District Court decision which invoked the Dormant Commerce Clause to strike down the enforcement of a California regulation beyond the state’s border.  Daniels was an Illinois-based corporation that made systems for the disposal of biohazardous medical products including waste syringes and blood collection devices.  It also transported and treated medical waste.  It had a medical waste treatment facility in Fresno, as well as others in several different states.  California’s Medical Waste Management Act (CMWMA) required that California-generated medical waste must be incinerated.  And if medical waste was transported out-of-state, it was required to be “consigned” to a waste treatment facility “permitted” in the “recovery state.”  As of 2014, there were no incinerators within California to treat Daniels’ biohazardous medical waste (why that is the case is not discussed in the decision), and so Daniels transported that waste to other states to have it incinerated.  Eventually, Daniels shipped that waste to Kentucky and Indiana, where that waste was treated by methods other than incineration consistent with the regulations in those states.  In Kentucky, the waste was treated by a method called autoclave; in Indiana, the method was “thermal deactivation.”  Both treatment methods are less expensive than incineration.

California regulators took the position that biohazardous medical waste originating in California had to be incinerated in Indiana and Kentucky, even though the regulations and laws of other states permitted an alternative method.  To that end, the regulators proposed daily fines against Daniels for failure to do so.  Daniels filed a complaint in the Eastern District of California arguing that state officials had violated the Dormant Commerce Clause by its extraterritorial application of the MWMA.  The District Court granted Daniels’ motion for a preliminary injunction and in a short, focused decision, the Ninth Circuit affirmed. It characterized the regulation as “an attempt to reach beyond the borders of California and control transactions that occur wholly outside of the State after the material in question . . . has been removed from the State.”  Id. at *4.  Attempts at direct regulation of out-of-state conduct have generally been struck down without further inquiry.  See Brown-Forman Distillers Corp. v. N.Y. State Liquor Auth., 476 U.S. 573, 579 (1986); and Healy v. Beer Inst., 491 U.S. 324, 336 (1989).  Laws neutral on their face, but which have an impermissible protectionist purpose and effect, have also been struck down.  But where there is no obvious protectionist purpose and a state law has only incidental impact on interstate commerce, such laws are subject to a more lenient standard of review.  They are usually upheld unless the burden they impose on interstate commerce exceeds their local benefits. Pike v. Bruce Church, Inc., 397 U.S. 137, 144–46 (1970).

Such a standard was employed in Garber v. Menendez, 888 F.3d 839 (6th Cir. 2018).  The case involved Ohio’s tolling statute, which stops the statute of limitations from running when the defendant is out-of-state.  O.R.C. 2305.15.  This statute had been construed by the Supreme Court in Bendix Autolite Corp. v. Midwesco Enterprises, Inc., 486 U.S. 888 (1988).  There, in a commercial dispute between corporations, the Supreme Court struck down the tolling statute noting:

The State may not withdraw such defenses [i.e., statutes of limitation] on conditions repugnant to the Commerce Clause.  Where a State denies ordinary legal defenses or like privileges to out-of-state persons or corporations engaged in commerce, the state law will be reviewed under the Commerce Clause to determine where the denial is discriminatory on its face or an impermissible burden on commerce.

Id. at 893.

Innovator liability, like the tolling statute, withdraws the legal defense of lack of product exposure so it neatly fits the language of Bendix (more later on that issue). In Bendix, the Supreme Court struck down the tolling statute under the Commerce Clause because Ohio could not justify its statute as a means of protecting its residents given the provisions of the Ohio long-arm statute.  It did not engage in any detailed discussion of the impact on commerce—almost assuming one from the statute.  Concurring in the result only, Justice Scalia noted that applying the Pike balancing factors “is more like judging whether a particular line is longer than a particular rock is heavy.”  Id. at 897 (Scalia, J., concurring).  He wrote that he would not know how to do such a balancing.

