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Don’t stop us if you’ve heard this before, because you have. A plaintiff brings an lawsuit over injuries allegedly from a medical device, sues not only the company that made and marketed the device but also a parent company that did not make or market the device, said parent moves for dismissal for want of personal jurisdiction, and the court grants the motion. That is what happened in Marcovecchio v. Wright Med. Grp., 2019 U.S. Dist. LEXIS 54414 (D. Utah, March 28, 2019). You might wonder whether there is anything to learn from this case, except that some plaintiff lawyers never learn. So at least learn this: when you consider your response to a complaint, don’t assume that the complaint was drafted with any degree of respect for even the most fundamental precedents. Consider a wide variety of motions, including jurisdictional ones. File the ones that look strong, make the other side do some work, and maybe the court will cut back the case to something coherent and manageable.

The plaintiff in Marcovecchio was a Utah resident who brought a lawsuit in Utah alleging personal injuries arising out of a hip replacement system. There were causes of action for strict products liability, negligence, breach of express and implied warranties, fraudulent misrepresentation, fraudulent concealment, negligent misrepresentation, and punitive damages. The plaintiff sued both the company that manufactured, marketed, and sold the hip system throughout the United States, including in Utah, as well as the parent company, which acted as a parent and holding company for various entities. Neither company was incorporated in or “at home” in Utah.

Utah is a lovely place, but the parent company wanted out. It supplied an affidavit establishing that the parent holding company and the manufacturing company were separate entities with separate accounting and banking records. The parent company had no contacts with Utah and did not manufacture, market, or sell the hip system. Rather, the parent was simply the sole shareholder of the manufacturer. It did not even have any employees. For these reasons, the parent had a strong argument that the court lacked personal jurisdiction over it.

The plaintiff went to the plaintiff playbook and responded with excerpts from the parent’s public SEC filings and press releases in which the parent, according to the plaintiff, publicly identified itself as a company that “specializes in the design, manufacture and marketing of reconstructive joint devices” and claimed the hip replacement products “as its own.” For example, in its 2001 10-K filing, the parent described itself as “a global orthopedic device company specializing in the design, manufacture and marketing of reconstructive joint devices …” that “offers a comprehensive line of products for hip joint reconstruction[.]”

Believe it or not, other plaintiffs have made this exact same argument before against this exact same parent company, citing the exact same documents in support of personal jurisdiction. And it never works. The Marcovecchio court held that these statement are insufficient to establish the parent’s role in the design of the hip system. The filings were outdated and the plaintiff cherry-picked phrases out of them to support his position. Plus, annual reports typically involves this sort of bloviation in characterizing the business of a parent and its subsidiaries. [Note to our transactional colleagues: couldn’t more precise draftsmanship avoid this issue completely?]. Even if the filings are not perfectly clear about separating the roles of parents and subsidiaries, the Marcovecchio court was clear that the filings were not necessarily discussing the activities of the parent as opposed to the subsidiary. Any pufferies in the filings certainly were not enough to contradict the parent’s sworn testimony.

We’re not done. There is a part two to the plaintiff’s jurisdictional playbook, just as ineffective as part one. The plaintiff in Marcovecchio argued that the subsidiary’s contacts with Utah (which were undisputed) could be imputed to the parent. Uh, no. A parent corporation is not subject to personal jurisdiction in a forum solely based on the subsidiary‘s contracts with the forum absent an allegation that either 1) the subsidiary was an agent of the parent, or 2) that the two companies are so intertwined as to be the other’s alter ego. Here, the plaintiff’s conclusory statement that each of the defendants was the “representative, agent … or alter ego of … the other” was not sufficient to establish personal jurisdiction under either an agency theory or an alter ego theory. Farewell, dear parent.

The manufacturing company was stuck in the lawsuit, but it also had a few beefs with the complaint. For example, the manufacturing defect claim contained nothing but conclusory statements. The plaintiff alleged that the hip system had “a tendency to (a) detach, disconnect and/or loosen from a Patient’s acetabulum, (b) generate dangerous and harmful metal debris …; (c) cause pain, (d) inhibit mobility; and (e) require revision surgery.” As the court pointed out, these allegations all identify harms caused by the hip system, not the actual manufacturing flaw that caused the harm. The court put it nicely: “Plaintiff alleges that because he was injured, there had to be a flaw.“ Because the plaintiff never identified the actual flaw in the manufacturing process that caused the hip system to differ from the design, he had failed to state a claim for manufacturing defect.

The plaintiff also failed to state a claim for failure to recall. The Marcovecchio court refused to entertain such a claim unless “(1) a governmental directive issued pursuant to a statute or administrative regulation specifically requires the seller or distributor to recall the product; or (2) the seller or distributor, in the absence of a recall requirement … undertakes to recall the product, and the seller or distributor fails to act as a reasonable person in recalling the product.” The complaint satisfied neither requirement. Instead, the plaintiff alleged only that the defendant failed to recall the product, which is insufficient to state a claim. (Over a decade ago, we wrote about a similar recall issue with a similar analysis here.)

The claim for breach of express warranty was also hobbled by bare-bones pleadings. Reliance is necessary to establish a cause of action for express warranty, and the plaintiff needed to allege that the product descriptions were communicated to him or his doctor and became the basis of the bargain. The plaintiff generally alleged that “express representations” were made “to healthcare providers and patients, including Plaintiff and Plaintiff’s healthcare providers,” but the plaintiff failed to allege how those warranties became a basis of the bargain. The court tossed the claim because “[m]ere recitations that Plaintiff relied are not enough to state a claim for breach of express warranty.”

Finally, there was the suite of deceit claims: fraudulent misrepresentation, fraudulent concealment, and negligent misrepresentation. The complaint referenced misrepresentations “to the medical community and the general public,” and also referenced misrepresentations in the 510(k) application submitted to the FDA. That last bit implicates Buckman preemption. The Marcovecchio court dodged the preemption issue by bouncing the active misrepresentation claims for failure to plead either the allegedly fraudulent statements or the plaintiff’s reliance with the requisite specificity. The concealment claim was allowed to stand (courts are a little too lenient on such claims), but there was a lot less left to the case than existed before the defendants filed their motions.

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

The phrase may be biblical in origin, coming from the story of Cain and Abel, but its meaning certainly persists and has relevance today.  Being both a sibling and a parent of siblings, this blogger doesn’t want to give the impression that her family is every person for themselves.  But, let’s face it in those teen years, just how helpful does an older brother want to be?  Or how quick is an older sister to sell out her not-yet-licensed brother when parents find the car is missing.  I’m not my brother’s keeper.  Now these are significantly less brutal examples than the original where Cain is trying to cover up having murdered his brother.  And by today’s standards, the phrase has become less associated with fratricide and more akin to not wanting to be held responsible for someone else’s actions.  No matter how closely related you may be.

And that brings us to today’s case – Smith v. Teva Pharms. USA, Inc., 2020 U.S. Dist. LEXIS 20405 (S.D. Fla. Feb. 4, 2020).  As you may have guessed, one about related companies.  Plaintiff filed suit alleging injuries sustained from taking two oral contraceptives – one branded and one generic.  The branded drug was approved by the FDA in 2006 and defendant is the grandparent-company of the drug’s NDA holder (defendant owns a company that owns the NDA holder).  Defendant is also the manufacturer of the generic drug and a distributor of the brand name drug.  Id. at *2-3.

Defendant moved for summary judgment on the grounds of conflict preemption under   PLIVA, Inc. v. Mensing, 564 U.S. 604 (2011).  The decision contains a nice discussion of the statutory framework for who and how one can change a drug’s label.  Id. at *6-8.  The who essentially boils down to the person who submitted the NDA, submitted an amendment or a supplement to an NDA, or who owns an NDA.  Id. at *7.  Oh, and the Secretary of Health and Human Services.  The how depends on the what.  Major changes require pre-approval by the FDA.  Id.  But, if merely adding or strengthening a warning (based on newly acquired information (not mentioned in the decision but we don’t want you to forget that part)), a manufacturer can use the “changes being effected” (CBE) process.  That allows a manufacturer to make the change at the same time as filing its supplemental NDA.  Id. at *8.

The court look at each drug separately.  As to the generic drug, PLIVA controls and requires dismissal based on preemption.  Generic labels are required to be the same as their branded counterpart’s labels.  There was no dispute that the generic labeling matched the branded labeling at all relevant times.  Therefore, the “duty of sameness” makes it impossible for the defendant to comply with that federal requirement and change its label in response to state duties.  Id. at *10.

Defendant did not stop its PLIVA argument there.  Because defendant is only the distributor of the branded drug, it argued plaintiff’s brand claims against it were also barred by PLIVA.  Plaintiff’s first argument was that PLIVA only applies to generic drugs.  “Not so.”  Id.   PLIVA applies “with equal force” to brand name drugs “preempt[ing] state claims against parties that are unable to unilaterally effectuate label changes.”  Id.  This brings us back to the question of “who” can change a drug’s label.  Defendant did not submit either the NDA or any supplement/amendment to the NDA.  Defendant was never the owner of the NDA.  Nor was defendant the Secretary of Health and Human Services.  Id. at *11.  What was the defendant – a distributor.

Plaintiff’s next argued that all of foregoing aside, PLIVA shouldn’t apply because defendant is the parent of the parent of the NDA holder.  However, “[t]he FDA’s regulations nowhere contemplate a distributor of a brand drug, albeit a distributor closely affiliated with the NDA holder, initiating changes to an approved NDA.”  Id. at *12.  I’m not my brother’s keeper.  Plaintiff ignored the “wealth of authority” holding that non-NDA holders are “powerless to submit label changes to the FDA.”  Id. at *12-13.  Rather, plaintiff argued that precedent shouldn’t control because the companies are “intertwined” and defendant promotes the drug and handles its pharmacovigilance.  “That is not the inquiry.”  Id. at *14.  The CBE regulations make clear who can submit and effect a labeling change – and it’s not the distributor or the parent of the parent of the NDA holder.  I’m not my brother’s keeper.

Plaintiff’s last ditch effort was to point out, in supplemental briefing, that in 2003 the parent of the NDA holder submitted a CBE on behalf of the NDA holder for a different oral contraceptive.  Plaintiff argued this was proof that defendant “could, in theory, have submitted a CBE” in this instance.  Id. at *14 n.6.  But the regulations still control and they state that a labeling change can be made by someone who actually submits an NDA or NDA supplement/amendment.  Not someone who can theoretically submit one.  It was too large a leap for the court to “assume that parent companies can submit CBEs for their subsidiaries.”  Id.  I’m not my brother’s keeper.

Finally, plaintiff asked for permission to amend her complaint to add the NDA holder as a defendant.  However, because “[p]laintiff has failed to explain her undue delay in adding [the NDA holder] as a defendant when its involvement was known early on,” the request was denied.  Case dismissed.  If you’re not the NDA holder, you’re also not the NDA holder’s keeper.

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We’re product liability bloggers, so we don’t claim to know a lot about other drug-related subjects such as how “Buy American” requirements apply to federal procurement.  But we can read, and the Federal Circuit’s unanimous decision in Acetris Health, LLC v. United States, ___ F.3d ___, 2020 WL 610487 (Fed. Cir. Feb. 10, 2020), appears to be important because it overturns what had been the established “rule-of-origin” procurement test that the Veterans Administration (and thus, we suspect, other federal health programs) used to exclude drugs with active ingredients of overseas origin.  Id. at *8.  Apparently the existing rule dates back to 1954.  Id. at *1.

Given the quantities of drugs that these programs purchase, and the age of the regulation, we’d call this a big deal.  The decision interpreted two key statutes.  First, the government “shall . . . prohibit the procurement . . . of products . . . which are products of a foreign country” as to which there is no reciprocal trade agreement.  19 U.S.C. §2512(a)(1).  Second, a “product” is “of a foreign country” when:  it is either “wholly the growth, product, or manufacture of that country,” or “has been substantially transformed into a new and different article of commerce” in that country.  19 U.S.C. §2518(4)(B).  See Acetris, 2020 WL 610487, at *2.

The “long held” rule of thumb that Acetris overturned was “that the source of a pharmaceutical product’s active ingredient generally dictates its country of origin.”  Id.  The claimant tabletized its product in the United States, but used an “active pharmaceutical ingredient” (“API”) manufactured overseas.  Id. at *8.

Acetris held (we’re ignoring extensive non-merits discussion concerning whether the case could be heard) that the source of a drug’s active ingredient cannot be controlling under the statutory language quoted above:

The government argues that [claimant’s] tablets are products of [a foreign country] because the tablets’ API was made in [there].  But the government cannot identify any Supreme Court or Circuit authority holding that a pharmaceutical product’s country-of-origin is determined by the country in which its API was manufactured.  To the contrary, it is clear from the [statute] that the “product” is the final product that is procured − here, the pill itself − rather than the ingredients of the pill.

Id. at *8 (emphasis added).  Further, “[t]he regulatory history . . . makes clear that the source of the components (here, the API) is irrelevant in determining where a product is ‘manufactured.’”  Id.

The pills were neither “wholly” manufactured overseas, nor were had they been “substantially transformed” (that is, tabletized) overseas.  Id.  Since these pills met neither prong of §2518(4)(B)’s foreign origin test, they were not “products of a foreign country” under §2512(a)(1), so that “the [statute] does not bar the VA from procuring [claimant’s] products.”  Id.

A product need not be wholly manufactured or substantially transformed in the United States to be a “U.S.-made end product.”  Instead, such products may be . . . “manufactured” in the United States from foreign-made components. . . .  Therefore, on the plain meaning of the [federal acquisition requirements], [claimant’s] products are “U.S.-made end products.”

Id. (footnote omitted).

Boom.  Just like that, the government’s nearly 70-year-old practice of excluding any drug with an overseas-manufactured active ingredient from being purchased for federal health programs goes out the window.  Rather, the statutory language controls.  “If the government is dissatisfied” with how “U.S.-made end product” is defined, “it must change the definition, not argue for an untenable construction of the existing definition.”  Id. at *9.  Thus:

[T]he VA erred in interpreting the [statutes] to exclude pharmaceutical products that, like [claimant’s] products, are manufactured in the United States using API made in a foreign country.  Such products are not . . . the “product of” the country in which their API was made, and are “U.S.-made end products.”

Acetris, 2020 WL 610487, at *10.

Some drug companies – those that import overseas-made active ingredients – will love this decision.  Other drug companies – those whose products met the previous procurement standard that Acetris overturned – will not appreciate the additional competition.  Either way, we think this decision is something our readers (at least those in-house) would want to know about.

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Mention the Third Restatement of Torts and the learned intermediary rule in the same sentence, and our response would be to cite §6(d) of the product liability part of the Restatement.  But the Third Restatement also confirms that this widely followed (perhaps the most widely followed) legal rule also applies to negligence causes of action.  We discovered this fact totally by accident recently while researching duty in a non-drug/device context.  Specifically, Comment i to Restatement (Third) of Torts, Physical & Emotional Harm §7 (2010), provides:

[I]n the field of products liability, courts have declared that the warning obligation of prescription-drug manufacturers ordinarily is limited to the prescribing physician and does not extend to warning the patient directly.  They reason that the physician can best assess the relevant risk information and determine the appropriate course of treatment.  When appropriate, the physician can inform the patient of means by which the patient may minimize the risk of adverse side effects. . . .  Courts have, through this duty limitation, made a categorical determination that having manufacturers provide safety information to physicians, rather than to patients, is the appropriate manner for minimizing the costs of adverse side effects.  Such a categorical determination also has the benefit of providing clearer rules of behavior for actors who may be subject to tort liability and who structure their behavior in response to that potential liability.

(Cross-referencing §6(d)).

We were not expecting to find further Third Restatement support for the learned intermediary rule in a non-product liability section.  Having stumbled across it, we decided to review the entirety of §7 – entitled simply “Duty” − for other possible nuggets.  First, that section’s black letter:

            (a) An actor ordinarily has a duty to exercise reasonable care when the actor’s conduct creates a risk of physical harm.

(b) In exceptional cases, when an articulated countervailing principle or policy warrants denying or limiting liability in a particular class of cases, a court may decide that the defendant has no duty or that the ordinary duty of reasonable care requires modification.

That’s far better and more nuanced than the absolutist language in the Second Restatement that “anyone who does an affirmative act is under a duty to others to exercise the care of a reasonable man to protect them against an unreasonable risk of harm to them arising out of the act.”  Restatement (Second) of Torts §302, comment a (1965).

As exemplified by the already-discussed comment i concerning the learned intermediary rule, other nuggets are available in Restatement Third §7’s wide-ranging comments.  For example there is additional support for the non-existence of a “duty to recall” a product:

[C]ourts generally impose on sellers of products that are not defective at the time of sale the limited duty to warn of newly discovered risks, rather than the more general duty of reasonable care, which a jury might find includes a duty to recall and retrofit the product so as to eliminate the risk.

Restatement (Third) §7, comment a.  Further, while “stop selling” claims involving prescription medical products were held preempted in Mutual Pharmaceutical Co. v. Bartlett, 570 U.S. 472 (2013), the Third Restatement’s duty considerations urges that such claims should not exist, ab initio under state law:

[W]hen a plaintiff claims that it is negligent merely to engage in the activity of manufacturing a product, the competing social concerns and affected groups would be appropriate considerations for a court in deciding to adopt a no-duty rule.

Restatement (Third) §7, comment f.  State courts don’t have the “institutional competence” to make such decisions.  Id.

Comment j recognizes that – contrary to those few courts allowing innovator liability – that foreseeability is not properly the primary (or, indeed, any) consideration for the establishment of a duty:

Despite widespread use of foreseeability in no-duty determinations, this Restatement disapproves that practice and limits no-duty rulings to articulated policy or principle in order to facilitate more transparent explanations of the reasons for a no-duty ruling and to protect the traditional function of the jury as factfinder.

“Just as foreseeability is unhelpful in determining whether there is no duty, foreseeability is unhelpful for expanding the scope of tort law, such as in the area of affirmative duties.”  Id. (Reporter’s Notes).  The Third Restatement thus recognizes that “foreseeability” is simply a dodge courts use to disguise result-oriented decisions, and instead urges courts to be “more transparent” in their reasoning.

Finally, the economic loss rule also receives some favorable treatment in the comments to §7, here:

[O]ne reason the general duty of reasonable care stated in §6 is limited to physical harm is that liability for purely economic harm in commercial cases often raises issues better addressed by contract law or by the tort of misrepresentation.