In Garber, the District Court and the Sixth Circuit took very different views of Bendix. The District Court, confronted with same statute held to violate the Dormant Commerce Clause in Bendix, not surprisingly reached the same result.  But the Sixth Circuit distinguished Bendix, finding that the statute forced out-of-state companies like Midwesco to face liability forever as a cost of doing business across state lines and noting the Supreme Court’s application of the Pike test in that context.  It viewed the transaction in Garber, which involved one patient suing one doctor (who had left the state), as yielding a different result under the Commerce Clause with there being no demonstrable effect on the same.  In the absence of a record establishing such an effect—there was no such record apparent in Bendix—the challenge failed.

Putting the facts of Garber aside, Bendix clearly remains good law.  Defenses cannot be withdrawn in a way “repugnant” to the commerce clause.  Is there an impact on commerce from the largest state in the country (population wise) radically changing product exposure rules?  At an elementary level, if drug companies are going to have to defend and pay settlements and judgments on products made by other companies in California, that will have a dramatic impact on drug pricing throughout the country.  The difference between the District Court and the Sixth Circuit here is one of what is in the record.  It would not take a particularly high powered economist to establish such a record in regard to the impact of innovator liability.

The Dormant Commerce Clause has been used to invalidate state registration statutes.  See here and here.  So it is not surprising that in addition to the argument that innovator liability may be precluded by lack of personal jurisdiction (see here and here), there is also a Dormant Commerce Clause argument in regard to innovator liability.  Once again—don’t sleep on the Dormant Commerce Clause.

 

Today is our favorite holiday of the year.  It is about BBQ, beach, and conviviality to some extent, but it is chiefly a celebration of the first official public announcement of the Declaration of Independence here in Philadelphia two hundred and forty two years ago.  The delegates of the Second Continental Congress actually approved the Declaration two days earlier.  The vote was twelve in favor of independence, with one abstention (New York – which made it unanimous after the fact).  John Adams predicted that July 2 would become a day of jubilation that would be “solemnized with Pomp and Parade, with shews, Games, Sports, Balls, Bonfires and Illustrations from one end of the Continent to the other from this Time forward forever more.”  Well, aside from being off by two days, Adams turned out to be right.  The announcement date became more important than the vote itself.  Plus, July 4 is the date on the signed document that sits in our National Archives.

 

Adams, by the way, was originally proposed to be the author of the Declaration, but he deferred to Jefferson.   Even so, Adams and other members of the drafting committee (including Benjamin Franklin) edited Jefferson’s draft with a heavy quilled pen.  Jefferson thought that the edits “mangled” his work, but we’d say the document turned out fairly well.  The Declaration was really a legal brief supporting separation from Great Britain.  But its second sentence also set out our country’s mission statement, which perseveres no matter how many times we manage to fall short:  “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among them are Life, Liberty, and the pursuit of Happiness.”  We’ll take that single sentence over the Parthenon, Colosseum, Notre Dame, Tower Bridge, or Great Wall (or any other wall).

 

The Fourth of July is a quintessentially American holiday.  It is hot, loud, and rambunctious.  We meant to order four big pieces of red, white, and blue bunting, but clicked the wrong button and ended up with eight.  No matter.  We climbed a ladder and hung it all over the front porch.  John Philip Sousa would love our house. Meanwhile, the dog trembles in anticipation and terror.  He seems to know that lots of cooked cow and pig and chicken flesh is coming his way, followed by a festival of sparklers,  cherry-bombs, and Roman candles in the backyard.

 

Many other important American historical moments occurred on July 4, some purposefully coinciding with that date, and some being purely accidental.  For example:

 

July 4, 1817 – Construction of the Erie Canal commences.  Some point to the canal as the major reason why New York overtook Philly as the nation’s preeminent metropolis.  Some of us still haven’t gotten over it.  The 2009 World Series didn’t help.

July 4, 1826 – Both Thomas Jefferson and John Adams perish 50 years after the first Independence Day.