Id., comment d.

In sum, we were surprised by the amount of useful material that we found in Restatement (Third) §7.  Feeling our readers might be equally unaware of the wide-ranging discussion in this section, we went through it thoroughly.  We note that similarly useful support for defense arguments might exist in other, adjacent sections of this part of the Third Restatement that we have yet to have occasion to review.

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Mandamus appeals are difficult to win.  That’s one reason that we were intrigued to read In re Williams-Sonoma, Inc., ___ F.3d ___, 2020 WL 131360 (9th Cir. Jan. 13, 2020).  The second was the result, which prevented an improper would-be class representative from using discovery as a bootstrap method to his own replacement.  The plaintiff here was a would-be litigation tourist from Kentucky who sought to utilize California’s more liberal class action practices to bring a claim that was impermissible under Kentucky law:

[Plaintiff] brought an action . . . to recover damages under the law of the State of California that he allegedly suffered due to [defendant’s] alleged misrepresentations.  He also sought damages under California law for a class of consumers. . . .  Before a class action was certified, the district court determined, inter alia, that Kentucky law governed [plaintiff’s] claims and that Kentucky consumer law prohibited class actions.

Id. at *1-2 (footnote omitted).

Rather than go quietly into the night following these rulings, plaintiff “sought to obtain discovery from [defendant] for the sole purpose of aiding his counsel’s attempt to find a California purchaser . . . who might be willing to sue.”  Id. at *2.  The District Court thought plaintiff’s bootstrap attempt to use discovery in an invalid action to recruit a replacement was peachy-keen and ordered the defendant “to produce a list of all California customers,” for this particular product for a period of over seven years.  Id.

That discovery, of course, had nothing to do with any claim that the plaintiff seeking it could validly bring, so the defendant sought mandamus relief in the Ninth Circuit – and won.

Three elements of mandamus were important, not just to the result, but to simply being heard:  “(1) The party seeking the writ has no other adequate means” of relief; “(2) The petitioner will be damaged or prejudiced in a way not correctable on appeal”; and “(3) The district court’s order is clearly erroneous as a matter of law.”  Id.

From our perspective as interested outsiders, item three was the key.  The Ninth Circuit (by a 2-1 decision) held as a matter of law it was clearly erroneous for a class action plaintiff to use discovery solely to seek his/her own replacement.

Rule 26(b)(1) limits the scope of discovery to “nonprivileged matter that is relevant to any party’s claim or defense.”  . . . [S]eeking discovery of the name of a class member (here an unknown person, who could sue [defendant]) is not relevant within the meaning of that rule.

Williams-Sonoma, 2020 WL 131360, at *2.

Even under the pre-2015 scope of discovery, it was improper to use discovery to identify putative class members:

Respondents’ attempt to obtain the class members’ names and addresses cannot be forced into the concept of “relevancy” described above.  The difficulty is that respondents do not seek this information for any bearing that it might have on issues in the case.

Id. at *3 (quoting Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 350-53 (1978) (footnote omitted)).  Oppenheimer involved a plaintiff’s attempt to use discovery to identify class members for purposes of providing class notice, 437 U.S. at 353, but the Ninth Circuit majority held that, as long as the reason for seeking class members’ identities was extraneous to the substance of the litigation, Oppenheimer’s prohibition applied.  “[W]e do not think that the discovery rules are the right tool for this job.”  Williams-Sonoma, 2020 WL 131360, at *3 (quoting Oppenheimer).

Longtime readers may be forgiven for thinking, “Oppenheimer, Oppenheimer . . . where have I seen that name before?”  Several years ago, we complained about a number of courts’ misuse of language from the same Oppenheimer decision to avoid the 2015 tightening of the definition of the scope of discovery in Rule 26.  Well, the Ninth Circuit in Williams-Sonoma threw cold water on that, because plaintiff raised those 2015 rules change in an attempt to avoid the actual Oppenheimer decision.  However, the 2015 amendment to Rule 26 “cut against” allowing greater discovery than permissible under Oppenheimer:

Rule 26(b)(1) was amended to its current form after 1978 when Oppenheimer was decided.  As quoted above, the rule then indicated that discovery must be “relevant to the subject matter involved in the pending action” that related to a party’s claim or defense.  Now, the “subject matter” reference has been eliminated from the rule, and the matter sought must be “relevant to any party’s claim or defense.”  Rule 26(b)(1).  That change, however, was intended to restrict, not broaden, the scope of discovery.  See Rule 26(b)(1) advisory committee’s note to 2000 amendment; see also id. advisory committee’s note to 2015 amendment.

Williams-Sonoma, 2020 WL 131360, at *3 (emphasis added).  After a couple of quick searches, we’re pretty sure that  Williams-Sonoma is the first appellate court explicitly holding that Oppenheimer has been superseded by the 2015 federal rules amendment.

Plaintiff also failed with a second, less important, attempt to distinguish Oppenheimer.  That no class had been certified in Williams-Sonoma (as opposed to Oppenheimer, where certification had occurred), was all the more reason to reject the plaintiff’s attempt at self-help.  “[H]ere counsel is without a lead plaintiff for the class issues that counsel wishes to pursue,” so without any certified class, “the request here is less relevant than the request in Oppenheimer.”  Id.  Thus, it was “clear error” “as a matter of law” to force a defendant to provide discovery designed to facilitate its opponent’s attempt to solicit a new class representative.  “[U]sing discovery to find a client to be the named plaintiff before a class action is certified is not within the scope of Rule 26(b)(1).”  Id.

That, too, is a useful ruling.

The other essential prerequisites to mandamus relief were also satisfied:

[Defendant] has no other adequate means for relief available to it at this time, and before a direct appeal could be taken and heard, the disclosure and damage to its (and its customers’) interests would be complete − its claim would be mooted.  Thus, the first and second factors weigh in favor of granting the petition.

Id. at *4 (footnotes omitted).

Finally, we see a broader implication in Williams-Sonoma with possible spill-over effects to other types of complex litigation.  The 2015 “claim or defense” amendment to Rule 26(b)(1), comes into play any time that a party (usually, but not necessarily, a plaintiff) seeks some kind of collateral advantage through “discovery” that is unrelated to the merits of the litigation.  Here, it was an attempt to solicit a new class representative.  But plaintiffs have been known to use what they call “discovery” to disrupt a defendant’s relationships with its customers, to pressure a governmental unit, or even a nihilistic desire just to generate bad publicity for the other side.  Unless any given request is “relevant to any party’s claim or defense,” Williams-Sonoma is persuasive precedent for it being impermissible discovery, with mandamus as a proper remedy.

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There was once a musician from Michigan who rapped that “the FCC won’t let me be.”  This was in the context of claiming that his songs were only permitted to be played over this thing called radio with edits that he apparently found unacceptable.  In Cyr v. Ford Motor Co., No. 345751, 2019 WL 7206100 (Mich. App. Dec. 26, 2019), the Court of Appeals of Michigan tackled two issues on appeal:  (1) denial of summary judgment sought for a governmental authorization exemption under the Michigan Consumer Protection Act and (2) denial of dismissal of nonresident claims under forum non conveniens, a doctrine often shortened to FNC.  While both lower court decisions were reversed, we will focus on the latter, consistent with our malapropism-inspired title.

It is usually very hard to win on FNC, largely because it is discretionary, the plaintiff typically gets deference for her choice of venue, and the venue need not be the best venue to be an appropriate venue.  When it comes to litigation tourism that features lots of different plaintiffs from around the country crammed together in one case, FNC still has a role.  Cyr is not a drug or device case, but its facts sound like some of our litigations on steroids.  The decision also injects a good bit of common sense into the process.  Although Michigan advertises to attract vacationers, its intermediate appellate court does not want to become a destination for litigation tourism against one of its big local companies.

The facts related to the FNC analysis are as follows.  More than 12,000 people opted out of a class action related to allegedly defective transmissions in two Ford vehicles and decided to sue.  More than 100 of those sued in Cyr in state court in Michigan and the rest were spread among 82 other cases.  They hailed from every state, Puerto Rico, and Canada and alleged a range of claims under state and federal law.  The defendant moved to dismiss all the non-Michiganders.  The trial court applied the well-known factors for public and private interests in FNC, complete with deference to the plaintiffs’ choice of Ford’s home state as the forum, and denied the motion.

Before we get to the appellate court’s reasoning in reversing, we pause to think about the big picture here.  Another malapropism for the defendant in serial product liability litigation to ponder might be “To scatter, or not to scatter, that is the question.”  Defending 83 cases in your backyard, even with 12,000 plaintiffs, is a big task, but it pales in comparison to the prospect of defending thousands of cases in courts around the country.  A number of considerations go into taking the step of trying to sever and scatter these multi-plaintiff cases, including the burden on the plaintiffs’ lawyers, the attrition rate attendant to re-filing, the likelihood of re-filed individual cases ending up in federal court (and maybe an MDL), avoiding a particular judge or jury pool, and generally not wanting to put all your eggs in one basket, even if the basket is local to you.  These considerations certainly apply to big drug and device litigation.  While tighter limits on personal jurisdiction have helped to curtail the sort of litigation where the defendant faces a bunch of cases in a state court in a state where neither it nor most of the plaintiffs reside, multi-plaintiff actions in state court in a state where the defendant resides is still a thing.  FNC, if the defendant is prepared to accept the result of winning, is still a significant tool for those defendants.

One of the public interest factors for FNC is “[c]onsideration of the state law which must govern the case.”  Whereas the trial court concluded Michigan law would apply to all the state law claims that the plaintiffs alleged, regardless of where any plaintiff resided or purchased her car, the appellate court noted that the choice of law for contract-based claims like express warranty can turn on the provisions of the contract.  Here, each sale involved an “express warranty booklet” that said the law of the state of sale would govern the choice of law for warranty claims.  Manufacturers of prescription medical products are unlikely to have contractual relationships with the individuals who end up suing them, let alone provisions that will specify the state of purchase as the applicable law.  The rest of the decision, however, has broader application.

Noting the number of cases, parties, and claims, the court chose not to endorse centralization as the way to maximize efficiency:

The sheer volume of individual claims would make the case difficult to manage, and the choice-of-law implications will only complicate matters. Standing alone, the breach-of-warranty claims would require the trial court to apply the contract law of dozens of other jurisdictions. That would be an exceedingly difficult task for an appellate court; it would likely prove to be an impossible one for the trial court. Moreover, we fail to see how residents of other states or other nations, who purchased vehicles in other jurisdictions, can avail themselves of statutory claims related to those purchases under Michigan law. Such novel questions of law are bound to arise in mass litigation like this when it is pursued in a single forum, but there would be no such questions if the nonresident plaintiffs sought recourse to the courts of their own respective states under local law. As a practical matter, given that plaintiffs’ contractual claims are subject to the law of the jurisdiction where the subject vehicles were purchased or leased, adjudication of all of their claims in those fora would be far more efficient. It would be far easier for a court in each state to apply its local contract law than it would be for one court in this state to independently research and apply the law of all of the others.

Id. at *7.  Efficiency is not the only consideration in weighing public interest:

Also, although Michigan may have a vested interest in adjudicating the noncontractual claims against Ford in this action, it seems that the nonresident plaintiffs’ home jurisdictions have at least an equal stake in adjudicating controversies that affect their citizens’ rights[.  T]his state also has an interest in dissuading this sort of mass automotive litigation from habitually clogging our court system. Therefore, we conclude that the public-interest factors, on the whole, clearly favor resolution of the nonresident plaintiffs’ claims in their home fora rather than this one.

Id. (omitting footnote).  While some states certainly welcome large numbers of out-of-state plaintiffs against resident defendants as a source of revenue—or to gain a high spot on some infernal list—the court says Michigan’s interest is in “dissuading this sort of mass automotive litigation from habitually clogging our court system.”

After determining that FNC was decided wrongly below, the appellate court elected to reverse rather than simply vacate and remand for a do-over.  Dismissing the non-resident plaintiffs and letting them re-file where they reside was so strongly preferred by the court’s assessment of the public interests that any anticipated complaints about private interests would need to yield.

In our view, however, reversal is warranted because the public-interest factors weigh so heavily in favor of applying forum non conveniens that a decision to the contrary would necessarily yield a result outside the range of reasonable and principled outcomes. Put simply, no matter what interest the roughly 12,000 plaintiffs may have in resolving their claims in Michigan rather than their home jurisdictions, those private interests are outweighed by this state’s public interest in avoiding the related administrative difficulties. Also, as a pragmatic matter, we are unpersuaded by plaintiffs’ contention that forcing them to pursue this litigation in their home fora would result in undue hardship. Plaintiffs had an opportunity to resolve their claims in this action via a national class action, at minimal personal expense of time and money. They instead opted out of the class action, thereby preserving their right to pursue their individual claims against Ford on an individual basis. Plaintiffs will not now be heard to complain that it is unfair to deprive them of the opportunity to consolidate all of their individual claims in one action in this state. In litigating these claims on a less massive basis in their home fora, they will merely be faced with the same hardships that generally face litigants as a matter of course.

Id.  As our liberal block-quoting suggests, we could not have said it better.  The only thing missing is to recognize the role of the plaintiffs’ lawyers in all of this.  The individual plaintiffs are unlikely to have played a role in where, when, or how they sued, but you can be rest assured that their lawyers picked a path to what they thought was most likely to result in the biggest payday with the least effort.

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You have probably heard the old truism about how a person representing him or herself in a lawsuit has a fool for a client. You’d think that having a pro se opponent would make the case a breeze. Not necessarily. When we worked in the U.S. Attorney’s Office, that work seemed harder, not easier, when prisoners scribbled their own complaints and briefs. That meant we faced the extra step of trying to decode what the other side was saying, or even should be saying. That also meant we often faced a judge who was determined to cut plenty of slack for the unrepresented party. To use a technical term, it was a pain.

Today’s case, Vollrath v. DePuy Synthes Bus. Entities, 2020 U.S. Dist. LEXIS 10634 (D. Oregon Jan. 22, 2020), is a splendid illustration of the mischief wrought by pro se parties — and wannabe parties. The case was brought by a pro se plaintiff alleging that this modular hip was defective in both design and manufacture. The complaint included claims of negligence, product liability (including failure to warn), breach of warranty, fraud (including willful concealment), and intentional infliction of emotional distress.

So far so good.

But then the plaintiff’s four minor children, through their mother, appearing pro se, moved to intervene as additional plaintiffs in this lawsuit. These proposed intervenor-plaintiffs asserted “legal and equitable rights to distribution of damages in this case” that were not adequately protected by the plaintiff. They also intended to pursue their own separate claims against the defendants, “not yet asserted,” including claims of emotional distress and loss of guidance, care, and support. The intervention was premised on the assertion that the plaintiff was more than $60,000 in arrears under a court-ordered support obligation and that the plaintiff had refused to communicate with his children since the plaintiff’s injury in 2017.

Thankfully, there actually is law, Federal Rule of Civil Procedure 24, to sort out this mess. There are standards for both intervention of right and permissive intervention. (More on that soon.) Preliminarily, Rule 24 (c) requires that a motion to intervene “be accompanied by a pleading that sets out the claim or defense for which intervention is sought.” That did not happen. Nor did the plaintiff respond to the motion to intervene. But the defendants did file an opposition, arguing that the proposed plaintiff-intervenors did not show that their interests in this lawsuit were protected by law or that there was a relationship between any legally-protected interest they might have and the plaintiff’s claims against the defendants. The defendants further argued that the court should deny permissive intervention on the ground that the claims of the proposed plaintiff-intervenors did not share a common question of law of fact with the plaintiff’s claims.

Let’s break down the standards for intervention of right and permissive intervention. To intervene as of right under Rule 24(a)(2), an applicant must meet four requirements: (1) the applicant has a significant protectable interest relating to the property or transaction that is the subject of the action; (2) the disposition of the action may, as a practical matter, impair or impede the applicant’s ability to protect its interest; (3) the application is timely, and (4) the existing parties may not adequately represent the applicant’s interest. Applicants for permissive intervention under Rule 24(b) must meet three requirements: (1) an independent ground for jurisdiction; (2) a timely motion; and (3) a common question of law and fact between the movant’s claim or defense and the main action.

The court ruled against the proposed plaintiff-intervenors. First, they had no right to intervene because they could adequately protect their own interest by bringing their own lawsuit, either against the defendants or the allegedly deadbeat dad.

That was the easy part.

Second, the court exercised its discretion to deny permissive intervention. The court expressed a need to proceed “cautiously.” That caution was justified, because it turns out that our recital of the facts above actually understated the messiness. As already mentioned, the four children, in their motion appearing pro se, said that their father, the plaintiff, “has refused the children’s communication and cut contact with them since the injury.” But in their reply in support of the intervention motion, the four children asserted, again through their mother, that their father has “already obtained” orders from a state court in Oregon “granting him sole physical and legal custody and denying Plaintiff’s mother direct contact with the minor children.” The mother then helpfully added that these orders “were only recently vacated” by a judge in an emergency hearing just as enforcement was pending. Huh? The Vollrath court understated things a bit when it observed that “it is not clear who, between (the father and Plaintiff pro se) and (the mother, who also appears pro se and purports to represent the interests of the Proposed Plaintiff-Intervenors), has the legal authority to represent the minor children (the Proposed Plaintiff-Intervenors).” The court concluded that such lack of clarity had “the potential unduly to delay the resolution of this lawsuit, the main action. This potential for delay is an appropriate basis to deny permissive intervention.”

Kudos to the court for refusing to make a messy case even messier. The theory of the proposed intervention, taken to its illogical extreme, would mean that creditors could routinely stick their noses into tort lawsuits. Imagine how crazy that would be. (Then again, some might argue that creditors already are surreptitiously nosing their way into lawsuits. But that’s an entirely different topic.)

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Patchwork is a type of needlework that involves sewing together pieces of fabric into a larger design, usually based on some repeating pattern.  The fabric pieces can be different shapes and different colors that are then pieced together.  Evidence of patchwork was found in Egyptian tombs.  We tend to think of it more in terms of a style that came to America with the pilgrims and had a resurgence during World War I and the Great Depression as clothing and other materials were recycled to make blankets and quilts.  Today, patchwork is a form of art, in which the designers use precious fabrics to create beautiful textiles.  The use of uneven pieces of fabric in particular can result in real masterpieces.  Need proof?  There’s the National Quilt Museum in Kentucky, the Visions Art Museum in San Diego, or the City Quilter in New York.  Just to name a few.  To create a beautiful patchwork design, however, requires effort and time.