July 4, 1827 – Slavery was abolished in New York. It is shocking and sad to think how long slavery lingered even in the northern states that claimed the moral high ground only a few decades later. (One of the edits that Jefferson believed “mangled” the Declaration was deletion of a passage condemning slavery.)

July 4, 1845 – Henry David Thoreau set up house on the shore of Walden Pond.  Why?  We can hardly improve on Thoreau’s explanation:  “I went to the woods because I wished to live deliberately, to front only the essential facts of life, and see if I could not learn what it had to teach, and not, when I came to die, discover that I had not lived.”  The book marked another declaration of independence, this time with literary, cultural, economic, and spiritual ambitions.

July 4, 1855 – Walt Whitman published the first edition of Leaves of Grass.  Like America, the book was always a work in progress.  Over the years, it grew in size, greatness, and reputation.

July 4, 1863 – The Confederate Army withdrew from Gettysburg and Vicksburg surrendered.  While the Civil War would wreak carnage and calamity for almost another two years, the conclusion now seemed inevitable.

July 4, 1881 – Tuskegee Institute opened.

July 4, 1910 – Jack Johnson knocked out Jim Jeffries.

July 4, 1939 –A stricken Lou Gehrig told a Yankee Stadium crowd that he was “the luckiest man on the face of the earth.”

July 4, 1966 – LBJ grudgingly signed the Freedom of Information Act into law.

 

The Fourth of July also witnessed the birth of people who exemplified the American character in various ways:  Stephen Foster (1826) began the American songbook, Rube Goldberg (1883) conjured up crazy, convoluted machines to perform simple tasks, thereby giving rise to a wonderful adjective (“Goldbergian”), and George Steinbrenner (1930) contributed to that pesky New York dominance alluded to above.  (Grrrr.)

 

Whether or not you manage to make history today, we hope you manage to make merry with loved ones.  If it is too hot outside, take in a “shew.”  If you light any fireworks or bonfires, by all means be careful! Go ahead and pursue happiness.  Maybe you’ll even catch it.

 

It’s been a few years since we talked about the conundrum facing pharmacies if they suspect prescriptions are medically unnecessary or improper. Back in 2015, two cases were decided within days of each other that allowed claims to go forward suggesting that a pharmacy could be potentially liable for both filling suspect prescriptions (see here) and for not filling suspect prescriptions (see here). Hence “damned if you do (question a prescription) and damned if you don’t.” We obviously have issues with both decisions as our prior posts explain. We don’t like the creation of new, ill-defined duties and we don’t like anything that creeps around in learned intermediary territory. But this is also a state-by-state issue and we have found other states not willing to make the leap to find that pharmacies have a duty to monitor patients or warn about excessive prescriptions. See Hernandez v. Walgreen Company, 2015 Ill. App. LEXIS 986 (Ill. App. Ct. Dec. 28, 2015). So, there is no bright line regarding what a pharmacy should do and it certainly seems at a minimum that pharmacies in different states are going to have to follow different rules – interesting when you consider the vast majority of prescriptions are filled by large national chains.

While the overarching question remains unanswered, a recent Seventh Circuit decision took a closer look at the substance of a “damned if you don’t” case that made it all the way to trial and found that most of it shouldn’t have survived summary judgment.

In Mimms v. CVS Pharmacy, Inc., — F.3d —, 2018 WL 2126720, *1 (7th Cir. May 9, 2018), plaintiff was a pain management physician who prescribed, among other things, opioids. On several occasions, CVS pharmacy employees informed customers that they would not fill Dr. Mimms’s prescriptions leading Dr. Mimms to sue CVS for alleged defamation. Id.   By the time the case went to trial it was based on four statements allegedly made by CVS employees:

  • “CVS doesn’t fill Dr. Mimms’[s] prescriptions or prescriptions for any other pill mills.”
  • “Dr. Mimms went to jail.”
  • “Dr. Mimms has been … or will be arrested.”
  • “Dr. Mimms is under DEA investigation.”