We say all this because to us the term “patchwork” conjures up something nicer than a “hodgepodge” or a “mixed bag.”  Something in which there is a grander design or a prettier outcome when all the pieces come together.  A case like Crockett v. Luitpold Pharmaceuticals, Inc., 2020 WL 433367 (E.D. Pa. Jan. 28, 2020) may not be headed for a museum, but we are going to choose to see the good over the bad and find the pretty among the mismatched pieces.

The case involves an injectable medication used to treat iron deficiency anemia in people who are intolerant to oral medications.  The particular formulation of this product contains a formulation that is alleged to cause abnormally low phosphate levels which can have serious consequences.  Id. at *1.  The drug was first marketed in Europe, during which time the low phosphate condition was noted and studied.  When the manufacturer submitted a New Drug Application to the FDA to bring the drug to the United States, it was twice rejected.   In its non-approvable letters, the FDA cited the low phosphate as a concern.  The drug was eventually FDA approved in 2013.  Id. at *2.  The drug’s labeling since that time has included the condition in its adverse reaction section.  Id.

Plaintiff’s complaint alleged 11 causes of action, which we’ll address in the order the court did.  First up, strict liability failure to warn and design defect.  Defendants argued that these claims were not viable under Pennsylvania law for prescription drug cases citing Hahn v. Richter, 673 A.2d 888 (Pa. 1966).  The court agreed.  Both claims were dismissed with prejudice.  Id. at *4-5.  The court went on to dismiss plaintiff’s breach of implied warranty claim for the same reason.  Noting that strict liability and breach of implied warranty of merchantability are “parallel theories of recovery,” “[i]t would be inconsistent to exempt a drug manufacturer from strict liability for defective design or failure to warn under Comment k, but allow recovery for the same issue under a breach of implied warranty claim.”  Id. at *5.

Next up were plaintiff’s negligence claims – failure to warn, design defect, misrepresentation, and a catch-all claim.  This one of the pieces of fabric we could have done without.  Defendant moved to dismiss these claims as preempted.  That’s an uphill battle in a branded prescription drug case and one we on the defense side should be cautious about bringing.  If a defendant can demonstrate that the risk at issue was submitted to the FDA (by defendant or someone else) for evaluation and the FDA did something to demonstrate that it would not have approved a change in the labeling, by all means bring the motion.  Given the need for “clear evidence,” this is still a hard issue at the Rule 12 stage due to the limited record.  Id. at *7.    And, without “clear evidence” or really “any” evidence, bringing the motion is just inviting bad law.  Not something we want pieced into the fabric of product liability law.

Here, the court ultimately ruled that deciding the preemption issue on the pleadings would be premature.  Id. at *8.  But, since the motion was brought, the court did undertake an analysis and found no evidence of any submission to the FDA that demonstrated the FDA considered and rejected a different warning label.  Defendants argued that the non-approvable letters were evidence that the FDA was aware of the low phosphate issue and approved the drug with its current labeling.  Id. at *7.  However, the court did not find that to be evidence that either the defendants proposed a stronger warning or that if presented with a different warning, the FDA would have rejected it.  Id.  Defendants also argued that plaintiff failed to plead facts supporting an inference that the FDA was not aware of the risk when it approved the drug.  Id. at *8.  But, because preemption is an affirmative defense, it’s not something on which plaintiff bears the burden and therefore has no obligation to plead around.  Id.  So, plaintiffs’ negligence claims survive.

Defendants’ next argument was that the learned intermediary doctrine barred plaintiffs’ fraud claim and claim for violation of Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (“UTPCPL”).  While the court did not find the argument persuasive as to common law fraud, it did as to the UTPCPL claim.  Both claims require a showing of justifiable reliance by the plaintiff.  Common law fraud, however, is governed by Restatement (Second) of Torts which allows third party reliance and therefore permits a plaintiff to prove reliance by showing that her prescribing physician relied on the allege misrepresentations made by defendant.  Id. at *9.  The UTPCPL, not governed by the Restatement, creates a private right of action for someone harmed as a result of defendant’s “unfair or deceptive” trade practices.  It does not recognize third party reliance and therefore, there is no UTPCPL claim where the drug is not sold directly to the plaintiff and defendant does not have a duty to warn the patient.  Id.  So, the statutory consumer protection claim is barred by the learned intermediary doctrine.

Defendants also moved to dismiss on TwIqbal grounds.  Of note in this section of the opinion is the court’s finding that the holding of Lance v. Wyeth, 85 A.3d 434 (Pa. 2014) did not limit negligent design claims to the extreme case of a drug that is “too harmful to be used by anyone.”  Id. at *10-11.  Such a finding would be inconsistent with Pennsylvania’s adoption of the Restatement (Second) of Torts, § 398 which does not require the design to be unsafe for any use.  Id. at *11.

The court did find that plaintiff failed to plead her fraud claim with the particularity required by Rule 9(b)’s heightened standard.  Allegations simply recycled from the negligence section of the complaint with the addition of words like “falsely” and “fraudulently” weren’t enough.  Id. at *12.  And finally, plaintiff’s express warranty claim was dismissed for failure to plead pre-suit notice.  Plaintiff tried to argue that had notice of the low phosphate issue and that “should suffice to achieve the same goal as pre-suit notice.”  Id. But notice is not that same thing as notifying.  Pennsylvania requires plaintiff to notify defendant of the alleged breach to provide an opportunity for resolution before a lawsuit is initiated.  Unless plaintiff took that step, this claim is also gone.

Call it what you will, the case has its high points and its low points.  If we were designing it, there are some pieces we’d have left out.  So, it may not be going on our wall for display, we’ll tuck it away in a drawer because we might need a piece of it to keep us warm down the road.

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Not too long ago, our search keyed to Merck Sharp & Dohme Corp. v. Albrecht, 139 S. Ct. 1668 (2019), picked up the following article in Trial Magazine:  Abaray & Harman, “Navigating Preemption After Merck,” 56 Trial 20 (Jan. 2020).  For anybody who doesn’t know, Trial is the house organ of the American Ass’n for Justice – the rebranded name for ATLA – and thus a thought leader for the other side of the “v.”

Cognizant of the limits of fair use, we thought we’d provide our views on those arguments.  We’ll start with trivia – we prefer using plaintiff names to describe cases where, as here, there are many cases out there against the named defendant, so we’ll continue calling it Albrecht, except possibly in formal briefing.  That’s the same rule we use for Bauman, Levine, Lohr and a number of other cases we cite frequently where the sides of the “v.” were flipped by the vagaries of the appellate process (usually signifying that the defendant lost in an intermediate appellate court).  Speaking of naming conventions, we’ll refer to the article in this post as “NPAM.”

First off, we agree with the other side that “[a] court’s decision whether state law failure-to-warn claims are federally preempted is a pivotal, sometimes dispositive point in pharmaceutical litigation.”  NPAM, 56-JAN JTLATRIAL 20, at *21 (we’re using Westlaw cites and pagination, since we don’t subscribe).  In fact, for precisely that reason, we’ve supported Lawyers for Civil Justice in its not-yet-successful quest to have certain MDL decisions, including preemption, become eligible for immediate interlocutory review.  As for the Albrecht angle to this, we’ve mentioned before that the Court’s main holding in Albrecht – that preemption is a question of law to be decided by the court – should make the case for interlocutory appeals easier, both before the Rules Committee and under current standards:

[O]ne type of MDL ruling that everyone agrees qualifies as “important” is preemption.  Now that Albrecht has disconnected preemption decisions from factual disputes that require jury resolution, preemption rulings thereby become much more discrete, and thus collateral. . . .  Thus, Albrecht makes it much easier for the defense side to argue that MDL preemption decisions . . . are not only important, but procedurally severable, so as to facilitate interlocutory appeal.

In the same paragraph, and indeed throughout the NPAM article, the authors refer to “impossibility” preemption.  They’re right that Albrecht was an impossibility case, but wrong if they think its holdings are so limited.  In particular, the key holding that made Albrecht our #1 good case for 2019 is that preemption is a legal issue applies to all preemption cases.  That is how post-Albrecht decisions have treated it.  See Delfino v. Medtronic, Inc., 2019 WL 2415049, at *10 (Minn. App. June 10, 2019), review denied (Minn. Aug. 20, 2019) (express preemption case; “the issue of whether [something] constituted a federal requirement is a question of law to be decided by a judge”).  Delfino went on to hold that, given the Albrecht holding that preemption was an issue of law, it was proper to exclude plaintiff’s expert, since experts may not opine on questions of law.  Id. at *12 (“we explained in the preceding section, ‘determining compliance with a regulation . . . is a question of law”; “expert opinion as to a legal matter is generally inadmissible,” so the district court did not abuse its discretion by prohibiting [plaintiff’s expert] from opining on a legal question”).

Even though the Albrecht Court only decided the legal/factual question point, and with it the collateral proposition that there is no heightened evidentiary standard in preemption cases, the majority did reach out and alter the criteria for “clear evidence” of impossibility preemption in cases “like” Levine.  Albrecht, 139 S. Ct. at 1678.  Levine (which the Court calls “Wyeth”) had stated:  “absent clear evidence that the FDA would not have approved a change to [the drug’s] label, we will not conclude that it was impossible for [defendant] to comply with both federal and state requirements.”  Wyeth v. Levine, 555 U.S. 555, 571 (2009).  Albrecht turned Levine’s holding into something resembling a multi-part test:

[I]n [Levine], we confronted that question in the context of a particular set of circumstances. . . .  In a case like [Levine], showing that federal law prohibited the drug manufacturer from adding a warning that would satisfy state law requires the drug manufacturer to show that it fully informed the FDA of the justifications for the warning required by state law and that the FDA, in turn, informed the drug manufacturer that the FDA would not approve changing the drug’s label to include that warning.

Albrecht, 139 S. Ct. at 1678.

Almost all of NPAM focuses on various parts of this language – except it ignores the Albrecht majority’s “like” Levine qualifier entirely.  Indeed, the word “like” appears nowhere in NPAM.  That has a number of consequences that we will point out.

NPAM interprets Albrecht as eliminating any consideration of what FDA “would not have” done under the Levine standard.  NPAM, 56-JAN JTLATRIAL 20, at *22.  However, that is only true in cases “like” Levine.  In Levine, there was no claim or evidence that anyone other than the manufacturer had sought any relevant agency decision.  NPAM’s statement that “the manufacturer must have submitted a label change, and the FDA must have rejected it,” id., is thus way overbroad.  For years, pro-plaintiff organizations, usually in connection with litigation, have filed “citizen petitions” with the FDA concerning identical risks and demanding either warnings or to have the drug in question removed from the market.  FDA rulings on such petitions are final agency action.  21 U.S.C. §355(q)(1)(F); 21 C.F.R. §10.30(e)(3) (authorizing publication of the FDA’s decision in the Federal Register).  Citizen petitions also produce “an official administrative record for an FDA decision.”  Albrecht, 139 S. Ct. at 1680.  See 21 C.F.R. §10.30(i) (specifying the “record of the administrative proceeding”).

NPAM’s argument, 56-JAN JTLATRIAL 20, at *25-26, that courts should ignore FDA resolution of citizen’s petitions ignores Albrecht’s “like” Levine qualifier to the discussion of what “manufacturers” submit.  Essentially, plaintiffs are trying to have it both ways – so their fellow traveler organizations (and even plaintiffs’ counsel themselves) can petition the FDA about anything they want with no consequences when the FDA denies their petitions, formally and on the record.  As we’ve pointed out before, post-Albrecht cases involving FDA resolutions of identical issues in citizen’s petitions agree with us.  An on-point FDA ruling on a citizen’s petition is a “set of circumstances with a key difference.”  Cerveny v. Aventis, Inc., 783 F. Appx. 804, 808 n. 9 (10th Cir. 2019); accord State v. Purdue Pharma L.P., 2019 WL 3776653, at *2-3 (N.D. Dist. July 22, 2019).  We also note that, to the extent NPAM advocates serving intrusive discovery on the FDA concerning its internal deliberations, 56-JAN JTLATRIAL 20, at *25, that is unlikely to succeed under United States ex rel. Touhy v. Ragen, 340 U.S. 462 (1951).  For more about that, see here.

We also designated Albrecht as our #6 worst case of 2019, and one point NPAM discusses is the primary reason why.  “Lesser steps such as conversations with FDA employees, email exchanges, or internal FDA analyses of scientific data do not establish a federal requirement that can give rise to impossibility preemption.”  Id. at *22.  We think that’s probably correct, except when such “conversations,” exchanges,” or “analyses” produce some “other agency action carrying the force of law.”  Albrecht, 139 S. Ct. at 1679 (citing “e.g., 21 U.S.C. §355(o)(4)(A)”).  This arguable retreat is the primary reason for our designation.  Secondarily, are all the other, bogus arguments that plaintiffs will advance claiming support in Albrecht (in other words everything else in NPAM).

Albrecht stated, “[t]he Supremacy Clause grants ‘supreme’ status only to the ‘the Laws of the United States,’” 139 S. Ct. at 1679 (quoting U. S. Const., Art. VI, cl. 2.), so informal back-and-forth with the FDA by itself wouldn’t seem to qualify.  But preemption motions based on nothing more than that just aren’t very common.  The Third Circuit, for one, closed that door over a decade ago in Fellner v. Tri-Union Seafoods, L.L.C., 539 F.3d 237, 250 (3d Cir. 2008) (FDA “advisory and backgrounder” insufficient basis for conflict preemption).

Further, we think the converse is also true.  NPAM points out what falls short of Albrecht are “informal statements are not binding on the FDA.”  56-JAN JTLATRIAL 20, at *22.  Well, plaintiffs in both express and implied preemption situations (especially involving generic drugs) often seek to oppose preemption under “the Laws of the United States” with their own collection of FDA actions lacking the requisite “force of law.”  Albrecht, 139 S. Ct. at 1679.  Two prime examples are FDA warning letters and Forms 483.  This type of argument is particularly common in PMA preemption litigation, where the operation of an express preemption clause (21 U.S.C. §360k(a)), is frequently opposed by purported “parallel” claims also relying solely on “informal statements [that] are not binding on the FDA.”

Also, attention needs to be paid to Albrecht’s citation of §355(o)(4)(A) as an example of “other” preemptive “agency action carrying the force of law”:

If the [FDA] becomes aware of new information, including any new safety information or information related to reduced effectiveness, that the Secretary determines should be included in the labeling of the drug, the Secretary shall promptly notify the responsible person or, if the same drug approved under subsection (b) is not currently marketed, the holder of an approved application under subsection (j).

(Emphasis added).  Note, the reference to “subsection (j)” involves generic drugs.  This regulation cited by Albrecht nicely dovetails with the limitation of the FDA’s so-called “CBE regulation” authorizing unilateral changes to warnings only to” reflect newly acquired information.”  Albrecht, 139 S. Ct. at 1679.  FDA activity pursuant to this statutory power – whether affirmative or negative – should, if sufficiently formal, also support preemption in prescription drug cases.

Since the same “new information” both obligates the FDA to act unilaterally under §355(o)(4)(A) and allows the manufacturer to change warnings unilaterally under the CBE regulation, defendants desirous of the protections of preemption would be well advised to obtain formal FDA no-action letter under §355(o)(4)(A) to avoid the other side’s arguments outlined in NPAM.  NPAM concedes this as a valid reason for preemption, but describes it as “rare,” 56-JAN JTLATRIAL 20, at *23 n.12.  Albrecht provides reasons for our side to ensure that FDA decisions of this sort become much more common.

NPAM also urges plaintiffs to oppose preemption with intrusive discovery into the basis for any FDA’s decision rejecting the warning change at issue:

If the manufacturer establishes that the FDA denied the proposed label change, request discovery of all communications between the defendant and the agency pertaining to the risk at issue, and specifically request the drug manufacturer’s CBE or PAS submissions asking for the label change.

56-JAN JTLATRIAL 20, at *23.  That presents an obvious conflict with Buckman Co. v. Plaintiffs Legal Committee, 531 U.S. 341 (2001), as the article anticipates.  Id.  To argue that “Buckman should not be an obstacle to challenging a drug manufacturer’s deficient submissions to the FDA,” NPAM, 56-JAN JTLATRIAL 20, at *24, relies on the highlighted portion of the following discussion:

[I]f the FDA rejected a drug manufacturer’s supplemental application . . . on the ground that the information supporting the application was insufficient to warrant a labeling change, the meaning and scope of that decision might depend on what information the FDA had before it.  Yet in litigation between a drug consumer and a drug manufacturer (which will ordinarily lack an official administrative record for an FDA decision), the litigants may dispute whether the drug manufacturer submitted all material information to the FDA.

Albrecht, 139 S. Ct. at 1680.

The excerpt was from a discussion of why preemption is a legal, rather than a fact, question, and the Court doesn’t mention, let alone distinguish, Buckman.  Thus, it hardly stands for ignoring a unanimous Supreme Court decision.  It’s not the “litigants” who decide whether the FDA was fully informed.  Rather, under Albrecht, “the FDA, and only the FDA, can determine what information is “material” to its own decision to approve or reject a labelling change.”  In re Avandia Marketing, Sales & Products Liability Litigation, 945 F.3d 749, 759 (3d Cir. 2019) (emphasis original).  The obvious alternative is to ask the FDA.  We addressed the relationship between Albrecht and Buckman in more detail, here.

This can be done in several ways.  First, courts of the view that “only the FDA” can make the requisite determination could apply the doctrine of primary jurisdiction, which as we’ve discussed elsewhere, is the most reliable means to ensure that the FDA has requisite opportunity.  We haven’t seen a post-Albrecht decision addressing primary jurisdiction, but it’s the strongest option short of preemption itself to preserve the FDA’s decision-making power.  Second, as we discussed earlier in this post, another way is via citizen petition.  That was done recently in the Zofran, MDL, with the MDL judge telling the FDA he would express “no view as to the merits,” while urging the agency to “make its decision based on the relevant scientific and medical criteria, and according to the law, without regard to its potential impact on the litigation,” and to do so “without undue delay.”  Public letter to FDA, Zofran MDL PACER Docket #1773 (D. Mass. Dec. 13, 2019).