Id. Defendant moved for summary judgement on all four statements which was denied. Id. Defendant moved for judgment as a matter of law as to the first three statements at the conclusion of plaintiff’s case at trial. That too was denied and a verdict was entered in favor of plaintiff. Id.

Under Indiana law, to prove defamation, plaintiff had to establish that the speakers acted with actual malice. That is that they either knew their statements were false or had serious doubt as to their truth. Id. The district court found that plaintiff had met its burden regarding knowledge of falsity by showing that “CVS’s corporate office had concluded an investigation of Mimms and had not stopped stores from filling his patients’ prescriptions.” Id. In other words, the court imputed the knowledge of the principal to its agent which it is not permitted to do. Id. at *2 (citing New York Times v. Sullivan, 376 U.S. 254, 287 (1964)). Plaintiff had to prove that the employees themselves knew their statements were false or had serious doubts about their truth, which he did not do. Plaintiff pointed to emails from corporate officers to store supervisors asking supervisors to remind employees that company policy is not to make derogatory statements when refusing to fill prescriptions. Id. But there was no evidence that the email was sent to any of the speakers and more importantly it contained no information that would have informed speakers about the truth or falsity of their statements. So, plaintiff had no evidence from which a reasonable juror could conclude that the first three statements were made with actual malice. The court granted judgement as a matter of law as to those statements.

There was, however, some evidence that created a genuine dispute as to whether the speaker of the fourth statement – plaintiff was under DEA investigation – doubted its veracity. Id. So, while that statement would have survived summary judgment, the court found that CVS is entitled to a new trial based on erroneous trial rulings. At trial CVS was not allowed to offer evidence that Dr. Mimms’s former clinic had been subpoenaed for records of his prescriptions. That evidence CVS argued went to whether the statement was in fact true – a complete defense to defamation. Id. at *3. Even though Mimms had left the clinic at the time the subpoena was issued, “the fact that the DEA was seeking records for Mimms’s patients shortly after he left the practice supports CVS’s claim that Mimms was under investigation.” Id. CVS was also prohibited from introducing a transcript from a criminal trial in which a Health and Human Services agent testified that he investigated Mimms with a DEA agent. The Seventh Circuit found that the unduly prejudicial portions of the transcript could be redacted. It also concluded that the district court unnecessarily relieved plaintiff of his stipulation not to assert a hearsay objection to the transcript at trial. CVS relied on that agreement in deciding not to seek live testimony of the agent. Id. Finally, CVS was prohibited from offering evidence that Mimms’s professional reputation was already tarnished. While prejudicial, of course, the state of plaintiff’s reputation in a defamation action is critical to the issue of damages. Not allowing the evidence was an abuse of discretion. Add it all up and CVS is entitled to a new trial – one that feels like it should be drastically different than the first one.

 

We bloggers don’t generally consider the Drug and Device Law sandbox to extend to illegal drugs.  We regard that as a completely separate can of worms.  But what of a drug – like marijuana – that’s in between being legal and being illegal?  In an increasing number of states, marijuana’s current situation is a bit like Schroedinger’s famous cat, legal and illegal at the same time depending on who’s enforcing what law.

The same could be said of sports betting – at least until last week, when the United States Supreme Court decided Murphy v. National Collegiate Athletic Assn., ___ S. Ct. ___, 2018 WL 2186168 (U.S. May 14, 2018).  The federal government had banned sports betting (except in Nevada), but a number of states (including New Jersey, the real plaintiff) were champing at the bet to legalize – and reap tax revenues from – gambling on sporting events.

The Supreme Court basically said that the federal government couldn’t force the states to abstain from legalizing sports betting.  The feds could not “commandeer” state law enforcement and require them to keep sports betting illegal:

The [statutory] provision at issue here − prohibiting state authorization of sports gambling − violates the anticommandeering rule. That provision unequivocally dictates what a state legislature may and may not do. . . .  [S]tate legislatures are put under the direct control of Congress.  It is as if federal officers were installed in state legislative chambers and were armed with the authority to stop legislators from voting on any offending proposals. A more direct affront to state sovereignty is not easy to imagine.