The NPAM article mentioned a third option, seeking an FDA amicus brief, something courts do from time to time (the last request we’re aware of happening in Albrecht itself).  The simple fact that the Supreme Court did precisely this in Albrecht substantially undercuts NPAM’s argument that FDA amicus briefs on “clear evidence” preemption questions:

[A]sk[] the court and the FDA to speculate about what the agency would have done in a counterfactual world in which the drug manufacturer fully informed the FDA.  Based on [Albrecht], such speculation has no place in a preemption analysis.

56-JAN JTLATRIAL 20, at *24.  This argument makes little sense.  First, courts routinely ask the FDA for amicus briefs in preemption cases, and even find such briefs persuasive in other cases.  E.g., Shuker v. Smith & Nephew, PLC, 885 F.3d 760, 774-75 (3d Cir. 2018) (relying on requested FDA amicus brief in preemption decision); Williams v. Mentor Worldwide LLC, 2019 WL 4750843, at *6 (N.D. Ohio Sept. 30, 2019) (preemption decision citing FDA amicus brief in prior case); In re Smith & Nephew Birmingham Hip Resurfacing (BHR) Hip Implant Products Liability Litigation, 401 F. Supp.3d 538, 552, 554 (D. Md. 2019) (same as Williams, citing Shuker FDA amicus brief multiple times).  Second, there is nothing “counterfactual” or “hypothetical” about asking the FDA to state whether or not a specific decision that it has already made was “fully informed,” in light of whatever additional material the plaintiffs have brought forward.  This particular argument is based on one thing – plaintiffs’ fear of the prerequisites for preemption being decided by an independent, unbiased decision maker.

Finally, we’d like to point out all the preemption-related arguments NPAM avoids mentioning.  First and foremost, NPAM stays away from express preemption in PMA medical devices, as well as generic drug preemption.  As we’ve mentioned, the conclusion that preemption is a “legal question” and its emphasis on FDA decisions with “force of law” will have (and has already had) significant beneficial effects for defendants in all preemption cases:  (1) thumbs are now off the evidentiary scale – as we’ve discussed, the judge “simply ask[s]” who has the better of the argument, 139 S. Ct. at 1679; (2) precluding of expert testimony on questions of law; (3) Albrecht’s reiteration of the FDA’s CBE regulation as the basis for avoiding preemption, id., reinforcing the other, CBE-related bases for preemption, such as “newly acquired” information and other exceptions to that regulation; (4) Albrecht’s omission of any mention of a “presumption” against preemption from its restatement of Levine; (5) recognition of “overwarning” as a policy concern, id., at 1673 (“exaggeration of risk, or inclusion of speculative or hypothetical risks, could discourage appropriate use of a beneficial drug . . . or decrease the usefulness and accessibility of important information by diluting or obscuring it”); and (6) better arguments for interlocutory review.  There are good reasons we awarded Albrecht the # Best decision of 2019 that NPAM has no response to, and therefore remains mum.

We’re not just blowing smoke.  It’s still quite early, but we’ve already seen post-Albrecht decisions discussing overwarning.  McGrath v. Bayer HealthCare Pharm. Inc., 393 F. Supp. 3d 161, 169 (E.D.N.Y. 2019); Klein v. Bayer Healthcare Pharmaceuticals, Inc., 2019 WL 3945652, at *5 (D. Nev. Aug. 21, 2019).  Several courts have applied the “new evidence” limitation to the CBE exception and ruled in favor of preemption.  McGrath, 393 F. Supp.3d at 171; Goodell v. Bayer Healthcare Pharmaceuticals, Inc., 2019 WL 4771136, at *4 (D. Mass. Sept. 30, 2019); Pradaxa Cases, 2019 WL 6043513, at *3-4 (Cal. Super. Nov. 8, 2019); Roberto v. Boehringer Ingelheim Pharmaceuticals, Inc., 2019 WL 5068452, at *13 (Conn. Super. Sept. 11, 2019).

Photo of Bexis

If asbestos litigation reminds of the 100 Years War, and the Bone Screw litigation recalls (for us) the winning side of the Franco-Prussian War, or Napoleon’s Italian Campaign − pelvic mesh litigation seems like something out of a different war.  Try World War I.  It’s not quite the Somme (at least not yet) but more like Verdun, and our side has yet to find its “They shall not pass” moment.

Today’s example is Kaiser v. Johnson & Johnson, ___ F.3d ___, 2020 WL 205651 (7th Cir. Jan. 14, 2020).  Kaiser is the latest rotten precedent out of the pelvic mesh litigation.  Rejecting what it described as the defendant’s “broad-spectrum attack on the judgment,” id. at *1, the appellate court affirmed a $20 million verdict that included a (reduced) $10 million in punitive damages.  Id.

When a court takes the position that the FDA does not exist (except when plaintiffs say it can), then perhaps this type of result is logical.  Logical, but not rational.  As with most pelvic mesh cases, design defect is front and center.  In Kaiser, Indiana law governed, which meant that the unfortunate Indiana Supreme Court decision in TRW Vehicle Safety Systems, Inc. v. Moore, 936 N.E.2d 201 (Ind. 2010), controlled.  With surprising little analysis – mostly a footnote, Moore rejected an alternative design requirement under Indiana’s negligence-based product liability statute:

For actions based on an alleged product design defect, however, the Act . . . specifies a different standard of proof:  “[T]he party making the claim must establish that the manufacturer or seller failed to exercise reasonable care under the circumstances in designing the product.”  Ind. Code §34-20-2-2.  Thus the statute itself prescribes the applicable standard of care.  We decline to require proof of any additional or more particular standard of care in product liability actions alleging a design defect.2

2The American Law Institute recommends a different approach, prescribing . . . adoption of a reasonable alternative design . . ., and [that] the omission of the alternative design renders the product not reasonably safe.” Restatement (Third) of Torts: Products Liability § 2(b) (1997).  Our legislature did not adopt this analytical framework but instead enacted in 1998 a negligence standard for product liability claims based on defective design.

936 N.E.2d at 209 & n.2 (second citation to statute omitted).  That’s an unusual ruling, because negligent design – which Moore repeatedly recognized it was applying, id. at 209-10 (four references to negligence) – at common law almost always has included an alternative design element, as we discussed here.  But the Indiana high court is the final arbiter of Indiana law, and if it chooses to interpret a statutory carve-out from strict liability as an invitation to expand liability, that’s for the legislature to fix.  So we don’t like it, but that’s where Indiana law apparently stands at the moment.

Thus, Kaiser recognized the abrogation of prior Seventh Circuit precedent that had enforced an alternative design requirement in Indiana product liability cases.  2020 WL 205651, at *11 (“[o]ur circuit caselaw cannot be reconciled with [Moore]”).  OK, we’re big fans of Erie restraint, so we have to take the good with the bad.

But if, as Moore held, the Indiana product liability imposes an negligence “reasonable” person standard in design defect cases, why the heck is the next section of Kaiser entitled “Unreasonably Dangerous”?  We frankly don’t know, and we think Kaiser got this completely wrong.  The “unreasonably dangerous” element of Indiana statutory product liability comes from Ind. Code §34-20-2-1 (creating general “defective condition unreasonably dangerous” standard).  But §34-20-2-2, construed in the just-discussed Moore case, provides

The rule stated in section 1 of this chapter applies. . . .

However, in an action based on an alleged design defect in the product or based on an alleged failure to provide adequate warnings or instructions regarding the use of the product, the party making the claim must establish that the manufacturer or seller failed to exercise reasonable care under the circumstances in designing the product or in providing the warnings or instructions.

(Emphasis added).  So the “unreasonably dangerous” test – and the consumer expectation gloss that Ind. Code §34-6-2-146 gives to that test − doesn’t even apply to warning or design claims, which are governed by negligence principles according to §34-20-2-2.

Kaiser is an example of “heads plaintiffs win; tails defendants lose.”  Consumer expectation is the statutory definition of “unreasonably dangerous,” but the very same statutory carve-out that Kaiser relied upon to avoid defendant’s alternative design, expressly excludes design and warning claims from said unreasonably dangerous requirement, the one that Kaiser invoked to conclude that “a reasonable jury could conclude that [the product] was unreasonably dangerous” despite  the implanting surgeon “testif[ying] that he was aware of many of [product’s] risks.”  2020 WL 205651, at *12.  Thus, it appears to us that, when negligence principles benefited plaintiff’s design defect claim in Kaiser, negligence applied, but when strict liability principles could defeat a defense argument, then the same claim was treated as strict liability.

And then there’s the FDA, which cleared this device, and which would have to clear a supplemental application before any design change materially affecting device safety and effectiveness could occur.

But this is mesh world.  In order to ensure that plaintiffs can win – and thus force defendants to settle – the FDA does not exist, except when plaintiffs want it to exist.  Kaiser stated, about the “original” 1988 FDA clearance of the predicate device on which the agency’s later clearance of this particular product was based:

When it promulgated that rule, the FDA cautioned that the “surgical mesh has not been implanted in a sufficient number of patients by a sufficient number of medical practitioners to provide adequate evidence on the long-term biocompatibility of these devices.”  General and Plastic Surgery Devices, 53 Fed. Reg. 23856, 23862 (June 24, 1988).  Due to “insufficient evidence of safety and effectiveness,” the FDA assigned these surgical meshes to Class II.  Id.

Kaiser, 2020 WL 205651, at *4.

That didn’t make sense to us.  If there weren’t “adequate evidence on the long-term biocompatibility” of what was supposed to be a permanent implant, then the FDA wouldn’t have cleared that product at all, and certainly wouldn’t have put it in an intermediate classification like Class II.

Something wasn’t right, so we looked up the Federal Register reference that Kaiser cited.  Sure enough, to justify ignoring the FDA’s safety and effectiveness conclusion, Kaiser mangled it beyond recognition.  Here, in context, is what the FDA was actually discussing in the snippet cited in Kaiser:

Two comments said that the device is made from well-established materials and that general controls would provide reasonable assurance of the continuing reliability of the device.  The comments requested that the device be classified into class I instead of class II, based on safe and effective clinical use over the years.

FDA disagrees with the comments.  FDA is classifying the device into class II to control the risks to health of infection and foreign body reaction which may result in implant rejection.  Surgical mesh is intended to be implanted in the human body.  Section 513(d)(2)(B) of the act (21 U.S.C. 360c(d)(2)(B)) requires that FDA classify all implants into class III unless the agency determines that, for a particular implant, premarket approval is unnecessary to provide reasonable assurance of its safety and effectiveness.  FDA believes that surgical mesh has not been implanted in a sufficient number of patients by a sufficient number of medical practitioners to provide adequate evidence on the long-term biocompatibility of these devices.  Consequently, FDA believes that insufficient evidence of safety and effectiveness is available at this time to support classifying surgical mesh into class I.

General & Plastic Surgery Devices; General Provisions and Classifications of 51 Devices, 53 Fed. Reg. 23856, 23681-892 (FDA June 24, 1988) (emphasis added).

The FDA’s decision was almost the exact opposite of what Kaiser cited it for.  The FDA rejected only a proposal to classify the mesh in question into its lowest classification, Class I.  The FDA acknowledged that, if there was not “reasonable assurance of [a device’s] safety and effectiveness,” a Class III designation would have been “require[d].”  It nonetheless put these mesh predicates in Class II.  Why?  Elsewhere in the same document, the FDA also rejected comments that the mesh predicates be placed in Class III.  Class III was unnecessary because:

  • “FDA has determined that requirements of premarket approval are unnecessary to control the risks to health presented by the devices, including the risk of bioincompatibility.”  Id. at 23861.
  • “FDA believes that the biocompatibility of the materials now being used in these devices has been established through their successful use for a number of years.”  Id.
  • “Clinical experience with the devices listed above has established the persons for whose use the devices are intended and the proper conditions of use. FDA has determined that the probable benefit to health from proper use of these devices outweighs and likelihood of illness or injury resulting from their use.”   Id.
  • “FDA believes that establishment of performance standards will provide reasonable assurance of the safety and effectiveness of these devices and sufficient evidence is available to establish such standards.”  Id.

Kaiser thus mischaracterized the 1988 administrative record to suggest a finding of “insufficient evidence of safety and effectiveness” for any purpose.  That can’t be so, because such a finding would have precluded any clearance at all.  The full administrative record demonstrates that Kaiser’s implication was false – and, in fact, the FDA made a positive finding of “reasonable assurance of the safety and effectiveness of these devices” when they were subject to Class II “performance standards.”

We went through this regulatory history in detail because we think that the judicial gyrations in Kaiser, in and of themselves, demonstrate why the exclusion of FDA evidence in Kaiser, 2020 WL 205651, at *16, as supposedly “minimally” probative was error and should have been reversed.  The statement in Kaiser that “[t]he FDA warned that [product’s] original predicates − the surgical meshes in the 1988 rulemaking − did not come with a reasonable assurance of safety,” id. simply ain’t so.  Facts matter, and the fact is that in 1988 “FDA believe[d] that establishment of performance standards will provide reasonable assurance of the safety and effectiveness of these devices.”  53 Fed. Reg. at 23861.  That Kaiser found it necessary to mischaracterize the regulatory history so thoroughly only underscores how relevant and probative that history really was.

Finally, preemption.  We’ll give Kaiser this – is did treat the defendant’s implied preemption argument seriously.  The express preemption argument for this product is a difficult one, since its pedigree stretches back to 1988, which was before the Safe Medical Devices Act of 1990 revamped the §510(k) process.  To find express preemption, one would have to argue that Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996), is wrong, and not merely based on a superseded statute (for more background see our discussion here).  That may be true.  Compare:

Despite its relatively innocuous phrasing, the process of establishing this “reasonable assurance,” [of safety and effectiveness] which is known as the “premarket approval,” or “PMA” process, is a rigorous one.

Lohr, 518 U.S. at 477 (emphasis added), with:

Clinical experience with the devices listed above [including mesh] has established the persons for whose use the devices are intended and the proper conditions of use.  FDA has determined that the probable benefit to health from proper use of these devices outweighs and likelihood of illness or injury resulting from their use. . . .  FDA believes that establishment of performance standards will provide reasonable assurance of the safety and effectiveness of these devices and sufficient evidence is available to establish such standards.

53 Fed. Reg. at 23861 (emphasis added).  This regulatory record seems to us to establish that the FDA in fact used the same “reasonable assurance” standard for this Class II device that Lohr described as “rigorous.”  That was in 1988, prior to SMDA, and indicates that the FDA was already holding Class II medical devices to the “reasonable assurance” standard.  Lohr’s blanket holding that all non-pre-market approved devices are “marketed without” this “rigorous” FDA review, 518 U.S. at 478, is not borne out by the regulatory history of at least this particular Class II mesh device.

Unlike a lot of prior decisions, which fail to distinguish between types of preemption in Class II device cases and simply chant “Lohr, Lohr, Lohr” regardless of express or implied preemption, Kaiser gave the implied preemption argument full (if questionable) treatment.  “[Plaintiff] argues that Lohr forecloses [defendant’s] preemption defense without further inquiry.  We disagree.  Lohr addressed a question of express preemption; [defendant] argues here for implied preemption.”  Kaiser, 2020 WL 205651, at *7.  Kaiser also correctly identified the test imposed by the Mensing independence principle.  “The question for ‘impossibility’ is whether the private party could independently do under federal law what state law requires of it.”  Id. at *8 (quoting PLIVA, Inc. v. Mensing, 564 U.S. 604, 620 (2011)).

What did the FDA have to say about independent action and design defects?  In the same 1988 regulatory action, the agency stated, “FDA believes that a change in a material used in a device intended to be implanted is a significant change in a device that could affect its safety and effectiveness.”  53 Fed. Reg. at 23861 (emphasis added).  Thus, “FDA will require that new or significantly changed materials be subject to requirements of premarket approval.”  Id.  For preemption purposes, this means that any change in the composition of this product would require FDA pre-approval, which under Mensing requires preemption.

So how did Kaiser, after setting up the proper test, nonetheless get around preemption?  By creating a circuit split.  In Mutual Pharmaceutical Co. v. Bartlett, 570 U.S. 472 (2013), the Court held that state law cannot demand, consistently with the Supremacy Clause, that the manufacturer of a product that the FDA allows to be marketed – even via abbreviated review – stop marketing its product.  Id. at 488.  In Yates v. Ortho-McNeil-Janssen Pharmaceuticals, Inc., 808 F.3d 281, 300 (6th Cir. 2015), the court held that a claim that the product design the FDA initially approved was “defective” was merely a stop selling claim under a different name.  We discussed Yates here.

Kaiser disagreed with Yates:

[T]he Court’s generic-drug rulings turn on whether a “generic manufacturer[] may change [its] label[ ] after initial FDA approval.”  [Mensing], 564 U.S. at 613, 131 S.Ct. 2567.  The important point for this case, however, is that [defendant] had complete and independent control over [its product’s] design before it sought §510(k) clearance for the device.  It was not impossible to simultaneously comply with federal and state law.

Kaiser, 2020 WL 205651, at *7.  That’s all true, but this factual distinction simply ignores the holding in Mensing.  We repeat, “[t]he question for ‘impossibility’ is whether the private party could independently do under federal law what state law requires of it.”  564 U.S. at 620.  The test Mensing poses turns on “whether,” not “why.”

Before the Manufacturers could satisfy state law, the FDA − a federal agency − had to undertake special effort permitting them to do so.  To decide these cases, it is enough to hold that when a party cannot satisfy its state duties without the Federal Government’s special permission and assistance, which is dependent on the exercise of judgment by a federal agency, that party cannot independently satisfy those state duties for pre-emption purposes.

Id. at 623-24 (emphasis added).  Similarly, in Kaiser is should have been “enough to hold” that the FDA would have required a new application, whether in place of the one that the defendant originally submitted, or at some later date, to implement the design change that state tort law supposedly required here.  The “impossibility” that undergirds preemption here is two-fold:  First, that simultaneous compliance becomes impossible when independent agency action is required.  Check.  Second, once the FDA has said “yes” to marketing,” a state cannot say “no.”  Check.  Still not sure?  There’s always the Shuker approach of asking the FDA directly for its views.

To sum up, Kaiser butchered the regulatory record of this product, and used the dismembered remnants both to justify exclusion of FDA evidence and to wriggle around preemption.  Further, Kaiser’s treatment of Indiana design defect law is internally inconsistent so that plaintiff wins either way.  Thus, Kaiser is an early candidate for our “worst of “ list of 2020.

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