Murphy, 2018 WL 2186168, at *13.  See Id. at *17 (“Just as Congress lacks the power to order a state legislature not to enact a law authorizing sports gambling, it may not order a state legislature to refrain from enacting a law licensing sports gambling.”). The federal scheme “would break down if a State broadly decriminalized sports gambling.”  Id. at *19.

The Court viewed both affirmative and negative demands that the states do what the feds want as barred by that principle:

Here is an illustration.  [The statute] includes an exemption for [Nevada], but suppose Congress did not adopt such an exemption.  Suppose Congress ordered States with legalized sports betting to take the affirmative step of criminalizing that activity and ordered the remaining States to retain their laws prohibiting sports betting. There is no good reason why the former would intrude more deeply on state sovereignty than the latter.

Id.  This example certainly seems to resembles certain noises emanating from the current Department of Justice that it might seek to roll back state legalization of marijuana.

Now, let’s be clear, “commandeering” is not something that dissolves federal powers provided for in the constitution.  It would not allow the department to re-institute Jim Crow, let alone slavery.  Federal powers in the constitution (such as power over interstate commerce) remain:

The legislative powers granted to Congress are sizable, but they are not unlimited. The Constitution confers on Congress not plenary legislative power but only certain enumerated powers.  Therefore, all other legislative power is reserved for the States, as the Tenth Amendment confirms.  And conspicuously absent from the list of powers given to Congress is the power to issue direct orders to the governments of the States. The anticommandeering doctrine simply represents the recognition of this limit on congressional authority.

Id. at *10.  But once the state decides to legalize the activity within its borders, the feds can’t force the states to keep that activity illegal under state lawId. at *18 (“If the people of a State support the legalization of sports gambling, federal law would make the activity illegal.”).  A federal law that only operates only to “undermine[] whatever policy is favored by the people of a State” is both “perverse” and “weird.” Id. at *18.

Thus, what Murphy calls “the anticommandeering principle” is limited.  While it could well prevent DoJ from – as the “example” above indicates – “order[ing] States with legalized [marijuana] to take the affirmative step of criminalizing that activity,” id. at *13, the feds still retain the power, for example, to ban marijuana from interstate commerce.  Murphy also leaves open the possibility that a federal statute, phrased (unlike the law before the Court) explicitly in terms of federal preemption and not directed at states, might have provided means of avoiding the anticommandeering principle.  Id. at *15-16 (“every form of preemption is based on a federal law that regulates the conduct of private actors, not the States”). So that’s another possible source of federal power to continue prohibition, should Congress choose to act in that fashion.

There’s one other place where would be marijuana entrepreneurs – and states wishing to raise revenue from taxing such enterprises – might be able to put the anticommandeering principle to good use.  One big problem has been federal laws that prevent even legalized marijuana businesses from accessing the banking system.  While the feds can certainly continue that practice, whether it’s a good or bad idea, with respect to federally regulated banks, we think that Murphy casts considerable doubt on whether the federal government can tell state banks that they cannot accept deposits from marijuana businesses that the state regulating those banks has declared to be legal.

We don’t claim to know all the ins and outs of anticommandeering – a word we had never seen before reading Murphy.  But if a state, in its wisdom, chooses to legalize commerce in marijuana, it seems equally “perverse” and “weird” to require those legal businesses to bury the money they legally make in their basements rather than to deposit it in a bank regulated by the same government that legalized their activities.

 

If  clients get sued by someone where physical or financial injury seems remote, unclear, or speculative, consider raising the defense of lack of standing.  Courts are for resolving actual disputes among parties.  As we said a little more than a month ago in another post on standing, courts are not debate halls.  The standing issue was front and center in the recent case of Center for Responsible Science v. Gottlieb, 2018 WL 1997266 (D.D.C. April 27, 2018).  Because the plaintiffs lacked standing, the case was dismissed.

The plaintiffs were three individuals and one organization, the Center for Responsible Science (CRS).  They sued over the FDA’s rejection of their Citizen Petition, which demanded that three specific warnings be added to standard informed consent forms for clinical trials.  The proposed warnings would have told trial participants that (1) animal tests might not be predictive of human safety, (2) some participants in clinical trials for investigative drugs died or were seriously injured, and (3) the drugs in the trial might end up proving to be unsafe or ineffective in humans. The FDA denied the Petition because the additional language applied only to drugs, whereas the standard informed consent forms apply to all clinical trials.

Who were the plaintiffs?  How were they harmed by the FDA’s denial of the Petition?  The three individuals included two people who had previously participated in clinical trials, though it seems nothing bad happened to those two.  The third individual lost a son as a result of his participation in a clinical trial.  The organization, CRS, is a non-profit, non-member organization that promotes advances in regulatory science and advocates better results for patients.

Did the individuals have standing?  No, they did not.  The lawsuit sought injunctive relief, so past harm was irrelevant.  The problem for the individuals was that they could not establish future harm traceable to the FDA’s denial of the Petition.  Any future injury would stem from lack of information, but these individuals clearly had the information (that animal tests are not completely predictive of human safety/efficacy, and that clinical trials pose the risk of death/injury).  Oddly, just by bringing the lawsuit, the plaintiffs demonstrated their lack of standing.  You might put this ruling down to sophistry, but the logic is inescapable.

Does the organization have standing?  Not here, not based on the allegations in the complaint.  An organization can bring a lawsuit on behalf of itself or its members.  But remember that CRS does not have members.  So we are thrown back onto organizational standing, the law concerning which is, as the court admits, “not a model of clarity.”  An organization must show the same things an individual must show: injury, causation, and redressability.  The injury must be concrete and demonstrable.  There must be a consequent drain on the organization’s resources.  A setback to the organization’s social interests will not suffice.  Here, CRS alleged standing “because the interests at stake are germane to [its] purposes, and FDA’s response will require further extensive advocacy work on [its] part, placing a significant train on its limited resources, causing a diversion of its resources, and the frustration of its mission.”  The court held that these allegations, plus others, were too conclusory and vague.  You might chalk this conclusion up to TwIqbal, but it is actually a tougher test for plaintiffs to meet because lack of standing is a Rule 12(b)(1) motion that goes to the court’s subject matter jurisdiction.  Thus, the plaintiff’s factual allegations will be subject to “closer scrutiny.”  CRS’s allegations could not survive such closer scrutiny, but the court permitted CRS to amend the complaint to show programmatic, concrete harms that truly would be above and beyond the organization’s day-to-day advocacy mission.

We will not speculate as to whether CRS can satisfy this test on the next go around.  We leave speculation to plaintiffs.

With the nicer weather quickly approaching, we have been told that Chicago, IL is the place to be from June 13-15. Is something special happening in Millennium Park? Are the Cubs playing the Cardinals at Wrigley? Do the ChiSox still exist?

We found something even better.  American Conference Institute, in collaboration with HP, are presenting the first Legal, Regulatory, and Business conference on 3D Printing. This program is a “can’t miss” industry event that prepares those in the 3D printing community with the knowledge they need to tackle the rapidly rising regulatory, IP, and product liability challenges in this space.

In addition to being present to say some friendly hellos, Bexis will be taking part in one of the more anticipated sessions “3D Printing Potential Product Liability Issues” focusing on theories of liabilities companies in the industry will face, potential defenses that can be utilized, and ways in which companies can minimize their product liability risks.

Since we hope to see you at the conference, we wanted to share two pieces of helpful news:

  • First, the discounted rates for the program end Friday, May 11th making now the best time to register for the event, if you have yet to do so.
  • Second, as a thank you for Bexis’s participation in the program, ACI is offering a special registration discount for the conference for the blog’s readers. Make sure to use the code D10-767-BCK10 when you register. You will save 10% off published rates.

We look forward to seeing you in Chicago this June for an outstanding event!